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Business Studies – Multiple choice questions
1. What is POSDCORB? Who coined the term?
Ans: P – Planning. O – Organising, S – Staffing, D – Directing, C – Coordinating, O – Organising, R – Reporting and B – Budgeting. This term is coined by L. Gullick and L. Urwick.
2. Give any two characteristics of Management?
Ans.: (I) Management is goal – oriented process. (II) Management is all pervasive.
3. Why is coordination known as essence of Management? 2012
Ans.: Because it is not a separate function of Management rather it forms a major part of all the other functions of Management. It is the base of all other function of management.
4. Implementation of plan is the function of which level of management? 2011 Ans: Middle Level Management
5. At which level business policy is framed? 2015 Ans: Top Level
6. Management is intangible and dynamic. True or false. True 2011
7. What is meant by Management principles?
Ans: Management principles are those basic truths which have the ability to predict the result of the managerial activities.
8. State two features of Principles of management. 2008, 2011
Ans: a) Universal Applicability b) General Statements c) Flexibility
9. State one violating effect of the principle of ‘Division of work’ Ans: Lack of specialization.
10. State one positive effect of the principle of ‘Unity of command’
Ans: Avoidance of confusion leading to efficiency.
11. Distinguish between contribution made by Fayol and Taylor on the basis of applicability.
Ans: Fayol's principles are applied universally as they are general in nature whereas Taylor’s principles are specific as they are scientific in nature.
12. What do you understand by principles of management? 2009
Ans: Principles of Management are the statements of fundamental truth which provide guidelines which help management to take decisions and action. They are derived from observation and experimental studies.
13. What is the criticism of scientific management? 2008
Ans: Criticism of scientific management: Rigid Control, Monotonous work, Lack of initiative, Exploitation, Lack of employment opportunities, Weak Unions.
14. Who introduced the concept of functional foremanship? 2008, 2010, 2015
Ans: F.W. Taylor. It insists on hiring specialist for every job. (8 Specialists foremen)
15. Who introduced the concept of Gang Plank? 2011
Ans: Henry Fayol. It permits direct communication between employees working at same level.
16. General and Industrial Management book written by which writer? 2008, 2012
Ans: Henry Fayol
17. Who classified the activities of an industrial organisation into six groups? 2010 Ans: Henry Fayol
18.What is business environment? 2010
Ans. It refers to the sum total of all individuals, institution & other forces that are outside the control of business enterprise but that may affect its performance.
19. Mention two element of political environment?
Ans. (a) Political ideology & practices of the ruling party. (b). Nature of relationship of our country with foreign countries.
20. Mention any two elements of social environment?
Ans. ( a.) Birth & death rates. (b.) Concern with quality of life.
21. Give two changes introduced in industrial policy of July 1991?
Ans. (a.) Abolition of industrial licensing. (b.) Dereservation of industries for public sector.
22. What is privatization?
Ans. Privatization may be defined as the transfer of ownership & control from the public sector to Private sector.
23. What is Globalisation?
Ans.. Globalisation means integrating our economy with world economy.
24. Name two elements of technological environment?
Ans.. 1.Recent technological. 2. Advances in computers & electronics.
25. Which environment prohibits the advertisement of alcoholic beverages? 2014 Ans.:- legal Environment
26. Which economic policy of the Indian Government initiated globalisation? 2011, 2012
Ans: Industrial Policy 1991.
27. What is meant by “policies” as a type of plans? 2009, 2011
Ans. Policies are general statements or understandings which guide thinking in decision-making. Example: Different business firms may follow different sales policies as stated below: “We don’t sell on credit”; “It is our policy to deal with wholesalers only.”
28. State the meaning of “Rules” as a type of plan. 2008
Ans. Rules are specific statements that tell what is to be done. Rules are to be enforced rigidly. They do not allow for any flexibility or discretion.
29. ‘No Smoking in the factory’ is which type of plan. Ans. Rules
30. Define Planning Premises. 2013
Ans: Planning is concerned with the future, which is uncertain. Therefore, the manager is required to make certain assumptions about the future. These assumptions are called premises.
31. A superior is responsible to his subordinates. 2008
Ans: This statement is false.
32. Can responsibility be delegated? 2008, 2010, 2013
Ans: According to the principle of absolute responsibility, authority can be delegated but responsibility can’t be delegated by a manager.
33. Which organizational structure is suitable for a multi-product manufacturing company?
Ans: Divisional organization structure
34. Which organizational structure is suitable for a uni-product manufacturing company?
Ans: Functional organization structure
35. Out of formal and informal organisation which is dependent upon which?
Ans: Informal organization depends on formal organization.
36. How is informal organisation created? 2010
Ans: Informal organisation is created spontaneously by the employees working together and interacting with each other. It is an unintentional creation.
37. Name the organisation in which employees are allowed to communicate freely and there are no rules and regulations. Ans: Informal organisation
38. Define span of control.
Ans: It refers to the number of subordinates coming under direct control and supervision of the superior.
39. “Delegation can take place without decentralisation”. Explain. 2009
Ans: This statement is true because delegation is necessary in every organisation but decentralisation is not necessary.
40. Authority always flows downwards, while responsibility always flows upwards. 2009
41. Which function of management helps in obtaining right people and putting them on the right jobs?
42. Name the process concerned with searching for prospective candidates for vacant job position. 2012
43. Mention the elements of staffing in appropriate sequence. 2009
Ans: 1. Recruitment 2. Selection 3. Placement.
44. What is recruitment?
Ans: It is a process of inducing the people to apply for the job in the organisation.
45. State is the internal sources of Recruitment? 2009, 2010
Ans: (i) Transfer (ii) Promotion
46. Why recruitment is regarded as a Positive Process and selection is a negative process? 2009, 2011
Ans: Recruitment is Positive Process because it is concerned with attracting qualified and competent individuals to apply for a job while selection is choosing the best among them and rejecting the unsuitable candidates.
47. State the elements of Directing. 2009, 2012, 2015
Ans: Supervision, leadership, Motivation and communication. (Details are given below)
48. State the form of communication where official talks take place. Ans: Formal communication.
49. What is grapevine? 2008, 2014
Ans: The network of informal communication is called grapevine.
50. Who Proposed the “Need theory of Motivation”? 2008, 2014 Ans: Abraham Maslow
51. Which function of management ensures that actual activities confirm to planned activities? 2012
Ans: It is controlling.
52. Why it is said that ‘planning is meaningless without controlling’?
Ans: Because in the absence of controlling no will take it seriously to work according to the plans and hence, the plan will fail.
53. Why it is said that ‘controlling is looking back’?
Ans: Because under it, a manager tries to find out whether the work has been done according to the standards or not.
54. Which of the following is not an essential element of an effective control system? 2009
- Rigidity, Economy, Simplicity, Flexibility
55.What is meant by Financial Planning?
Ans: Financial Planning refers to determination of firm’s financial objectives, financial policies and financial procedure.
56. State the decisions involved in financial management. 2015
Ans: a) Investment decision b) Financing decision c) Dividend decision
57. State the primary objective of financial management.
Ans: To maximize the shareholders wealth.
58. State two objectives of financial planning.
Ans: a) to ensure availability of fund whenever required. b) To see that the firm does not raise funds unnecessarily.
59. What is disinvestment? 2013, 2014
Ans: Disinvestment refers to the use of a concerted economic boycott to pressure a government, industry, or company towards a change in policy, or in the case of governments, even regime change.
60. Name the instruments that are traded in money market. 2013
Ans: Call money, Commercial Papers, Certificates of deposits, Bills of exchange.
61. In which year NSEI and BSE were established? 2015
Ans: NSEI – In 1991 and BSE – In 1875. But, NSEI was recognized in 1992.
62. In which year OTCEI was established? Ans: 1990
63. Write the full form of NSEI, BSE and OTCEI.
Ans: NSEI – National stock exchange of India (Nifty), BSE – Bombay Stock Exchange (Sensex), OTCEI – Over the Counter Exchange of India.
64. How many stock exchanges are there in India? Ans: There are 24 stock exchanges in India.
65. Name the system where there is electronic book entry form of holding and transferring the securities.
66. Name the Benchmark index of BSE and NSE. Ans: SENSEX (BSE) and NIFTY (NSE)
67. When was SEBI established? Ans: It was established in 1988 but was given statutory status in 1992.
68. Define Marketing. 2012
Ans: Marketing is a social process whereby people exchange goods & services for money or for something of value to them.
69. What is marketing mix? 2013
Ans: It refers to the combination of four basic elements product, price, promotion and the place, known as the four P’s of marketing.
70. What is trademark? 2014
Ans: Trademark simply means mark of a trade carried on by an identified entity. It is usually a sign mark or a symbol, word or words.
71. What is a product? Ans: It means good or services or anything of value which is offered to the market for exchange.
72. What is package? Ans: The container which carries the product is called package.
73. What is packaging?
Ans: Packaging is defined as a set of tasks or activities which is concerned with the design and production of an appropriate container for the product
74. Which Marketing philosophy gives more importance to “Consumer welfare” instead of “Consumer Satisfaction”?
Ans: Societal marketing 2015
75. What is the purpose of enacting the consumer protection Act 1986?
Ans: To protect and promote the interest of consumer.
76. Mohit filed a case against ‘Domestic Cooling ltd.’ in the ‘District Forum’, but was not satisfied with the orders of the District Forum. Where can he appeal further against the decisions of District Forum and in how many days?
Ans: Mohit can further appeal against the decision of District Forum in the ‘State Commission’ within 30 days.
77. Mohit filed a case against ‘Volvo Ltd.’ in the ‘State Commission’. But he was not satisfied with the orders of the ‘State Commission’. Name the authority to which he can appeal against the decisions of ‘State Commission’.
Ans: Amrit can further appeal in ‘National Commission’.
78. Ankit filed a case against ‘Mahindra Ltd.’ in the ‘National Commission’. But he was not satisfied with the orders of the ‘National Commission’. Name the authority to which he can appeal against the decisions of ‘National Commission’.
Ans: He can appeal in Supreme Court within 30 days.
79. Ram wants to buy ghee. How can he check the quality of product?
Ans: Through ‘AGMARK’ symbol. “AGMARK” symbol is used for food products.
80. Ram wants to buy an iron. As an aware customer, how can he be sure about the quality of iron? 2012
Ans: Through “ISI” mark. “ISI” mark is used for electronic items.
81. Can a consumer file complaint in consumer court without having cash memo?
Ans: No, without cash memo he cannot file a complaint. Cash memo is the proof of the transaction.
82. Mr. A suffers a loss of Rs.20, 00,000 due to bad quality of goods. Name the commission to which Mr. A approach for claim?
Ans: District Commission
83. Mr. A suffers a loss of Rs.1, 00, 00,000 due to bad quality of goods. Name the commission to which Mr. A approach for claim? Ans: State Commission
84. Mr. A suffers a loss of Rs.1, 10, 00,000 due to bad quality of goods. Name the commission to which Mr. A approach for claim?
Ans: National Commission
Previous exam questions
a) Which principle of management promotes team spirit.
b) Which policy of govt. has moved India towards globalization?
c) Mention one responsibility on consumer under consumer Protection Act.
d) Which function of management is considered as the base of all other function?
e) Name the process concerned with searching for prospective candidates for various jobs in an organization.
f) Give any two benefit of training to the organization.
g) Name the techniques of control by which all operations are planned in advance in the form of budget.
h) Ahmed wants to buy iron. As an aware customer, how can he be sure about the quality of iron?
i) Which act aims at controlling production, supply and distribution of essential commodities?
j) Which plan states ‘one plan, one boss’ and ‘one head one plan’?
k) Give two example of non-financial incentives.
l) Which function of management ensures that actual activities conform to planned activities?
m) Under which environmental factor does fiscal policy fall?
n) Give one difference between policy and procedure.
o) Ankit failed a case against Mahindra ltd. In the National commission. But he was not satisfied with the order of the national commission. Name the authority where he can appeal against the decision of the National commission.
p) Who introduced the concept of ‘differential-piece-rate-wage’ system?
q) Give an example of legal environment.
r) At which level business policy is farmed?
s) Who defined management as the art of getting things done through others?
t) Which principle of management promotes team spirit?
u) Which technique of scientific management does provide of eight specialist foremen over workers?
v) Name the function by which managers build an organization through the recruitment, selection and development of individual as capable employees.w) Which is the most costly capital for a company?
Pattern of Question Paper
No of Questions
Marks Per Questions
Frequently Asked Questions
Unit: 1 – Nature and Significance of Management
Expected Marking Pattern: 1 + 2 + 5
Q. What do you mean by management? Discuss the importance of management to a modern business enterprise.
Q. What are various levels of management? Mention five functions of each level and also distinguish between them.
Q. What do you mean by coordination? Why coordination is regarded as essence of management?
Q. Distinguish between Coordination and Cooperation.
Q. Write a brief note of various functions of management.
Q. What is management? Explain management as:
Q. Mention three features and objectives of Management.
Unit: 2 – Principles of Management
Expected Marking Pattern: 1 + 2 + 5
Q. What do you mean by Principles of Management? Mentions its three features. Explain its importance.
Q. Mention 14 principles of management as propounded by “Henry Fayol”.
Q. Explain in brief Taylor’s principles of scientific management.
Q. What is scientific management? What are its importance and limitations?
Q. Mention at least five techniques of scientific management including time and motion study.
Q. Distinguish between scientific management and general management.
Q. Write a brief note on similarities and dissimilarities between Fayol’s and Taylor’s principles of management.
Q. Functional foremanship
Unit: 3 – Business Environment
Expected Marking Pattern: 1 + 3 + 5
Q. What is business environment? Discuss the importance of business environment to a business firm.
Q. Explain in detail various environment of business environment. (VVI – Economic and non-economic)
Q. Explain, in brief, the economic reforms that have been initiated by the govt. on India since 1991.
Q. What are Liberalization, Privatisation and Globalisation (LPG)?
Q. Mention three arguments in favour of and against Liberalisation, Privatisation and Globalisation.
Q. What is Liberalisation? Explain its process.
Unit: 4 - Planning
Expected Marking Pattern: 1 + 3 + 5
Q. What is planning? Explain the importance of planning.
Q. What is planning premises? What are the essentials of an effective plan?
Q. Explain the steps involved in planning.
Q. Mention three features and limitations of Planning.
Q. Define in one line: Policy, Procedures, Method, Rule, Strategy, Budget and Programmes.
Q. Write three differences between: Policy, Procedures and Rule.
Unit: 5 - Organizing
Expected Marking: 2 + 3+ 5 + 8
Q. What is meant by organization? Discuss the importance of organisation. What are the various steps involved in the process of organising?
Q. What do you mean by organisational structure? Write a note on functional and divisional organisation and also mention three differences between them.
Q. What do you mean by delegation of authority? Suggest measures for effective delegation of authority. Mention its essential elements.
Q. What do you mean by formal and informal organisation? Mention five features of it. Distinguish between Formal and Informal organisation. [Features can be presented as difference]
Q. Distinguish between delegation and decentralisation of authority.
Q. Mention three importance of decentralisation and delegation.
Unit: 6 - Staffing
Expected Marking Pattern: 1 + 2 + 2 + 5
Q. What is Staffing? Mention its 5 importance. Why staffing is taken as a part of human resource management?
Q. What are the various steps involved in staffing process?
Q. What is recruitment? What are various sources of recruitment? Why do organisations prefer recruitment through internal sources?
Q. Explain five external sources of recruitment.
Q. Distinguish between (5 points)
Ø Staffing and Selection
Ø Recruitment and Selection
Q. Explain the steps involved in the process of selection of employee.
Q. What is training? Mention its importance. Mention various methods of training (on the job and off the job).
Unit: 7 – Directing
Expected Marking Pattern: 1 + 2 + 5 + 8
Q. What is directing? Mention it’s three importance and features. What are various elements of directing? (Supervision, motivation, communication and leadership)
Q. Explain various principles of directing.
Q. What is supervision? Mention its importance.
Q. Define Leadership. What is its importance in an organisation? Mention various qualities of a good leader.
Q. What is formal and informal (Grapevine) communication? Distinguish between them.
Q. What is meant my communication? Explain its importance. Discuss the barriers to effective communication.
Q. What is motivation? Explain its importance in business.
Q. Explain Maslow’s need hierarchy theory of motivation.
Q. Write a brief note on various types of financial and non-financial incentives.
Unit: 8 - Controlling
Expected Marking Pattern: 1 + 2 + 5
Q. What is controlling? What the various steps involved in the process of control.
Q. Explain the importance of Controlling for better management.
Q. Discuss the relationship between planning and control and also distinguish between them.
Q. Discuss in brief the essentials of an effective control system.
Q. Mention various techniques of Controlling.
Unit: 9 – Financial Management
Expected Marking Pattern: 1 + 2 + 2 + 8
Q. What do you mean by Financial Management? Mention its objectives and importance?
Q. What is financial planning? What are its three aspects? Mention its objectives and importance.
Q. Distinguish between Financial management and Financial Planning.
Q. What do you mean by Working Capital and Fixed Capital? Why working capital and fixed capital are needed?
Q. Mention various factors which affect the requirement of working capital.
Q. Mention various factors which affect the requirement of fixed capital.
Q. What do you mean by capital structure of a company? What are the factors affecting the capital structure of a company?
Q. What is dividend decision? What are the factors affecting dividend decision of a company?
Unit: 10 – Financial Markets
Expected Marking Pattern: 1 + 3 + 8
Q. What is financial market? What are its components? Mention its functions.
Q. What is money market? What are the instruments used in money market? Mention five features of Indian money market.
Q. What is capital market? Mention its two types. Mention five features of capital market.
Q. What is stock exchange? What are its functions?
Q. Mention five objectives and five functions of SEBI. (Regulatory, Developmental and Protective)
Q. What is NSEI and OTCEI? Write short note on trading procedure in Indian stock exchange.
Q. Distinguish between:
Ø Capital Market and Money Market
Ø Primary and Secondary Market
Unit: 11 - Marketing
Most important chapter (Expected marking Pattern: 1 + 1 + 5 + 8)
Q. Define marketing. What are its functions? Distinguish between marketing and personal selling.
Q. Write a brief note on various concept of marketing. 1 mark expected
Q. What is marketing mix? What are its elements? Explain 4 p’s of marketing mix.
Q. What is sales promotion? Explain various methods of sales promotion.
Q. What is advertising? Explain its role and Limitations.
Q. What is price? What are the factors affecting price of a product?
Q. What is product? What are its features? Mention its various types.
Q. What is meant by channel of distribution? What are its various types? What are the factors affecting choice of channel of distribution?
Q. What is Physical Distribution? Explain its role.
Q. What is a labeling? What are its Functions?
Unit: 12 – Consumer Protection
Expected Marking Pattern: 3+3
Q. Define consumer protection? What are the salient features and objectives of Consumer Protection Act?
Explain briefly the meaning of “consumer” with reference to Consumer Protection Act 1986. Who cannot be considered as consumer?
Q. Mention six rights and responsibilities of consumers. VVI
Q. Explain the importance of Consumer Protection from the view point of consumer and business house. VVI
Q. Who can file a complaint under the CP Act 1986 and under what circumstances? What are the features of a “Complaint”?
Q. How Complaints are filed? What are the remedies/reliefs available to consumers under the Consumer Protection Act 1986?
Q. Explain the role of consumer organisation and NGO in consumer protection.
Q. Explain any five ways and means of consumer protection.
Q. Write briefly on District, State and National Commission with their respective complaint limits.