Plus Two

Kerala State Board New Syllabus Plus Two Economics Chapter Wise Previous Questions and Answers Part II Chapter 6 Open Economy Macroeconomics.

Kerala Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 6 Open Economy Macroeconomics

Question 1.
Indian Economy is having a deficit of Balance of Payment Account. Suggest some measures to improve its balance of payment position. (MARCH-2008)
Answer:
Measures to improve balance of payment deficit are given below:
1) Devaluation of rupee
2) Control of inflation
3) Promotional measures
4) Tariff and quota restrictions
5) Reduction of imports
6) Provision of incentives

Question 2.
Correct the following statements if necessary. (MARCH-2009)
1) Balance of payment at current account rate to both visible and invisible trade.
2) International trade is trade within the boundaries of a country.
3) The theory of comparative cost advantage is stated by David Ricardo
Answer:
1) True/ Correct
2) False. International trade means trade between two or more countries or internal trade is the trade within the boundaries of a country.
3) True/Correct

Question 3.
Devaluation of domestic currency will enable an economy to overcome deficit in balance of payments. Do you agree with the statement? Justify your answer. (JUNE-2009)
Answer:
Yes. I agree with this statement. Because, when there is deficit in balance of payment, the domestic currency is devalued. This will increase our exports and reduce imports. As a result of increased export and less imports, the deficit in balance of payment can be solved.

Question 4.
If C = 0.8 and M = 0.3
a) Calculate open economy and closed economy multiplier. (MARCH-2010)
b) If domestic autonomous demand increases by 100, what will be multiplier effect on output in both economy?
c) Elucidate the result.
Answer:
i) Open economy multiplier

ii) Closed economy multiplier

b) Multiplier effect of output on closed economy
5 x 100 = 500
Multiplier effect of output on open economy,
2 x 100 = 200

Question 5.
The following table shows the total cost schedule of a competitive firm. It is given that the price of the . good is ₹15. (MARCH-2010)

Answer:
a)

b) The profit maximising level of outputs is ₹6, where the difference between TR and TC is highest.

Question 6.
Mr. Sudheer converted rupees into dollar, he got 20 dollars in exchange of ₹1,000. (JUNE-2010)
a) Calculate profit at each level of output.
b) Find the profit maximising level of output.
Answer:
a) Exchange rate
b) Real exchange rate is the relative price of foreign goods in terms of domestic goods. It is equal to the nominal exchange rate times the foreign price level divided by the domestic price level. When the real exchange rate is equal to one, the two countries are said to be in purchasing power parity.

Question 7.
An Imaginary Balance of Payment situation is given in the table. (JUNE-2010)

a) Find out the trade balance, explain the concept.
b) Calculate the Current Account Balance, comment about the figure.
Answer:
a) Export-Import =12801 -19103
= – 6302
b) 998

Question 8.
Economics are classified into open and closed economics. Distinguish between open and closed economy with an example. (MARCH-2011)
Answer:
An open economy is one which has trade relationship with rest of the world.
Eg: A country with exports (India export rubber). On the other hand a closed economy is one which has not trade relation with rest of the world.
Eg: A country which has no exports or imports.

Question 9.
If a toy costs ₹10 in America and exchange rate is at 45 per U.S. dollar, what is the price of this toy in Indian currency? (MARCH-2011)
Answer:
₹450

Question 10.
If inflation is higher in country ‘A’ than in country ‘B’ and the exchange rate between the two countries is fixed, what is likely to happen to the trade balance between the two countries? Justify your answer. (MARCH-2012)
Answer:
When there is inflation, the domestic currency of country A’will depreciate. Depreciation of domestic currency will lead to increase in export and decrease in import. But this will depend on the elasticity of export and import. If the sum of export and import elasticities is greater than T, there will be positive effect on trade balance. However, in short run the elasticities are supposed to be less than T and therefore there may be negative effect on trade balance. The ultimate effect depends on the composition of trade items.

Question 11.
Compare the following graphs and explain the positions of economy that the diagrams represent. Suggest measures to correct these situations. (MARCH-2012)

Answer:


Excess demand

• Increase taxes
• Decrease Government expenditure
• Reduce deficit financing
• Increase public borrowing

Deficient demand

• Decrease taxes
• Increase government expenditure
• Increase deficit financing
• Reduce public borrowing

Question 12.
Among the following, identify the concepts (JUNE-2014)
i) Trade deficit
ii) Budget deficit
a) G + T
b) T + X
c) G-T
d) G + M
e) X-M
f) X+M
Answer:
i) e) X-M
ii) c) G-T

Question 13.
Fill appropriately. (JUNE-2014)
a) Domestic demand for foreign goods leads to ______
b) The tiny production unit is referred as ________
c) The expenses that raise productive capacity is called ________
Answer:
a) import
b) firm
c) investment expenditure

Question 14.
Distinguish nominal exchange rate and real exchange rate. (JUNE-2014)
Answer:
The price of one currency in terms of the other is . known as the exchange rate. Nominal exchange rates are bilateral in the sense that they are exchange rates for one currency against another and they are nominal because they quote the exchange rate in money terms, i.e. so many rupees per dollar or per pound. However, the real exchange rate is the ratio of foreign to domestic prices, measured in the same currency. It is defined as Real exchange rate = eP_f / P where P and P_f are the price levels here and abroad, respectively, and e is the rupee price of foreign exchange (the nominal exchange rate).
The real exchange rate is often taken as a measure of a country’s international competitiveness. Therefore, real exchange rate is considered to be more relevant.

Question 15.
Write down the national income identify for an open economy with due explanation of the terms used. (JUNE-2014)
Answer:
National income identity for an open economy
In a closed economy, there are three sources of demand for domestic goods – Consumption (C), government spending (G), and domestic investment (I).
We can write Y =C+ l + G
In an open economy, exports (X) constitute an additional source of demand for domestic goods and services that comes from abroad and therefore must be added to aggregate demand. Imports (M) supplement supplies in domestic markets and constitute that part of domestic demand that falls on foreign goods and services. Therefore, the national income identity for an open economy is
Y+M = C + I + G + X
Rearranging, we get
Y = C + I + G + X-M or
Y = C + I + G + NX
where, NX is net exports (exports – imports). A positive NX (with exports greater than imports) implies a trade surplus and a negative NX (with imports exceeding exports) implies a trade deficit.

Question 16.
Differentiate between: (JUNE-2014)
i) Currency Devaluation and
ii) Currency Depreciation
Answer:
Devaluation means increase in exchange rate. Devaluation is said to occur when the exchange rate is increased by social action under a pegged exchange rate system. Devaluation is used as a tool to bridge the gap of trade deficit.
On the other hand, change in the price of foreign exchange under flexible exchange rate, when it becomes cheaper as compared to domestic currency is known as depreciation.

Question 17.
Two National Income identities are shown below: (MARCH-2015)
i) Y = C + I + G
ii) Y = C + I + G + X – M
a) Pick out the National Income identity for an open economy.
b) If marginal propensity to consume (C) = 0.5 and marginal propensity to import (M) = 0.3, prove that the open economy multiplier is smaller than that of the closed economy
Answer:

the multiplier in closed economy is 2 and open economy is 1.25.

Question 18.
The economic principle of exchange rate determination are different in different systems. Write in one or two sentences how the exchange rate is determined under:  (MARCH-2015)
a) Flexible Exchange rate system
b) Fixed Exchange rate system
c) Managed floating Exchange rate system.
Answer:
a) A country’s exchange rate regime where its currency is set by the foreign-exchange market through supply and demand for that particular currency relative to other currencies. Thus, floating exchange rates change freely and are determined by trading in the for ex market. This is in contrast to a “fixed exchange rate” regime.

b) Fixed Exchange Rate’ A country’s exchange rate regime under which the government or central bank ties the official exchange rate to another country’s currency (or the price of gold). The purpose of a fixed exchange rate system is to maintain a country’s currency value within a very narrow band. Also known as pegged exchange rate.
In a fixed exchange-rate system, a country’s central bank typically uses an open market mechanism and is committed at all times to buy and/or sell its currency at a fixed price in order to maintain its pegged ratio and, hence, the stable value of its currency in relation to the reference to which it is pegged. The central bank provides the assets and/or the foreign currency or currencies which are needed in order to finance any payments imbalances.

c) Managed float regime is the current international financial environment in which exchange rates fluctuate from day to day, but central banks attempt to influence their countries exchange by buying and selling currencies. It is also known as a dirty float.
Managed float exchange rates are determined in the foreign exchange market. Authorities can and do intervene, but are not bound by any intervention rule.
Often accompanied by a separate nominal anchor, such as inflation target. The arrangement provides a way to mix market-determined rates with stabilizing intervention in a non-rule-based system. Its potential drawbacks are that it doesn’t place hard constraints on monetary and fiscal policy. It suffers from uncertainty from reduced credibility, relying on the credibility of monetary authorities. It typically offers limited transparency.

Question 19.
Differentiate between fixed and floating exchange rates.  (MAY-2015)
Answer:
In a system of flexible exchange rates (also known as floating exchange rates), the exchange rate is determined by the forces of market demand and supply.
Countries have had flexible exchange rate system ever since the breakdown of the Bretton Woods system in the early 1970s. Prior to that, most countries had fixed or what is called pegged exchange rate system, in which the exchange rate is pegged at a particular level. Sometimes, a distinction is made between the fixed and pegged exchange rates.
Under a fixed exchange rate system, such as the gold standard, adjustment to BOP surpluses or deficits cannot be brought about through changes in the exchange rate.

Question 20.
Give one-word for the following:  (MAY-2015)
The price of one unit of foreign currency in terms of domestic currency.
Answer:
Exchange rate

Question 21.
Explain Balance of Payments (BOP). What do you mean by balance of payment surplus and balance of payment deficit?  (MAY-2015)
Answer:
Balance of trade is the record of a country’s visible export and visible imports. It includes only visible trade and excludes invisible trade of services. However, balance of payment is a more comprehensive term which denoted a country’s total monetary transactions with the rest of the world. It includes both visible and invisible trade of goods and services.
The balance of payments (BOP) records the transactions in goods, services and assets between residents of a country with the rest of the world. There are two main accounts in the BOP – the current account and the capital account.
When the total receipt is larger than the payment the balance of payment is said to be surplus. On the other hand when payments are larger than receipts, balance of payments is said to be deficit.

Question 22.
Differentiate:  (MARCH-2016)
a) Currency devaluation
b) Currency depreciation
Answer:
a) Currency devaluation: It is the deliberate reduction of the value of domestic currency in terms of a foreign currency.
b) Currency depreciation: It is the reduction in the value of domestic currency due to the operation of supply for money and demand for money.

Question 23.
Write a note on fixed exchange rate and floating exchange rate.  (MAY-2016)
Answer:
In a system of flexible exchange rates (also known as floating exchange rates), the exchange rate is determined by the forces of market demand and supply.
Countries have had flexible exchange rate system ever since the breakdown of the Bretton Woods system in the early 1970’s. Prior to that, most countries had fixed or what is called pegged exchange rate system, in which the exchange rate is pegged at a particular level. Sometimes, a distinction is made between the fixed and pegged exchange rates.
Under a fixed exchange rate system, such as the gold standard, adjustment to BOP surpluses or deficits cannot be brought about through changes in the exchange rate.

Question 24.
The relative price of foreign goods in terms of domestic goods is _____ (MAY-2016)
a) The nominal exchange rate
b) The real exchange rate
c) Floating exchange rate
d) All of the above
Answer:
The real exchange rate

Question 25.
Explain the working of a pegged exchange rate system with suitable diagram. (MARCH-2017)
Answer:
Fixed exchange rate is also known as pegged exchange rate system. Under this system, the exchange rate will be determined by central bank. The intervention made in the foreign exchange market by the central bank to keep exchange rate fixed is known as pegging. This can be explained with the help of diagram. Which is given below.

Here e* is the market determined exchange rate. Suppose that government fixes exchange rate as e₁ At e, exchange rate the demand for foreign exchange is greater than the supply of foreign exchange. If there is no.control over exchange rate. It will increase to e*. In order to maintain the exchange rate at e₁ the central bank will sell AB amount of foreign exchange in the market. So the exchange will be maintained at e*.
Suppose that the central bank fixes the exchange rate e₂. If there is no central bank intervention in the market the exchange rate will fall to e*. In order to maintain the exchange rate at e₂ the central bank will purchase CD amount of foreign exchange from the market. Thus fixed exchange rate is maintained.

Question 26.
Differentiate between Devaluation and Depreciation. (MARCH-2017)
Answer:
Devalution: Lowering of the value of domestic currency through official procedure by the central bank under fixed exchange rate system is known as currency devaluation.
Depreciation: The loss in the value of domestic currency when exchanged with foreign currency under flexible exchange rate system is known as currency depreciation.

Kerala State Board New Syllabus Plus Two Economics Chapter Wise Previous Questions and Answers Part II Chapter 5 The Government: Budget and The Economy.

Kerala Plus Two Macroeconomics Chapter Wise Previous Questions Chapter 5 The Government: Budget and The Economy

Question 1.
Keynes suggested a deficit budget for a developing economy but classical economists supported a surplus budget. (MARCH-2008)
a) Differentiate the two concepts of budget.
b) What is your opinion? Justify your answer.
Answer:
a) Deficit budget and Surplus budget.
When the proposed expenditure is greater than the expected revenue, the budget is said to be deficient. On the other hand, when the proposed expenditure is less than the expected revenue, the budget is said to be a surplus one.
b) I do agree with the opinion of Keynes. Because in a developing economy govt, will have to make so many developmental activities for the welfare of the society. In such a situation, a deficit budget is possible and it will become unavoidable.

Question 2.
discretionary and non-discretionary.  (MARCH-2009)
a) Progressive Income Tax
b) Unemployment allowances
c) Public Expenditure programme.
d) Public borrowing
Answer:

Discretionary	Non-discretionary
Public expenditure programme	Progressive income tax
Public borrowing	Unemployment allowance

Question 3.
In the present world, the budget is an important instrument of government policy. One of the objectives of the budget is given below. Supplement the other objectives. (MARCH-2008)
Redistribution of Income and Wealth
Answer:

• Reallocation of resources
• Stabilisation of economy
• Management of public enterprises
• Execution of plans
• Control of public fund

Question 4.
Classify the followings into tax revenue and non-tax revenue: (MARCH-2008)
Personal Income Tax, Excise duty, Import duty, License Fee, Surplus from Public Enterprise, Escheat.
Answer:

Tax Revenue	Non – Tax Revenue
Personal Income Tax	License Fee
Excise Duty	Escheat
Import Duty	Surplus from public enterprises

Question 5.
In a developed economy Keynesian budgetary policy is more effective compared to classical budgetary policy. Can you agree with this statement? Justify your answer. (JUNE-2009)
Answer:
Yes. I agree with this statement. Because in the developed economy the role of government and the private sector is more desirable. There will be situations of the business cycle in such economies. General overproduction and underproduction are common features. On such occasions, the classical policy will not properly work. Keynesian ideas will help the proper functioning of the developed economies.

Question 6.
Complete the following chart: (MARCH-2010)

Answer:

Question 7.
A glance at the Union Budget of 2009 reveals that there is a fiscal deficit of 6.8% of GDP as compared to 6% last year. What are the various measures used for deficit reduction? (JUNE-2010)
Answer:
If the government increases taxes or decreases expenditure then the fiscal deficit gets reduced. Indian government is trying to reduce the fiscal deficit by increasing tax revenue by selling the share of PSUs and by reducing the government expenditure. The deficit reduction influences the different sectors of an economy in different ways.
The government is trying to fill the gap of reduced fiscal deficit by making government activities more efficient through better planning of programmes and better administration.
The cutting back government programmes in vital areas like agriculture, education, health, poverty alleviation has adverse effect on the economy.
The same fiscal measures can lead to a large or small deficit government by the state of the economy. During recession period GDP falls which reduces tax revenue which increase the fiscal deficit.

Question 8.
The Government allocates more amount for subsidies in the budget. (MARCH-2011)
a) Give your opinion about its impact on fiscal deficit.
b) Total Expenditure = ₹3,000 crores
Revenue receipts = ₹1,500 crores
Non-debt creating Capital receipts = ₹600 crores
Calculate Gross
c) Define Primary Deficit.
Answer:
a) Increases fiscal deficit.
b) Gross fiscal deficit, = 3000 – (1500 + 600)
= 3000-2100 = 900
c) Primary deficit is fiscal deficit minus the interest payments
ie, Primary deficit = fiscal deficit – Interest payments

Question 9.
“Fiscal deficits are inflationary.” Do you agree with this statement? Comment. (MARCH-2012)
Answer:
Fiscal deficits are generally treated as inflationary. Increase in govt, expenditure and cuts in taxes both leads to government deficit. Increased govt, expenditure and reduced taxes tend to increase the aggregate demand. Generally firms are not able to produce higher quantities that are demanded at the going prices. This leads to inflationary pressure. However, there is a solution to this inflationary pressure. The economy can utilize the unutilized resources and raise production. Therefore, the deficit cannot be inflationary when an economy has unutilized resources.

Question 10.
The following are some of the fiscal policy measures. Complete the table appropriately.(MARCH-2012)

Fiscal policy measures	At the time of Excess demand	At the time of Deficit demand
Taxation
Public borrowing
Public expenditure

Answer:

Fiscal policy measures	At the time of Excess demand	At the time of Deficit demand
Taxation	Increase	Decrease
Public borrowing	Increase	Decrease
Public expenditure	Decrease	Increase

Question 11.
Below are given the relative size of the budget. Mention the type of budget. (MARCH-2013)
Relative size of Budget
i) Revenue > Expenditure
ii) Revenue = Expenditure
iii) Revenue < Expenditure
Type of Budget?
Answer:
i) surplus budget
ii) balanced budget
iii) deficit budget

Question 12.
Schematically represent the components of a government budget. (JUNE-2014)
Answer:

Question 13.
Which of the following is a transfer payment? (MARCH-2015)
a) Rent
b) Wages
c) Interest
d) Old age pension
Answer:
old age pension

Question 14.
Distinguish between revenue deficit and fiscal deficit. (MAY-2015)
Answer:
When a government spends more than it collects by way of revenue, it incurs a budget deficit. There are various measures that capture government deficit and they have their own implications for the economy. The important concepts of deficits are discussed below.

Revenue Deficit: The revenue deficit refers to the excess of government’s revenue expenditure over revenue receipts.
Fiscal Deficit: Fiscal deficit is the difference between the government’s total expenditure and its total receipts excluding borrowing.
Primary Deficit: We must note that the borrowing requirement of the government includes interest obligations on accumulated debt. To obtain an estimate of borrowing on account of current expenditures exceeding revenues, we need to calculate what has been called the primary deficit. It is simply the fiscal deficit minus the interest payments.
Gross primary deficit = Gross fiscal deficit – net interest liabilities.

Question 15.
Should current account deficit be a cause for alarm? (MARCH-2016)
Answer:
Yes, current account deficit is a cause for alarm because it will create inflationary pressures in the economy. Inflation will badly affect all classes of society. Hence current account deficit should be reduced by taking effective fiscal measures.

Question 16.
Complete the following equations: (MAY-2016)
a) Revenue Deficit = Revenue Expenditure – ( ___________ )
b) Gross Fiscal Deficit = Total Expenditure – (_________ )
c) Gross Primary Deficit = Gross Fiscal Deficit – ( _________)
d) 1 – MPC = (_________)
Answer:
a) Revenue receipts
b) Revenue receipts + non-debt creating capital receipts
c) Net investment liabilities
d) MPS

Question 17.
Are Fiscal deficit inflationary? Substantiate your answer.(MAY-2016)
Answer:
Yes. An increase in government expenditure beyond certain limits leads to a fiscal deficit increased spending thus pumps too much money into the economy. It increases the purchasing power of the public. The ultimate result of this overspending or fiscal deficit is an increase in the price level. Thus, fiscal deficits are inflationary in nature.

Question 18.
Fill in the blanks:
i) _______ = Revenue Expenditure – Revenue Receipts (MARCH-2017)
ii) Primary Deficit = _______ – Net Interest Liabilities
Answer:
i) Revenue Deficit
ii) Gross fiscal deficit

Question 19.
Distinguish between Revenue Expenditure and Capital Expenditure. (MARCH-2017)
Answer:
Revenue expenditure: Revenue expenditure is expenditure incurred for the normal functioning of the government. Which does not create liabilities or reduce the assets of the govt.
It can be further classified into plan revenue expenditure and non-plan revenue expenditure.
Capital expenditure: This expenditure creates physical or financial assets or decreases the liability of the government. Capital expenditure can be further classified into plan capital expenditure and non-plan capital expenditure.

Kerala State Board New Syllabus Plus Two Business Studies Chapter Wise Previous Questions and Answers Chapter 7 Directing.

Kerala Plus Two Business Studies Chapter Wise Previous Questions Chapter 7 Directing

Plus Two Business Studies Directing 1 Mark Important Questions

Question 1.
Mr. Abhinav has been working as Marketing Manager of an electrical components manufacturing unitforthe last five years. Mr. Suresh is working as an assistant in the same section. Suresh made a complaint about his junior to the Marketing Manager. Mention the direction in which communication flows. (MARCH-2009)
Answer:
Upward communication

Question 2.
Suggest a suitable term to describe the network of informal communication which lead to ________ (February-2010)
Answer:
Grapevine communication

Question 3.
Mr.Praveen, the production manager of ABC Ltd, always encourages his subordinates to work hard. Which management term is used to refer Praveen’s activity? (MARCH -2010)
Answer:
Motivation

Question 4.
Identify the term used to refer to the ability of a person to look at things from other’s point of view. (MARCH-2010)
a) empathy
b) responsibility
c) sympathy
d) authority
Answer:
Empathy

Question 5.
Observe the following and pick out and odd one. Justify your answer. (MAY-2010)
a) Supervision
b) Control
c) Motivation
d) Leadership
Answer:
Control

Question 6.
Maslow defines this need as “The desire to become everything one is capable of becoming.” (MARCH-2012)
a) Social need
b) Self actualization need
c) Safety need
d) Esteem need
Answer:
Self actualization need

Question 7.
“I am always with the subordinates, giving them direct and immediate guidance and controlling them in the performance of their tasks”. Who am I? (MAY-2012)
Answer:
Supervision

Question 8.
“Desire to become everything one is capable to becoming” Which is the need that Maslow mean here? (MAY-2012)
Answer:
Self Actualisation Needs

Question 9.
Ability of a leader to look things from others point of view is (MARCH-2013)
a) Empathy
b) Sympathy
c) Responsibility
d) Authority
Answer:
a) Empathy

Question 10.
Identify the communication network in the following diagram. (MARCH-2013)

a) wheel pattern
b) Chain pattern
c) Circle pattern
d) Ladder pattern
Answer:
Chain pattern

Question 11.
Which among the following is not an example of downward communication? (MAY-2013)
a) Letters
b) Memos
c) Complaints
d) Orders
Answer:
Complaints

Question 12.
Who among the following suggested need hierarchy theory? . (MARCH-2014)
a) Henry Fayol
b) F.W. Taylor
c) Abraham Maslow
d) Peter Drucker
Answer:
Abraham Maslow

Question 13.
Which one of the following is not an element of directing? (MAY-2016)
a) Planning
b) Supervision
c) Leadership
d) Communication
Answer:
a) Planning

Question 14.
Which one of the following is not a semantic barrier of communication? (MAY-2016)
a) Technical Jargons
b) Gesture decoding
c) Badly expressed messages
d) Status
Answer:
d) Status

Question 15.
Autonomy status requirement of an individual is a factor, under which category of needs identified by Abraham Maslow: (MAY-2017)
a) Affiliation
b) Self Actualisation
c) Esteem needs
d) Safety
Answer:
c) Esteem needs

Question 16.
A democratic leader is otherwise known as: (MAY-2017)
a) Participative leader
b) Free-rein leader
c) Autocratic leader
d) Laissezfaire leader
Answer:
a) Participative leader

Plus Two Business Studies Directing 2 Marks Important Questions

Question 1.
Shajahan, one of your classmates, asks you why informal communication is also known as ‘grapevine’? What explanation will you give to shajahan? (MARCH-2009)
Answer:
The network or pathway of Informal communication is known as grapevine communication. Because the origin and direction of flow of the informal mes-sages cannot be easily traced.

Question 2.
“The sales executive of marketing department communicates with the manager of Production Department about the quality of products.
a) What type of communication takes place here? (MAY-2012)
b) If the sales executive communicates with his boss, ie. marketing manager, what type of communication will be that?
Answer:
a) Diagonal communication
b) Upward communication.

Question 3.
The newly established Technical University in Kerala wants to appoint 100 data entry operators. (MARCH-2015)
a) Suggest a suitable testto be conducted to select the candidates.
b) Justify your answer.
Answer:
a) Performance test.
b) These tests are conducted to assess the actual performance and ability to do the particular job.

Question 4.
Observe the following methods of communication (MARCH-2015)
i) Upward communication
ii) Informal communication
iii) Horizontal communication
iv) Diagonal commyfiication
a) Spot the odd orfe
b) Justify your answer.
Answer:
a) Informal communication
b) Others are methods or types of formal communication.

Question 5.
Prepare a pyramidal diagram showing Maslow’s Need Hierarchy Theory. (MARCH-2016)
Answer:
Maslow’s Need Hierarchy Theory

Question 6.
Diagrammatically present communication process involved in a telephonic conversation between X and Y. (MARCH-2017)
Answer:

Plus Two Business Studies Directing 3 Marks Important Questions

Question 1.
Put a right word in the circle in the picture given be-low. Explain the meaning of that term. (MARCH-2009)

Answer:
Directing: Directing refers to the process of instruct-ing, guiding, counselling, motivating and leading people in the organisation to achieve its objectives.

Question 2.
Identify the communication pattern. Also explain its feature. (MARCH-2011)

Answer:
In wheel network, all subordinates under one superior communicate through him only. The subordinates are not allowed to communicate among themselves.

Question 3.
Differentiate between formal and informal communication. (MAY-2016)
Answer:

Formal communication	Informal communication
1. Communication through the official chain of command	1. Communication through the informal communci  network.
2. It is rigid	2. It is flexible
3. The messages can be kept as .records for future reference.	3. No messages can be kept as records
4. The responsibility of the sender can be fixed	4. The responsibility of the sender cann’t be fixed

Question 4.
Organisation keen on developing effective communication should adopt suitable measures to overcome the barriers. Suggest any six measures to overcome the barriers of communication. (MAY-2017)
Answer:
Measures to overcome barriers to communication
1) The entire problem to be communicated should be studied in depth, analysed and stated in such a mannerthat it is clearly conveyed to subordinates.
2) Communication must be according to the education and understanding levels of subordinates.
3) Before communicating.the message, it is better to consult with others.
4) The contents of the message, tone, language used, etc. are important aspects of effective communication.
5) While conveying message to others, it is better to know the interests and needs of the receiver.
6) Ensure proper feedback.
7) Manager should be a good listener.

Plus Two Business Studies Directing 4 Marks Important Questions

Question 1.
Mr.Ramesh is the newly appointed Branch Manager of a bank in the town. There are 40 employees in the branch. He is very active and enthusiastic in the duties. State any four qualities should he acquire to become a good leader.(MAY-2011)
Answer:
Qualities of Good Leader
1) Physical Features : Physical features like height, weight, health, appearance determine the physical personality of a leader.
2) Knowledge: A good leader should have required knowledge and competence.
3) Honesty: A leader should possess high level of honesty.
4) Initiative : A leader should have courage and initiative.
5) Communication Skills : A leader should have the capacity to clearly explain the ideas.
6) Motivation Skills : The leader should have the ability to motivate the subordinates by satisfying their needs.
7) Self Confidence: A leader should have high level of self confidence.

Question 2.
The workers of the catering department of Akshaya Food Industries, Thrissur whole heartedly accepted Mr.Vivek, the production Manager, as their leader. Explain the qualitieswhich make Mr.Vivek, a good leader. (MAY-2012)
Answer:
Qualities of Good Leader
1) Physical Features : Physical features like height, weight, health, appearance determine the physical personality of a leader.
2) Knowledge: A good leader should have required knowledge and competence.
3) Honesty: A leader should possess high level of honesty.
4) Initiative : A leader should have courage and initiative.
5) Communication Skills : A leader should have the capacity to clearly explain the ideas.
6) Motivation Skills : The leader should have the ability to motivate the subordinates by satisfying their needs.
7) Self Confidence: A leader should have high level of self confidence.

Question 3.
“It is the process of stimulating subordinates to act for accomplishing desired goals.” (MARCH-2014)
a) Identified it.
b) State its importance in business organisation.
Answer:
a) Motivation
b) Importance of Motivation
1) Motivation helps to improve performance levels of employees as well as the organisation.
2) Motivation helps to change negative attitudes of employee to positive attitudes.
3) Motivation helps to reduce employee turnover.
4) Motivation helps to reduce absenteeism in the organisation.
5) Motivation helps managers to introduce changes smoothly

Question 4.
Suppose you are appointed as Marketing Manager in S.K.Industries.State different types of communications possible here. Explain each with its requirements. (MARCH-2014)
Answer:
Formal Communication : Communication through the official chain of command is called formal communication. It flows through the scalar chain of authority. Formal communication may be of two types:
1) Vertical Communication
2) Horizontal Communication
Vertical Communication: Vertical communication flows vertically i.e., upwards or downwards through formal communication channels.
a) Downward Communication : Downward communication refers to flow of communication from a superior to subordinate. E.g. Notices, circulars, memos, reports, etc.
b) Upward Communication : It refers to flow of communication from a subordinate to superior. E.g. application for leave, submission of progress report, suggestions, complaints, etc.
Horizontal or Lateral communication : The flow of communication between persons holding position at the same level of the organisation is known as horizontal communication.

Question 5.
“Effectiveness of leadership depends upon the qualities of a leader.” Explain any four qualities of a leader. (MARCH-2015)
Answer:
Qualities of Good Leader
1) Physical Features : Physical features like height, weight, health, appearance determine the physical personality of a leader.
2) Knowledge: A good leader should have required knowledge and competence.
3) Honesty: A leader should possess high level of honesty.
4) Initiative : A leader should have courage and initiative.
5) Communication Skills : A leader should have the capacity to clearly explain the ideas.
6) Motivation Skills : The leader should have the ability to motivate the subordinates by satisfying their needs.
7) Self Confidence: A leader should have high level of self confidence.

Plus Two Business Studies Directing 5 Marks Important Questions

Question 1.
‘A good communication system is necessary for effective coordination of activities. But there are cer¬tain factors which disrupt the flow of information and communication process. Discuss. (MAY-2009)
a) Briefly explain the factors which disrupt the proper flow of information and communication process.
Answer:
 Barriers to Communication
1) Semantic barriers : Semantic barriers are concerned with problems and obstructions in the process of encoding and decoding of message into words or impressions. Semantic barriers are:-
a) Badly expressed message : The badly expressed messages may be an account of inadequate vocabulary, usage of wrong words, omission of needed words, etc.
b) Symbols with different meanings : People may interpret the same message differently depending upon their attitude, education, social and cultural backgrounds.
c) Faulty Translations : If the translator is not proficient with both the languages, mistakes may arise causing different meanings to the communication.
d) Technical jargon : Technical words may not be understood by the workers.
2) Psychological Barriers : Emotional or psychological factors act as barriers to communicators. Psychological barriers are:
a) Premature evaluation : People evaluate the meaning of message before the sender completes his message.
b) Lack of attention : The preoccupied mind of receiver and the resultant non-listening of message acts as a major psychological barrier.
c) Loss by transmission and poor retention : When communication passes through various levels, there is a chance of distortion of the message.
d) Distrust: Distrust between communicator and communicatee act as a barrier.
3) Organisational Barriers
Organisation’s policies, Number of levels of management, rigid rules, etc,, are the examples . of organisational barriers.
a) Organisational policy: If the organisational policy is complex, it restricts the free flow of communication.
b) Rules and regulations : Rigid Rules and regulations may be a hurdle to communication
c) Status : Status differences of people in communication chain also adversely affect the effectiveness of communication.
d) Complex organisational structure: If there are number of managerial levels, communication gets delayed and distorted.
4) Personal barriers
It includes fear of challenge to authority, lack of confidence, lack of incentives, etc.
a) Fear of challenge to authority: If a superior perceives that a particular communication may affect his authority, then he withhold such communication.
b) Lack of confidence: If superiors do not have confidence on the competency of subordinates*tPiey may not seek their advice.
c) Lack of incentives: If there is no motivation or incentive for communication, subordinates may not take initiative to communicate.

Question 2.
Biju is a newly appointed manager of Niranjan Ltd, where 40 workers are working. He is active and enthusiastic in his duties. What qualities should be possess to become a good leader. (February-2010)
Answer:
Qualities of Good Leader
1) Physical Features : Physical features like height, weight, health, appearance determine the physical personality of a leader.
2) Knowledge: A good leader should have required knowledge and competence.
3) Honesty: A leader should possess high level of honesty.
4) Initiative : A leader should have courage and initiative.
5) Communication Skills : A leader should have the capacity to clearly explain the ideas.
6) Motivation Skills : The leader should have the ability to motivate the subordinates by satisfying their needs.
7) Self Confidence: A leader should have high level of self confidence.

Question 3.
The Manager of Unitech Software Solutions, Mr. Vipin found that majority of his employees are wasting their time unless somebody oversees their activities. (MARCH-2010)
a) How can the Manager solve this problem?
b) Explain the management term related to this and also explain its importance.
Answer:
a) The manager can solve the problem by appointing the supervisors.
b) 1) A good supervisor acts as a guide, friend and philosopher to the workers.
2) Supervisor acts as a link between workers and management. It helps to avoid misunderstandings and conflicts among the management and workers.
3) Supervisor provides good On the Job training to the workers and employees.
4) A supervisor with good leadership qualities can build up high morale among workers.

Question 4.
The success of an enterprise highly depends on effective leadership. (MAY-2010)
a) Do you agree with this statement?
b) State any three qualities of a good leader.
Answer:
a) Yes.
b) Qualities of Good Leader
1) Physical Features : Physical features like height, weight, health, appearance determine the physical personality of a leader.
2) Knowledge: A good leader should have required knowledge and competence.
3) Honesty: A leader should possess high level of honesty.
4) Initiative : A leader should have courage and initiative.
5) Communication Skills : A leader should have the capacity to clearly explain the ideas.
6) Motivation Skills : The leader should have the ability to motivate the subordinates by satisfying their needs.
7) Self Confidence: A leader should have high level of self confidence.

Question 5.
“All organizational facility will become unproductive in the absence of Motivated People.” Explain. (MARCH-2011)
Answer:
Importance of Motivation
1) Motivation helps to improve performance levels of employees as well as the organisation.
2) Motivation helps to change negative attitudes of employee to positive attitudes.
3) Motivation helps to reduce employee turnover.
4) Motivation helps to reduce absenteeism in the organisation.
5) Motivation helps managers to introduce changes smoothly.

Question 6.
Identify the name of the famous psychologist who developed the need hierarchy theory. Explain the theory with the help of a diagram. (MARCH-2012)
Answer:
a) Abraham Maslow
b) Maslow’s Need Hierarchy Theory of Motivation
Abraham Maslow’s Need Hierarchy Theory is considered fundamental to understanding of motivation. His theory was based on human needs. Various human needs are:
1) Physiological Needs : These are the basic needs which include food, clothes, hunger, thirst,shelter, sleep and sex. If physiological needs are not satisfied, the higher level needs will not be emerged.
2) Safety/Security Needs : These needs provide security and protection from physical and emotional harm. These needs include job security, stability of income, pension plans, etc.
3) Social Needs : These needs refer to affection, sense of belongingness, acceptance and friendship. Informal organisation helps to satisfy the social needs of an individual.
4) Esteem Needs : These include factors such as self-respect, autonomy status, recognition and attention.
5) Self Actualisation Needs: It is the highest level of need in the hierarchy. Self actualisation is the need to maximise one’s potential, whatever it may be. These needs include growth, self-fulfilment and achievement of goals

Question 7.
Amal is the newly elected leader of Seven Hills School. Suggest the qualities he should have to become a good leader.(MARCH-2013)
Answer:
Qualities of Good Leader
1) Physical Features : Physical features like height, weight, health, appearance determine the physical personality of a leader.
2) Knowledge: A good leader should have required knowledge and competence.
3) Honesty: A leader should possess high level of honesty.
4) Initiative : A leader should have courage and initiative.
5) Communication Skills : A leader should have the capacity to clearly explain the ideas.
6) Motivation Skills : The leader should have the ability to motivate the subordinates by satisfying their needs.
7) Self Confidence: A leader should have high level of self confidence.

Question 8.
Mr. Ram Mohan is a newly appointed MBA in the marketing Department of a firm. There are 50 7 employees under him and he is very active and enthusiastic in his duties. State the qualities should he acquire to become a good leader. (MAY-2013)
Answer:
Qualities of Good Leader
1) Physical Features : Physical features like height, weight, health, appearance determine the physical personality of a leader.
2) Knowledge: A good leader should have required knowledge and competence.
3) Honesty: A leader should possess high level of honesty.
4) Initiative : A leader should have courage and initiative.
5) Communication Skills : A leader should have the capacity to clearly explain the ideas.
6) Motivation Skills : The leader should have the ability to motivate the subordinates by satisfying their needs.
7) Self Confidence: A leader should have high level of self confidence.

Question 9.
Explain briefly the various qualities to be possessed by a good leader. (MAY-2016)
Answer:
Qualities of Good Leader
1) Physical Features : Physical features like height, weight, health, appearance determine the physical personality of a leader.
2) Knowledge: A good leader should have required knowledge and competence.
3) Honesty: A leader should possess high level of honesty.
4) Initiative : A leader should have courage and initiative.
5) Communication Skills : A leader should have the capacity to clearly explain the ideas.
6) Motivation Skills : The leader should have the ability to motivate the subordinates by satisfying their needs.
7) Self Confidence: A leader should have high level of self confidence.

Question 10.
Explain the term directing in the context of management.Briefly explain the salient principles of directing. (MAY-2017)
Answer:
a) Meaning : Directing refers to the process of in¬structing, guiding, counselling, motivating and leading people in the organisation to achieve its objectives.
b) Principles of Directing
1) Maximum Individual Contribution: This principle emphasises that directing techniques must help every individual in the organization to contribute to his maximum potential for achievement of organisational objectives.
2) Harmony of Objectives : The objectives of individual and organization must be in harmony with each other.
3) Unity of Command : This principle insists that a person in the organisation should receive instructions from one superior only.
4) Appropriateness of Direction Technique : According to this principle, appropriate motivational and leadership techniques should be used while directing the people.
5) Managerial Communication : Effective managerial communication across all the levels in the organisation makes direction effective.
6) Use of informal organization : Managers must make use of informal structure in the formal organisation forgetting correct and real feedback.
7) Leadership : While directing the subordinates, managers should exercise good leadership.
8) Follow through : Managers must continuously review whether the instructions are being understood and followed by the employees or not.

Plus Two Business Studies Directing 8 Marks Important Questions

Question 1.
“Incentives contribute to the performance of the employees.”(MAY-2013)
a) Do you agree with this statement?
b) Justify your view points.
c) Mention the various monetary incentives
Answer:
a) Yes
b) Financial and Non-Financial Incentives: Incentive means all measures which are used to motivate people to improve performance. These incentives maybe-
Financial Incentives: Financial incentives refer to incentives which are in direct monetary form or measurable in monetary term and serve to motivate people for better performance. Financial incentives are:
a) Pay and allowances : It includes basic pay, dearness allowances and other allowances.
b) Commission: Underthis system, a sales person is guaranteed a minimum wage as well as commission on sales. A commission plan motivates him to work better.
c) Bonus : Bonus is an incentive offered over and above the wages/salary to the employees.
d) Profit Sharing: Profit sharing is meant to provide a share to employees in the profits of the organisation.
e) Co-partnership/ Stock option : Under these incentive schemes, employees are offered company shares at a price which is lower than market price.
f) Retirement Benefits : Several retirement benefits such as provident fund,, pension, and gratuity provide financial security to employees after their retirement.
g) Perquisites: It includes car allowance housing, medical aid, and education to the children, etc., over and above the salary.

Question 2.
a) “It is a process of instructing, guiding, motivating and leading people in the organisation to achieve its objectives.”
Identify the definition and briefly explain the elements of it.(MARCH-2016)
1) Supervision 2) Motivation
3) Leadership 4) Communication
Answer:

Supervision : Supervision means overseeing the subordinates at work. Supervision is instructing, guiding and controlling the workforce with a view to see that they are working according to plans, policies, programmes and instructions.
Motivation: Motivation is the process of stimulating people to action to accomplish desired goals. Motivation depends upon satisfying needs of people. Leadership : Leadership can be defined as the process of influencing the behaviour of employees at work towards the accomplishment of organisational objectives.
Communication: Communication may be defined as an exchange of facts, ideas, opinions or emotions between two or more persons to create mutual understanding.

Question 3.
b) What do you mean by incentive? Briefly explain different types of incentives. (MARCH-2016)
Answer:
Financial and Non-Financial Incentives : Incen¬tive means all measures which are used to motivate people to improve performance. These incentives may be –
Financial Incentives : Financial incentives refer to people for better performance. Financial incentives . are:
a) Pay and allowances : It includes basic pay, dearness allowances and other allowances.
b) Commission: Urttferthis system, a sales person is guaranteed a minimum wage as well as commission on sales. A commission plan motivates him to work better.
Non-Financial Incentives: Incentives which are not measurable in terms of money are called Non-Financial Incentives. These incentives are essential forsatisfying psychological, social and emotional needs. Some of the important non-financial incentives are:
a) Status: status means ranking of positions in the organisation. Psychological, social and esteem needs of an individual are satisfied by status given to their job.
b) Organisational Climate : It includes individuals autonomy, reward orientation, consideration to employees, etc. These characteristics influence the behaviour of individuals in the organization

Question 4.
Pecuniary and non-pecuniary incentives are used to motivate employees to improve their performance. Explain the pecuniary and non-peruniary incentives used by organizations now-a-days. (MARCH-2017)
Answer:
Financial Incentives: Financial incentives refer to incentives which are in direct monetary form or measurable in monetary term and serve to motivate people for better performance. Financial incentives are:
a) Pay and allowances : It includes basic pay, dearness allowances and other allowances.
b) Commission: Underthis system, a sales person is guaranteed a minimum wage as well as commission on sales. A commission plan motivates him to work better.
c) Bonus : Bonus is an incentive offered over and above the wages/salary to the employees.
d) Profit Sharing: Profit sharing is meant to provide a share to employees in the profits of the organisation.
e) Co-partnership/ Stock option : Under these incentive schemes, employees are offered company shares at a price which is lower than market price.
f) Retirement Benefits : Several retirement benefits such as provident fund,, pension, and gratuity provide financial security to employees after their retirement.
g) Perquisites: It includes car allowance housing, medical aid, and education to the children, etc., over and above the salary.
Non-Financial Incentives: Incentives which are not measurable in Terms of money are called Non- Financial Incentives. These incentives are essential for satisfying physiological, social and emotional needs. Some of the important non-financial incentives are:
a) Status: status means ranking of positions in the organisation. Physiological, social and esteem needs of an individual are satisfied by status given to their job.
b) Organisational Climate : It includes individual autonomy, reward orientation, consideration to employees, etc. These characteristics influence the behaviour of individuals in the organization.
c) Career Advancement Opportunity: Managers should provide opportunity to employees to improve their skills and be promoted to the higher level jobs.
d) Job Enrichment: It is a method of motivating employee by making the task to be performed by him more interesting and challenging.
e) Employee Recognition Programmes : It includes Congratulating the employee for good performance, Displaying on the notice board about the achievement of employee, installing award or certificate for best performance and Distributing mementos or complimentaries etc.
f) Employee Participation : It means involving employees in decision making of the issues related to them.

Question 5.
What is leadership? What qualities should a leader possess to become a successful one? Briefly ex¬plain its different styles. (MARCH-2017)
Answer:
Leadership : Leadership can be defined as the process of influencing the behaviour of employees at work towards the accomplishment of organisational objectives.
Qualities of Good Leader
1) Physical Features : Physical features like height, weight, health, appearance determine the physical personality of a leader.
2) Knowledge: A good leader should have required knowledge and competence.
3) Honesty: A leader should possess high level of honesty.
4) Initiative : A leader should have courage and initiative.
5) Communication Skills : A leader should have the capacity to clearly explain the ideas.
6) Motivation Skills : The leader should have the ability to motivate the subordinates by satisfying their needs.
7) Self Confidence: A leader should have high level of self confidence.
Leadership Style
1) Autocratic or Authoritarian Leader : An autocratic leader gives orders and expects his subordinates to obey those orders. Here communication is only one-way with the subordinate.
2) Democratic or Participative Leader : A democratic leader encourages subordinates to participate in decision-making. They respect the other’s opinion and support subordinates to perform their duties.
3) Laissez Faire or Free-rein Leader: Here the followers are given a high degree of independence to formulate their own objectives and ways to achieve them.

Kerala State Board New Syllabus Plus Two Business Studies Chapter Wise Previous Questions and Answers Chapter 6 Staffing.

Kerala Plus Two Business Studies Chapter Wise Previous Questions Chapter 6 Staffing

Plus Two Business Studies Staffing 1 Mark Important Questions

Question 1.
Mr. Sajan is working as Human Resource Manager of an automobile manufacturing unit. One of the following combinations represents his functions. Identify it. (MARCH-2009)
a) Recruitment, branding, dividend decision
b) Selection, training, recruitment
c) Selection, recruitment, marketing
d) Training, pricing, promotion
Answer:
Selection, training, recruitment

Question 2.
Which one of the following functions is not related with staffing function? (MAY-2009)
a) Recruitment of employees
b) Selection of employees
c) Compensation of employees
d) Motivation of employees
Answer:
Motivation of employees

Question 3.
Observe the following sources of recruitments: (MAY-2011)
i) Advertisement
ii) Promotion
iii) Employment Exchange
iv) College Campus
a) Spot the odd one
b) Give justfication to your answer.
Answer:
Promotion. All others are external sources of recruitment.

Question 4.
_________ is the non-paid form of non-personal communication. (MARCH-2012)
Answer:
Publicity

Question 5.
Mr.Roshan and Electrical diploma holder, has been appointed as an apprenticeship trainee in the KSEB. Roshan does not know anything about apprenticeship. Being a friend of him, explain the meaning of apprenticeship to his Illiterate parents. (MAY -2013)
Answer:
Under this method, a trainee is put under supervision of an experienced experts.

Question 6.
Sony, the newly appointed staff of Alpha Food Products Ltd. is given training in accounts, purchase, production and quality control sections in each week. Identify the training method. (MARCH-2014)
Answer:
Job Rotation

Question 7.
Shifting the employee from one department to another or from one job to another as part of training is known as ______ (MAY-2016)
a) Internship
b) Coaching
c)Job rotation
d) Apprenticeship
Answer:
c) Job rotation

Question 8.
Which one of the following sources of recruitment is not an external source? (MAY-2017)
a) Employment Exchange
b) Promotion
c) Casual Callers
d) Campus Recruitment
Answer:
b) Promotion

Plus Two Business Studies Staffing 2 Marks Important Questions

Question 1.
State any two benefits of training the employees in an organisation. (FEBRUARY – 2009)
Answer:
a) It enhances employee productivity both in terms of quantity and quality, leading to higher profits
b) Training helps in securing promotion and career growth.

Question 2.
Mr. Alex wishes to start a medium type business unit. He decided to employ 25 candidates for different posts. Which source of recruitment he can adopt? Justify your answer. (MARCH-2009)
a) Internal source only
b) External source only
c) Both internal and external
d) Neither internal or external
Answer:
External source only. Internal source of recruitment is not possible because it is a new firm.

Question 3.
Mr. Mohan Kumar, the HRM Manager of Global Bank Ltd. wants to appoint 50 computer operators for their different branches in Kerala from internal sources. Name any two internal sources forthe recruitment. (MAY-2010)
Answer:
Transfer, Promotion.

Question 4.
“In transfer, there is no change in the status and compensation of the employees.” (MARCH-2012)
State your opinion and justify your answer
Answer:
Yes.
Transfer: It involves shifting of an employee from one job to another without change in responsibility or compensation.

Question 5.
Prepare a flow-chart showing different steps in selection process. (MARCH-2016)
Answer:
Steps in Selection
1) Preliminary Screening
2) Selection tests
3) Interview
4) Reference & Background Check
5) Final Selection
6) Medical Examination
7) Job offer
8) Signing of Employment Contract

Plus Two Business Studies Staffing 3 Marks Important Questions

Question 1.
T.K.Trading Company selected 5 B.Com Graduates forthe post of accountant in their organisation. The chief accounts officer of the company decided to provide training to these employees, while they are actually engaged in their work.
Identify and explain the different types of training programmes which can be used in this case. (MAY-2009)
Answer:
On the job training
b) 1) Apprenticeship Programme
2) Coaching
3) Internship Training
4) Job Rotation

Question 2.
Training is beneficial not only to the employers but also to the employees. Comment. (MARCH -2010)
Answer:
1) Training helps in securing promotion and career growth.
2) Increased performance by the individual helps him to earn more.
3) Training helps to reduce the chances of accident and wastages.
4) Training increases the satisfaction of employees.

Question 3.
Classify the following as internal and external sources of recruitment: (MARCH-2010)
a) Advertisement
b) Transfer
c) Campus recruitment
d) Promotion
e) Employment Exchange
f) Job Contractors
Answer:
Internal sources of recruitment: Transfer, Promotion. External sources of recruitment – Advertisement, Campus recruitment, Employment exchange, Job contractors.

Question 4.
Differentiate between recruitment and selection. (MAY-2016)
Answer:

Training	Development
1) It means imparting skills and knowledge for doing a particular job	1) It means the growth of am employee in all respects
2) It increases job skills	2) It shapes the attitude
3) It has a short term perspective	3) It has long term perspective
4) It is job centred	4) It is career centred
5) The role of supervisor is very important	5) It is self driven

Question 5.
Match the following: (MARCH-2017)

Answer:

Question 6.
The extent to which sophistication and complexity is increasing, it demands for refined skill sets among existing employees. Explain the two different ways by which an organisation can achieve this. (MAY-2017)
Answer:
The two ways are: (1) Training (2) and Development
1) Training : Training is any process by which the aptitudes, skills and abilities of employees to perform specific jobs are increased.
2) Development: Development refers to the overall growth of the employee. It includes personality development, motivation for growth, career planning, n etc. Development equip the employees to take up future responsibilities of the organisation.

Plus Two Business Studies Staffing 4 Marks Important Questions

Question 1.
In a classroom debate Jith argues that recruitment and selection are same. Anoop argues that both are different. (MARCH-2009)
a) Whom do you support? Give justification.
b) If you are supporting Anoop, which one comes first?
Answer:
a) Recruitment: Recruitment may be defined as the process of searching for prospective employees and stimulating them to apply for jobs in the organisation.
Selection : Selection is the process of selecting the most suitable candidates from a large number of applicants.
b) Recruitment is The first process.

Question 2.
Smt. Nija is newly appointed as Assistant Personnel Manager in a manufacturing unit. You have to give her a detailed idea about various types of tests conducted for selecting candidates. (MARCH-2010)
Answer:
a) Intelligence Tests : This is one of the important psychological tests used to measure the level of intelligence quotient (IQ) of an individual.
b) Aptitude Test: It is a measure of individual’s potential for learning new skills.
c) Personality Tests : Personality tests provide clues to a person’s emotions, reactions, maturity and value system, etc.
d) Trade Test: These tests measure the existing skills of the individual.
e) Interest Tests : Interest tests are used to know’ the pattern of interests or involvement of a person.

Question 3.
Mr.Rasheed sent an application to the post of an Assistant Manager in Jacks FM Radio. Explain the process that Mr. Rasheed has to undergo before he is to be selected to that post. (MARCH-2011)
Answer:
1) Preliminary Screening
2) Selection Tests
3) Employment Interview
4) Reference and Background Checks
5) Final Selection
6) Medical Examination
7) Job Offer
8) Employment Contract

Question 4.
Identify the management function from the following statement. Also explain different sources of it. “It is the process of searching for prospective employees and stimulating them to apply for job in the organization.(MARCH-2012)
Answer:
External Sources: Selection of employees from outside the enterprise is known as external recruitment. The important external sources of recruitment are:
1) Direct Recruitment : Under the direct ‘ recruitment, a notice is placed on the notice-board of the enterprise specifying the details of the jobs available. Jobseekers assemble outside the premises of the organisation on the’specrfied date and selection is done on the spot. It is suitable forfilling casual vacancies.
2) Casual callers : Many reputed business organisations keep a database of unsolicited applicants in their office. These list can be used for recruitment.
3) Advertisement : Advertisement in newspapers or trade and professional journals is generally used when a wider choice is required.
4) Employment Exchange : Employment exchanges keep records of job seekers and will be supplied to business concern on the basis of their requisition.
5) Placement Agencies and Management Consultants : These agencies compile bio-data of a large number of candidates and recommend suitable names to their clients.
6) Campus Recruitment : Business enterprises may conduct campus recruitment in educational institutions for selecting young and talented candidates.
7) Recommendations of Employees : Applicants introduced by present employees, ortheirfriends and relatives may prove to be a good source of recruitment.
8) Labour Contractors : Labour contractors maintain close contacts with labourers and they can provide the required number of unskilled workers at short notice.
9) Web Publishing : There are certain websites specifically designed and dedicated forthe purpose of providing information to the job seekers.

Question 5.
Briefly explain the various methods of on- the -job training.(MARCH-2012)
Answer:
is given training when he is on the job. It means learn-ing while doing. The important On the Job Methods are:
On the Job Method : Under this method the employee is given training when he is on the job. It means learning while doing. The important On the Job Methods are:
a) Apprenticeship Programme : Under apprenticeship training, a trainee is put under the supervision of a master worker.
b) Coaching : In this method, the superior guides and instructs the trainee as a coach.
c) Internship Training : It is a joint programme of training in which vocational and professional institutes enter into an agreement with business enterprises for providing practical knowledge to its students.
d) Job Rotation : Here the trainee is transferred from one job to another job or from one department to another department so that he can learn the working of various sections.

Question 6.
Zodiac Ltd, is contemplating to recruit employees and workers for its proposed overseas project. Write a brief not indicating the various tests used for selection employees.(MAY-2010)
Answer:
Selection Tests : Various tests are conducted to know the level of ability, knowledge, interest, apti¬tude, etc. of a particular candidate. The various types of tests are:
a) Intelligence Tests : This is one of the important psychological tests used to measure the level of intelligence quotient (IQ) of an individual.
b) Aptitude Test : It is a measure of individual’s potential for learning new skills.
c) Personality Tests : Personality tests provide clues to a person’s emotions, reactions, maturity and value system, etc.
d) Trade Test : These tests measure the existing skills of the individual.
e) Interest Tests : Interest tests are used to know the pattern of interests or involvement of a person.

Plus Two Business Studies Staffing 5 Marks Important Questions

Question 1.
Distinguish between recruitment and selection process (FEBRUARY – 2009)
Answer:
Differences between training and development

Training	Development
1) It means imparting skills and knowledge for doing a particular job	1) It means the growth of am employee in all respects
2) It increases job skills	2) It shapes the attitude
3) It has a short term perspective	3) It has long term perspective
4) It is job centred	4) It is career centred
5) The role of supervisor is very important	5) It is self driven

Question 2.
Human Resource Department of Sachin Power Limited proposed to conduct two programmes for the employees in the organisation. First one to the office staff to provide knowledge and skill in Linux operating system. And second one to higher level managers for their overall growth.(MAY-2009)
a) Identify and differentiate between the two programmes of the Human Resource Department.
b) Differences between training and development.
Answer:
a) Training and Development
b) Differences between training and development

Training	Development
1) It means imparting skills and knowledge for doing a particular job	1) It means the growth of am employee in all respects
2) It increases job skills	2) It shapes the attitude
3) It has a short term perspective	3) It has long term perspective
4) It is job centred	4) It is career centred
5) The role of supervisor is very important	5) It is self driven

Question 3.
There are different methods of training. Identify and explain each such method. (FEBRUARY – 2010)
Answer:
Training methods: There are two methods of training
1) On the job training.
2) Off the job training .

On the Job Method : Under this method the employee is given training when he is on the job. It means learning while doing. The important On the Job Methods are:
a) Apprenticeship Programme : Under apprenticeship training, a trainee is put under the supervision of a master worker.
b) Coaching : In this method, the superior guides and instructs the trainee as a coach.
c) Internship Training : It is a joint programme of training in which vocational and professional institutes enter into an agreement with business enterprises for providing practical knowledge to its students.
d) Job Rotation : Here the trainee is transferred from one job to another job or from one department to another department so that he can learn the working of various sections.

Off the Job Method : It refers to those methods under which an individual is provided training away from the work place. It means learning before doing. The important Off the Job Methods are:
a) Class room Lectures/Conferences : The lecture approach is well adapted to convey specific information such as rules, procedures or methods. The use of audio-visuals can often make a formal classroom.
b) Films : They can provide information and demonstrate skills.
c) Case Study : Trainee studies the cases to determine problems, analyses causes, develop alternative solutions and select the best solution to implement.
d) Computer Modelling : It stimulate the work environment by programming a computer to imitate the realities of the job and allows learning to take place without the risk or high cost.
e) Vestibule Training : Under this method, separate training centres are setup to give training to the new employees. Actual work environment is created in that centre and employees used the same material, equipment, etc. which they use while doing the actual job.
f) Programmed Instruction : Here information is broken into meaningful units and these units are arranged in a proper way to form a logical and sequential learning package.

Question 4.
Training is the art of increasing the knowledge and skills of an employee for doing a particular job. (MAY-2010)
a) Do you agree with the statement? (MARCH-2010)
b) Write any four advantages of training.
Answer:
a) Yes.
b) Importance of Training

A. Benefits to the Organisation

1) It enhances employee productivity both in terms of quantity and quality, leading to higher profits.
2) Training reduces absenteeism and employee turnover.
3) It helps to obtaining effective response to the changing environment.
4) Training increases employee morale.
5) If the employees are given adequate training, the need for supervision is minimum.
6) Trained employees can use materials and machines economically. It helps to reduce cost of production.

B. Benefits to the Employee

1) Training helps in securing promotion and career growth.
2) Increased performance by the individual helps him to earn more.
3) Training helps to reduce the chances of accident and wastages.
4) Training increases the satisfaction of employees.

Question 5.
Wipro – India Ltd. selected 30 fresh Software Engineers for the company. The personnel management decided to give training to the new employees at the work place itself. (MARCH-2011)
Which method of training is mentioned here? Explain its different ways. Also explain the importance of training.
Answer:
On the job training

On the Job Method : Under this method the employee is given training when he is on the job. It means learning while doing. The important On the Job Methods are:
a) Apprenticeship Programme : Under apprenticeship training, a trainee is put under the supervision of a master worker.
b) Coaching : In this method, the superior guides and instructs the trainee as a coach.
c) Internship Training : It is a joint programme of training in which vocational and professional institutes enter into an agreement with business enterprises for providing practical knowledge to its students.
d) Job Rotation : Here the trainee is transferred from one job to another job or from one department to another department so that he can learn the working of various sections.

Importance of Training

A. Benefits to the Organisation

1) It enhances employee productivity both in terms of quantity and quality, leading to higher profits.
2) Training reduces absenteeism and employee turnover.
3) It helps to obtaining effective response to the changing environment.
4) Training increases employee morale.
5) If the employees are given adequate training, the need for supervision is minimum.
6) Trained employees can use materials and machines economically. It helps to reduce cost of production.

B. Benefits to the Employee

1) Training helps in securing promotion and career growth.
2) Increased performance by the individual helps him to earn more.
3) Training helps to reduce the chances of accident and wastages.
4) Training increases the satisfaction of employees.

Question 6.
In a classroom discussion, Manesh argues that materials and machines are most essential elements of a business unit. Arun argues that without the productive efforts of the workers the materials and machines would be of no use. (MARCH-2012)
1) Whose argument do you support?
2) State five reasons.
Answer:
a) Arun’s argument is right
b) Importance of Staffing
1) Helps in discovering and obtaining competent personnel for various jobs.
2) Makes for higher performance, by putting right person on the right job.
3) Ensures continuous survival and growth of the enterprise.
4) Helps to ensure optimum utilization of the human resources.
5) Improves job satisfaction and morale of employees.

Question 7.
Yasir is a newly appointed manager of Moon Ltd. He is of the view that training will increase productivity of his employees in the organisation. Do you agree with his views? Give the importance of training . (MARCH-2013)
Answer:
Yes
b) Importance of Training

A.Benefits to the Organisation

1) It enhances employee productivity both in terms of quantity and quality, leading to higher profits.
2) Training reduces absenteeism and employee turnover.
3) It helps to obtaining effective response to the changing environment.
4) Training increases employee morale.
5) If the employees are given adequate training, the need for supervision is minimum.
6) Trained employees can use materials and machines economically. It helps to reduce cost of production.

B. Benefits to the Employee

1) Training helps in securing promotion and career growth.
2) Increased performance by the individual helps him to earn more.
3) Training helps to reduce the chances of accident and wastages.
4) Training increases the satisfaction of employees.

Question 8.
Mr.Hari started an industrial unit in Tamil Nadu. His son Manu, your friend appointed as H.R.Manager. Manu appoint 25 staff in different posts. Advise Manu, about different types of training possible here. (MARCH-2014)
Answer:
On the Job Method : Under this method the employee is given training when he is on the job. It means learning while doing. The important On the Job Methods are:
a) Apprenticeship Programme : Under apprenticeship training, a trainee is put under the supervision of a master worker.
b) Coaching : In this method, the superior guides and instructs the trainee as a coach.
c) Internship Training : It is a joint programme of training in which vocational and professional institutes enter into an agreement with business enterprises for providing practical knowledge to its students.
d) Job Rotation : Here the trainee is transferred from one job to another job or from one department to another department so that he can learn the working of various sections.

Question 9.
As attracted by ‘Make in India Scheme’ of govt., RR Autos, a German based company started a car manu-facturing unit in Tamil Nadu.lt requires candidate for different positions in its main plant. What external sources are available to them to fill up different posts? (MARCH-2016)
Answer:
i)Direct recruitment
ii) Advertisement
iii) Casual callers
iv) Web publishing
v) Labour contractors
vi) Employment exchange
vii) Placement and management consultants
viii) Recommendations
External Sources: Selection of employees from outside the enterprise is known as external . recruitment. The important external sources of recruitment are:
1) Direct Recruitment : Under the direct ‘ recruitment, a notice is placed on the notice-board of the enterprise specifying the details of the jobs available. Job seekers assemble outside the premises of the organisation on the’specified date and selection is done on the spot. It is suitable for filling casual vacancies.
2) Casual callers : Many reputed business organisations keep a database of unsolicited applicants in their office. These list can be used for recruitment.
3) Advertisement : Advertisement in newspapers or trade and professional journals is generally used when a wider choice is required.
4) Employment Exchange : Employment exchanges keep records of job seekers and will be supplied to business concern on the basis of their requisition.
5) Placement Agencies and Management Consultants : These agencies compile bio-data of a large number of candidates and recommend suitable names to their clients.
6) Campus Recruitment : Business enterprises may conduct campus recruitment in educational institutions for selecting young and talented candidates.
7) Recommendations of Employees : Applicants introduced by present employees, or their friends and relatives may prove to be a good source of recruitment.
8) Labour Contractors : Labour contractors maintain close contacts with labourers and they can provide the required number of unskilled workers at short notice.
9) Web Publishing : There are certain websites specifically designed and dedicated for the purpose of providing information to the job seekers.

Question 10.
“It’s a managerial function of filling and keeping filled the positions in the organisations structure.” Identify the management function and state different steps followed in it. (MARCH-2017)
Answer:
a) Staffing
b) Staffing Process
1) Manpower planning : It is concerned with forecasting the future manpower needs of the organisation, i.e. finding out number and type of employees need by the organisation in future.
2) Recruitment : Recruitment may be defined as the process of searching for prospective employees and stimulating them to apply for jobs in the organisation.
3) Selection : Selection is the process of selecting the most suitable candidates from a large number of applicants.
4) Placement and Orientation : Placement refers to putting the right person on the right job. Orientation is introducing the selected employee to other employees and familiarising him with the rules and policies of the organisation.
5) Training and Development : The process of training helps to improve the job knowledge and skill of the employees. It motivates the employees and improve their efficiency.
6) Performance Appraisal : Performance appraisal means evaluating an employee’s current and past performance as against certain predetermined standards.
7) Promotion and Career Planning : Promotion means movement of an employee from his present job to a higher level job.
8) Compensation : Compensation refers to all forms of pay or rewards going to employees. It may be in the form of direct financial payments like wages, salaries, commissions and indirect payments like employer paid insurance and vacation.

Plus Two Business Studies Staffing 8 Marks Important Questions

Question 1.
Mr.M.K.Nambiar, the newly appointed Personnel Manager of Hindustan Aeronautics Ltd. wants to identify the sources of man power to fill various job positions in the company. Can you help him to identify different sources he would use? (MARCH-2011)
Answer:
Sources of Recruitment
There are two sources of recruitment.
1) Internal sources .
2) External sources
Sources of Recruitment
There are two sources of recruitment.
1) Internal sources
2) External sources
Internal Sources: It refers to the recruitment for jobs from within the organisation. It includes:
1) Transfer: It involves shifting of an employee from one job to another without change in responsibility or compensation.
2) Promotion: It refers to shifting of a person from lower position to a higher position carrying higher status, responsibility and more salary.
External Sources: Selection of employees from outside the enterprise is known as external . recruitment. The important external sources of recruitment are:
1) Direct Recruitment : Under the direct ‘ recruitment, a notice is placed on the notice-board of the enterprise specifying the details of the jobs available. Job seekers assemble outside the premises of the organisation on the specified date and selection is done on the spot. It is suitable for filling casual vacancies.
2) Casual callers : Many reputed business organisations keep a database of unsolicited applicants in their office. These list can be used for recruitment.
3) Advertisement : Advertisement in newspapers or trade and professional journals is generally used when a wider choice is required.
4) Employment Exchange : Employment exchanges keep records of job seekers and will be supplied to business concern on the basis of their requisition.
5) Placement Agencies and Management Consultants : These agencies compile bio-data of a large number of candidates and recommend suitable names to their clients.
6) Campus Recruitment : Business enterprises may conduct campus recruitment in educational institutions for selecting young and talented candidates.
7) Recommendations of Employees: Applicants introduced by present employees, or their friends and relatives may prove to be a good source of recruitment.
8) Labour Contractors : Labour contractors maintain close contacts with labourers and they can provide the required number of unskilled workers at short notice.
9) Web Publishing : There are certain websites specifically designed and dedicated for the purpose of providing information to the job seekers.

Question 2.
Mr. Padma Kumar, the personnel manager of National Manufacturing Co. is confronted with the problem of recruitment of 10 Clerks – cum – Accounts. (MAY-2013)
Explain the sources of recruitment. Also explain its merits & demerits.
Answer:
Internal Sources : It refers to the recruitment for jobs from within the organisation. It includes:
1) Transfer: It involves shifting of an employee from one job to another without change in responsibility or compensation.
2) Promotion : It refers to shifting of a person from lower position to a higher position carrying higher status, responsibility and more salary.
External Sources : Selection of employees from outside the enterprise is known as external . recruitment. The important external sources of recruitment are:
1) Direct Recruitment : Under the direct ‘ recruitment, a notice is placed on the notice-board of the enterprise specifying the details of the jobs available. Job seekers assemble outside the premises of the organisation on the specified date and selection is done on the spot. It is suitable for filling casual vacancies.
2) Casual callers : Many reputed business organisations keep a database of unsolicited applicants in their office. These list can be used for recruitment.
3) Advertisement: Advertisement in newspapers or trade and professional journals is generally used when a wider choice is required.
4) Employment Exchange : Employment exchanges keep records of job seekers and will be supplied to business concern on the basis of their requisition.
5) Placement Agencies and Management Consultants : These agencies compile bio-data of a large number of candidates and recommend suitable names to their clients.
6) Campus Recruitment : Business enterprises may conduct campus recruitment in educational institutions for selecting young and talented candidates.
7) Recommendations of Employees: Applicants introduced by present employees, or their friends and relatives may prove to be a good source of recruitment.
8) Labour Contractors : Labour contractors maintain close contacts with labourers and they can provide the required number of unskilled workers at short notice.
9) Web Publishing : There are certain websites specifically designed and dedicated for the purpose of providing information to the job seekers.

Kerala State Board New Syllabus Plus Two Business Studies Chapter Wise Previous Questions and Answers Chapter 5 Organising.

Kerala Plus Two Business Studies Chapter Wise Previous Questions Chapter 5 Organising

Plus Two Business Studies Organising 1 Mark Important Questions

Question 1.
The technical term which denotes the number of subordinates that a superior can effectively supervise.(FEBRUARY-2009)
Answer:
Span of control

Question 2.
To satisfy social and cultural needs and to fulfill common interest, people organise themselves. What is the technical term forthis type of organisation? (FEBRUARY-2009)
Answer:
Informal organization

Question 3.
KSR Limited is a transport service company with its head office at Calicut. It has also operations and office in Thrissur, Kochi and Trivandrum.
Name the form of organisational structure suitable to this company. (MAY-2009)
Answer:
Divisional organisation

Question 4.
Anand Industries produce different types of products namely, Mobile phones, Television etc. and they have separate production managers and marketing managers for each line of products. Name the organisation structure that prevails in the firm. (MARCH-2010)
Answer:
Divisional organisation

Question 5.
Mr.Rajagopal is a foreman in a spinning mill and there are 25 employees working under him. Due to the increased number of subordinates he cannot control them effectively and hence the company could not achieve the target. Identify the element or organizational structure violated here. (MAY-2010)
Answer:
Span of control

Question 6.
Mr. Sreekumar is the leader of a marketing item. There are 25 salesmen under him. Due to the increased number of subordinates he cannot supervise them efficiently and hence the company could not achieve the target. Name the element of organisational strucutre violated here. (MAY-2011)
Answer:
Span of control

Question 7.
Identify it:
It is the framework within which an organisation functions.(MARCH-2012)
Answer:
Organisational structure

Question 8.
In which organisation, authority and responsibility relationships are not defined? (MAY-2012)
Answer:
Informal organization

Question 9.
Name the management principle which refers to concentration of authority at one place. (MAY-2013)
Answer:
Centralisation

Question 10.
Which among the following is true for formal organisation? (MAY-2013)
a) It is not clear
b) To satisfy the members
c) Importance to persons and feelings
d) To fulfill the firm’s goals.
Answer:
To fulfill the firm’s goal

Question 11.
Span of control refers to (MARCH-2014)
a) Number of managers.
b) Period of appointment of manager.
c) Number of subordinates under a Manager.
d) None of these.
Answer:
Number of subordinates under a manager.

Question 12.
In connection with Christmas celebration on the employees of National Bank formed a small group, who organized a feast and other entertainments. Name the type of organization referred here. (MARCH-2015)
Answer:
Informal organisation

Question 13.
From the following choose one which is not a part in the process of organising : (MARCH-2015)
a) Division of work
b) Grouping of jobs
c) Co-ordination of activities
d) Scalar chain
Answer:
Scalar chain

Plus Two Business Studies Organising 2 Marks Important Questions

Question 1.
Name any two elements of delegation. (FEBRUARY-2009)
Answer:
1) Identifying and grouping the work to be performed.
2) Defining and delegating authority and . responsibility.
3) and establising relationships for the purpose of accomplishing objectives.

Question 2.
In a manufacturing firm, the Production Manager entrusted a part of his work to the foreman in the factoty. Examine two possible benefitsto be gained from this forthis Foreman. (FEBRUARY-2010)
Answer:
a) Delegation of authority
b) It helps the foreman to take quick decision. It helps to develop creative skill and motivate the subordinate.

Question 3.
Rearrange the following as it takes place in the process of organising: (MARCH-2010)
a) establishing authority relationship
b) division of work
c) co-ordination of activities
d) departmentation
Answer:
Division of work
b) Departmentation
c) Establishing authority relationship
d) Co-ordination of activities

Question 4.
The following are different steps involved in the process of Organising. (MARCH-2011)
i) Grouping of similar jobs.
ii) Division of work.
iii) Co-ordination of activities.
iv) Creation of authority relationship Which of the following sequence js correct?
a) (i), (ii), (iv) & (iii)
b) (ii), (i), (iv) & (iii)
Answer:
i) Division of work
ii) Grouping of similar jobs
iii) Creation of authority relationship
iv) Co-ordination of activities

Question 5.
The aim of organizing is to enable people to work togetherfora common purpose. Explain. (MARCH-2012)
Answer:
Specialisation: Since the activities are divided into convenient jobs, and are assigned to a particular employee, it leads to specialisation, more productivity and efficiency.

Plus Two Business Studies Organising 3 Marks Important Questions

Question 1.
“Delegation of authority leads to reduction in the work load of superiors” In the light of this statement, com-ment briefly on the importance of delegation of authority. (MARCH-2009)
Answer:
1) Reduces the work load of managers : The managers are able to function more efficiently as they get more time to concentrate on important matters.
2) Employee development: Delegation empowers the employees by providing them the chance to use their skills, gain experience and develop themselves for higher positions.
3) Motivation of employees : Responsibility for work builds the self-esteem of an employee and improves his confidence. He feels encouraged and tries to improve his performance.

Question 2.
Match the following : (MAY-2009)

Answer:

Question 3.
In a classroom discussion Saleem, a Plus Two Commerce student, argues that delegation and decentralisation are one and same. (MAY-2009)
a) Do you agree with his argument?
b) Give any two points to justify your answer.
Answer:
a) No. Delegation and decentralisation are different.
b) The differences between Delegation of authority and Decentralization are :

Question 4.
Describe the importance of transferring decision making authority to the lowest levels. (MAY-2012)
Answer:
Importance of Decentralisation
1) Decentralisation helps to promote confidence amongst the subordinates.
2) It is a means of trained manpower
3) It helps in quick decision making.
4) It reduces the burden of top executives.
5) It helps to increase productivity and more returns.
6) It helps in maintaining effective control

Question 5.
Smt. Seema is a Principal of a Higher Secondary School. She decides to give some of her charges to the Vice-Principal Smt. Beena. Which function of management is used here? Explain. (MARCH-2013)
Answer:
Delegation of Authority : Delegation means the granting of authority to subordinates to operate within the prescribed limits. It enables the manager to distribute his workload to others so that he can concentrate on important matters.
Elements of Delegation
1) Authority : Authority refers to the right of an individual to command his subordinates and to take action within the scope of his position. Authority flows from top to bottom. Authority determines the superior subordinate relationship in an organisation.
2) Responsibility: Responsibility is the obligation of a subordinate to properly perform the assigned duty. Responsibility flows upwards, i.e., a subordinate will always be responsible to his superior.
3) Accountability : Accountability implies being answerable for the final outcome, i.e., subordinate will be accountable to a superior for satisfactory performance of work.

Question 6.
ABC Ltd. is manufacturing and distributing plastic home appliances.(MARCH-2014)
Draw a diagram and explain the functional organizational structure of AB Ltd.
Answer:
Functional Organisation.

Question 7.
Delegation of authority leads to inefficient superiors. (MARCH-2014)
a) Do you agree with this statement?
b) Justify your answer.
Answer:
No
b) Importance of Delegation of Authority
1) Reduces the work load of managers : The managers are able to function more efficiently as they get more time to concentrate on important matters.
2) Employee development: Delegation empowers the employees by providing them the chance to use their skills,’gain experience and develop themselves for higher positions.
3) Motivation of employees : Responsibility for work builds the self-esteem of an employee and improves his confidence. He feels encouraged and tries to improvers performance.
4) Facilitation of.growth : Delegation helps in the expansion of an organisation by providing a ready workforce to take up leading positions in new ventures.
5) Superior-subordinate relations: Delegation of authority establishes superior subordinate relationships, which are the basis of hierarchy of management.
6) Better co-ordination: The elements of delegation – authority, responsibility and accountability help to avoid overlapping of duties and duplication of effort.

Plus Two Business Studies Organising 4 Marks Important Questions

Question 1.
Delegation is the administrative process of getting things done through others and sharing authority with them. List out the importance and steps in the process of delegation. (FEBRUARY-2010)
Answer:
Importance of Delegation of Authority
1) Reduces the work load of managers : The managers are able to function more efficiently as they get more time to concentrate on important matters.
2) Employee development: Delegation empowers the employees by providing them the chance to use their skills,’gain experience and develop themselves for higher positions.
3) Motivation of employees : Responsibility for work builds the self-esteem of an employee and improves his confidence. He feels encouraged and tries to improvers performance.
4) Facilitation of growth : Delegation helps in the expansion of an organisation by providing a ready workforce to take up leading positions in new ventures.
5) Superior-subordinate relations: Delegation of authority establishes superior subordinate relationships, which are the basis of hierarchy of management.
6) Better co-ordination: The elements of delegation – authority, responsibility and accountability help to avoid overlapping of duties and duplication of effort.

Question 2.
ABC Ltd., a large size organization has five majorde- partments, viz., Production Department, Purchase Department, Personnel Department, Finance Department & Marketing Department. Which organizational structure is suitable to the company? Draw a chart showing the organizational structure of the company. (MARCH-2011)
Answer:
Functional Organisation.

Question 3.
‘Delegation and Decentralisation are one and same.’ Do you agree with this statement? Give any 4 differences. (MARCH-2013)
Answer:

Plus Two Business Studies Organising 5 Marks Important Questions

Question 1.
Hashik studying in your class has opined that there is no difference between formal and informal organisation. Do you agree? Justify your answer. (MARCH-2010)
Answer:
a) No
b)

Question 2.
Darsana Books Ltd. a leading book sellers of the State organized a book fair at Kottayam as a sales promotion programme under the control and supervision of Mr.Rajesh, the Sales Manager. On the book fairground the employees of the firm arranged a dance programme of a famous film star to collect funds for the rehabilitation of blind children of the locality. Mr. Devargjan, an employee of the firm, voluntarily acted as teh convener of the dance programme. (MAY-2010)
a) Do you find any structural difference in organising these two programmes?
b) Classify the organization of the conduct of books fair and conduct of the dance programme on the basis of their formation.
c) State any three demerits of the organization formed forthe dance programme.
Answer:
a) Yes.
b) Formal & Informal Organisation.
c) 1) It spreads rumours.
2) If informal organisation opposes the policies and changes of management, then it becomes very difficult to implement them in organisation.
3) Informal organizations lead to conflicts among employees.

Question 3.
What is ‘Delegation of Authority’ ? Explain its importance. (MARCH-2011)
Answer:
Delegation of Authority : Delegation means the granting of authority to subordinates to operate within the prescribed limits. It enables the manager to dis-tribute his workload to others so that he can concentrate on important matters.
Importance of Delegation of Authority
1) Reduces the work load of managers : The managers are able to function more efficiently as they get more time to concentrate on important matters.
2) Employee development: Delegation empowers the employees by providing them the chance to use their skills,’gain experience and develop themselves for higher positions.
3) Motivation of employees : Responsibility for work builds the self-esteem of an employee and improves his confidence. He feels encouraged and tries to improvers performance.
4) Facilitation of.growth : Delegation helps in the expansion of an organisation by providing a ready workforce to take up leading positions in new ventures.
5) Superior-subordinate relations: Delegation of authority establishes superior subordinate relationships, which are the basis of hierarchy of management.
6) Better co-ordination: The elements of delegation – authority, responsibility and accountability help to avoid overlapping of duties and duplication of effort.

Question 4.
Bhoomi daily, very often handed over some of his duties to Mr. Vijayan, the Assistant Circulation Manager. This will provide Gopalakrishnan more time to concentrate on the circulation target of the firm. In this regard. (MAY-2011)
Answer:
a) Name the element of organization applied by Gopalakrishnan.
b) State the steps to be fallowed by Mr.Gopalakrishnan before handing over the duties.
c) Do you think that the policy of decentralization can be adopted as an alternative to the above referred concept?
a) Delegation of authority
b) Elements of Delegation
1) Authority : Authority refers to the right of an individual to command his subordinates and to take action within the scope of his position. Authority flows from top to bottom. Authority determines the superior subordinate relationship in an organisation.
2) Responsibility: Responsibility is the obligation of a subordinate to properly perform the assigned duty. Responsibility flows upwards, i.e., a subordinate will always be responsible to his superior.
3) Accountability : Accountability implies being answerable for the final outcome, i.e., subordinate will be accountable to a superior for satisfactory performance of work.
c) No. Decentralisation refers to a systematic dispersal of authority to the lower levels of the orga-nization. it takes place as per the organization structure. It cannot be adopted as an alternative to delegation.
Decentralisation : Decentralisation refers to a systematic dispersal of authority to the lower lev-els of the organisation. Here decision making authority is shared with lower levels in the organisation.

Question 5.
Differentiate between formal organisation and infor-mal organisation. (MARCH-2012)
Answer:

Question 6.
Thomas, one of your friends, has decided to start a business at Kollam. He requested you to assist him in framing a suitable organisation structure. Describe the elements you should keep in mind while assisting Thomas. (MAY-2012)
Answer:
Step in the Process of Organising
1) Division of Work: The first step in the process of organising involves identifying and dividing the work that has to be done. Division of work leads to specialisation!
2) Departmentation : The second step is to group similar or related jobs into larger units, called departments. The grouping of activities is known as departmentation.
3) Assignment of duties : The next step is to allocate the work to various employees according to their ability and competencies.
4) Establishing authority – responsibility relationship: The last step is creation of authority – responsibility relationship among the job positions. It helps in the smooth functioning of the organisation.

Question 7.
General Electronics Ltd. manufacturers of electronic goods organised an exhibition of its products for sales promotion under the control of Mr.Mohan, the Sales Manager, on the exhibition ground, the employees of the company arranged a musical concert to collect funds for the rehabilitation of handicapped children of the locality. Mr. Suresh one of the employees voluntarily act as the convenor of the musical concert.
a) Do you find any structural difference in organising these two programmes. (MAY-2013)
b) Classify the organisation of the conduct of exhibition and musical concert on the basis of their formation.
c) State four demerits of informal organisation.
Answer:
a) Yes
b) Formal and informal organization.
c) i) It is not stable.
ii) No authority responsibility relationships.
iii) No formal rules exist.
iv) Cannot be presented in organization charts. No official line of communication.

Question 8.
Mr. Radhakrishnan, the Branch Manager of a nationalized bank often share some of his work to his immediate subordinate Mr. Rajendran, the Assistant Manager. This helps Mr. Radhakrishnan to spend more time to mobilize their targeted deposit. (MARCH-2015)
a) Name the element of organization applied by Mr. Radhakrishnan.
b) State the various steps to be followed in the process involved in it.
Answer:
Delegation of authority
b) Elements of Delegation
1) Authority : Authority refers to the right of an individual to command his subordinates and to take action within the scope of his position. Authority flows from top to bottom. Authority determines the superior subordinate relationship in an organisation.
2) Responsibility: Responsibility is the obligation of a subordinate to properly perform the assigned duty. Responsibility flows upwards, i.e., a subordinate will always be responsible to his superior.
3) Accountability : Accountability implies being answerable for the final outcome, i.e., subordinate will be accountable to a superior for satisfactory performance of work.

Question 9.
‘Clever Dogs’ is a leading IT Company in Techno Park at Thiruvananthapuram and the organisation has its necessary hierarchical position. The employees of this firm decided to form a Carol Club for its X-mas celebrations and Mr. Mathew is elected as the convenor. (MARCH-2016)
a) Identify the 2 forms of organisation here.
b) Distinguish between them.
Answer:
a) Ciever Dogs is a formal organisation and Carol Club is an informal organisation, b) Distinction between Formal and Informal organisation.

Question 10.
Briefly describe any five advantages of effective delegation in the case of a business enterprise.(MAY-2016)
Answer:
Importance of Delegation of Authority
1) Reduces the work load of managers : The managers are able to function more efficiently as they get more time to concentrate on important matters.
2) Employee development: Delegation empowers the employees by providing them the chance to use their skills,’gain experience and develop themselves for higher positions.
3) Motivation of employees : Responsibility for work builds the self-esteem of an employee and improves his confidence. He feels encouraged and tries to improvers performance.
4) Facilitation of.growth : Delegation helps in the expansion of an organisation by providing a ready workforce to take up leading positions in new ventures.
5) Superior-subordinate relations: Delegation of authority establishes superior subordinate relationships, which are the basis of hierarchy of management.
6) Better co-ordination: The elements of delegation – authority, responsibility and accountability help to avoid overlapping of duties and duplication of effort.

Question 11.
V-Guard Ltd. a leading company in Kerala is engaged in diversified business namely electricals, textiles, amusement parks etc. Each of this have different departments namely Marketing, Production Finance Research and Development etc. Suggest a suitable organizational structure to this company and list its merits and demerits. (MARCH-2017)
Answer:
Divisional Organisation Structure
b) Advantages
1) Each division functions as an autonomous unit which leads to faster decision making.
2) It helps in fixation of responsibility in cases of poor performance of the division
c) Disadvantages 
1) Conflict may arise among different divisions with reference to allocation of funds.
2) ft may lead to increase in costs since there may be a duplication of activities across products.

Question 12.
It is often accepted that, instead of having a confronting attitude, management should skill fully take the advantages of both formal and informal organisation. Substantiate. (MAY-2017)
Answer:
Advantages
1) It is easier to fix responsibility since mutual relationships are clearly defined.
2) Clear determination of duties, authorities and responsibilities. It helps in avoiding duplication of effort.
3) Unity of command is maintained through an established chain of command.
4) It provides stability to the organisation.
5) Co-ordination and control become easy.
Advantages
1) There can be faster spread of communication.
2) It helps to fulfil the social needs of the members and this enhances their jpb satisfaction.
3) Top level managers can know the real feedback of employees on various policies and plans.

Plus Two Business Studies Organising 8 Marks Important Questions

Question 1.
Explain the concept of delegation and decentralisation bringing out their distinction.(FEBRUARY – 2009)
Answer:
Organising is one of the most important functions of management, which includes
1) Identifying and grouping the work to be performed.
2) Defining and delegating authority and responsibility.
3) and establising relationships for the purpose of accomplishing objectives

Question 2.
Joy Ltd. is having an organisational structure which is intentionally created with well defined jobs. (MARCH-2009)
a) Identifythe type of organisation, miniojm
b) State its features.
c) Locate its difference from an organisation created on personal and social relationship on the basis of friendship.
Answer:
a) Formal Organisation
b) Features
1) It is deliberately created by the top management to achieve the objectives.
2) It is based on division of labour and specialisation.
3) It is impersonal – Does not take into consideration emotional aspect of employees.
4) It clearly defines the authority and responsibility of every individual.
5) The principle of scalar chain is followed in formal organisation.
c)

Question 3.
Salma Ltd., a firm manufacturing shampoo has the following departments. Purchase, Marketing, Produc-tion, Finance and Human Resources Department. (MARCH-2009)
Mr. Basheer, the general manage,r was taking all major decisions of the different departments. The company decided to introduce herbal shampoo in the market. In the circumstances of work overload, Mr. Basheer decided to grant some authority to his subordinates.
a) What is the concept referred to?
b) State the importance of this concept
c) How does it differ from decentralisation?
Answer:
a) Delegation of authority
b) Importance of Delegation of Authority
1) Reduces the work load of managers : The managers are able to function more efficiently as they get more time to concentrate on important matters.
2) Employee development: Delegation empowers the employees by providing them the chance to use their skills,’gain experience and develop themselves for higher positions.
3) Motivation of employees : Responsibility for work builds the self-esteem of an employee and improves his confidence. He feels encouraged and tries to improvers performance.
4) Facilitation of.growth : Delegation helps in the expansion of an organisation by providing a ready workforce to take up leading positions in new ventures.
5) Superior-subordinate relations: Delegation of authority establishes superior subordinate relationships, which are the basis of hierarchy of management.
6) Better co-ordination: The elements of delegation – authority, responsibility and accountability help to avoid overlapping of duties and duplication of effort.

c)

Kerala State Board New Syllabus Plus Two Business Studies Chapter Wise Previous Questions and Answers Chapter 4 Planning.

Kerala Plus Two Business Studies Chapter Wise Previous Questions Chapter 4 Planning

Plus Two Business Studies Planning 1 Mark Important Questions

Question 1.
Find out the correct pair: (MAY-2009)
a) Objective – Promotion is based on merit only.
b) Policy – Time rate system of wage payment.
c) Rule – No smoking
d) Method – Make a profit of 40% on capital invested
Answer:
a) Rule – No smoking

Question 2.
Aswathy Automobiles Ltd. has decided to open five showrooms in different parts of the State to meet the increased demand of motor cars. Identify the type of plan in which the decision can be included. (MAY-2010)
Answer:
Programmes

Question 3.
Hindustan Motors Ltd. decided to increase the production of ambassador cards by 10% in the year 2010-11. Identify the type of plan in which the decision can be included. (MAY-2011)
Answer:
Objective

Question 4.
Budget is an instrument of (MARCH-2012)
a) Planning only
b) Control only
c) Both planning and control
d) None of these
Answer:
Both planning and control

Question 5.
The breakup of master plan department wise and sectional wise to support the master plan is called _____ (MAY-2012)
Answer:
Derivative Plan

Question 6.
What do you mean by ‘planning premises’? (MARCH-2013)
Answer:
All planning involves certain assumptions about the future which are known as planning premises.

Question 7.
The management of Sunlight Detergents Ltd. has decided to increase the sales of washing powder by 5 percent. Identify the element of planning in which the decision can be included. (MAY-2013)
Answer:
Objectives

Question 8.
Identify the odd one and justify. (MARCH-2014)
a) Motivation
b) Policies
c) Procedure
d) Objectives
Answer:
Motivation. Others are types of plans.

Question 9.
The basic material upon which plans are drawn is known as ______.
Answer:
Planning premises

Question 10.
Find the odd one from the following:
a) Rule
b) Procedure
c) Policy
d) Objective
Answer:
b) Procedure

Question 11.
Specific statements that tell you about what is to be done are
a) Rules
b) Procedures
c) Policy
d) Strategy
Answer:
a) Rules

Question 12.
The basic material upon which plans are drawn is known as _______
Answer:
Planning premises.

Question 13.
A statement of expected results expressed in numerical terms is known as:
a) Budget
b) Programme
c) Policy
d) Strategy
Answer:
a) Budget

Plus Two Business Studies Planning 2 Marks Important Questions

Question 1.
Identify the type of plan from the following statements and explain its meaning.(FEBRUARY-2009)
a) Smoking is prohibited in the factory premises.
b) Sales only on cash basis.
Answer:
a) Rule
b) Policy

Question 2.
Defect the differences in the following statements contained in a firms plan.(FEBRUARY-2010)
a) We sell goods only on cash basis.
b) Smoking is prohibited in the factory premises.
Answer:
a) Policy
b) Rule

Question 3.
Draw a hierarchy of plans by rearranging the following by taking budget as the base.(MARCH-2010)
Budget, Rules, Policies, Objectives, Procedures, Methods and Programmes.
Answer:
Hierarchy of plans

Question 4.
State the limitations of planning. (MARCH-2014)
Answer:
1) Planning makes the activities rigid.
2) Long term plans are insignificant in the rapidly changing business environment.

Plus Two Business Studies Planning 3 Marks Important Questions

Question 1.
“Planning is of vital importance in the managerial functions but it is noHree from limitations”. Do you agree with this statement? Justify your views. Mention any two limitations of planning. (MAY-2011)
Answer:
a) I agree
b) 1) Planning makes the activities rigid.
2) Long term plans are insignificant in the rapidly changing business environment.
3) It reduces creativity.
4) It involves cost.

Question 2.
Mr. Shallmon, the Production Manager of RM. Ltd., prepared a plan of actipn for the next month. Mr. Hari, the newly appointed assistant asked him, why he is giving this much importance to planning. Give answerto the question of Hari. (MARCH-2012)
Answer:
1) Planning provides directions
2) Planning reduces the risk of uncertainty
3) Planning reduces wasteful activities
4) Planning promotes innovative ideas
5) Planning facilitates decision making
6) Facilitates control

Question 3.
Even though planning is important in business, it suffers some limitations also. Explain any three limitations of planning.
Answer:
Limitations of Planning
1) Planning makes the activities rigid.
2) Long term plans are insignificant in the rapidly changing business environment.
3) It reduces creativity.
4) It involves cost.
5) It involves a lot of time.
6) Planning does not guarantee success.

Plus Two Business Studies Planning 4 Marks Important Questions

Question 1.
You are going to conduct a field trip to V-Guard Industries. You are required to make a detailed plan covering different steps in planning. (FEBRUARY-2009)
Answer:

Question 2.
“Planning, the primary function of management, suf- fersfrom a number of limitations.” Elucidate. (MAY-2009)
Answer:
Limitations of Planning
1) Planning makes the activities rigid.
2) Long term plans are insignificant in the rapidly changing business environment.
3) It reduces creativity.
4) It involves cost.
5) It involves a lot of time.
6) Planning does not guarantee success.

Question 3.
Mr.Gopinathan, an Engineer, has decided to start a small scale industrial unit. As a commerce student, you are asked to prepare a plan of action for this business. In this respect state the steps to be followed in the planning process. (MAY-2010)
Answer:
a) Planning
b) Planning Process (Steps in Planning)
1) Setting Objectives: The first step in planning is setting objectives. Objectives may be set for the entire organisation and for each department. The objective must be specific and clear.
2) Developing premises : Planning is based on certain assumptions about the future. These assumptions are called planning premises. Forecasting is important in developing planning premises.
3) Identifying alternative courses of action: The next step in planning is to identify the alternative courses of action to achieve the objectives.
4) Evaluating alternative Courses : The pros and cons of various alternatives must be evaluated in terms of their expected cost and benefits.
5) Selecting an alternative : After evaluating the alternatives the manager will select that alternative which gives maximum benefit at minimum cost.
6) Implement the plan : Implementation of plan means putting plans, into action so as to achieve the objectives of the business.
7) Follow up action : Plans are to be evaluated regularly to check whether they are being implemented and activities are performed according to schedule.

Question 4.
Explain the following terms: (MARCH-2011)
a) Objectives
b) Procedure
c) Programmes
Answer:
Objectives : Objectives are the ends, towards which activity is aimed at forthe accomplishment of organizational goals. Objective should be measurable in quantitative terms.
2) Procedure : Procedure is a chronological sequence or steps to be undertaken to enforce a policy.
3) Programme : Programme includes all the activities necessary for achieving a given objective. Programmes are the combination of goals, policies, procedures and rules.

Question 5.
“A policy is a guide to thinking and step to decision making.” Do you agree with this statement? Justify your answer. Give two examples of the policies of a firm.(MAY-2013)
Answer:
Policy : Policy is a broad statement formulated to provide guidelineSm decision making.
Eg. 1) Promotion based on merits only.
2) We don’t sell on credit.

Question 6.
The Board of Directors of National Aluminium Co. Ltd. decided to implement the following plans in their production department during the year 2014.
a) Increase the production by 10% in the year 2014.
b) Only ITI certificate holders should be appointed.
c) All employees should punch at the factory gate at 8 am.
d) Newly selected employees should be given one month training.
1) Classifies the plans adopted by the National Aluminium Co. Ltd.
2) Establish the reasons for such classification.
Answer:
a) Objective-Targetto be achieved
b) Policy – Guide in decision making
c) Rule – Rigid policy which cannot be changed.
d) Programme-All activities necessary for achieving a given objective.

Question 7.
What are the steps the management need to take in the process of planning?
Answer:
a) Planning
b) Planning Process (Steps in Planning)
1) Setting Objectives: The first step in planning is setting objectives. Objectives may be set for the entire organisation and for each department. The objective must be specific and clear.
2) Developing premises : Planning is based on certain assumptions about the future. These assumptions are called planning premises. Forecasting is important in developing planning premises.
3) Identifying alternative courses of action: The next step in planning is to identify the alternative courses of action to achieve the objectives.
4) Evaluating alternative Courses : The pros and cons of various alternatives must be evaluated in terms of their expected cost and benefits.
5) Selecting an alternative : After evaluating the alternatives the manager will select that alternative which gives maximum benefit at minimum cost.
6) Implement the plan : Implementation of plan means putting plans, into action so as to achieve the objectives of the business.
7) Follow up action : Plans are to be evaluated regularly to check whether they are being implemented and activities are performed according to schedule.

Question 8.
“Planning is certainly important as it tells us where to go; it provide direction and reduces the risk of uncertainty.” Briefly explain the importance of planning in the light of above statement.
Answer:
Importance of Planning
1) Planning provides directions : By stating in advance how work is to be done planning provides direction for all actions.
2) Planning reduces the risk of uncertainty : Planning enables an organisation to predict future events and prepare to face the unexpected events.
3) Planning reduces wasteful activities: Planning serves as the basis of co-ordinating the activities and efforts of different departments and individuals. It helps to eliminate useless and redundant activities.
4) Planning promotes innovative ideas : Since planning is thinking in advance, there is scope for finding better and different methods to achieve the desired objectives.
5) Planning facilitates decision making: Planning helps in decision making by selecting the best alternative among the various alternatives.
6) Facilitates control: Planning provides the basis for control. Planning specifies the standard with which the actual performance is compared to find out deviation and taking corrective action.

Question 9.
Briefly explain the various limitations of planning the business managers need to overcome.
Answer:
Limitations of Planning
1) Planning makes the activities rigid.
2) Long term plans are insignificant in the rapidly changing business environment.
3) It reduces creativity.
4) It involves cost.
5) It involves a lot of time.
6) Planning does not guarantee success.

Plus Two Business Studies Planning 5 Marks Important Questions

Question 1.
While asking questions in the classroom the teacher asks Kala about the important functions of manage¬ment. She replies: Organising, staffing, directing and controlling.(MARCH-2009)
The teacher replies that one of the important functions is missing. The teacher gives one clue that it is the preliminary function of management.
a) Identify the function.
b) What are the different steps involved in that function.
Answer:
a) Planning
b) Planning Process (Steps in Planning)
1) Setting Objectives: The first step in planning is setting objectives. Objectives may be set for the entire organisation and for each department. The objective must be specific and clear.
2) Developing premises : Planning is based on certain assumptions about the future. These assumptions are called planning premises. Forecasting is important in developing planning premises.
3) Identifying alternative courses of action: The next step in planning is to identify the alternative courses of action to achieve the objectives.
4) Evaluating alternative Courses : The pros and cons of various alternatives must be evaluated in terms of their expected cost and benefits.
5) Selecting an alternative : After evaluating the alternatives the manager will select that alternative which gives maximum benefit at minimum cost.
6) Implement the plan : Implementation of plan means putting plans, into action so as to achieve the objectives of the business.
7) Follow up action : Plans are to be evaluated regularly to check whether they are being implemented and activities are performed according to schedule.

Question 2.
Ganga, a commerce student, argue in a class debate that planning ends with the selection of best alternative. But Parvathy of same class opposed the argument stating the planning continues even after the selection of best alternative.(FEBRUARY-2010)
a) To whom do you agree?
b) Explain the steps to be followed after the selection of best alternative
Answer:
a) Parvathy.
b) 1) Setting Objectives
2) Developing premises
3) Identifying alternative courses of action
4) Evaluating alternative Courses
5) Selecting an alternative
6) Implement the plan
7) Follow up action

Kerala State Board New Syllabus Plus Two Business Studies Chapter Wise Previous Questions and Answers Chapter 3 Business Environment.

Kerala Plus Two Business Studies Chapter Wise Previous Questions Chapter 3 Business Environment

Plus Two Business Studies Business Environment 1 Mark Important Questions

Question 1.
Which of the following is an example of Social environment? (FEBRUARY – 2009)
a) Economic system
b) Stability of Government
c) Consumer protection Act
d) Composition of family
Answer:
d) Composition of family

Question 2.
Find out the environment which describes the char-acteristics of the society.(MARCH-2009)
a) Political environment
b) Legal environment
c) Social environment
d) Technological environment
Answer:
c) Social environment

Question 3.
On November 1,2008 Reserve Bank of India reduced the cash reserve ratio to 5.5% to improve the avail-ability of credit.
identify the environment to which it relates to. (MAY-2009)
Answer:
Economic Environment

Question 4.
Find the odd one. (FEBRUARY-2010)
a) Unstable Government
b) Import-Export policy
c) Taxation Policy
d) Licensing Policy
Answer:
a) Unstable Government

Question 5.
Mr. Ramachandran, a Keralite, is doing computer software business in Germany. He wants to establish a computer software industrial project in Technopark, Thiruvananthapuram because of the business environment prevailing in Kerala.
Identify the particular business environment attracted Mr.Ramachandran. ?(MAY-2010)
Answer:
Political Environment

Question 6.
The Management of Kerala Bank Ltd. has decided to introduce core banking sysem in its branches in Kerala for providing modern banking facilities to its customers. Identify the business environment the bank has been made use of. (MAY-2011)
Answer:
Technological environment

Question 7.
“Introduction of internet banking in banking sector.” Identify the environment referred here. (MARCH-2012)
Answer:
Technological environment

Question 8.
The environment consists of components such as beliefs, traditions, etc. is known as environment. (MARCH-2013)
a) Legal
b) Economic
c) Political
d) Social
Answer:
d) Social

Question 9.
The environment which consists of those elements related to government affairs is called. (MAY-2013)
a) Economic environment
b) Social environment
c) Political environment
d) Legal environment
Answer:
c) Political environment

Question 10.
Royal Insurance Company Ltd. decided to computerise all its branches in Kerala to provide better services to the customers.
Identify the external environment the company has made use of. (MARCH-2015)
Answer:
Technological environment

Question 11.
Abolition of unnecessary licensing and quotas are examples of ___________ (MARCH-2016)
Answer:
Liberalisation

Question 12.
Life expectancy is one of the key elements that influences: (MAY-2016)
a) legal environment
b) Economic environment
c) Social environment
d) Political environment
Answer:
c) Social environment

Question 13.
The integration of the various economies of the world leading towards the emergence of a cohesive global economy is known as _________?(MARCH-2017)
Answer:
Globalisation

Question 14.
Stability and peace prevailing in the country are examples of (MAY-2017)
a) Legal environment
b) Economic environment
c) Social environment
d) Political environment
Answer:
d) Political Environment

Plus Two Business Studies Business Environment 2 Marks Important Questions

Question 1.
“Industrial policies usually give more importance to rural and backward areas.”Give four reasons. (MAY-2013)
Answer:
i) It helps in employment generation and utilization of local resources.
ii) It helps to promote economic and industrial development in the rural area.
iii) It helps to develop traditional sector industries to achieve equitable social development.

Plus Two Business Studies Business Environment 3 Marks Important Questions

Question 1.
Classify the following environmental factors into Economic, Social and Legal factors. (MAY-2009)
1) Tax Rates
2) LabourLaws
3) Level of Education
4) Human Rights
5) Foreign Trade
6) Demographiccomposition
7) Liberalisation
8) Customs and Beliefs
(9) Trademarks Act
Answer:

Economic factors	Social factors	Legal factors
Tax rates	Level of education	Labour laws
Foreign trade	Human rights	Trademarks act
Liberalisation	Demographic compostion
	Customs and belief

Question 2.
As a commerce student describe your point of view regarding the fact that aim of globalization is to look up on the world as a global village.”(FEBRUARY-2010)
Answer:
Globalization : Globalisation means the integration of the various economies of the world leading towards the emergence of a cohesive global economy.
Features of Globalisation:
a) Free flow of goods and services across nations
b) Free flow of capital across nations
c) Free flow of information and technology
d) Free movement of people across borders

Question 3.
“Scaning helps to get detailed information”. Give your comments in relation to business environment. (MARCH-2010)
Answer:
1) Identification of opportunities : Environment provides numerous opportunities for business suc-cess. Early identification of opportunities helps an enterprise to be the first to exploit them.
2) Identification of threats : Environmental awareness help managers to identify various threats on time and serves as an early warning signal.
3) Tapping useful resources : Business environment helps to know the availability of resources and making them available on time .

Question 4.
Match the following. (MARCH-2012)

A	B
a) Legal environment b) Economic environment c) Social environment	1)      Innovation 2)      Labour laws 3)      Disinvestment policy 4)      Level of literacy

Answer:
a) Legal environment – Labour laws
b) Economic environment – Disinvestment policy
c) Social environment – Level of literacy

Question 5.
‘Govt, has decided to increase foreign direct investment in insurance sector.’ Which area of business environment is mentioned in the above decision. Explain. (MARCH-2013)
Answer:
a) Political environment
b) Political Environment: Political environment includes constitution, political parties and their ideology, types of govt., political stability, attitude towards business, etc.

Question 6.
“Smart phones were widely used in rail ticket booking, internet browsing, e-commerce, etc.” Explain the element of business environment referred here.(MARCH-2016)
Answer:
a) Technological environment
b) Technological Environment : Technological environment consists of new products, new technologies, new approaches to product, new methods and equipments, etc.

Question 7.
What is your understanding about the terms (i) Glo-balization, (ii) Liberalization and (iii) Privatisation? (MAY-2016)
Answer:
a) Globalization : Globalisation means the inte-gration of the various economies of the world leading towards the emergence of a cohesive global economy.
b) Liberalisation : Liberalization of economy means, to free it from direct control imposed by the government.
c) Privatisation: Privatisation means transfer of the public sector enterprises to the private sector.

Question 8.
“Inspite of global economic crisis India is expected to achieve a growth rate of 6.8% in the F.Y. 2015-16.” In theHight of the above statement briefly explain the impact of Government policy changes in business and Industry.(MARCH-2017)
Answer:
1) Competition for Indian firms has increased.
2) The customer’s wider choice in purchasing better quality of goods and services.
3) Rapid technological advancement has changed/ improved the production process.

Question 9.
State the various grounds. Why understanding the importance of business environment is so vital for business managers? (MAY-2017)
Answer:
2 Importance of Business Environment
1) Identification of opportunities : Environment provides numerous opportunities for business success. Early identification of opportunities helps an enterprise to be the first to exploit them.
2) Identification of threats : Environmental awareness help managers to identify various threats on time and serves as an early warning signal.
3) Tapping useful resources : Business environment helps to know the availability of resources and making them available on time .
4) Coping with rapid changes : Environmental . scanning enables the firms to adapt themselves
to the changes in the market.
5) Assistance in planning and policy formulation: Environmental understanding and analysis is the basis for planning and policy making.
6) Improving performance: Environment scanning helps an organisation in improving its performance

Plus Two Business Studies Business Environment 4 Marks Important Questions

Question 1.
Write a short note on any four factors affecting environment of a business. (MARCH-2010)
Answer:
Dimensions of Business Environment

1) Economic Environment: Interest rates, inflation rates, changes in disposable income of people, stock market indices and the value of rupee are some of the economic factors that can affect the business enterprise.
2) Social Environment: The social environment of business includes the social forces like customs and traditions, values, social trends, literacy rate, educational levels, lifestyle, etc.
3) Technological Environment : Technological environment consists of new products, new technologies, new approaches to product, new methods and equipments, etc.
4) Political Environment: Political environment includes constitution, political parties and their ideology, types of govt., political stability, attitude towards business, etc.

Question 2.
Write down the contents you have to include in the seminar report on the topic business environment and its classifications. (MARCH-2014)
Answer:
Business Environment: The term ‘business environment’ means the sum total of all individuals, in-stitutions and other forces that are outside the control of a business enterprise but that may affect its performance.

Question 3.
The Industrial Policy 2003 formulated by the Govt, of India was to highlight some objectives. Name any four such objectives. (MARCH-2015)
Answer:
1) Encourage foreign direct investment
2) Abolition of industrial registration schemes
3) Delicencing of industries.
4) Strengthening the role of private sector
5) Increase in employment opportunities.

Plus Two Business Studies Business Environment 5 Marks Important Questions

Question 1.
Draw a chart showing the components of business environment.(FEBRUARY-2009)
Answer:
Dimensions of Business Environment

1) Economic Environment: Interest rates, inflation rates, changes in disposable income of people, stock market indices and the value of rupee are some of the economic factors that can affect the business enterprise.
2) Social Environment: The social environment of business includes the social forces like customs and traditions, values, social trends, literacy rate, educational levels, lifestyle, etc.
3) Technological Environment : Technological environment consists of new products, new technologies, new approaches to product, new methods and equipments, etc.
4) Political Environment: Political environment includes constitution, political parties and their ideology, types of govt., political stability, attitude towards business, etc,
5) Legal Environment : Legal environment includes various legislations passed by the central, state or local Government.

Question 2.
Following is the headline of an article published in a business format. “Awareness of environment is a must for business success.” Do you agree with this statement? Justify your answer.(MAY-2012)
Answer:
(a) Yes
(b) 2 Importance of Business Environment
1) Identification of opportunities : Environment provides numerous opportunities for business success. Early identification of opportunities helps an enterprise to be the first to exploit them.
2) Identification of threats : Environmental awareness help managers to identify various threats on time and serves as an early warning signal.
3) Tapping useful resources : Business environment helps to know the availability of resources and making them available on time .
4) Coping with rapid changes : Environmental . scanning enables the firms to adapt themselves
to the changes in the market.
5) Assistance in planning and policy formulation: Environmental understanding and analysis is the basis for planning and policy making.
6) Improving performance: Environment scanning helps an organisation in improving its performance.

Kerala State Board New Syllabus Plus Two Business Studies Chapter Wise Previous Questions and Answers Chapter 2 Principles of Management.

Kerala Plus Two Business Studies Chapter Wise Previous Questions Chapter 2 Principles of Management

Plus Two Business Studies Principles of Management 1 Mark Important Questions

Question 1.
Identify the management principle which states that “Union is strength.” (FEBRUARY-2009)
Answer:
Espirit de corps

Question 2.
Mr. Syam, the Production Manager of a firm, instructs Mr. Kiran to produce 50 units of a product per day. Mr. Arun, the Assistant Production Manager, instructs Mr. Kiran to produce 75 units. Which management principle is violated here? (MARCH-2009)
Answer:
Unity of Command

Question 3.
Identify the Management principle which states that managers should never try to have a divide and rule policy. (FEBRUARY-2010)
Answer:
Espirit de corps

Question 4.
Observe the following management principles and pick the odd one out. (MAY-2010)
(a) Unit of command
(b) Unit of direction
(c) Maximum output
(d) Equity
Answer:
(c) Maximum output

Question 5.
Management principles never remain static in its application mode. They can be applied with variation under different conditions in different ways. Identify the nature of management principle referred above. (MAY-2011)
Answer:
Universal Application

Question 6.
Complete the series
General and Industrial Management: Henry Fayol (MAY-2012)
The Philosopy of Management: ______
Answer:
F.W. Taylor

Question 7.
_________ are the prescribed guidelines for conducting an action.(MARCH-2013)
(a) Rules
(b) Methods
(c) Budgets
(d) Programmes
Answer:
(a) Rules

Question 8.
As a part of implementing scientific management techniques in his institution, Mr.Aravind decided to conduct work study. For that he conduct time study, motion study and fatigue study. But he forget to conduct one related study. Identify it.(MARCH-2014)
Answer:
Method study

Question 9.
In the opinion of Henry Fayol, the management expert, each employee should be received orders from one superior only. (MARCH-2015)
Mention the management principle referred here
Answer:
Unity of command

Question 10.
One of the following is not a feature of planning. Spot it. (MARCH-2015)
(a) Pervasiveness
(b) Mental revolution
(c) Continuous process
(d) Flexibility
Answer:
(b) Mental revolution

Question 11.
Henry Fayol a famous management theorist hails from _________. (MARCH-2016)
Answer:
(a) Japan
(b) Spain
(c) Russia
(d) France

Question 12.
Which one of the following principles of Fayol justi¬fies the statement “a place for everything and everything in its place”.(MAY-2016)
(a) Equity
(b) Stability of personnel
(c) Espirit De Corps
(d) Order
Answer:
(d) Order

Question 13.
Which among the following is not a contribution by F.W. Taylor?(MAY-2017)
(a) Differential Piece Rate
(b) Time Study
(c) Scalar Chain
(d) Functional Foremanship
Answer:
(c) Scalar Chain

Plus Two Business Studies Principles of Management 2 Marks Important Questions

Question 1.
Analyse the following diagram.(MARCH-2009)

According to Fayol’s Principles of Management, which term is used to mention the direct communi¬cation between D and P in the above diagram? Explain the concept.
Answer:
Gang Plank : According to the concept of gang plank persons of the same rank can communicate with each other especially in emergency situations. It helpstosave a lot of time in communication and possibility of distortion of messages can be reduced.

Question 2.
Find out the odd one. (MAY-2009)
(a) Stability of tenure of personnel.
(b) Scientific selection and training of workers.
(c) Maximum output.
(d) Replacement of old rule of thumb method.
Answer:
Stability of tenure of personnel – It is the management principle developed by Henry Fayol. All others are Taylors Scientific management principles.

Question 3.
“Proper understanding of management principles makes the managers more realistic in their profession.” Explain the concept.(MARCH-2010)
Answer:
(1) Increase efficiency : The understanding of the management principles provides guidelines to the managers for handling effectively the complex problems.
(2) Meeting the changing environmental requirements: Management principles are flexible and can be modified to meet changing requirements of environment.

Question 4.
Superiors should be impartial while dealing with their subordinates? (MAY-2012)
(a) Which management principle is meant here?
(b) Who advocated this principle?
Answer:
(a) Equity
(b) Henry Fayol

Question 5.
Mr.Sam, working in production department always receive instructions from production manager only. (MARCH-2014)
(a) Which management principle is applicable here?
(b) Who advocated these principles?
Answer:
(a) Unity of command
(b) Henry Fayol

Plus Two Business Studies Principles of Management 3 Marks Important Questions

Question 1.
Group the following persons coming under planning -in-charge and production -in-charge based on F.W Taylor’s functional foremanship.(MARCH-2009)
Gang Boss, Instruction Card Clerk, Inspector, Disci-plinarian, Speed Boss, Route Clerk.
Answer:

Planning in charge	Production in charge
1. Instruction card clerk	1. Gang boss
2. Disciplinarian	2. Inspector
3. Route clerk	3. Speed boss

Question 2.
Draw a figure showing functional foremanship as advocated by F.W.Taylor to ensure specialisation in the organisation.(MAY-2012)
Answer:

Question 3.
As the father of modern management, Henry Fayol has suggested some management principles. List out any six of them.(MARCH-2014)
Answer:
Fayol’s Principles of Management: Henry Fayol (1841-1925) is known as the ‘Father of General Management’. The 14 principles of management given by him are:
1) Division of Work : This principle states that a complex work should be divided into small tasks, and each task should be assigned a particular employee. Division of work leads to specialization.
2) Authority and Responsibility: Authority is the right to give orders to the subordinates and responsibility is the obligation to perform the work in the mannerdirected by authority. There should be a balance between authority and responsibility.

3) Discipline: it is the obedience to organizational rules and employment agreement which are necessary for working of the organization.
4) Unity of Command : The principle of unity of command statej that each employee should receive orders ffom one superior only. It helps to avoid confusion and conflict in the employees.
5) Unity of Direction : Each group of activities having the same objective must have one head and one plan. This ensures unity of action and co-ordination.
6) Subordination of Individual Interest to General Interest: The Interest of an organization should take priority over the interests of any one individual employee.
7) Remuneration of Employees: Remuneration should be just, equitable and fair to both employees and the organization.
8) Centralization and Decentralization: Centralisation means concentration of authority at the top management. Decentralisation means dispersal of authority to the lower levels in the organisation. There should be a balance between Centralisation and decentralization.
9) Scalar Chain: The formal lines of authority from highest to lowest ranks are known as scalar chain. According to this principle, communication should passthrough the established chain of command. It ensures unity of command and effective communication.
Gang Plank : According to the concept of gang plank persons of the same rank can cprnmunicate with each other especially in emergency situations. It helps to save a lot of time in communication and possibility of distortion of messages can be reduced.
10. Order: According to Fayol, “People and materials must be in suitable places at appropriate time for maximum efficiency.” ‘
11. Equity: This principle requires the managers to be kind and just to workers. Superiors should be impartial while dealing with their subordinates.
12.Stability of Personnel: According to Fayol, workers should not be moved from one job to another frequently. It helps to minimise labour tumoverin the organization.
13.Initiative: Workers should be encouraged to develop and carry out their plans for improvements.
14. Espirit De Corps (Union is strength): According to Fayol, Management should promote a team spirit of unity and harmony among employees.

Plus Two Business Studies Principles of Management 4 Marks Important Questions

Question 1.
Henry Fayol suggested that there should be one head and one plan fora group of activities having the same objective. (MAY-2009)
(a) Identify the management principle referred to here.
(b) Compare the same with the principle of unity of command.
Answer:
(a) Unity of direction
(b) Unity of Command : The principle of unity of command states that each employee should re-ceive orders from one superior only. It helps to avoid confusion and conflict in the employees.
Unity of Direction : Each group of activities having the same objective must have one head and one plan. This ensures unity of action and co-ordination.

Question 2.
Mr.Ramesh Menon is the proprietor of Modern Garments Centre, a readymade garments manufacturing unit. There are 40 workers in the unit and grouped them into 4 groups according to their skill and ability. Each group was given separate tasks like designing, measuring, cutting and stitching. Now, this is the leading garment manufacturing unit in the city. (MAY-2010)
(a) Identify the general management principle that caused the success of the unit. (1 mark)
(b) State any two merits of this principle. (3 marks)
Answer:
(a) Division of labour
(b) a) Division of work
(b) Benefits of Division of Work
(1) It brings specialisation.
(2) It helps to minimise wastage.

Question 3.
Fayol’s ‘Unity of Command’ and Tailor’s ‘Functional foremanship’ are contradictory.” – Do you agree ? Give reason. (MARCH-2011)
Answer:
Yes. in case of unity of command, every employee receives instructions from one boss only and he is responsible and accountable to him alone. In case of functional foremanship, every worker receives instructions from eight bosses, four from planning department and four from production department. In this way, unity of command stresses on centralisation and functional foremanship on decentralization.

Question 4.
‘Henry Fayol suggested short circuiting the chain of command where emergency decisionsare to be taken.” (MARCH-2011)
(a) Which management principle is reflected here?
(b) What technique is suggested by Fayol to short circuit the path of communication?
Answer:
(a) Scalar Chain
(b) GangPlank
(b) Gang Plank : According to the concept of gang plank persons of the same rank can communicate with each other especially in emergency situations. It helps to save a lot of time in communication and possibility of distortion of messages can be reduced.

Question 5.
Mr.Thomas is the proprietor of National Engineering Industries and employed 40 workers under him. He grouped the employees into 4 according to their skill and ability. Each group was given separate tasks like designing, turning, welding and painting. Now this is the leading engineering industrial unit in the city. (MAY-2011)
(a) Identify the general management principle . contributes to the success of firm.
(b) State any three merits of this principle.
Answer:
(a) Division of labour
(b) a) Division of work
b) Benefits of Division of Work
(1) It helps to minimize wastage.
(2) The quality and quantity of production will improve. .
(3) It helps increase the efficiency of employees.

Question 6.
F.W. Taylor, the father of scientific management developed various techniques to improve performance of business firms. Explain any four of such techniques. (MARCH-2015)
Answer:
Techniques of Scientific Management
foremanship is a technique in which planning and execution are separated. He classified 8 specialist foremen into two departments viz. Planning and Production department. Both departments have four foremen each. Functional foremanship is based on the principle of division of work.

a) Route clerk : To lay down the sequence of operations through which the raw materials have to pass in the production process.
b) Time & cost clerk: To lay down the standard time for completion of the work.
c) Instruction card clerk: He is expected to deal the instructions to be followed by workers in handling the job.
d) Disciplinarian: He maintains proper discipline in the factory.
e) Gang boss: He arranges material, machine, tool, etc. for operation.
f) Speed boss: He supervises matters relating to the speed of work.
g) Repair boss: He ensures repairs and maintenance of the tools and machines.
h) Inspector: He checksthe quality of work done.
2) Standardisation and simplification of work: Standardisation refers to the process of setting standards for every business activity. It includes use of standard tools and equipments, methods, working conditions, etc. for the maximisation of output. Simplification aims at eliminating unnecessary diversity of products. -It results in savings of cost of labour, machines and tools.
3) Method study: The objective of method study is to find out one best way of doing the job. The main objective is to minimize the cost of production and maximize the.quality of the work.
4) Motion study: Motion study involves close observation of the movements of the workers and machines to perform a particular job. It helps to eliminate unnecessary movements of men, materials and machine.
5) Time study: It determines the standard time taken to perform a well-defined job. The objective of time study is to determine the number of workers to be employed, frame suitable incentive schemes and determine labour costs.
6) Fatigue study: Fatigue study seeks to determine the amount and frequency of rest intervals in completing a task.
7) Differential piece wage system: Under this system of wage payment, two kinds of rates are laid down.
a) Higher rates are offered to those workers who produce more than standard output.
b) Lower rates for those who produce below standard output.
8) Mental revolution: It involves a change in the mental attitude of workers and management towards each other. Both the parties should realise each other’s importance and work towards the profit of the firm.

Plus Two Business Studies Principles of Management 5 Marks Important Questions

Question 1.
Mr. Godwin, the owner of a manufacturing unit, likes to implement scientific management techniques in his business. What are the important principles he has to follow?(MARCH-2012)
Answer:
Principles of Scientific Management
1) Science and not the rule of thumb : The first principle of scientific management requires scientific study and analysis of each element of job in orderto replace old rule of thumb approach.
2) Harmony, not discord : As per this principle, there should be complete harmony between the management and workers. Taylor called for complete mental revolution on the part of both management and workers. Both the parties should realize each other’s importance and work towards the profits of the firm.
3) Co-operation not individualism : There should be complete co-operation between the labour and the management instead of individualism. According to Taylor, there should be an almost equal division of work and responsibility between workers and management.
4) Development of each and every person to his or her greatest efficiency and prosperity : The growth and development of an organisation depends on the efficiency and prosperity of employees. The efficiency of employees can be developed by giving propertraining and development. This ensure the growth of an organisation.

Question 2.
Explain any 3 techniques of scientific management.(MARCH-2013)
Answer:
Techniques of Scientific Management
1) Functional foremanship: Functional foremanship is a technique in which planning and execution are separated. He classified 8 specialist foremen into two departments viz. Planning and Production department. Both departments have four foremen each. Functional foremanship is based on the principle of division of work.

a) Route clerk : To lay down the sequence of operations through which the raw materials have to pass in the production process.
b) Time & cost clerk: To lay down the standard time for completion of the work.
c) Instruction card clerk: He is expected to deal the instructions to be followed by workers in handling the job.
d) Disciplinarian: He maintains proper discipline in the factory.
e) Gang boss: He arranges material, machine, tool, etc. for operation.
f) Speed boss: He supervises matters relating to the speed of work.
g) Repair boss: He ensures repairs and maintenance of the tools and machines.
h) Inspector: He checksthe quality of work done.
2) Standardisation and simplification of work: Standardisation refers to the process of setting standards for every business activity. It includes use of standard tools and equipments, methods, working conditions, etc. for the maximisation of output. Simplification aims at eliminating unnecessary diversity of products. -It results in savings of cost of labour, machines and tools.
3) Method study: The objective of method study is to find out one best way of doing the job. The main objective is to minimize the cost of production and maximize the.quality of the work.
4) Motion study: Motion study involves close observation of the movements of the workers and machines to perform a particular job. It helps to eliminate unnecessary movements of men, materials and machine.
5) Time study: It determines the standard time taken to perform a well-defined job. The objective of time study is to determine the number of workers to be employed, frame suitable incentive schemes and determine labour costs.
6) Fatigue study: Fatigue study seeks to determine the amount and frequency of rest intervals in completing a task.
7) Differential piece wage system: Under this system of wage payment, two kinds of rates are laid down.
a) Higher rates are offered to those workers who produce more than standard output.
b) Lower rates for those who produce below standard output.
8) Mental revolution: It involves a change in the mental attitude of workers and management towards each other. Both the parties should realise each other’s importance and work towards the profit of the firm.

Question 3.
Henry Foyal made three distinct contributions to the theory of management, which have given him the title “The father of management Thought”. One of them is the development of management principles. Mention any 10 principles which had grown out of the thoughts of Fayol.(MAY-2013)
Answer:
Fayol’s Principles of Management: Henry Fayol (1841-1925) is known as the ‘Father of General Management’. The 14 principles of management given by him are:
1) Division of Work : This principle states that a complex work should be divided into small tasks, and each task should be assigned a particular employee. Division of work leads to specialization.
2) Authority and Responsibility: Authority is the right to give orders to the subordinates and responsibility is the obligation to perform the work in the mannerdirected by authority. There should be a balance between authority and responsibility.

3) Discipline: it is the obedience to organizational rules and employment agreement which are necessary for working of the organization.
4) Unity of Command : The principle of unity of command statej that each employee should receive orders ffom one superior only. It helps to avoid confusion and conflict in the employees.
5) Unity of Direction : Each group of activities having the same objective must have one head and one plan. This ensures unity of action and co-ordination.
6) Subordination of Individual Interest to General Interest: The Interest of an organization should take priority over the interests of any one individual employee.
7) Remuneration of Employees: Remuneration should be just, equitable and fair to both employees and the organization.
8) Centralization and Decentralization: Centralisation means concentration of authority at the top management. Decentralisation means dispersal of authority to the lower levels in the organisation. There should be a balance between Centralisation and decentralization.
9) Scalar Chain: The formal lines of authority from highest to lowest ranks are known as scalar chain. According to this principle, communication should passthrough the established chain of command. It ensures unity of command and effective communication.
Gang Plank : According to the concept of gang plank persons of the same rank can cprnmunicate with each other especially in emergency situations. It helps to save a lot of time in communication and possibility of distortion of messages can be reduced.
10. Order: According to Fayol, “People and materials must be in suitable places at appropriate time for maximum efficiency.” ‘
11. Equity: This principle requires the managers to be kind and just to workers. Superiors should be impartial while dealing with their subordinates.
12.Stability of Personnel: According to Fayol, workers should not be moved from one job to another frequently. It helps to minimise labour tumoverin the organization.
13.Initiative: Workers should be encouraged to develop and carry out their plans for improvements.
14. Espirit De Corps (Union is strength): According to Fayol, Management should promote a team spirit of unity and harmony among employees.

Question 4.
“Wages of employees should be fixed scientifically based upon their performance.” Identify and explain the principle mentioned here by F.W. Taylor.(MARCH-2016)
Answer:
a) Differential piece Rate system
b) Differential piece wage system: Under this system of wage payment, two kinds of rates are laid down.
a) Higher rates are offered to those workers who produce more than standard output.
b) Lower rates for those who produce below standard output.

Question 5.
Discuss about any five techniques of scientific man-agement as specified F.W. Taylor.(MAY-2016)
Answer:
Techniques of Scientific Management
1) Functional foremanship: Functional foremanship is a technique in which planning and execution are separated. He classified 8 specialist foremen into two departments viz. Planning and Production department. Both departments have four foremen each. Functional foremanship is based on the principle of division of work.

a) Route clerk : To lay down the sequence of operations through which the raw materials have to pass in the production process.
b) Time & cost clerk: To lay down the standard time for completion of the work.
c) Instruction card clerk: He is expected to deal the instructions to be followed by workers in handling the job.
d) Disciplinarian: He maintains proper discipline in the factory.
e) Gang boss: He arranges material, machine, tool, etc. for operation.
f) Speed boss: He supervises matters relating to the speed of work.
g) Repair boss: He ensures repairs and maintenance of the tools and machines.
h) Inspector: He checksthe quality of work done.
2) Standardisation and simplification of work: Standardisation refers to the process of setting standards for every business activity. It includes use of standard tools and equipments, methods, working conditions, etc. for the maximisation of output. Simplification aims at eliminating unnecessary diversity of products. -It results in savings of cost of labour, machines and tools.
3) Method study: The objective of method study is to find out one best way of doing the job. The main objective is to minimize the cost of production and maximize the.quality of the work.
4) Motion study: Motion study involves close observation of the movements of the workers and machines to perform a particular job. It helps to eliminate unnecessary movements of men, materials and machine.
5) Time study: It determines the standard time taken to perform a well-defined job. The objective of time study is to determine the number of workers to be employed, frame suitable incentive schemes and determine labour costs.
6) Fatigue study: Fatigue study seeks to determine the amount and frequency of rest intervals in completing a task.
7) Differential piece wage system: Under this system of wage payment, two kinds of rates are laid down.
a) Higher rates are offered to those workers who produce more than standard output.
b) Lower rates for those who produce below standard output.
8) Mental revolution: It involves a change in the mental attitude of workers and management towards each other. Both the parties should realise each other’s importance and work towards the profit of the firm.

Question 6.
Explain briefly the techniques of Scientific Manage-ment as propounded by F.W. Taylor.(MARCH-2017)
Answer:
Techniques of Scientific Management
1) Functional foremanship: Functional foremanship is a technique in which planning and execution are separated. He classified 8 specialist foremen into two departments viz. Planning and Production department. Both departments have four foremen each. Functional foremanship is based on the principle of division of work.

a) Route clerk : To lay down the sequence of operations through which the raw materials have to pass in the production process.
b) Time & cost clerk: To lay down the standard time for completion of the work.
c) Instruction card clerk: He is expected to deal the instructions to be followed by workers in handling the job.
d) Disciplinarian: He maintains proper discipline in the factory.
e) Gang boss: He arranges material, machine, tool, etc. for operation.
f) Speed boss: He supervises matters relating to the speed of work.
g) Repair boss: He ensures repairs and maintenance of the tools and machines.
h) Inspector: He checksthe quality of work done.
2) Standardisation and simplification of work: Standardisation refers to the process of setting standards for every business activity. It includes use of standard tools and equipments, methods, working conditions, etc. for the maximisation of output. Simplification aims at eliminating unnecessary diversity of products. -It results in savings of cost of labour, machines and tools.
3) Method study: The objective of method study is to find out one best way of doing the job. The main objective is to minimize the cost of production and maximize the.quality of the work.
4) Motion study: Motion study involves close observation of the movements of the workers and machines to perform a particular job. It helps to eliminate unnecessary movements of men, materials and machine.
5) Time study: It determines the standard time taken to perform a well-defined job. The objective of time study is to determine the number of workers to be employed, frame suitable incentive schemes and determine labour costs.
6) Fatigue study: Fatigue study seeks to determine the amount and frequency of rest intervals in completing a task.
7) Differential piece wage system: Under this system of wage payment, two kinds of rates are laid down.
a) Higher rates are offered to those workers who produce more than standard output.
b) Lower rates for those who produce below standard output.
8) Mental revolution: It involves a change in the mental attitude of workers and management towards each other. Both the parties should realise each other’s importance and work towards the profit of the firm.

Question 7.
briefly explain about any 10 principles of management as contributed by Henry Fayol.(MAY-2017)
Answer:
Fayol’s Principles of Management: Henry Fayol (1841-1925) is known as the ‘Father of General Management’. The 14 principles of management given by him are:
1) Division of Work : This principle states that a complex work should be divided into small tasks, and each task should be assigned a particular employee. Division of work leads to specialization.
2) Authority and Responsibility: Authority is the right to give orders to the subordinates and responsibility is the obligation to perform the work in the mannerdirected by authority. There should be a balance between authority and responsibility.
–
3) Discipline: it is the obedience to organizational rules and employment agreement which are necessary for working of the organization.
4) Unity of Command : The principle of unity of command statej that each employee should receive orders ffom one superior only. It helps to avoid confusion and conflict in the employees.
5) Unity of Direction : Each group of activities having the same objective must have one head and one plan. This ensures unity of action and co-ordination.
6) Subordination of Individual Interest to General Interest: The Interest of an organization should take priority over the interests of any one individual employee.
7) Remuneration of Employees: Remuneration should be just, equitable and fair to both employees and the organization.
8) Centralization and Decentralization: Centralisation means concentration of authority at the top management. Decentralisation means dispersal of authority to the lower levels in the organisation. There should be a balance between Centralisation and decentralization.
9) Scalar Chain: The formal lines of authority from highest to lowest ranks are known as scalar chain. According to this principle, communication should passthrough the established chain of command. It ensures unity of command and effective communication.
Gang Plank : According to the concept of gang plank persons of the same rank can cprnmunicate with each other especially in emergency situations. It helps to save a lot of time in communication and possibility of distortion of messages can be reduced.
10. Order: According to Fayol, “People and materials must be in suitable places at appropriate time for maximum efficiency.” ‘
11. Equity: This principle requires the managers to be kind and just to workers. Superiors should be impartial while dealing with their subordinates.
12.Stability of Personnel: According to Fayol, workers should not be moved from one job to another frequently. It helps to minimise labour tumoverin the organization.
13.Initiative: Workers should be encouraged to develop and carry out their plans for improvements.
14. Espirit De Corps (Union is strength): According to Fayol, Management should promote a team spirit of unity and harmony among employees.

Plus Two Business Studies Principles of Management 8 Marks Important Questions

Question 1.
Explain Fayol’s principles of management.(FEBRUARY-2009)
Answer:
Fayol’s Principles of Management: Henry Fayol (1841-1925) is known as the ‘Father of General Management’. The 14 principles of management given by him are:
1) Division of Work : This principle states that a complex work should be divided into small tasks, and each task should be assigned a particular employee. Division of work leads to specialization.
2) Authority and Responsibility: Authority is the right to give orders to the subordinates and responsibility is the obligation to perform the work in the mannerdirected by authority. There should be a balance between authority and responsibility.

3) Discipline: it is the obedience to organizational rules and employment agreement which are necessary for working of the organization.
4) Unity of Command : The principle of unity of command statej that each employee should receive orders ffom one superior only. It helps to avoid confusion and conflict in the employees.
5) Unity of Direction : Each group of activities having the same objective must have one head and one plan. This ensures unity of action and co-ordination.
6) Subordination of Individual Interest to General Interest: The Interest of an organization should take priority over the interests of any one individual employee.
7) Remuneration of Employees: Remuneration should be just, equitable and fair to both employees and the organization.
8) Centralization and Decentralization: Centralisation means concentration of authority at the top management. Decentralisation means dispersal of authority to the lower levels in the organisation. There should be a balance between Centralisation and decentralization.
9) Scalar Chain: The formal lines of authority from highest to lowest ranks are known as scalar chain. According to this principle, communication should passthrough the established chain of command. It ensures unity of command and effective communication.
Gang Plank : According to the concept of gang plank persons of the same rank can cprnmunicate with each other especially in emergency situations. It helps to save a lot of time in communication and possibility of distortion of messages can be reduced.
10. Order: According to Fayol, “People and materials must be in suitable places at appropriate time for maximum efficiency.” ‘
11. Equity: This principle requires the managers to be kind and just to workers. Superiors should be impartial while dealing with their subordinates.
12.Stability of Personnel: According to Fayol, workers should not be moved from one job to another frequently. It helps to minimise labour tumoverin the organization.
13.Initiative: Workers should be encouraged to develop and carry out their plans for improvements.
14. Espirit De Corps (Union is strength): According to Fayol, Management should promote a team spirit of unity and harmony among employees.

Question 2.
The contributions of Henry Fayol and F.W.Taylorand Complementary to each other.” Do you agree? State your comments giving reason.(FEBRUARY-2010)
Answer:

Kerala State Board New Syllabus Plus Two Business Studies Chapter Wise Previous Questions and Answers Chapter 1 Nature and Significance of Management.

Kerala Plus Two Business Studies Chapter Wise Previous Questions Chapter 1 Nature and Significance of Management

Plus Two Business Studies Nature and Significance of Management 1 Mark Important Questions

Question 1.
Suggest the most suitable terminology to describe the process of integrating all the activities of a concern in order to facilitate its working and success. (FEBRUARY – 2009)
Answer:
Co-ordination.

Question 2.
Which among the following is not an element of co-ordination? (MARCH-2009)
(a) Integration
(b) Balancing
(c) Proper timing
(d) Directing
Answer:
(d)Directing

Question 3.
Which of the following is correct to the concept of the levels of management? (MAY-2009)
(a) Board of Directors come under the category of middle level management.
(b) Middle level management plans day-to-day activities
(c) Lower level management is also known as su-pervisory management.
(d) Top level management is accountable to employees.
Answer:
(c) Lower level management is also known as su-pervisory management.

Question 4.
Mr.Goutham Krishna is the production manager of a joint stock company and he is always, maintaining a closer watch on day to day performance of his department. (MAY-2010)
Identify the level of management he belongs to
Answer:
Middle level management

Question 5.
Which of the following is ‘not’ a function of Middle level management? (MARCH-2011)
(a) Reporting to top management
(b) Participate in the operational decisions. Operational decisions
(c) Lays down the objectives of the enterprise
(d) Directing the managers at lower-levels.
Answer:
(c) Lays down the objectives of the enterprise

Question 6.
Mr.Sethumadhavan is working as a Foreman in a shoe manufacturing company. He supervises 8 employees under him and makes the day-to-day production plan. Identify the level of management he belongs to.(MAY-2011)
Answer:
Lower Level Management.

Question 7.
Draw a diagram to show management as a process.(MARCH-2012)
Answer:

Question 8.
Foreman is an example __________ of level management.(MARCH-2013)
(a) Top
(b) Middle
(c) Lower
(d) Executive
Answer:
(c) Lower

Question 9.
Mr.Unnikrishnan is working as a foreman in a garment factory and he supervises 8 employees under him and makes the day to day production plan and other activities. In which level of management he belong to? (MAY-2013)
Answer:
Lower Level Management.

Question 10.
Mr. Siva Kumar, the sales officer of a firm maintains direct contacts with all the emplyees in his department.
Identify the level of management he belongs to.(MARCH-2015)
Answer:
Lower level

Question 11.
The process by which a manager synchronises the activities of different departments is known as _______.(MARCH-2016)
(a) Planning
(b) integration
(c) Direction
(d) Co-ordination
Answer:
(d) Co-ordination

Question 12.
The process by which a manager synchronises the , activities of departments is known as ________.(MAY-2016)
(a) Controlling
(b) Co-ordination
(c) Directing
(d) Organizing
Answer:
(b) Co-ordination

Question 13.
Spot the odd one (MARCH-2017)
(a) Production Manager
(b) Marketing Manager
(c) General Manager
(d) Personnel Manager
Answer:
(c) General Manager

Question 14.
What a manager does in India is the same as what a manager practices in US? Which characteristic of management well justifies the above statement? (MAY-2017)
(a) Goal orientation
(b) Pervasiveness
(c) Multidimensional approach
(d) Continuous nature
Answer:
(b) Pervasiveness

Plus Two Business Studies Nature and Significance of Management 2 Marks Important Questions

Question 1.
Match the following : (MARCH-2011)
i) Purchase Manager -(a) Top Level Management
ii) Accounts Officer – (b) Middle Level Management
– (c) Supervisory Level Management
Answer:
(i) Purchase Manager – Middle Level Management
(ii) Accounts Officer- Supervisory Level Management

Question 2.
Identify the odd one from the following and justify the answer. (MAY-2011)
(a) Notices
(b) Memos
(c) Orders
(d) Complaints
Answer:
Complaints.
All others are examples of downward communication.

Question 3.
Effectiveness and efficiency of management are two sides of the same coin. What are your arguments about the above statement? (MAY-2016)
Answer:
Efficiency and Effectivenss of Management.
Efficiency means doing the tasks correctly and with minimum cost. Effectiveness is concerned with doing the right task, completing activities and achieving goals. Management must try to achieve the goals by maintaining a balance between efficiency and effectiveness.

Question 4.
Do you agree that management has some charac-teristics of sciences? Substantiate. (MAY-2016)
Answer:
Management can be treated as science because –
(a) Management has a systematised body of knowledge.
(b) Its principles are based on cause and effect rela-tionship.
(c) Management principles are developed through experiments and observations.
(d) Management principles are applicable in all types of organisations.

Question 5.
Management is responsible for efficient utilisation of men and material resources for fulfilling the economic objectives of the business. Explain about these economic objectives. (MAY-2017)
Answer:
(a) Survival : Management must strive to ensure the survival of the organisation.
(b) Profit : Management has to ensure that the organization makes reasonable profit.

Question 6.
Madan and Sidan got into an argument “whether management is a profession or not”? Help them to resolve the conflict. (MAY-2017)
Answer:
(a) Management is a profession
(b) Management as a Profession : Profession means an occupation for which specialised knowledge and skills are required. The main features of profession are as follows.
(1) Well defined body of knowledge.
(2) Formal education and training.
(3) Professional Associations.

Plus Two Business Studies Nature and Significance of Management 4 Marks Important Questions

Question 1.
In a classroom debate you argue that management is a profession. What are the points you will raise to substantiate your arguments? (MARCH-2009)
Answer:
Management as a Profession : Profession means an occupation forwhich specialised knowledge and skills are required. The main features of profession are as follows.
(1) Well defined body of knowledge
(2) Formal education and training
(3) Professional Associations Management is a profession because:

(a) Management is based on a systematic body of knowledge comprising well defined principles.
(b) A manager acquires management skills through formal education and training.
(c) All professions are affiliated to a professional association which regulates entry and frame code of conduct relating to the profession.

Question 2.
Read the following arguments of two students. (MAY-2009)
Anil: “Management is an ordinary job, which doesn’t require any special knowledge and skill”,
Sunil: Management is a profession, which requires specialised knowledge and skill.”
(a) Whose argument do you favour?
(b) Justify your answer.
Answer:
(a) Sunil’s arguments correct. Management is a profession.
(b) (1) Management is based on a systematic body of knowledge comprising well defined principles.
(2) A manager acquires management skills through formal education and training.
(3) All professions are affiliated to a professional association which regulates entry and frame code of conduct relating to the profession.

Question 3.
In order to be recognized as a science, a subject should have the following features: (MAY-2011)
a) It should have a systematized body of knowledge.
b) It should establish cause anb effect relationship.
c) Its principles should be verifiable.
d) It should ensure predictable results.
By analyzing each of the above features of science, state whether management is a science or not.
Answer:
Management as a Science : Science is a systematised body of knowledge that is based on general truths. The features of science are as follows.

(1) Science is a systematic body of knowledge.
(2) Scientific principles are developed through experiments.
(3) Universal validity and application.
Management can be treated as a science because:
(a) Management has a systematized body of knowledge.
(b) Management principles are developed after scientific enquiry, experimentation and observation.
(c) Management principles are applicable to all types of organizations. So management is also called a science.

Question 4.
All the functional departmental heads come under this category of management.(MARCH-2012)
i) Identify the level of management.
ii) What are the general functions performed by this level of management?
Answer:
(a) Middle Level management
(b) Middle Management : All the functional department heads and branch managers come under the category of middle level managers. E.g. Production manager, Sales manager, Finance manager, etc.,
Functions of Middle Level Management
(1) Carry out the plans formulated by the top managers.
(2) To act as a link between Top Level Management and Lower Level Management.
(3) Assign necessary duties and responsibilities to the subordinates.
(4) Motivate them to achieve desired objectives.
(5) Co-operate with other departments.
(6) Reporting to top level management.

Question 5.
List out and explain various managerial functions to be performed. If you are appointed as manager in an organisation. (MARCH-2014)
Answer:
Functions of Management
1. Planning: Planning is the function of determining in advance what is to be done and who is to do it.
2. Organising : It is the management function of assigning duties, grouping tasks, establishing authority responsibility relationship and allocating resources required to carry out a specific plan.
3. Staffing: Staffing means finding the right people with the right qualifications to accomplish the goals ofthe organisation. It involves activities such as recruitment, selection, placement and training of personnel.
4. Directing: Directing involves leading, supervising, communicating and motivating the employees to perform the tasks assigned to them.
5. Controlling: It means monitoring organizational performance towards the attainment of organisational goals.

Question 6.
State any four points that validate management as a science. (MARCH-2015)
Answer:
Management as a Science : Science is a systematised body of knowledge that is based on general truths. The features of science are as follows.
(1) Science is a systematic body of knowledge.
(2) Scientific principles are developed through experiments.
(3) Universal validity and application.
Management can be treated as a science because:
(a) Management has a systematized body of knowledge.
(b) Management principles are developed after scientific enquiry, experimentation and observation.
(c) Management principles are applicable to all types of organizations.
So management is also called a science.

Question 7.
“Business today is dynamic and complex in nature; management helps people to adapt these changes”. In the light of this statement explain other significance of management. (MARCH-2016)
Answer:
Need and Importance of Management
1. Achieving Group Goals: Efficient management co-ordinates all the activities forthe achievement of organisational goals.
2. Increases Efficiency : Management helps to reduce costs and increase productivity through better planning, organising, directing, staffing and controlling the activities of the organisation.
3. Creates Dynamic Organisation : A good management enables the business to adapt and adjust according to the changes in the business environment.
4. Achieving Personal Objectives : Through motivation and leadership, the management helps individuals to develop team spirit, co-operation and commitment to group success.
5. Development of Society : Management helps to provide good quality products and services, creates employment opportunities, adopts new technology, etc., for the good of the people and the society.

Plus Two Business Studies Nature and Significance of Management 5 Marks Important Questions

Question 1.
Mr.Manoj is an officerof Madras Fertilizers Limited. He is entrusted with the task of taking key decisions in the organisation.(FEBRUARY-2009)
(a) Identify the level of management Mr.Manoj belongs.
(b) List out the functions he should perform in the organisation.
Answer:
Top Management: It consists of chairman, the Chief Executive Officer, Board of Directors, Managing Director, etc.
Functions of Top Level Management
(1) Lays down the objectives of the business
(2) Prepares strategic plans and policies
(3) Appoint middle level managers
(4) Issues necessary instructions to departmental heads.
(5) To maintain relations with outside agencies like govt., public, trade unions, etc.
(6) Co-ordinate and control all the departments in the organisation

Question 2.
Name the level of management which has direct con¬tact with operative employees. Also mention different functions performed by Managers at this level. (MARCH-2010)
Answer:
(a) Lower Level Management
(b) Lower / Supervisory / Operational Management : This level includes foremen, supervisors, finance and accounts officers, sales officers, etc. This level of managers have direct contact with employees.
Functions of Lower Level Management
1. Plan day-to-day production activities.
2. Assign workers to different jobs
3. Solve the problems of workers
4. Provide job training to workers
5. Looking after safety of workers.
6. Send periodical reports to middle level management.
7. Act as a link between management and employees.

Question 3.
In a group discussion conducted for the selection of students of MBA course of the university of Kerala on a topic, ‘Management discipline – a science or a profession’, Mr. Raju argued that it is a science as it possess all the characteristics of the science. But, Venu argued that it is a profession as it possesses all the features of a profession. (MAY-2010)
As the moderator of the discussion, how will you wind up this? Justify your arguments.
Answer:
Management can be treated as a science because:

(a) Management has a systematized body of knowledge.
(b) Management principles are developed after scientific enquiry, experimentation and observation.
(c) Management principles are applicable to all types of organizations.

Management is a profession because:

(a) Management is based on a systematic body of knowledge comprising well defined principles.
(b) A manager acquires management skills through formal education and training.
(c) All professions are affiliated to a professional association which regulates entry and frame code of conduct relating to the profession.

Question 4.
Volks Wagen, a famous car manufacturing company decided to call back some of its models due to poor pollution standards. By doing so they upheld one of the objectives of management. Briefly explain the objectives of management in the light of above action. (MARCH-2017)
Answer:
(a) Social Objectives of Management
(b) Social objectives: Social objectives are defined as the fulfilment of responsibility of an organisation towards society.
They are :

(a) Providing quality goods to consumers at reasonable price.
(b) Using environmental friendly methods of production.
(c) Giving employment opportunities to the society.
(d) Providing basic amenities like hospitals, schools, etc., to the employees and general public.
(e) Payment of taxes to the government.

Kerala State Board New Syllabus Plus Two Accountancy Chapter Wise Previous Questions and Answers Chapter 5 Dissolution of Partnership.

Kerala Plus Two Accountancy Chapter Wise Previous Questions Chapter 5 Dissolution of Partnership

Plus Two Accountancy Dissolution of Partnership 1 Marks Important Questions

Question 1.
On the dissolution of a firm, which of the following liability shall be paid first of all? (March 2012)
a) Creditors liability
b) Partner’s loan
c) Partner’s capital
d) None of the above
Answer:
a) Creditors liability

Question 2.
Realisation account is a account. (May 2013 (May)
a) Current
b) Personal
c) Real
d) Nominal
Answer:
d) Nominal

Question 3.
When realisation expenses are paid by a partner on behalf of the firm, A/c. is debited. (March 2016)
Answer:
Realisation A/c

Question 4.
Mention the name of account where profit or loss on realization is transferred. (March 2017)
Answer:
Partner’s capital account/ Partners current account

Question 5.
What journal entry will be passed if realization expenses are paid by a partner on behalf of the firm? (March 2017)
Answer:
Realisation A/c Dr
To partner’s capital A/c

Plus Two Accountancy Dissolution of Partnership 2 Marks Important Questions

Question 6.
On dissolution of a partnership in what order must the proceeds of the realization of assets be applied. (May 2016)
Answer:
i) Payment of third party liabilities
ii) Paying the loans from partners
iii) Paying the capital of the partners
iv) Surplus if any, is to be distributed to partners.

Question 7.
Anoop and Jony are partner’s in a firm, sharing profits and losses in the ratio of 3:2. The firm was decided to dissolve on 31st (March 2016). Mention any four ways of dissolution of the firm. (March 2017)
Answer:
a) Dissolution by agreement
b) Compulsory dissolution
c) Dissolution by notice
d) Dissolution by court

Plus Two Accountancy Dissolution of Partnership 5 Marks Important Questions

Question 8.
Anita and Binu were partners sharing profits in the ratio of 3:2. On the date of dissolution their capitals were: (March 2009)

Anita – Rs. 76,500 and Binu Rs. 43,000. The creditors amounted to Rs. 2,75,000. The balance of cash was Rs. 7,600. The assets realised Rs. 2,54,300, the expenses of realisation were Rs. 15,400. Anita and Binu were solvent. Close the books of the firm, showing the realisation account, capital accounts and cash account.

Hint: Book value of assets on the date of dissolution is to be ascertained by preparing a Balance Sheet.
Answer:
Opening Balance sheet

Liabilities		Assets
Capital-Anita Binu Sundry creditors	76500 43000 275000	Cash Assets (Balancing figure)	7600 386900
	394500		394500

Realisation A/c

Capital A/c

Cash Amount

Question 9.
B, J & S are partners in a firm sharing profits and loses in the ratio of 3:2:3. They have decided to dissolve the firm. On the date of dissolution total creditors were Rs. 16,000 Bills discounted Rs. 2,650 during the year has become a real liability which has not paid, though this has not been recorded anywhere in the books of accounts. The capital account balances were: B Rs. 12,000, J Rs. 10,000, S Rs. 8,000. B advanced 14,000 besides his capital account. (May 2011)

Find out
a) Total Sundry Assets,
b) Profit or Loss on Realization,
c) Capital Balance of Partners.
Answer:
Calculation of total Sundry Asset Balance Sheet

b) Profit or Loss on Realisation
Realisation A/c

Partners Capital A/c

Question 10.
What entry would you pass for the following transaction on the dissolution of a firm having partners Vishal and Rakesh? (June 2012)
a) An unrecorded asset realised Rs. 6200.
b) Dissolution expenses amounted to Rs. 3200.
c) Creditors already transferred to Realisation account were paid Rs. 88,000.
d) Profit on Realisation Rs.48000 to be distributed between partners Vishal and Rakesh.
Answer:

Question 11.
A, B and C are the partners sharing profit and losses in their capital ratio. Balance sheet as on 31st (March 2012) were as follows: (March 2013)

Balance Sheet

The firm was dissolved on the above date. A took over investments and stock at Rs. 40,600. Joint Life policy was realised at surrender value. Furniture was sold at book value. Plant and Machinery were realised for Rs. 82,040. Creditors were paid in full settlement. Prepare Realisation Account, Bank Account and Partners Capital A/c.
Answer:
Realisation a/c

Capital A/c

Bank A/c

Question 12.
The Balance sheet of P, Q and R sharing profit and losses in the ratio 3:2:1 respectively. The balance sheet on 30th June 2010 was as follows: (March 2013)
Balance Sheet

Answer:
The firm was dissolved on that date. For the purpose of dissolution, the investments were valued at Rs. 18000 and Stock at Rs. 17500. ‘P’ took over investments and ‘Q’ to take over stock. ‘R’ took over furniture at book value. Debtors and buildings realised Rs. 57000 and Rs. 25000 respectively. Expenses of realisation amounted to Rs. 450. In addition one bill forRs. 500 under discount was dishonored and had to be taken up by the firm. Prepare Realisation A/c, Partners Capital a/c and Bank A/c.
Answer:
Realisation a/c

Capital A/c

Bank A/c

Question 13.
A and B were partners in a firm sharing profits and losses in the ratio of 3:2 respectively. They decided to dissolve the firm on 31st March, 2010. On that date, their capitals stood at Rs. 1,60,000 and Rs. 80.0 respectively. Amount owned by “B” to firm was Rs. 59,200 and there was a loan by “A” for Rs. 72,000. Creditors were Rs. 4,80,000, sundry, assets Rs. 6,89,600 and cash Rs. 43,200. Sundry assets realised Rs. 5,53,600. Realisation expenses amounted to Rs. 16,000. (March 2013)

Prepare realisation account, cash account and capital accounts of partners assuming that both the partners are solvent.
Answer:
Realisation A/c

Capital A/c

Cash A/c

Question 14.
Joy and Roy were in partnership, sharing profits and losses equally. Their Balance Sheet as on 31-03-2012 was as follows : (May 2013 (May)

Balance Sheet as on 31-03-2012

The firm was dissolved on the date of Balance Sheet. The assets realized as follows. Furniture Rs. 9,000; Debtors Rs. 8,500; Stock Rs. 7,000. Creditors were paid (in full settlement) Rs. 8,000. Realisation expenses amounted to Rs. 500. Prepare necessary Ledger Accounts to close the books of the firm.
Answer:
Realisation A/c

Partners Capital A/c

Bank A/c

Question 15.
Mibi and Maggie were in partnership, sharing profits and losses equally. Their Balance Sheet as on 31.03.2013 was as follows. (March 2014)
Answer:
Balance Sheet as on 31.03.2013

The firm was dissolved on the date of Balance Sheet. The assets realized as follows:
Furniture Rs. 8000 Debtors Rs. 6,500 Stock Rs. 5,000 Creditors were paid in full.
The Realisation expenses amounted to Rs. 500. Prepare necessary Ledger Accounts.
Answer:
Realisation a/c

Capital A/c

Bank a/c

Question 16.
What journal entries would you pass for the following transactions on the dissolution of the firm of partners X and Y? (May 2016)
i) Dissolution expenses 1800 were paid by ‘Y’
ii) An unrecorded asset realized 13,000.
iii) Stock 15,000 already transferred to realization account was taken over by ‘X’.
iv) Creditors already transferred to realization account were paid? 4000.
v) Loss on realization 13,000 was distributed among the partners X and Y in their profit sharing ratio 3:2.
Answer:
Realisation A/c Dr 800
To Y’s capital A/c 800

ii) Cash A/c Dr 3000
To realisation 3000

iii) X’s capital A/c Dr 5000
To realisation 5000

iv) Realisation A/c Dr 4000
To cash 4000

v) X’s capital A/c Dr 1800
Y’s capital A/c Dr 1200
To realisation 3000

Question 17.
A, B & C are partners sharing profit and losses in the ratio of 5:3:2. Their Balance Sheet as on 31st March 2015 was as follows: (March 2017)
Balance Sheet of A, B & Cas on 31st March 2015

The firm was dissolved on that date. Prepare realization account with the following information:

1) Building realized forRs. 1,20,000; Bills receivables realized for Rs. 70,000; Stock realized for Rs.40,000 and Machinery sold for Rs.33,000 and furniture Rs.60,000.
2) Bank loan was settled for Rs.70,000; Creditors and bills payable were settled at 10% discount.
3) Realisation expenses Rs.1,500.
Answer:
Realisation A/c

Plus Two Accountancy Dissolution of Partnership 8 Marks Important Questions

Question 18.
Arun, Basheerand Christy are in partnership with a profit-sharing ratio of 3:2:1. They decided to dissolve the firm. On the date of dissolution, their capitals were Rs. 20,000/-, Rs. 15,000/- and Rs. 10,000/-respectively. Their books of accounts showed the total creditors as Rs. 20,000/- and bills payables as Rs. 5,000/-. (June 2009 (May)

Christy advanced an additional Rs. 10,000/ be-sides his capital, to the firm. At the time of dissolution has an unrecorded liability for Rs. 4,000/-. The cost of dissolution amounted to Rs. 2,000/-. The firm is having a cash balance of Rs. 8,000/- as per records.

You are asked to find out:
(a) Sundry assets
(b) Profit or Loss on Realisation
(c) Amount to be received or brought in by each partner.
Answer:
Balance Sheet

Realisastion A/c

Capital Accounts

Cash A/c

Question 19.
Abu, Bibu and Cebu were sharing profits and losses in the ratio 2:1:1. Their Assets and Liabilities as on 31-12-2007 is as shown below: (June 2009 (May)

The assets realized on dissolution are :
Sundry Debtors 20,500
Furniture 10,000
Stock 10,000
Plant & Machinery 15,000
Cash at Bank 5,000
Provision for bad debts 500
Sundry Creditors 15,000
Bills Payables 3,000
Bank Overdraft 5,000

In addition to the above the firm had a general re serve for Rs. 4000/- and an accumulated loss of Rs. 2,000/-.

The Partners decided to dissolve the firm on the above said date and their capital balances on that date were:
Abu (Cr.) – Rs. 30,000/-
Bibu(Cr.) – Rs.15,000/-
and Cibu(Dr.) – Rs. 10,000/-

The assets realized on dissolution are:
Sundry Debtors – 18,000/-
Funiture – 15,000/-
Plant & Machinery – 20,000/-
Stock was taken over by Bibu at Rs. 8,000/-

The firm had an unrecorded investment of Rs. 5,000/- and there was a pending case for a claim of Rs. 2,000/- which was settled at Rs. 1,000/- Realisation expenses amounted to Rs. 500/-. The creditors are settled at a discount of 10%. Prepare Realisation ale, Capital a/cs and Bank a/c.
Answer:
Old Balance Sheet

Realisation A/c

Capital A/c

Cash A/c

Question 20.
a) Given below is an abstract of particulars related to a dissolved partnership firm on 31.3.2009 where Sam, Gopal and Rahim were partners sharing profits on 5:3:2. (June 2010)

Liabilities: Capital –
Sam : 200000
Gopal: 150000
Rahim:100000
Creditors – 50000
General Reserve- 100000

The firm collects the balance from the creditors after adjustment of fixtures taken over by them.

Prepare: Realisation Account, Capital accounts and Cash account.
Answer:
Realisation a/c

Capital A/c

Cash a/c

Note:
When a creditor accepts an asset which has a higher value than the amount due to him, then an entry will be passed only for receiving the excess amount from such creditor. Here, fixture taken over by creditor for Rs.60000, which is higher than the amount due to him ie. 50000. The excess amount Rs.10000/- (60000 – 50000) is credited to Realisation a/c.

Question 21.
Balance sheet of M/s. J3 is given below: (June 2010)

Balance Sheet as on 31.3.2009

On a dispute between the partners they decide to wind up the firm on the following terms:
1. Assets realised land and buildings -100000 Stock -10000
2. Jane took over Bills Receivable for Rs. 12000
3. A creditor accepts office equipment for Rs.8000 and the balance were paid in cash.
4. The Joint Life Policy was surrendered for Rs.9000.

Prepare: Realisation Account, Capital Accounts and Cash Account.
Answer:
Realisation a/c

Capital A/c

Cash A/c

Question 22.
Thara, Sony and Agnes started business on 1st April, 2002 with capitals of Rs. 1,00,000, Rs. 80,000 and Rs. 60,000 respectively sharing profits (losses) in the ratio of 4 : 3 : 3. For the year ending March 31st, 2003, the firm suffered a loss of Rs. 50,000. Each of the partners withdrew Rs. 10,000 during the year. On March 31st, 2003 the firm was dissolved, the creditors of the firm stood at Rs. 24,000 on that date and cash in hand was Rs. 4,000. The assets realised Rs. 3,00,000 and creditors were paid Rs. 23,500 in full settlement of their claim. Prepare realisation ac-count and show your workings clearly. (March 2010)

Hint: Book value of assets on the date of dissolution is to be ascertained by preparing a Balance Sheet.
Answer:
Opening Capital Accounts

Opening Balance Sheet

Realisation A/c

Question 23.
a) Anil and Sunil are partners sharing profits and losses in the ratio of 3:2. Their Balance Sheet as on 31st December 2010. (March 2012)

The firm dissolved on the above date. Following transaction took place:
1) Anil took over investments at Rs. 8,000 and also agreed to pay off his wife’s loan.
2) Other assets were realised as: Stock- 15,000, Debtors- 18,500, Fumiture-4,500, Machinery -25,000.
3) Realisation expenses were Rs. 1,100.
4) Creditors were paid off at a discount of 2.5%. Close the books of the firm.
Answer:
a) Realisation A/c

Capital A/c

Cash A/c

Question 24.
R and S are partners who share profits and losses in the ratio of 3 : 1. They decided to dissolve their partnership on 31 st December 2009, on which date their Balance Sheet stood as under: (March 2012)

Dissolution was effected on the following terms:
i) Mr. R agreed to pay off Mrs. R’s loan.
ii) Assets were realised as under:
Debtors – 44,000; Plant and Machinery – 28,000; Goodwill – 18,000; Furniture – 5,000; Stock – 11,000.
iii) Mr. S took away investments at Rs. 33,000 and bills receivable at 10% discount.
iv) Sundry creditors and Bills payable were settled at 5% discount.
v) Realisation expenses come to Rs. 2,500.

Prepare Realisation Account, Capital Account and Bank Account.
Answer:
a) Realisation A/c

Capital A/c

Bank A/c

Question 25.
The following is the Balance Sheet of Jack and Jill as on 31 st December 2007. (Score 4) (June 2012)

The firm was dissolved on 31st December 2007 on the following terms:
a) Jack promised to pay off Mrs. Jack loan and took away stock Rs.8000.
b) Jill took away half of the investment at 10% discount.
c) Debtors realised Rs.38000
d) Creditors and bills payable were due on an average basis, one month after 31st December, but they are paid immediately on 31 st December at 6% discount p.a.
e) Plant realised Rs.50000, buildings Rs.80000, goodwill Rs.12000 and remaining investments Rs.9000.
f) There was a old typewriter in the firm which had been written off completely from the books. It is now estimate^ to realise Rs.600. It was taken away by Jill at this estimated price.
g) Realisation expenses were Rs.2000. You are required to give the necessary ledger account. (8 scores)
Answer:
Realisation A/c

Capital A/c

Cash a/c

Working Note
1. Investment = 20000 x 1/2 x 10/100 = 1000 Taken over by Jill = 10000 -1000 = 9000
2. Creditors & Bills payable paid off = (76000 x6/100×1/12) = 380 76000-380 = 75620

Question 26.
Black and White are equal partners of a firm, the Balance sheet of which is given below as on 31st March 2011, the date at which they decide to dissolve the partnership. (May 2013 (May)

a) Assets were realized as follows: Stock Rs. 22,000, Debtors 9,500, Machinery Rs.21,000, Buildings rs. 30,000.
b) White took over the furniture at Rs. 7,000.
c) Black agreed to accept Rs. 2,500 in full settlement of his loan account.
d) Dissolution expenses amounted to Rs. 2500.

Prepare Realisation Account, Partner’s Capital Account and Bank Account.

Realisation account, Partner’s Capital Account, Bank Account.
Answer:
a) Realisation a/c

Capital A/c

Bank a/c

Note: Balance of Black’s loan a/c Rs. 500 (3000 – 2500) being profit will be transferred to the Realisation a/c.

Question 27.
A) Saji, Stephen and Sunil were partners sharing profits and losses in the ratio of 1:2:2. Their Balance Sheet as on 31st March 2013 was as follows: (March 2014).

The partners agreed to dissolve the firm on the following terms:
a) Assets realised as – Land and Buildings – Rs.120000, Stock – Rs. 40000, Accounts receiv-able – Rs.15,000.
b) Expenses on dissolution – Rs. 3000
c) A creditor accepts office equipment for Rs.7000 and the remaining creditors were paid in full by cheque.
d) The Joint Life Insurance Policy was surrendered for Rs.9,000. Prepare realization a/c, capital accounts and bank account.
Answer:
Realisation a/c

Capital A/c

Bank a/c

Question 28.
Jack and Jill are partners sharing profits in the ratio of 3:2. They decided to close the firm and their Balance Sheet is given below: (March 2014)

Assets realised as follows:
Buildings Rs. 32000
Debtors Rs.28000
Furniture Rs.36000

Liabilities settled as follows:
Plant has been taken over by Bank at Rs. 66,000 in respect of the loan granted by the Bank and the rest has been paid in cash.
Creditors are settled at Rs. 30,000
Realisation expenses came to Rs. 1000 which have been met by Jill.
Prepare necessary accounts to dissolve the firm and ascertain the amount due to ordue from the partners.
Answer:
Realisation a/c

Capital A/c

Bank a/c

Question 29.
Green and Red sharing profits as 3:1 and they agree upon dissolution. The Balance Sheet as on 31-03-2014 is as under: (March 2016)

Balance Sheet as on 31-03-2014

Green took over plant and machinery at an agreed value of Rs. 60,000. Stock and furniture were sold for Rs. 42,000 and Rs.13,900 respectively. Debtors were taken over by Red at Rs.69,000. Creditors were paid at a discount of Rs.900. Green agreed to pay the loans. Realisation expenses were Rs.1,600. Prepare necessary Ledger A/cs.
Answer:
Realisation A/C

Capital A/c

Cash A/c