2nd PUC Business Studies Previous Year Question Paper March 2019

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

Time: 3.15 Hours
Max Marks: 70

Instructions :

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

Part – A

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

Question 1.
Which of the following is not a feature of management?
(a) Planning
(b) Staffing
(c) Co-operating
(d) Controlling.
Answer:
(c) Co-operating

Question 2.
Who is known as the father of scientific management?
Answer:
F.W. Taylor is’considered as Father of Scientific Management.

Question 3.
What is Business environment?
Answer:
The term ‘business environment’ means the sum total of all individuals, institutions and other forces that are outside the control of a business enterprise but that may affect its performance.

Question 4.
Give the meaning of “Rule”.
Answer:
Rules are the specific statement which prescribes code of behaviour to the people of an organisation and specifies what is to be done and what is not to be done.

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

Question 6.
State any or e internal source of recruitment.
Answer:
One internal source of recruitment is transfer.

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

Question 8.
Give the meaning of control.
Answer:
It is the power or authority to direct or order to confirm the standard performance.

Question 9.
What is business finance?
Answer:
Money required for carrying out business activities is called business finance.

Question 10.
Primary and secondary markets :
(a) Compete with each other
(b) Complement each other
(c) Function independently
(d) Control each other
Answer:
(b) Complement each other.

Question 11.
What is publicity?
Answer:
Publicity is any promotional communication regarding an organisation and/or its products where the message is not paid for by the organisation benefiting from it.

Question 12.
Who can file a complaint in consumer court?
(a) Consumer
(b) Consumer relative
(c) On public interest any person
(d) Government on behalf of public/consumer.
Answer:
(d) Government on behalf of public/consumer.

Part – B

II. Answer any ten questions in two or three sentence

Question 13.
State any two organisational objectives of business.
Answer:
Profit and growth.

Question 14.
What is gang plank?
Answer:
Gang plank is a shorter route in a scalar chain which allows employees at same level to communicate with each other directly.

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

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

Planning is a goal oriented
Planning is pervasive.

Question 17.
Give the meaning of formal organisation.
Answer:
Formal organisation is one which has a system of well defined positions, authority, responsibility, policies, principles, etc.

Question 18.
Write any two factors which influence the way of recruitment, selection and training of employees in any organisation.
Answer:

Size of organisation
Salary structure or working condition.

Question 19.
Define leadership.
Answer:
According to Louis Allen, “A leader is one who guides and directs other people. A leader gives the efforts of his followers a direction and purpose by influencing their behaviour”.

Question 20.
State any two traditional techniques of management control.
Answer:
The two traditional techiniques of management control are:

Personal observation
Break even analysis.

Question 21.
State any two types of financial decisions.
Answer:
Financial management is concerned with the solution of three major issues relating to the financial operations of a firm corresponding to the three questions of investment, financing and dividend decision. In a financial context, it means the selection of best financing alternative or best investment alternative. The finance function therefore, is concerned with three broad decisions which are as follows:

Investment decision: The investment decision relates to how the firm’s funds are invested in different assets.
Financing decisions: This decision is about the quantum of finance to be raised from various long term sources and short term sources. It involves identification of various available sources of finance.
Dividend decision: This decision relates to distribution of dividend.

Question 22.
What is marketing?
Answer:
Marketing is a total system of business activities designed to plan, price, promote and distribute want satisfying goods and services to present and potential customers.

Question 23.
What are commercial papers?
Answer:
Commercial paper is a short term unsecured promissory note, negotiable and transferable by endorsement and delivery with a fixed maturity period issued by the companies.

Question 24.
Write any two Rights of consumers.
Answer:

Right to Safety
Right to Choose.

Part – C

III. Answer any seven questions in fifteen to twenty sentences. 7 x 4 = 28

Question 25.
Explain any four nature of principles of management.
Answer:

Universal applicability: The principles of management are applicable to all types of organisations, business as well as non-business, small as well large, public sector as well as private sector, manufacturing as well as the services sectors. But, the extent of their applicability depends on the nature of the organisation.
General guidelines: The principles are guidelines to action but do not provide ready made solutions to all managerial problems. But it also provides guidelines and suggestions to solve the problem.
Practice and experimentation: The principles of management are formed by experience and collective opinion wisdom of managers as well as experimentation.
Flexible: The principles of management are not rigid. They are flexible and can be modified by the managers according to the situation.

Question 26.
Briefly explain any four dimensions of business environment.
Answer:
Dimensions of business environment:
(a) Economic environment : It includes the changes in the system due to economic policies made by the government. Reserve Bank of India is the key regulator of country’s economic environment since it:

influences the interest rates
controls the flow of money in the economy.
regulates the working of banks.

Example: When the banks reduce the interest rates on long-term loans, automobiles and construction industries get a boost to the business as more spending is made on the purchase of homes and cars through loans.

(b) Social environment: The social environment of business includes the social forces like customs and traditions, values social trends, society’s expectations from business, etc. In business terms, these values translate into freedom of choice in the market. Major elements of social environment are:

Life expectancy.
Shifts in the presence of women in the workforce.
Consumer habits.

Example: Due to the shift in the presence of women in the workforce the demand for ready made ladies formal wear, cosmetics, packed/processed food and electronic gadgets have gone up.

(c) Technological environment: Technological environment includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services and new methods and techniques of operating a business.

Example: Because of technological advancement, it has become possible to book railway tickets through internet from home, office, etc.

(d) Political environment: Political environment includes political conditions such as general stability and peace in the country and specific attitudes that elected government representatives hold towards business. It is only of use when a business enterprise can predict its business activities under stable political conditions. Major elements of political environment are:

The constitution of the country.
The nature and profile of political leadership and thinking of political personalities
Political ideology and practices of the ruling party.

Example: After the NEP of 1991, due to globalisation the foreign companies started coming to India, but due to the bureaucratic red tape, it became difficult for them to cut through it to do business here. As a result, these companies were discouraged in our country regarding investments. The situation has improved over time.

(e) Legal environment: Legal environment includes various legislation passed by the government, administrative orders issued by government authorities, court judgement as well as the decisions rendered by various commissions and agencies. It is imperative for the management of every enterprise to obey the law of the land. Therefore, an adequate knowledge of rules and regulations framed by the government is a pre-requisite for better business performance.

Example: There is a government regulation to protect consumer’s interest, e.g. the advertisements of alcoholic beverages is prohibited.

Question 27.
Explain the importance of planning with any four points.
Answer:
The major limitations of planning are given below

a. Planning leads to rigidity: In an organization, a well-defined plan is drawn up with specific goals to be achieved within a specific time frame. These plans then decide the future course of action. The managers may not be in a position to change these plans. This kind of rigidity in plans may create difficulty. This rigidity restricts the individual freedom, initiative and creativity.

b. Planning may not work in a dynamic environment: The business environment is dynamic. Planning anticipates future. It takes into consideration the possible changes in economic, political, legal and social dimensions. But it becomes difficult to accurately assess the future trends. Competition in the market can also upset the plans. Planning cannot foresee everything and thus, there may be obstacles to effective planning.

c. Planning reduces creativity: Planning is an activity which is done by the top management. Usually the rest of the members just implement these plans. Middle management and other decision makers are neither allowed to deviate from plans nor are they permitted to act on their own. Thus, much of the initiative or creativity inherent in them also gets lost or reduced.

d. Planning involves huge costs: When plans are drawn up, huge costs are involved in their formulation. These maybe in terms of time and money. The cost incurred sometimes may not justify the benefits derived from the plans.

Question 28.
Explain the four methods of “On the job” training.
Answer:
Training: Training is the process of teaching the new or present employees, the basic skills they need to effectively perform their job.

Importance of training:

Improves employee’s ability and skills.
Leads to high morale among the employees.
The chances of accidents are very less.
Become more eligible for promotion.
Maintain industrial peace in the organization.

Method of Training

On the job-training
It is a method, where workers learn by doing the work. The following are the important methods of on the job training:

Apprenticeship training
Coaching
Internship training
job-rotation

Off the job training

Classroom lecture
Case-study
Vestibule training
Computer modeling

On the job means learning while doing. The following are the popular on the job training methods:

1. Apprenticeship Programmes: Apprenticeship programmes put the trainee under the guidance of a master worker. These are designed to acquire a higher level of skill. People seeking to enter skilled jobs like plumbers, electricians etc., are required to undergo apprenticeship training.

2. Coaching: In this method, the superior guides and instructs the trainee as a coach. The coach or counselor sets mutually agreed upon goals, suggests how to achieve these goals periodically reviews the trainees progress and suggests changes required in behavior and performance. The trainee works directly with a senior manager and the manager takes lull responsibility for the trainees coaching.

3. Internship training: It is a joint programme of training In which educational institutions and business Finns cooperate. Selected candidates carry on regular studies for the prescribed period. They also work in some factory or office to acquire practical knowledge and skills.

4. lob Rotation: This kind of training involves shifting the trainee from one department to another or from one job to another. This enables the trainee to gain a broader understanding of all parts of the business and how the organization as a whole functions. job rotation allows trainees to interact with other employees. When employees are trained by this method, the organization finds it easy at the time of promotions, replacements or transfers.

Off the job training means learning before doing. The popular off the job methods of training include:

1. Class room lecture/Conferences: The lecture or conference approach is used to convey specific information effectively. The use of audio-visuals or demonstrations can often make a formal classroom presentation more interesting.

2. Case Study: Cases represent attempts to describe, as accurately as possible the real problems laced by the managers. They are generally taken from actual experiences of the organization and Its managers. Trainees study the cases to determine problems, analyse causes, develop alternative solutions, select what they believe to be the best solution and implement it.

3. Computer Modeling: It stimulates the work environment by programming a computer to initiate some of the realities of the job. ¡t also allows learning to take place without the risk or high costs that would be incurred if a mistake occurs in real life situation.

4. Vestibule Training: Employees learn their jobs on the equipment they will be using, but the training is conducted away from the actual work floor. Actual work environments are created in a class room and employees use the same materials, tools and equipment. This is usually done when employees are required to handle sophisticated machinery and equipment.

Conclusion: In order to perform well in an organization, an employee must have the theoretical and practical knowledge of the work. Training provides the practical knowledge that is required of an employee. Thus training is necessary to make the workers alert and active.

Question 29.
Explain the limitations of controlling.
Answer:
The limitations of controlling are:

Lesser Control on external factors: Organisations don’t have control on external factors such as Government policies, changes in technology, competition etc.
Organisation find it difficult to set quantitative standards: Certain qualitative factors like attitude, behaviour, satisfaction level of employees etc. can’t be fully regulated / controlled as it cannot be measured quantitatively.
Resistance from employees: Employees in any organisation detest excessive control or monitoring of their activities as they feel they affect their work performance.
Expensive / Costly affair: Small enterprises can’t instal control system as it proves to be expensive for them as it reduces their income / profit and the process might be complicated to understand too.

Question 30.
Explain any four factors affecting financial decision.
Answer:

Cost: The cost of raising funds through different sources is different. A prudent financial manager would normally opt for a source which is the cheapest.
Risk: The risk associated with different sources is different.
Floatation costs: Higher the floatation cost, less attractive the source.
Cash flow position of the business: A stronger cash flow position may make debt financing more viable than funding through equity.

Question 31.
Explain any four factors affecting working capital requirement of a business.
Answer:
The factors affecting the working capital requirement of a business are as follows:

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

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

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

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

Question 32.
Briefly explain any four characteristics of industrial product.
Answer:
Four characteristics of industrial product arc:

Limited number of buyers : Industrial goods in comparison with consumer and farm goods are bought only by few producers and only in certain regions hence limited operations.
Shorter channel of distribution : Since few buyers demand industrial product its sale is direct arid hence shorter channel of distribution.
Inelastic demand : The demand for industrial goods is not affected by changes in price and hence relatively inelastic.
Involves heavy investment: the production of industrial goods require heavy capital investment.
After sale service has to be available for industrial goods as maintenance is frequent.

Question 33.
Explain the elements of marketing mix.
Answer:
Marketing mix refers to the combination of four basic elements known as four P’s – Product, Price, Promotion and Place.

(a) Product mix: Product mix basically concerns with the features related to a product, e.g. range, quality, size, labelling, packaging, branding, etc. All products must satisfy consumer needs and expectations. It aims at providing good quality products at fair prices.

(b) Price mix: It includes decisions relating to price determination, discounts and allowances credit terms. It covers pricing objectives and pricing policies. Price should cover not only cost of production and selling expenses but also a reasonable profit margin. The price policy adopted by the enterprise should not only be cost based but also demand based and competition based.

(c) Place mix: Place mix links the seller and the buyer. The choice of channels of distribution and transport are the two major issues here. There are various factors which help in deciding the channel, e.g. the time and the place, where the goods have to reach or transportation. It is the nature of goods, place of destination, cost and availability, etc.

(d) Promotion mix: It refers to all marketing activities to increase the volume of sales of the product of an enterprise. It consists of means of marketing communication with a view to informing and persuading the prospective buyers to buy a certain product. It includes advertising, personal selling, publicity and sales promotion.

Question 34.
State any four consumer responsibilities.
Answer:

Quality conscious: A consumer must be conscious in respect of the quality of the product like AGMARK, BIS MARK, HALL MARK, etc. while purchasing the product.
Selection of goods: Consumer must choose only legal goods and services and discourage
malpractice like smuggling, black marketing, etc.
Consumer organisation: Consumer must form their own organisation to educate and protect their interest against malpractices of the manufactures and sellers.
Protection of environment: Consumer must have respect for the environment and avoid wastage of resources and work towards protecting the environment and ecology.
Demand for cash memo: The consumer must get a cash memo or bill in respect of the goods purchased or service availed.

Section – D

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

Question 35.
Management is considered to be both an art and a science. Explain.
Answer:
Features of Management:

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

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

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

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

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

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

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

Question 36.
What is organising? Explain the importance of organising.
Answer:
Organising is the process of identifying and grouping the work to be performed, determing and delegating authority and responsibility and establishing relationships the the purpose of enabling people to work most effectively together in accomplishing objectives. The following points highlight the importance of organizing:

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

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

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

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

Question 37.
Explain the external sources of recruitment.
Answer:
External sources of recruitment:
(a) Direct recruitment: This is a source of external recruitment in which the application for vacancies are presented on bulletin boards outside the factory or at the gate. A written application is submitted by the candidates and they have to take up tests and interviews. If they are suitable for the job, they are immediately selected.

(b) Casual callers (unsolicated applications): Many qualified persons apply for employment to reputed companies on their own initiative. Such applications are known as unsolicited applications. By keeping a proper record of these applications the candidates may be called for an interview whenever the need arises.

(c) Advertisement: This is the most effective means to search potential employees from outside the organisation. The necessary information about the company, job descriptions and job specifications given in the advertisement brings response from suitable candidates spread over different parts of the country.

(d) Employment exchange: In India, employment exchanges have been set up by the government for bringing together job seekers and employers who are looking for employees. Those who are in search of a job, register themselves with the local employment exchanges which keep a record of all such persons. The employer informs about the vacancies to his nearest employment exchange. Most of the government undertakings employ people through such exchanges.

(e) Placement agencies: In urban areas, a number of private organisations have functioning as placement agencies. They register the names of job seekers and arrange interviews and send them for different companies who have suitable openings.

Question 38.
Explain the qualities of good leaden
Answer:
a. Physical features: Physical features like height weight, health, appearance determine the physical personality of an individual. It is believed that good physical features attract people.

b. Knowledge: A good leader should have required knowledge and competence. Only such person can instruct subordinates correctly and influence them.

c. Integrity: A leader should possess high level o integrity and honesty. He should be a role model to others regarding the ethics and values.

d. Initiative: A leader should have courage and initiative. He should not wait for opportunities come to his way, rather he should grab the opportunity and use it to the advantage of organization.

e. Communication skills: A leader should he a good communicator. He should have the capacity to clearly explain his ideas and make the people to understand his ideas. He should be not only a good speaker but also a good listener, teacher, counsellor and persuader.

Question 39.
What is stock exchange? Explain the functions of stock exchange.
Answer:
Stock Exchange means any body of individuals, whether incorporated or not, constituted for the purpose of assisting,regulating or controlling the business of buying and selling or dealing in securities. The following are the important functions of stock exchange:

i. Providing liquidity and marketability to existing securities: The basic function of a stock exchange is the creation of a continuous market where securities are bought and sold. It gives investors the chance to disinvest and reinvest. This provides both liquidity and easy marketability to already existing securities in the market.

ii. Pricing of Securities: share prices on a stock exchange are determined by the forces of demand and supply. A stock exchange is a mechanism of constant valuation through which the prices of securities are determined. Such a valuation provides important instant information to both buyers and sellers in the market.

iii. Safety of Transaction: The membership of a stock exchange is well regulated and its dealings are well delined according to the existing legal framework. This ensures that the investing public gets a safe and fair deal on the market.

iv. Contributes to Economic Growth: A stock exchange is a market in which existing securities are resold or traded. Through this process of disinvestment and reinvestment, savings get channelized into their most productive investment avenues, This leads to capital formation and economic growth.

v. Spreading of Equity Cult: The stock exchange can play a vital role in ensuring diver share ownership by regulating new issues, better trading practices and taking effective steps in educating the public about investments.

vi. Providing scope for speculation: The stock exchange provides sufficient scope within the provisions of law for speculative activity in a restricted and controlled manner . It is generally accepted that a certain degree of healthy speculation is necessary to ensure liquidity and price continuity in the stock market.

vii. Regulates company management: Listed companies have to comply with rules and regulations of concerned stock exchange authorities. Thus, stock exchanges put the burden on the company to have healthy practices.

viii. Price Stability: There are many operators who buy from a stock exchange where securities are cheaper and sell in other stock exchanges where the prices for the same securities are higher. This process is known as arbitrage. These operators bring about stability in the prices of securities among various stock markets.

ix. Capital Mobility: The trading of various securities enables an investor to move his funds from one sector to another or from one industry to another. Investors can divert their investments from less profitable enterprises to more profitable enterprises.

x. Serves as economic barometer: A Stock Exchange is not only an indicator of the state of health of individual companies but also of the overall situation and economy as a whole. Even a small change in the internal environment of any company or in the political, economic and social environment of the country gets reflected in the prices of securities on the stock exchange.

Question 40.
Explain the importance of personal selling to customers and society.
Answer:
To the consumers:

Helps in identifying consumer needs, preference etc. Personal selling helps to understand the needs / requirements of consumers and identifies the product to be manufactured to fulfill their need and satisfy them.
Provides latest market information: Personal selling and interaction with consumers, helps in sharing market information, trends, price etc.
Expert advice: The seller can provide expert advice regarding the product to the consumers since they interact face to face.
Induces consumers: Personal selling can triger / induce a consumer to buy a product / service though he didn’t intend to buy through motivation.

Part – E
Particular Oriented Question

V. Answer any two Questions 2 x 5 = 10

Question 41.
Assuming that you are the manager, of an organisation, draw the neat diagram of different levels of management to specify that authority responsibility relationships create different levels of management.
Answer:

Question 42.
Draw the organisation chart showing divisional and functional structure.
Answer:

Question 43.
As a financial consultant, give the list of any 10 factors which affect the choice of capital structure.
Answer:

Cash flow position
Interest coverage ratio
Debt service coverage ratio
Return on investment (ROI)
Cost of debt
Tax rate
Cost of equity
Floatation costs
Risk consideration 0 Flexibility
Control
Regulatory framework
Stock market consideration.