Subhash Dey BST 12

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Subhash Dey
Subhash Dey
Shree Radhey Publications
CHAPTER-1 Nature and Significance of Management Chapter 1
EXAM HANDBOOK Business Studies XII 1
Nature and
Significance of
Management
Revised CBSE Syllabus for 2021 Examination Learning Outcomes

 Management - concept, objectives, and importance  Understand the concept of management
 Explain the meaning of ‘Effectiveness' and 'Efficiency'
 Discuss the objectives of management
 Describe the importance of management
 Management as Science, Art and Profession  Examine the nature of management as a science, art and profession
 Levels of Management  Understand the role of top, middle and lower levels of management
 Management functions-planning, organizing, staffing,  Explain the functions of management
directing and controlling
 Coordination- concept and importance  Discuss the concept and characteristics of coordination
 Explain the importance of coordination
SYNOPSIS
Concept of Management
Management is the process of getting things done with the aim of achieving goals effectively and efficiently.
• Process in the definition means series of primary functions or activities that management performs to get things done, i.e.
planning, organising, staffing, directing and controlling.
• ‘Effectiveness’ in management is concerned with doing the right task, completing activities and achieving goals.
• Efficiency means doing the task correctly and with minimum cost.
Characteristics/Features of Management G2IP MCD
1. Management is a goal oriented process as it strives to achieve organisational goals.
2. Management is pervasive as it is required in all organisations, in all the departments and at all levels.
3. Management is a continuous process as it involves a continuous series of functions (planning, organising, staffing, directing
and controlling).
4. Management is a dynamic function as it adapts itself to the changing environment.
5. Management is an intangible force as it cannot be seen but its presence can be felt when targets are achieved and there
is orderliness instead of chaos.
6. Management is a group activity as it ensures team work and coordination; and unites individual effort in a common direction.
7. Management is multi-dimensional as it involves three dimensions: Management of work, Management of people,
Management of operations.
• Management
of work means translating the work in terms of goals to be achieved and assigning the means to achieve it.
• Management of people means dealing with employees as individuals with diverse needs and behaviour as well as dealing
with individuals as a group of people.
• Management of operations means managing a production process which involves transforming inputs into desired
output for consumption.
2 EXAM HANDBOOK Business Studies XII For CBSE Exam 2021 – by Subhash Dey
Objectives of Management
1. Organisational or Economic Objectives
• Survival–Management must earn enough revenues to cover cost for the survival of the business.
• Profit–Management has to ensure that business earns profit which is essential for covering cost and risk of the business.
• Growth–Management must exploit fully the growth potential of the organization. Indicators of growth are increase in
sales turnover, capital investment and number of products and employees.
2. Social Objectives: It involves the creation of economic value for various constituents of society like using environment-
friendly methods of production, providing basic amenities like schools and health care for community, giving employment
opportunities to the disadvantaged sections of the society, etc.
3. Personnel Objectives: Personnel objectives of management aim at satisfying the needs of the employees such as financial
needs by giving them competitive salary and perks, social needs such as peer recognition, and higher level needs such as
personal growth and development.
Importance of Management DPS EG
1. Management increases efficiency by reducing costs and increasing productivity.
2. Management helps in the development of society by providing good quality products, creating employment opportunities
and adopting new technology, etc.
3. Management helps in achieving group goals by giving a common direction to individual effort.
4. Management creates a dynamic organisation by making the organisation adapt itself to the changing environment.
5. Management helps in achieving personal objectives by motivating and leading in such a way that both personal goals and
organisational objectives are accomplished.
Levels of Management
1. Top Level Management consists of Chief Operating Officer, Chief Executive Officer (CEO), Chief Finance Officer, Director,
Chairman, President, Vice-President, etc. Their functions are:
(i) To coordinate the activities of different departments according to the overall objectives of the organisation.
(ii) To be responsible for welfare and survival of the organisation.
(iii) To analyse the business environment and its implications for the survival of the firm.
(iv) To formulate overall organisational goals, and framing strategies for their achievement.
(v) To be responsible for all the activities of the business and for its impact on the society.
2. Middle Level Management consists of divisional/departmental heads, such as Production Manager, Marketing Manager,
Operations Manager, Plant Superintendent, etc. Their functions are:
(i) To interpret the policies framed by top management.
(ii) To ensure that their department has the necessary personnel.
(iii) To assign necessary duties and responsibilities to the employees.
(iv) To motivate employees of their respective departments to achieve the desired objectives.
(v) To cooperate with other departments for smooth functioning of the organisation.
3. Operational or Supervisory Management consists of Supervisors and Foremen. Their functions are:
(i) To oversee the efforts of the workforce.
(ii) To interact with the actual workforce and pass on the instructions of the middle management to the workers.
(iii) To ensure that the quality of output is maintained and wastage of material is minimized.
(iv) To ensure safety standards are maintained.
Management as an Art
Art is the skillful and personal application of knowledge to achieve desired results. Management is an art because of the
following reasons:
1. Existence of theoretical knowledge: As in art, in management too, there is a lot of literature available in various areas of
management which the manager has to specialise in.
2. Personalised application: Like in any art, in management too, a manager applies his acquired knowledge in a personalised
and unique manner.
3. Based on continuous practice and creativity: Management satisfies this criteria as manager gains experience through
regular practice and becomes more effective. Like any other art, a manager after studying various situations, formulates his
own theories for use in a given situation.
Management as a Science
Science is a systematised body of knowledge that explains certain general truths or the operation of general laws. Management
is a science but not an exact science. The reasons are:
CHAPTER-1 Nature and Significance of Management EXAM HANDBOOK Business Studies XII 3
1. Systematised body of knowledge: Like science, management is a systematised body of knowledge with its own theories
and principles that have developed over a period of time. So, this feature of science is present in management.
2. Principles based on observation and experimentation: Like science, management principles are derived through
observation and repeated experimentation. However, since management deals with human beings the outcome of these
experiments are not capable of being accurately predicted. So, this feature of science is not fully present in management.
3. Universal validity: Principles of management like principles of pure science provide managers with certain standardised
techniques that can be used in different situations. However, since they have to be modified according to a given situation,
their application and use is not universal. So, this feature of science is not fully present in management.
Management is both an art and a science. The practice of management is an art. However, managers can work better if
their practice is based on the principles of management. These principles constitute the science of management. Management
as an art and a science are therefore not mutually exclusive, but complementary to each other.
Management as a Profession SWEEP
Any body of knowledge that qualifies to become a profession must fulfill the following features: (i) Well defined body of
knowledge (ii) Restricted entry (iii) Professional association (iv) Ethical code of conduct (v) Service motive
On the basis of above features, it can be said that all the features of profession are not fully present in management:
1. Well-defined body of knowledge: The subject of management is taught at different institutions to provide management
education. So, this feature of profession is present in management.
2. Restricted Entry: 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.
3. Professional association: There are several associations of practising managers in India, like the AIMA, that have laid down
a code of conduct to regulate the activities of their members, but, there is, however, no compulsion for managers to be
members of such associations. So, presently this feature of profession is not fully present in management
4. Ethical code of conduct: AIMA has devised a code of conduct for Indian managers but there is no statutory backing for this
code. So, presently this feature of profession is not fully present in management.
5. Service motive: The basic purpose of management to help the organisation achieve its goals by providing good quality
products at reasonable prices, thereby, serving the society, is being increasingly recognised. So, presently this feature of
profession is not fully present in management.
It can be concluded that management is not a full fledged profession like legal, accounting or medical professions because it
does not meet the exact criteria of a profession.
Coordination – The essence of management
The process by which a manager synchronises the activities of different departments is called coordination. Coordination is
not a separate function of management. It is the force that binds all other functions and thus called the essence of management.
• The process of coordinating the activities begins at the planning stage in which the top management plans for the entire
organization.
• At the organizing stage, the organizational structure is developed as per plans.
• The staffing function is performed to fill the positions developed in the organization structure.
• Directing is then required to ensure that these plans are executed accordingly.
• Controlling function ensures that the discrepancies between actual and planned activities are taken care of.
Characteristics/Features of Coordination DU PCR I
1. Coordination integrates group efforts by unifying diverse interests into purposeful work activity.
2. Coordination ensures unity of action by acting as a binding force between departments and ensuring that all action is
aimed at achieving the goals of the organisation.
3. Coordination is a continuous process as it starts at the planning stage and continues till controlling.
4. Coordination is a pervasive function as it is required in all types of organisations, in all the departments and at all levels.
5. Coordination is the responsibility of all managers at the top, middle and operational level.
• Top level managers need to coordinate with their subordinates to ensure that the overall policies are duly carried out.
• Middle level management coordinates with both the top level and first line managers.
• Operational level management coordinates the activities of its workers to ensure that work proceeds according to plans.
6. Coordination is a deliberate function as every manager has to coordinate the efforts of different people in a conscious and
deliberate manner.
Need and Importance of Coordination
1. Growth in size – As organizations grow in size, the number of people employed by the organization increases. Individuals
differ in their habits of work, needs and behavior and may have their own individual goals. Coordination is necessary to
harmonize individual goals and organizational goals. Coordination ensures that all individuals work towards the common
goals of the organization.
2. Functional differentiation – Functions of organization are divided into departments /divisions of finance, production,
marketing or human resources. All these departments are dependent on each other. Coordination links the activities of
various departments to focus on attainment of common goals. There may also arise conflict among them. Coordination is
needed to ensure unity of action to avoid inter-departmental conflicts.
3. Specialisation – Modern organizations have high degree of specialization and employ a number of specialists. This leads to
conflict as some specialists do not like to take advice or suggestions from others. Coordination is required to reconcile their
differences in approach.
Case Study
Case-based Integrated Questions
Case Study 1: Read the following text and answer question no. 1-4 on the basis of the same:
Founded in 1868, by Jamsetji Nusserwanji ,Tata the Tata Group is a global business conglomerate operating in over 100 countries
across 5 continents. His strong sense of values and spirit of innovation and entrepreneurship are a legacy that continues to guide
Tata companies till date. He had four goals in life: setting up an iron and steel company, a world-class learning institution, a
unique hotel and a hydro-electric plant. Only the hotel became a reality during his lifetime, with the inauguration of the Taj
Mahal Hotel at Colaba waterfront in Mumbai on 3 December 1903 at the cost of 11 million (worth 11 billion in 2015 prices). At
that time it was the only hotel in India to have electricity.
He believed that satisfied workers create satisfied workers and in lieu to this principle he paid all his workers gratuity, provident
fund well before it was made mandatory. His management skills were clearly evident when minute details were chalked in planning
and building the entire city of Jamshedpur. The values and principles that have governed the business for a century are enshrined
in the Tata Code of Conduct (TCOC).
From an early foray into steel and automobiles, to staying abreast of the latest technologies, the Tata Group today has 29 publicly-
listed Tata enterprises, which include Tata Steel, Tata Motors, Tata Consultancy Services, Tata Power, Tata Chemicals, Tata Global
Beverages, Tata Teleservices, Titan, Tata Communications and Indian Hotels. The group has a combined market capitalisation of
around $103.51bn (2016-17).
Tata has a strong sense of social responsibility. They balance economic prosperity, environmental responsibility and social benefits
for the community. In India, they are a partner in progress with Odisha, and believe in taking its stakeholders forward in its
journey of growth. Tata Steel Thailand is one of the first 30 companies that joined UNICEF in Child Friendly Business in “The
Children Sustainability Forum” to make a commitment in protecting children’s rights. Tata Steel Europe’s Community Partnership
Programme- ‘Future Generations’, with sub-themes of education, environment, health and Well-being works across the UK, assisting
job and wealth creation by supporting small and medium businesses with finance and business premises.
They also play a constructive role in addressing climate change – both by reducing carbon footprint, and by creating high
performance steels that lead to fuel-efficient vehicles and energy-efficient buildings. Their Environmental Management Systems
meet the ISO 14001 standards at all of their main manufacturing sites.
Shaped by a lineage of sound and straightforward business principles, the Tata Group is built on a foundation of trust and
transparency. Building such huge enterprises, sustaining and running them profitably are possible only through effective and efficient
management and co-ordination at all levels. Source: www.tatasteel.com; Accessed June, 2018
1. Which of the following function must be performed by Jamsetji Nusserwanji?
(a) Oversee the efforts of the workforce. (b) Motivate personnel to achieve desired objectives.
(c) Welfare and survival of the organisation (d) All the above
2. "He believed that satisfied workers create satisfied workers and in lieu to this principle he paid all his workers gratuity,
provident fund well before it was made mandatory." Which objectives have been fulfilled by the management of Tata Steel?
(a) Organisational Objectives (b) Social Objectives
(c) Personnel Objectives (d) Both (a) and (c)
3. Which of the following highlights the social objectives fulfilled by the management of Tata Steel?
(a) Tata Steel Thailand is one of the first 30 companies that joined UNICEF in Child Friendly Business in “The Children
Sustainability Forum” to make a commitment in protecting children’s rights.
(b) Tata Steel Europe’s Community Partnership Programme- ‘Future Generations’, with sub-themes of education,
environment, health and Well-being works across the UK, assisting job and wealth creation by supporting small and
medium businesses with finance and business premises.
(c) They also play a constructive role in addressing climate change – both by reducing carbon footprint, and by creating
high performance steels that lead to fuel-efficient vehicles and energy-efficient buildings.
(d) All the above
4. Tata Steel has risen to the top because of ______________.

(a) Effective and Efficient Management (b) Coordination at all levels
(c) Both (a) and (b) (d) Strong sense of values and spirit of innovation and entrepreneurship
Smita Rai is a 38-year old entrepreneur who grew up in a rural district called Namchi, South Sikkim. She was very good in art and
craft particularly, Wax moulds. She loved to make candles, often she make into toys and small pieces of art with wax and used it as a
gift for her friends and relatives. She was loved and appreciated for these. Smita was never happy with the conditions of the women in
her district as most were poor and jobless, so she planned to do something to solve their problems because she knew that imparting
skills for livelihood is needed but she had no idea of how to implement her idea.
In August 2012, she met Abishek Lama, the Branch Manager of NEDFI, Namchi Branch, a financial corporation which support
local people with skills development programs and also channelize them into revenue generating activities. Smita got interested. “I
love making candles, then, why not convert my hobby into a venture and involve these rural women also”, she thought. This led
to the establishment of Namchi Designer Candles with the help of NEDFI, some financial institutions and support from different
stakeholders in various dimensions.
Since then, the women have never looked back, despite challenges. The women also faced a lot of harassment but they could overcome
all those troubles. Namchi Designer Candles has 100 per cent women as employees and they also produce varieties of candles. During
Diwali, they produce customized candles meant for the occasion. These Diwali themed candle has been a success in Sikkim as its
demand increases on a yearly basis. Namchi Designer Candles has been receiving numerous awards such as North East Women
Entrepreneur of the year 2015-2016 for Sikkim and Sreemanta Shankar Mission of Guwahati on 26th April 2018 at New Delhi.
A typical day in Smita’s life consists of a series of interrelated and continuous functions. She has to plan a special festive collection for
Diwali. This means organising more funds and recruiting more workers. She also has to regularly communicate with her suppliers to
ensure that deadlines regarding delivery of goods are met. In the course of the day, she meets customers for a general feedback and
any suggestions that they may have.
The purchase, production and sales departmental efforts have to be coordinated by Smita for achieving organisational objectives
harmoniously. The purchase department is responsible for procuring fabric. This then becomes the basis of the activities of the
production department and finally sales can take place. If fabric purchased is of an inferior quality or is not according to the
specifications of the production department, further sales will also decline.
5. " Smita was never happy with the conditions of the women in her district as most were poor and jobless, so she planned to
do something to solve their problems because she knew that imparting skills for livelihood is needed..." Which objectives of
management does Smita Rai want to fulfil in her organisation?
(c) Personnel Objectives (d) All of these
6. At which level of management does Abishek Lama work at NEDFI?
(a) Top Level Management (b) Middle Level Management
(c) Operational Management (d) All of these
7. "She also has to regularly communicate with her suppliers to ensure that deadlines regarding delivery of goods are met."
Which function of management is performed by Smita Rai?
(a) Planning (b) Directing (c) Controlling (d) Both (a) and (c)
8. "The purchase, production and sales departmental efforts have to be coordinated by Smita for achieving organisational
objectives harmoniously." Identify the characteristic of coordination discussed above.
(a) Coordination integrates group efforts (b) Coordination ensures unity of action
(c) Coordination is a continuous process (d) Coordination is an all pervasive function
The Dabbawallas of Mumbai is the story of a SIX SIGMA business enterprise. The success of the business lies in the complex
yet well coordinated exercise that is carried out on the streets of Mumbai day after day. What is the secret behind the efficiency
with which their business is conducted? The story of the dabbawallas begins in the kitchens of Mumbai. After they step out of
their door, someone begins the time-consuming process of preparing the worker a fresh, homecooked lunch. What happens next
for demonstrates the coordination of the dabbawallas system. The first dabbawalla picks up the tiffin from home and takes it to
the nearest railway station.The second dabbawalla sorts out the dabbas at the railway station according to destination and puts
them in the luggage carriage. The third one travels with the dabbas to the railway stations nearest to the destinations. The fourth
one picks up dabbas from the railway station and drops them off at the offices. By mid-morning, thousands of dabbawallas are
bicycling through the streets of Mumbai, ensuring a hot home cooked lunch for their customers. The whole tiffin distribution
requires negligible technology. The dabbawallas rely on low capital and use cycles, wooden carriages and local trains to achieve their
target. The dabbawallas, thus, ensure that the organisation earns enough revenues to cover costs.
9. What is the secret of success of the business of the Dabbawallas as highlighted in the above case?
(a) Quality of management (b) Division of work and specialisation
(c) Coordination (d) All of these
10. "The first dabbawalla picks up the tiffin from home and takes it to the nearest railway station.The second dabbawalla sorts
out the dabbas at the railway station according to destination and puts them in the luggage carriage. The third one travels
with the dabbas to the railway stations nearest to the destinations. The fourth one picks up dabbas from the railway station
and drops them off at the offices." Which characteristic of coordination is highlighted above?
(c) Coordination is a continuous process (d) All of these
11. "The dabbawallas rely on low capital and use cycles, wooden carriages and local trains to achieve their target. The dabbawallas,
thus, ensure that the organisation earns enough revenues to cover costs." Which of the following organisational objective is
highlighted above?
(a) Survival (b) Profit (c) Growth (d) None of these
12. "The story of the dabbawallas begins in the kitchens of Mumbai. After they step out of their door, someone begins the time-
consuming process of preparing the worker a fresh, home-cooked lunch." Which function of management is highlighted above?
(a) Planning (b) Organising (c) Directing (d) Controlling
Company X is facing a lot of problems these days. It manufactures white goods like washing machines, microwave ovens, refrigerators
and air conditioners. The company’s margins are under pressure and the profits and market share are declining. The production
department blames marketing for not meeting sales targets and marketing blames production department for producing goods,
which are not of good quality meeting customers expectations. The finance department blames both production and marketing for
declining return on investment and bad marketing.
13. What quality of management do you think the company is lacking?
(a) Planning (b) Controlling (c) Directing (d) Coordination
14. Which of the following characteristic of management is not fulfilled by the company?
(a) Management is a goal-oriented process (b) Management is a group activity
(c) Management is an intangible force (d) Management is all pervasive
15. Why do these kinds of inter-departmental conflicts arise in organisations?
(a) All the departments may have their own objectives, policies and their own style of working.
(b) Each department is performing activities in isolation from others.
(c) Barriers between departments are becoming more rigid.
(d) Both (b) and (c)
16. What step(s) should the company management take to bring the company back on track?
(a) Linking the activities of various departments through coordination.
(b) The activity of each department needs to be focused on attainment of common organisational goals.
(c) Managers need to reconcile differences in approach, timing, effort or interest.
(d) All the above
Forex Ltd. is a private limited company with several branches all over India. It promotes the sales of Indian handloom and handicraft products
while providing equitable employment to traditional artisans. Mr. Brijesh, a branch manager of the company plans his winter collection in
the month of June itself. He has to ensure that there is adequate workforce and continuously monitor whether production is proceeding
according to plans. He also provides direction and motivation to his employees. The purchase, production and sales departmental efforts
are coordinated by Mr. Brijesh for achieving organisational objectives harmoniously. The production and the sales department coordinate
their work, so that production takes place according to the demand in the market. The purchase department is responsible for procuring
material. This then becomes the basis of the activities of the production department and finally sales can take place.
17. "It promotes the sales of Indian handloom and handicraft products while providing equitable employment to traditional
artisans." Which of the following objectives of management are fulfilled by Forex Ltd.?
18. At which level of management is Mr. Brijesh working in Forex Ltd.?
(c) Operational Management (d) Supervisory Management
19. "He has to ensure that there is adequate workforce and continuously monitor whether production is proceeding according to
plans." Identify the functions of management highlighted in the above statement.
(a) Planning and Controlling (b) Staffing and Planning
(c) Staffing and Directing (d) Staffing and Controlling
20. "The purchase, production and sales departmental efforts are coordinated by Mr. Brijesh for achieving organisational
objectives harmoniously. The production and the sales department coordinate their work, so that production takes place
according to the demand in the market." Identify the characteristic of coordination highlighted above.
(a) Coordination is an all pervasive function (b) Coordination ensures unity of action
(c) Coordination is a continuous process (d) Both (a) and (b)
Multiple Choice Questions (MCQ) (1 mark each)

1. Arnav has recently started a business to sell computers. He hired a shop in Nehru Place in New Delhi, where he assembles
make computers and various components supplies them as per order. He performs a series of composite but separate functions
simultaneously and ensures that computers are delivered in time as per orders. These functions are performed by all managers
at all times. The feature of management highlighted above is:
(a) Management is a continuous process. (b) Management is pervasive.
(c) Management is dynamic. (d) Management is a group activity.
2. At times, a business may concentrate more on producing goods with fewer resources i.e., cutting down cost but not achieving
the target production. Consequently, the goods do not reach the market and hence the demand for them declines and
competitors enter the market. This is a case of :
(a) being efficient but not effective (b) being effective but not efficient
(c) being both effective and efficient (d) All of these
3. “A petrol pump needs to be managed as much as a hospital or a school. What managers do in India, the USA, Germany or
Japan is the same. How they do it may be quite different. This difference is due to the differences in culture, tradition and
history.” Identify the characteristic of management highlighted above.
(a) Management is a goal-oriented process (b) Management is all pervasive
(c) Management is multi-dimensional (d) Management is a dynamic function
4. “Every member of an organisation has a different purpose for joining the organisation but as members of the organisation they
work towards fulfilling the common organisational goal. This requires team work and coordination of individual effort in a
common direction.” Identify the characteristic of management highlighted above.
5. “Management has to achieve a variety of objectives in all areas considering the interest of all stakeholders including, shareholders,
employees, customers and the government. The main objective of any organisation should be to utilise human and material
resources to the maximum possible advantage.” Identify the objectives of management highlighted above.
(c) Personnel Objectives (d) None of these
6. Match the objective of management in Column I with their respective definition in Column II:
A. Survival (i) Increase in the number of employees, the number of products or the increase in capital
investment, etc.
B. Profit (ii) A vital incentive for the continued successful operation of the enterprise.
C. Growth (iii) An organisation must earn enough revenues to cover costs.
(a) (i), (ii), (iii) (b) (ii), (i), (iii)
(c) (iii), (ii), (i) (d) (i), (iii), (ii)
7. Match the objective of management in Column I with their respective definition in Column II:
A. Organisational Objectives (i) Survival, profit and growth
B. Social objectives (ii) Providing basic amenities like schools and healthcare, etc.
C. Personnel objectives (iii) Satisfying diverse needs of employees, e.g. financial needs such as competitive salaries and
perks, social needs such as peer recognition and higher level needs such as personal growth
and development.
(a) (i), (ii), (iii) (b) (ii), (i), (iii)
(c) (iii), (ii), (i) (d) (i), (iii), (ii)
8. “The aim of a manager is to reduce costs and increase productivity through better planning, organising, directing, staffing and
controlling the activities of the organisation. ” Identify the point of importance of management highlighted above.
(a) Management helps in achieving group goals (b) Management increases efficiency
(c) Management creates a dynamic organisation (d) Management helps in achieving personal objectives
9. “Through motivation and leadership the management helps individuals to develop team spirit, cooperation and commitment
to group success.” Identify the point of importance of management highlighted above.
10. Which of the following proves that management is not an exact science?
(a) Management has its own theory and principles that have developed over a period of time, but it also draws on other
disciplines such as Economics, Sociology, Psychology and Mathematics. Like all other organised activity, management has
its own vocabulary of terms and concepts.
(b) Since management deals with human beings and human behaviour, the outcomes of these experiments are not capable of
being accurately predicted or replicated.
(c) The application and use of principles of management is not universal. They have to be modified according to a given situation.
(d) Both (b) and (c)
11. “Unlike professions such as medicine or law which require a practicing doctor or lawyer to possess valid degrees, nowhere in
the world is it mandatory for a manager to possess any such specific degree.” Identify the characteristic of the profession that
Management does not fulfil in the statement being discussed above.
(a) Ethical code of conduct (b) Restricted entry
(c) Professional association (d) Service motive
12. “There are several associations of practising managers in India, like the AIMA (All India Management Association) 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 nor does it have any statutory backing.” Identify the characteristic of the profession that
Management does not fulfil in the statement being discussed above.
(a) Ethical code of conduct (b) Restricted entry
(c) Professional association (d) Service motive
13. Match the levels of management in Column I with their designation in Column II:
A. Top Management (i) Foreman
B. Middle Management (ii) Production Manager
C. Supervisory or Operational (iii) Vice-President
Management
(a) (i), (ii), (iii) (b) (ii), (i), (iii) (c) (iii), (ii), (i) (d) (i), (iii), (ii)
14. Match the levels of management in Column I with their function in Column II:
A. Top Management (i) They directly oversee the efforts of the workforce.
B. Middle Management (ii) They cooperate with other departments for smooth functioning of the organisation.
C. Supervisory or Operational (iii) They are responsible for all the activities of the business and for its impact on society.
Management
15. Match the characteristics of coordination in Column I with their explanation in Column II:
A. Integrates group efforts (i) Coordination unifies unrelated or diverse interests into purposeful work activity.
B. Ensures unity of action (ii) A manager has to coordinate the efforts of different people in a conscious and deliberate manner.
C. A deliberate function (iii) It acts as the binding force between departments and ensures that all action is aimed at
achieving the goals of the organisation.
16. Mridul and his brother Rehan started a business of making handmade cards from waste material and named it ‘Fantasy.
Their business started flourishing. They formulated attainable and time-bound overall goals and also framed strategies for
the achievement of these goals. For this, they gave permission to appoint the required people who would be responsible for
implementing and controlling those strategies. On the basis of the functions highlighted above, identify the level at which the
people will be appointed for implementing and controlling the strategies :
(a) Top-level (b) Middle-level (c) Supervisory-level (d) At all levels
17. The Production Manager of RK Ltd. Kushagra is very popular among his subordinates, He believes in application of scientific
principles of management to his organisation to increase productivity. Moreover, he applies them in a personalised and a skilful
manner in the light of the realities of a given situation. Being involved in the activities of the organisation, he studies critical
situation and formulates his own theories for a given situation. The nature of management discussed in the above case is:
(a) Management as a Science (b) Management as an Art
(c) Management as an Inexact Science (d) Management as both, an Art and a Science
18. A production manager was able to produce the desired output with minimum cost but not within the required time. In this
case the manager was:
(a) Effective only (b) Efficient only (c) Both (a) and (b) (d) Neither effective nor efficient
19. It is through the process of _______ that a manager ensure the orderly arrangement of individual and group efforts to ensure
unity of action in the realisation of common objectives.
(a) Management (b) Organising (c) Coordination (e) Controlling
20. _____________ is concerned with the end result.
(a) Effectiveness (b) Efficiency (c) Management (d) Coordination
21. Match the following activities in column I with their respective levels of management in column II:
A. Top management (i) Introducing a new product line and deciding the capital structure of the company.
B. Middle management (ii) Recruitment of casual labourers.
C. Supervisory or Operational (iii) Devise a suitable advertising campaign to sell a new product/service a company is launching.
management
22. “McDonalds, the fast food giant made major changes in its menu to be able to survive in the Indian market.”
Identify the characteristic of management highlighted in the above statement.
23. ‘In order to be successful an organisation must change its goals according to the needs of the environment.’
Which characteristic of management is highlighted in the statement?
(a) Management is multi-dimensional (b) Management is a group activity
(c) Management is a dynamic function (d) Management is a goal-oriented process
24. “Successful organizations do not achieve their goals by chance but by following a deliberate process”. Identify the process
highlighted here.
(a) Planning (b) Coordination (c) Management (d) All of these
25. Suhasini, the General Manager of Fabmart, perfoms the managerial functions of planning, organising, staffing, directing and
controlling as an ongoing process. Which management feature is highlighted by this?
(a) Management is a goal-oriented process (b) Management is a a continuous process
26. Why is management considered a multi-faceted concept?
(a) Because management is a complex activity that has three main dimensions: management of work, management of people
and management of operations.
(b) The activities involved in managing an enterprise are common to all organisations whether economic, social or political.
(c) The process of management is a series of continuous, composite, but separate functions (planning, organising, directing,
staffing and controlling). These functions are simultaneously performed by all managers all the time.
(d) None of the above
27. Raheja Ltd. is diversifying its product lines. What organisational objective it is trying to achieve?
(a) Survival (b) Profit
(c) Growth (d) All of these
28. Ritu is the manager of the northern division of a large corporate house. What is her main task?
(a) To formulate overall organisational goals, and frame strategies for their achievement.
(b) To carry out the plans formulated by the top managers.
(c) To ensure that their department has the necessary personnel.
(d) To interact with the actual work force and pass on instructions of the management to the workers.
29. At which level of management coordination takes place in an organisation?
30. In Flipmart Co. Ltd. the production and sales department have to coordinate their work, so that production takes place
according to the demand in the market. State the feature of coordination highlighted here.
(c) Coordination is a continuous process (d) Coordination is an all pervasive function
31. To meet the objectives of the firm, the management of Bhavya Ltd. offers employment to physically challenged persons.
Identify the organisational objective it is trying to achieve.
(a) Survival (b) Profit (c) Growth (d) Social objectives
32. Dheeraj is working as ‘Operations Manager’ in Tifco Ltd. Name the managerial level at which he is working.
33. Name the level of management which is a team consisting of managers from different functional levels, heading finance,
marketing, etc, for example, chief finance officer, vice president (marketing).
(c) Operational Management (d) None of these
34. In today’s scenario, organisations look for individuals with specific qualifications and experience to manage them. It has also
been observe that there has been an increase in the corporate form of business and increasing emphasis on managed business
concerns. What does the above statement imply?
(a) Management as a science (b) Management as an art
(c) Management as a profession (d) Management is both art and science
35. Name the process which provides the requisite amount, quality, timing and sequence of efforts and ensures that planned
objectives are achieved with a minimum of conflict.
(a) Organising (b) Coordination (c) Management (d) Controlling
36. A firm plans in advance and has a sound organisation structure with efficient supervisory staff and control system but on
several occasion it finds that plans are not being adhered to. It leads to confusion and duplication of work. Advise remedy.
(a) Directing (b) Coordination (c) Management (d) Controlling
37. Das is the Managing Director of ‘Gamut Ltd.’, manufacturing different varieties of cheese. He has an efficient team
working under him consisting of Rajat, the Production manager, Vinay – the Marketing manager and Adit – the
Finance manager. They understand and interpret the policies made by Das, ensure that their departments have adequate
manpower, assign them the necessary duties and motivate them to achieve the desired objectives. I dentify the level of
management they are working.
38. Name the process of designing and maintaining an environment in which individuals working together in groups efficiently
accomplish selected aims.
(a) Management (b) Coordination (c) Organising (d) Directing
39. The purchase, production and sales managers at Sharda Ltd, a firm manufacturing ready made garments are generally at a
conflict, as they have their own objectives. Usually each thinks that only they are qualified to evaluate, judge and decide on any
matter, according to their professional criteria. Name the concept which will be required by the CEO Mr. Raman, to reconcile
the differences in approach, interest or opinion in the organisation.
40. In a company, the marketing department’s objective is to increase sales by 10 per cent by offering discounts. But, the finance
department does not approve of such discounts as it means loss of revenue. These kinds of conflict arise in organisations
because of the lack of one of the concepts of management. Identify the concept highlighted above.
(a) Management (b) Directing (c) Organising (d) Coordination
41. Vrinda Ltd. is able to achieve the target production of 5,000 units within the prescribed period. However, to achieve the target
on time, additional ` 40,000 were paid as overtime wages to employees. Vrinda Ltd. is __________ .
(a) efficient but not effective (b) effective but not efficient
(c) both effective and efficient (d) Neither effective nor efficient
42. Volvo Ltd.’s target is to produce 10,000 shirts per month at a cost of `100/- per shirt. The Production Manager achieved this
target at a cost of `90/- per shirt. The Production Manager is ___________.
43. Hero Ltd.’s target is to produce 10,000 shirts per month at a cost of `150 per shirt. The Production Manager was able to
produce 10,000 shirts at a cost of `140 per shirt but not within the stipulated time. As a result, there was loss of revenue. In
this case the Production Manager is _____________.
44. Tina, a manager of Shikhar Automobiles Ltd.; establishes an atmosphere that encourages employees to do their best. She also
creates an environment that makes them want to work. She directs through praise and criticism in such a way that it brings out
the best in the employee. Identify the concept highlighted in the above para.
45. Directors of Aman Ltd. assigned the task of implementing the plans and policies framed by the board to all the departmental
heads. Departmental heads appointed supervisors, superintendent, executives, etc. so that work can be assigned to workers as per
the plan. Supervisors kept a check on workers as per the plan. Identify the feature of management highlighted in above para.
46. Social-Connect Pvt. Ltd. is a mobile manufacturing company. The manager of the company observed that the market is
dynamic and a lot of changes were taking place in the mobile market and hence, the risk of the product becoming obsolete is
high. The designs of the phones are governed by requirements and preferences of the customers. He started incorporating new
and advanced features taking clue from the consumers and with the help of his workers.
Identify the characteristic of management highlighted in this case.
47. Anushka Fabric Ltd. has been able to achieve its production targets as per plans using a new German technology. Its employees
are happy and satisfied with their pay scale and working environment in the organisation. All the work proceeds as per plans
and there is orderliness in the entire functioning of the organisation. Identify the feature of the management discussed above.
(a) Management is an intangible force (b) Management is a group activity
48. ABC Group of companies decided to donate 2% of its sales to ‘Child Rights and You (CRY)’ for improving the condition
of children in India. This initiative by the company was highly appreciated by the public and their sales increased by 10%.
Identify the objective of management depicted in the given case.
49. Management of Alpha Ltd. has installed a special recycling plant to recycle the waste instead of dumping the waste in ground.
It is also providing employment opportunities to local residents. Identify the objective of management the company is fulfilling.
50. The manager of Beta Ltd. is very efficient and effective and makes sure that all the employees and workers in his team perform
the task on time with minimum cost. His main focus is on cost reduction. So he never listens to the demand of workers for
increasing wages. He even gives no opportunity to workers for promotion. As a result workers started becoming frustrated and
disheartened all the time. Which objective of management could not be achieved by the manager?
51. Rajiv Automobiles aims to produce and sell 1,00,000 cars in 2021. To achieve this objective, the production department strives for timely
production and sales department takes all possible steps to sell them. Due to combined efforts of all the departments, the company is
able to achieve its target. Which of the following point of importance of management is highlighted in the given case?
52. Ashutosh Goenka was working in ‘Axe Ltd.’, a company manufacturing air purifiers. He found that the profits had started
declining from the last six months. Profit has an implication for the survival of the firm, so he analysed the business environment
to find out the reasons for this decline. Identify the level of management at which Ashutosh Goenka was working.
53. Rishitosh Mukerjee has recently joined AMV Ltd., a company manufacturing refrigerators. He found that his department was
under-staffed and other departments were not cooperating with his department for smooth functioning of the organization.
Therefore, he ensured that his department has the required number of employees and its cooperation with other departments is
improved. Identify the level at which Rishitosh Mukerjee was working.
54. Hema is one of the most successful managers of her company, ‘Kobe Ltd.’ She uses her creativity and initiative in handling
challenging situations at work. The knowledge gained by her during her student days at a renowned management institute as
well as through her observation and experience over the years is applied by Hema in a skillful manner in the context of the
realities of a given situation. She often reads books and other literature in various fields of management to keep her knowledge
updated. A n aspect of the nature of management is being highlighted in the above description. Identify the aspect.
(a) Management as a science (b) Management as an art
(c) Management as a profession (d) Management is both art and science
55. In X Ltd., the purchase department purchased 10 tonnes of raw material for the production department. However, the
production department needed just 7 tonnes. Due to this reason, goods were over produced and were not accepted by Sales
department. As a result, some goods remained unsold. Which aspect of management is lacking?
(a) Organising (b) Coordination
(c) Staffing (d) Controlling
Applying, Analysing and Creating Based Questions

Q.1 Indian Railways has launched a new broad gauge solar power train which is going to be a path breaking
leap towards making trains greener and more environment friendly. The solar power DEMU (Diesel
Electric Multiple Unit) has 6 trailer coaches and is expected to save about 21,000 liters of diesel and ensure
a cost saving of `12,00,000 per year. Identify and explain the objectives of management achieved by Indian
Railways in the above case. (3)
Ans. The objectives of management achieved by Indian Railways are:
(i) Organisational Objectives
(a) Profit: Cost saving of `12,00,000 per year due to solar power DEMU (Diesel Electric Multiple Unit) implies
increase in profits of Indian Railways.
(b) Growth: Increase in number of products, i.e. new broad gauge solar power trains.
(ii) Social Objectives — New broad gauge solar power train is going to be a path breaking leap towards making
trains greener and more environment friendly.
Q.2 The management of Vrinda Ltd. strongly believes that the members of an organisation should work
towards fulfilling the common organisational goals. This requires team work and integration of efforts of
all individuals, departments and specialists. This is because all the individuals and departments depend on
each other for information and resources to perform their respective activities. Managers need to reconcile
differences in approach, timing, effort or interest. At the same time it should enable all its members to grow
and develop. Thus, there is a need to harmonise individual goals and organisational goals.
(a) Identify and explain the concept of management discussed above.
(b) State the characteristic of management which is reflected from the above para. (3)
Ans. (a) Coordination (b) Management is a group activity (give explanation)
Q.3 Ashita and Lakshita are employees working in Dazzling enterprises dealing in costume jewellery. The firm
secured an urgent order for 1,000 bracelets that were to be delivered within 4 days. They were assigned the
responsibility of producing 500 bracelets each at a cost of `100 per bracelet. Ashita was able to produce the
required number within the stipulated time at the cost of ` 55,000 whereas, Lakshita was able to produce
only 450 units at a cost of ` 90 per unit. State whether Ashita and Lakshita are efficient and effective. Give
reasons to justify your answer. (3)
Ans. Ashita is effective but not efficient. R eason: She was able to produce 500 bracelets within the stipulated time but at a
higher cost of `110 per bracelet.
Lakshita is efficient but not effective. R eason: Though she was able to achieve a lower cost of `90 per bracelet but
could not produce the target production of 500 bracelets. She was able to produce only 450 bracelets.
Q.4 Fashion India Limited is a chain of ladies garments boutiques where most of the work is done manually.
Due to coming of international brands in India, the company is finding it difficult to compete on two
fronts—finishing and embroidery work. The production manager realised that without modern machines it
would not be possible for them to survive for long. The company purchased new hi-tech modern machines
from Germany. During the production process, the manager observed that the quality of production is
not as per standard and very often production is disrupted due to break-down of machinery. The workers
get frustrated by continuous rejection of output and started showing resistance towards new technology.
To increase the efficiency of the workers, the company decided to train their workers on-the-job under
the able guidance of specialists. The workers who are able to pick the skills are promoted and made
incharge of the not so trained groups. This created positive impact and everybody became keen to learn.
Suggestions from the workers are valued and workers are encouraged to communicate freely. Identify any
three points of importance of management highlighted in the above case by quoting the lines. (3)
Ans. The points of importance of management highlighted in the given case are:
(i) Management increases efficiency: “To increase the efficiency of the workers, the company decided to train their workers on-
the-job under the able guidance of specialists.”
(ii) Management helps in achieving personal objectives: “The workers who are able to pick the skills are promoted and made
incharge of the not so trained groups. This created positive impact and everybody became keen to learn. ”
(iii) Management creates a dynamic organisation: “The production manager realised that without modern machines it would not
be possible for them to survive for long. The company purchased new hi-tech modern machines from Germany. ”
Think about it
Q.1 “A successful enterprise has to achieve its goals effectively and efficiently.” Explain. NCERT (3 marks)
Ans. The given statement is correct. Management is a process of getting things done with the aim of achieving goals effectively and
efficiently. Management has to see that tasks are completed and goals are achieved (i.e., effectiveness) with the least amount
of resources at a minimum cost (i.e., efficiency).
Effectiveness in management is concerned with doing the right task, completing activities and achieving goals.
Efficiency means doing the task correctly and with minimum cost.
It is important for management to achieve goals (effectiveness) with minimum resources i.e., as efficiently as possible while
maintaining a balance between effectiveness and efficiency.
Q.2 "Management is considered to be both an art and science." Explain. NCERT (6 marks)
Ans. Yes, management is both an art and a science. The practice of management is an art. However, managers can work better if
their practice is based on the principles of management. These principles constitute the science of management.
Management as an art and a science are therefore not mutually exclusive, but complementary to each other.
Management is an art because of the following reasons:
(i) Existence of theoretical knowledge (ii) Personalised application (iii) Based on continuous practice and creativity (explain)
Management is a science but not an exact science. The reasons are:
(i) Systematised body of knowledge (ii) Principles based on observation and experimentation (iii) Universal validity (explain)
Answer Key
Multiple Choice Questions (MCQ) 41. (b) 42. (c) 43. (a) 44. (d) 45. (b)
1. (a) 2. (a) 3. (b) 4. (b) 5. (a) 46. (c) 47. (a) 48. (b) 49. (b) 50. (c)
6. (c) 7. (a) 8. (b) 9. (d) 10. (d) 51. (a) 52. (a) 53. (b) 54. (b) 55. (b)
11. (b) 12. (a) 13. (c) 14. (c) 15. (d) Case Study (Case-based Integrated Questions)
16. (b) 17. (d) 18. (b) 19. (c) 20. (a) 1. (d) 2. (c) 3. (d) 4. (c) 5. (b)
21. (d) 22. (d) 23. (c) 24. (c) 25. (b)
6. (b) 7. (d) 8. (d) 9. (c) 10. (d)
26. (a) 27. (c) 28. (b) 29. (d) 30. (b)
11. (a) 12. (a) 13. (d) 14. (b) 15. (d)
31. (c) 32. (b) 33. (a) 34. (c) 35. (b)
16. (d) 17. (b) 18. (b) 19. (d) 20. (d)
36. (a) 37. (b) 38. (a) 39. (b) 40. (d)
14 EXAM HANDBOOK Business Studies XII
Chapter 2
For CBSE Exam 2021 – by Subhash Dey
Principles of
Management
Revised CBSE Syllabus for 2021 Examination Learning Outcomes

 Principles of Management — concept and  Understand the concept of principles of management.
significance  Explain the significance of management principles.
 Fayol’s principles of management  Discuss the principles of management developed by Fayol.
 Taylor’s Scientific management- principles and  Explain

the principles and techniques of ‘Scientific
techniques Management’.
SYNOPSIS
Concept of Principles of Management

Principles of management are general guidelines for managerial decision making and behaviour.
Fayol’s Principles of Management
1. Division of work: Work can be performed more efficiently if it is divided into specialised tasks. A trained specialist who is
competent, is required to perform each job leading to specialization which results in efficient and effective output.
2. Authority and Responsibility: Managers require authority equal to responsibility. An organisation should build safeguards against
abuse of managerial power. At the same time, a manager should have necessary authority to carry out his responsibility. For
example, a manager enhances the production target from 500 units to 700 units per month but the authority to draw raw
material was not given by him. The production manager should not be blamed if he could not achieve the revised production
target. He should have the necessary authority to carry out his responsibility.
3. Discipline: Discipline refers to the obedience to organizational rules and employment agreement. It requires good superiors
at all levels, clear and fair agreement and judicious application of penalties. Example: Suppose management and labour
union have entered into an agreement whereby workers have agreed to work overtime without any additional payment
to revive the company out of loss. In return, the management has promised to increase wages later. Both workers and
management must honour their commitments.
4. Unity of command: Each employee in an organisation should receive orders from one superior only and he should be
responsible to only one superior. If this principle is violated “authority is undermined, discipline is in jeopardy, order disturbed
and stability threatened.” Aim: It prevents dual subordination. Implications: It affects an individual employee.
5. Unity of Direction: All the divisions/units of an organisation should be moving towards the same objectives through
coordinated and focused efforts. Each group of activities having the same objective must have one head and one plan. This
ensures unity of action and coordination. Aim: It prevents overlapping of activities. Implications: It affects the entire organisation.
6. Subordination of individual interest to general interest: The interests of an organisation should take priority over the
interests of any individual employee. The larger interests of the workers and stakeholders are more important than the
interest of any one person. A manager can ensure this by his exemplary behaviour. For example, he should not fall into temptation
of misusing his powers for individual/ family benefit at the cost of larger general interest of the workers/ company.
7. Remuneration of employees: It states that the remuneration of employees should be just and equitable. Employees should
be paid fair wages, which should give them at least a reasonable standard of living. At the same time it should be within the
paying capacity of the company. This will ensure good relations between workers and management.
CHAPTER-2 Principles of Management EXAM HANDBOOK Business Studies XII 15
8. Centralisation and Decentralisation: The concentration of decision-making authority by the top management is
called centralisation whereas its dispersal among more than one person is known as decentralisation. In general, large
organisations have more decentralisation than small organisations. According to Fayol, “There is a need to balance
subordinate involvement through decentralisation with managers’ retention of final authority through centralisation.”
9. Scalar chain: It refers to chain of authority and communication that runs from top to bottom and should be followed by the
managers and the subordinates. It facilitates smooth flow of communication and unity of command in the organisation.
This chain should not be violated in the normal course of formal communication. However, in case of any emergency, a
shorter route named ‘gang plank’ may be used to avoid delay in communication.
10. Order: It states that there should be a place for everything and everyone in an organization and that everything or person
should be found in its allotted place. This will lead to increased productivity and efficiency.
11. Equity: Equity states that there should be no discrimination against anyone on account of sex, religion, language, caste,
belief, nationality etc. It emphasises kindliness and justice in the behaviour of managers towards the workers. This will
ensure loyalty and devotion.
12. Stability of personnel: Employees, once selected, should be kept at their post for a minimum fixed tenure and be given
reasonable time to show results. It will help to minimize employee turnover and maintain organizational efficiency. Any
adhocism will create instability/insecurity among employees. They would tend to leave the organization. Recruitment,
selection and training cost of new employees will be high.
13. Initiative: Initiative means thinking out and executing the plan within the prescribed limits of authority. It states that the
workers should be encouraged to develop and carry out their plans for improvement in the organisation. A good company
should have an employee suggestion system whereby initiative/suggestions which result in substantial cost/time reduction
should be rewarded.
14. Esprit De Corps: It states that management should promote a team spirit of unity and harmony among employees to
realise organisational objectives. Otherwise, it will result in a loss of coordination. A manager should replace ‘I’ with ‘We’
in all his conversations with workers to foster team spirit. This will give rise to a spirit of mutual trust and belongingness
among team members. It will also minimise the need for using penalties.
Taylor’s Scientific Management – Principles
Scientific management means knowing exactly what you want men to do and seeing that they do it in the best and cheapest way.
1. Science not rule of thumb: Taylor believed that there was only one best method to maximise efficiency. This method can
be developed through scientific study and analysis of each element of a job and should substitute ‘Rule of Thumb’. This
standard method then should be followed throughout the organisation.
2. Harmony Not Discord: There should be complete harmony between the management and the workers. Management should
share gains of the company with the workers and workers should work hard and be willing to embrace change for the good
of the company. This requires ‘Mental revolution’ on the part of both management and workers. Both management and the
workers should transform their thinking. Both should realise that they require one another.
3. Cooperation, not individualism: This principle is an extension of principle of ‘Harmony, Not Discord’. There should be
complete cooperation between the management and the workers instead of individualism. According to Taylor, there
should be an almost equal division of work and responsibility between workers and management. The management
should work almost side by side with the workers helping, encouraging and smoothing the way for them. For all important
decisions taken by the management, workers should be taken into confidence. The management should be open to any
constructive suggestions made by the employees and suitably reward them.
4. Development of each and every person to his/her greatest efficiency and prosperity: This principle is concerned with
efficiency of employees which could be built in right from the process of employee selection. The work assigned to employees
should suit their capabilities. They should be given the required training to increase their efficiency. Efficient employees would
produce more and earn more. This will ensure greatest efficiency and prosperity for both the company and the workers.
Techniques of Scientific Management
1. Functional Foremanship: Functional foremanship is an extension of the principle of division of work and specialisation. It is a
technique which aims to improve the quality of supervision at shop floor by putting a worker under eight specialist foremen.
In this technique, planning is separated from execution. Taylor suggested four foremen for planning and four foremen for execution.
The four foremen for planning and their role: (i) Instruction card clerk: To draft instructions for the workers. (ii) Route clerk: To
specify the route of production. (iii) Time and cost clerk: To prepare time and cost sheet. (iv) Disciplinarian: To ensure discipline.
The four foremen for execution and their role: (i) Speed boss: To be responsible for timely and accurate completion of
the job. (ii) Gang boss: To keep machines and tools ready for operation by the workers. (iii) Repair boss: To ensure proper
working conditions of machines and tools. (iv) Inspector: To check the quality of work.
2. Method Study: The objective of method study is to find out one best way of doing the job and includes all activities from
procurement of raw materials till the final product is delivered to the customer. It helps to minimize the cost of production,
improve the quality and maximize satisfaction of the customer.
3. Motion Study: It is a technique to study the movements which are undertaken while doing a well defined job. The movement
could be productive, incidental and unproductive. Motion study seeks to eliminate unnecessary and wasteful movements
so that it takes less time to complete a job efficiently.
4. Time Study: It is a technique to determine the standard time i.e. the time taken by a worker of reasonable skill and efficiency to
perform a well-defined job. Standard time is fixed for the whole of the task by taking several readings. Objective of time study
is to determine the number of workers to be employed, and determine labour costs.
5. Fatigue study: Fatigue Study determines the amount and frequency of rest intervals in completing task. The rest intervals
help the workers to regain stamina and work again with the same capacity resulting in increased productivity. There can be
many causes for fatigue like long working hours, doing unsuitable work, bad working conditions etc.
6. Differential piece wage system: It is a technique which differentiates between efficient and less efficient workers. Taylor
wanted to reward the efficient workers. So he introduced different rate of wage payment for those who performed above
standard and for those who performed below standard.
7. Standardisation and simplification of work: Standardisation is the process of setting standards for every business activity –
standardisation of process, raw material, time, etc. Objectives: (i) To reduce a given line or product to fixed types, sizes and
characteristics. (ii) To establish standards of excellence and quality in materials. (iii) To establish standards of performance
of men and machines. (iv) To establish interchange ability of manufactured parts and products.
Simplification of Work is a technique to eliminate unnecessary varieties, sizes and dimensions of products. It leads to
reduced inventories and increased turnover to reduce costs.
Nature/Characteristics/Features of Principles of Management UGC2 F2B
1. General guidelines: Principles of management are guidelines to action but do not provide readymade, straitjacket solutions
to all managerial problems since real business situations are very complex and dynamic.
2. Formed by practice and experimentation: Principles of management are derived by observation, experimentation and
personal experience of managers.
3. Universal applicability: Principles of management apply to all types of organisations, at all levels and at all times.
4. Flexible: They are not rigid but are flexible and can be modified by the manager when the situation so demands.
5. Contingent: Application of principles of management is dependent upon the prevailing situation at a particular point of time.
6. Behavioural: Management principles aim at influencing behaviour of human beings.
7. Cause and effect relationships: Principles of management establish cause and effect relationship so that they can be used
in similar situations in a large number of cases.
Significance of Management Principles TOP SMS
1. They provide the managers with useful insights into real world situations by learning from past mistakes and conserving time by
solving recurring problems quickly. Principles adds to their knowledge and understanding of managerial situations and circumstances.
2. They help in optimum utilisation of resources as the wastages associated with trial and error approach can be reduced.
They help in effective administration as the decisions are free from personal bias.
3. They help managers in scientific/thoughtful decision-making because decisions based on principles are free from bias.
They are based on the objective assessment of the situation.
4. They help in meeting changing environment requirements as they can be modified according to the needs of the environment.
5. They help in fulfilling social responsibility by responding to the demands of the public.
6. They are used as a basis for management training, education and research.
Case Study
Case-based/Source-based Integrated Questions
‘Bhasin’ limited was engaged in the business of food processing and selling its products under a popular brand. Lately the business was
expanding due to good quality and reasonable prices. Also with more people working the market for processed food was increasing.
New players were also coming to cash in on the new trend. In order to keep its market share in the short run the company directed its
existing workforce to work overtime. But this resulted in many problems. Due to increased pressure of work the efficiency of the workers
declined. Sometimes the subordinates had to work for more than one superior resulting in declining efficiency. The divisions that were
previously working on one product were also made to work on two or more products. This resulted in a lot of overlapping and wastage.
The workers were becoming indisciplined. The spirit of teamwork, which had characterized the company, previously was beginning to
wane. Workers were feeling cheated and initiative was declining. The quality of the products was beginning to decline and market share
was on the verge of decrease. Actually the company had implemented changes without creating the required infrastructure.
The management of company Bhasin Limited now realised its folly. In order to rectify the situation it appointed a management
consultant -Mukti Consultants - to recommend a restructure plan to bring the company back on the rails. Mukti Consultants
undertook a study of the production process at the plant of the company Bhasin Limited and recommended that the company
should introduce scientific management with regard to production. It suggested that planning and execution should be separated and
that 'work study' should be undertaken to optimise the use of resources.
1. "In order to keep its market share in the short run the company directed its existing workforce to work overtime. But
this resulted in many problems. Due to increased pressure of work the efficiency of the workers declined. Sometimes the
subordinates had to work for more than one superior resulting in declining efficiency." Identify the principle/technique of
management overlooked above.
(a) Fatigue Study (b) Unity of command
(c) Both (a) and (b) (d) Development of each and every person to his/her greatest efficiency.
2. "The divisions that were previously working on one product were also made to work on two or more products. This resulted
in a lot of overlapping and wastage." Identify the principle of management violated here.
(a) Unity of command (b) Unity of direction (c) Scalar Chain (d) Division of work
3. "The spirit of teamwork, which had characterized the company, previously was beginning to wane." Identify the principle of
management violated here.
(a) Discipline (b) Equity (c) Initiative (d) Esprit De Corps
4. "Bhasin Limited and recommended that the company should introduce scientific management with regard to production. It
suggested that planning and execution should be separated..." Which technique of scientific management is highlighted above?
(a) Standardisation and Simplification of work (b) Functional Foremanship
(c) Differential Piece Wage System (d) Method Study
The story of Shri Mahila Griha Udyog lijjat Papad is very inspiring for would-be managers. It shows how an organisation can combine
business with social responsibility and make its stakeholders self-reliant. The stakeholders are various women who, numbering over
45,000, are given the task of making lijjat papads, which are famous for their quality throughout the world. The organisation started
with a modest loan of Rs 80 and is now worth around Rs 650 crores. Its exports exceed Rs 60 crores. Their exports are made through
Merchant Exporters to countries like UK, USA, Middle East Countries, Thailand, Singapore, Hongkong, Holland, Japan, Australia and
other Countries. One of the main reasons for their success can be attributed to their core values to which they have stuck to since its
inception in 1959. It has shown how it is possible to combine Gandhian values with business. Shri Mahila Griha Udyog Lijjat Papad is
a synthesis of three different concepts (core values) namely: the concept of business, the concept of family, and the concept of devotion.
All these concepts are uniformly followed in this institution. As a result of this synthesis, a peculiar Lijjat way of thinking has
developed therein. Besides the concept of business, the institution along with all its member sisters has adopted the concept of
mutual family affection, concern and trust. All the affairs of the institution are dealt with in a manner similar to that of a family
carrying out its own daily household chores. But the most important concept adopted by the institution is the concept of devotion.
For the member sisters, employees and well-wishers, the institution is never merely a place to earn one’s livelihood — it is a place of
worship to devote one’s energy not for his or her own benefits but for the benefit of all. Lijjat’ provides scholarships to the children
of the papad roller sister members who pass out in 10th and 12th standard every year so as to enable the Lady Members to encourage
their children for education. The management of the organisation promotes a team spirit of unity and harmony among its members.
This gives rise to a spirit of mutual trust and belongingness among the members. Lijjat' provides fair and just remuneration to its
members, based on members' contribution and company's paying capacity, etc.
5. "For the member sisters, employees and well-wishers, the institution is never merely a place to earn one’s livelihood — it is
a place of worship to devote one’s energy not for his or her own benefits but for the benefit of all." Which of the following
general principle of management is followed here?
(a) Equity (b) Discipline
(c) Order (d) Subordination of individual interest to general interest
6. "Lijjat’ provides scholarships to the children of the papad roller sister members who pass out in 10th and 12th standard
every year so as to enable the Lady Members to encourage their children for education." Which of the following point of
significance of management principles is highlighted above?
(a) Scientific Decisions (b) Meeting changing environment requirements
(c) Fulfilling social responsibility (d) Optimum utilisation of resources
7. "The management of the organisation promotes a team spirit of unity and harmony among its members. This gives rise to a
spirit of mutual trust and belongingness among the members." Identify the principle of management highlighted above.
(a) Division of work (b) Equity (c) Initiative (d) Esprit De Corps
8. "Lijjat' provides fair and just remuneration to its members, based on members' contribution and company's paying capacity,
etc. " What nature of principles of management is highlighted above?
(a) General Guidelines (b) Flexible (c) Contingent (d) Mainly behavioural
Damini D’souza took over the reins of ‘Kinsa Retail’ as its Managing Director in India. Kinsa Retail with its headquarters at
Japan has been in retail business for the last 40 years. It has regional offices in many countries with each regional office taking
care of the shops in that particular region. As it is a large organisation, the regional officers have been given the powers to decide
and spend funds sanctioned to them by the headquarter for the welfare of the customers of their region. Kinsa Retail wants the
highest possible standards of ethical conduct being followed for which a code of conduct is in place for putting values into practice.
All employees as well as Board members are required to act in accordance with the highest standards of personal and professional
integrity when acting on behalf of the company. Non-compliance involves a heavy penalty including termination of employment.
The management of 'Kinsa Retail' firmly believes that the principles of management are not rigid prescriptions which have to be
followed absolutely. Rather, the application of principles of management is dependent upon the prevailing situation at a particular
point of time. Their application has to be changed as per requirements.
'Kinsa Retail' selects and appoints personnel after due and rigorous procedure. But once selected, they are given reasonable time to
show results. All the employees are happy and satisfied working in the organisation.
9. "As it is a large organisation, the regional officers have been given the powers to decide and spend funds sanctioned to them by
the headquarter for the welfare of the customers of their region." Identify the principle of management followed by the company.
(a) Authority and Responsibility (b) Division of work
(c) Centralisation and Decentralisation (d) Order
10. "All employees as well as Board members are required to act in accordance with the highest standards of personal
and professional integrity when acting on behalf of the company. Non-compliance involves a heavy penalty including
termination of employment." Identify the principle of management/technique of scientific management highlighted above.
(a) Discipline (b) Standardisation and Simplification of work
(c) Esprit De Corps (d) Initiative
11. "The management of 'Kinsa Retail' firmly believes that the principles of management are not rigid prescriptions which have
to be followed absolutely. Rather, the application of principles of management is dependent upon the prevailing situation
at a particular point of time. Their application has to be changed as per requirements." What nature of management
principles has been highlighted above?
(a) Universal applicability (b) Flexible (c) Contingent (d) Mainly behavioural
12. "'Kinsa Retail' selects and appoints personnel after due and rigorous procedure. But once selected, they are given
reasonable time to show results. All the employees are happy and satisfied working in the organisation." Which principle of
management is highlighted here?
(a) Equity (b) Subordination of individual interest to general interest
(c) Stability of personnel (d) Esprit De Corps
Tanvi is a manager in Beta Ltd, a company manufacturing plastic glasses and bowls. The government banned plastic items. As a
result, Beta Ltd. incurred a huge loss as it had to stop production of plastic glasses and bowls, and had to purchase new machinery
for producing paper glasses and bowls. The management of the company entered into an agreement with labour union whereby
workers agreed to put in extra hours without additional payment to revive the company out of loss. In return the management
promised to increase wages of the workers when this mission was accomplished. Tanvi found that workers’ efficiency declined due
to long working hours. She conducted an experiment to see the effect of improvement of physical conditions of work to reduce
stress. It worked and workers efficiency and productivity increased manifold. Within two months, the company revived out of loss.
The management in return increased their wages by 30 per cent.
13. "The management of the company entered into an agreement with labour union whereby workers agreed to put in extra
hours without additional payment to revive the company out of loss. In return the management promised to increase
wages of the workers when this mission was accomplished... Within two months, the company revived out of loss. The
management in return increased their wages by 30 per cent." Identify the principle of management highlighted above.
(a) Authority and Responsibility (b) Unity of command
(c) Discipline (d) Subordination of individual interest to general interest
14. "Tanvi found that workers’ efficiency declined due to long working hours. She conducted an experiment to see the effect of
improvement of physical conditions of work to reduce stress. It worked and workers efficiency and productivity increased
manifold." Identify the principle/technique of management highlighted above.
(a) Time Study (b) Fatigue Study
(c) Initiative (d) Development of each and every person to his/her greatest efficiency
15. What nature of principles of management is highlighted in the above case?

(a) General guidelines (b) Mainly behavioural
(c) Cause and effect relationships (d) Formed by practice and experimentation
16. Which of the following point of significance of management principles is highlighted in the above case?
(a) Optimum utilisation of resources (b) Providing managers with useful insights into reality
(c) Meeting changing environment requirements (d) All of these
Vishesh completed his MBA at a reputed business school in Lucknow. He was impressed by the Principles and Techniques of
Scientific Management developed by F.W. Taylor. On completing his MBA, he wanted to apply scientific Management in his
family’s business of fast food chain of restaurants named ‘Burger Mania’.
His main goal was to reduce costs with increased output. To begin with, he wanted to develop a standard method which would be
followed throughout the organisation. So, he investigated traditional methods through work study and unified the best practices.
The standard method, i.e. the best way of doing the job was then developed taking into account all parameters right from the
procurement of raw materials till the delivery of the final product to the customer. Vishesh also believed that each person should
not only be scientifically selected but should also be given the required training to increase efficiency. For this, he set up a Special
Training Unit called ‘Hamburger’ in Bengaluru where the workers were given the required training to increase efficiency. For this,
he set up a workers were given the required training to learn the best method. At the factory, the ingredients making up a burger
were strategically placed to reduce the time taken for excess movements. The standard time and other parameters were determined
on the basis of work study and Vishesh rewarded the workers for meeting the standard output.
Now, ‘Burger Mania’ has standardised processes, raw material, time, machinery, product and working conditions that ensure the
food they send out to their customers has the same high standards of excellence and level of quality in every chain or franchise. The
application of Scientific Management to every aspect of restaurant operations led to Burger Mania’s widespread success.
17. "The standard method, i.e. the best way of doing the job was then developed taking into account all parameters right from
the procurement of raw materials till the delivery of the final product to the customer." Identify the principle/technique of
scientific management highlighted above.
(a) Science, not rule of thumb (b) Development of each and every person to his/her greatest efficiency
(c) Method Study (d) Standardisation of work
18. "Vishesh also believed that each person should not only be scientifically selected but should also be given the required training
to increase efficiency. For this, he set up a Special Training Unit called ‘Hamburger’ in Bengaluru where the workers were given
the required training to increase efficiency." Identify the principle/technique of scientific management highlighted above.
19. "Now, ‘Burger Mania’ has standardised processes, raw material, time, machinery, product and working conditions that
ensure the food they send out to their customers has the same high standards of excellence and level of quality in every
chain or franchise." Identify the principle/technique of scientific management highlighted above.
20. "At the factory, the ingredients making up a burger were strategically placed to reduce the time taken for excess movements."
Identify the work study technique of scientific management highlighted above.
(a) Time Study (b) Method Study (c) Motion Study (d) Fatigue Study
Multiple Choice Questions (MCQ) (1 mark each)

1. The principles of management are said to be flexible as:
(a) they aim at influencing behaviour of human beings.
(b) they are general guidelines to action, but do not provide ready made solutions to management problems.
(c) they can be modified by the manager when the situation so demands.
(d) their application is dependent upon the prevailing situation at a particular point of time.
2. “Management principles are not as rigid as principles of pure science.” Which of the following best describes the given statement?
(a) Management principles deal with human behaviour and, thus, are to be applied creatively given the demands of the situation.
(b) Principles of management are formed after research in work situations, which are technical in nature.
(c) Principles of management contribute towards the development of management both as a science and as an art.
3. The principles are guidelines to action but do not provide readymade, straitjacket solutions to all managerial problems. This is so
because _______________.
(a) the application of principles has to be changed as per requirements.
(b) real business situations are very complex and dynamic and are a result of many factors.
(c) principles are like different tools serving different purposes, the manager has to decide which tool to use under what circumstances.
(d) All the above
4. “The principles of management are not rigid prescriptions, which have to be followed absolutely.” Which of the following best
describes the given statement?
(a) Management principles aim at influencing behaviour of human beings.
(b) Management principles enable a better understanding of the relationship between human and material resources in accomplishing
organisational purposes.
(c) Management principles are flexible and can be modified by the manager when the situation so demands.
5. The application of principles has to be changed as per requirements. For example, employees deserve fair and just remuneration. But
what is just and fair is determined by multiple factors. They include contribution of the employee, paying capacity of the employer
and also prevailing wage rate for the occupation under consideration.
Identify the nature of principles of management highlighted above.
(a) General Guidelines (b) Flexible
(c) Mainly Behavioural (d) Contingent
6. A manager should have the right to punish a subordinate for wilfully not obeying a legitimate order but only after sufficient
opportunity has been given to a subordinate for presenting her/his case. Identify the principle of management highlighted above.
(a) Authority and Responsibility (b) Discipline
(c) Equity (d) Stability of Personnel
7. According to Fayol, discipline requires ____________.
(a) good superiors at all levels (b) clear and fair agreements
(c) judicious application of penalties (d) All of these
8. __________ is an extension of the principle of division of work and specialisation to the shop floor; and it violates the principle of
Unity of command.
(a) Cooperation, not individualism (b) Functional foremanship
(c) Unity of Direction (d) Standardisation and Simplification of work
9. Which of the following technique of scientific management violates the principle of Equity?
(a) Functional foremanship (b) Standardisation and Simplification of work
10. A worker directly contacts the CEO of the company with a complaint regarding working conditions in the factory. Which of the
following principles is being violated here?
(a) Unity of Command (b) Discipline (c) Scalar Chain (d) Unity of Direction
11. Same battery can be used in different mobile phones of a particular brand. This is an example of which of the following techniques of
scientific management?
(a) Standardisation of work (b) Method Study (c) Simplification of work (d) Functional Foremanship
12. ‘She/he keeps machines, materials, tools etc., ready for operations by concerned workers’. Whose work is described by this sentence
under functional foremanship?
(a) Route Clerk (b) Repair Boss (c) Gang Boss (d) Instruction Card Clerk
13. Which one of the following statements best describes ‘Mental Revolution’ as described by F.W. Taylor?
(a) It implies change of attitude.
(b) The management and workers should not play the game of one upmanship.
(c) Both management and workers require each other.
(d) Workers should be paid more wages.
14. In an organisation, each person should be scientifically selected. Then work assigned should suit his physical, mental and intellectual
capabilities. To increase efficiency, they should be given the required training. Efficient employees would produce more and earn
more. Which of the following principle of management is highlighted above?
(a) Science, not rule of thumb
(b) Division of work.
(c) Development of each and every person to his/her greatest efficiency and prosperity.
(d) Remuneration of employees.
15. According to this principle of management, there should be obedience to organisational rules and contract of employment, clear and
fair decisions and judicious application of penalties which are necessary for the working of the organisation.
The principle of management referred to above is :
(c) Unity of Command (d) Subordination of Individual Interest to General Interest
16. Sanak and Gagan started their career in Wales Limited (a printing press) after going through a rigorous recruitment process. Since
they had no prior work experience, the firm decided to give them one year to prove themselves. The principle of management
followed by Wales Limited is __________.
(c) Equity (d) Stability of Personnel
17. Match the principle of management in Column I with their respective explanation in Column II:
A. Scalar chain (i) When no division of the company has a separate plan of action.
B. Subordination of individual (ii) When a manager awards contract for supply of raw material to a particular party, which happens
interest to general interest to be owned by his relative ignoring other parties, who can supply the same at a cheaper rate.
C. Unity of direction (iii) When a subordinate habitually contacts higher authorities in the company by passing
his/her immediate superior.
D. Equity (iv) When the manager grants one month medical leave to a supervisor with pay and only one
week medical leave to accountant.
(a) (i), (ii), (iii), (iv) (b) (ii), (i), (iii), (iv) (c) (iii), (ii), (i), (iv) (d) (iii), (i), (ii), (iv)
18. Match the technique of scientific management in Column I with their respective explanation in Column II:
A. Time study (i) Each specialist is to be assigned work according to her/his qualities. For example, those
with technical mastery, intelligence and grit may be given planning work. Those with
energy and good health may be assigned execution work.
B. Method study (ii) Devising new varieties instead of the existing ones and eliminating unnecessary diversity
of products.
C. Functional foremanship (iii) Fixing the standard time taken to perform a well-defined job so as to determine the number
of workers to be employed; frame suitable incentive schemes and determine labour costs.
D. Standardisation and (iv) Finding out one best way of doing the job to minimise the cost of production and maximise
simplification of work the quality and satisfaction of the customer.
(a) (iii), (ii), (i), (iv) (b) (ii), (i), (iii), (iv) (c) (iii), (iv), (i), (ii) (d) (i), (iii), (ii), (iv)
A. Standardisation of work (i) Separation of planning and execution functions
B. Simplification of work (ii) Setting benchmarks for every business activity which must be adhered to during production
C. Method study (iii) Eliminating superfluous varieties, sizes and dimensions.
D. Functional foremanship (iv) Minimising the cost of production and maximise the quality and satisfaction of the customer
(a) (i), (ii), (iii), (iv) (b) (ii), (iii), (iv), (i) (c) (ii), (iv), (i), (iii) (d) (i), (iii), (ii), (iv)
A. Method Study (i)
To reduce a given line or product to fixed types, sizes and characteristic
B. Time Study (ii)
Devising new varieties instead of the existing ones
C. Standardisation of work (iii)
To find out one best way of doing the job.
D. Simplification of work (iv)
To determine the number of workers to be employed ; frame suitable incentive schemes and
determine labour costs.
(a) (iii), (iv), (i), (ii) (b) (i), (ii), (iii), (iv) (c) (ii), (iv), (i), (iii) (d) (iii), (i), (ii), (iv)
21. Match the principle/technique/concept of management in Column I with their respective explanation in Column II:
A. Standardisation of work (i) To establish interchange ability of the manufactured parts and products.
B. Mental revolution (ii) Classification of workers as efficient and inefficient an the basis of certain standards
C. Cooperation, not (iii) Change in the attitude of workers and management towards one another from
individualism competition to cooperation.
D. Differential piece rate system. (iv) Equal division of work and responsibility between workers and management
(a) (i), (iv), (iii), (ii) (b) (i), (iii), (iv), (ii) (c) (ii), (iv), (i), (iii) (d) (iii), (i), (ii), (iv)
22. Name the technique of scientific management which is the strongest motivator for a worker to reach standard performance.
23. In one of the principles of scientific management, Taylor emphasises that there should be equal division of work and responsibility
between workers and management and management should work almost side by side with workers helping and smoothing the way
for them. Identify the principle.
(a) Science, not rule of thumb (b) Harmony, not discord
(c) Cooperation, not individualism (d) Development of each and every person to his/her greatest efficiency
24. According to Fayol, workers should be encouraged to develop and carry out their plans for improvements. A good company should
have an employee suggestion system whereby initiative/ suggestions which result in substantial cost/time reduction should be
rewarded. Identify the principle of management highlighted above.
(a) Initiative (b) Equity
(c) Remuneration of Employees (d) Stability of personnel
25. According to Fayol, a manager should not fall into temptation of misusing his powers for individual/ family benefit at the cost of
larger interest of the workers/ company. This exemplary behaviour of the manager will raise his stature in the eyes of the workers and
at the same time will ensure same behaviour by them. Identify the principle of management discussed.
(a) Initiative (b) Esprit De Corps
(c) Discipline (d) Subordination of Individual Interest to General Interest
26. Name the principle of management according to which a manager should replace ‘I’ with ‘We’ in all his conversations with the workers.
(a) Initiative (b) Discipline
(c) Esprit De Corps (d) Subordination of Individual Interest to General Interest
27. According to Taylor, scientific method should be used to analyse methods of production prevalent under the rule of thumb. The
best practices can be kept and further refined to develop a standard which should be followed throughout the organisation. These
are the benchmarks, which must be adhered to during production. Its objective is to reduce a given line or product to fixed types,
sizes and characteristics; and to establish interchange ability of manufactured parts and products. Scientific management also aims
at eliminating unnecessary diversity of products. Most large companies like Nokia, Toyota and Microsoft etc. have successfully
implemented these technique of scientific management. This is evident from their large share in their respective markets. I dentify the
technique of scientific management highlighted in the above paragraph.
28. According to Taylor, management should not close its ears to any constructive suggestions made by the employees. They should
be rewarded for their suggestions which results in substantial reduction in costs. They should be part of management and, if any
important decisions are taken, workers should be taken into confidence. At the same time workers should desist from going on
strike and making unreasonable demands on the management. Both should realise that they need each other. In fact, when there
will be open communication system and goodwill there will be no need for even a trade union. Paternalistic style of management,
whereby the employer takes care of the needs of employees, would prevail as in the case of Japanese companies. I dentify the principle
of scientific management highlighted in the above paragraph.
29. In the factory set-up / system ,Taylor concentrated on improving the performance of the managerial figure with whom the workers
are in face-to-face contact on a daily basis. He is the pivot around whom revolves the entire production planning, implementation
and control. In fact, Taylor identified a list of qualities of that person such as intelligence, education, tact, grit, judgement, special
knowledge, manual dexterity, and energy, honesty and good health. Taylor found that no single person could fit them all. This
prompted him to suggest a technique of scientific management which is an extension of the principle of division of work and
specialisation to the shop floor. This concept was extended to the lowest level of the shop floor. I dentify the technique of scientific
management discussed in the above paragraph.
30. According to Taylor, even a small production activity like loading pigs of iron into boxcars can be scientifically planned and managed.
This can result in tremendous saving of human energy as well as wastage of time and materials. The more sophisticated the processes,
greater would be the savings. In the present context, the use of internet has brought about dramatic improvements in internal
efficiencies and customer satisfaction. Identify the principle of management highlighted above.
31. Name the technique of Scientific Management given by Taylor, with the objective of determining the number of workers to be
employed for a task.
32. Appliances India Ltd is engaged in manufacturing and distribution of home appliances since 1987. It has a good name in
the market as the company is producing good quality appliances. It has separate departments for manufacturing, finance, sales,
maintenance services and technical services to achieve specialisation. Since the areas of operation of the company have increased
and customers have become more demanding, the company decided to modify the existing principle of management to meet the
changing requirements of the environment. The general principle of management which the company wants to modify to meet
the changing requirements is _________ .
(a) Unity of command (b) Unity of direction
(c) Authority and Responsibility (d) Division of work
33. Entrance to management institutes is preceded by management aptitude tests, which are developed with an understanding of
management principles. These principles provide basic groundwork for the development of management as a discipline. Professional
courses, such as MBA,BBA also teach these principles as part of their curriculum at the beginner’s level. These principles enable
refinement of management practices as well by facilitating the development of new management techniques like Operations Research
(OR), ‘Just in Time’ and ‘Kaizen’. Identify the point significance of management principles highlighted above.
(a) Scientific Decisions (b) Meeting changing environment requirements
(c) Fulfilling social responsibility (d) Basis for management training, education and research
34. Loyd Co. Ltd. manufactures motorcycles and cars. It has two separate divisions for both of them. Each division has its own incharge,
plans and execution resources. On no account the working of two divisions overlap. Which principle of management is followed by
Loyd Co. Ltd.?
35. ‘Aapka Vidyalaya’ believes in holistic development of students and encourages team building through a mix of curricular, co-curricular
and sports activities. On its founders day a stage performance had to be put up. A committee of ten prefects was constituted to plan
different aspects of the function. They all decided to use recycled paper for decoration. There was a spirit of unity and harmony and all
members supported each other. With mutual trust and belongingness the programme was systematically planned and executed. Kartik,
one of the prefects realised that unknowingly the group had applied one of the principles of management while planning and executing
the programme. He was so inspired by the success of the function that he asked his father to apply the same principle in his business. His
father replied that he was already using this principle. Identify the principle of management applied for the success of the programme.
(a) Initiative (b) Esprit De Corps
(c) Discipline (d) Subordination of Individual Interest to General Interest
36. Nikita and Salman completed their MBA and started working in a multinational company at the same level. Both are working
hard and are happy with their employer. Salman had the habit of backbiting and wrong reporting about his colleagues to impress
his boss. All the employees in the organisation knew about it. At the time of performance appraisal the performance of Nikita was
judged better than Salman. Even then their boss, Mohammed Sharif decided to promote Salman stating that being a female Nikita
will not be able to handle the complications of a higher post.
Identify the principle of management which was not followed by this multinational company.
(a) Equity (b) Initiative
37. Sigma Ltd. is a large company manufacturing electric motors. The company has several departments-Production, Marketing, Finance
and HR. Mr. Shashank, CEO of the company set the target sale of ` 10 crore in a month. To increase the sales, the marketing
manager, Mr. Ishaan insists on offering 10% discount to customers. But the finance manager, Mr. Mohak does not approve such
discount as it would mean loss of revenue. Because of dual subordination, the sales manager, Mr. Anshik could not achieve the sales
target. Which principle of management has been overlooked by this company?
38. In an organisation, a sales person is asked to clinch a deal with a buyer and is allowed to give 10% discount by the marketing
manager. But finance department tells him not to offer more than 5% discount. Which principle of management is overlooked here?
39. In a company, management and labour union have entered into an agreement whereby workers have agreed to put in extra hours without any
additional payment to revive the company out of loss. In return the management has promised to increase wages of the workers when this
mission is accomplished. As per the agreement, the workers worked overtime and within two months, the company’s losses were wiped out.
Soon the company started earning high profits. All this was due to the hard work and commitment of the workers. But the company denied
to increase wages of the workers as per the agreement. Identify the principle of management violated in the above case.
(a) Authority and Responsibility (b) Esprit De Corps
(c) Order (d) Discipline
40. For the last two years, Tulip Industries is not functioning smoothly and systematically. The relations between management and
employees are becoming bitter day-by-day. After a complete analysis, it was observed that employees are not working effectively and
efficiently and management is not fulfilling its commitment of increments and promotions. Which management principle is being
ignored in the given case?
(a) Authority and Responsibility (b) Esprit De Corps
(c) Order (d) Discipline
41. Arun is a salesman in Sunrise Ltd. He did an aggressive research on a new cost saving advertisement technique and suggested the
same to his sales manager. However, the sales manager did not pay any attention to his suggestion. W hich principle of management
is being violated by the sales manager?
(a) Equity (b) Initiative
42. Fast Cool Industries (AC manufacturing company) asked its employees to work overtime in order to meet growing demand of
AC in the summer season. However, the employees were not paid overtime wages for extra time worked by them. As a result, the
employees always felt dissatisfied and it led to unhealthy relationships between the employees and management. Identify the principle
of management not observed by Fast Cool Industries.
(a) Equity (b) Remuneration of Employees
(c) Discipline (d) Initiative
43. Mr. Prakash Chopra, General Manager of M/s Kwality Enterprises (Leather bags manufacturing company) retains complete authority
over all the activities of the business. No decision-making power is given to the subordinates. As a result, Mr. Prakash is always
engaged in day-to-day operational activities and is unable to concentrate on core issues of the company. I dentify the management
principle violated by Mr. Prakash Chopra.
(a) Authority and Responsibility (b) Initiative
(c) Equity (d) Centralisation and Decentralisation
44. Wizard Digitek Enterprises imports various computer parts from China and assembles them to make a complete computer. The total work
involves three different tasks: assembling, labelling and packaging of computer. Each employee of the company independently performs these
three tasks. As a result, no employee is able to gain specialisation in a particular field and the company is unable to fulfill the orders on time.
Identify the principle/technique of management which can be followed by Wizard Digitek Enterprises to overcome this problem.
(a) Method Study (b) Centralisation and Decentralisation
(c) Initiative (d) Division of work
45. Mr. Kapoor, Finance manager of ABC Ltd. applied for leave to attend a family function in Amritsar. The director of the company
requested him to cancel his leave as there is an important meeting schedule on that date. Mr. Kapoor immediately agreed and cancelled
his trip as he thought that attending the meeting was more important for company’s benefit. Which principle of management is
highlighted in this case?
(a) Unity of command (b) Order
(c) Initiative (d) Subordination of Individual Interest to General Interest
46. Raghav, a manager, expects his subordinates to adapt to the new environs and working conditions without giving them time to settle
down. Identify the principle of management overlooked by the manager.
(a) Unity of command (b) Discipline
(c) Stability of Personnel (d) Subordination of Individual Interest to General Interest
47. Pranav, a manager, expects his subordinates to work for the happiness and pleasure of being in the organisation.
Identify the principle of management violated by the manager.
(a) Discipline (b) Remuneration of Employees
(c) Equity (d) Authority and Responsibility
48. The sales manager assigned a target of selling 40 RO Water Purifiers in a month to a group of 10 sales executives. They mutually
decided to sell 4 purifiers each. However, after selling 1 purifier, Kshitij (one of the sales executive) met with an accident. The other
sales executives did not pay any attention to the remaining target of Kshitij and concentrated on their individual sales target. At the
end of the month, only 37 purifiers could be sold. Identify the principle of management violated in the given case?
(a) Esprit De Corps (b) Centralisation and Decentralisation
(c) Initiative (d) Division of work
49. Mr. Gopal, HR Manager of a company, selects each person scientifically, assigns work to each employee according to her/his physical,
mental and intellectual capabilities. He also gives them the required training so that they may produce more and earn more. This will ensure
their prosperity for both company and workers. Identify the principle/technique of scientific management highlighted in the above case.
(a) Method Study (b) Harmony, not discord
50. In order to set up standard target of performance for workers, it was necessary for Shiv Ltd. to fix standard time for workers to
perform a particular job. For this Mr. Ganesh, the Production Manager of the company observed the workers when they were
performing the job. He used a stop watch in hand and noted down the average time taken by workers for completion of the job. He
repeated the same observation for 100 times and then calculated average time for the performance of the job. This was fixed as the
standard time on the basis of which efficient and inefficient workers were distinguished. Identify technique of scientific management
followed by Mr. Ganesh.
51. Sitaram, the production manager of X Ltd., wants to increase the speed of packaging. In order to identify and eliminate unnecessary
and unproductive movements of workers in packaging, he installed a CCTV camera in the factory. Which technique of scientific
management is adopted by Sitaram?
52. Ram Kishan is the owner of a shoe manufacturing factory. He follows the traditional practice of fixing standard time of work based
on his own past experiences. He could not match the supply with the demand for shoes produced in his factory. His son, Shyam who
has done MBA from FMS joined business and suggested to fix the standard time by analysing the work scientifically. The production
increased and supply could match the demand. Which principle of scientific management of Taylor is highlighted in above case?
(a) Science, not rule of thumb (b) Cooperation, not individualism
(c) Harmony, not discord (d) Development of each and every person to his/her greatest efficiency
53. Beena, a student of management, likes to relate what she learnt in class to real life situations. She observed many situations while
watching educational programmes on television that remind her of concepts of scientific Management. In one such programme,
factories manufacturing parts for products like automobiles, computers and mobile phones were being telecast.
Name the technique of Scientific management that should be adhered to, while manufacturing parts for such products.
54. Pawan is working as a ‘production manager’ in CFL Ltd. engaged in manufacturing of CFL bulbs. There is no class conflict between
the management and workers. The working conditions are very good. The company is earning huge profits. As a policy matter,
management is sharing the gains with the workers because they believe that prosperity of the company cannot exist for a long time
without the prosperity of the employees. I dentify the principle of scientific management described in the above para.
(a) Science, not rule of thumb (b) Cooperation, not individualism
(c) Harmony, not discord (d) Development of each and every person to his/her greatest efficiency
Applying, Analysing and Creating Based Questions
Q.1 Vaibhav Sharma was working as the Production Manager in Crescent Pharmaceuticals Pvt. Ltd. To get his
son admitted in school he wanted to take leave from the office but on the same day, an important meeting
with the Chief Executive Officer (CEO) of the company was scheduled to discuss about some new medicines
to be manufactured. Considering the significance of the meeting, he did not take leave. The CEO appreciated
his exemplary behaviour as he gave priority to the organisational interest over his personal interest.
Name and explain the principle of management being followed by Vaibhav Sharma in the above case. (3)
Ans. Subordination of individual interest to General Interest (explain)
Q.2 Management principles enable managers to learn from past mistakes and conserve time by solving
recurring problems quickly. As such management principles increase managerial efficiency. For example,
a manager can leave routine decision-making to his subordinates and deal with exceptional situations
which require his/her expertise.
(a) State the point of significance of principles of management highlighted above.
(b) Identify and explain the principle of management highlighted above. (3)
Ans. (a) The principles of management provide the managers with useful insights into real world situations.
(b) Centralisation & decentralisation (explain)
Q.3 Kirtika Kapoor, the CEO of Mobilo Ltd. firmly believes in providing fair wages to the employees , superior
value to the customer, care for the environment and honest dealings with business associates.
(a) Identify and explain the general principle of management followed by Kirtika Kapoor.
(b) State the point of importance of management principles highlighted above. (3)
Ans. (a) Equity (b) Principles of management help in fulfilling social responsibility. ( explain)
Q.4 For greater productivity, work should be divided into small tasks and each employee should be trained to perform
his/her specialised job. This principle is applicable to a government office where there is a diary/dispatch clerk
whose job is to receive and send mail or documents, a data entry operator whose task is to input data on the
computer, a peon and an officer etc. This principle is also applicable to a limited company where there are separate
departments like Production, Finance, Marketing and Research and Development (R&D)etc.
(a) Identify and explain the principle of management highlighted in the above para
(b) Identify and state the characteristic of principles of management highlighted in the above para. (3)
Ans. (a) Division of work (b) Universal applicability (explain)
Q.5 A production manager at top level in a reputed corporate, Mr. Rathore holds the responsibility for ordering raw
material for the firm. While deciding on the supplier for the financial year 2018-19, he gave the order to his cousin
at a higher price per unit instead of the firm’s usual supplier who was willing to lower the rates for the order.
(a) Which principle of management was violated by Mr. Rathore?
(b) What are the positive impacts of following the above identified principle? (3)
Ans. Subordination of individual interest to general interest.
Q.6 ‘Scientific Management means knowing exactly what you want men to do and seeing that they do it in the
best and the cheapest way.’ Taylor developed various techniques for application of Scientific Management
principles and was able to achieve a three-fold increase in productivity in Bethlehem Steel Company,
where he worked. One of the techniques helps to determine the number of workers to be employed; frame
suitable incentive schemes and labour costs. Another technique recognises those workers who are able to
accomplish/exceed the fair day’s work and is based on the premise that efficiency is the result of the joint
efforts of the managers and the workers. Quoting the lines from the above paragraph, identify and explain
the two techniques of Scientific Management. (4)
Ans. Time Study — ‘One of the techniques helps to determine labour costs’
Differential Piece Wage System — ‘Another technique recognises those workers .... the workers’
Q.7 Mr. Sanjeev, a manager believes that through principles of management do not provide strait jacket
solutions to all managerial problems, yet they cannot be underestimated because even a small guideline
helps to solve a given problem. Mr. Sanjeev, in dealing with a situation of conflict between two departments,
always emphasizes the primacy of the overall goals of the organisation.
(a) Identify and explain the principles of management followed by Mr. Sanjeev.
(b) Identify and state the characteristic of principles of management highlighted above. (3)
Ans. (a) Subordination of individual interest to general interest (b) General guidelines (explain)
Q.8 In a company, a sales manager has to negotiate a deal with a buyer. She finds that if she can offer credit
period of 60 days she is likely to clinch the deal which is supposed to fetch the company net margin of say
Rs. 50 crores. But the company gives power to the manager to offer a credit period of only 40 days. As a
result, she could not negotiate the deal with the buyer.
(a) Is the sales manager liable for this? Give reason in support of your answer.
(b) Should the sales manager be given a power to offer a credit period of 100 days? Justify your answer. (3)
Ans. (a) No, the sales manager is not responsible if she could not negotiate the deal with the buyer.
She should be granted authority of offering credit period of 60 days in the interest of the company.
Here, the principle of Authority and Responsibility is violated. A manager should have necessary
authority to c arry out his responsibility.
(b) No, the sales manager should not be given a power to offer a credit period of 100 days because it is not
required. An organisation should build safeguards against abuse of managerial power.
Q.9 In a formal organisation, a worker cannot directly contact the CEO of the company. If at all he has to,
then all the formal levels, i.e. foreman, superintendent, manager, director, etc have to know about the
matter. However, in an emergency it can be possible that a worker can contact CEO directly.
(a) Identify and state the principle of management highlighted above.

(b) State the device that can be used when in an emergency a worker can contact CEO directly. (3)
Ans. (a) Scalar Chain (b) Gang Plank (explain)
Q.10 Zoya International Ltd. is a multinational company in which people of various nationalities work together
with a team spirit of unity and harmony in a discrimination free environment. Equal opportunities are
available for everyone in the company. The pay and compensation of all the employees is just and equitable.
(a) State the principles of management being followed by Zoya International Ltd.
(b) What benefits will Zoya International Ltd. derive by following the principles identified in part (a). (6)
Ans. The principles of management being followed by Zoya International Ltd. are:
(i) Esprit de corps (ii) Equity (iii) Remuneration of employees (Give the meaning and benefits)
Q.11 Zaika Ltd. is a company manufacturing garments under the brand name ‘Amol’. The management of
the company does not give the workers reasonable time to show results. Even the management does not
promote a team spirit of unity and harmony among the workers. The workers often have to work under
two superiors at the same time.
(a) Identify and state the principles of management overlooked in the above case. (6)
(b) State the consequences which Zaika Ltd. will have to face by not following the principles identified in part (a).
Ans. The principles of management overlooked by the management of Zaika Ltd. are:
(i) Stability of Personnel (ii) Esprit De Corps (iii) Unity of Command (Give the meaning and consequences)
Q.12 The production manager of an automobile company asked the foreman to achieve a target production
of 200 scooters per day. But he did not give him the authority to requisition tools and materials from the
stores department. Can the production manager blame the foreman if he is not able to achieve the desired
target? Explain briefly the principle relating to the situation. (3)
Ans. No, the production manager cannot blame the foreman because he did not give him the authority to requisition
tools and materials from the stores department.
In this case the principle of ‘Authority and Responsibility‘ is violated. Managers require authority commensurate
with their responsibility. There should be a balance between authority and responsibility. An organisation should
build safeguards against abuse of managerial power. At the same time a manager should have necessary authority to
carry out his responsibility.
Q.13 Nutan Tiffin Box service was started in Mumbai by Mumbai Dabbawalas. The Dabbawalas who are the
soul of entire Mumbai aim to provide prompt and efficient services by providing tasty homemade tiffin
to all office goers at right time and place. The service is uninterrupted even on the days of bad weather,
political unrest and social disturbances. Recently they have started online booking system through their
website ‘mydabbawala.com’. Owing to their tremendous popularity amongst the happy and satisfied
customers and members, the dabbawalas were invited as guest lecturers by top business schools. The
Dabbawalas operate in a group of 25-30 people along with a group leader. Each group teams up with
other groups in order to deliver the tiffin on time. They are not transferred on frequent basis as they have
to remember the addresses of their customers. They follow certain rules while doing trade- No alcohol
during working hours; No leave without permission; Wearing of white cap & carrying ID cards during
business hours. S tate the three principles of management given by Fayol. (3)
Ans. Principles of management: (i) Stability of Personnel (ii) Discipline (iii) Esprit de corps (Explain)
Q.14 Rajat joined as a CEO of Bharat Ltd, a firm manufacturing Computer hardware. On the first day he
addressed the employees. He said that he believed that a good company should have an employee
suggestion system and he wished to minimise employee turnover to maintain organisational efficiency. He
informed all employees that he would ensure that all agreements were clear, fair and there was judicious
application of penalties. However, he said that he believed that lazy personnel should be dealt sternly
to send the message that everyone was equal in the eyes of management. Also, that he would want to
promote a team spirit of unity and harmony among employees, which would give rise to a spirit of mutual
trust and belongingness among team members and eventually minimise need for using penalties. He
told all present that the interests of the organisation should take priority over the interests of any one
individual employee. Identify and briefly explain the principles of management given by Fayol, which
Rajat highlighted in his address to the employees. (6)
Ans. Following are the principles of management highlighted by Rajat in his address to the employees: (Explain)
(i) Initiative (ii) Stability of personnel (iii) Discipline
(iv) Equity (v) Esprit de corps (vi ) Subordination of individual interest to general interest
Q.15 Appar Foundation is a Non Government Organisation (NGO) working to improve the lives of children with
medical needs, the homeless and victims of natural disasters. Apart from donations in cash, they collect dry
ration, old clothes, shoes, toys, books and medicines from donors. At Appar Foundation’s office in Bhopal
the material collected is segregated, classified and put in shelves and boxes that are labelled systematically.
There is a specific place for each these items and volunteers put everything at their respective places. T he
volunteer work is divided into specific jobs like fund raising, field visit, social media updates and so on.
Each volunteer is part of a particular team, depending on their competency and training. Each volunteer
becomes specialised in their respective field, leading to efficient utilisation of human effort.
Identify and explain two principles of management adopted by Apaar Foundation. (4)
Ans. Principles of management adopted by Appar Foundation are: (i) Order (ii) Division of work (Explain)
Q.16 Deewan Ltd. is a multinational consulting company with its headquarters at Washington D.C. It hires
young people from different countries of the world. It is a company in which people dream to work because
of its work-environment, pay and growth prospectus. The company has a culture of open communication
and people of various nationalities work together in a discrimination free environment. The behaviour
of managers of Deewan Ltd. emphasizes kindliness and justice which ensures loyalty and devotion of
workers. It also promotes mutual trust and belongingness among team members. In this way management
of Deewan Ltd. is able to achieve its objectives by promoting team work. By doing so managers of Deewan
Ltd. are following some principles of management. Identify and explain two such principles. (4)
Ans. Two principles of management followed by managers of Dewan Ltd are: (i) Equity (ii) Esprit de Corps (Explain)
Q.17 Mohan Ltd. is producing different lines of products viz. cosmetics, medicines, confectionary items, etc.
All activities of the company like purchase, production, sales, accounting, etc. share common Purchase,
Production, Sales and Accounts Departments. As a result, there is chaos and ineffective working of the
organisation. No department is able to set specific targets related to each type of product and is unable to
give justice and full concentration to each product line. Moreover, employees remain confused regarding
provision of their focus and attention to a particular product line. Identify and explain the principle of
management violated here. (3)
Ans. Unity of Direction (Explain)
Q.18 According to Taylor, there are various ways of doing the job. To determine the best way there are several
parameters. Right from procurement of raw materials till the final product is delivered to the customer every
activity is part of it. For designing a car, the assembly line production would entail deciding the sequence
of operations, place for men, machines and raw materials etc. All this is part of this technique of scientific
management. Ford Motor Company used this concept very successfully. Even now auto companies are using it.
Taylor also demonstrated that productivity increased to about four times by following his another technique.
On close examination of body movements, it is possible to find out the productive, incidental and unproductive
movements. He used stopwatches and various symbols and colours to identify different movements. Through
this technique, Taylor was able to design suitable equipment and tools to educate workers on their use.
Identify and explain the two techniques of scientific management highlighted above. (3)
Ans. The two techniques of scientific management highlighted are: (Explain)
(i) Method Study (ii) Motion Study
Q.19 Factory system of production implies that managers serve as a link between the owners and the workers. Since as
managers they had the mandate to ‘get work done’ from the workers, there always exist the possibility of a kind of
class-conflict, the managers versus workers. Taylor recognised that this conflict helped none, the workers, the
managers or the factory owners. Both should realise that each one is important. In such a situation even
trade unions will not think of going on strike etc. According to Taylor, ‘Scientific management has for its
foundation the firm conviction that the true interests of the two are one and the same; that prosperity of
the business cannot exist for a long time unless it is accompanied by prosperity/well-being of its workers.’
Japanese work culture is a classic example of such a situation. In Japanese companies, paternalistic style
of management is in practice. There is complete openness between the management and workers. If at
all workers go to strike they wear a black badge but work more than normal working hours to gain the
sympathy of the management.
(a) Identify and explain the principle of scientific management highlighted in the above paragraph.
(b) To achieve a state like that of Japanese work culture, Taylor called for an important concept. Identify
and explain that concept. (4)
Ans. (a) Harmony, Not Discord (Explain)
(b) To achieve this state, Taylor called for Mental Revolution. (Explain)
Q.20 Taylor’s prescription for efficiency depends to a large extent on personnel competencies. To increase
efficiency, workers should be given the required training. Efficient employees will produce more and
earn more. Efficiency also requires the search for one best method of doing the job. The best method
chosen must lead to the determination of a fair day’s work. There must be a compensation system that
differentiates those who are able to accomplish/exceed the fair day’s work. This system must be based on
the premise that efficiency is the result of the joint efforts of the managers and the workers. Thus, rather
than quarreling over the share in the resultant surplus, the workers and managers should work in harmony
for maximising the output rather than restricting it. Identify and explain the principles / techniques of
scientific management as given by Taylor discussed above. (6)
Ans. The principles of scientific management as given by Taylor discussed above are:
(i) Development of each and every person to his or her greatest efficiency and prosperity
(ii) Harmony, Not Discord (Explain)
The techniques of scientific management as given by Taylor discussed above are:
(i) Method study (ii) Differential Piece Wage System (Explain)
Q.21 Karan Nath took over ‘D North Motor Company’ from his ailing father three months ago. In the past the
company was not performing well. Karan was determined to improve the company’s performance. He
observed that the methods of production as well as selection of employees in the company were not scientific.
He believed that there was only one best method to maximise efficiency. He also felt that once the method
is developed, the workers of the company should be trained to learn that ‘best method’. He asked the
Production Manager to develop the best method and carry out the necessary training. The Production
Manager developed this method using several parameters right from deciding the sequence of operations,
place for men, machines and raw materials till the delivery of the product to the customers. This method
was implemented throughout the organisation. It helped in increasing the output, improving the quality
and reducing the cost and wastage.
Identify and explain the principles and the technique of scientific management followed by the Production
Manager in the above case. (6)
Ans. Principles of management followed in the above case: (a) Science, not rule of thumb (b) Development of each and
every person to his greatest efficiency and prosperity
Technique of scientific management followed in the above case: Method Study (Explain)
Q.22 Sanchit, after completing his entrepreneurship course from Sweden returned to India and started a coffee
shop ‘Aroma Coffee Can’ in a famous mall in New Delhi. The speciality of the coffee shop was the special
aroma of coffee and a wide variety of flavours to choose from. Somehow, the business was neither profitable
nor popular. Sanchit was keen to find out the reason. He appointed Sandhya, an MBA from a reputed college,
as a manager to find out the causes for the same. Sandhya took feedback from the clients and found out that
though they loved the special unique aroma of coffee but were not happy with the long waiting time being
taken to process the order. She analysed and found out that there were many unnecessary obstructions in
between which could be eliminated. She fixed a standard time for processing the order. She also
realised that there were some flavours whose demand was not enough. So, she also decided to stop the sale of
such flavours. As a result within a short period Sandhya was able to attract the customers. Identify and explain
any two techniques of scientific management used by Sandhya to solve the problem. (4)
Ans. Techniques of Scientific management used by Sandhya to solve the problem were:
(i) Motion Study (ii) Time Study (iii) Simplification of Work (Explain any two)
Q.23 Principles of management equip the managers to foresee the cause and effect relationship of their decisions
and actions. As such the wastages associated with a trial - and - error approach can be overcome.
Principles of management also limit the boundary of managerial discretion so that their decisions may be free
from personal prejudices and biases. For example, in deciding the annual budgets for different departments,
rather than personal preferences, managerial discretion is bounded by the principles of contribution to
organisational objectives. (a) Identify and explain the administration principle of management highlighted
above. (b) State the point of significance of management principles highlighted above. (3)
Ans. (a) Subordination of individual interest to general interest. (explain)
(b) Principles of management help in optimum utilisation of resources and effective administration.
Q.24 Fayol, in one of his principles, insists that employees deserve fair and just wages or salary. But what is just
and fair is determined by multiple factors, such as contribution of the employee, paying capacity of the
employer and also prevailing wage rate for the occupation under consideration.
(a) Identify and state the feature of principles of management highlighted above.
(b) Identify and explain the principle of Fayol highlighted above. (3)
Ans. (a) Contingent: The application of principles of management is contingent or dependent upon the prevailing
situation at a particular point of time. The application of principles has to be changed as per requirements.
(b) The principle of ‘Remuneration of Employees’ is highlighted in the above case. (Explain)
Q.25 In today’s dynamic business environment, companies are specialising in their core competency and
divesting non-core businesses. In this context, one may cite the decision of Hindustan Unilever Limited
in divesting non-core businesses of chemicals and seeds. Some companies are outsourcing their non-core
activities like share-transfer management and advertising to outside agencies. So much so, that even core
processes such as R&D, manufacturing and marketing are being outsourced today. Thus, significance of
‘Business Process Outsourcing’(BPO) and ‘Knowledge Process Outsourcing’ (KPO) has increased.
(a) Identify the significance of principles of management highlighted above.
(b) Identify and explain the principle of management followed by the companies which are outsourcing
their non-core and core activities. (3)
Ans. (a) Principles of management help in meeting changing environment requirements.
(b) Division of work and specialisation (Explain)
Think about it
Q.1 "There should be an almost equal division of work and responsibility between workers and management." Do you
agree? Give reasons in support of your answer highlighting the principle of management. (4 marks)
Ans. The given statement by F.W. Taylor is true. The principle of scientific management highlighted here is 'Cooperation, not Individualism'. (explain)
Q.2 "Each group of activities having the same objective must have one head and one plan." Justify the statement.(3 marks)
Ans. The given statement by Henri Fayol is true. The principle of management highlighted here is 'Unity of Direction'. (explain)
Q.3 "Good sense and experience are needed to ensure fairness to all employees, who should be treated as fairly as
possible." Justify the statement by giving reasons. (3 marks)
Ans. The given statement by Henri Fayol is true. The principle of management highlighted here is 'Equity'. (explain)
Q.4 "Employee turnover should be minimised to maintain organisational efficiency." Do you agree? (3 marks)
Ans. The given statement by Henri Fayol is true. The principle of management highlighted here is 'Stability of Personnel'. (explain)
Answer Key
Multiple Choice Questions (MCQ) 41. (b) 42. (b) 43. (d) 44. (d) 45. (d)
46. (c) 47. (b) 48. (a) 49. (d) 50. (a)
1. (c) 2. (a) 3. (b) 4. (c) 5. (d)
51. (c) 52. (a) 53. (b) 54. (c)
6. (a) 7. (a) 8. (b) 9. (c) 10. (c)
11. (a) 12. (c) 13. (c) 14. (c) 15. (b) Case Study (Case-based Integrated Questions)
16. (d) 17. (c) 18. (c) 19. (b) 20. (a) 1. (c) 2. (b) 3. (d) 4. (b) 5. (d)
21. (b) 22. (c) 23. (c) 24. (a) 25. (d) 6. (c) 7. (d) 8. (c) 9. (c) 10. (a)
26. (c) 27. (b) 28. (c) 29. (a) 30. (a) 11. (b) 12. (c) 13. (d) 14. (b) 15. (d)
31. (a) 32. (d) 33. (d) 34. (b) 35. (b) 16. (d) 17. (c) 18. (b) 19. (d) 20. (c)
36. (a) 37. (a) 38. (a) 39. (d) 40. (d)
Preparing for Examination and Sample Papers EXAM HANDBOOK Business Studies XII 131
Preparing for
Examinations
Important Tips for Attempting CBSE Business Studies XII Exam 2021
 During 15 minutes Reading Time, read all questions carefully. Select the Option to be answered in questions having internal
choice. When reading, underline the key lines with pencil which help you to write answers.
 In Case-based Questions, before reading the whole question first you must read what is required in the question as given in
the last line(s) of the question.
 Timing is an essential ingredient of success. Business Studies paper is worth 80 marks and must be completed in 180 minutes.
Allowing 20 minutes revision time, this leaves 160 minutes or 2 minutes per mark. So, do not spend 10 minutes on a question
worth just 3 marks! Do not exceed the time you have allocated for each question.
There are 4 types of questions in the CBSE Business Studies Examinations. These are:
Types of Questions Marks Word limit No. of Questions Total Marks Estimated Time
MCQs (including 1 One word to a sentence 20 20 30 min.
Case-based Questions
SA-I 3 50-75 words 4 12 20 min.
SA-II 4 150 words 6 24 50 min.
LA 6 200 words 4 24 60 min.
20 Minutes – Revision
Total 34 80 180 min.
 Write impersonally. In other words, do not use ‘I’ or ‘We’ in your answers. For example, do not write — “I don’t agree with
the statement.” Rather you must write — “The given statement is not correct.”
 The following table shows a list of key directive words which are most likely to occur in CBSE Business Studies examination
questions. You should read these carefully and understand what each means.
Directive Words The examine is supposed to:
Name/Identify/Which Write the name of the concept/term only
State Make clear
List/Enumerate/State Write the statements without giving heading
Explain/ Describe Give the heading and then explanation/description with reasons and examples, if required.
Comment Give your reasoned opinions on
 Remember the weightage of the units. This helps you when you are not able to find the unit from which a particular question
has been put up.
Unit Weightage
I. Nature and significance of management, Principles of management and Business Environment 16 marks
II. Planning and Organising 14 marks
III. Staffing, Directing and Controlling 20 marks
IV. Financial Management and Financial Markets 15 marks
V. Marketing and Consumer Protection 15 marks
Total 80 marks
 To score 100% marks, the presentation of answers is as much important as their content.
 Write the main heading in capital letters. (Use dark and bold pen like Pilot V10)
 Underline the headings with pencil.
 Explanation/description from next line of heading.
 Attempt all parts of a question together.
 Give answer in points, as far as possible, rather than in paragraphs. Use bullets for the points.
 Leave one line space between two headings
 Leave at least 2-3 lines space between two answers of 1 mark questions.
 Attempt all questions from new page (except answers to 1 mark questions).
 During last 20 minutes of revision, first of all make sure that you have attempted all the questions and written Question
Number for each answer. If any question(s) left, attempt it first. Don’t leave it even if you don’t know the proper answer.
Remember that writing something is always better than leaving it at all. Then, read your answers one by one underlining the
key lines using pencil.
Important Quotes
1. Successful organisations do not achieve their goals by chance but by following a deliberate process called ‘management’.
Management = Manage : Men + T (things)
2. Individuals say ‘I’.... Team says ‘We’. A successful team beats with one heart. TEAM (Together Everyone Achieves More)
3. Failing to plan is planning to fail.
4. The right people can take a business to the top; the wrong people can break the business.
5. Directing is the heart of management process.
6. Like a traffic signal, controlling guides the organisation and keeps it on the right track.
Important Diagrams
A
B L
C M
D N
Scalar Chain Gang Plank

Managing
Director
Human
Marketing Finance Production
Resource
Organisation chart showing FUNCTIONAL STRUCTURE

Managing
Director
FOOTWEAR GARMENTS
Division Division
HR Marketing Finance Production

HR Marketing Finance Production
Organisation chart showing DIVISIONAL STRUCTURE

C A
A C A
A C A
A B C
B C
B C
B A D
BB AA DD
B C D E D E
B C D EE D D E E
ABisAthe C
leader: D A Aisisthe
theleader: A is
is the
theleader:
leader:
Aisisthe
the leader:
leader: A is the leader:
leader: A isAthe leader:
Boss-Centred
Boss-Centred Leadership Group-Centred
Group-CentredLeadership
Leadership Subordinate–
Subordinate– Centred
Centred Leadership
Leadership
Boss-Centred Leadership
Leadership Group-Centred Leadership Subordinate– Centred Leadership
Autocratic
Autocratic Leadership
Autocratic Leadership
Leadership Democratic
DemocraticLeadership
Democratic Leadership
Leadership Free-rein
Free-rein Leadership
Leadership
Free-rein Leadership
To conclude, it is very important for you to be well-organised and to be able to plan ahead if you are to score 100% marks
in CBSE Business Studies examination. Revision should be an ongoing process, not just a last-minute activity you carry
out just before a written examination. A lack of time and an inability to understand the relevance of directive words are the
most common causes of under performance. I know Board examinations create a lot of anxiety among students. Everyone
expects good performance so as to get admission in a college of repute. My advice to you is:
To work hard and give your 100%. Remember: Success will never lower its standard to accommodate you. You have to
raise your standard to achieve it. For every bird, God provides food but not in their nest.
Always believe in yourself. Don’t give up. One thing keep in mind: You are something! Because God does not create garbage.
Always remember God. Without Him, your all efforts are in vain! 0 0 0 0 0 0 0 = 0. But if you put 1 before these zeros,
you get 1 crore (10000000). We human beings are zeros without Him! And 1 is God!
I’ll feel pleasure to solve any of your queries/doubts related to the subject through my social media handles.
Phone/Whatsapp Number 9810475716
Instagram: subhashdey_20: https://www.instagram.com/subhashdey_20/
Email: [email protected]
Mobile App: Shree Radhey Publications: https://play.google.com/store/apps/details?id=com.
shreeradheypublications&hl=en
Finally I pray the Supreme Divine to bestow the best of blessings on you!
Regards
Your servant
SUBHASH DEY
B.Com. (Hons.), M.Com. (DSE), M.A. (Economics), PGDBA (Finance), B.Ed, PGD in Labour and Administrative Laws
• Author and Publisher of CBSE Books – Accountancy, Business Studies, Economics, Mathematics and English
• M.Com (Delhi School of Economics)– Gold Medalist, Topper of Delhi University
• Consecutive four years’ Economics topper of Delhi University
• Ex-Lecturer of Commerce in Hindu College, Delhi University
• Resource Person and Educationist conducting Workshops/Seminars of Teachers and Students
• Founder/Director of ‘Shree Radhey Academy, The Gurukul’ (C-3/6 Yamuna Vihar, Delhi-53)
Sample Question Papers
CBSE Sample Question Paper 2020-21

Maximum Marks – 80 Time – 3 Hours
General Instructions
1. This question paper contains 34 questions. 2. Marks are indicated against each question.
3. Answer should be brief and to the point. 4. Attempt all parts of the questions together.
5. Answers to the questions carrying 3 marks may be from 50 to 75 words.
6. Answers to the questions carrying 4 marks may be about 150 words.
7. Answers to the questions carrying 6 marks may be about 200 words.
Q.1 ______ is the process of dividing work into manageable activities and then grouping the activities which are similar in nature. (1)
A. Coordination B. Departmentalisation C. Organisation Structure D. Delegation of authority
Q.2 Even Though the political conditions vary from country to country, they impact the sentiment of an investor in the
business, if the instability of the political conditions cause uncertainty and make it difficult for him to predict the future.
Which feature of the Business environment is being highlighted in the above statement? (1)
A. Specific and general forces B. Dynamic nature C. Relativity D. All the above
Q.3 “Any one can be called a manager irrespective of the educational qualification possessed.” Identify the characteristic of the
profession that Management does not fulfil in the statement being discussed above. (1)
A. Ethical code of Conduct B. Professional Association C. Restricted Entry D. Service Motive
Q.4 “Even after opening up of the Indian economy in 1991 foreign companies found it extremely difficult to cut through the
bureaucratic red tape to get permits for doing business in India, which created a negative impact on business.”
Identify the dimension of the business environment which led to creation of the negative impact on business. (1)
A. Social Environment B. Technological Environment C. Political Environment D. Legal Environment
Q.5 Name the process of working with and through others to effectively achieve organisational objectives by efficiently using
limited resources in a changing environment. (1)
A. Management B. Planning C. Organising D. Controlling
Q.6 “The increase in the demand for many Ayurvedic medicines, Health products and services in the past few months, is related
to the need for building immunity and an increased awareness for health care due to the spread of Corona virus.” Identify
the feature of business environment being described above. (1)
A. Specific and general forces B. Interrelatedness C. Relativity D. None of the above
Q.7 Which of the following is not an element of social environment? (1)
A. Birth and Death rate B. Constitution of the country C. Population Shifts D. Life expectancy
Q.8 ‘Even where members of a department willingly cooperate and work, a manager has to coordinate the efforts of different
people in a conscious manner.’ Identify the characteristic of coordination discussed above. (1)
A. Coordination ensures unity of action B. Coordination is a deliberate function
C. Coordination is a continuous process D. Coordination is an all-pervasive function

Q.9 Name the function of management which helps in the formulation of future plans, in the light of the problems that were
identified and thus, helps in better planning in the future period. (1)
A. Planning B. Organising C. Directing D. Controlling
Q.10 Identify an important principle of management control in which only significant deviations which go beyond the permissible
limit should be brought to the notice of management. (1)
A. Management by control B. Control by exception C. Critical point control D. (a) & (b)
Q.11 __________ is the process by which the manager brings order out of chaos, removes conflict among people over work or
responsibility sharing and creates an environment suitable for teamwork. (1)
A. Planning B. Organising C. Staffing D. Controlling
OR
_______________ ensures that the heads of separate business units in the organisation are responsible for profit or loss of
their unit and have authority over it. (1)
A. Span of management B. Divisional Structure C. Functional structure D. Hierarchy of Authority.
Q.12 Match the concept of marketing in Column I with their respective definition in Column II: (1)
COLUMN – I COLUMN – II
(a) Product Concept i. relates to maintaining high quality of the product
(b) Selling Concept ii relates to satisfying customer needs
(c) Marketing Concept iii. relates to aggressively persuading buyer to purchase the product
A. i,ii,iii B. ii,i,iii C. iii,ii,i D. i,iii,ii
OR
In order to get feedback about its recently launched immunity boosting ayurvedic medicine, Atulya limited conducted an
online survey using a questionnaire, to gather customer views and opinions. Identify the marketing function being used by
Atulya Limited: (1)
A. Standardisation B. Product Designing C. Customer support service D. Gathering and analyzing market information
Read the following text and answer question No.13-16 on the basis of the same:
ISQAA SOLAR limited is searching options to raise `20,000 crores from the primary market for diversification and modernisation
of existing projects. It hired the services of a renowned financial consultancy firm, DHAN LAXMI PVT. LTD. for suggesting
options for the same. DHAN LAXMI PVT. LTD. suggested a list of options to the Board of Directors of the company. It was
decided that for the immediate requirement of `1500 crores the company will give a privilege to existing shareholders to subscribe
to a new issue of shares according to the terms and conditions of the company. `4500 crores would be raised by allotment of
securities to a consortium of financial institutions, instead of inviting subscription from the public by making a direct appeal to
investors to raise capital. It was further decided to raise capital to the tune of `6000 crores through an issuing house. All these
options were accepted by the Board of Directors. The Board further decided to raise `8,000 crores through the on-line system of the
stock exchange by entering into an agreement with the exchange.
Q.13 Identify the method of floatation of new issues in the primary market, not taken up by ISQAA SOLAR LTD. (1)
A. Offer for sale B. Rights issue C. E-IPO D. Offer through prospectus
Q.14 “`4500 crores would be raised by allotment of securities to a consortium of financial institutions, instead of inviting
subscription from the public by making a direct appeal to investors to raise capital.’’ Identify the method of floatation of
new issues in the primary market being discussed above, which the company has decided to use. (1)
A. Offer for sale B. Private placement C. Right Issue D. Offer through Prospectus
Q.15 Identify the reason which has made the firm raise funds from the institutional investors. (1)
A. It helps to raise funds quickly B. It is not expensive
C. Both a & b D. None of the above.
Q.16 How much money was raised by the company through E-IPO’s? (1)
A. `8000 crores B. `4500 crores C. `20,000 crores D. `6000 crores
Read the following text and answer question No.17-20 on the basis of the same:
Yamuna Prasad, a small shopkeeper in Bikaner, Rajasthan used to sell the famous ‘Bhujia-Sev’. It was a quick selling product for locals
and foreign tourists. His second generation expanded the business and got ‘Yamuna Ki Bhujia’ registered with concerned authorities.
Gradually the brand offered a wide range of products to its customers like namkeen, sweets, bakery items etc. However, ‘Bhujia-Sev’
remained the most popular product of the brand creating maximum revenue. ‘Yamuna Ki Bhujia’ offered its products at competitive
prices even while offering customer services like gift packaging and free home delivery to become a household name. Now it has
virtually become a synonym for bhujia-sev in the market, so much so, that people ask for ‘Yamuna Ki Bhujia’ instead of bhujia-sev.
‘Yamuna Ki Bhujia’ has developed a strong distribution network in India and abroad by setting up retail outlets and reaching out to
the customer through internet selling. Promotion of the brand had always been low profile, till the increase in competition pushed
it to hire the services of a professional advertising agency, VIGYAPAN PVT.LTD for promoting the product. On the advice of
VIGYAPAN PVT.LTD, ‘Yamuna Ki Bhujia’ has also worked upon managing public opinion by developing relations with the masses
through sponsoring cultural and sporting events, maintenance of public parks etc.
Q.17 ‘His second generation expanded the business and got ‘Yamuna Ki Bhujia’ registered with concerned authorities.’
With reference to the given text ‘Yamuna ki Bhujia’ is a _____ giving it a legal protection against its use by anyone else. (1)
A. Brand value B. Trademark C. Trait mark D. Brand mark
Q.18 ‘Yamuna Ki Bhujia’ offered its products at competitive prices even while offering customer services like gift packaging and free
home delivery to become a household name. Identify the factor affecting the element of marketing mix being discussed above. (1)
A. Marketing methods used B. Objectives
C. Extent of competition in the market D. Product cost
Q.19 ‘Yamuna Ki Bhujia’ has developed a strong distribution network in India and abroad by setting up retail outlets and reaching out
to the customer through internet selling. Identify the decision related to the element of marketing mix being discussed above. (1)
A. Storing and assorting products in order to create time utility
B. Regarding the channels or using intermediaries
C. Both a & b
D. One regarding branding, packaging and labelling
Q.20 On the advice of VIGYAPAN PVT.LTD, ‘Yamuna Ki Bhujia’ has also worked upon managing public opinion by developing
relation with the masses through sponsoring cultural and sporting events, maintenance of public parks etc. Name the department
in the organisation which is generally responsible for performing the above important task of managing public opinion. (1)
A. Marketing Department B. A separate department created in the firm for the purpose
C. An outside agency D. Any of the above.
Q.21 Identify the level of management whose basic task is to integrate diverse elements and coordinate the activities of different
departments according to the overall objectives of the organisation. State any two functions of the level of management
identified. (3)
Q.22 Explain ‘Internship training’ and ‘vestibule training’ and classify them as on-the-job and off-the-job methods of training. (3)
Q.23 “Controlling is an indispensable function of management. Without controlling the best of plans can go awry “. Do you
agree? Explain any two reasons in support of your answer. (3)
OR
“It is generally believed that measurement of performence should be done after the task is completed.” Identify and explain the
step in the process of the function of management being discussed above and the step followed by the same in the process. (3)
Q.24 State the development functions of the Securities Exchange Board of India. (3)
OR
State any three money market instruments. (3)
Q.25 ‘In an interview with a leading news channel, Mr. Rakesh Kwatra, CEO of ‘Get My Job’ has suggested that the Companies
which want more and more people to apply for jobs in their organisation should make the process for applying for jobs
easier and candidate friendly.’ Name and explain the next two steps which follow the step, in the process of the function of
management being discussed above. (4)
Q.26 Pramod is a supervisor at ‘Shyam Breads and Biscuits Factory’. The factory produces 20,000 packets of bread and biscuits
every day. As a supervisor Promod ensures that work goes on smoothly and there is no interruption in production. He is
a good leader who gives orders only after consulting his subordinates, working out the policies with the acceptance of the
group. Identify and explain the leadership style being adopted by Pramod. (4)
Q.27 Briefly explain the positive and negative aspects of the type of communication which arises out of the need of employees to
exchange their views. (4)
OR
Identity and explain the elements of directing mentioned below: (4)
A. Astha, a manager, has the ability to influence others to bring about a change in their behaviour.
B. Neeraj, a managing director, declares share in the profits to the manager for their contribution to
increase profits of the company.
Q.28 Explain any four factors that can affect the working capital requirement of a company. (4)
OR
Explain any four factors that affect the choice of capital structure of a company. (4)
Q.29 Dheeraj wants to start a business of selling N-95 masks after the outbreak of the global pandemic of COVID-19. Due to the
uncertain market conditions he wants to make a low investment in fixed capital. Suggest how the decisions related to the choice of
technique and financing alternatives can help Dheeraj in ensuring a low investment in fixed capital requirements. (4)
Q.30 Explain the following rights of consumers provided by Consumer Protection Act, 1986:- (4)
(a) Right to Safety (b) Right to Consumer Education
Q.31 Explain ‘Science, not rule of thumb’, ‘Harmony, not discord’, and ‘Development of each and every person to his or her
greatest efficiency and prosperity’ as principles of Scientific Management given by F.W. Taylor. (6)
Q.32 “Planning is worth the huge costs involved?” Do you agree? Explain any four reasons in support of your answer. (6)
OR
“If the project is important then more alternatives should be generated and thoroughly discussed amongst the members of
the organisation.” Identify and explain the step in the process of planning being discussed above. Also explain the remaining
steps which will have to be carried out to complete the process. (6)
Q.33 An important difference between S&M Ltd and most other companies is that instead of operating as one large corporation
it operates as 180 smaller companies each focused on a specific product and area, implying selective dispersal of authority,
recognising the decision makers need for autonomy, as decision making authority is pushed down the chain of command.
It enables the company to maintain short lines of communication with customers and employees, and accelerate the
development of talent. Identify the philosophy that is being followed by S&M Ltd. through which it is dividing the decision-
making responsibilities among the hierarchical levels. State any five points of importance of the philosophy identified. (6)
Q.34 ‘Advertising’ and ‘Personal selling’ both are communication tools used by the marketers to promote their products. Yet they
differ in their approach. Differentiate between the two by giving any six points. (6)
OR
“The elements of marketing mix are popularly known as 4 P’s of marketing.” Briefly explain these elements. (6)
Answer Key
1. B. Departmentalisation 23. I option: Yes. Importance of controlling: (Any two)
2. D. All the above II option: • The step in the process of controlling being
3. C. Restricted Entry discussed is – Measurement of Actual performance (explain)
4. C. Political environment •T he following (next) step is – Comparing actual performance
5. A. Management with standards (explain)
25. The next two steps in staffing process are: (i) Selection (ii)
6. B. Interrelatedness
Placement and orientation (explain)
7. B. Constitution of the country
26. Democratic or participative leader (explain)
8. B. Coordination is a deliberate function
27. II option: (A) Leadership (B) Motivation (explain)
9. D. Controlling 29. Choice of Technique: As he wishes to stick to a low
10. B. Control by exception investment model, we may suggest him to go with the labour-
11. B. Organising OR B. Divisional structure intensive approach to manufacture N- 95 masks. Since better
12. D. i,iii,ii OR D. Gathering and analyzing market information technology would cost him much and his risk appetite is not
13. D. Offer through prospectus conducive for capital intensive techniques of production.
14. B. Private placement Financial Alternatives: As he wishes to stick to a low
15. C. Both a and b investment model, we may suggest him to go with the lease
16. A.`8000 crores option for fixed assets like building, heavy machinery etc. as
this may reduce his investments requirement in the business.
17. B. Trademark
32. Yes. Importance of Planning (Explain any four points)
18. A. Marketing methods used
II option: • The step in the process of planning being
19. B. Regarding the channels or using intermediaries discussed is: Identifying alternative courses of action
20. D. Any of the above Remaining steps: (i) Evaluating alternative courses (ii) Selecting
21. Top level management an alternative (iii) Implementing the plan (iv) Follow up
22. Internship training – on-the-job method of training; action (explain)
Vestibule training – off-the-job method of training 33. Decentralisation (explain its importance)
Sample Question Paper 10 (for Practice)

Q.1 Beena, a student of management, likes to relate what she learnt in class to real life situations. She observed many situations
while watching educational programmes on television that remind her of concepts of scientific Management. In one such
programme, factories manufacturing parts for products like automobiles, computers and mobile phones were being telecast.
Name the technique of Scientific management that should be adhered to, while manufacturing parts for such products. (1)
Q.2 Which of the following is a component of economic environment? (1)
(a) Concern with quality of life (b) Rates of saving and investment
(c) Extent of government intervention in business (d) Birth and death rates
Q.3 ‘Express Tours Ltd.’ is a travel agency which books air tickets on commission basis. It takes two days for Express Tours to
get the tickets from airport reservation counter and deliver the same to customers. During the last one year, there has been
drastic decrease in its business as most of the customers have shifted to another travel agency, ‘Shiva Tours and Travels’,
which provides tickets within half-an-hour through Internet.
Identify the dimension of business environment that is being overlooked by ‘Express Tours Ltd’. (1)
(a) Technological environment (b) Legal environment
(c) Political environment (d) Economic environment
OR
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. (1)
(a) Technological environment (b) Legal environment
(c) Political environment (d) Social environment
Q.4 On the introduction of Goods and Services Tax Act, experts in the field of business started analysing and forecasting its
impact on various sectors and industries. Vivek, an established businessman, attended a few seminars and conferences
organised by such experts to familiarise himself with this information. He wanted to use these forecasts to reduce the
uncertainty in making decisions for the future in his business.
Name the step in the planning process that is being discussed in the above paragraph. (1)
(a) Setting Objectives (b) Developing Premises
(c) Identifying alternative courses of action (d) Evaluating alternative courses
Q.5 Ravi was working in a mobile company. It had an assembling unit in Noida. In this assembling unit, standard output
of producing 12 units per day per worker had been set. While assembling mobile phones, he realised that by simply
reorganising the sequence of tasks more units can be assembled at a lower cost. He went to his supervisor and informed
him about his new discovery. The supervisor, on the contrary, instructed him to carry out work as per the method and
techniques decided earlier. Identify this limitation of one of the functions of management. (1)
(a) Planning leads to rigidity (b) Planning may not work in a dynamic environment
(c) Planning does not guarantee success (d) Planning reduces creativity
Q.6 Aradhana and Gandharv are heads of two different departments in ‘Yumco Ltd.’ They are efficient managers and are able
to motivate the employees of their respective departments to improve performance. However, their drive to excel in their
own sphere of activity instead of giving emphasis on objectives of the enterprise has hindered the interaction between the
departments that Aradhana and Gandharv are heading. Often there are inter-departmental conflicts and they have become
incompatible. This has proved to be harmful in the fulfilment of the organisational objectives. The situation has deteriorated
to such an extent that the CEO of ‘Yumco Ltd.’ has hired a consultant, Rashmi, to resolve the problem. After studying the
situation closely, Rashmi found that the problem has arisen due to inflexibility and a narrow perspective on the part of both
Aradhana and Gandharv. She is of the view that this situation is a result of the type of Organisation structure ‘Yumco Ltd.’
has adopted. From the above information, identify the Organisation structure adopted by ‘Yumco Ltd.’ (1)
(a) Functional structure (b) Divisional structure
(c) Formal Organisation Structure (d) Informal Organisation Structure
OR
Kiran Industries is a company manufacturing office furniture. The company chose to diversify its operations to improve
its growth potential and increase market share. As the project was important many alternatives were generated for the
purpose and were thoroughly discussed amongst the members of the organisation. After evaluating the various alternatives
Sukhvinder, the Managing Director of the company decided that they should add ‘Home Interiors and Furnishings’ as a
new line of business activity. Name the framework, which the diversified organisation should adopt, to enable it to cope
with the emerging complexity? (1)
(a) Functional structure (b) Divisional structure
(c) Formal Organisation Structure (d) Informal Organisation Structure
Q.7 Alpha Enterprises is a company manufacturing water geysers. The company has a functional structure with four main
functions-Production, Marketing, Finance and Human Resource. As the demand for the product grew, the company
decided to hire more employees. Identify the concept which will help the Human Resource Manager in deciding the actual
number of persons required in each department. (1)
(a) Workload Analysis (b) Workforce Analysis
(c) Estimating manpower requirements (d) All of these
Q.8 While scrutinizing the production records, it is found that in a particular batch the rejection rate was 5% against the set
standard of 2%. The management found out that this was due to negligence of quality control staff. This action is part of
which step in the controlling process? (1)
(a) Measurement of actual performance (b) Comparing actual performance with standards
(c) Analysing deviations (d) Taking corrective action
Q.9 ‘XY Ltd.’ is registered with an authorised capital of `10 crore. The paid-up capital of the company is `6 crore. The
company was facing shortage of funds. The management of the company decided to raise funds by issue of 1,00,000
equity shares of `100 each. The issue was fully subscribed. After this it was realised that the funds raised were in excess of
the actual requirement. The concept which was not considered by the company before deciding the amount of funds to
be raised is ____________. (1)
(a) Dividend decision (b) Financial Planning
(c) Capital structure decision (d) Financing decision
Q.10 In the paint industry, various raw materials are mixed in different proportions with petroleum for manufacturing different
kinds of paints. One specific raw material is not readily and regularly available to the paint manufacturing companies.
Bonler Paints Company is also facing this problem and because of this there is a time lag between placing the order and the
actual receipt of the material. But, once it receives the raw materials, it takes less time in converting it into finished goods.
Identify the factor affecting the working capital requirements of this industry. (1)
(a) Availability of raw materials (b) Nature of business
(c) Production Cycle (d) All of these
Q.11 Borrowing @ 10% and the tax rate @ 30% means the after tax cost of debt is _________. (1)
(a) 20% (b) 7% (c) 3% (d) 10%
Q.12 Himesh after completing his graduation started working with a multinational company in Delhi. But due to ill health of his
parents he had to go back to his village. There he noticed that the villagers were literate but ignorant about their rights. Many
vegetable vendors were using stones as weights to sell their vegetables. Some shopkeepers were selling food items without
having ‘FPO mark’. Villagers did not find anything wrong with these practices. So to create awareness among villagers Himesh
decided to publish a weekly Journal ‘Jan Jagriti’. State the ‘Right’ which Himesh has exercised by doing so. (1)
(a) Right to safety (b) Right to be informed
(c) Right to consumer education (d) Right to be heard
Read the following text and answer question no. 13-16 on the basis of the same:
Ram Murthy, the CEO of ‘Goodcare Hospitals’, a leading chain of hospitals, decided to reward the good work of the doctors of this
organization. For this he instituted two running trophies. A ‘Healthcare Achievers Trophy’ to acknowledge and appreciate the tireless
efforts of the doctors who rendered selfless services to the patients and another ‘Beti Bachao Trophy’ to recognize the outstanding
work done by the doctors in saving the girl child. The CEO also wanted to improve the health services in rural areas all over the
country. He decided that all doctors must work in rural areas for at least six months. He also decided that the paramedical staff
should be employed locally.
Q.13 Identify the function of management discussed in the above case. (1)
(a) Planning (b) Organising (c) Staffing (d) Directing
Q.14 Identify the element of the function of management identified as highlighted above. (1)
(a) Supervision (b) Motivation
(c) Leadership (d) Communication
Q.15 Identify the incentive provided by ‘Goodcare Hospitals’ to its doctors through running trophies. (1)
(a) Job Enrichment (b) Career Advancement Opportunity
(c) Employee recognition programmes (d) Employee Empowerment
Q.16 Which need of the doctors will be satisfied through the incentive identified in Q.15? (1)
(a) Esteem Needs (b) Self Actualisation Needs
(c) Affiliation Needs (d) Safety Needs
Read the following text and answer question no. 17-20 on the basis of the same:
Forex Ltd. is a private limited company with several branches all over India. It promotes the sales of Indian handloom and handicraft
products while providing equitable employment to traditional artisans. Mr. Brijesh, a branch manager of the company plans his
winter collection in the month of June itself. He has to ensure that there is adequate workforce and continuously monitor whether
production is proceeding according to plans. He also provides direction and motivation to his employees. The purchase, production
and sales departmental efforts are coordinated by Mr. Brijesh for achieving organisational objectives harmoniously. The production
and the sales department coordinate their work, so that production takes place according to the demand in the market. The purchase
department is responsible for procuring material. This then becomes the basis of the activities of the production department and
finally sales can take place.
Q.17 “It promotes the sales of Indian handloom and handicraft products while providing equitable employment to traditional
artisans.” Which of the following objectives of management are fulfilled by Forex Ltd.? (1)
Q.18 At which level of management is Mr. Brijesh working in Forex Ltd.? (1)
(c) Operational Management (d) Supervisory Management
Q.19 “He has to ensure that there is adequate workforce and continuously monitor whether production is proceeding according
to plans.” Identify the functions of management highlighted in the above statement. (1)
(a) Planning and Controlling (b) Staffing and Planning
(c) Staffing and Directing (d) Staffing and Controlling
Q.20 “The purchase, production and sales departmental efforts are coordinated by Mr. Brijesh for achieving organisational
objectives harmoniously. The production and the sales department coordinate their work, so that production takes place
according to the demand in the market.” Identify the characteristic of coordination highlighted above. (1)
(a) Coordination is an all pervasive function (b) Coordination ensures unity of action
(c) Coordination is a continuous process (d) Both (a) and (b)
Q.21 Mita has a successful ice cream business at Bikaner, namely ‘Smartflavours’. 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 down costs. This would sometimes
lead to delay in delivery and the ice cream was not reaching 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 an example. (3)
Q.22 Prem India Limited is a well-established International Camera Company. It was pioneer in introducing products like non-
digital ‘aim and shoot’ cameras. After tasting success in the previous project, they introduced wide array of products in
DSLR cameras. Their products range from 20 to 250 mega pixels digital cameras. With the advancement of technology,
they planned to make huge investment in developing and selling even higher resolution digital cameras. The made a budget
allocation of ` 1,000 crore in developing it. The company has started working on this improved product. It is a lengthy
process of research and development. It may take 2 to 3 years to actually start production. In the mean time one of its
competitors moved a step forward and developed and marketed mirror-less cameras in the market. It resulted in heavy losses
to Prem India Limited.
Identify any three limitations of planning by quoting the lines from the above para. (3)
OR
Rahul decided to start a desert cooler manufacturing business. He sets the target of earning 20% profit on sales in the first
year. He was very much concerned about the future prospects of the business, which were uncertain. For this, he gathered
information from the potential market and analyzed that the demand for wall-mounted coolers is increasing day by day. He
used this information as the base for future planning. On the basis of the gathered information, he called a meeting in the
following week to find new methods to achieve the objective.

(a) Identify the function of management involved in the above case.
(b) Enumerate the next two steps, which have been followed by Rahul that are related to the process of one of the functions
of management. (3)
Q.23 Aakanksha, Nikita and Parishma are the owners of a handicraft unit in the urban area of Dibrugarh in Assam, which
is involved in the manufacturing and marketing of Sital Pati, traditional mats and Jappi (the traditional headgear).
They decided to shift this manufacturing unit to a rural area with an objective of reducing the cost and providing job
opportunities to the locals. They followed the functional structure in this organisation with a view to increasing managerial
and operational efficiency. They assessed and analysed the type and number of employees required, keeping in mind that
they had to encourage the women, and the people with special needs belonging to the rural area.
State the next three steps that they will have to undertake, for obtaining a satisfied workforce for their handicraft unit. (3)
OR
Sahil, the director of garments company, is planning to manufacture bags for the utilisation of waste material of one of
his garments unit. He decided that his manufacturing unit will be set up in a rural area of Orissa where people have very
less job opportunities and labour is available at very low rate. He also thought of giving equal opportunities to men and
women. For this he selected S. Chatterjee, Indrajeet Kaur, Aslam and Sarabjeet as heads of Sales, Accounts, Purchase and
Production departments.
Identify and state the next two steps that Sahil has to follow in the staffing process after selecting the above heads. (3)
Q.24 Dhruv is working as a supervisor with ‘Neer Purifier Ltd.’ which is producing water purifiers. The target of the company is
to produce 200 water purifiers every day. His job is to make sure that work goes on smoothly and there is no interruption in
production. The achieve this, he always gives orders and insists that they are obeyed. He believes that reward or punishment
both can be given depending upon the performance. Identify and explain the leadership style being adopted by Dhruv. (3)
Q.25 “Organisation structure is an indispensable means; and the wrong structure will seriously impair business performance and
even destroy it.” Do you agree? Give reasons in support of your answer. (4)
OR
“Decentralisation must always be balanced with centralisation in areas of major policy decisions.” Do you agree? Give
reasons in support of your answer. (4)
Q.26 (a) The directors of Shiv Electronics, an organisation manufacturing T.V. components, have asked Shakti, their Marketing
Manager to achieve a target sale of `5,00,000 per day. Shakti has delegated the task to Manav, his Deputy Sales
Manager working under him. Manav could not achieve the targets. Is Shakti responsible for the failure of Manav? State
the relevant principle in support of your answer. (2)
(b) A company has its registered office in Delhi, manufacturing unit at Gurgaon and marketing and sales department
at Faridabad. The company manufactures the Fast Moving Consumer Goods(FMCG). Which type of Organisation
structure should it adopt to achieve its target? Why? (2)
Q.27 When Lenovo India decided to strengthen its diversity numbers, it decided to tap into its referral system. The company
asked its employees to recommend candidates, and decided to reward those who successfully recommended more women
for the same roles. As employee referrals become an established method to hire quality lateral talent, companies are using
technology platforms to build a steady talent pipeline through referrals. A majority of companies (nearly 41%, according
to one study) across India use top technology for referral hires. According to the study India Recruiting Trends 2016
conducted by LinkedIn Talent Solutions, employee referrals are on the rise. This year, referrals were the top source of quality
hires. “Nearly 55% of talent leaders see employee referral programmes as the top source of quality hire,” says Irfan Abdulla,
director, talent solutions, LinkedIn India. Top players such as Coca-Cola, Infosys, Genpact, Capgemini, Deloitte, Dabur,
Jubilant and more are reporting that over 40% of their hires come through referrals.
(a) The above discussion is indicating an important function of management. Name the function of management
(b) The management function identified in part (a) follows a particular process. Explain the step of this process which is
being discussed in the above para.
(c) Identify the source of the step identified in part (b). (4)
Q.28 Controlling is the last function of management. Do you agree? Give reasons in support of your answer. (4)
OR
“Measurement of performance should be done after the task is completed.” Do you agree? Give reasons in support of your answer. (4)
Q.29 Joginder, John, Iqbal and Shreya are friends. They are operating different businesses. Each one has his/her own concept
egarding operating their businesses.
Joginder focuses on providing best quality products because he believes that a customer always wishes to buy a good quality
product. The price of the product is secondary.
John is of the belief that most important aspect of business is sales and so he undertakes aggressive selling and promotional effort.
Iqbal believes that his firm can achieve its goals only by identifying the needs of the customer satisfying them better
than the competitors. Shreya feels that her firm has a responsibility towards the society as well. So she provides customer
satisfaction along with using techniques which are environmental friendly.
Identify and explain the marketing concepts followed by each of them. (4)
Q.30 (a) On Sonika’s birthday her mother gave her a pair of gold earrings. After one month Sonika observed that the ear-rings
are losing their shine. She checked the mark on the ear-rings and found that it was not a proper Hallmark and her
mother had been cheated by the shopkeeper. So, she filed a complaint in the district forum which rejected it. Not
satisfied by the decision of district forum, she was very much disturbed and after two months decided to appeal
further. Can Sonika appeal against the decision of the district forum? Give reason in support of your answer.
(b) Sirajuddin purchased a car for `15 lacs from an automobile company and found that its airbags were defective. After many
complaints with the company that went unheard, he filed a case in the District Forum. He was not satisfied with the
orders of the District Forum. He then appealed before the State Commission and on being dissatisfied with the orders of
State Commission, he appealed before the National Commission. Sirajuddin was not satisfied with the orders of National
Commission. Suggest him the highest authority where he could appeal against the decision of the National Commission.
(c) Harish purchased a medicine from ‘Hari Govind Medical Stores’ for his son who had high fever. Even after giving
the medicine his son’s condition did not improve and he had to be hospitalised. The doctor informed Harish that the
medicine given to his son was spurious. Harish complained about this to ‘Hari Govind Medical Stores’. As a result,
‘Hari Govind Medical Stores’ decided to file a complaint against the manufacturer in the consumer court. Can ‘Hari
Govind Medical Stores’ do this? Give reason.
(d) Pankaj purchased a car from Abhishek Motors for `50 lakh. The company offered many attractive gifts to Pankaj, like
free insurance for two years, free pick-up and drop facilities for free servicing up to 20,000 km, etc. But after a few
days Pankaj noticed that the pick-up of the car was not good and there was some problem in the engine. The company
serviced the car free of cost but even then Pankaj was not satisfied with its performance and Abhishek Motors was not
giving him due response. So he filed a complaint in the State Commission but was not satisfied with its decision also.
He was very much disturbed and after two months decided to appeal against it. Can Pankaj appeal against the decision
of the State Commission? Give reason in support of your answer. (6)
Q.31 Zoya International Ltd. is a multinational company in which people of various nationalities work together with a team
spirit of unity and harmony in a discrimination free environment. Equal opportunities are available for everyone in the
company. The pay and compensation of all the employees is just and equitable.
(a) State the principles of management being followed by Zoya International Ltd.
(b) What benefits will Zoya International Ltd. derive by following the principles identified in part (a). (6)
OR
‘Scientific Management means knowing exactly what you want men to do and seeing that they do it in the best and the cheapest
way.’ Taylor developed various techniques for application of Scientific Management principles and was able to achieve a three-fold
increase in productivity in Bethlehem Steel Company, where he worked. One of the techniques helps to determine the number of
workers to be employed; frame suitable incentive schemes and labour costs. Another technique recognises those workers who are able to
accomplish/exceed the fair day’s work and is based on the premise that efficiency is the result of the joint efforts of the managers and
the workers. Quoting the lines from the above paragraph, identify and explain the two techniques of Scientific Management. (6)
Q.32 Explain briefly any six factors affecting financing decision. (6)
OR
Explain briefly any six factors affecting dividend decision. (6)
Q.33 With the explosive growth of its subscriber base, to fuel its expansion plan Airo Telecom Co. Ltd. wants to raise ` 500 crore
by issuing equity shares.
(a) Identify and state the market Airo Telecom Co. Ltd. will look for to raise funds worth `500 crore to fuel its expansion
plan. Give reason in support of your answer.
(b) Explain any four methods through which Airo Telecom Co. Ltd. can issue equity shares. (6)
Q.34 Explain, giving reasons, whether the following statements are true/false: (6)
(a) Marketing is a merely a post-production activity.
(b) Only a product or a service can be marketed.
(c) Marketing is not merely a business phenomena or confined only to business organisations.
(d) Grading is particularly necessary for products which are not produced according to predetermined specifications.
(e) Physical distribution includes the decision regarding channels of distribution or the marketing intermediaries (like
whole salers, retailers) to be used only.
(f ) If the pricing objectives of a firm is “obtaining market share leadership, it will keep the price of its products at lower levels.
ANSWERS/HINTS
Sample Question Paper-1 23. (a) Two benefits which the company will derive from a good
control system are: (i) Accomplishing organisational goals
1. (c) 2. (c) 3. (b) OR (c) 4. (b) OR (a)
(ii) Judging accuracy of standards
5. (a) 6. (d) 7. (a) 8. (a)
9. (b) 10. (d) 11. (d) 12. (b) (b) The steps that the company should follow to remove the
13. (c) 14. (a), (c) 15. (b), (d) 16. (b) problems it is facing are:
17. (b) 18. (c) 19. (c) 20. (a) (i) Analysing deviations to identify their causes, e.g.
23. Features of Controlling highlighted in the given situation are: obsolete machinery, defective process, etc.
(i) Goal-oriented function (ii) Continuous function (ii) Taking corrective action: The company should
(iii) Pervasive function undertake technological upgradation of machinery, and
modify the existing process, etc.
OR
The next three steps in the process of ‘controlling’ are: OR
Step 3: Comparing actual performance with standards Management by exception (explain)
Step 4: Analysing deviations Step 5: Taking corrective action 24. Regulatory function – calling for information by undertaking
24. (a) True: Access to the primary market can be expensive on account of inspection, conducting enquires and audits of stock exchanges
various mandatory and non-mandatory expenses. and intermediaries.
(b) True: In the primary market, the flow of funds is form savers Protective function – Controlling insider trading and imposing
to investors, i.e. the primary market directly promotes capital penalties for such practices.
formation; On the other hand, secondary market enhances 25. (a) Specific and General Forces (explain)
en cash ability (liquidity) of shares, i.e. it indirectly promotes (b) Importance of business environment: (explain any three points)
capital formation. 26. Incentives provided to Siyaram Singh are: (a) Pay and allowances
25. Transfers and Promotions (Internal Sources of recruitment) (explain) (Financial Incentive)
26. (a) Motivation (b)Employee Recognition Programmes (Non-Financial Incentive)
30. Tanya cannot file a complaint in any consumer court since she does 27. (a) True: This is because there is formal arrangement for this.
not have the proof of purchase, i.e., Cash memo. She did not fulfil The Discount Finance House of India (DFHI) has been
her responsibility of an honest consumer. She should have gone back established for the specific objective of providing a ready
to the general store to get its billing. market for money market instruments.
OR (b) True: This is because issuing companies may fail to perform as per
(a) Learn about the risks associated with products and services, projections and promoters may defraud investors.
follow manufacturer’s instructions and use the products safely. (c) True: The possibility of earnings is higher if the securities are
(b) (i) Right to be heard held for a longer duration. First, there is the scope of earnings
(ii) Right to seek redressal (explain) capital gains in equity share. Second in the long run, the
31. The principles of scientific management as given by Taylor prosperity of a company is shared by shareholders by way of
discussed above are: high dividends and bonus issues.
(i) Development of each and every person to his or her greatest (d) True: It deals with new securities being issued for the first time.
efficiency and prosperity 29. (i) (a) Safety/Security needs: “Charu is working in a company on
(ii) Harmony, Not Discord (explain) permanent basis.”
The techniques of scientific management as given by Taylor (b) Affiliation/Belonging needs: “No one showed concern and
discussed above are: (i) Method study enquired about her health.”
(ii) Differential Piece Wage System (explain)
(ii) (a) Esteem needs (b) Self actualisation needs (explain)
33. (a) Decentralisation
OR
Sample Question Paper-2 (a) Informal communication
1. (d) OR (b) 2. (b) 3. (b) 4. (a) OR (b) (b) (Give two negative aspects of informal communication)
5. (b) 6. (b) 7. (b) 8. (c) (c) Formal communication system
9. (b) 10. (c) 11. (a) 12. (c) 30. (a) No, ‘Bharat Electricals cannot file a complaint in the consumer
13. (c) 14. (a) 15. (a) 16. (c) court against the manufacture of the electric iron since Bharat
Electricals is not a consumer. As per the provisions of the
17. (a) 18. (a) 19. (c) 20. (d)
Consumer Protection Act, 1986, definition of a consumer
22. (a) Selection decision. does not include a person who obtains goods for resale or any
(b) Production manager; because it is he who is responsible for commercial purpose.
the performance of the new employees since the production 31. (a) The principles of management overlooked by the management
departments needs additional 20 workers to meet the of Zaika Ltd. are: (i) Stability of Personnel (ii) Esprit De
growing demand for the products. Corps (iii) Unity of Command (Give the meaning)
OR 32. (a) The concept of management involved is PLANNING.
The next three steps for choosing the best candidate are: (b) Steps involved are:
(a) Employment interview (b) Reference and background (i) Setting objectives: increasing profits
checks (c) Selection decision (explain) (ii) Developing premises: making certain assumptions about future.
25. (a) “Comes to India to start a new business ... launches a new Functions of packaging: (Explain)
product in e-learning for Senior secondary school students OR
in Commerce stream.” The following are the variables used by R&T Reality to prepare
(i) It helps in assisting in planning and policy formulation. its market offering: (Explain)
(ii) It helps the firm to identify opportunities and get the (a) Product (b) Price (c) Place (d) Promotion
first mover advantage.
(b) “His business starts flourishing in India.” Sample Question Paper-9
(iii) It helps in improving performance. 1. (a) OR (b) 2. (a) 3. (a) OR (a) 4. (b)
(c) “Now more Indian companies entered into the market with 5. (d) 6. (a) 7. (b), (d) 8. (b)
different subjects also.” 9. (a) 10. (d) 11. (a) 12. (c)
(iv) It helps the firm to identify threats and early warning signals. 13. (d) 14. (b) 15. (c) 16. (a)
26. (i) Planning is a time consuming process. 17. (d) 18. (d) 19. (b), (d) 20. (d)
‘ABC Ltd. has devoted a lot of time and money to its plan.’ 21. (i) Business Cycle (ii) Growth Prospects (iii) Level of competition
(ii) Planning leads to rigidity OR
‘The competition starts increasing, so it could not change its Option ‘A’ is better. This is because in this option, Return on
plan to beat its competitors because huge amount of money Investment (10-12%)is higher than the Rate of interest (9%).
had already been devoted to the pre-decided plan.’(give The concept being used in taking the decision is Trading on
explanation of these two limitations) Equity. (Give the meaning)
27. (a) To the employees, the company can give pay and allowances, 22. (a) Dematerialisation
bonus, retirement benefits, perquisites (e.g., car allowance),
(b) For this, the investors has to open a ‘Demat account’ with a
recognition, promotion, job security etc. to motivate them for
depository participant (DP)
higher performance.
OR
To the agents, the company can give the following incentives:
(i) Profit sharing (a) Dematerialisation
(ii) Stock option (i.e., giving company’s share at a price (b) Problems with dealing in physical form: (i) Theft (ii)
less than market price) Fake/forged transfers (iii) Transfer delays (iv) Paper work
associated with share certificates or debentures held in
(b) By giving recognition, autonomy status, etc. and providing
physical form. (any two)
growth and self-fulfillment opportunities, the company
ensures that higher order needs—esteem and self 23. Societal marketing philosophy (Explain)
actualisation needs are met. 24. (a) Right to be heard (b) Right to seek redressal
28. Controlling (c) Right to consumer education
OR 25. (i) Organisational Objectives
(a) The management function is Controlling.“Comparing (a) Profit: Cost saving of `12,00,000 per year due to solar
actual performance with standards” is the step involved in power DEMU (Diesel Electric Multiple Unit) implies
the process of controlling which helped in finding out that increase in profits of Indian Railways.
the actual production of a worker is less than the set target. (b) Growth: Increase in number of products, i.e. new
29. Equity: (a) Stock market conditions/ State of capital market. broad gauge solar power trains.
(b) Fixed operating costs/ Risk considerations. (ii) Social Objectives — New broad gauge solar power train
OR is going to be a path breaking leap towards making trains
(a) (i) Investment decision/ Capital budgeting decision greener and more environment friendly.
(ii) Financing decision 26. (i) Motion Study (ii) Time Study
31. Principles: (explain) (iii) Simplification of Work (explain any two)
(a) Science, not rule of thumb 27. II Option: Legal Environment and Technological
(b) Development of each and every person to his greatest Environment (explain)
efficiency and prosperity
28. (a) Setting objectives (explain)
Technique: Method Study (explain)
(b) Follow up action (explain)
32. (a) Functional Structure
OR
(b) Yes, the directors can blame the production manager.Delegation
(a) Planning
does not mean abdication. (Explain)
29. Divisional Structure (Explain with diagram)
However, the production manager cannot blame his foreman
because he did not give him the authority for the requisition 34. (a) Branding (b) Advertising
of tools and materials from the stores department. (Principle of Sample Question Paper-10
authority and responsibility)
1. (b) 2. (b) 3. (a) OR (c) 4. (b)
33. II Option: The directors should approach a consultant for new 5. (d) 6. (a) OR (b) 7. (a) 8. (c)
public issue of shares. The stock exchanges deal with sale and
9. (b) 10. (d) 11. (b) 12. (c)
purchase of existing securities only, not in new issue of securities.
13. (d) 14. (b) 15. (c) 16. (a)
34. Different levels of packaging of the pain relieving medicine are: 17. (b) 18. (b) 19. (d) 20. (d)
• Ointment tube: Primary packaging
21. Efficiency (explain with example)
• Cardboard box: Secondary packaging
22. (i) Planning involves huge cost. (b) He cannot appeal to any other higher authority as only
“With the advancement of technology, the planned to make those matters which have been directly filed in the National
huge investment in developing and selling even higher Commission and where the value of goods and services in
resolution digital cameras. The made a budget allocation of question along with the compensation claimed exceed ` 1
`1,000 crore in developing it.” crore are appealable before Supreme Court.
(ii) Planning is time-consuming. (c) No, ‘Hari Govind Medical Stores’ cannot file a complaint
“It is a lengthy process of research and development. It may take against the manufacturer in the consumer court. The
2 to 3 years to actually start production.” Medical Stores is not a consumer since it buys medicine for
re-sale or commercial purpose.
(iii) Planning may not work in a dynamic environment.
“ In the mean time one of its competitors moved a step forward (d) No, Pankaj cannot appeal against the decision of State
and developed and marketed mirror-less cameras in the market. Commission since he has failed to appeal before the National
It resulted in heavy losses to Prem India Limited.” Commission with 30 days of the passing of the order.
OR 31. (a) The principles of management being followed by Zoya
International Ltd. are:
(a) Planning
(i) Esprit de corps (ii) Equity
(b) (i) Identifying alternative courses of action
(ii) Evaluating alternative courses of action (iii) Remuneration of employees (Give the meaning)
23. The next three steps in the process of staffing are stated below: (b) Benefits that Zoya International Ltd. will derive by
following the above principles are:
(i) Recruitment (ii) Selection (iii) Placement and orientation (explain)
(i) Esprit de corps – This will give rise to a spirit of
OR mutual trust and belongingness among team members.
The next two steps that Sahil has to follow in the staffing process are: It will also minimise the need for using penalties.
(a) Placement and Orientation (ii) Equity – Kindliness and justice in the behaviour of
(b) Training and development (explain) managers towards workers will ensure loyalty and devotion.
24. Authoritarian leadership (iii) Remuneration of employees – This will ensure
26. (a) Yes; since delegation does not mean abdication. (explain) congenial atmosphere and good relations between
workers and management. Consequently, the working
(b) Divisional structure; since the company manufactures many
of the company would be smooth.
consumer products, it is a multi-product company. The
company will have separate business units or divisions for OR
each product. Each unit will have a divisional manager Time Study — ‘One of the techniques helps to determine
responsible for performance of his division. labour costs’
27. (a) Staffing (b) Recruitment Differential Piece Wage System — ‘ Another technique recognises
(c) Recommendations of employees (Explain the meaning) those workers .... the workers’
33. (a) Primary market: Primary market is a type of capital market
28. The given statement is false. It is generally believed that
in which new securities are issued by the companies. Since
measurement should be done after the task is completed.
Airo Telecom Co. Ltd. wants to raise ` 500 crore by issuing
However, wherever possible, measurement of work should
new equity shares, it will look for the primary market.
be done during the performance. For instance, in case of
assembling task, each part produced should be checked (b) Methods through which Airo Telecom Co. Ltd. can issue
before assembling. Similarly, in a manufacturing plant, levels equity shares are: (explain any four)
of gas particles in the air could be continuously monitored (i) Offer through prospectus (ii) Offer for sales
for safety. There are several techniques for measurement of (iii) Private placement (iv) Rights issue
performance. These include personal observation, sample (v) e-IPOs
checking, performance reports, etc.
34. (a) False: Marketing includes many activities that are performed
OR even before goods are actually produced, and continue even
The given statement is false. Controlling should not be after the goods have been sold.
misunderstood as the last function of management. It is a function (b) False: Anything that is of value to the other can be marketed.
that brings back the management cycle back to the planning It can be a product or a service or a person or a place or an
function. The controlling function finds out how far actual idea or an organisation or experience or properties.
performance deviates from standards, analyses the causes of such
deviations and attempts to take corrective actions based on the same. (c) True: Marketing activities are equally relevant to non-profit
This process helps in formulation of future plans in the light of the organisations such as hospitals, schools, sports clubs and
problems that were identified and, thus, helps in better planning in social and religious organisations.
the future periods. Thus, controlling only completes one cycle of (d) True; such as in the case of agricultural products, say wheat
management process and improves planning in the next cycle. oranges, etc.
29. Joginder — Product concept, John — Selling concept; Iqbal — (e) False: It also includes the decision areas related to physical
Marketing concept and Shreya — Societal marketing concept movement of the product from where it is produced to a place
(Explain) where it is required by the customer for their consumption or use.
30. (a) No, Sonika cannot appeal now as the appeal has to be filed (f ) True: So that greater number of people are attracted to
within 30 days of passing of the order by the district forum. purchase the products.

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Edition 2021 CBSE Revised Syllabus for 2021 Exam

Exam Hanbook 2021 Business Studies-XII

CBSE Sample Question Paper 2020-21

Effective for CBSE Examination 2021

< ‘SYNOPSIS of all units to review essential understanding of each unit

Revised CBSE Syllabus for 2021 Examination Learning Outcomes

4. Tata Steel has risen to the top because of ______________.

Multiple Choice Questions (MCQ) (1 mark each)

Applying, Analysing and Creating Based Questions

Revised CBSE Syllabus for 2021 Examination Learning Outcomes

 Fayol’s principles of management  Discuss the principles of management developed by Fayol.

 Taylor’s Scientific management- principles and  Explain

Concept of Principles of Management

15. What nature of principles of management is highlighted in the above case?

Multiple Choice Questions (MCQ) (1 mark each)

Applying, Analysing and Creating Based Questions

(a) Identify and state the principle of management highlighted above.

Scalar Chain Gang Plank

Organisation chart showing FUNCTIONAL STRUCTURE

HR Marketing Finance Production

Organisation chart showing DIVISIONAL STRUCTURE

Sample Question Papers

CBSE Sample Question Paper 2020-21

Sample Question Paper 10 (for Practice)

following week to find new methods to achieve the objective.

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