Quarterly Exam 2025-26 Question Bank 12th Business Study English medium

12th Business Study Question Bank with Answers

Quarterly Exam 2025-26 Question Bank 12th Business Study English medium: Unlock success in your Class 12 Business Studies quarterly exams for the 2025-26 academic year with our comprehensive question bank. Designed specifically for English medium students, this resource is a must-have for scoring high. We’ve compiled a meticulously curated collection of questions covering all key chapters, including Principles of Management, Business Environment, Planning and more.

This question bank provides a structured approach to your exam preparation, helping you practice with a wide variety of questions—from multiple-choice to short and long-answer types. It is an essential tool for identifying your strengths and weaknesses, allowing you to focus on challenging topics. With a focus on the latest syllabus and exam patterns, this is the ultimate guide to master your concepts and build confidence for the upcoming quarterly exams. Start preparing smarter not harder.

Chapters for Quarterly Examination 2025-26

• 1. Nature and Significance of Management
• 2. Principles of Management
• 3. Business Environment
• 4. Planning
• 5. Organisation

Unit 1 – Management

Choose the correct option:

(I) Management is a –
(a) Art and science
(b) Art
(c) Science
(d) Neither art nor science
Answer: (a) Art and science

(II) Which of the following is not a function of management –
(a) Planning
(b) Staffing
(c) Cooperation
(d) Controlling
Answer: (c) Cooperation

(III) How many levels of management are there –
(a) One
(b) Three
(c) Two
(d) Four
Answer: (b) Three

(IV) Policies and goals are determined by –
(a) Management
(b) Administration
(c) Organization
(d) Employees
Answer: (b) Administration

(V) Which of the following is not a characteristic of management –
(a) Profession
(b) Industry
(c) Group effort
(d) Dynamic activity
Answer: (b) Industry

(VI) The final function of the management process is –
(a) Planning
(b) Organizing
(c) Controlling
(d) Staffing
Answer: (c) Controlling

Fill in the Blanks
(I) A supervisor is included in low-level management.
(II) Planning is the primary function of management.
(III) Management is the art of getting things done through others.
(IV) Management achieves pre-determined objectives.
(V) Departmental management falls under middle-level management.
(VI) In modern times, the word leadership has begun to be used in place of direction.

True / False
(I) Management is a complete science like Physics and Chemistry.
False. Management is a social science.

(II) Management is goal-oriented.
True.

(III) The shape of the authority chain of any organization is like a pyramid.
True.

(IV) Coordination is the essence of management.
True.

(V) Coordination is linked to all the activities of management.
True.

(VI) Management is multi-dimensional.
True.

Answer in One Word / One Sentence
(I) What is a systematic body of knowledge called?
Science.

(II) Who determines the policies of a business?
Administration.

(III) What kind of effort is management?
Group effort.

(IV) What is the practical application of knowledge called?
Art.

(V) What is the function of staffing in management?
The second function.

(VI) Who determines the objectives?
Top-level management.

(VII) To whom is management’s responsibility to provide fair dividends?
Shareholders.

(VIII) To whom is management’s responsibility to earn adequate profit?
Owners/Shareholders.

MP Board 12th Business Study Quarterly Exam 2025-26 Question Bank in hindi

Very Short Answer Questions (2 Marks Each)
Define Management.
Management is the process of getting things done effectively and efficiently with and through other people. It involves planning, organizing, staffing, directing, and controlling organizational resources to achieve desired goals.

Explain that management is universal.
Management is a universal process, meaning its principles and practices can be applied to any type of organization, whether it’s a business, a government agency, a hospital, or a non-profit. The fundamental functions of planning, organizing, staffing, directing, and controlling are essential for all organized efforts.

What is the meaning of coordination?
Coordination is the process of integrating the activities of different departments and individuals to ensure unity of action towards the achievement of common goals. It is the thread that holds all management functions together.

Explain, “Management is both an art and a science.”
Management is a science because it has a systematic body of knowledge, with principles and laws that can be observed, tested, and applied. It’s an art because it requires personal skills, creativity, and judgment to apply those principles in a specific situation. The practice of management is an art that is perfected with experience.

Why is management considered a multi-dimensional concept?
Management is multi-dimensional because it involves the management of work, people, and operations. It’s not just about one task; it’s about ensuring that the work is done efficiently, the people are motivated and work together, and the operational processes are streamlined.

Write two characteristics of a profession.
A profession is characterized by a well-defined body of knowledge and restricted entry. A person can only enter a profession after acquiring a specific degree or passing a certain exam. Other characteristics include a professional association and a code of conduct.

Write two functions of top-level management.
Top-level management’s main functions are determining objectives and policies and issuing necessary instructions and budgets for the preparation of departmental plans and procedures.

How does management enable the most efficient use of resources?
Management achieves the most efficient use of resources by integrating and optimizing human, physical, and financial resources. Through effective planning and control, it minimizes waste and maximizes output.

What is meant by efficiency in management?
Efficiency in management refers to doing the task correctly and with minimum cost. It is about minimizing resource consumption and maximizing output.

Explain, “Management is a social process.”
Management is a social process because it is concerned with managing people. It involves working with people and getting things done through them. It considers human relationships, motivations, and group behavior to achieve organizational goals.

Short Answer Questions (3 Marks Each)

Coordination is the essence of management. State the reason.
Coordination is considered the essence of management because all other functions of management—planning, organizing, staffing, directing, and controlling—are incomplete without it. Coordination ensures that the work of various departments and employees is synchronized to avoid conflicts and achieve unity of action. It’s the unifying force that binds all management functions together.

Write any three significances of management.

Achieves group goals: Management helps in directing the efforts of various individuals in the organization towards achieving the common goal.

Increases efficiency: By proper planning, organizing, and controlling, management helps to reduce costs and increase productivity.

Creates a dynamic organization: Management helps the organization to adapt to changing environments, which is crucial for survival and growth.

Mention any three objectives of management.

Organizational Objectives: Aims for the prosperity and growth of the organization, including survival, profit, and growth.

Social Objectives: Aims to serve the society, such as providing quality products, generating employment opportunities, and using eco-friendly production methods.

Personal Objectives: Aims to satisfy the individual needs of employees, such as providing a good working environment, fair salaries, and growth opportunities.

What are the functions of middle-level management?
The main functions of middle-level management are:

Implementing policies: They act as a link between top-level and lower-level management, translating policies into departmental plans.

Recruiting and training employees: They are responsible for recruiting and training staff for their respective departments.

Motivating employees: They motivate employees to perform at their best and achieve departmental goals.

Describe the core characteristics of management as a profession.

Well-defined body of knowledge: Management has a systematic body of knowledge with principles and concepts.

Restricted entry: Entry into a profession is restricted through educational qualifications and examinations.

Service motive: The primary motive of a profession is to serve society, not just to earn profit.

Code of conduct: A professional must adhere to a code of conduct that guides their behavior.

Explain, “Management is a series of continuous, interacting functions.”
Management is not a one-time activity but a continuous process. It consists of a series of functions—planning, organizing, staffing, directing, and controlling—that are interconnected. The performance of one function influences the performance of others. For example, controlling helps in identifying weaknesses that can be improved in future planning.

Explain, “Management is an innate and acquired talent.”
Management is considered both an innate and acquired talent. Innate talent refers to the natural abilities and qualities a person is born with, such as leadership skills and good judgment. Acquired talent refers to the skills and knowledge that can be learned through education, training, and experience. Successful managers usually have a combination of both innate talent and acquired skills.

Long Answer Questions (4 Marks Each)

Explain any 4 characteristics of management.

Goal-oriented Process: Management’s core function is to achieve pre-determined objectives. It aligns the efforts of various individuals toward a common goal.

All-Pervasive: The principles and techniques of management are applied to all organizations, regardless of their size, nature, or location.

Multi-Dimensional: Management is a complex activity that has three main dimensions: managing work, managing people, and managing operations.

Continuous Process: The functions of management (planning, organizing, staffing, directing, and controlling) are performed continuously. A manager never stops performing these functions.

Explain the difference between management and administration.

Basis	Management	Administration
Meaning	It is an executing function.	It is a decision-making and policy-making function.
Work	It involves implementing the plans and policies decided by the administration.	It involves framing the policies and objectives of the organization.
Level	Middle and lower level	Top level
Nature	It is a dynamic and executive function.	It is a static and determinative function.

How does management contribute to the success of an enterprise?
Management is crucial for the success of an enterprise in several ways. Firstly, it provides a clear vision and direction, ensuring that all efforts are aligned with the company’s goals. Secondly, it optimizes resource allocation, leading to greater efficiency and profitability. Thirdly, it creates a disciplined and productive environment by coordinating the activities of all employees. Lastly, it helps the organization to adapt to a changing market, ensuring its long-term survival and growth.

Write any four major functions of management.

Planning: This is the first and most fundamental function of management. It involves determining the future course of action and deciding in advance what to do, how to do it, and who is going to do it.

Organizing: This function involves identifying and grouping activities, defining roles, and establishing authority and responsibility relationships to achieve organizational goals.

Staffing: This function involves recruiting, selecting, training, and developing employees to fill various positions within the organization.

Controlling: This is the final function of management. It involves measuring actual performance against the standards, identifying deviations, and taking corrective actions to ensure that objectives are achieved.

A successful enterprise must achieve its goals effectively and efficiently. Explain.
A successful enterprise must be both effective and efficient. Effectiveness means doing the right things, i.e., achieving the desired goals. For example, if the goal is to produce 1,000 units, the company is effective if it produces 1,000 units. Efficiency means doing things in the right way, i.e., doing the task with minimum cost and resource consumption. A company can be effective but not efficient. For example, it might produce 1,000 units but at a very high cost. A truly successful enterprise is one that is both effective and efficient, achieving its goals with optimal use of resources.

Madan is the manager of the Northern Division of a large corporate house. At what level does he work in the organization? What are his basic functions?
Madan works at the middle level of management. His basic functions would be:

Implementing the policies and plans formulated by top-level management for his division.

Ensuring that his division has the necessary personnel and resources to achieve the goals.

Motivating and leading his team to improve productivity and performance.

Coordinating with other divisions to ensure smooth operations.

Why is management important for a better society? Explain.
Management plays a vital role in building a better society. It enables organizations to produce high-quality goods and services efficiently, which improves the standard of living. It creates employment opportunities, which contributes to the economic well-being of the society. Furthermore, good management promotes corporate social responsibility, encouraging businesses to adopt ethical practices and contribute to community development and environmental protection.

Unit 2 – Principles of Management

Choose the Correct Option
(I) How are the principles of management created?
(a) In laboratories
(b) By the experience of managers
(c) By the experience of customers
(d) By social scientists
Answer: (b) By the experience of managers

(II) The principles of management are –
(a) Static
(b) Dynamic
(c) Rigid
(d) Correct
Answer: (b) Dynamic

(III) The analysis in scientific management is –
(a) 25%
(b) 50%
(c) 75%
(d) 35%
Answer: (c) 75%

(IV) In scientific management, production is –
(a) Maximum
(b) Minimum
(c) Normal
(d) No effect
Answer: (a) Maximum

(V) What is the function of a workshop disciplinarian?
(a) Resolving disputes
(b) Maintaining discipline at the workplace
(c) Both
(d) None of these
Answer: (b) Maintaining discipline at the workplace

(VI) Scientific management is in the interest and favor of the owners.
(a) Interest
(b) Favor
(c) Opposition
(d) Both interest and favor
Answer: (d) Both interest and favor

(VII) In which year did Henry Fayol die?
(a) 1825
(b) 1725
(c) 1925
(d) 1625
Answer: (c) 1925

(VIII) What is the full name of Taylor?
(a) Francis Winslow Taylor
(b) Farm Winslow Taylor
(c) Frederick Winslow Taylor
(d) None of these
Answer: (c) Frederick Winslow Taylor

Fill in the Blanks
(I) Fayol’s principles are applied in special circumstances, whereas Taylor’s principles are universally applicable.
(II) Scientific management started in the year 1911.
(III) Henry Fayol was born in the year 1841.
(IV) The father of scientific management is Frederick Winslow Taylor.
(V) Mental work leads to mental fatigue.
(VI) The book ‘General and Industrial Management’ is in the French language.
(VII) Frederick Winslow Taylor was born in the year 1856.
(VIII) A stopwatch is used during motion study.

Match the Columns
(1) A and B
(I) A piece rate system – (c) 1895
(II) Concrete, Plain Reinforce – (b) 1917
(III) Notes on Belting – (a) 1893
(IV) General and Industrial Management – (d) 1949
(V) Administration Industrielle et Générale – (e) 1906

(2) A and B
(I) Unity of command – (e) Answerable to one boss
(II) Unity of direction – (b) One plan officer
(III) ‘We’ instead of ‘I’ – (d) Esprit de corps
(IV) Division of work – (c) Specialization
(V) Standardization – (a) Setting standards

True / False
(I) Fayol was a mining engineer, while Taylor was a mechanical engineer.
True.

(II) A stopwatch is used during time study.
True.

(III) Henry Fayol propounded 14 principles of management.
True.

(IV) The presenter of administrative management was Taylor.
False. Fayol was the presenter of administrative management.

(V) Fayol was a management thinker who first saw management from the perspective of its functions.
True.

(VI) The implementation of scientific management leads to an increase in production.
True.

(VII) Are the principles of management general guidance?
True.

Answer in One Word / One Sentence
(I) Who propounded the differential piece-rate system?
Frederick Winslow Taylor.

(II) Where are the principles of management applied?
Everywhere/In all types of organizations.

(III) Name the principle in which a task is divided into sub-tasks.
Division of Work.

(IV) Write the name of the management philosophy developed between 1920 and 1950.
Human Relations Approach.

(V) Due to what disease did Taylor die?
Pneumonia.

(VI) What is it called to provide wages on the basis of work?
Piece-rate wage system.

(VII) What is the head of a group of workers called?
Gang boss.

Very Short Answer Questions (2 Marks Each)

1. What is meant by the principles of management? Management principles are fundamental truths or guidelines that provide a framework for managers to make decisions and take actions. They are derived from the experiences of managers and are not rigid rules, but flexible guides.

2. How is efficiency developed from the division of labor? Efficiency is developed from the division of labor because when work is divided into specialized tasks, workers can focus on a single activity. This specialization leads to increased skill, reduced time, and less waste, thereby boosting overall efficiency.

3. Explain why scientific selection and training are necessary for excellent management. Scientific selection ensures that the right person is chosen for the right job, based on their skills and abilities. Proper training then enhances their performance and effectiveness. Together, they lead to a more competent workforce, which is essential for excellent management.

4. What is Taylor’s eight-boss system? Taylor’s eight-boss system, also known as functional foremanship, is a technique where a single worker is supervised by eight different specialists. These supervisors are divided into two groups (planning and production) to ensure specific guidance and improve the quality and efficiency of work.

5. Explain that management principles are general guidelines. Management principles are considered general guidelines because they are not absolute laws. They provide a broad framework for managers to act, but their application needs to be adjusted according to the specific situations and unique circumstances of an organization.

6. Into how many parts did Fayol divide business activities? Henry Fayol divided business activities into six parts: Technical, Commercial, Financial, Security, Accounting, and Managerial.

7. What is meant by scientific management? Scientific management is a systematic approach to management that aims to improve economic efficiency, especially labor productivity. It involves analyzing and synthesizing workflows to find the “one best way” to perform a task.

8. What is meant by work study? Work study is a technique used in scientific management to systematically analyze and improve the methods of performing a job. Its purpose is to eliminate wasteful movements and activities, thereby increasing efficiency and productivity.

Short Answer Questions (3 Marks Each)

1. Explain 3 differences between time study and motion study.

• Purpose: Time study aims to determine the standard time required to complete a job, while motion study aims to eliminate wasteful movements and find the most efficient way to perform a task.
• Tool: A stopwatch is used in time study, whereas a motion picture camera or simple observation is used in motion study.
• Result: Time study helps in fixing the wage rates and calculating the labor cost, while motion study helps in improving the operational efficiency and designing better work methods.

2. Why is scientific management opposed by workers? Write any 3 reasons.

1. Fear of unemployment: Workers fear that increased productivity will lead to a reduction in the workforce and subsequent unemployment.
2. Increased workload: They believe scientific management increases their workload and pressure to perform, which can lead to stress and fatigue.
3. Loss of initiative: Workers feel that the rigid rules and standardization under scientific management stifle their creativity and personal initiative.

3. State 3 similarities in the management viewpoints of Taylor and Fayol.

1. Emphasis on efficiency: Both Taylor and Fayol aimed to improve the efficiency and productivity of the organization.
2. Rational approach: Both believed in a scientific and rational approach to management, rather than relying on intuition or trial and error.
3. Importance of training: Both stressed the importance of proper training and development for employees to enhance their skills and performance.

4. Explain the importance of management principles in three points.

1. Provides useful insights to managers: Principles act as a guide for managers to understand and solve problems effectively, helping them to make rational decisions.
2. Helps in scientific decision-making: By providing a logical basis for decision-making, principles reduce the reliance on guesswork and instinct.
3. Facilitates training and research: Management principles form the basis for management education, helping to train future managers and providing a foundation for further research.

5. Explain the difference between management principles and management techniques.

• Nature: Principles are fundamental truths that act as general guidelines for managers, while techniques are the specific methods or procedures used to achieve a particular objective.
• Flexibility: Principles are flexible and can be adapted to various situations, whereas techniques are more specific and are designed to be followed exactly.
• Application: A principle provides a broad direction (e.g., Unity of Command), while a technique is a tool for implementation (e.g., Differential Piece-Rate System).

6. What points should be kept in mind while determining fair wages? While determining fair wages, the following points should be considered:

1. Productivity of the worker: The wage should be directly linked to the worker’s output.
2. Cost of living: The wage should be sufficient to meet the basic needs of the worker and their family.
3. Competitive rates: The wage should be comparable to what is being paid in similar industries to attract and retain talent.

7. How do management principles make administration more effective? Explain with an example. Management principles make administration more effective by providing a structured framework for policy formulation and decision-making. For example, the principle of Unity of Direction ensures that all the activities of a department are guided by a single plan and a single manager. This prevents conflicts and ensures that all employees are working toward a common goal, making administration more effective.

8. What could be the ill-effects of a salesman receiving orders from two senior officers? If a salesman receives orders from two senior officers, it violates the principle of Unity of Command. This can lead to:

1. Confusion: The salesman will be confused about whose orders to follow.
2. Conflict: It can lead to clashes between the two superiors as they might have different expectations from the salesman.
3. Evasion of responsibility: The salesman might be able to evade responsibility by blaming one superior for the orders given by the other, leading to a lack of accountability.

Long Answer Questions (4 Marks Each)

1. Write any 4 benefits of scientific management.

1. Increased Productivity: It uses scientific methods to optimize work processes, leading to a significant increase in output per worker.
2. Cost Reduction: By eliminating waste and inefficient methods, it helps in minimizing the cost of production.
3. Higher Wages: Scientific management advocates for paying higher wages to productive workers, which motivates them to work harder.
4. Improved Industrial Relations: It creates a harmonious relationship between management and workers by providing a scientific basis for fair work standards and wages.

2. Write 4 characteristics of scientific management.

1. Systematic Approach: It replaces “rule of thumb” with a scientific, systematic approach to work and management.
2. Standardization: It aims to standardize every aspect of work, including tools, methods, time, and working conditions.
3. Mental Revolution: It seeks to bring about a complete mental revolution in the attitudes of both workers and management.
4. Separation of Planning and Doing: It separates the planning function from the execution function, with managers doing the planning and workers doing the work.

3. Explain the techniques of scientific management.

1. Functional Foremanship: A technique that divides supervision among eight specialist bosses, each responsible for a specific function (e.g., Speed Boss, Gang Boss, Disciplinarian).
2. Standardization and Simplification of Work: It involves setting standards for every aspect of production to ensure uniformity and reduce waste, and simplifying the work by eliminating unnecessary varieties of a product.
3. Fatigue Study: This technique aims to determine the amount and frequency of rest intervals required to enable a worker to regain their stamina and remain productive.
4. Differential Piece-Rate System: This system provides a higher wage rate for workers who achieve the standard output and a lower wage rate for those who do not.

4. Write any 4 principles of Taylor’s scientific management.

1. Science, Not Rule of Thumb: This principle emphasizes replacing guesswork with a scientific approach to analyze and find the most efficient way to do a job.
2. Harmony, Not Discord: It stresses the importance of harmony and a cooperative environment between management and workers to achieve mutual goals.
3. Cooperation, Not Individualism: This principle advocates for the collaboration of management and workers, discouraging individualism and competition.
4. Development of Each Person to his/her Greatest Efficiency and Prosperity: Taylor believed in the scientific selection and training of each employee to their highest potential.

5. Write any 4 principles propounded by Henry Fayol.

1. Division of Work: The entire work should be divided into smaller tasks and assigned to specialists to increase efficiency.
2. Authority and Responsibility: There should be a balance between the authority to give orders and the responsibility to complete a task.
3. Unity of Command: An employee should receive orders from only one superior to avoid confusion and conflict.
4. Unity of Direction: All activities that have the same objective should be guided by one head and one plan.

6. Write the characteristics of management principles.

1. Universal Applicability: They can be applied to all types of organizations, from business firms to government agencies.
2. General Guidelines: They are not rigid rules but flexible guidelines that managers can adapt to different situations.
3. Formed by Practice and Experimentation: They are developed through careful observation and repeated experimentation in various organizations.
4. Flexible: They are not static and can be modified and adapted according to the needs and situations of the organization.

7. State 4 dissimilarities in the management principles of Taylor and Fayol.

1. Level of Application: Taylor’s principles focus on the shop-floor level, while Fayol’s principles are more applicable to top-level management.
2. Focus: Taylor focused on improving worker efficiency and productivity, while Fayol focused on improving the overall administration and management of the organization.
3. Perspective: Taylor had a bottom-up approach, while Fayol had a top-down approach to management.
4. Subject Matter: Taylor’s principles are often referred to as Scientific Management, while Fayol’s principles are known as Administrative Management.

8. “The works of Taylor and Fayol are complementary to each other.” Explain this statement. This statement is true because the works of Taylor and Fayol address different levels of management, and their principles can be integrated to create a more effective organization. Taylor focused on the micro-level, dealing with the efficiency of individual workers and tasks. Fayol, on the other hand, focused on the macro-level, providing a framework for the overall administration of the organization. By applying Taylor’s techniques to the shop floor and Fayol’s principles to the higher levels of management, an organization can achieve both operational efficiency and administrative effectiveness. Their works complement each other by providing a holistic approach to management.

Unit 3 – Business Environment

Choose the correct option (1 mark each)

(I) As a result of the policy of liberalization in India, industries have: (a) Developed (b) Not developed at all (c) Industries have closed down rapidly (d) None of the above Answer: (a) Developed

(II) The geographical location of any country is related to the country’s: (a) Legal environment (b) Physical environment (c) Economic environment (d) Cultural environment Answer: (b) Physical environment

(III) The component of the social environment is: (a) Nationalization of banks (b) Foreign policy (c) Formation of the family (d) Industrial policy Answer: (c) Formation of the family

(IV) In any economy, fiscal deficit means: (a) Excess of income over expenditure (b) Excess of expenditure over income (c) Expenditure and income are equal (d) Both a and b Answer: (b) Excess of expenditure over income

(V) The new economic reforms are related to: (a) Liberalization (b) Privatization (c) Globalization (d) All of the above Answer: (d) All of the above

(VI) In the demonetization carried out in India on November 8, 2016, the demonetized notes were of the value: (a) ₹100 and ₹500 notes (b) ₹200 and ₹500 notes (c) ₹500 and ₹1000 notes (d) ₹1000 and ₹2000 notes Answer: (c) ₹500 and ₹1000 notes

(VII) As a result of demonetization, private property: (a) Decreased (b) Increased (c) Both a and b (d) Neither a nor b Answer: (a) Decreased

(VIII) Business environment includes: (a) Technological forces (b) Social forces (c) Economic forces (d) All of the above Answer: (d) All of the above

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Fill in the blanks (1 mark each)

(I) Economic reforms were implemented in India in the year 1991. (II) Business environment is always dynamic. (III) As a result of demonetization, the wealth of the public sector increased. (IV) Annual budget and five-year plan are part of economic planning. (V) The legal environment is related to the laws passed by the government. (VI) A business has no control over the external components of the environment. (VII) A mixed economic system has been adopted in India. (VIII) The integration of an economy with the economies of the rest of the world is called Globalization. (IX) Selling a portion of public sector undertakings to private hands is called Privatization. (X) The first time demonetization was done in India was in the year 1946. (XI) Stopping black money is a major objective of Demonetization.

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State whether true or false (1 mark each)

(I) Consumers and media are external components of the business environment. Answer: True

(II) The business environment is always dynamic. Answer: True

(III) The business environment is a relative concept. Answer: True

(IV) The increasing participation of women in the workforce is an aspect of the social environment. Answer: True

(V) The educational system and literacy rate are aspects of the economic environment. Answer: False

(VI) The ending of tax on all exports of goods and services is an aspect of the social environment. Answer: False

(VII) As a result of the effects of demonetization, the prices of land and buildings decreased. Answer: True

(VIII) As a result of the liberalization of licensing rules, competition has increased for Indian businesses. Answer: True

(IX) As a result of globalization, the choices available to consumers have decreased. Answer: False

(X) With a good understanding of the business environment, the performance of industrial units can be improved. Answer: True

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Answer in one word/one sentence (1 mark each)

(I) Which business environment is foreign policy an indicator of? Answer: Political environment

(II) What is the policy of removing restrictions on the transfer of goods and services called? Answer: Liberalization

(III) What is the policy of increasing the role of the private sector and reducing the role of the public sector called? Answer: Privatization

(IV) Marketing intermediaries are a force of which environment? Answer: Micro-environment

(V) What is the policy made to provide employment to people called? Answer: Employment policy

(VI) What is the policy of all the economies of the world uniting called? Answer: Globalization

(VII) What is the name of the law made in India in 1986 to protect the interests of consumers? Answer: Consumer Protection Act (उपभोक्ता संरक्षण अधिनियम)

(VIII) The laws and legal amendments passed by the government from time to time are related to which environment? Answer: Legal environment

(IX) When was the last time demonetization was done by the Government of India? Answer: November 8, 2016

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Very Short Answer Questions (2 marks each)

1. Define business environment. Business environment refers to the totality of all individuals, institutions, and other forces that are outside a business enterprise but have the potential to influence its performance.

2. Explain how an understanding of the business environment can improve an enterprise’s performance. An understanding of the business environment helps an enterprise to identify opportunities and threats in the market. By doing so, the business can formulate strategies to capitalize on opportunities and mitigate threats, thereby improving its overall performance and efficiency.

3. Name any two aspects of the social environment.

1. Social trends and values.
2. Family composition and education levels.

4. Name any two aspects of the technological environment.

1. Technological advancements and innovations.
2. Automation and robotics.

5. Give any two examples of the social environment.

1. Changes in consumer lifestyle and tastes.
2. Growing awareness of health and fitness.

6. Give any two examples of the political environment.

1. Political stability and peace in the country.
2. Government’s attitude towards the business community.

7. Name two aspects of the legal environment.

1. Government policies and laws.
2. Legal framework for business operations.

8. Write any two effects of demonetization.

1. Reduced black money: It aimed to curb the circulation of black money by invalidating high-denomination notes.
2. Increased digitalization: It encouraged people to use digital modes of payment, leading to a cashless economy.

9. Write any two benefits of privatization.

1. Increased competition: It promotes a competitive environment, which leads to better quality goods and services at lower prices.
2. Improved efficiency: Private companies are often more efficient and innovative than public sector undertakings.

10. What is meant by globalization? Globalization refers to the integration of the world’s economy through the free flow of goods, services, capital, and technology across national borders.

11. What is meant by privatization? Privatization is the process of transferring ownership, control, and management of a public sector enterprise to the private sector.

12. What is meant by demonetization? Demonetization is the act of stripping a currency unit of its legal tender status. In India, this was done to curb black money, fake currency, and promote digital payments.

13. What is meant by liberalization? Liberalization is the policy of removing government controls and restrictions on economic activities to encourage private sector participation and foreign investment.

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Short Answer Questions (3 marks each)

1. Explain the importance of understanding the business environment for the success of a business enterprise.

1. Helps in identifying opportunities: A thorough understanding of the business environment helps a business to spot emerging opportunities and take a first-mover advantage.
2. Helps in identifying threats: It helps in anticipating potential threats from competitors or government policies, allowing the business to take preventive measures.
3. Assists in planning and policy formulation: Understanding the environment provides a basis for strategic planning and formulating effective policies.

2. Write in 3 points the impact of changes in government policy on business and industries.

1. Increased competition: Changes like liberalization have opened up the market to foreign players, leading to increased competition for domestic firms.
2. More demanding customers: With more choices and better quality products available, customers have become more demanding.
3. Need for new technology: Businesses are required to adopt new technologies to stay competitive and meet the new challenges of the market.

3. Write the effects of demonetization on interest rates, private property, and immovable property.

1. Interest rates: Demonetization led to a significant increase in bank deposits, which in turn resulted in a reduction in lending rates.
2. Private property: Due to a lack of liquidity, the demand for goods and services decreased, which adversely affected private property.
3. Immovable property: The real estate sector was hit hard as cash transactions came to a halt, leading to a sharp decline in the prices of land and buildings.

4. In the context of the business environment, explain the following points: (a) Dynamism, (b) Uncertainty, (c) Complexity. (a) Dynamism: The business environment is not static but constantly changing. These changes include shifts in consumer trends, new technological advancements, or changes in government policies. (b) Uncertainty: It is very difficult to predict future changes in the business environment. For example, it is impossible to predict a new government policy or a sudden change in consumer demand. (c) Complexity: The business environment is a complex phenomenon consisting of a number of interconnected and dynamic forces. It is difficult for a business to understand the impact of a single force in isolation.

5. Explain how the success of a business is affected by its environment. A business’s success is directly influenced by its environment. A favorable environment, with supportive government policies and stable economic conditions, can lead to business growth. Conversely, an unfavorable environment, with high competition, restrictive policies, or social unrest, can hinder business success. Businesses that are quick to adapt to the changes in their environment are more likely to succeed.

6. In the context of the business environment, explain the difference between general and specific environment. The specific environment includes those forces and institutions that directly affect a firm’s operations, such as its customers, suppliers, competitors, and investors. The general environment includes broad forces that do not have a direct impact on a specific firm but can affect all businesses in general. Examples include the political, legal, social, and economic environment.

7. Write any 3 changes made by the government under the Industrial Policy of 1991.

1. Abolition of Industrial Licensing: The need for licenses to start or expand an industrial unit was largely abolished.
2. De-reservation of Industries: The number of industries reserved for the public sector was significantly reduced.
3. Foreign Investment: The policy made it easier for foreign companies to invest in India by allowing foreign direct investment (FDI) in many sectors.

8. Critically evaluate the effects of demonetization in 3 points.

1. Curbing black money: While a significant amount of cash was deposited in banks, it did not entirely eliminate black money.
2. Digital payments: Demonetization gave a major push to digital payments, which was a positive long-term effect.
3. Impact on small businesses: Many small businesses that relied on cash transactions were severely affected by the sudden shortage of currency.

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Unit 4 – Planning

Choose the correct option (1 mark each)

(I) Objectives should be: (a) Idealistic (b) Complex (c) Practical (d) One-sided Answer: (c) Practical

(II) The elements of planning are: (a) Goals and objectives (b) Policies (c) Rules (d) All of the above Answer: (d) All of the above

(III) The planning process includes: (a) Setting objectives (b) Developing premises (c) Evaluating alternatives (d) All of the above Answer: (d) All of the above

(IV) The objective of planning is: (a) Healthy competition (b) Forecasting (c) Optimal distribution of resources (d) All of the above Answer: (d) All of the above

(V) The last step of planning is: (a) Setting objectives (b) Forecasting (c) Optimal distribution of resources (d) Follow up Answer: (d) Follow up

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Fill in the blanks (1 mark each)

(I) Planning reduces the risk of uncertainty. (II) Planning makes decision-making easier. (III) Rules help in establishing discipline. (IV) Planning is a continuous process. (V) Planning determines what and how to do in the future. (VI) Planning is not a guarantee of success. (VII) In the planning process, alternatives are evaluated. (VIII) A new plan is made for every task.

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Match the pairs (1 mark each)

1. (I) Primary function of management: (f) Planning (II) Operation of daily activities: (c) Does not repeat in the future (III) Permanent plan: (b) Repeats in the future (IV) Single-use plan: (c) Does not repeat in the future (V) Center point of planning: (a) Goal achievement (VI) Single-use plan: (e) Budget

2. (I) To set a sequence: (c) Procedures (II) Increase in work efficiency: (e) Method (III) Last point: (a) Objective (IV) General statement: (d) Policy (V) Specific statement: (b) Rule

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State whether true or false (1 mark each)

(I) Planning reduces creativity. Answer: True

(II) Planning is a time-consuming process. Answer: True

(III) Planning establishes coordination between different departments and employees. Answer: True

(IV) Planning makes decision-making simple. Answer: True

(V) Planning creates competitive interest. Answer: True

(VI) Rules allow for flexibility. Answer: False

(VII) Planning provides direction. Answer: True

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Answer in one word/one sentence (1 mark each)

(I) What is the process of getting information about the pros and cons of each alternative called? Answer: Evaluating alternatives (विकल्पों का मूल्यांकन)

(II) What is the first task in planning? Answer: Setting objectives (उद्देश्य निर्धारण)

(III) By whom are the plans implemented? Answer: Managers (प्रबंधक)

(IV) What is the broad plan to fulfill the objectives of the organization called? Answer: Strategy (व्यूह रचना)

(V) What kind of process is planning? Answer: Continuous (निरंतर)

(VI) What kind of exercise is planning? Answer: Mental (मानसिक)

(VII) Who determines the standards for control? Answer: Planning (नियोजन)

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Very Short Answer Questions (2 marks each)

1. What is meant by planning? Planning is a mental process that involves deciding in advance what to do, when to do it, how to do it, and who is to do it.

2. Write the meaning of a program. A program is a single-use plan that is a detailed statement of the courses of action for a specific project. It includes objectives, policies, procedures, rules, and budgets.

3. Write any two limitations of planning.

1. It creates a sense of rigidity, as managers may not be able to deviate from the plan.
2. It may not be effective in a dynamic environment, where conditions are constantly changing.

4. Write any two objectives of planning.

1. To achieve the predetermined goals of the organization.
2. To make the best use of available resources.

5. Write the meaning of a procedure. A procedure is a sequence of steps or a series of actions to be taken to carry out a particular activity. It is a guide to action rather than to thinking.

6. What is meant by a method? A method is a systematic way of doing a task. It specifies the sequence of operations or steps to be performed to accomplish a task.

7. Write the meaning of a rule. A rule is a specific statement that defines what is to be done and what is not to be done in a given situation. It is a rigid plan that must be followed.

8. Explain the meaning of a program. A program is a comprehensive plan that outlines the objectives, policies, procedures, and rules for a specific project. It is a detailed plan for a one-time event or project.

9. Write the meaning of a budget. A budget is a plan that expresses the expected results in numerical terms, such as money, time, or quantity. It is a control device that helps in comparing actual performance with the planned performance.

10. Write the meaning of an objective. An objective is the desired result that an organization aims to achieve. It is a statement of the purpose of an organization or a department.

11. Write the meaning of a policy. A policy is a general statement or a guide to managerial thinking and decision-making. It provides a framework within which managers can act.

12. Write the meaning of a follow-up. A follow-up is the last step in the planning process, which involves checking if the plan is being implemented properly and making necessary corrections if there are any deviations.

13. Write the meaning of evaluation of alternatives. Evaluation of alternatives is the process of critically examining the pros and cons of each alternative solution to a problem before making a decision.

14. Why is planning a mental exercise? Planning is a mental exercise because it involves thinking, analyzing, and using foresight to make decisions. It requires the use of mental abilities like thinking, imagination, and sound judgment.

15. Write the meaning of a standing plan. A standing plan is a plan that is used repeatedly for activities that occur regularly in an organization. Examples include policies, procedures, and rules.

16. Write the meaning of a strategy. A strategy is a comprehensive plan that is designed to achieve the overall objectives of an organization. It includes a long-term plan, the selection of a course of action, and the allocation of resources.

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Short Answer Questions (3 marks each)

1. Write any 3 characteristics of planning.

1. Goal-oriented: Planning is a purposeful activity that is directed toward achieving the goals of the organization.
2. Futuristic: Planning is always concerned with the future. It is a way of looking ahead and making preparations for the future.
3. Pervasive: Planning is required at all levels of management, from top-level to lower-level.

2. Write any 3 limitations of planning.

1. May not work in a dynamic environment: Planning is based on certain assumptions about the future, which may not hold true in a rapidly changing environment.
2. Reduces creativity: It reduces the freedom and initiative of managers at lower levels, as they have to strictly follow the plans made by top management.
3. Involves huge costs: Planning is a time-consuming and expensive process. The cost of planning may sometimes be more than the benefits derived from it.

3. How does planning make decision-making simple? Planning provides a framework within which decisions can be made. It sets clear objectives and provides a range of alternatives. By evaluating the pros and cons of each alternative, managers can make a quick and rational decision.

4. Explain the statement, “Planning is pervasive.” The statement “Planning is pervasive” means that planning is required at all levels of management in an organization. Top-level managers are involved in strategic planning, middle-level managers are involved in tactical planning for their departments, and lower-level managers are involved in operational planning for daily activities.

5. How does planning determine the standards for control? Planning provides the standards against which actual performance is measured. For example, if a plan sets a target of producing 100 units per day, then this target becomes the standard for control. The actual output is then compared with this standard to check for any deviations.

6. Why is planning not effective in a changing environment? Planning may not be effective in a changing environment because it is based on assumptions about the future. If the market conditions, government policies, or customer preferences change, the plans may become obsolete and ineffective. It requires continuous monitoring and adaptation.

7. “Is planning a time-wasting process?” Explain. Planning is often seen as a time-wasting process because it takes a lot of time and effort to gather information, analyze alternatives, and formulate a plan. However, a well-thought-out plan saves time in the long run by providing clear directions and preventing chaos.

8. Explain the statement, “Planning is not a guarantee of success.” The statement “Planning is not a guarantee of success” means that merely having a plan does not guarantee success. The success of a plan depends on many factors, such as the accuracy of the assumptions, the proper implementation of the plan, and the reaction of competitors.

9. Explain the selection of alternatives in the planning process. After the identification of all possible alternatives, the next step in the planning process is to evaluate them. This involves weighing the pros and cons of each alternative based on the objectives and the resources of the organization. The alternative with the maximum benefits and minimum costs is selected.

10. “Is planning a mental exercise?” Explain. Yes, planning is a mental exercise. It is a systematic process of thinking before doing. It requires the use of mental abilities like foresight, analysis, judgment, and creativity. It is not just about making a list of tasks but about thinking through the entire process and its consequences.

11. How does planning reduce the risk of uncertainty? Planning helps to reduce the risk of uncertainty by allowing managers to foresee the future and prepare for it. By making assumptions about future events and preparing for contingencies, planning helps an organization to face the challenges of a dynamic environment with confidence.

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Long Answer Questions (4 marks each)

1. Describe the steps to be taken by management in the planning process.

1. Setting objectives: The first step is to set clear and measurable objectives for the organization.
2. Developing premises: This involves making assumptions about the future environment, such as market conditions and government policies.
3. Identifying alternatives: Managers need to identify all possible courses of action that can be taken to achieve the objectives.
4. Evaluating alternatives: The pros and cons of each alternative are evaluated to select the best one.
5. Selecting an alternative: The best alternative is chosen based on the evaluation.
6. Implementing the plan: The plan is put into action.
7. Follow up: The progress of the plan is monitored, and necessary adjustments are made.

2. Write the importance of planning.

1. Provides direction: Planning provides a clear direction for the organization by stating what needs to be done and how it should be done.
2. Reduces risks: It helps in reducing the risk of uncertainty by anticipating future events and preparing for them.
3. Promotes innovation: It encourages managers to think creatively and come up with new ideas and methods.
4. Facilitates decision-making: It provides a systematic framework for making rational decisions.

3. Write the planning process. The planning process involves a series of logical steps:

1. Setting Objectives: Clearly defining what the organization wants to achieve.
2. Developing Premises: Making assumptions about the future.
3. Identifying Alternatives: Listing all possible ways to achieve the objectives.
4. Evaluating Alternatives: Analyzing the pros and cons of each alternative.
5. Selecting an Alternative: Choosing the best alternative.
6. Implementing the Plan: Putting the plan into action.
7. Follow-up Action: Monitoring the plan and making corrections.

4. Write any 4 differences between method and procedure. | Basis | Method | Procedure | |—|—|—| | Meaning | A method is a way of performing a single step of a task. | A procedure is a sequence of steps to perform a complete task. | | Scope | It is narrower in scope. | It is broader in scope. | | Nature | It is concerned with the execution of a single step. | It is concerned with the flow of a whole task. | | Example | The method of operating a machine. | The procedure for handling customer complaints. |

5. Write any 4 differences between policies and rules. | Basis | Policy | Rule | |—|—|—| | Nature | A policy is a general guide to action. | A rule is a specific statement that must be followed. | | Flexibility | Policies are flexible. | Rules are rigid and inflexible. | | Purpose | It guides managers in decision-making. | It specifies what to do and what not to do. | | Example | A policy of not giving credit to new customers. | The rule of no smoking in the office. |

6. Write any 4 differences between objective and policy. | Basis | Objective | Policy | |—|—|—| | Meaning | An objective is the end goal that an organization wants to achieve. | A policy is a means to achieve the objective. | | Nature | Objectives are specific and measurable. | Policies are general guidelines. | | Time Horizon | Objectives can be long-term or short-term. | Policies are generally long-term in nature. | | Relationship | Policies are formulated to achieve the objectives. | Objectives provide the direction for formulating policies. |

7. Write the types of plans.

1. Standing Plans: Used repeatedly for regular activities (e.g., policies, procedures, rules).
2. Single-Use Plans: Designed for a specific purpose and are not used again (e.g., programs, budgets).
3. Strategic Plans: Long-term plans for the entire organization.
4. Tactical Plans: Medium-term plans for specific departments.
5. Operational Plans: Short-term plans for daily operations.

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Unit 5 – Organizing

Choose the correct option (1 mark each)

(I) Span of management refers to: (a) The number of managers (b) The number of members in top management (c) The number of subordinates working under a senior officer (d) The time limit for which a manager is appointed Answer: (c) The number of subordinates working under a senior officer

(II) Which of the following organizations is formed automatically? (a) Functional (b) Divisional (c) Formal (d) Informal Answer: (d) Informal

(III) Authority cannot be delegated for: (a) Daily tasks (b) General tasks (c) Simple tasks (d) All of the above Answer: (d) All of the above

(IV) Which of the following organizations promotes occupational specialization? (a) Functional organization (b) Divisional organization (c) Informal organization (d) All of the above Answer: (a) Functional organization

(V) Which of the following is the first step of the organizing process? (a) Identification of work (b) Division of work (c) Determination of authority (d) Determination of objectives Answer: (d) Determination of objectives

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Fill in the blanks (1 mark each)

(I) Decentralization is an advanced form of delegation. (II) Departmentalization is a step in the organizing process. (III) In a formal organization, authority and responsibilities are clearly defined. (IV) Transferring limited authority to subordinates is called delegation. (V) Organizational structure aims to explain the authority and responsibility relationships in an institution. (VI) Decentralization should always be balanced with centralization.

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Match the pairs (1 mark each)

1. (I) Formal organization: (d) Fixed (II) Informal organization: (e) Variable (III) Functional structure: (a) Job specialization (IV) Divisional structure: (b) Product specialization (V) Flow from top to bottom: (c) Authority (VI) Flow from bottom to top: (f) Responsibility

2. (I) Ability to answer for the final result: (b) Accountability (II) Decisions only at the top level: (c) Centralization (III) Decisions at all levels: (a) Decentralization (IV) Creation of a hierarchical order: (e) Clarity of communication (V) Rumors: (d) Disruptive force

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State whether true or false (1 mark each)

(I) Organization is a process. Answer: True

(II) Organization gives rise to corruption. Answer: False

(III) Decentralization is not a process. Answer: False

(IV) Divisional organization increases the need for highly qualified staff. Answer: True

(V) The establishment of the organization is done by lower-level management. Answer: False

(VI) Delegation of authority is mandatory for all businesses. Answer: False

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Answer in one word/one sentence (1 mark each)

(I) What is the power to make decisions called? Answer: Authority (अधिकार)

(II) What is the process of assigning work to subordinates called? Answer: Delegation (अधिकार अंतरण)

(III) How many steps are included in the organizing process? Answer: Eight (आठ)

(IV) Which organization should an institution that makes various types of products adopt? Answer: Divisional organization (प्रभागीय संगठन)

(V) The determination of duties in an organization is done after what? Answer: Division of work (कार्य विभाजन)

(VI) What is the outcome of the organizing process? Answer: Organizational structure (संगठन ढाँचा)

(VII) Which organization has no pattern of activity? Answer: Informal organization (अनौपचारिक संगठन)

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Very Short Answer Questions (2 marks each)

1. What is meant by organization? Organization is a process of identifying and grouping the work to be performed, defining and delegating responsibility and authority, and establishing relationships for the purpose of enabling people to work most effectively.

2. What is meant by formal organization? Formal organization is a deliberately created structure of authority and responsibility. It is a system of well-defined jobs, with a clear line of authority and responsibility.

3. What is meant by informal organization? An informal organization is a network of personal and social relationships that is not established or required by the formal organization. It arises spontaneously as people interact with each other.

4. What is accountability? Accountability is the obligation of a person to answer for their actions and performance. It is the obligation of the subordinate to the superior to whom he has delegated authority.

5. What is meant by centralization? Centralization refers to the concentration of authority and decision-making power in the hands of a few top-level managers.

6. What is meant by decentralization? Decentralization is the systematic delegation of authority and decision-making power to the lower levels of management.

7. What is meant by delegation of authority? Delegation of authority is the process of entrusting some part of a manager’s work to his subordinates, along with the authority to perform that work.

8. State any two objectives of delegation of authority.

1. To reduce the workload of the manager.
2. To motivate and develop the subordinates.

9. Draw a diagram of a divisional structure.

10. What is a functional organization? A functional organization is a structure in which the organization is divided into specialized departments based on functions, such as production, marketing, and finance.

11. Write the definition of delegation of authority. According to Louis Allen, “Delegation is the process a manager follows in dividing the work assigned to him so that he performs that part which he cannot pass on and entrusts the rest to his subordinates.”

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Short Answer Questions (3 marks each)

1. State any 3 benefits of a formal organization.

1. Clarity of authority: It clearly defines the line of authority and responsibility, which helps in avoiding confusion and conflicts.
2. Orderly work: It ensures that all work is done in a systematic and orderly manner.
3. Stability: It is a more stable structure that is not affected by the personal relationships of employees.

2. How does an informal organization support a formal organization? An informal organization supports a formal organization by:

1. Providing social satisfaction: It fulfills the social and psychological needs of employees, which can lead to better morale and productivity.
2. Faster communication: It helps in the quick and informal transmission of information, which is not possible in a formal organization.
3. Promoting teamwork: It encourages teamwork and cooperation among employees, which helps in achieving the goals of the formal organization.

3. When and why is decentralization done? Decentralization is done when the size of the organization is large and it becomes difficult for top management to handle all the work. It is done to reduce the workload of top managers, to provide more autonomy and motivation to lower-level managers, and to make decisions faster.

4. Write the elements of delegation of authority. The three elements of delegation of authority are:

1. Authority: The right of a person to give orders and take action.
2. Responsibility: The obligation of a person to complete a task.
3. Accountability: The obligation of a subordinate to their superior to whom they have delegated authority.

5. State any 3 demerits of an informal organization.

1. Resistance to change: It can create resistance to changes in the organization, as the group may not be willing to accept new policies.
2. Spreading rumors: It is a channel for the spread of rumors, which can harm the organization’s reputation and create a negative work environment.
3. Conflict with formal organization: The goals of the informal organization may sometimes be in conflict with the goals of the formal organization.

6. Write any 3 characteristics of an organization.

1. Division of work: The work is divided into smaller tasks and assigned to different individuals.
2. Coordination: All the activities are coordinated to achieve the common goal.
3. Hierarchy of authority: It establishes a clear line of authority from the top to the bottom of the organization.

7. Write any 3 differences between authority and responsibility. | Basis | Authority | Responsibility | |—|—|—| | Meaning | The right to give orders. | The obligation to perform a task. | | Flow | It flows from top to bottom. | It flows from bottom to top. | | Delegation | It can be delegated. | It cannot be delegated entirely. |

8. Write any 3 differences between functional organization and divisional organization. | Basis | Functional Organization | Divisional Organization | |—|—|—| | Structure | Based on functions (e.g., production, marketing). | Based on products or geographical areas. | | Specialization | Job specialization. | Product specialization. | | Coordination | More difficult to coordinate different functions. | Easier to coordinate as each division is self-contained. |

9. Write any 3 merits of a divisional organization.

1. Product specialization: It focuses on the development of a specific product line, which leads to better quality.
2. Flexibility: It is a more flexible structure that can easily adapt to changes in the market.
3. Better control: Each division is an independent unit, which makes it easier for the manager to control and monitor its performance.

10. Write any 3 merits of a functional organization.

1. Occupational specialization: It promotes occupational specialization, which leads to better efficiency and performance.
2. Better utilization of resources: It ensures that all resources are used effectively by placing them under the control of specialists.
3. Simplicity: It is a simple and easy-to-understand structure.

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Long Answer Questions (4 marks each)

1. Write 4 differences between delegation of authority and decentralization. | Basis | Delegation of Authority | Decentralization | |—|—|—| | Meaning | Transfer of authority from a superior to a subordinate. | Systematic delegation of authority to lower levels. | | Scope | Narrower, as it applies only to a superior and a subordinate. | Broader, as it applies to the entire organization. | | Nature | It is a process that is required for effective management. | It is a policy decision of top management. | | Control | The superior retains control and is accountable. | Top management has less control. |

2. Write 4 differences between a formal and informal organization. | Basis | Formal Organization | Informal Organization | |—|—|—| | Meaning | A deliberately created structure of authority. | A network of personal and social relationships. | | Formation | Created by top management. | Arises spontaneously. | | Rules | Governed by fixed rules and regulations. | Governed by social norms and customs. | | Purpose | To achieve the goals of the organization. | To fulfill the social and psychological needs of employees. |

3. Explain the importance of delegation of authority.

1. Reduces the manager’s workload: It frees up the manager’s time to focus on more important tasks.
2. Employee development: It provides opportunities for subordinates to develop their skills and abilities.
3. Basis of organization: It is the foundation of an organization, as it establishes the line of authority and responsibility.
4. Better communication: It improves communication between a manager and his subordinates, as they have to communicate regularly to get things done.

4. Write the steps of the organizing process.

1. Identification and division of work: The total work is identified and divided into smaller tasks.
2. Grouping of activities: Similar activities are grouped together to form departments.
3. Assignment of duties: The duties are assigned to the employees based on their skills and abilities.
4. Establishing authority relationships: The line of authority and responsibility is established from the top to the bottom of the organization.

5. Explain the divisional organizational structure. A divisional organizational structure is a structure in which the organization is divided into separate divisions. Each division is a self-contained unit with its own set of resources, such as production, marketing, and finance departments. Divisions are created based on products, geographical areas, or customers.

6. Write any 4 benefits of decentralization.

1. Reduces the workload of top managers: It frees up the time of top managers to focus on strategic planning and policy formulation.
2. Employee motivation: It gives more autonomy and decision-making power to lower-level managers, which motivates them.
3. Faster decision-making: Decisions can be made more quickly as they do not have to be referred to top management.
4. Better control: It allows for better control as the performance of each division or department can be easily measured.

7. State the types of delegation. Delegation of authority can be of two types:

1. Formal Delegation: This is a part of the formal organization, where authority is delegated through written orders or a formal document.
2. Informal Delegation: This is a part of the informal organization, where authority is delegated through informal relationships and interactions.

8. Write any 4 objectives of an organization.

1. To achieve the predetermined goals of the organization.
2. To make the best use of available resources.
3. To establish a clear line of authority and responsibility.
4. To create a framework for coordination and communication.

9. Write any 4 benefits of a functional organization.

1. Job specialization: It leads to specialization in a particular field, which results in efficiency.
2. Better supervision: It allows for better supervision as the manager is a specialist in a particular function.
3. Coordination: It facilitates coordination within a single department.
4. Easy to understand: It is a simple and easy-to-understand structure.

10. Write any 4 demerits of a divisional organization.

1. Costly: It is an expensive structure as each division requires its own set of resources and staff.
2. Conflict between divisions: It can lead to conflicts between different divisions, as they may compete for resources.
3. Lack of coordination: It can be difficult to coordinate the activities of different divisions.
4. Neglect of organizational goals: Each division may focus on its own goals rather than the overall goals of the organization.