2nd PUC Business Studies Previous Year Question Paper June 2019

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Karnataka 2nd PUC Business Studies Previous Year Question Paper March 2019

Time: 3.15 Hours
Max Marks: 70

Instructions :

1. Write the serial number of questions properly as given in the question paper while answering.
2. Answer for a question should be continuous.

Part – A

I. Answer any ten questions in a sentence or a word. 1 x 10 = 10

Question 1.
What is efficiency?
Answer:
Efficiency means doing the task correctly and with minimum cost.

Question 2.
Who strongly advocated piece wage system?
Answer:
F.W Taylor strongly advocated Piece Wage S\stem.

Question 3.
Mention the external force of business environment.
Answer:
Economic and political environment.

Question 4.
State the first step in planning process.
Answer:
Setting objectives is the first step in planning process.

Question 5.
Which of the following is not an element of delegation?
(a) Accountability
(b) Authority
(c) Responsibility
(d) Informal Organisation
Answer:
(d) Informal Organisation

Question 6.
T Name any one internal source of recruitment.
Answer:
Internal transfers.

Question 7.
The software company promoted by Narayana Murthy.is
(a) Wipro
(b) Infosys
(c) Satyam
(d) HCL
Answer:
(b) Infosys

Question 8.
Expand CPM.
Answer:
CPM = Critical Path Method.

Question 9.
The decision of acquiring a new machine is an example for
(a) Financing decision
(b) Working capital decision
(c) Investment decision
(d) None of the above
Answer:
(c) Investment decision is related to careful selection of assets in which funds will be invested by firms. Thus, the above case comes under the investment decision.

Question 10.
The settlement cycle in NSE is
(a) T + 5
(b) T + 3
(c) T + 2
(d) T + 1
Answer:
(c) The settlement cycle in NSE is T + 2.

Question 11.
A brand is a name, sign, symbol, design used to identify the product/service. |statc True/False|.
Answer:
True.

Question 12.
In which year the Consumer Production Act was enacted?
Answer:
In the year 1986.

Part – B

II. Answer any ten questions in two or three sentences. 10 x 2 = 20

Question 13.
Define management.
Answer:
According to Harold Koontz and Heinz Weihrich, “Management is the process of designing and maintaining an environment in which individuals, working together in a group, efficiently ’ accomplish selected aims.

Question 14.
What is Scalar Chain?
Answer:
Formal line of authority from highest to the lowest ranks are known as scalar chain principle. It should be followed by all managers as well as subordinates.

Question 15.
Give the meaning of mental revolution according to F.W. Taylor.
Answer:
Mental revolution involves a change in the attitude of workers and management towards one another from competition to co-operation. Both should realise that they require one another.

Question 16.
State any two features of Planning.
Answer:

• Planning focuses on achieving objectives.
• Planning is a primary function of management.

Question 17.
Write any two difference between Authority and Accountability.
Answer:

Authority	Accountability
Authority means right to give order	Accountability means being answerable for the job performed
It can be delegated	It cannot be delegated at all
Authority is power	Accountability is answerability

Question 18.
What is recruitment?
Answer:
According to Weather and Davis “Recruitment is the process of finding and attracting capable applicants for employment. The process begins when new recruits are sought and ends when their applications are submitted.”

Question 19.
Name any two styles of Leadership.
Answer:

• Autocratic leadership
• Democratic leadership
• Laissez faire leadership
• Bureaucratic leadership

Question 20.
State any two traditional technique of managerial control.
Answer:

• Personal observation
• Statistical reports.

Question 21.
Give the meaning of Dividend decision.
Answer:
Dividend decisions are concerned with the apportionment of the firm’s profit. Dividends are the portions of the profit which will be distributed to the share holders. The portion of profit which is undistributed to the share holders are called as retained earnings which will be utilized for expansion and development of the business.

Question 22.
Name the two depositories operating in India.
Answer:
NSDL (National Securities Depository Account), CDSL (Central Depository Service Limited).

Question 23.
State any two examples for the things that can be marketed other than product.
Answer:

• Service
• Ideas.

Question 24.
Name any two parties who can file a complaint before the appropriate consumer forum.
Answer:

• Any consumer
• Any registered consumer’s association
• The central government or any state government.

Part – C

III. Answer any seven questions in fifteen to twenty sentences. 7 x 4 = 21

Question 25.
What are the four aspects of work study developed by F.W. Taylor? Explain.
Answer:
Standardisation and simplification of work : Standardisation refers to the process of setting standards for every business activity. These standards are the benchmarks, which must he adhered to during production. This can be done by following scientific methods of production and through work — study techniques which include time study, motion study etc. Standardisation relates to process, raw — material, time, product, machinery, methods or working conditions.

• Method study : The objective of method study is to find out one best way of
  doing the job.
• Work — study: It refers to the study of movements like lifting, putting objects, sitting and changing positions etc, which are undertaken while doing any job.
• Time — study: It determines the standard time taken to perform
  a well—defined job.
• Fatigue study: It determines the amount and frequency of rest intervals in completing a task

Question 26.
Explain any four features of Business Environment.
Answer:
Business environment has the following features:

a. Totality of external forces: Business environments the sum total of all things external to business firms and, as such, is aggregative in nature.

b. Specific and general forces: Business environment includes both specific and general forces. Specific forces such as Investors, customers, etc, affect individual enterprises directly and immediately in their day-to-day working. General forces such as social, political conditions have impact on all business enterprises and thus may affect an individual firm only indirectly.

c. Inter-relatedness: Different elements of business environment are closely interrelated., One element of the environment affects the other. For example, new health aware products such as diet coke, fat-free cooking oil etc changed people’s life styles.

d. Dynamic nature: Business environment Is dynamic. It keeps on changing whether in terms of technological improvement, shifts in consumer preferences etc.

e. Uncertainty: Business environment is largely uncertain because it is difficult to predict future happenings.

f. Complexity: Since business environment consists of numerous interrelated and dynamic forces which arise from different sources, it is relatively easier to understand in parts hut difficult to grasp in its totality.

g. Relativity: Business environment is a relative concept. It differs from country to country and even from region to region.

Question 27.
Explain any four limitations of Planning.
Answer:
Types of plans

1. Single-use plans: A single-use plan is developed for a one-time event or project. The examples are

• Budgets
• Programmes
• Projects

2. Standing Plans: A standing plan is used for activities that occur regularly over a period of time. The examples are

• Policies
• Procedures
• Methods
• Rules

a. Policy: Policies are general statements that guide thinking.
Policies provide a basis for interpreting strategy.
Policy is a guide to managerial action and decision in the implementation of strategy.
Strategies are formulated by the top management.

Formulation of strategy involves the following aspects:

• Determination of the long term objectives
• Adopting a course of action to achieve the objectives and
• Allocating resources necessary to achieve the objectives.

b. Procedure: Procedures are routine steps on how to carry out activities. They detail the exact manner in which any work is to be performed. Procedures are the guidelines to action and they are usually intended to the works which are repetitive in nature. Examples of procedure include procedure for execution of the customer’s order for supply of goods and procedure for recruitment of employees in an organisation.

Question 28.
How does training and development of employees benefit the Organization?
Answer:
Benefits of training and development to the organisation:

• Training is a systematic learning, always better than hit and trial methods which lead to wastage of efforts and money.
• It enhances employee productivity both in terms of quantity and quality, leading to higher profits.
• Training equips the future manager who can take over in case of emergency.
• Training increases employee morale and reduces absenteeism and employee turnover.
• It helps in obtaining effective response to fast changing environment technological and economic.

Question 29.
Briefly explain first four steps involved in controlling process.
Answer:
Controlling is a systematic process involving the following steps:

i. Setting performance standards: The first step in the controlling process is setting up of performance standards. Standards are the criteria against which actual performance would be measured. Standards can be set in both quantitative as well as qualitative terms.

ii. Measurement of Actual Performance: Once performance standards are set, the next step is measurement of actual performance. It is generally believed that measurement should be done after the task is completed.

iii. Comparing actual performance with standards: This step involves comparison of actual performance with the standard. Such comparison will reveal the deviation between actual and desired results. Comparison becomes easier when standards are set
in quantitative terms.

iv. Analysing deviations: Some deviation in performance can be expected in all activities. After identifying the deviations that demand managerial attention, these deviations need to be analysed for their causes. These causes may be unrealistic standards, defective process, inadequacy of resources, structural drawbacks etc. It is necessary to identify the exact cause of deviation, failing which an appropriate corrective action might not be possible.

v. Taking corrective action: The final step in the controlling process is taking corrective action. No corrective action is required when the deviations are within acceptable limits. When the deviations go beyond the acceptable range, it demands immediate managerial attention. Corrective action might involve training of employees if the production target could not be met.

Question 30.
Explain any four factors affecting the working capital requirement of an organization.
Answer:
The factors affecting the working capital requirement of a business are as follows:

a. Nature of Business: The basic nature of business influences the amount of working capital required. A trading organization usually needs a smaller amount of working capital compared to a manufacturing organization. Similarly, service industries which
usually do not have to maintain inventory require less working capital.

b. Scale of Operations: for organizations which operate on a higher scale of operation, the quantum of inventory and debtors required is generally high. Such organizations, therefore, require large amount of working capital as compared to the organizations which operate on a lower scale.

c. Business Cycle: Different phases of business cycles affect the requirement of working capital by a firm. In case of a boom, the sales and production are likely to be larger and therefore larger amount of working capital is required. Working capital requirement will be less during the period of depression as the sales and production will be small.

d. Seasonal Factors: Most business have some seasonality in their operations. In peak season, because of higher level of activity, larger amount of working capital, is required. When the level of activity is less, working capital requirement will be less.

Question 31.
Explain any four factors affecting financing decisions.
Answer:
Financing Decision: This decision is about the quantum of finance to be raised from various long-term sources. It involves identification of various available sources. It has to make a judicious combination of these sources namely debt, equity preference share capital and retained earnings.
The financing decisions are affected by various factors which are as follows:

• Cost: The cost of raising funds through different sources Is different. A good financial manager would normally opt for a source which is the cheapest.
• Risk: The risk associated with each of the sources is different.
• Flotation Costs: Higher the flotation cost, less attractive is the source.
• Cash Flow position of the company: A stronger cash flow position may make debt financing more viable than funding through equity.

Question 32.
Explain the elements of Marketing mix.
Answer:
(a) Product mix: Product means goods or services or ’anything of value’, which is offered to the market for sale. In other words, product means anything that satisfies needs of the consumers.

(b) Price mix: Price is the exchange value of goods and service represented in terms of money. Pricing is the process of fixing or determining reasonable price to the product or service.

(c) Place mix: Place or distribution mix refers to providing the product at a place which is
convenient for consumers to access. It includes two aspects viz:

• Physical distribution
• Channels of distribution.

(d) Promotion mix: Promotion is a process of communication with the potential buyers involving information persuasion and influence.

Question 33.
State any four features of Speciality Products.
Answer:

• The demand for speciality products is limited as relatively small number of people buy these products.
• These products are generally costly and their unit price is very high.
• After sales services are very important for many of the speciality products.
• These products are available for sale at few places as the number of customers is small.

Question 34.
Explain any four Rights of Consumers.
Answer:

• Right to safety: The consumer has a right to be protected against goods and services which are hazardous to life and health. Example: Defective electronic appliances, gas cylinder, etc.
• Right to be informed: The consumer has a right to have complete information about the product he intends to buy including its ingredients, date of manufacture, expiry date, price, quantity, quality, directions for use, etc.
• Right to choose: The consumer has the freedom to choose from a variety of products at competitive prices. This implies that the marketers should offer a wide variety of products in terms of quality, brand, prices, size, etc.
• Right to be heard: The consumer has a right to file a complaint and to be heard in case of dissatisfaction with a good or a service.

Part – D

IV. Answer any four questions in twenty to thirty sentences. 4 x 8 = 32

Question 35.
Explain the characteristics of Management.
Answer:
Features of Management:

(a) Management is a goat oriented process: Every organisation has a set of basic goals to achieve. Management unites the efforts of different individuals in the organisation towards achieving these goals:

(b) Management is all pervasive: Management activities are universally applicable to all organisations, social, economic and political. Hence, management is all pervasive and a universal phenomenon.

(c) Management is multi – dimensional: Management is a complex activity and involves three dimensions namely.

• Management of work
• Management of people (and)
• Management of operations

(d) Management is a continuous process: Management consists of a series of functions like planning, organising, staffing and controlling which are continuous and composite in nature. These functions are simultaneously performed by all managers all the time. Hence, management is considered a continuous process.

(e) Management is a group activity: An organisation is a collection of number of individuals with different needs. Every member of the group has different purpose to join the organisation. But, as members of the organisation, they work towards fulfilling the common organisation goal. This requires team work and coordination. Hence, management is a group activity.

(f) Management is a dynamic function: Every organisation works in an environment which keeps on changing. The external environment which consists of various social, economic and political factors keep changing. In order to be successful, an organisation must change itself and its goals according to the needs of the environment. Hence, management is a dynamic environment.

(g) Management is an intangible force: Management cannot be seen but its presence can he felt in the operations of the organisation. The effect of management is noticeable in an organisation where targets are met according to plans, when employees are happy and satisfied, So management is an unseen force but reflects in the collective efforts.

Question 36.
Explain the importance of Organizing.
Answer:
Organising is the process of identifying and grouping the work to be performed. defining and delegating authority and responsibility and establishing relationships for the purpose of enabling people to work most selectively together in accomplishing objectives.

The following points highlight the importance of organizing:

a. Benefits of specialization: Organizing leads to a systematic allocation of obs amongst the work force. This reduces the workload as well as enhances productivity. Right man is placed for the right job. Repetitive performance of a specific job on regular basis helps worker to gain experience and leads to specialization.

b. Clarity in working relationships: The establishment of working relationships and clarifies lines of communication and specifies who is to report to whom. This further helps in fixation of responsibility and also specifies the dimensions of authority which an
individual can exercise.

c. Optimum utilization of resources: Organising leads to the proper usage of all material, financial and human resources. The proper assignment of jobs avoids overlapping of work and also makes possible the best use of resources. Avoiding duplication of work prevents confusion and minimizing the wastage of resources.

d. Adaptation to change: The process of organizing allows a business enterprise to accommodate changes in the business environment. It allows the organization structure to be suitably modified. It provides stability to the organization.

e. Effective administration: Organising provides clear description of jobs and related duties. This helps to avoid conftision and duplication. Clarity in work relationship enables proper execution of work. Thus, it provides effective administration in the enterprise.

f. Development of personnel: organizing stimulates creativity amongst the managers. Effective delegation allows the managers to reduce their workload by assigning routine jobs to their subordinates. This reduction in the work load allows the manager to develop new methods and ways of performing tasks for the growth of an organization. It also develops ability among the subordinates to deal effectively with the challenges.

g. Expansion and growth: Organising helps in the growth and diversification of an enterprise by enabling it to deviate from existing norms and taking up new challenges.

Conclusion: Thus, organizing is a process by which the manager brings order out of confusion, removes conflict among people over work or responsibility sharing and creates an environment suitable for team work.

Question 37.
Describe the steps involved in selection process.
Answer:
Employee selection is the process of putting right men on right job. It is a procedure of matching organizational recruitments with the skills and qualifications of people. The following steps are generally followed by all business organizations during selection process:
Steps in selection process:
a. Preliminary Screening
b. Selection Tests

• Intelligence tests
• Aptitude tests
• Trade or proficiency tests
• Personality tests
• Interest tests

Interview

• Direct Interview
• Indirect Interview
• Patterned or structural Interview
• Stress interview
• Board or Panel Interview
• Group Interview
• Reference and background checks
• Selection Decision
• Medical Examination
• Job offer (Issue of Appointment Letter)
• Contract of Employment (Acceptance of job offer)

1. Preliminary Screening: After receiving the applications from the candidates through recruitment process, the same must be examined to decide, which ones deserve to be considered and followed up. The main purpose of screening is to prepare a list of eligible candidates who are to be evaluated further. Screening exercise involves checking the contents of the application, so as to find out whether or not the minimum eligibility conditions are fulfilled by the applicants.

2. Selection Tests: Selection tests are given to discover and measure, the skill and abilities of the candidates in terms of the requirements of the job. The following tests are usually conducted to measure the intelligence, aptitude, proficiency, personality etc.

• Intelligence tests: These tests are used to judge the mental capacity of the applicant. Intelligence tests evaluate the ability of an individual to understand instructions and make decisions.
• Aptitude tests: Aptitude means the potential which an individual has for learning new skills. Aptitude test indicate the person’s capacity and his potential for development.
• Trade or proficiency tests: These tests are designed to measure the skills already acquired by the individuals. They measure the level of knowledge and proficiency in the area of profession or technical training.
• Personality tests: These tests probe for the overall qualities of a person as a while. They provide clues to a person’s emotional reactions, maturity level, value system etc.
• Interest tests: These tests identify the areas in which a candidate has special concern, fascination; involvement etc. These tests suggest the nature of job liked by a candidate which may bring him job satisfaction.

3. Interview: Interview is a face to face conversation and observation. Interview helps the employer to evaluate the candidate regarding the personality, smartness, intelligence, attitude etc. There are different kinds of interviews conducted by the employers. Some of them are as follows:

a. Direct Interview: Under this method, direct questions are asked to the applicant, to identify his skills, character, area of interest, attitudes etc,. The in-depth knowledge of applicant is not observed under this type of interview.

b. Indirect Interview: Under this method, the applicant is asked to express his opinion on any topic he likes. Here the interviewer listens to the views of the applicant without any intervention. This interview helps the interviewer to assess the personality of the applicant.

c. Patterned or Structural Interview: In this type of interview, the interviewer is looking for information in a particular area of interest of the organization. A number of standard questions are framed in advance which is to be answered by the applicant. These questions focus on the experience, skills and personality of the ideal candidate would possess.

d. Stress Interview: In this interview, the interviewer will intentionally try to upset the applicant, to see his reactions under pressure. Uncomfortable or irritating questions may be asked to the applicant to test his patience. This type of interview may be more commonly used in high stress jobs.

e. Board or Panel Interview: En this interview a group of persons called interviewers ask the applicant, questions in different subjects or area of interest of the candidate. Immediately after the interview, they meet, discuss and evaluate the performance of the applicant on the basis of answers given by him. This type of interview is common in case of professional jobs.

f. Group Interview: A group interview occurs when several candidates for a position are interviewed simultaneously. A common topic presented before the candidates for discussion. Group interview offers candidates to express their leadership potential and style.

4. Reference and Background checks: In addition to the required educational qualifications, skill and experience, the candidates must also possess other qualities liked honesty, loyalty etc. These qualities can be judged by the information obtained from the heads of educational institutions where the candidates have studies or from the persons whose names are given by the candidates as reference or from their previous employers.

5. Selection Decision: After a candidate has cleared all the hurdles in the selection procedure, the employer may take a decision of selection after consulting the concerned manager who is responsible for the performance of the new employee.

6. Medical examination: Candidates finally selected for the job are asked to undergo medical examination to see whether they are physically fit for the job. The physical fitness of employees reduces labour turnover, absenteeism, accidents etc., and ensure
higher standard of health of employees in the organization.

Question 38.
Suggest any eight suitable measures to improve effectiveness of communication.
Answer:
Perfect and complete communication does not take place many a times due to certain obstacles which are known as barriers to communication. Following are the barriers to effective communication:

1. Physical barriers: Internal structure of the organization and layout of office machines and equipment creates physical barriers in communication. Physical barriers include:

• Distance
• Noise
• Physical arrangement

2. Semantic barriers: The use of difficult and multiple uses of languages, words, figures, and symbols create semantic barriers. Some semantic barriers are:

• Language
• Jargons.

3. Organisational barriers: These arise from the organizational goals, regulations, structure and culture. Organisational barriers include:

• Poor planning
• Structure complexities
• Status differences
• Organisational distance
• Information overload
• Timing

4. Psychological barriers: These are the barriers to effective communication created due to lack of interest in the people for whom the communication is meant. People do not pay attention to the communication in which they are not interested.
Examples for psychological barriers are:

• Perception
• Filtering
• Distrust
• Emotions
• Viewpoint

Following are the ways to overcome barriers to effective communication:

1. Clarity of ideas: The problem to be communicated to subordinates should be clear in all aspects. The entire problem should be studied in depth, analysed and stated in such a manner that is clearly conveyed to subordinates.

2. Communicate according to the needs of receiver: The level of understanding of receiver should be crystal clear to the communicator. Manager should adjust his communication according to the education and understanding levels of subordinates.

3. Consult others before communicating: Before actually communicating the message. it is better to involve others in developing a plan for communication. Participation and involvement of subordinates may help to gain ready acceptance and willing cooperation of subordinates.

4. Be aware of languages, tone and content of message: The contents of the message, tone, and language used, manner in which the message is to be communicated are the important aspects of effective communication. The language used should be
understandable to the receiver and should not offend the sentiments of listeners.

5. Convey things of help and value to listeners: While conveying message to others, it is better to know the interests and needs of the people with whom you are communicating. Is the message relates directly or indirectly to such interests and needs it certainly evokes response from communicate.

6. Ensure proper feedback: The communicator may ensure the success of communication by asking questions regarding the message conveyed. The receiver of communication may also be encouraged to respond to communication. The communication process may be improved by the feedback received to make it more responsive.

7. Communicate for present as well as future: Generally, communication is needed to meet the existing commitments to maintain consistency; the communication should aim at future goals of the enterprise also.

8. Follow up communications: There should he regular follow up and review on the instructions given to subordinates. Such follow up measures help in removing hurdles if any in implementing the instructions.

9. Be a good listener: Manager should be a good listener. Patient and attentive listening solves half of the problems. Managers should also give indications of their interest in listening to their subordinates.

Question 39.
Explain any four Money Market Instruments.
Answer:
(a) Treasury bill: A treasury bill is a promissory notes or financial bills issued by the Government of India which has short term maturity, i.e. less than one year. The maturity period of these securities varies from 14 days to 364 days. Treasury bills are negotiable instruments and are freely transferable.

(b) Call money: It is mainly used by the banks to meet their temporary requirement of cash. They borrow and lend money from each other normally on a daily basis. It is repayable on demand and its maturity period is very short, i.e. 1 day to 15 days. The rate of interest paid on call money loan is known as call fate.

(c) Commercial paper: Commercial paper instrument was introduced in 1990 as a money market instrument. The commercial paper is an unsecured instrument issued in the form of promissory note. It can be issued for period ranging from 15 days to 1 year. Commercial papers are transferable by endorsement and delivery.

(d) Certificate of deposit: It is short-term instruments issued by Commercial Banks and Special Financial Institutions (SFIs). The maturity period of Certificate of Deposit ranges from 91 days to 1 year. These can be issued to individuals, cooperatives and companies.

Question 40.
State any eight difference between Advertising and Personal Selling.
Answer:

Advertising	Personal Selling
Advertising is an impersonal form of communication.	Personal selling is a personal form of communication.
Advertising involves transmission of standardised messages.	In personal selling, the sales talk is adjusted keeping in view customer’s background and needs.
Advertising is inflexible as the message cannot be adjusted to the needs of the buyer.	Personal selling is highly flexible as the message can be adjusted.
It reaches masses, i.e. a large number of people can be approached.	Only a limited number of people can be contacted because of time and cost considerations.
In advertising the cost per person reached is very low.	The cost per person is quite high in the case of personal selling.
Advertising can cover the market in a short time.	Personal selling efforts take a lot of time to cover the entire market.
Advertising makes use of mass media such as television, radio, newspaper and magazines,	Personal selling makes use of sales staff, which has limited reach.
Advertising lacks direct feedback. Marketing research efforts are needed to judge customers’ reactions to advertising.	Personal selling provides direct and immediate feedback. Sales persons come to know about the customers’ reactions immediately.
Advertising is more useful in creating and building interest of the consumers in the firms products.	Personal selling plays important role at the awareness stage of decision making.
Advertising is more useful in marketing to the ultimate consumer’s who are large in numbers.	Personal selling is more helpful in selling products to the industrial buyers or to intermediaries such as dealers and retailers who are relatively few in numbers.

Part – E
Particular Oriented Question

V. Answer any two Questions 2 x 5 = 10

Question 41.
Show the different elements of Business Environment that influence the Success of Business Enterprises with a neat diagram.
Answer:
Elements of Business Environment

Question 42.
Draw the triangular diagram of Maslow’s need Hierarchy theory.
Answer:

Question 43.
As a Marketing manager, suggest any five sales promotion activities to boost up sales.
Answer:

• Discounts
• Buy 1 get 1
• Rebate
• Sweep game
• Concession
• Samples
• Quantity gift
• Lucky draw
• Usable benefit
• Refund