Bihar Board 12th Business Studies Important Questions Short Answer Type Part 3

Bihar Board 12th Business Studies Important Questions Short Answer Type Part 3 are the best resource for students which helps in revision.

Bihar Board 12th Business Studies Important Questions Short Answer Type Part 3

Question 1.
List any three consumer organisations/NGOs in Delhi.

  1. Common Causes, Delhi.
  2. Consumer Coordination Council, Delhi.
  3. Voluntary organisation in interest of consumer education (VOICE), Delhi.

Question 2.
Explain in brief the objectives of management.
Objectives of Management:
(i) Securing maximum results with minimum efforts:The main objective of the management is to obtain maximum output with the minimum use of a vailable resources, directed towards reducing the cost of production.

(ii) To increase efficiency of the factor, of production: Through optimum utilization of its factors of production, management aims at reducing wastage of time, efforts and many, leading to increase in productivity and there by growth of an enterprise.

(iii) To achieve prosperity Management aims at securing prosperity for both the owners and the workers by generating higher profits for the owners and providing a fair remuneration to the workers.

(iv) To ensure betterment of human life and social justice Management also aims at improving the standared and quality of living of the people within and outside the orgnisation structure and seeks justice to all through its uniform policies and practices.

Question 3.
Co-ordination is a ‘Continuous Process’ and the ‘Essence of Management’ in an organisation. Explain.
Essence of Management:

  • Co-ordination is needed to perform all the functions of management.
  • In Planning, co-ordination is required between main plan and supportive plans of different departmants.
  • In Organisation, co-ordination is required between different resources of an organisation and also between authority, responsibility and accountability.
  • In Staffing, co-ordination is required between skill of a person and job assigned to him, between efficiency and compensation, etc.
  • In Directing co-ordination is required between superior and sub-ordinates, between orders, instructions guidelines and suggestions, etc.
  • In controlling co-ordination is required between standard and actual performance.

Question 4.
What are the three levels of management? State any there functions of the middle level management?
The term level of management refers to line of demarcation between various managment positions is an organisation. Breach has divided management into three levels as under:

  1. Top level management.
  2. Middle level management.
  3. Lower level management.

Functions of middle level management:

  1. To serve as a link between the upper level and lower level management.
  2. To explain the objectives and policies laid down by the top level management.
  3. To keep an eye on the actual results, so that work performance can be assessed.
  4. To maintain a balance between different parts of the organisation.

Question 5.
Define scientific management. State any three of its principles.
Scientific management implies the application of science to management. It means conducting business activities according to standardized tools method and trained personnel in order to increase the output improve its quality and reduce the cost and wastes.

Principles of management:
(i) Co-operation between labour and management: Taylor has advocated for harmonious relationship between workers and the management because he feels that if there is close relationship between employees and the employer, maximum output may be obtained at minimum cost.

(ii) Maximum prosperity of the employer and its employees: Taylor under, stand that maximum output at minimum cost leads to maximum profit. Therefore, both workers and die management should be paid handsome records for their service.

(iii) Scientific selection, training and development of workers: According to Taylor, employees should be selected according to pre-determined standards. After that, proper training should be imparted to develop the workforce.

Question 6.
What is meant by ‘work study’? Briefly explain the role of ‘Time’ and ‘Motion’ studies while setting the standard task.
Work Study: In the words of Russell M. Cume, “Work study is the systematic, objective and critical study of all the factors governing the operational efficiency of any specified activity in order to effect improvement.”

Time study: Time Study is the art of observing and recording the time required to perform each detailed task of an industrial operation. It involves the following steps:

  • Dividing the work into various parts or components,
  • Recording the time taken by different employees in completing that sub-task.
  • Selection of the average worker.
  • Finally setting up the standared time.

Every worker is required to compete the work within die standard time.

Motion Study: Motion Study is the science of eliminating wastefulness resulting from using unnecessary, ill-directed and inefficient motions. The aim of motion study is to identify a scheme of least waste or best method of work.
Steps involved in moton study are:

  • Selection of efficient workers.
  • Analysis of movement involved.
  • Recording the best motions involving minimum time and effort.
  • Selection of the most efficient working system.

These work measurement techniques help in determining the best method of doing a job and the standard time allowed for Jt. It is on this basis that the standard task is, set.

Question 7.
Describe, in brief, Taylor’s principles of:
(i) Co-operation, not individualism, and
(ii) Maximum, not restricted output.
(i) Co-operation, not individulism: This principle suggests to secure cooperation of workers. It is only through co-operation with workmen that managers can ensure that work is carried out in accordance with plans and standared of performance. Work should be Carried out by individuals in cooperation with each other based on mutual confidence and sense of good will, while setting standards, employees who are supposed to perform should be involved in that process.

(ii) Maximum, not restricted output: There should be continuous increase in production and productivity. As a result surplus will increase and both the management and labour can have a larger share. This principle requires that the aim of management should be to secure maximum prosperity for the employees along with maximum welfare of employess.

Question 8.
Why is it important for business enterprises to understand their environment? Explain briefly.
Importantancc of study of Business Environment: Business environment is highly dynamic and uncontrollable. It keeps the entire business active and prudent.

Business environment has following benefits:

  • A study of the changing business environment is helpful in formulating future strategies.
  • A study of the environment reveals various internal and external environmental factors affecting the enterprise.
  • A study of the business environment helps recognize the threats, challenges, risks and dangers likely to be faced by an enterprise.

Question 9.
Explain the meaning of Business Environment Explain any two dimensions of general environment of business.
Business Environment means forces (economic, social, political, technological etc.) and instututions (suppliers, customers, competitors, etc.) outside the firm with which its members must deal to achieve the organization’s purpose.

Business Environment is the aggregate of all and influences that surround and affect the business. The dimensions of general environment of business are:

  1. Economic Environment.
  2. Social Environment
  3. Technological Environment.

(1) Economic Environment: Economic environment consists of national income, corporate profits, inflation rate, fate of interest, tax rates employment rate, government spending, etc. general economic environment influences the policies and actions of the business in a big way.

(2) Social Environment: It describes characteristics of the society in which the organisation exists, literary rate, educational level, custom beliefs, value, life style, demographic distribution are apart of social environment.

Question 10.
Why is planning regarded as a pervasive function of management?
Planning is needed for all activities at all levels although the nature and extent of planning varies with the delegated authority or position a persons holding in the organizational hierarchy and with the broad guidelines outlined by his superiors, Thus planning is a pervasive function of management

Question 11.
“Planning is the basic function of management.” Explain.
Among various functions of management planning occupies the foremost position. Planning proceeds the executer of all other managerial functions because it provides the frame of reference for future decisions reduces overall impact of changes and allows managers to organize, staff, direct and control the activities necessary to achieve the organizational goals.

Question 12.
How can political climax and policies of competitors obstruct Planning?
Political climax: Political climax affects the planning in a negative way. Planning is adversely affected by the policies of Government. If the Government, introduces new laws, changes in trade policy, taxation policy or industrial policy, the planning of many enterprises is disturbed.

Policies of competitors: The planning of competitors affects the planning. While planning, the planner must keep the policies of the competitors convinces the consumer and surpassed them in marketing. This will distribute the planning.

Question 13.
“Planning restricts creativity”. Explain.
Planning involves deciding in advance what is to be done, how is to be done and by whom. Thus all organizational activities arc pre-conceived and predetermined at the stage of planning itself and there is very little or no scope for deviating from the plans due to factors like capital investments, government policies and so on. This blind conformity with pre-determined guidelines discourages individual initiative and freedom.

Question 14.
Define organizing.
Or, What is meant by organizing process?
Organizing is a process of bringing together physical, financial and human resources establishing productive relations among them for the achievemnt of goals. According to Harold Koontz O’ Donnell “Organizing involves the grouping of activities necessary to accomplish goals and plans, the assignment of these activities to appropriate departments and the provision for authority delegation and co-ordination.”

Thus, organizing is concerned with building up a stable framework or structure of various interrelated parts of an enterprise, each part having its own function and being centrally regulated.

Question 15.
Distinguish between formal and informal communications.
Difference between formal organisation and informal organisation:

Basis Informal communication Formal communication
1. Authenticity It is authoritative. It is not authoritative.
2. Sender Manager sends it. Leader sends it.
3. Channel It is sent through established channel. It is sent through unestablished channels.
4. Identification Its source can be identified. Its source cannot be identified.
5. Responsibility Responsibility for action can be fixed. Responsibility for action cannot be fixed.
6. Flexibility or rigidity It is rigid as it passes through established channel. It is flexible as it has not to pass through established channels.
7. Reliability It is reliable. It is not reliable as it carries rumors.
8. Speed It is slow. It is speedier.
9. Direction of flow It follows a set pattern i.e., from top to lower level or vice-versa. It does not follow any set pattern.
10. Scope Its scope is limited as it serves organisation interests or needs. Its scope is wide. It not only serves the employees but also the organisation.

Question 16.
Discuss the four function of management.
The four functions of management are as follow:
1. Planning: planning is the function of determining in advance what is to be done and who is to do it. This implies setting goals in advance and developing a way of achieve them efficiently and effectively. Planning cannot prevent problems but it can predict them and prepare contingency plans to deal with them if and when they occur.

2. Organising: Organising is the management function of assigning duties, grouping tasks, establishing authority and allocating resources required to carry out a specific plan. It determines what activities and resources are required. It decides who will do a particular task, what it will be done, and when it will be done. Organising involves the grouping of the required tasks into manageable departments or work units the establishment of authority and reporting relationships.

3. Staffing: Staffing is finding the right people for the right job. A very important aspect of management is to make sure that the right people with the right qualifications are available at the right places and times to accomplish the goals of the organisation. This is also known as the human resource function and it involves activities such as recruitment, selection, placement and training of personnel.

4. Directing: directing involves leading, influencing and motivation employees to perform the tasks assigned to them. This requires establishing an atmosphere that encourages employees to do their best motivation and leadership are two key components of direction. Directing also involves communicating effectively as well as supervising employees at work. Motivating workers means simply creating an environmentthat makes them want to work.

5. Controlling: Controlling is the management function of monitoring organisational performance towards the attainment of organisational goals. The task of controlling involves establishing standards of performance measuring current performance comparing this with establishment standards and taking corrective action where any deviation is found.

Question 17.
What are the steps in the process of organizing?
following are the steps in the process of organizing:

  1. Division of Labour: On the basis of principles of division, every group is handed over some specified work. This leads to increase in the efficiency of efforts of such groups. Division of labour leads to increase in work efficiency.
  2. Sources of Authority: As authority gives rise to responsibility, fixing of responsibility is essential while delegating authority to people working at different levels of the organization.
  3. Departmentation: At this stage, the activities of the same nature are grouped and assigned to a particular department.

Question 18.
Discuss the elements of delegation.
Or, Explain the elements of delegation of authority.
following are the elements of delegation:

  • Responsibility: It is the obligation of a subordinate to properly perform the assigned duty. When a superior assigns a job to his subordinate, it becomes the responsibility of the subordinate to complete the job. This means that the word responsibility comes into play only after the job has been assigned.
  • Authority: Authority means the power to take decisions. Decision can be related to the use of resources and to do or not to do something.
  • Accountability: It means the accountability of the subordinate to his superior for his work performance.

Question 19.
Distinguish ‘Formal’ and ‘Informal’ organization.
Difference between ‘Formal’ and ‘Informal’ organization:

Basis of Difference Formal organization. Informal organization
1. Formation It is deliberately established to achieve the pre-determined objectives. This is an outcome of the inter-relationship of different people.
2. Rules It is based on strict rules which are written. The violation of rules may lead to penalties. It has its own group norms which are not written and clear the violation of group norms invity social disapproval.
3. Organization Structure chart In a formal organization an organization chart showing different departments is prepared which show them clearly. An informal organization has no place in an organization chart.
4. Purpose Its purpose is to achieve the objectives of the organization economically. Its purpose is to fulfill individual needs and protect mutual interest.

Question 20.
What does the term ‘Span of Management’ refer to?
Span of management refers to the number of subordinates that can be effectively managed by a superior. The span of management determines the level of management in structure. In general, the span of management is wider at higher levels of management.

Question 21.
Describe the importance of an informal organization.
Or, Why is an informal organization considered necessary? Give any three reasons?
Or, What is the importance of an informal organization in a formal set-up?
The importance of an informal organization in a formal set-up may be explained as under:

  • Sense of belongingness: In case of an informal organization, there is a feeling of belongingness and personal satisfaction among employees.
  • Flexibility: Informal Organization is more flexible because it is based on social relationships and not on formal relationship.

Question 22.
Briefly enumerate the important sources of recruitment.
The sources of recruitment can be conveniently classified into internal and external sources.
(i) Internal sources: it is recruitment of employers from within the existing employees, of the organization whenever new vacancy arises people from within the organisation will be upgraded, promoted, transferred or demoted, this process or filling job is called internal sources.

(ii) External sources: External sources of recruitment means the recruitments from outside the organization. when an organization has exhausted internal sources to be unsuitable, then external sources are used. The methods of recruitment are many walk-ins. public employment agencies, labour unions, educational institutions, professional associations, military services, etc.

Question 23.
Distinguish between Time Study and Motion Study.
Difference between Time Study and Motion Study:
Time Study:

  1. Time study covers only stop watch procedures.
  2. Time study is done before motion study.
  3. Time study provides the evolution of work measurement devices by establishing time standards.
  4. Time study considers the time taken by the worker in the performance of a job.

Motion Study:

  1. Motion study mainly covers photographic procedures
  2. Motion study is done after time study.
  3. Motion study provides for the evolution of ideal methods of doing the work.
  4. Motion study is mainly concerned with the physical effect made by him for completing the work.

Question 24.
What is the importance of staffing function in today’s environment?
Or, ‘Staffing is an important function of management in all organizations.’ Why? Explain any four reasons.
Or, State the importance of staffing function in management.
Importance of staffing function:

  • Investment costs: Procurement of human resources involves investment in terms of selection, training and development cost.
  • Long term effect: The investment in human resources is of long term effect.
  • Potential contribution: While selecting a person more particularly for the managerial position, the enterprise has not only to think of the current tasks but also his potential contribution in future.
  • Cost may surpass investment: The return of investment of personnel more particularly managerial personnel may be positive or negative.
  • Multiple effect: The total effect of the functioning of die individual members of a team of managers may not be equal to the effect of the team as a whole.

Question 25.
Explain the internal sources of recruitment.
(i) Transfer: it involves the shifting of an employee from one job to another, one department to another or from one shift to another without a substantive change in the responsibilities and status of the employees. Shortage of suitable personnel in one branch may be filled through transfer from other branch or department. Job transfers are helpful in avoiding termination and in removing individual problems and grievances.

(ii) Promotions generally, enterprises fill the higher jobs by promoting employees from lower jobs. Promotion leads to shifting an employees to a higher position, carrying higher responsibilities, facilities, status and pay. Promotion is a vertically shifting of employees. It helps in improving the motivation, loyalty and satisfaction level of employees. It has a great psychological impact over the employees.

Question 26.
Why does entrepreneurship consider as a creative function?
The nature of entrepreneurship is creative work culture and qualitative improvement is development only through creative thinking by promoter, organization and management. Basically entrepreneurship is a creative activity creative thinking always motivates to execute positive fundamental and practical thinking.

Question 27.
Distinguish between ‘external’ and ‘internal’ source of recruitment.
The difference between ‘External’ and ‘internal’ source of recruitment are as follows:

Basis Internal source of Recruitment External source of Recruitment
1. Meaning It is recruitment of employees from within the existing empioyees of the organisation. It is recruitment of employess from outside the organisation.
2. Basis Generally, seniority is the basis of recruitment. Generally, requirement is based on merit.
3. Choice It gives limited choice in the requirement of employees. It provided wider choice in the requirement of employees.
4. Effect on staff The existing staff is motivated to improve their performance. The existing staff feels dissatisfied if external sources are used.

Question 28.
Who is a supervisor?
The supervisor occupies an intermediate position between management and operative employees. As the connecting link between management and workers, the supervisor bridges the gap between what the management expects and what the workers wants. He acts as the medium of communication between higher level managers and the operatives.

The supervisor holds a key position in the organization. He turns plans and policies of the organization into actual results through the efforts of operatives. As the leader of his group or section he is responsible for both the quality and quantity of production. Supervisors are online executives with command authority. They perform all the basic functions of management. Their main task is to secure desired results from rank and file in accordance with predetermined standards of performance.

Question 29.
Explain the process of motivation.
Process of motivation: Motivation is the result of interaction between human needs and incentives offered to satisfy them. The main steps in motivation process are given below:

  • Awareness of need: The process of motivation begins with awareness of a need. Feeling of a need creates anxiety of tension in the person.
  • Stimulus for action: In order to satisfy the need and remove tension, a person takes some action. When a person feels hungry, for example, he takes steps to satisfy his hunger. He workes to earn money with which he can buy food. If the gets no work he may beg for food or may even try to steal food.
  • Fulfillment of need: In case the person is successful in satisfying his need he feels motivated. If the attempt is unsuccessful die need remains unsatisfied. In such a case the person may search for a different action.
  • Discovery of new need: when one need is satisfies a new need arises and the process is repeated.

Question 30.
What are the various objectives of Consumer Protection Act?
There are many objectives of Consumer Protection Act, main of them are as follows:

  • To protect and promote the rights of consumer.
  • To establish consumer council in order to protect consumer’s interests and rights.
  • To provide for disposal of consumer disputes and allied matters.
  • To dispose as early as possible and through easy process, the consumer disputes.
  • To set up quasi-judicial machinery to solve disputes.

Question 31.
State any three factors that influence the effectiveness of a leader.
Or, State any three qualities of a good leader.
Following are the qualities of a good leader:

  1. Physical energy and stamina: A leader should have a good personality, charming manners and ability to work hard. A leader will be successful only when he acts with the group as a member and works hard.
  2. Intelligence: Leaders should have somewhat higher intelligence than the average of their subordinates. They should possess the ability to think scientifically analyse accurately and interpret clearly and concisely the problems faced by the group.
  3. Vision and foresight: A leader, should exhibit his trait of looking forward. He must have foresight to see and feel the future. He should take into account the happenings which are about to occur in future.

Question 32.
“All managers are leaders, but all leaders are not managers.” Do you agree with this statement? Give any three reasons in support of your answer.
Yes, we agree with the statement that all managers are leaders but all leaders are not managers following points may be given in support of our views:

  1. Leaders perform only one function i.e. leadership function which is one of the elements of directing function of management, Managers perform all the managerial functions i. e., planning, organizing, staffing, directing and controlling.
  2. Managers possess formal authority and hold managerial position in the organization whereas a leader may not hold any managerial position, because his authority is informal.
  3. The focus of managers is on achieving the organizational goals only while leaders have to achieve the expectations of followers.

Question 33.
Distinguish between ‘upward’ and ‘downward’ communication.
Following table shows the distinction between downward communication and upward communication:

Basis of Distinction Downward Communication Upward Communication
1. Flow Its flow is from higher to lower authority. Its flow is from lower to higher authority.
2. Nature of compliance It is essentially directive in nature and demands action by superiors. It is essentially non-directive because its purpose is to provide the manager with the information the sub-ordinates posses.
3. Speed It travels very fast. It travel slowly.
4. Purpose Its purpose is to issue orders and instructions to the sub-ordinates. Its purpose is to put the suggestions or grievances by the subordinates to the superiors.

Question 34.
Explain the meaning of controlling.
Control is a basic management function which implies measurement of actual performance comparing it with the standards and take corrective measures to ensure attainment of objectives according to plans.

According to Henry Fayol, “Control consists in verifying whether everything, occurs conformity with the plans adopted, the instructions issued. principles established, It has for its object to point out weakness and errors in order to rectify them and prevent recurrence.”

Question 35.
“Planning is looking ahead and controlling is looking back.” Comment.
Planning and controlling are closely interrelated, controlling is impossible without planning and planning cannot be successful without a proper system of controlling. Planning sets standards to achieve business objectives, controlling measures and assesses the actual performance and compares it with planned standards and suggest corrective measures to be taken to prevent recurrence of the deviations. Planning is the beginning and controlling is the final stage of business activity. Both are interrelated and complementary to each other.

Question 36.
“Controlling implies taking action”. Explain.
Controlling means taking action to correct a condition which is different from one that is planned. A manager sitting in the side lines and watching the organization in action does not control. To controlling has to initiate action which will guide the operations within the spheres of plans. Remedial action is the essence of controlling. This will also include actions to modify and improve on the existing plans to recurrence of the deviations noticed by manager.

Question 37.
What are the advantages of Management Audit?
The main advantages of Management Audit are as follows:

  • It helps to locate present and potential deficiencies in the performance of management functions.
  • It helps to improve the control system of an organization by continuously monitoring the performance of the management.
  • It improves co-ordination in the functioning of various departments so that they work together effectively towards the achievement of organizational objectives.
  • It ensures updating of existing managerial policies and strategies in the light of environmental changes.

Conducting management audit may sometimes pose a problem as there are no standard techniques of management audit. Also, management audit is not compulsory under any low. Enlightened managers, however, understand its usefulness in improving overall performance of the organization.

Question 38.
Distinguish between ‘formal’ and ‘informal’ communication.
Or, How does informal communication differ from formal communication in respect of:
(i) Mutual relationships,
(ii) Speed of communication, and
(iii) Needs.
Following table shows difference between formal communication and informal communication:

S.No. Basis of Difference Formal Communication Informal Communication
1. 1. Mutual relationships Its channel laid down in the organisation structure. It follows the chain of command. Its channel is based on social relationships. It is independent of the chain of command and free from all formalities.
2. 2. Speed of communication It is slow moving process because it takes the routes prescribed by the scalar chain. It is a fast moving process because it does not have any prescribed route.
3. 3. Needs It serves organization needs. It serves not only organizational needs but also social needs of the members of the organization.

Question 39.
Explain the process of control as a function of management.
Steps in Control process: The main objective of controlling function is to ensure that the actual performance of work is in accordance with the established norms and standard of work. For this objective following steps are taken in mind in the control process:

(i) Establishing Standards: The first step is to establish standards which should be in verifiable terms i.e., quantity of producton units of service, man hour, speed, volume, etc, These standards should be fixed separately for individual, groups, department etc.

(ii) Measuring actual performance: A comprehensive report regarding the actual performance of individual groups, departments and the whole enterprise should be prepared at regular intervals so that they can be studied, analyzed and discussed.

(iii) Comparing actual performance with the desired performance: Actual performance of the individuals, groups, departments and the whole enterprise should be compared with the desired performance.

Question 40.
Describe in brief five features of a good control system.
Features of a good control system:

  1. Simplicity: A good control system must be simple and easy to understand, Every employee should understand the control system.
  2. Motivating: It should motivate both controller and controlled.
  3. Economy: The system of control must be worth its cost. It is justified only if the economies anticipated from it are more than the expected costs in its working.
  4. Quick reporting: Information relating to target and actual performance should be speedily available.