KENDRIYA VIDYALAYA SANGATHAN

CHANDIGARH REGION

SUBJECT ENRICHMENT MATERIAL

CLASS: XII

SUBJECT: BUSINESS STUDIES

2019-20

INDEX

Sr. No.

Name of the Chapter

Page No.

1.

Nature and Significance of the management

3-20

2.

Principles of Management

21-29

3.

Business Environment

30-57

4.

Planning

58-81

5.

Organising

82-100

6.

Staffing

101-121

7.

Directing

122-131

8.

Controlling

132-142

9.

Financial Management

143-154

10.

Financial Markets

155-169

11.

Marketing Management

170-181

12.

Consumer Protection

182-190

SUBJECT ENRICHMENT MATERIAL

(FOR HIGH ACHIEVERS)

CLASS : XIISUBJECT : BUSINESS STUDIES

UNIT 1 - NATURE AND SIGNIFICANCE OF MANAGEMENT

Q. NO.

QUESTIONS

MARKS

1

One of the organisational objectives of management is ‘Growth of business’. Which one of the following is not associated with measurement of business growth?

(a) Sales volume (b) Number of Employees

(c) Number of Creditors (d) Number of Products offered

1

2

-------------- refers to the orderly synchronising of efforts of subordinates to provide proper amount, timing and quality of execution.

(a) Planning (b) Organising

(c) Coordination (d) Cooperation

1

3

------------- in Management means to complete the task correctly with minimum resources.

(a) Effectiveness (b) Efficiency

(c) Coordination (d) None of the above

1

4

Vijay works in a bank. The bank is about to lose its position as the leading bank in the banking industry. Vijay was assigned to find out the reason behind poor performance of the bank. He analysed the situation and came out with the conclusion that there was lack of integration of efforts made by various departments like human resource, information technology and consumer relationship.

Identify the managerial concept discussed in the above case.

(a) Cooperation (b) Coordination

(c) Effectiveness (d) Efficiency

1

5

Saurabh is managing director in a shoe manufacturing company. He has been doing well at this post. Under his guidance and leadership, the company has been actively achieving all the set targets as all the unrelated and diverse actions taken by different departments are given a common direction.

Identify the characteristic of management discussed in the above case.

(a)Management is a goal oriented process

(b) Management is a continuous process

(c) Management is a group activity

(d) Management is a dynamic function.

1

6

Jay is working as a marketing manager in a company. Has been given the task of selling 1,00,000 units of a product at the cost of Rs. 100 per unit within 20 days. He is able to sell all the units within the stipulated time, but had to sell last 1,000 units at 20% discount in order to complete the target. In such a situation, he will be considered to be

(a) An efficient manager (b) An effective manager

(c) Both inefficient and ineffective (d) None of the above

1

7

Management is said to be poor if it is

(a) Efficient but ineffective (b) Effective but inefficient

(c) Both inefficient and ineffective (d) All of the above

1

8

Tarang Enterprises Limited is planning to increase its sales by 30% in the next quarter. Identify the feature of management being highlighted in the given statement.

(a) Management is all pervasive

(b) Management is a goal oriented process

(c) Management is a continuous process

(d) All of the above

1

9

Management is equally important to run a political organisation as it is to run an economic organisation. Which feature of management is being reflected in the given statement?

(a) Management is a goal oriented process

(b) Management is multidimensional

(c) Management is all pervasive

(d) Management is a group activity

1

10

Management translates the work to be carried out in terms of goals to be achieved and assigns the means to achieve it.

This statement relates to :

(a) Management of work (b) Management of people

(c) Management of operations (d) All of the above

1

11

Principles of management are not exact as the principles of science and they have to be modified according to a given situation. Which feature of science is not applicable in this statement?

1

12

Why is coordination and cooperation required together?

1

13

At which level of management are the managers responsible for maintaining the quality of output and the safety standards?

1

14

“Dominos pizza keeps introducing new variety of pizzas in its menu”. Which feature of management represents this act?

1

15

“A manager applies his knowledge of management in his own way”. Which aspect of the nature of management does this statement indicate?

1

16

“Management increases efficiency”. How?

1

17

What is the basic difference in the nature of coordination and cooperation?

1

18

Since management deals with human beings and human behaviour, it can be termed as a --------------

1

19

It is the process whereby an executive develops an orderly pattern of group efforts among his subordinates and secures unity of action in the pursuit of common purpose. Which process is referred to here?

1

20

Bhawna feels that management is required in all kinds of organisation whereas Puja argues that management is not required in non-business organisations like Schools, hospitals and clubs, who is correct?

1

21

Mita has a successful ice cream business at Bikaner, namely ‘Smart flavours’. Her ice creams are utterly delicious. She makes ice creams from fresh milk and the same are available in a wide range of flavours and packs. She sets viable business objectives and works with the same in mind in order to ensure that the customers will come back for purchasing.

Having the first mover advantage her business was doing well. To earn higher profits, she started cutting costs. This would sometime lead to delay in delivery and the ice cream was not reaching in the market in time. Over a period of time, the demand for her ice cream declined and because of it the competitors entered the market. She lost some of her market share to competitors.

At the beginning of summer season she got back to back orders for supply of 4,000 ice cream packs of different flavours for special occasions. To ensure that the task was completed and orders delivered in time she hired additional workers. She was, thus able to produce and deliver the ice cream packs but at a high production cost. While completing activities and finishing the given task for achieving goals, Mita realised that she was ignoring one of the important aspects of management.

Identify the aspect of management that has been ignored by Mita. Also explain the same with the help of example.

3

22

Shiva Computers Ltd. is a leading company in Computer Technology and IT services. The CEO of the company attributes the success of the company to its managerial team spirit, which have helped to handle rapid changes in technologies and to transform into opportunities. Like any other business enterprise profits are important for survival and growth of Shiva Computers Ltd. The management of the company believes that a satisfied employee creates a satisfied customer, who in turn creates profits that leads to satisfied shareholders.

The company has a strong sense of social responsibility. It has set up many educational institutions in the field of management, engineering and computer education in which half of the students are girls.

Identify and explain the various types of objectives of management being fulfilled by Shiva Computers Ltd. by quoting lines from the paragraph.

3

23

Ayushi works as a soft skill trainer in a corporate house. She begins a new session every time by acquainting the trainees with a process which is vital for achieving the goals of the organisation effectively and efficiently. She also makes them understand the various primary activities involved in carrying out this process. She emphasis upon the fact that in the absence of this process it will be difficult for the employees to attain their personal goals. Moreover the development of the society will be hampered as the welfare of the people is also likely to be overlooked by the organisation.

In context of the above case:

(a) Identify and explain the process being referred to in the above lines.

(b) List the primary activities contained in this process.

(c) How does this process help in achieving personal objectives of the employees?

3

24

Ajay and Sanjay are childhood friends. Sanjay had lost his right hand in an accident in childhood. They meet after a long time in a restaurant. On being asked, Sanjay tells Ajay that he feels very discontented in managing his family business after the death of his father as it doesn’t match with his areas of interest. Ajay knows that Sanjay possess extraordinary skills in management although he hasn’t acquired any professional degree in management. Therefore, he asks Sanjay to wind up his business in India and join him in his hotel business in Dubai as an Assistant Manager in Sales and Marketing Division.

Can Sanjay be deployed at the post of Assistant Manager in Sales and Marketing Division although he hasn’t acquired any professional degree in management? Explain by giving suitable justification in support of your answer.

3

25

Harshita has successfully emerged as the owner of the best modular kitchen manufacturer firm in Delhi. Her friend Vartika is highly inspired by Harshita’s success in business. In order to understand the essence of successful business management Vartika decides to spend a week in her office. Vartika observes that a deliberate effort is made to integrate the diverse activities of the organisation. Like whenever the sales manager makes a plan to raise the sales target, he also consults other department managers i.e. the production manager, the purchase manager, the finance manager, etc. in order to avoid any problem that may arise in future. Moreover, work among the people working in the production department is divided in such a manner that where the work of one person ends, the work of the next person begins. Therefore, everybody makes efforts to complete his/her work on time, and the workers do not create obstruction in each other’s work.

In the context of above case:

(a) Identify the concept being described in the above paragraph.

(b) How does the concept as identified in part (a) of the question help in carrying out management functions successfully?

3

26

Devesh works as head (Finance) in a electronics company. Although over the years, with experience he has been able to build upon his managerial skills in terms of creativity, imagination and initiative, but still he feels that the knowledge of certain underlying theories and principles of management is a must for any aspiring manager. This is primarily due to the fact that these principles are evolved through observations and tested through experimentation and help the managers in taking scientific decisions. Thus, a manager requires both the knowledge and certain skills to apply the related knowledge in the light of given situations to be successful in his work.

In context of the above case:

(a) Identify and explain the two aspects of nature of management which Devesh thinks makes a manager successful.

(b) Also, explain the specific feature of one of the aspects of nature of management as identified in part (a) of the question which distinguishes it from other physical sciences like biology, physics and chemistry etc.

3

27

“Management helps in development of society”. How?

4

28

Rishi Sharma has recently joined ABC Ltd., a company manufacturing Air-conditioners. He found that his department was under-staffed and other departments were not cooperating with his department for smooth functioning of the organisation. Therefore, he ensured that his department has the required number of employees and its cooperation with other departments is improved.

(a) Identify the level at which Rishi Sharma was working.

(b) Also, state three more functions required to be performed by him at this level.

4

29

Noori owns a garment factory in Gurugram. She has observed that frequent conflicts emerge between production and marketing department which adversely affects the sales of the company. When she shared this problem with her father, he told her that these conflicts arise due to the fact that each department is performing activities in isolation from others and barriers between departments are becoming more rigid.

In the context of above case:

(a) Identify and explain the quality of management which is lacking because of which each department is performing activities in isolation from others.

(b) Also, explain any three features of the concept as identified in part (a) of the question.

4

30

Esha works as the cost and risk management head of a company in power sector. As a result of her excellent managerial competence, the company is able to reduce cost and increase productivity. The company belongs to infrastructure sector, wherein regular amendments are made in the government regulations and policies. She holds regular meetings to ensure that people in her department are not only aware of the related changes but are also able to adapt to these changes effectively. This helps the company to maintain its competitive edge. She motivates and leads her team in such a manner that individual members are able to achieve personal goals while contributing to the overall organisational objective. In the process of fulfilling her duties for the growth of the organisation, she helps in providing competitive services, adopting new technology, creating more employment opportunities etc. for the greater good of the people at large.

In the context of the above case:

Identify the various reasons that have made management so important by quoting lines from the paragraph.

4

31

Amit and Sumit are good friends. Considering the fact that the activities involved in managing an enterprise are common to all organisations, after completing their masters in business management, both of them take up a job at managerial level in different organisations as per their individual areas of interest. Amit takes up a marketing job in retail company and strives to increase sales whereas Sumit joins an NGO and works diligently to realise its objective related to providing employment to especially abled persons. Both of them have to perform a series of continuous, composite, but separate functions. On some days, Amit may spend more time in planning a future display layout and on another day, he may spend time in sorting out an employee’s problem. Both Amit and Sumit make conscious efforts to build a feeling of team spirit and coordination among diverse individuals with different needs who work under them. The effect of their management is noticeable in their respective departments as the targets are met according to plans, employees are happy and satisfied, and there is orderliness in its functioning rather than chaos.

Identify the various features of management highlighted in the above paragraph by quoting lines from it.

5

32

Aman, Ahmad and Ally are partners in a firm engaged in the distribution of dairy products in Maharashtra state. Aman is a holder of Senior Secondary School Certificate from Central Board of Secondary Education with Business Studies as one of his elective subjects. Ahmad has done his post graduation in History and Ally in dairy farming. One day there was a serious discussion between Ahmad and Ally regarding the nature of management. Ahmad argued that management was a profession, whereas Ally argued against it saying that the legal and medical professions are the only profession because they fulfil all the conditions of profession. Aman on the basis of his knowledge of Business Studies explained the nature of management as a profession to Ahmad and Ally.

Explain how Aman would have satisfied both Ahmad and Ally.

5

33

A consumer goods company, manufacturing electrical goods, has been facing a lot of problems for the last one year. Its margins are under pressure and its profits and market share are declining. For this state of affairs, the production department blames the marketing department for not meeting sales targets and the marketing department blames the production department for producing goods which are not of good quality meeting customers’ expectations. The finance department blames both the production and the marketing departments for declining return on investment and bad marketing.

What steps should be taken to bring the company on track?

5

34

Real Alliance Ltd. is a well-known company in India. It is able to earn adequate revenues to cover costs. Its capital base, number of employees and production turnover has increased manifolds over the years. The rate of profitability of the business is also creditable. The employees of the company are happy and satisfied with their remuneration, working conditions, promotion policy etc. As a part of its moral obligation, the company has taken many initiatives for providing employment to especially abled persons and promoting literacy in the villages adopted by it.

Identify and explain the various types of objectives of management being fulfilled by Real Alliance Ltd. by quoting lines from the paragraph.

5

Answers

ANSWERS

MARKS

1

C

1

2

C

1

3

B

1

4

B

1

5

C

1

6

B

1

7

C

1

8

B

1

9

C

1

10

A

1

11

Universal validity and application

1

12

Because these are required at all levels of management due to the interdependent nature of activities of various departments.

1

13

Supervisory or Operational Level Management

1

14

Management is Dynamic in nature.

1

15

Management is called an Art because it is concerned with the application of personal skills by the manager.

1

16

Through planning and organisation, management eliminates all types of wastages and achieves efficiency in all business operations.

1

17

Coordination is a conscious and deliberate effort, whereas cooperation is a voluntary effort.

1

18

Inexact Science

1

19

Coordination

1

20

Bhawna is correct because management is pervasive in nature.

1

21

The aspects of management that has been ignored by Mita are Effectiveness and Efficiency. For example, Alka works as a designer in an export house. As per the terms of an order received by the export house she has to get 1,000 units of leather jackets made in 14 days @ Rs. 1,500 per jacket. She is able to complete her target production in 18 days. So, in order to complete the order in 14 days she would have made the workers work over time. As a result the cost o production per jacket may have increased by Rs. 100.

(a) In the above case, Alka is efficient in her work as she has been able to get 1,000 units of leather jackets made @ Rs. 1,500 per jacket.

(b) But we cannot consider Alka to be effective as she was not able to get the work completed within the stipulated time of 14 days.

3

22

(a) Organisational objectives: It refers to the utilisation of human and material resources considering the interest of stakeholders.

‘Like any other business enterprise profits are important for survival and growth of Shiva Computers Ltd.’

(b) Social Objectives: it refers to consistently creating economic value for various constituents of the society.

‘It has set up many educational institutions in the field of management, engineering and computer education in which half of the students are girls.’

3

23

(a) The process of Management is being referred to in the above lines.

Management is the process of designing and maintaining the environment in which individuals working together in groups efficiently accomplish selected goals.

(b) The primary activities contained in management process refers to the functions of management namely; planning, organising, staffing, directing and controlling.

(c) Personal objectives relate to the needs of employees of the organisations which must be given due considerations like fair wages and salary, growth prospects, good working conditions etc. The management ensures that individual members are able to achieve personal goals while contributing towards the overall organisational objectives.

3

24

Yes, Sanjay can be deployed at the post of Assistant Manager in Sales and Marketing Division although he hasn’t acquired any professional degree in management as management is not considered to be a full-fledged profession because of the following reasons:

(i) Restricted Entry. The entry to the above stated profession is restricted through a prescribed qualification. But there is no restriction on anyone being appointed as a manager in any business enterprise. So, presently this feature of profession is not present in management.

(iii) Professional association. Legal and Medical professions are affiliated to a professional association like bar council and medical council which regulates entry, grants certificate of practice and formulates and enforces a code of conduct. There are several associations of practising managers in India like the AIMA that has laid down a code of conduct to regulate the activities of their members. There is, however, no compulsion for managers to be members of such an association. So, presently this feature of profession is not present in management.

3

25

(a) Coordination is the concept being described in the above paragraph.

(b) The importance of coordination is described below:

(i) Growth in size: With the growth in the size of an organisation there is a proportionate increase in the number of its employees. So there is a greater need to unify the efforts of diverse individuals towards the realization of organizational goals.

(ii) Functional differentiation: As a result of functional differentiation in an organisation its people and activities get divided into small departments on the basis of functions like marketing, finance etc. Therefore, there is need to reconcile the goals pursued by each of such department with the goal of the organisation as a whole.

3

26

(a) The two aspects of nature of management which Devesh thinks makes manager successful are Management as a Science and Management as an Art.

Management as science forms the basis of knowledge of underlying theories and principles of management. Management as an art enables skilful and personal application of existing knowledge by the managers to achieve desired results. It also leads to emergence of different styles of management.

(b) The specific feature of management as science which distinguishes it from other physical sciences like biology, physics and chemistry etc. is Universal validity.

Unlike the scientific principles, the principles of management lack universal validity as it deals with human behaviour which is complex in nature. Different people react differently to the same situation and there for their behaviour cannot be predicted with accuracy.

3

27

Efficient management of resources helps in the development of nation in the following ways:

(a) Provision of good quality products and services;

(b) creation of employment opportunities;

(c) technological innovations for the betterment of the society; and

(d) Contribution to economic growth and development.

4

28

Rishi sharma is working at Middle level of management. The three more functions that he has to perform at this level are :

(i) He has to assign duties and responsibilities to the people in his department.

(ii) He has to motivate the people in his department to achieve the desired objectives.

(iii) he has to interpret the policies framed by top management.

4

29

(a) Coordination is the quality of management which is lacking because of which each department is performing activities in isolation from others.

(b) Coordination is the process of integrating the individual and group efforts in pursuit of common goals. The three features of coordination are stated below:

(i) Coordination integrates group efforts: Coordination integrates group efforts into a purposeful activity by ensuring that activities are carried out as per predetermined standards.

(ii) Coordination ensures unity of action: Coordination ensures unity of action as it acts as a binding force between and among departments and facilitates smooth working of the organisation.

(iii) Coordination is a continuous process: Coordination is a continuous on-going process as it is required till an organisation exists in order to integrate diverse activities of different individual/ groups.

4

30

The various reasons mentioned in the above paragraph that have made management so important are stated below:

(a) Management increases efficiency as it leads to reduction in costs due to optimum utilisation of resources.

“As a result of her excellent managerial competence, the company is able to reduce cost and increase productivity.”

(b) Management creates a dynamic organisation so that it is able to incorporate the corresponding changes in its working with any change in its business environment.

“The company belongs to infrastructure sector, wherein regular amendments are made in the government regulations and policies. She holds regular meetings to ensure that people in her department are not only aware of the related changes but are also able to adapt to these changes effectively. This helps the company to maintain its competitive edge.”

(c) Management helps in achieving personal objectives of the employees in the organisation.

“She motivates and leads her team in such a manner that individual members are able to achieve personal goals while contributing to the overall organisational objective.”

(d) Management helps in the development of society by contributing effectively towards it in multiple ways.

“In the process of fulfilling her duties for the growth of the organisation, she helps in providing competitive services, adopting new technology, creating more employment opportunities etc. for the greater good of the people at large.”

4

31

The various features of management highlighted in the above paragraph are:

(a) Management is all pervasive. “Considering the fact that the activities ------------------ as per their individual areas of interest.”

(b) Management is a goal-oriented process. “Amit takes up a marketing job in retail ---------------employment to specially abled persons.”

(c) Management is a continuous process. “Both of them have to perform a series of --------------- in sorting out an employee’s problem.

(d) Management is a group activity. “Both Amit and Sumit make conscious efforts to ------------------needs who work under them.”

(e) Management is an intangible force. “The effect of their management is ----------------------orderliness in its functioning rather than chaos.”

5

32

Aman would have satisfied both Ahmad and Ally by explaining the following features of management as a profession.

(i) Well-defined body of knowledge. All professions are based on a well-defined body of knowledge that can be acquired through instruction.

Management too is based on a systemic body of knowledge comprising well-defined principles. This feature of profession is present in management.

(ii) Restricted Entry. The entry to the above stated profession is restricted through a prescribed qualification. But there is no restriction on anyone being appointed as a manager in any business enterprise. So, presently this feature of profession is not present in management.

(iii) Professional association. Legal and Medical professions are affiliated to a professional association like bar council and medical council which regulates entry, grants certificate of practice and formulates and enforces a code of conduct. There are several associations of practising managers in india like the AIMA that has laid down a code of conduct to regulate the activities of their members. There is, however, no compulsion for managers to be members of such an association. So, presently this feature of profession is not present in management.

(iv) Ethical code of conduct. Legal and medical professions are bound by a code of conduct which guides the behaviour of its members. AIMA has devised the code of conduct for Indian managers but there is no statutory backing for this code. So, presently this feature of profession is not present in management.

(v) Service motive. The motive of legal and medical profession is to serve their client’s interest by rendering dedicated and committed service. The basic purpose of management to help the organisation achieve its goal by providing good quality products at reasonable prices, thereby serving the society, is being increasingly recognised. So, presently this feature of profession is not fully present in management.

This shows that management does not satisfy all the criteria of a profession. So, Aman would have been able to satisfy both Ahmad and Ally by making them understand that Management is a profession but not a full fledged or a true profession.

5

33

In this case, there is lack of coordination among different departments. Each department is blaming the others for declining sales and profit margins.

The top management of the company should take the following steps:

(i) Every department should be asked to work for the corporate objectives.

(ii) There should be proper communication among the different departments.

(iii) Periodic meetings of the head of different departments should be held to remove any misunderstanding and to integrate their efforts.

(iv) The plans of various departments should be coordinated by the CEO.

(v) conflicts among different departments must be resolved at the earliest.

5

34

Objectives;

(i) organisational objectives: An organisation strives to achieve multiple organisational objectives, mainly:

(a) Survival: “it is able to earn adequate revenues to cover costs”.

(b) Growth: “ Its capital base, number of employees and production turnover has increased manifolds over the years”.

(c) Profit: “the rate of profitability of the business is also creditable”.

(ii) Personal objectives: It relate to the needs of the employees of the organisation which must be given due consideration.

“The employees of the company are happy and satisfied with their remuneration, working conditions, promotion policy etc.”

(iii) Social objectives: They relate to taking initiatives for the welfare of social groups and society at large.

“As a part of its moral obligation, the company has taken many initiatives for providing employment to specially abled persons and promoting literacy in the villages adopted by it.”

5

UNIT 2 -PRINCIPLES OF MANAGEMENT

1

Which principle of management aims at securing the loyalty and devotion of the employees by giving them fair and just treatment?

A. Unity of direction

B. Equity

C. Order

D. Unity of command

1

2

What is the purpose of Time Study?

A. To eliminate unnecessary motion of workers

B. To estimate the amount of rest intervals

C. To determine the fair day work

D. To differentiate between efficient and inefficient worker

1

3

Which of the following statement is related to division of work

A. Resources should be divided equally among departments

B. Work should be divided into smaller parts

C. Subordinates should be divided among superiors

D. Departments should be divided into sub sections

1

4

Who is known as the father of scientific management

A. F W Taylor

B. Harold Koontz

C. Gilbreth

D. Henry Fayol

1

5

Which of the following statements describes `Unity of direction` the best?

A. One head One plan

B. One subordinate one superior

C. One work one person

D. One superior one department

1

6

______is the formal line of authority and communication that runs from top to bottom level of management

1

7

_________ involves a complete change in the mental outlook and attitude of workers and management from competition to cooperation

1

8

________ is the technique of scientific management that is the extension of principle of division of work and specialization to the shop floor

1

9

Management principles aims at influencing behaviour of human being. State the feature of management principle highlighted here.

1

10

This principle of Taylor is an extension of principle of harmony not discord. Name it.

1

11

Principles of Fayol and Taylor are mutually complementary. One believed that management should not only scientifically select the person and the work assigned should also suit his physical and intellectual capabilities, while other suggested that the work can be performed more efficiently if divided into specialised tasks. Identify and explain the principles of Taylor and Fayol referred in the above case.

12

Taylor`s techniques of management are universally applicable. Do you agree? Give reason in support of your answer.

3

13

The Delhi Government imposes ban on use, storage, sale and manufacture of plastic after considering its adverse impact on environment and ecology. Which principle of Fayol is mentioned in above decision. Explain.

3

14

Faiyaz the production manager of ABC Ltd. wants to increase the speed of packaging. In order to identify and eliminate needless and unproductive movements of workers in packaging, he installed the movie camera in the factory.

Which technique of Taylor is adopted by Faiyaz ?

How can the technique helped ABC Ltd

3

15

The application of principles of management is dependent upon the prevailing situation at particular point of time. State and explain the feature of management mentioned here.

3

16

Name and explain the technique of Taylor which is the strongest motivator for a worker to reach standard performance.

3

17

Give three objectives of Standardisation of work.

3

18

SG Ltd is a well known company manufacturing washing machines. The company has the policy of paying proper attention to the training of the managers. The organisation teaches the various management principles to the managers whenever required so that they apply them and understand the practical aspects of business through them. Year by year the organisation is able to increase its revenue this is because mangers are able to economically use the funds of the company and increase the output of workers through various principles of management. The company has decided to donate 10% of its earning to nearby orphanage.

Identify the three importance of principles of management highlighted in above case by quoting lines.

3

19

Identify the nature of principles of management highlighted in given statements

1. They do not provide readymade solutions as business environment is ever changing and dynamic.

2. They are applied to all types of organisation, business as well as non business.

They are developed through research work on the basis of experience of manager.

3

20

Identify the significance of principles of management highlighted from the following statement:

1. Management principles help in thoughtful decision making. They emphasis logic rather than blind faith.

2. Professional courses such as BBA, MBA also teach these principles as part of their curriculum

Principles of management can be modified according to changes take place in the environment

3

21

Satyam Ltd manufactures curtain clothes. Noticing it’s popularity in the market , the company decided to manufacture bed sheets also. The decision was executed with immediate effect. But the company did not increase the workforce to the desired extent. The company wanted the existing staff to manage the work for some time, by working overtime. The result was that on the one hand the new product of the company failed to keep its hold on the market and on the other hand due to overwork the efficiency of the employees declined. On several occasions it was discovered that a subordinate was getting instructions from two or more managers .Managers had started giving simple and easy work to their known employees and complex and difficult work to other employees. The company was now ignoring the rules completely.

Identify and state those three principles of management that have been ignored in the case by quoting the lines.

6

22

Anuj Gupta and Mangala Sharma are both qualified dentist and good friends. After obtaining a certificate of practice, they decided to pursue a career of their own choice. Anuj Gupta starts a dental care centre in the city whereas Mangala Sharma joins a government hospital. They meet after a long time in a party. Anuj Gupta invites Mangala Sharma to visit his dental care centre and she accepts his invitation. She observes at his clinic that there is fixed place for everything and everyone and tools and equipments are lying in an organised manner. Also, Anuj Gupta always tend to replace I with We while having a conversation with the staff members. Later on Anuj Gupta also shares with her that he always deals with lazy staff sternly to send the message that everyone is equal in his eyes. Identify and explain the three principles of management which Anuj Gupta is applying for successful management of his dental care centre.

6

23

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 maximize efficiency. He also felt that once method is developed the workers of the company should be trained to learn that best method.

He asked the production manager to learn the best method and carry out the necessary training. The production manager developed this method and carry out 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 6implemented throughout the organization. It helped in increasing the output, improving the quality and reducing the wastage. Identify and explain the principles and techniques scientific management followed by the production manager in above case.

6

24

Rishabh managing director of an electronic goods manufacturing company has been experiencing year to year increase in revenues and net profit. The reason was that he ensured competition is replaced by cooperation and Rishabh has always been receptive towards constructive employees suggestions. He emphasized on worker training as he felt that efficient employees shall produce more. Thus , he decided to reward workers by paying them higher pay as compared to inefficient ones.

Identify and explain the principle of management and technique of scientific management referred in above para.

6

25

New Delhi Ltd is a famous service providing company .Mr Lakshay Wadhwa is its managing director. He continuously motivates the research and development department that a new and latest method of doing work must be explored. The provision has been made to give reward to those employees who will participate in a particular exploration. He also believes that the two groups working in managerial and non managerial posts are similar to two wheels of an organisational vehicle. If this vehicle is to be driven in a right way then both the wheel should be properly aligned. Mr. Lakshay is a successful leader. Among his employees he has instilled the feeling that no decision will be taken without consulting the subordinates. To excel, the other companies in this field is the main motive of Mr Lakshay. Paying attention to training is the secret of the company.

Identify the four principles of scientific management highlighted in above para by quoting the lines.

6

26

Application Ltd is engaged in manufacturing and distribution of home appliances since 1987. It has good name in market as the company is producing good quality appliances. It has separate departments for manufacturing, finance, sales, maintenance services and technical services to achieve specialization.

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 environment.

State and explain the principle of management which the company wants to modify to meet the changing requirements.

6

27

Consolidated constructions Ltd have never given any importance to employees suggestions. All employees of the company consider themselves superior to other. They neither help anybody nor get help from anybody. Last year Mr.Gurpreet was appointed as Chief manager of the company. He was an MBA from IIM Ahemdabad and also seven years experience of the same post. Immediately after taking charge he decided to deal with both the problems of the company. He convened the meeting of all the employees and said “ All the employees are free to give their suggestions. Besides the one who gives the best suggestion will be rewarded. In addition he advised them to discard ego and extend help in each others work. We will have to give it shape of the movement. Those who participated in the movement will be promoted at the earliest. Gurpreet proved to be a good leader.

Identify and explain principles discussed above by quoting the lines.

6

Suggested Answers:

1

B

1

2

C

1

3

B

1

4

A

1

5

A

1

6

Scalar Chain

1

7

Mental revolution

1

8

Functional foremanship

1

9

Mainly behavioral

1

10

Cooperation not individualism

1

11

Taylor principle development of each and every person to his greatest efficiency and prosperity

Fayol principle: Division of work

3

12

No, techniques of scientific management are not universally applicable

1. Functional Foremanship:

This technique insist on orders and instructions from eight specialist. This technique is not applicable in organizations following Unity of command.Moreover this technique is not applicable in case of small sized organizations.

2. Differential piece wage system

This technique is not applicable in the organizations following principle of equity as this technique makes provision for payment of different for same job.

3

13

Initative with explanation

3

14

Motion study

Motion study can help in detecting and eliminating unproductive movements and can determine the better way of doing the job

3

15

Contingent(with explanation)

3

16

Differential piece wage system

3

17

1. Reduction in the given line or product to a fixed type size and characteristics.

2. Determine the standard of performance of men and machine

3.Establish standard of excellence and quality in material

3

18

1. Providing manager useful insight into reality

The organisation teaches ……..practical aspects of business through them

2. Optimum utilization of resources

This is because the mangers……..through various principles of management

3. Fulfiling social responsibilty

The company has decided to donate…….to a nearby orphanage

3

19

1. Management principles are general guidelines

2. They have Universal applicability

3.Formed by practice and experimentation

3

20

1. Providing manger useful insight to reality

2. Management training, Education and research

Meeting changing environment requirement

3

21

1. Unity of command

2. Equity

3. Discipline

With explanation

6

22

1. Order

2. Espirit de corps

3. Equity

With explanation

6

23

Principles of scientific management followed by production manager in above case:

1. Science not the rule of thumb

2. Development of each and every person to his/her greatest efficiency and prosperity

The technique of scientific management discussed in above case is `Method study`

6

24

Principle of management is Initiative

Technique of scientific management differential piece wage system

With their explanation

6

25

1. Science not the rule of thumb

He continuously motivates his research and development dept. That new and latest method of doing work must be explored

2. Harmony not discord

If this vehicle is to be driven in a right way then both the wheels should be properly aligned.

3. Cooperation not individualism

Among his employees he has instilled the feeling that no decision will be taken without consulting the subordinates

4. Development of each and every person to his/her greatest efficiency and prosperity

Paying attention to the training is the secret of the company.

6

26

The company wants to modify existing principle of centralization to decentralization. Explanation in detail

6

27

1. Initative

All employees are free to give their suggestion. Besides one who give the best suggestion will be rewarded

2. Espirit de corps

In addition he advised……..each other work

6

UNIT 3 -BUSINESS ENVIRONMENT

Q.No.

Questions

Marks

1

Business environment is a group of ………………. Powers.

(a) Specific

(b) General

(c) Internal

(d) Specific and general

1

2

Which of following is not included in special powers of business environment?

(a) Technical situations

(b) Customers

(c) Suppliers

(d) Investors

1

3

Indicate whether the following statements are ‘True’ or ‘False’ :

(i) Composition of family is an example of social environment.

(ii) More supply in the economy is an example of Social environment.

1

4

Which of following is available on time with help of study of environment?

(a) Government help

(b) Foreign Aid

(c) Warning signal

(d) Material

1

5

The study of Environment makes available …………………. Resources.

(a) Costly

(b) Cheap

(c) Inferior

(d) Useful

1

6

Which of following is undergoing quick changes?

(a) Competition

(b) Fashion

(c) Technique

(d) All of above

1

7

ITC hotels made a study of business environment and planned to open ……………. in India and Abroad.

(a) Factories

(b) Hotels

(c) Shops

(d) Offices

1

8

With the help of study of business environment an organisation can improve its…………..

(a) Present

(b) Future

(c) Present and future

(d) Past

1

9

Determination of Economic policies is for the purpose of regulating……………

(a) Political environment

(b) Social environment

(c) Legal environment

(d) Economic environment

1

10

Under which environmental effects IBM and Coca- cola had to leave India?

(a) Political

(b) Social

(c)Economic

(d) Technical

1

11

Which of following is factor of the social environment of business?

(a) Customs

(b) Standard of education

(c) Standard of Living

(d) All the above

1

12

Which component of business environment resulted in the relaxation of ban imposed on Foreign Direct Investment?

(a) Economic Environment

(b) Political Environment

(c) Social environment

(d) Legal regulatory environment.

1

13

With the introduction of photostat machines in the market, the carbon paper industry was adversely affected. Which component of environment was responsible for it?

(a) Economic

(b) Political

(c) Technical

(d) All the above

1

14

Which of following deals with the process of simplification of Import- Export?

(a) Liberalisation

(b) Privatisation

(c) Liberalisation and privatisation

(d) Globalisation

1

15

Under Industrial policy the role of ………….. has been decided.

(a) Public sector

(b) Private sector

(c) Public sector and private sector

(d) Government

1

16

The Income and Expenditure policy of the government is called?

(a) Fiscal policy

(b) Industrial policy

(c) Trade policy

(d) Monetary reforms

1

17

Price control means that the companies will sell goods on the …………price.

(a) Government

(b) Market

(c) Printed

(d) Voluntary

1

18

As a result of economic Reforms the seller market has been replaced by

(a) Buyer market

(b) Foreign market

(c) Wholesale market

(d) Retail market

1

CASE STUDIES

Q. No.

Questions

Marks

19

Which component of business environment requires that advertisements of baby food must necessarily inform the potential buyers that mother’s milk is best for the baby?

1

20

The government of India is seriously thinking of allowing the oil marketing public sector undertakings to fix their own prices for petrol and diesel. Which economic reform is reason for this change in government’s policy?

1

21

Mr. Ajay after completing MBA from USA comes to India to start a new business under the banner Ecom Creations Ltd. He launches a new product in e-learning for Senior Secondary School students in Commerce stream, which already has a established market in UK and USA but not in India. His business starts flourishing in India. Now more Indian companies entered into the market with other subjects also.

Identify and quote the lines from above para which highlight the significance of understanding business environment.

3

22

Just after declaration of Lok Sabha Elections 2014 results, the Bombay stock exchange’s price index (Sensex) rose by 1000 points in a day. Identify the environmental factor which led to this rise giving reason. Also explain any two other dimensions of business environment.

3

23

The court passed an order that all schools must have water purifier for the school children as

(i) Society in general is more concerned about quality of life.

(ii) Innovative techniques are being developed to manufacture water purifier at competitive rates.

(iii)Incomes are rising and children at home are also drinking purified water.

(iv) The government is also showing positive attitude towards the water purifier business.

Identify the different dimensions of business environment by quoting from the above details.

3

24

It is common now to see CD-ROM‟s, computerized information kiosks, and Internet/Word Wide Web multimedia pages highlighting the virtues of products.‟ Name the dimension of the business environment highlighted by this statement.

3

25

It is the process by which government control over the industry is being loosened. Give the term to which this statement is trying to indicate.

1

26

Due to entry of foreign firms, competition for Indian firms has increased, especially in service industries. Name such service industries.

1

27

The Court passed an order to ban polythene bags as the bags are creating many environmental problems which affect the life of people in general and society in general is more concerned about quality of life.

The Government decided to give subsidy to jute industry to promote this business.

Innovative techniques are being developed to manufacture jute bags at low rates.

Incomes are rising and people can afford to buy these bags.

Identify the different dimensions of Business Environment by quoting the lines from the above particulars.

4

28

Kapil Sharma is working as the Country Head of a company which owns a chain of malls under the name of “Virtuoso” in the various parts of India. Through an analysis report of the business environment, it has been brought to his notice that in the coming years, shopping at a mall will not be a necessity for the buyers as purchases can be made online from anywhere and at any time with ease and at the consumer’s convenience. Hence, malls will have to provide much more than shopping to be able to attract customers. So, he recommends that “Virtuoso” malls should to be restructured into recreation centres, offering more spaces to socialize, host events and concerts, and provide ample Food and Beverages options.

Consequently the share of entertainment segment and Beverages segment in the overall mall space is increased by 20%. As a result, the company gains enormously by getting the first mover advantage.

In context of the above case:

1. Define the term “Business Environment”.

2. Explain the terms “Threats” and “Opportunities” by quoting lines from

the paragraph.

4

28

“Zero Defect Zero Effect” (ZED) is a slogan coined by the Prime Minister of India, Narendra Modi with reference to the Make in India initiative launched by the government. The slogan reflects the efficiency of production processes, i.e. the products have no defects and the process through which the product is made has zero adverse environmental and ecological effects. The Zed model aims to make India the manufacturing hub of the world and prevent the products developed in India from being rejected by the global market. Moreover, before the initiative was launched, the limits of foreign direct investment in various sectors had been relaxed. The application for licences was made available online and the validity of licences was increased to three years. Various other norms and procedures were also relaxed by the government.

In the light of the above paragraph, identify and explain the major component of New Economic Policy of 1991 that are being referred to by quoting lines from the paragraph.

4

29

Over the years, e-business in our country has witnessed tremendous growth due to several reasons. There is significant improvement in the Information Technology infrastructure over the last decade as the Government has taken important steps in high-speed Internet connectivity. As a result, the broadband networks have not only become better but also more affordable. Additionally, Government is trying to make rural India connected through broadband – a great possibility for e-business to expand the retail market by reaching out to the most remote rural customer. Another catalyst strengthening the e- business segment is the country’s favourable demography. It has more than 50% of its population below the age of 25 and more than 65% below the age of 35. It is expected that, in the year 2020, the average age of an Indian will be 29 years, compared to 37 for China and 48 for Japan, this promises for phenomenal increase in e-business. Moreover, the penetration of the smart phone in a large section of the population has aptly addressed the problem of compute illiteracy. Notwithstanding the fact that consumers also prefer e-business due to multiple factors like convenience, time etc.

Identify and explain the various dimensions of business environment being referred to in the above case.

5

30

Beni, after completing her MBA, took up a job in a multinational company named “Fortio”. The company was paying good salary and perks to its employees. The wages were within the paying capacity of the company that provided the employees a reasonable standard of living. The company also had a good work-culture and the behaviours of superiors were very good towards their subordinates. Beni was very happy in this organization, but due to long working hours she did not have time to cook her meals. She had to depend on outside found, which was deteriorating her health.

She observed that this problem was faced by many of her colleagues, not only in her company but also in many other companies. This was because of increase in the number of working women and non-availability of hygienic home-cooked food. She identified this as a great opportunity and decided to give up her job to supply packaged home-cooked food to office goers at a reasonable price. At the end of the day she also distributing the left-over food in the nearby night-shelters.

(i) State the dimension of business environment being discussed above.

(ii) State the principle of management being followed by “Fortio”.

(iii) Identify any two values being communicated by the company to the society in the above case.

5

31

Nakul, a manager of Zyco Ltd. always takes into account the changes taking place in business environment while determining plans. He accepts changes readily and gives useful suggestions to his superior, which results in reduction of costs. As a result, company’s profits increase. Nakul enjoys cordial relations with his co-workers and makes plans in consultation with his team to achieve organizational goals.

(i) Which characteristic of management is highlighted in the above lines?

(ii) Identify and state any two principles of management followed by Zyco Ltd.

(iii) Give any two benefits which Zyco Ltd. get by taking into account the

changes taking place in business environment, quoting the lines from the above para.

(iv) State any one value which Nakul wants to communicate to the society.

5

32

It is interesting to know that the menu items of the multinational food chains are customized to suit the general palates of the local people in the region. When McDonald’s started its business in India in the year 1996, the company went through a complete localization strategy. McDonald’s changed its product menu to accommodate the vegetable burger given the large vegetarian population. It also altered its store design and even reduced the product price by close to fifteen per cent. Also, the “McAlooTikki burger” is not available anywhere but in the Indian outlets of McDonalds.

Identify the relevant feature of business environment being discussed above.

4

33

Eco-friendly products are gaining power as the consumers‟ awareness about environmental issues has increased over the years and they are conscious about choosing products that do not have adverse effects on the environment. They are now more conscious about the carbon emission and climate change effects, and want themselves to be „seen‟ as a green advocate among their peers. In such a scenario, it has become a challenge for the companies as they have to not only meet the needs of the consumers but also ensure that their products are safe and environment friendly. At a result, there is growing need for better and advanced technologies to works as a catalyst in this regard.

(i) Identify the relevant feature of business environment being discussed above.

(ii) Describe briefly any three points which highlight the importance of

business environment and its understanding by managers.

4

34

Ultra Paint Co. which is manufacturing paints has been enjoying a prominent market position as it manufactured best quality paints, made timely payment of taxes to government. It assembled various inputs like finance, machines, raw materials, etc. from its environment. But since last year it has been dumping its untreated poisonous waste on the river bank which has created many health problems for the people. As a result, the court passed an order to seal the manufacturing unit of the company.

(i) State the importance of business environment highlighted quoting the line from the above case.

(ii) Identify any two dimensions of business environment mentioned in the above case by quoting lines from it.

(iii) State any two values which have been overlooked by the company?

5

35

Philips, a company manufacturing light bulbs incurred heavy expenditure on scientific Research and Development and discovered a technology that made it possible to produce an energy efficient light bulb that lasts at least twenty times as long as a standard bulb. It resulted in growth and profitability of the company.

(i) Identify and state the dimension of business environment mentioned

above.

(ii) State the importance of business environment mentioned above by

quoting the lines.

(iii) State any one value which the company wants to communicate to the society.

5

36

Disco Ltd. manufactures fashionable and designer clothes. Recently it finds that the demand for its products has been declining. After market research it was discovered that fashion and tastes of the consumers is changing at a fast pace. Customers‟ demand is increasing. New competitors have entered the market with new designs. It is very difficult for the company to predict future happenings. Also, it is difficult to know the extent of the relative impact of the social, economic, political, technological or legal factors on decrease in demand of its products in the market.

A meeting was held in which managers from different functional levels heading Production, Marketing, Finance, etc., for example, Chief Operating Officer, Chief Finance Officer, Vice President (Marketing) were present to discuss how to deal with the situation. After a long discussion, it was decided that they would study and analyze the market first to identify customer tastes and fashion and then manufacture garments accordingly. It was also decided to increase expenditure on advertising, after-sales services, etc.

(i) Identify any two features of business environment by quoting the lines from the above case.

(ii) At which level of management the meeting of managers of Disco Ltd. was held?

(iii) Identify any two impact of government policy changes on business,

quoting lines from the above case.

(iv) State the importance of understanding of environment by business managers in the light of the above para.

6

37

The organic food market in India is grow at 25-30 per cent which reflects a clear shift in consumer tastes and preferences. The current growth in the organic food market is driven by multiplicity of factors like rising health consciousness, changing lifestyles, increase in disposable income and growing availability of organic food products in shopping malls, retail outlets and online.

In context of the above case:

(i) Identify and explain the features of business environment being referred to here.

(ii) By quoting phrases from the paragraph identify the various components of general forces which have led to a growth in the organic food market.

6

38

Anurag, aspires to work with a socially and environmentally committed company as he does not want to work just for monetary benefits but also the brand value of the company he works for in the society matters a lot to him. Therefore, he has joined Cerebra Integrated Technologies a Bengaluru-based Infotech company. The company has built India’s largest e-waste recycling plant. The company strives to be one of the leading players in this business which has huge potential not only in terms of generating huge revenues and profits but also wants to contribute to the environment issues that have become crucial worldwide. The company sees big business in the mountains of e-waste in Bengaluru which produces 2,00,000 tonnes of e-waste a year. The company plans to make its millions by extracting metals such as gold and platinum from the e-waste piling up in the city. As a mobile phone, for example, is made up of a combination of rare earth and precious metals: it contains 250 mg of silver, 24 mg of gold and nine mg of palladium while a laptop has 1,000 mg of silver, 220 mg of gold and 500 grams of copper.

To start the business, the company has obtained a licence from KSPCB (Karnataka State Pollution Control Board).

In context of the above case:

(i) Identify the various dimensions of business environment being

referred to by quoting lines form the paragraph.

(ii) List any two values which the company wants to convey to the society. .

6

39

After competing his education, Arun joins his father in their family business of manufacturing cookware. As a businessman, his father is rigid in his approach and has fixed ideas about various issues. He tends to maintain a distance from the factory workers.

However, Arun is more receptive to the needs of the workers and doesn‟tseem to believe in any class-differences. He believes that the prosperity of their business greatly depends upon the prosperity of their workers and vice versa. At the same time, he has a good understanding of the business environment. Therefore, he introduces a new range of green pans that provide a healthy cooking surface, as they are manufactured with all ceramic or silicon coating and are considered safer than the traditional petroleum based nonstick surfaces which may contain toxic substances. Although, the new cookware range is highly prices, he expects a ready market for it as both the purchasing power of people and their preference for better quality products has increased over the years.

In context of the above case:

1. Identify the nature of management which is being reflected in the

different styles of management in practice adopted by Arun and his father.

2. Name and explain the related principle of scientific management.

3. State the related dimensions of business environment.

6

40

Continuous and comprehensive evaluation is a process of assessment, mandated by the right to Education Act, of India. This approach to assessment has been introduced by state governments in India, as well as by the Central Board of Secondary Education in India. With the introduction of (CCE) system in education there is greater focus on project based learning. As a result, besides time and effort the students are willing to invest money to enhance the visual appeal of their project files so as to score higher marks. In order to cash on the opportunity Rishabh has started a small business unit to manufacture different kinds of decorative materials for the project files. He has employed a team of four creative designers for developing the innovative material with the help of latest technology. However, he has a prejudice against women and therefore pays less salary to them as compared to the male staff for equal work.

In the context of the above case:

1. Name any two functions of management that Rishabh will have to

perform in order to manage his business successfully.

2. Name and explain the principle of management which is being violated

by Rishabh.

3. Identify the related dimensions of the business environment.

6

41

Government of India is seriously thinking to allow oil marketing public sector, undertaking to fix their own price for petrol and diesel.

1. Name the economic reform related to this decision of government.

2. Name other two reforms recommended in new economic policy.

3

42

Recently many companies have planned for significant investment in organizes retailing in India. Various factors which have encouraged companies to take these decisions are customer income is increasing, rise in standard of living of people. People are ready to pay high price for quality goods, government policy of liberalization regarding MNC entry and FDI, etc.

1. Explain briefly changes in business environment under different heads

that have facilitated the companies decision to plan significant investment in retailing.

2. What has been the impact of these changes with regards to globalization and privatization?

6

43

Two big banner movies were scheduled to be released on the same date. On the last movement release of one of the movies has to be postponed due to opposition of a group of people due to some unethical contents related to their religion was shown in the that movie. The other movie released on time and made huge profit as there was no competition and movie which was postponed suffered loss.

1. Which feature of business environment is highlighted here.

2. Identify the dimension of business environment, which delayed the release of movie.

3

44

After winning the election, Prime Minister Mr. Narender Modi launched a Campaign of “Swachh Bharat” and invited various celebrities to be a part of this Abhiyaan. This spread awareness among the people in society and in general, people started becoming more careful and aware about the cleanliness around their area. To continue its impact, a new service tax for Swachh Bharat was also started. The government is planning to import new and better technology to adopt new methods of treating the garbage and waste.

State the various dimension of business environment mentioned in the above para quoting the lines from the above para.

5

45

Even after opening up of Indian Economy, foreign companies found it extremely difficult to cut through the bureaucratic and red tapism in government offices. This discourages them from investing in India.

Identify the dimension of environment mention in above para.

1

46

Just after the declaration of Lok Sabha Elections in 2019, the Bombay Stock Exchange Index rose by 1000 points.

Identify the dimension of business environment.

1

47

Mamta Rice Food Ltd‟ is a well know rice producing company. The sales have been falling down from the beginning of the year. The managing director MR. Bhuvan is worried about this situation. With a view to find out the solution of this problem he made a team to find but the reasons for downfall of sales. The team conducted the survey and gave following four reasons for the downfall of company’s sale.

1. On account of increase in export duty made by the government, the foreign demand has gone down.

2. Due to availability of other eatable substitute the taste of people is diverted from rice.

3. The competitor’s imported new technology machine and are producing better quality rice.

4. Due to strain with neighbouring country’s government and our Country’s government export is effected.

Identify the dimension of Business Environment discussed in the above case.

5

48

With changes in the consumption habits of people, Neelesh, who was running a sweet shop, shifted to the chocolate business. On the eve of Diwali, he offered chocolates in attractive packages at reasonable prices. He anticipated huge demand and created a website chocolove.com for taking orders online. He got a lot of orders online and earned huge profits by selling the chocolate.

Identify and explain the dimensions of business environment discussed in the above case.

3

49

A recent rate cut in the interest on loans announced by the banks encouraged Amit, a science student of Progressive School, to take a loan from State Bank of India to experiment and develop cars to be powered by fuel produced form garbage. He developed such a car and exhibited it in the Science Fair organized by the Directorate of Education. He was awarded the first prize for his invention.

Identify and explain the dimensions of business environment discussed in the above case.

3

50

Accent electronics Ltd.‟ was operating its business in Malaysia. The company started exporting its products to India when the Prime Minister announced relaxation in import duties on electronic items. The company appointed retailers in India who had direct online links with the suppliers to replenish stocks when needed.

Identify and explain the dimensions of business environment discussed in the above case.

3

51

As per the directions issued by the Supreme Court, the government passed an order to ban the sale of tobacco products within the area of 200 meters of all educational institutions as:

1. Its consumptions injurious to health.

2. People are becoming more conscious about health and fitness.

This indicates the government‟s attitude towards this business.

Identify the business environment under three different dimensions by quoting from above paragraph.

3

52

Make in India is an initiative launched by the Government of India to encourage national and multinational companies to manufacture their products in India. It focuses on job creation and skill enhancement and is in twenty five sectors of the economy. Under the initiative, brochures on these sectors and a web portal were released. The initiative aims at high quality standards and minimizing the impact on the environment. It also seeks to attract foreign capital investment in India.

In context of the above case:

1. Identify the various dimensions of business environment being referred to by quoting lines from the paragraph.

2. List any two values which the Government of India wants to convey through this initiative.

5

53

India’s retail sector has been undergoing structural changes for the last two decades. On one hand, the „mall culture‟ has gradually become a way of life, especially in the metros and mini-metros. On the other hand, there is accelerated growth in e-business as customers also prefer to buy products and services via the Interest, telephone and television. However, operating in either of the segments is marked by the presence of strong competitors.

Identify the components of specific forces and general forces being discussed in the above paragraph. .

3

54

To mark the celebrations of International Family Day on 16th may 2016, Kurkure flagged off India’s first family food train – Kurkure Family Express at New Delhi. The train took forty families ona fun culinary experience of a lifetime through an eight-day journey across fourteen states in India. A whole lot of fun activities were hosted on the train by the travel and food anchors Rocky and mayor.

The families were selected through an online campaign, Chatpata family photos‟. The contest attracted approximately 1,000 entries, of which 40 entries that gelled with the brand’s image were selected.

The core idea of the campaign was to bring families from across India together over a journey like this. As in today’s time, everyone is busy with their life the family members may feel disconnected with each other.

Identify and explain the various dimensions of business environment being referred to the in the above case by quoting lines from the paragraph.

5

55

In the year 2016,the State Government of Kerala had made it mandatory for anganwadis hostels and canteens in educational institutions to secure the Food Safety and standards Authority of India (FSSAI) licence to ensure food safety. As the educational institutions also get categorized as food business operators in the event of the annual turnover of the hostels, they run exceeding Rs. 12 lakh per annum.

In context of the above case:

1. Identify and explain the various dimensions of business environment being referred to here.

2. List any two values which the State Government of Kerala wants to convey through this initiative.

6

56

Postage stamps have been unveiled to commemorate 140 years of existence of the country’s first stock exchange the Bombay Stock Exchange (BSE). The setting up of BSE is considered to be the greatest revolution that took place in the financial markets in India as it acts as a key driver for economic growth of a country. This is due to the fact that there exists a strong correlation between economic growth and capital accumulation.

In the context of the above case:

1. Identify the dimension of business environment of India being referred here.

2. State any three factors which broadly affected the dimension of business environment of India as identified in part (a) of the question.

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57

In May 2016, the government had launched a web-based application which will provide as opportunity to all the industries dealing in hazardous waste to apply online and get online permissions for import and export of certain categories of waste, which is for reuse, recycling or recovery while it will also help authorities in web-based processing, generation and grant of various types of permissions to the entrepreneurs and industries. It is also aimed at implementing the concept of paperless and green office and provide information regarding number authorizations or consent order granted by the State Pollution control Boards (SPCBs).

Identify the various dimensions of business environment being referred in the above case.

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58

Bharat is running an ice cream parlour in a local market. Keeping in mind the changing perceptions about health among the people, one of his employee Abhiraj suggests to him that they should introduce a range a flavoured yogurt. Bharat accepts his suggestion as a result both the image and the profitability of his business increases.

In the context of the above case:

1. Identify the feature of management which is being highlighted.

2. State the related dimension of the business environment.

3. Name and explain the related principle of general management.

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59

The Government of India announced ‘Demonetisation ‘ of Rs. 500 and Rs. 1,000 currency notes with effect from the midnight of November 8, 2016. As a result, the existing Rs 500 and Rs.1,000 currency notes ceased to be legal tender from that date. New currency notes of denomination of Rs 500 and Rs 2,000 issued by RBI after announcement. Discuss “demonetisation” in light of the legal and economic environment.

5

60

With change in the consumption habits of people, Neelesh who was running a sweets shop shifted to chocolate business. On the eve of Diwali he offered chocolates in attractive packages at reasonable prices. He anticipated huge demand and created a website chocolove.com for taking orders online. He got lot of orders online and earned huge profits by selling chocolates. Identify and explain the dimensions of business environment discussed in the above case.

6

ANSWERS

Q.No.

Answers

Marks

1

(d)

1

2

(a)

1

3

(i) True (ii) False

1

4

(c)

1

5

(d)

1

6

(d)

1

7

(b)

1

8

(c)

1

9

(d)

1

10

(a)

1

11

(d)

1

12

(d)

1

13

(c)

1

14

(a)

1

15

(c)

1

16

(a)

1

17

(a)

1

18

(a)

1

19

Legal Regulatory Environment

1

20

Privatisation as a reform is the reason for this change in the government policy.

1

21

• “Comes to India to start a new business ... launches a new product in e- learning for Senior secondary school students in Commerce stream.”

1. It helps in assisting in planning and policy formulation. 2. It helps the firm to identify opportunities and get the first mover advantage.

• “His business starts flourishing in India.”

1. It helps in improving performance.

• “Now more Indian companies entered into the market with different subjects also.”

1. It helps the firm to identify threats and early warning signals.

3

22

Rise in stock market index (Sensex) is economic environment. But Political environment (declaration of Lok Sabha Elections 2014 results)) led to this rise.

Two other dimensions of business environment:

1. Legal Environment: 2. Technological environment:

3

23

1. Legal environment: 2. Social environment: 3. Technological environment: 4. Economic environment: 5. Political environment:

3

24

Technological.

3

25

Liberalization

1

26

Telecommunications, airlines, banking, insurance, etc.

1

27

1. Legal environment: 2. Social environment: 3. Political environment: 4. Technological environment: 5. Economic environment:

4

28

The term „Business Environment‟ means the sum total of all individuals,

institutions and other forces that are outside the control of a business enterprise but that may affect its performance. 2. The term „threats‟ refers to the external environment, trends and changes

that will hinder a firm’s performance.

“Through an analysis report of the business environment, it has been brought to his notice that in the coming years, shopping at a mall will not be a necessity for the buyers as purchases can be made online from anywhere and at any time with ease and at the consumer’s convenience.Hence, malls will have to provide much more than shopping to be able to attract customers.”

The term „opportunities‟ refers to the positive external or changes that will help a firm to improve its performance.

“As a result, the company gains enormously by getting the first mover advantage.”

4

29

The major components of New Economic Policy of 1991 that are being referred to are as follows:

• Liberalization: The economic reforms signaled the end of the licence-permit- quota raj and were aimed at liberalizing the Indian business and industry from all unnecessary controls and restrictions.

“Moreover, before the initiative was launched, the limits of foreign direct investment in various sectors has been relaxed.The application for licences was made available online and the validity of licences was increased to three years. Various other norms and procedures were also relaxed by the government.”

• Globalization: Globalization means the integration of the various economies of the world leading towards the emergence of a cohesive global economy.

“The ZED model aims to make India the manufacturing hub of the world and prevent the products developed in India from being rejected by the global market.”

4

30

The various dimensions of business environment being referred to in the above case are as follows:

1. Political Environment: 2. Technological Environment: 3. Social Environment:

5

31

(i) Social environment which includes social forces like customs and traditions,

values trends etc.

‘this was because of increase in the number of working women and non- availability of hygienic home-cooked food.’

(ii) Remuneration of employees, which states that the overall pay and

compensation should be fair to both employees and the organization.

‘The company was paying good salary and perks to its employees.The wages were within the paying capacity...standard of living.’

(iii) Values being communicated by the company to the society are: (Any two)

1. Good work culture 2. Good behaviour inhuman interaction 3. Concern for the employees 4. Respect for law

5

32

(i) Management is a dynamic function.

(ii) 1. Initiative

This principle indicates that the subordinates should be encouraged to give suggestions and make and execute plans within the prescribed limits of authority.

2. Spirit de corps

This principle suggests that management should promote a team spirit of unity and harmony among the employees.

(iii) Benefits of business environment:

1. It helps in assisting in planning and policy formulation.

„... takes into account the changes taking place in business environment while determining plans.‟

2. It helps in improving performance.

„He accepts changes readily and gives useful suggestions to his superior, which results in reduction of costs.As a result, company’s profits increase.‟

(iv)Value:

• Team work

• Adaptability

33

Relativity is the relevant feature of business environment which is being discussed above.

3

34

1. Inter-relatedness is the relevant feature of business environment which is

being discussed above. 2. The three points which highlighted the importance of business environment

and its understanding by managers are described below:

1. It enables the firm to identify opportunities and getting the first mover advantage: The dynamic business environment provides numerous opportunities for a business to evolve as per the changing needs. Therefore, early identification of the forthcoming opportunities helps an enterprise to be the first to exploit them instead of losing them to the competitors. 2. It helps the firm to identify threats and early warning signals: sometimes the

changes in the external environment may pose as a threat and hinder a firm‟s performance. An awareness about the business environment helps the managers to identify such threats on time and take necessary decisions and action. 3. It helps in tapping useful resources as the enterprise designs policies that

allow it to get the resources that it needs so that it can convert those resources into outputs that the environment desires.

5

35

(a) Business environment helps in tapping useful resources.

„It assembled various inputs like finance, machines, raw materials, etc. from its environment.‟

(b) (i) Social environment

„...it has been dumping its untreated poisonous waste on the river bank which has created many health problems for the people.‟

(ii) Legal environment

„...the court passed an order to seal the manufacturing unit of the company.‟

1. Value overlooked.

• Environment p