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 Bihar Board 12th Business Studies Model Question Paper 5 in English Medium

Bihar Board 12th Business Studies Model Question Paper 5 in English Medium

Time : 3 Hour 15 Min
Full Marks : 100

Instructions

1. Candidates are required to give their answers in their own words as far as practicable.
2. Figures in the right hand margin indicate full marks.
3. 15 minutes of extra time has been allotted for the candidate to read the questions carefull.
4. This question paper has two sections : Section -A and Section-B.
5. In Section-A, there are 50 objective type questions which are compulsory, each carrying 1 mark. Darken the circle with black/blue ball pen against the correct option on OMR Sheet provided to you. Do not use Whitener/ Liquid/Blade/Nail on OMR Sheet, otherwise the result will be treated as invalid.
6. In Section-B, there are 25 Short answer type questions, out of which any 15 questions are to be answered. Each question carries 2 marks. Apart from this, there are 08 Long answer type questions, out-of which any 04 of them are to be answered. Each question carries 5 marks.
7. Use of any electronic device is prohibited.

Objective Type Questions

Question No. -1 to 50 have four options provided, out of which only one is correct. You have to mark, your selected option, on the OMR-Sheet. Each questiion carries 1 (one) mark. [50 x 1 = 50]

Question 1.
Profession in an Art _________
(a) Work by other
(b) Self work
(c) Both (a) and (b)
(d) None of these
Answer:
(a) Work by other

Question 2.
Project Evalution is _________
(a) 1986
(b) 1987
(c) 1968
(d) None of these
Answer:
(a) 1986

Question 3.
Risk capital establishment established For _________
(a) Import Analysis
(b) Export Analysis
(c) Both (a) and
(d) None of these
Answer:
(a) Import Analysis

Question 4.
A good Plane is ________
(a) Expensive
(b) time consuming
(c) flexible
(d) rigid
Answer:
(c) flexible

Question 5.
“Management is a profession.” This statement is of _________
(a) George R. Terry
(b) Henry Fayol
(c) American Management Association
(d) Lawrence A. Appley.
Answer:
(c) American Management Association

Question 6.
Of all managerial activities planning is the _________
(a) beginning
(b) end
(c) beginning & end both
(d) none of these
Answer:
(a) beginning

Question 7.
For delegation of authority to be effective, it is essential that accompanied with is necessary
(a) authority
(b) main power
(c) incentives
(d) Promotion
Answer:
(a) authority

Question 8.
Recruitment in the life of organisation is _________
(a) continuous
(b) occasionally
(c) once
(d) twice
Answer:
(a) continuous

Question 9.
In effective communication. language should not be used.
(a) expressive
(b) impressive
(c) ambiguous
(d) courteous
Answer:
(c) ambiguous

Question 10.
Who was the father of scientific management ?
(a) H. S. Parsons
(b) Diemer
(c) F. W. Taylor
(d) Charles Babbage
Answer:
(c) F. W. Taylor

Question 11.
Method (s) of training is /are _________
(a) conference
(b) lectures
(c) apprenticeship
(d) all of these
Answer:
(a) conference

Question 12.
Henry Fayol’s principles of management are _________
(a) 10
(b) 3
(c) 14
(d) 15.
Answer:
(c) 14

Question 13.
Financial manager takes decision as to _________
(a) finance
(b) investment
(c) dividend
(d) all of these
Answer:
(a) finance

Question 14.
Effective controlling is _________
(a) static
(b) pre-determined
(c) dynamic
(d) all of these
Answer:
(c) dynamic

Question 15.
Supervision is an element of _________
(a) leadership
(b) planning
(c) direction
(d) none of these
Answer:
(c) direction

Question 16.
Capital market deals in _________
(a) short-term funds
(b) medium-term funds
(c) long-term funds
(d) all of these
Answer:
(d) all of these

Question 17.
Consumer Protection Act was passed in _________
(a) 1886
(b) 1986
(c) 1996
(d) 1997
Answer:
(b) 1986

Question 18.
Headquarters of SEBI is in _________
(a) Delhi
(b) Mumbai
(c) Kolkata
(d) Chennai
Answer:
(b) Mumbai

Question 19.
Grapewine is _________
(a) formal Communication
(b) barriter to communication
(c) lateral communication
(d) Informal communication
Answer:
(a) formal Communication

Question 20.
Marketing includes _________
(a) Purchase
(b) Sales
(c) Warehousing
(d) All of these
Answer:
(d) All of these

Question 21.
Advertisement is deemed as _________
(a) Wastage
(b) Investment
(c) Luxury
(d) None of these
Answer:
(b) Investment

Question 22.
Bank overdraft facilities are available on _________
(a) Savings Bank Account
(b) Current Account
(c) Term Deposit Account
(d) None of these
Answer:
(b) Current Account

Question 23.
New issued shares deal in _________
(a) Secondary Market
(b) Primary Market
(c) Secondary Market and Primary Market both
(d) None of these
Answer:
(b) Primary Market

Question 24.
Budget is a statement of budgetary policy.
(a) Financial
(b) Final
(c) Work
(d) Non-financial
Answer:
(a) Financial

Question 25.
Main component (s) of New Economic Policy is/ are _________
(a) Liberalisation
(b) Globalisation
(c) Privatisation
(d) All of these
Answer:
(b) Globalisation

Question 26.
Authority cannot be delegated of _________
(a) Routine work
(b) Secret work
(c) Ordinary work
(d) None of these
Answer:
(b) Secret work

Question 27.
The proporinder of adminisimtive management was _________
(a) Fayol
(b) Taylor
(c) Terry
(d) None of these
Answer:
(b) Taylor

Question 28.
Which of the following depends on the sweet will of employees ?
(a) Formal Organisation
(b) Informal Organisation
(c) Functional Organisation
(d) Divisional Organisation
Answer:
(b) Informal Organisation

Question 29.
Co-ordination is _________
(a) voluntary
(b) necessary
(c) unnecssary
(d) waste of time
Answer:
(b) necessary

Question 30.
Fixed capital is needed for period _________
(a) short
(b) long
(c) short and long both
(d) none of these
Answer:
(b) long

Question 31.
Controlling is the aspect management.
(a) Theory
(b) Behaviour
(c) Mental
(d) Physical
Answer:
(b) Behaviour

Question 32.
Which of the following is not a characteristic of entrepreneurship ?
(a) Risk taking
(b) Innovation
(c) Creative activity
(d) Managerial training
Answer:
(d) Managerial training

Question 33.
Comprehensive plan for accomplishing an organisation’s objectives as _________
(a) Policy
(b) Programme
(c) Objective
(d) Strategy
Answer:
(d) Strategy

Question 34.
Barrier in effective communication is _________
(a) language
(b) distance
(c) individual differences
(d) all of these
Answer:
(c) individual differences

Question 35.
Which one amongst the following is not the Consumer product _________
(a) Raw material
(b) Refrigrator
(c) Old figure
(d) Share
Answer:
(c) Old figure

Question 36.
The disputes which come under Consumer Protection Act are _________
(a) disputes as to sale of shares by a company
(b) disputes of Penal Nature
(c) disputes as to sale of defective goods by the seller
(d) service disputes.
Answer:
(c) disputes as to sale of defective goods by the seller

Question 37.
Entrepreneurial Development institute of India is situated in _________
(a) Ahmedabad
(b) Mumbai
(c) New Delhi
(d) Chennai
Answer:
(a) Ahmedabad

Question 38.
The organisation spreading rumours is called _________
(a) Formal
(b) Informal
(c) Centralised
(d) Decentralised
Answer:
(b) Informal

Question 39.
The maximum duration of commercial paper is _________
(a) 3 months
(b) 6 months
(c) 12 months
(d) 24 months
Answer:
(a) 3 months

Question 40.
Stock exchange protects the interest of _________
(a) Investor
(b) Company
(c) Government
(d) None of these
Answer:
(a) Investor

Question 41.
which following is called “The Father of Scientific Management.”
(a) Alton Meyo
(b) F. W. Taylor
(c) Feyol
(d) None of these
Answer:
(b) F. W. Taylor

Question 42.
Management is :
(a) An art
(b) A science
(c) An art and science both
(d) None of these
Answer:
(c) An art and science both

Question 43.
14 principle of management is represented _________
(a) Henry Feyol
(b) F. W. Taylor
(c) Peter Drucker
(d) A. H. Maslo
Answer:
(a) Henry Feyol

Question 44.
In which following is important step in planning ?
(a) Decision
(b) Organiation
(c) Asiimption
(d) Direction
Answer:
(c) Asiimption

Question 45.
To whom social liabilities of management :
(a) To whole society
(b) Employee class
(c) Government
(d) Organisation
Answer:
(a) To whole society

Question 46.
What is the function of management ?
(a) Planning
(b) Organisation
(c) Direction
(d) None of these
Answer:
(d) None of these

Question 47.
The main object of budgeting is :
(a) Planning
(b) Co-ordination
(c) Controlling
(d) None of these
Answer:
(c) Controlling

Question 48.
“Scope of controlling” principle represented by :
(a) Henry Feyol
(b) Alton Meyo
(c) F. W. Taylor
(d) None of these
Answer:
(b) Alton Meyo

Question 49.
In inspiration’s “the principle of originated necessities” represented by :
(a) Hurjburg
(b) Maslo
(c) Alton Meyo
(d) None of these
Answer:
(b) Maslo

Question 50
communication is that _________
(a) One-sided process
(b) Two-sided process
(c) Multiple-sided process
(d) None of these
Answer:
(a) One-sided process

Non-Objective Type Questions

Short Answer Type Questions

Question no. 1 to 25 are Short answer type questions. Answer any 15 out of them. Each question carries 2 marks. (15 x 3 = 30)

Question 1.
State the nature and characteristics of Principles of Management.
Answer:
Management Principles : These are the statement of fundamental truth based on creation and systematic analysis which provides guidlines for managerial decision making and action.
Nature and charecteristics of management Principles are the same which are following :

1. Flexiblity
2. Univarsal application
3. lack of unanimity
4. Beharourial.

Question 2.
What do you mean by Scientific Management ?
Answer:
Meaning : Scientific management means a sound management technique that tends to eliminate wastage harmonises the different factors and processes of production and pings about an all around efficiency in the working of the organisation.

Definition : Scientific management means knowing exactly what you want men to do and seeing that they do it in the best and the cheapest way.

Question 3.
State the meaning of Liberalisation.
Answer:
Industrial economy in India has always been regulated by licensing system and bureaucratic procedure regulated in red – tapism and rampant corruption.These obstacles obstructed economic growth. Liberalization is the process of freeing the economy from licence system and other regulations.
Features of liberalisation :

1. Simplifying importance export procedure
2. Simplifying the process of attracting foreign capital and technology,
3. To do away with the necessity of having a license for most of the industries
4. Removing restrictions for the movement of goods and services from one place to another
5. Freedom in determining the scale of business activities
6. Freedom to fix, the prices of goods and, services
7. Reduction in the rate of taxes
8. Freedom from unnecessary control over economy.

Question 4.
Describe the limitations of planning.
Answer:
The major limitations of planning are as follows:

1. Planning leads to rigidity : A well defined plan is drawn up with specific goals to be achieved within a specific time frame.These plans then decide the future course of action and managers may not be in the position to change it.This kind of rigidity in plans may create difficulty.
2. Planning may not work in a dynamic environment : The business environment is dynamic, nothing is constant.Planning cannot foresee everything and thus, there may be obstacles to effective planning.
3. Planning reduces creativity : Planning is an activity which is done by the top management.Usually the rest of the members just implements these plans.Thus, planning in a way reduces creativity since people tend to think along the same lines as others.There is nothing new or innovative.
4. Planning involves huge costs : When plans are drawn up huge costs are involved in their formulation.These may be in terms of time and money for example,checking accuracy of facts may involve lot of time.
5. Planning is a time – consuming proces :
   Sometimes plans to be drawn up take so much of time that there is not much time left for their implementation.
6. Planning does not grantee success.

Question 5.
What is financial management ?
Answer:
Financial management is concerned with optimal procurement as well as usage of finance for optimal procurement, different available sources of finance are identified and compared in terms of their costs and associated risks. Similarly, the finance so procured needs to be invested in a manner that the returns from the investment exceed the cost at which procurement has taken place. Financial management aims at reducing the cost of funds procured keeping the risk under control and achieving effective deployment of such funds. It also aims at ensuring availability of enough funds whenever required as well as avoiding idle finance.

Question 6.
Explain the elements of directing function of management.
Answer:
Direction includes the following elements:

1. Supervision : The term ‘supervision’ is normally used in management to mean overseeing the employees at work. Itimplies, instructing, observing, monitoring and guiding the subordinates at work place to ensure that plans and procedures are implemented as intended.
2. Communication : Communication is a process which involves a sender of- massage and a receiver.Communication is complete only when the receiver is able to interpret the massage as desired by the sender and responds to it.Communication is regarded as a two way process.The process of communication begins when one person wants to transmit a fact; idea ,opinion or other information to someone else.
3. Leadership : Leadership may be defined as the process of influencing the behavior of people at work towards the realization of specified goals.lt involves ability to use non- conceive influence on the activities,goals and motivation of others for achieving organizational objectives.
4. Motivation : Motivation is a mental state. lt is a driving force that people to action and continuous them in action.Motivation is the set of forces that cause people to behave in certain ways.

Question 7.
What is function of Stock Marketing ?
Answer
The functions of stock markets are mentioned below :

1. Liquidity : Stock exchange provides a ready market for the securities issued by various institutions.
2. Promotes the habit of saving and investment: Stock exchange promotes the habit of saving and investment among the general public.
3. Safety of Dealing : Stock exchange protects the interests of investors against malpractices or dishonesty through

(a) strict enforcement of rules and regulations, framed to protect the interests of investors,
(b) strict rules and regulation for listing of securities. In case the brokers adopt any malpractice in their dealings, their membership may be suspended for some time or cancelled or fine may be imposed.

Question 8.
Enumerate the sales promotion .
Answer:
Sales Promotion has defined by various authors as under :

1. L.KJohnson : “Sales Promotion consists of all those activities whose purpose is to supplement,to coordinate and to make more effective the efforts of the sales force,of the advertising department and of distributors and to increase sales and otherwise stimulate consumers greater initiative in buying.”
2. American Marketing Association : “Sales promotion comprises those marketing activities,other than personal selling,advertising and publicity that stimulate consumer purchasing and dealer effectiveness,non -recurrent selling efforts not in the ordinary routine.”
3. Luick and Zeiler :”Sales promotion as a tool of markets promotions gives rise to increase in product usage as well as expansion of markets for a product or introduction of a new product.”

Question 9.
Explian the four functions of management.
Answer:
The four functions of management are as follow :

(i) Planning : Planning is the function of determining in advance what is to be done and who is to do it. This implies setting goals in advance and developing a way of achieving them efficiently and effectively. Planning cannot prevent problems but it can predict them and prepare contingency plans to deal with them if and when they occur, .

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

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

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

Question 10.
Write short notes on function of financial management ?
Answer:
The finance all manager in order to achieve the objectives of financial management, performs many functions. These functions involve many financial decisions which may be discussed under two groups.

(a) Principle functions
(b) Supplementary functions.

(a) Principle functions :
These are the types of principle functions :

1. Estimatiay the financial Requirements
2. Decision a bout capital structure,
3. Dividend Devisions.

(b) Supplementary functions:
These are the types of supplementary functions :

1. Cash management,
2. Report with Investors
3. Stock Exchange Trends.

Question 11.
What are the advantages of partnership ?
Answer:
The advantages of partnership are as following :

1. Easy to starts : There is no complicated legal procedure to start partnership. It does not take much expenditure to start partnership. It can be started very easily.
2. Sufficient capital: Partnerhsip has more capital resources as compared to sole trade. It can even get Model larger amount of loans from other institutions on easy terms.
3. More resources : The partnership has resources, contributed by at the most ten persons in banking and twenty persons in other busness. It is also the combination of the talent of many persons, working as partners.
4. Specialization in management : A division of work in partnership is done in accordance with scientific management principles.
5. Balanced decision : Decisions are taken jointly by consulting each other, therefore, the partnership is able to take balanced decision.

Question 12.
Discuss the four points of marketing.
Answer:
The four points of marketing are :

1. Product
2. Price
3. Place
4. Promotion and are discussed as below :

(i) Product : Product means goods or services or ‘anything of value’, which is offered to the market of for exchange.
For example : Hindustan Lever Company offers, number of consumer products like toiletries (close- up, tooth paste, lifebuoy, soap ec.) The important product decisions include decisions about the features, quality, packaging, lebelling and branding of the products.

(ii) Price : Price is the amount of money customers have to pay to obtain the product. The marketers have not only to decide about the objectives of price sitting but to analyse the factors determining the price and fix a price for the firm’s products.

(iii) Place : Place or physical distribution include activities that make firm’s products available to the target customers. Important decision areas in this respect include selection of dealers or intermediaries to reach the customers, providing support to the intermediaries. The other decision areas relate to managing inventory, storage and warehousing and transportation of goods from the place it is produced to the place it is required by the buyers.

(iv) Promotion : Promotion of products and services include activities that communicate availability features, merits etc. of the products to the target customers and persuade them to buy it. The promotional activities and spend substantial amount of money on the promotion of their goods through using number of tools such as advertising, personal selling and sales promotion techniques (like price discounts, free samples, etc.)

Question 13.
What is money market ?
Answer:
Enterprises need money, both for short medium and long’term. Medium and long medium and long term funds are raised in the capital market.
Short term funds are collected from the money market, short term means less than one year. Thus, money market is the market that facilitates the procurement of funds for short term or current requirements.
Some are the tools of money market-

1. Treasury Bill
2. Inter bank call money
3. Commercial paper
4. Certificate of Deposits
5. Trade bill / commercial bill

Question 14.
Define business company.
Answer:
The formation of a joint-stock company in India is to be done as per rules and guidelines envisaged in the companies act 1956. The meaning of companies business related with joint stock companies. Joint stock companies are made for profit and it is a optional institution which capital are undistributed in transferable shares. That is the mean it anybody can sell and purchase its share. The liabilities of the members are limited and general. It has a fixed existence and it is a artificial person and it is formed by common seal.

Question 15.
What are source of credit marketing ?
Answer:
In business the question of credit creditability is of almost significance in turns of an entrepreneur’s efforts on the basis of which the financial agencies and the businessman remain loyal and omitted to each other. This creditability is built on the basis of the business-man discipline creditability is achieved with a lot of efforts and difficulties and no remedy is available when it is lost. The transaction of the goods in the parties on the basis of commercial credit. It is called credit-marketing.

The sources of credit marketing are different type for example shares, debentures, banking companies and financial institutions from these sources traders get finance.

Question 16.
What is the role of profit/advantages in business.
Answer:
Roal of business should be profit maximisation some points are as follows :

1. Profit is the reward of labour.
2. Profit is the means of the satisfaction of human needs.
3. It is a measure of business efficiency.
4. Profit is the base of business protection, growth and stability.
5. Profit is the base of social responsibilities.
6. Profit is the cause of extension of various economies.
7. Profit is the base of exchange.
8. Profit is an incentive.

Question 17.
What is importance of consumer protection ?
Answer:
Consumer protection has a wide agenda. Importance of consumer protection from the consumers point of view.
Importance of consumers protection from the point of view of business are as follows :

1. Long-term interest of business : Satisfied customers not only lead to repeat sales but also provide good feedback to prospective customers and thus, help in increasing the customer base of business.
2. Business uses society’s resources : Business organisations use resources which belong to the society. They thus, have a responsibility to supply such products and render such services which are in public interest.
3. Socila Responsiblity : A business has social responsibilities towards varousnterest groups. Business organisations make money by selling goods and providing services to consumers.
4. Moral jusuficaPon : It is the moral duty of any business to take care of consumer’s interest and avoid any form of their exploitation. Thus, a business must avoid unscrupulous, exploitative and unfair trade practices like defective and unsafe products, adulteration, false and misleading advertising, hoarding, black marketing etc.

Question 18.
Explain the importance of financial planning in modern age.
Answer:
The importance of financial planning can be explained as follows:

1. It tries to forecast what may happen in future under different business situations
2. It helps in avoiding business shocks and surprises and helps the company in preparing for the future
3. If helps in co-ordinating various business functions e.g.sales and production functions,by providing clear policies and procedures
4. Detailed plans of action prepared under financial planning reduce waste,duplication of efforts, and gaps in planning
5. It tries to link the present with the future
6. It provides a link between investment and financing decisions on a continuous basis
7. By spelling out detailed objectives for various business segments,it makes the evaluation of actual performance easier.

Question 19.
Discuss the importance of communication in any business organisation.
Answer:
It is rightly said that managerial functions cannot be carried out without an efficient system of communication.We can give following arguments in favour of our decision:

1. Better coordination : Communication serves as a tool for coordinating activity.Coordination without communication is a remote possibility.Through communication employees come to know what is going on in other departments.
2. Quick decision and its enforcement : effective communication is needful for the quick
   decision.Effective communication translates the policies into effective instrument of seeing through the organisation on the veil of its progress.Effectiveness of the policies can be judged from its success which surely depends on effective communication system.
3. High morale of the employees : The effective medium of the communication develops the feeling of mutual trust.Hence,workers offer their proposals,suggestions and ideas.If suggestions of the workers are properly cared and promoted ,they will feed proud.All these help in boosting morale of the employees.

Question 20.
Explain the social responsibilities of the management.
Answer:
Social obligations means the responsibility of business to act in a manner which will serve the best interest of the society. The following are the various points which is need for assumption of social responsibilities :

1. Long-term business interest: While a business must seek to maximize profits and wealth, it must not igonre social and human problems of the society. Business is an important part of the society.
2. Government Intervention : The Government has favorable attitude towards business which fulfill their social obligations. Laws to prevent unfair trade practices, black marketing, overcharging, adulteration etc. bear proof of this.
3. Use of society’s resources : Business is a creation of the society and so it should respond to the requirements of the society. It is essential that every business enterprise should fulfill its social responsibilities.
4. Public image : If a business is conscious of its social responsibilities it will certainly enjoy a favorable image and will retain the needed credibility with the public.
5. Moral justification : Every business uses capital, physical, human resources of the society for business purposes.

Question 21.
Explain the various structures of organisation.
Answer:
The various forms of business organisations which is discussed follows :
(a) Sole proprietorship
(b) Joint hindu family business
(c) Partnership
(d) Cooperative societies and
(e) Joint stock company

(a) Sole proprietorship : Sole proprietorship is simple form of organisation. It is said that this organisation was evolved at the time when the man started living in family. As the time changed its shape and size went on changing. Only that person is responsible for its profits and losses. and services, creates employment opportunities, adopts new technology for the greater good of the people and leads the path towards growth and developments.

Long Answer Type Questions

Question no. 26 to 33 are Long answer type questions. Answer any 4 of them. Each question carries 5 marks. (4×5 = 20)

Question 26.
“Money spent on advertising is a waste.”Do you agree with this view ? Give reasons in your answer.
Answer:
“Money spent on advertising is a waste.” We do not agree with this statement.The given statement is based on the following agreements :

1. Advertising makes people to buy things which they do not really need.
2. Advertising destroys utilities of old models already in used.Advertising introduces new products with modern technology.For example with the introduction of colour television,black and white TV,become unpopular.
3. Advertising leads to discontent in the minds of those people who are temperate to purchase advertising goods but are not able to do so because they cannot afford to buy.
4. The cost of advertisement has to be borne buy the consumers.
5. Advertising tends to develop monopolices which are not desirable from social point of view .For example ,Daldavanaspati ,coalgate toothpaste ,lux toilet soap etc.have so much monopolised the market that is very difficult new manufactures to complete with these products.
6. Advertising is morely degrading .Advertisement excessive use of outrangingssetiments ,exciting .emotions nude poses of fair sex.They lower down the calculater and moral based of the new younger generation. However,abovecritictism are exaggerated and ill- founded.Advertising performs the number of economics function .Advertising leads to increase sales and helps the firm to produce on a large scale. It creates more business and it rises the standard of leaving. The utility of advertisement has proven. lt immense need to modern business and therefore we cannot say that all advertising is unnecessary and wasteful.

Question 27.
What do you mean by Entrepreneurship ?Explain any three needs of entrepreneurship.
Answer:
Entrepreneurship is a skill,a view- point ,a thinking, a technique and a working procedure. Entrepreneurship means he capability and tendency to bear risks involved in industry and business.Entrepreneurship is an art ,a tact .view point .thought and technique.Entrepreneurship is a group behavior and knowledge based activity.Following are the three needs of entrepreneurship :

1. Resource mobilizations : After getting appraisal from funding agents,entrepreneur starts identifying and assessment of various resources that are needed as inputs to produce the desired output.The types of resources to be taken care of will include:
   • Materials
   • Money
   • Machines
   • Market availability
   • Technology and
   • Human resources Entrepreneurs try their best to get these resources at minimum cost.
2. Scanning the environment : The process of setting up of an enterprise begins with the scanning of business opportunities.To scan business opportunities entrepreneur depends upon personal observations .personal and professional contacts.reports of governments and other official documents,Discoveries of new products .published documents etc.
3. Development of product of product/ service : Scanning of business environment helps the businessmen to know the opportunities available.For example, on scanning Indian and international environment one can find that due to liberalization in trade policy there is more scope, of external trade but exactly which product to export/import in which quantity,at what price,to which country ,etc.are the next decisions businessman has to take.

Question 28.
“Human beings cannot be only motivated through monetary incentives,non -incentives,non – monetary incentives are also necessary for motivate them.” Explain about non-monetary incentives in this context.
Answer:
Financial incentives are used to motivate employees for higher work.However,individuals have various needs which they want to satisfy while working in an organisation.People at comparatively higher level of managerial hierarchy attach more importance to socio- physycological needs which cannot be satisfied by money alone.

They want status and recognition in society;they want to satisfy there ego needs and they want to achieve something in their lives,thus .management ,in addition to the financial incentives provides non -financial incentives to motivate people in the organisation.

Forms of Non -financial Incentives: In order to motivate the employees .management may use the following forms of non-financial incentives:

1. Praise of appreciation of work done : Recognition of satisfactory performance acts as a non- financial incentive since it satisfies one’s ego needs.However,this incentive should be used with great care because praising an incompetent employee creates resentment among competent employees.
2. Workers’ participation in management : Participation in management provides strong motivation to the employees.Gives them psychological satisfaction if there voice is heard participants in management provides for two ways communication and so imbibes a sense of importance
3. Suggestion system : Suggestion system is an incentive with satisfies many needs of the employees. Many organisations which use the suggestion system make use of cash awards for useful suggestion .They sometimes publish the workers name with the photograph in the company magazine.This motivates the employees to be in search for something which may be of greater use to the organisation.
4. Competition : If there is healthy competition among individual employees ,group of employees ,it leads them to achieve their personal or group goals.Hence,competition acts as none financial incentives.
5. Opportunity for growth : Opportunity for growth is another kind of intensive.If the employees are provide opportunity for their advertisement and growth to develop their personality,they feel very much satisfied and more communicate to organisation goals.

Question 29.
Explain the sub-clause of Memorandum of Association.
Answer:
The memorandum of association contains the following clauses :
(i) Name clauses : Under this clause, the name of the company is stated. Any suitable name may be chosen subject to the following restrictions :

• The name of the company must not directly or indirectly incude the word ’President”, “King”, “Queen”, “Emperor”, “National Flag”, “Small soale” and cottage Industriesd”, “Federal”, “Municipal”, “Provincial” etc.
• It must not be objectionable under the provisions of the emblems, and names.
• It should not be identifcal with or resemble the name of any existing company.
• The proposed name should not be objectionable in any other manner. It must not hurt the feelings of any section, of the society.
• The name of a public company should end with the word “Limited”. In case of private company. The name should end with “Private Limited”.
• The name has to be displayed on every letter pad or any poster or display of the company.

(ii) Domicile clause : In this clause, name of the state in which the registered office of the company is to be situated is mentioned. Domicile clause is important as it determines the jurisdiction of the court.

(iii) Object clause : It is the most important clause of Memorandum of Association. It defines the limits and scope of the operations of the company. The object clause must specify the objects of the company in the following order :

• The main object of the company to be pursued by the company on its incorporation and the objects incidental to the attainment of the main objects
• Other object of the company not included in the above clause.

(iv) Liability clause : The fourth clause must state whether liability of the members is limited if so, whether it is limited by shares or by guarantee. In a company limited by guarantee, the liability clause will state the amount which each member, shold undertake to contribute to the assets of the company in the event of liquidation of the company.

(v) Capital clause : This clause, states the amount of capital, with which the company is registered, unless the company is an unlimited company. The shares into which the capital is divided must be of fixed value, which is commonly known as the nominal value of the share, the capital is variously described as “nominal”, “authorised” or “registered”. The company cannot issue shares without altering the memorandum as provided by section 94 of the companies act, 1956.

(vi) Association clause : The memorandum concludes with the subscription clause in which there is a declaration of association. The subscribers to the memorandum declare :

“We, the several persons whose names and addresses subscribed, are desirous of being formed into a company in pursuance of this memorandum of association, and we respectively agree to take the number of shares in the capital of the company set opposite our respective names.”

Then follow the names, addresses, occupations of the subscribers, and the number of shares each subscriber has taken and his signatures attested by a witness

Question 30.
Discuss the importance and methods of training.
Answer:
The importance of training are as follows :

1. Training is a systematic learning, always better than hit and trial methods which lead to wastage of efforts and money.
2. Training increases, employee morale and reduces absenteeism an employee turnover.
3. Improved skills and knowledge due to training lead to better career of the individual.
4. Training makes the employee more efficient to handle machines. Thus, less prone to accidents.
5. It helps in obtaining effective response to fast changing environment technological and economic.

There are various methods of training. These are broadly categories into two groups : On the job and off-the job methods.

On the job methods :

1. Apprenticeship programmed : Apprenticeship programmes put the trainee under the guidance of a master worker. These are designed to acquire a higher level of skill.
2. Coaching : In this method, the superior guides and instructs the trainee as a coach. The coach or counseler sets mutually agreed upon goals.
3. Internship training : It is a joint programmer of training in which educational institutions and business firms cooperate.
4. Job rotation : This kind of training involves shifting the trainee from one department to another or from one job to another.

Off the job methods :

1. Class room lectures/conferences : The lecture or conference approach is well adapted to conveying specific information rules, procedures or methods.
2. Films : They can provide information and explicitly demonstrate skills that are not easily represened by the other techniques.
3. Case study : Taken from actual experiences of organisations, cases represente attempts to describe, as accruetly as possible real problems that managers have faced.
4. Computer modelling : It simulates the work environment by programming a computer to imitate some of the realities of the job and allows learning to take place without the risk or high costs.
5. Vestibule training Employees learn their jobs on the equipment they will be using, but the training is conducted away from the actual work floor.
6. Programmed instruction : The method incorporates a prearranged and proposed acquisition of some specific skills or general knowledge.

Question 31.
Explain the long term financial sources in business.
Answer:
The financial requirements of a company may be classified as :

1. Long term finance
2. Medium term
3. Short term finance.

(i) Long term finance : Long term finance required for five years and above. Such finance is used for investment in fixed assets such as land, building, plant and machinery, furniture etc. Fixed assets are those assets which are required for permanent use and are not meant for sale. Long term finance is raised from shareholders, debenture holder, financial institutions and retained earnings.
Following are the main sources of long term finance :

1. Issue of shares : ‘Share’ is a share in the share capital of a company. According to section 2(46) of the companies act, “A share is the share in the capital of a company and includes stock except where a distinction between stock and share is expressed or implied.”
2. Issue of Debentures : A debenture is an instrument issued under the common seal of the company, acknowledging its debt to the holder under the terms and conditions specified in the instrument.
3. Ploughing back of profit or retained profit: Ploughing companies do not generally distribute the whole amount of profits as dividend.A certain proportion is transferred to reserves and utilised as additional capital. Thus, the financial needs of a company can be yet by retaining a part of the annual profits.
4. Loans from specialised financial institutions Loan when a bank mokes an advance in lump-sum against some security. The entire loan amount is paid to the borrower either in cash or by credit to his account, financial institutios have been set up of all India and regional levels for accelarating the growth of industries. These are mainly IFCI, ICICI, SECs, IDBI, SIDFCs, LIC, and UTI.

Question 32.
“Authority can be delegated ,but not responsibility.” Explain.
Answer:
“Authority can be delegated ,but not responsibility.” This statement is explaining about importance of delegation.Delegation or Authority is a process of sharing of tasks and authority between a manager and his subordinates.Delegation of authority is defined by Allen in the following words, “Delegation is the process a manager follows in dividing the work assigned to him so that he performs that part which only he,because of his unique organisational placement ,can perform effectively,and so that he can get others to help him with what remains.”
The following are the advantages of delegation or authority :

(i) Reduces the workload of managers : Delegation of authority permits a manager to share his workload with his subordinates. By passing on some of his own work to the subordinates,the manager is able to concentrate on more important aspects of his work-When delegation or authority takes place at all levels of the organisation it facilitates proper division of managerial work and its assignment to all managers in a systematic manner.

(ii) Basis of superior – subordinate relations : Delegation is the process by which superior – subordinate relations among managers are established.The flow of authority from the top management to lower levels is directed and regulated by the process of delegation.

(iii) Improves managerial effectiveness : In the delegation process managers pass routine work to the subordinates so they are free to concentrate on other important matters.The main job of managers is to get the work done effectively and by delegating the authorities and responsibilities.

(iv) Motivates subordinates : In the delegation when the manager is sharing his responsibilities and authority with the subordinates it motivates the subordinates as they develop the feeling of belonging and trust which is shown to them by their superiors.

(v) Facilitates the development of managers : Delegation is a source of development of managers.lt opens up opportunities for managers to acquire leadership and other skills and competency.They are required to exercise theirauthority,to handle situations and to solve managerial problems.

(vi) Facilitiesorganisational growth : In the process of delegation when the managers are passing their responsibility and authority to the subordinates they keep in mind the qualification and capability of all the subordinates.

Question 33
Mention the different external sources of recruitment.
Answer:
Anorganisation must recruit employeesfromoutside, i.e. through external sources.The important external sources of recruitment are as given follow :

(i) Factory gate : For recruitment of semi – skilled and unskilled employees a notice is put at the factory gate specifying the requirement of various types of workers.Job seekers wait outside the factory gate in the hope of finding some employment.

(ii) Waiting list: Very often organisations prepare and maintain a waiting list of employees from the applications of those candidates who had applied but could not be selected.

(iii) Employees recommendations : A large number of organisations ask their present employees to recommend the names of suitable candidates as and when a vacancy arises.The employees feel happy to recommend the names of their relatives and friends and ask them to apply for the jobs which suit them.

(iv) Labour union recommendations : It is a common practice in some organisations to ask the labour union(s) leaders to recommend the names of suitable candidates for the vacancies to be filled in the organisation.The leaders feel happy to suggest the names of suitable candidates.

(v) Private placement agencies : These are of recent origin now a days reputed private placement agencies such as Tata Consultancy Services are doing commendable jobs in this field.The agencies maintain data bank of specialists in various fields – skilled ,semi – skilled and even unskilled employees.

(vi) Employment Exchanges : Employment Exchanges have been set up by the government in metropolitan and other big other cities.People seeking employment get registered with the employment Exchange nearest to their place of residence.

(vii) Media advertisement: By far advertisement in leading newspaper,magazines and journals is a widely used method of external recruitment for skilled and specialisedjobs.lt is very effective due to the wide circulation.

(viii) Collages,institutions and campus: Reputed and multinational companies are recruiting employees through campus recruitment’ at reputed business schools,colleges and particularly at 1.1.Ms. Reputed institutions have 100% placements of their students.