Business studies

Test paper

1. This question paper contains 34 questions.

2. Marks are indicated against each question.
3. Answers should be brief and to the point.
4. Answers to the questions carrying 3 marks may be from 50 to 75 words.
5. Answers to the questions carrying 4 marks may be about 150 words.
6. Answers to the questions carrying 6 marks may be about 200 words.
7. Attempt all parts of the questions together.

SECTION A

1. The objective of management which consistently creates economic value

for various constituents of society is :

(A) Organisational objective

(B) Social objective

(C) Personal objective

(D) Both Social and Personal objective

2. Aarushi purchased a pack of biscuits. When she opened it, she felt the

biscuits were stale. She carefully read the label on the pack of biscuits

which mentioned :

‘‘If you are not satisfied with the product quality, write to our Customer

Care Cell at

Bell Foods Pvt. Ltd.

B/321, Jalandhar, Punjab.’’

The biscuit company has set up its own consumer service and grievance

cell to promote and protect the following right :

(A) Right to Safety

(B) Right to be Heard

(C) Right to be Informed

(D) Right to Consumer Education

3. At times, a business may concentrate on producing goods with fewer resources but cannot achieve
the targeted production. In such a case, the business is said to be :
(a) Effective but not efficient
(b) Efficient but not effective
(c) Both effective and efficient
(d) Neither effective nor efficient

4. 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 readymade 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.

5.The package of KRM Rawa Idli Mix describes the procedure of cooking idlis in three easy steps.
It also specifies its ingredients, instructions for storage and serving.
The function performed by the label in the above case is:
(A) Describing the product and specifies its contents.
(B) Identification of the product or brand.
(C) Helping in promotion of products.
(D) Providing information required by law.

6. Arnav has recently started a business to sell computers. He hired a shop in Nehru Place in New
Delhi, where he assembles various components to make computers and 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.
7. Using external sources for filling vacant positions :
(i) Gives a wider choice.
(ii) Simplifies the process of selection.
(iii) Instils a competitive spirit among the existing employees.
(iv) Does not infuse fresh talent in the organisation.
Choose the correct option from the following :
(A) (i) and (ii)
(B) (i) and (iii)
(C) (i), (iii) and (iv)
(D) (ii) and (iv)

8. ____________ test is a measure of an individual’s potential for learning new skills.

(A) Personality
(B) Aptitude
(C) Intelligence
(D) Interest

9. ‘Temptations’ is a food joint in Imperial Mall in Bengaluru. It is becoming popular among

students and working people due to healthy, on-the-go dishes on its menu like ‘Paneer Wrap’,
‘Chickpeas Salad’, ‘Grilled Sandwiches’, etc. It has now decided to open two new branches in other
parts of Bengaluru.
Which financial decision has been discussed in the above case?
(A) Long-term investment decision
(B) Short-term investment decision
(C) Dividend decision
(D) Financing decision

10. Who among the following is not considered a consumer under the Consumer Protection Act,
1986?
(A) A person who buys any goods for a consideration which has been paid.
(B) A person who avails of any service for a consideration which has been promised.
(C) A person who avails of a service for a commercial purpose.
(D) Any user of goods when such use is made with the approval of the buyer.

11. Which product-related decision is concerned with providing detailed information about the
product on its package ?
(a) Branding
(b) Packaging
(c) Labeling
(d) Both Branding and Packaging

12. The element of delegation which relates to the obligation of a subordinate to properly perform the
assigned duty is known as:
(a) Authority
(b) Responsibility
(c) Accountability
(d) Centralisation

13. The type of organizational structure in which jobs of similar nature are grouped together on the
basis of functions to form departments is called :

(a) Functional structure

(b) Divisional structure
(c) Informal structure
(d) Grouped structure

14. Which of the following statements correctly explains the limitation of planning ‘Planning does not
guarantee success?

(a) Planning is required at all levels of management and in all the departments of the organization.
(b) Planning involves thorough examination and evaluation of available alternatives.
(c) Relying on a previously tried and tested successful plan just because it had worked before and will
work again.
(d) By deciding in advance the tasks to be performed, planning shows the way to deal with changes
and uncertain events.

15. “Product Cost’ as a factor affecting price determination of a product includes:

(a) Cost of producing, distributing, and selling the product.

(b) Utility provided by the product.
(c) Nature and degree of competition.
(d) Maximising profit in the short run.

16. ‘Planning is an intellectual activity of thinking rather than doing. Which feature of planning is
highlighted in this statement?
(a) Planning focuses on achieving objectives.
(b) Planning is futuristic.
(c) Planning involves decision-making.
(d) Planning is a mental exercise.

17. ‘This principle will give rise to a spirit of mutual trust and belongingness among team members.’
Which principle of management stated by Fayol is highlighted by this statement?

(a) Initiative
(b) Esprit de Corps
(c) Equity
(d) Remuneration of Employees

18. Several initiatives have been undertaken the Government of India to encourage domestic
manufacturing and export of defence equipments. Make in India in Defence, was one such scheme
launched by the Government to encourage companies across the world to manufacture defense
products in India.

To which dimension of business environment does the above case relates to?

1. Economic Enviornment

2. Legal Environment

3. Political Enviornment

4. Social Environment

19. Which of the statements is true?

1. Accountability can be entirely delegated

2. Accountability flows downward

3. Accountability refers to answerability for final outcome of assigned task

4. Accountablity means the right of an individual to command his subordinates.

Q.43 For the following two statements, choose the correct option :
Statement I: If the demand of a product is inelastic, the firm is in a position to fix higher price.

statement II: In case the degree of competition is high, the firm is in position to set high prices.

Choose the correct option from options given below :

1. Statement I is correct and Statement II is wrong

2. Statement II is correct and Statement I is wrong

3. Both the statements are correct.

4. Both the statements are wrong

Section : B
21. Mr. Harsith, a social activist, was concerned with the pollution caused by the use of polythene
bags.These bags are non-biodegradable and are a great threat for the water bodies and also adversely
affect the quality of soil. To ban the use of these bags, he filed a writ petition in the court.
The court also identified the threats caused by these bags and passed an order banning the use of these
bags as these bags are creating many environmental problems which affect the life of people in
general and society in general is more concerned about quality of life. The government decided to
give subsidy to jute industry to promote this business and innovative techniques are being developed
to manufacture jute bags at low rates with more innovation and better technology, GDP of country is
expected to rise.

A)Identify the different dimensions of business environment by quoting the lines from the above
particulars.

22. What is meant by the Functional Organisation Structure? Discuss its suitability.
Or
“Authority can be delegated but accountability cannot.” Explain the statement.

23. Mr. Pachouri is the General Manager of Fast Life, a company manufacturing and selling speakers
and amplifiers. He manages 15 Departmental Managers who further handles around 200 employees
each. Mr. Pachouri allows all his managers to take their operative decisions but in some cases like if
there is a conflict between two departmental managers or there is an accident, then Mr. Pachouri
immediately takescontrol of the situation to ensure prompt and coordinated effort.
(a) At which level of management is Mr. Pachouri working?
(b) State any two functions he would perform at that level.
24. Explain how management by exception helps in controlling process.
Or
Explain the importance of interview in selection process.

Section : C

25. Name and discuss any four techniques of Scientific Management through which the best practices
can be kept and further refined to develop a standard that is to be applied throughout the organisation.
Or
What is meant by coordination? Why is coordination important in an organisation?

26. How is training in an organisation beneficial ‘for employees’? State by giving any four reasons.
or
Distinguish between the term ‘training’ and ‘development’.

27. Goal Group of companies has three divisions namely Shoes, Garments and Home Decor items
each headed by their Divisional Managers respectively. It has the plans to enter a new venture that is
related to the Hospitality Industry. The company has done the SWOT Analysis and found that the
business environment seems favourable for this industry as the government is offering huge
incentives for setting up of hotels in the remote hilly areas to promote tourism there. The Chief
Executive also knew that the company is having sufficient funds to finance the project; they just need
to add one more division, Hospitality, with a new set of employees, to their existing structure to start
the venture.
(a) What does the Chief Executive’s decision tell about the importance of Organising?
(b) Also, discuss three others points highlighting the importance of Organising

28. Explain how principles of management:

(a) provides useful insight into reality
(b) helps in thoughtful decision-making

29. Identify and state the various elements of communication highlighted in the following cases
(i) Department ‘A’ has sent an encoded message to department ‘B’ through internet. What is the role
of internet here?
(ii) Shiny is making gestures so that she can send a message to Romil. What is Shiny doing here?
(iii) Romil is trying to understand the message sent by Shiny by reading his gestures. What is Romil
doing here?
(iv) Prakash picks up his phone and finds a message on it. He reads the message carefully. What is the
role of Prakash here?
30. Somnath Export Private Limited, is engaged in the business of export of garments. In the past, the
performance of the company had been upto the expectations. In line with the latest technology, the
company decided to upgrade its machinery. For this, the Finance Manager, Raheja estimated the
amount of funds required and the timings. This will help the company in linking the investment and
the financing decisions on a continuous basis. Raheja therefore, began with the preparation of a sales
forecast for the next four years. He also collected the relevant data about the profit estimates in the
coming years. By doing this, he wanted to be sure about the availability of funds from the internal
sources of the business. For the remaining funds he is trying to find out alternative sources from
outside. Identify the financial concept discussed in the above para. Also state the objectives to be
achieved by the use of financial concept, so identified.

Section : D

31. Briefly discuss the Planning process.

OR
With the help of any four points, explain the crucial role that organising plays in an enterprise.

32. Explain any four functions of Stock Exchange.

or
Explain the recent Capital Market reforms in India.

33. Read the statements given in point (i) and (ii), answer the questions that follow
(i) Reena is the manager of the western division of a large corporate house.
(a) At what level does she work in the organisation?
(b) Explain any two functions performed by her.
(ii) Kunal supervise and control the workers. He ensures the proper arrangement of material and tools
to start the process.
(a) At which level does Kunal work in the organisation?
(b) Explain any two functions performed by him.

34. Samir Gupta started a telecommunication company, ‘Donira Ltd.’ to manufacture economical
mobile phones for the Indian rural market with 15 employees. The company did very well in its initial
years. As the product was good and marketed well, the demand of its products went up. To increase
production the company decided to recruit additional employees. Samir Gupta, who was earlier taking
all decisions for the company had to selectively disperse the authority. He believed that subordinates
are competent, capable and resourceful and can assume responsibility for effective implementation of
their decisions. This paid off and the company was not only able to increase its production but also
expanded its product range.
(a) Identify the concept used by Samir Gupta through which he was able to steer his company to
greater heights.
(b) Also explain any three points of importance of this concept.