Bihar Board 12th Business Studies Important Questions Short Answer Type Part 1 in English

Bihar Board 12th Business Studies Important Questions Short Answer Type Part 1 in English

BSEB 12th Business Studies Important Questions Short Answer Type Part 1 in English

Question 1. Does mere planning ensure success?
Answer: Sometimes the managers think that planning solve all their problems. Such a thinking makes them neglect their real work and the adverse effect; of such an attitude has to be faced by the organisation. In this way, planning offers the managers a false sense of security and makes them careless. Hence we can say that mere planning does not ensure success, rather efforts have to be made for it.

Question 2. What is meant by lay-off?
Answer: Lay-off refers to the temporary separation, of the employee from a employer on the initiative of the later. In most cases, the lay-off takes place due to lack of work. There is clear understanding between the employer and the employee that the preference will be given to that employee as and when the work will be available. Thus, by recalling the laid off employees vacant position may be filled up.

Question 3. What is meant by investment decision?
Answer: Investment decision: It relates to as how the funds of a firm are to be invested into different assets, so that the firm is able to earn highest possible return for the investors. Investment decision can be long term, also known as capital budgeting where the funds are committed into long term basis.

Short term investment decision also known as working capital decision and it is concerned with the levels of cash, inventories and debtors.

Question 4. Why NSEI is known as Model Exchange?
Answer: National stock exchange of India is known as model exchange because it is a unique stock exchange of its own kind. The first exchange in the country to provide a modem, fully automated screen based electronic trading system.

Question 5. The word communication has been derived from Latin word ’Communis’. What does it mean?
Answer: Communication is a process which involves a sender of message and a receiver. Communication is complete only when the receiver is able to interpret the message as desired by the sender and responds to it.

Communication is regarded as a two way process. The process of communication begins when one person (the sender) wants to transmit a fact; idea, opinion or other information to someone else (the receiver). This fact, idea or opinion has meaning to the sender, whether it be simple and concrete or complex and abstract. The next step is to translate or convert the message into a language which reflects the idea. That is the message must be encoded.

Question 6. “Management is a soft science.” How?
Answer: Management as a Science: Science may be defined as a systematic body of knowledge pertaining to a particular field, consisting universally accepted principles, which are based on observation and experiments.

Thus, following are the essential features of science:

• Existence of systematized body of knowledge
• Use of scientific methods of observation
• Principles based on experiments
• Established cause and ef feet relationship
• Universal validity of principles.

Question 7. What is meant by Authority?
Answer: Authority: The power of taking decision in order to guide the activities of others is called ’authority’. In other words, ’authority’ is that power which influence the conduct of others. In this way authority, has the following three elements: (i) To use one’s wisdom and take decisions, (ii) To get the decision implemented, (iii) To influence the conduct of the subordinates.

Question 8. Why is it said that ’Controlling is blind without planning’?
Answer: Under the system of controlling actual work performance is compared with the standards. Hence, if the standards are not determined there is no justification left for control, and the standards are determined under planning. It is, therefore, said that control is blind without planning or it is without any base.

Question 9. What is meant by channels of Distribution?
Answer: Channel of distribution refers to that path through which the products reach the consumers. In this path many people and firms participate. They are called Middleman/Intermediary. It includes mainly Agents, Wholesalers and Retailers. Channels of distribution can be small or large. For example, when we purchase sweets from a local sweet shop then there is no middleman between the manufacturer and the consumer. This is the smallest distribution channel. This is also called Direct Trade.

Question 10. Why it is said that principles of Management are universal?
Answer: Management is an essential element of every organised activity irrespective of its zero or type. All type of organisations e.g. family, club, university, government, army, cricket team or business, require organisation. The basic function of management are same in every group activity.

Question 11. Given definitions of Management.
Answer: According to Koontz and O’Donnell. “Management is the art of getting things done through and with people in formally organised groups. It is the art of creating an environment in which people can perform as individuals and yet co-operate towards attainment of group goals. It is the art of removing blacks to such performances, a way of optimising efficiencey in reaching goals.”

According to Peter F. Drucker, “Management is a multipurpose organ that manages a business, manages managers and manages workers and work.”

Question 12. “Planning is a mental process.” Explain in brief.
Answer: Planning is a mental process: Planning is known as mental process as it is related to thinking before doing. A planner has mainly to think – (i) What to do? (ii) How to do? (iii) When to do? and (iv) Who is to do?

Question 13. Explain the importance of management.
Answer: Management is a universal activity that is integral to any organisation. We now examine some of the reasons that have made management so important.
1. Management helps in achieving group goals: Management is required not for itself but for achieving the goals of the organisation, the task of a manager is to give a common direction to all.

2. Management increases efficiency: The aim of a manager is to reduce costs and increase productivity through better planning, organising directing, staffing and controlling the activities of organisation.

3. Management creates a dynamic organisation: All organisations have to function in an environment which is constantly changing.

4. Management helps in achieving personal objectives: A manager motivates and leads his team in such a manner that individual members are able to achieve personal goals while contributing to the overall organisational objective.

5. Management helps in the development of society: An organisation has multiple objective to serve the purpose of the different groups that constitute it. In the process of fulfilling all these management helps in the dcyelopHtobt of the organisation and through that it helps in the development of society it helps to provide good quality products and services, creates employment opportunities and leads the path towards growth and development.

Question 14. Explain the level of management and their main functions.
Answer: Level of Management:
Generally speaking there arc three, levels in the hierarchy of an organisation:
1. Top management: They consist of the seniormost executives of the organisation by whatever name they are called. They are usually referred to as the chairman, the chief executive officer, chief operating officer, president and vice-president. Top management is a term consisting of managers from different functional levels. Their basic task is to integrate diverse elements and coordinate the activities of different departments according to the overall objectives of the organisation. They are responsible for the welfare and survival of the organisation. Their job is complex and stressful.

2. Middle Management: It is the link between top and lower level management. They are subordinate to top managers and superior to the first line managers. They are usually known as division heads, operation managers or plant superintendent. They are responsible for implementing and controlling plans developed by top management. At the same time they are responsible for all the activities of first line management. Their main task is to carry out to plans formulated by the top management and at the same time they are responsible for all the activities of first line managers.

Question 15. Name important characteristics of management.
Answer: After knowing about management we find some elements that may be called the basic characteristics. They are as follows:

• Management is a goal oriented process.
• Management is all pervasive.
• Management is multidimentional.
• Management is a continuous process.
• Management is a group activity.
• Management is a dynamic function.
• Management is an intangible force.

Question 16. Write limitations of planning.
Answer: Following are the limitations of planning:

• Uncertainty of future conditions.
• Misuse of time and money.
• Required flexibility.
• Frustration work etc.

Question 17. What do you mean by staffing?
Answer: Staffing is concerned with filling various positions or job in the organisation with the suitable personnel. Staffing basically involves maintaining job and individuals. This may requires a number of functions like man power planning recruitment selection, training, promotion, transfer etc. Various authors took of staffing as one of the elements of the organizing process. We can say in brief, staffing refers to filling and keeping fixed the posts with people.

Question 18. “Management is a group activity”. Why?
Answer: Management is a group activity since management is essential to undertake any organised activity, one may infer that management is concerned with a group activity. It involves the use of group efforts in the pursuit of predetermined objectives.

Question 19. “Management increases efficiency.” How?
Answer: Management reduces costs and increases productivity through better planning, organising, directing, staffing and controlling the activities of the organisation.

Question 20. “Management helps in development of society.” How?
Answer: By providing good quality products and services, creating employment opportunities, adopting new technology and leading the path towards growth and development.

Question 21. “Management creates a dynamic organisation.” How?
Answer: Management helps people adapt to the changes so that the organisation is able to maintain its competitive edge which results in creating a dynamic organisation.

Question 22. Why is it said that “management is all pervasive”?
Answer: Because the activities involved in managing an enterprise are common to all organisations whether economic, social or political.

Question 23. Why are the principles of management called contingent?
Answer: Management principles are not absolute or state in nature. They cannot be applied blinding in all situation. They have to be applied keeping in view the prevailing situations.

Question 24. State the principle of ‘Order’.
Answer: It states a place for everything (everyone) in its (her/his) place for increasing productivity and efficiency.

Question 25. What is meant by Scientific management?
Answer: Scientific management refers to the use of scientific methods in decision, making to resolve management problems rather than depending on rule of thumb or trial and error-methods.

Question 26. How is planning a pervasive function? State.
Answer: Planning is required at all levels of management as well as in all departments of the organisation.

Question 27. Planning reduces the risks of uncertainty. How?
Answer: Planning enables a manager to look a head and anticipate changes and develop responses to them.

Question 28. Planning is a time consuming process. Why does this become a limitation?
Answer: There is not much time left for implementation of plan as sometimes much of time is consumed in drawing up the plans.

Question 29. State first two steps in the process of planning.
Answer:

1. Setting objectives
2. Developing premises

Question 30. What is meant by ‘policy’ as a type of plan?
Answer: Policy is a general statement that guides thinking or channelises ‘ energy towards a particular direction.

Question 31. Define ‘objectives’ as type of plans.
Answer: Objectives are the ends which the management seeks to achieve by its operations, e.g., increasing sales by 10%.

Question 32. Enumerate difference types of organisational structure.
Answer: Different types of organisational structure:

1. Functional structure
2. Divisional structure

Question 33. When is the functional structure more suitable?
Answer: Functional structure is most suitable when the size of the organisation is large has diversified activities and operations require a huge degree of specialization.

Question 34. Why is it easy to fix responsibility in formal organisation?
Answer: Because rules and responsibilities as wen as the inter relationship of different job positions are made clear.

Question 35. Define selection.
Answer: Selection is the process of carefully screening the candidates who offer themselves for appointment so as to Choose the most appropriate person for the job.

Question 36. What is an interview?
Answer: Interview is a phase of testing on the basis of face to face interaction between the interview and applicant with a view to finding the suitability of candidate keeping in view the job requirements.

Question 37. Define job rotation.
Answer: It involves shifting the trainee from one department to another or form one job to another.

Question 38. What is meant by directing?
Answer: Directing as a function of management is concerned with instructing, guiding and inspiring people in the organisation to achieve its objectives. It involves overseeing people at work, making provisions for necessary facilities and creating a work environment whereby employees may perform to the best of their abilities.

Question 39. Define supervision.
Answer: Supervision means overseeing the subordinates at work. It is an important function of every manager. It implies observing the subordinates at the work to see than they are working according to the plan and policies of the organisation and keeping the time schedule and do help them in solving their work problems.

Question 40. Define motivation.
Answer: Motivation may be defined as the process of stimulating people to action to accomplish designed goals. It involves arousing needs and desires in people to initiate and direct their behavior in a purposive manner. According to Koontz and O’ Donnell, “To motivate is to induce people and to act a desired manner.”

Question 41. Define Formal communication.
Answer: Formal communication refers to official communication which takes place following the chain of command.

Question 42. Define Informal communication.
Answer: Informal communication refers to communication between individuals and groups which are not officially recognised.

Question 43. Why it is said than controlling is a continuous activity?
Answer: Controlling is a continuous activity because actual performance has to be Compared with predetermined performance on a continuous basis so that any short coming can be overcome, the manager does not have to wait for the. year for end results but has to take action us and when any direction arises from the target performance.

Question 44. Give meaning of the term ‘Deviation’ as used in the control function of management.
Answer: Deviation refers to a situation when actual results/performance differs from the desired results during comparison.

Question 45. Define controlling.
Answer: Controlling is the process through which managers assure that the actual activities conform to the planned activities.

Question 46. Define financial management.
Answer: Financial management is the activity concerned with the planning, raising, controlling and administrating of funds used in the business.

Question 47. State the objective of financial management.
Answer: To maximise shareholder’s wealth (also referred as the wealth maximisation concept).

Question 48. Define capital budgeting techniques.
Answer: These are the techniques used to evaluate investment proposals before selecting a particular project.

Question 49. Define working capital.
Answer: Working capital refers to short-term assets of a firm such as inventories and short-term liabilities like creditors.

Question 50. What docs trading on equity refer to?
Answer: It refers to an increase in profit earned by the equity shareholders due to the presence of fixed financial charges like interest.

Question 51. Enumerate the two types/segments of financial markets.
Answer: Financial market consist of two major segments:

1. Capita market: The market for medium and long-term funds.
2. Money market: The market for short-term funds.

Question 52. What is meant by capital market?
Answer: Capital market can be described as the aggregate of financial institutions and those serving as intermediaries for long-term financial assets. It is the mechanism which makes the long-term finance available.

Question 53. Why is entrepreneurship is regarded as a creative activity?
Answer: Entrepreneurship is creative because it involves creation of value. In the absence of entrepreneurship “matter” does not become a “resource”. By combining the various factors of production, entrepreneur produce goods and services that satisfy the requirements of the customers. Entrepreneurship also encourages, innovation e.g. zerox machines has minimised the use of carbon paper. Entrepreneurship makes possible introduction of new products, discovery of new markets and supply of inputs, technological break through as well as introduction of newer organisational forms for doing things better.

Question 54. “Entrepreneur undertaken moderate risks.” Elaborate this statement.
Answer: As the enterepreneur contracts for an assured supply of the various inputs for his projects, he incurs the risk of paying them off whether or not the venture succeeds i.e. there is no assurance of profits for entrepreneur. It is believed that entrepreneurs take high risk but the entrepreneur takes “calculated risk” e.g., Motorcyclist in the ring of death, While the spectators think that the artist has taken high risk, but the artist takes “calculated risk” based on their training, skill and confidence, etc.

Question 55. Write the factors that promote entrepreneurship.
Answer: The following factors helps in promotion of entrepreneurship and consequently, economic development:

1. Easy availability of capital to the entrepreneur to start a new business.
2. Pressence of environment for transformation of scientific and technical development into business projects.
3. Supportive programmes provided by the government.
4. Availability of training facilities to start a new business.
5. Desire to create a favorable/climate for innovative and entrepreneurial activities.

Question 56. Explain any three points of importance of financial planning.
Answer: Following are the importance of financial planning:

• In integral part of corporate planning: Financial planning is an integral part of the corporate planning of the business.
• Overcoming the problems of excess or shortage of fund: Financial planning involves accurate forecasts of the present and future requirements of funds. Therefore, it helps companies in over coming the problems of cess and shortage of funds.
• It helps in financial control.
• Minimising cost of financing: Cost of finance is kept to minimum possible and scarce funds are used Judiciously.

Question 57. Give names of six stock exchange in India.
Answer: Six regional stock exchanges in India are:

1. Bangalore Stock Exchange
2. Pune Stock Exchange
3. Ahmedabad Stock Exchange
4. Madhya Pradesh Stock Exchange
5. Delhi Stock Exchange
6. Ludhiyana Stock Exchange

Question 58. Define Beneficial owner.
Answer: Beneficial owner is the investor or account holder and is required to open Demat Account for the trading of securities at the Stock exchanges.

Question 59. Who can be an investor?
Answer: Investor can be an individual as well as an non-individual. Individual investors could be Indian residents or NRIs. Non-individual investors include corporates, mutual funds, trusts etc.

Question 60. What are the consumer responsibilities?
Answer: A consumer should keep in mind the following responsibilities while purchasing, using and consuming goods and services:

• Be aware about various goods and services available in the market so that an intelligent and wise choice can be made.
• Buy only standardised goods as they provide quality assurance. Thus, look for ISI mark on electrical goods, FPO mark on food products, hallmark on jewellary, etc.
• Learn about the risks associated with products and services, follow manufacture’s instructions and use the product safely.
• Read labels carefully so as to have information about prices, net weight, manufacturing and expiry dates, etc.
• Assert yourself to ensure that you should get a fair deal.
• Be honest in your dealings. Purchase only from authorized distributors of goods and services and discourage unscrupulous practices like black marketing, hoarding etc.
• Ask for a cash memo on purchase of goods or services.
• File a complaint in an appropriate consumer forum in case of a shortcoming in the quality of goods purchased or services availed.
• From consumer societies which would play an active part in educating consumers and safeguarding their interests.

Question 61. What kind of cases can be filed in State Commission?
Answer: State commission: A complaint can be made to the appropriate State Commission when the value of the goods or services in question along with the compensation claimed, exceed Rs. 20 lakh but does not exceed Rs. 1 crore. The appeals against the orders of District Forum can also be filed before the State commission. On receiving the complaint, the State commission shall refer the complaint to the party againt whom the complaint is filed. If required, the goods of a sample there of, shall be sent for testing in a laboratory.

The State Commission shall pass an order after considering the test report from the laboratory and hearing to the party against whom the complaint is filed. In case the aggrieved party is not satisfied with the order of the State Commission be can appeal before the National commission within 30 days of the passing of the order.

Question 62. What are the objective of SEBI?
Answer: The main objectives of SEBI are as under:

• To promote fair dealings by the issuers of securities.
• To ensure market place where by the issuers of securities can raise funds at a relatively low cost.
• To protect and safeguard the interests and rights of investors so as to ensure steady flow of funds into the market.
• To regulate and develop a code of conduct and fair practices to be adopted by intermediaries (brokers, marchant bankers etc.) so as to make them competitive and professional.

Question 63. What are the items that can be marketed?
Answer: Anything that is of value can be marketed. List of items which can be marketed include physical products, services, ideas, persons, place, experience, properties, events, information, organisations.

Question 64. What is meant by market offering?
Answer: Market offering refers to a complete offer for a product or service, having given features like size, taste, quality, etc. at a given price available at a given outlet or location.

Question 65. Define marketing management.
Answer: Marketing management deals with planning, organising, directing and controlling the activities related to the marketing of goods and services to satisfy the customer’s needs.

Question 66. What do you mean by trademark?
Answer: Trademark simply means mark of a trade carried on by an identified entity. It is usually a sign, mark or symbol, word or words.

Question 67. What do you mean by labelling?
Answer: A label identifies the product or brand labels are attached onto the product package to help identification and provide some information to the customers. A label is a carrier of information, which is to be provided to the customers.

Question 68. Advertising is a very economical mode of communication. How?
Answer: Per unit cost of reach comes low due to its wide reach. The overall cost of advertising gets spread over numerous communication links established.

Question 69. One limitation of advertising is that it is less flexible. Why?
Answer: Because the message is standardised and is not tailor made to the requirements of the difference customer groups.

Question 70. How does advertisement confuses the buyers?
Answer: Buyers gets confused as to which one is true and which one should be relied upon as so many products are being advertised.

Question 71. Define sales promotion.
Answer: Sales promotion refers to short term incentives, other than advertising and personal selling, aimed at stimulating market demand for products:

Question 72. What do you mean by publicity?
Answer: Publicity is any promotional communication regarding an organisation and/or its products where the message is not paid for by the organisation benefiting from it; It is a non-paid form of non-personal communication which spreads in the form of news.

Question 73. Mention two features of publicity.
Answer:

1. On paid form of communication
2. There is no identified sponsor.

Question 74. Mention the purpose of public relations.
Answer: The purpose is to keep different public groups satisfied so that no obstructions are imposed on the functioning of the business.

Question 75. What does Consumer Protection Act, 1986 aim at?
Answer: To protect and promote the consumers interest through speedy and inexpensive redressal of their grievances.

Question 76. I low docs Consumer rights benefit the consumers?
Answer: It empowers consumers to fight against any unscrupulous, exploitative and unfair trade practices adopted by sellers.

Question 77. Why consumer protection is important for consumers? Give any one reason.
Answer: Because it helps to achieve consumer awareness through educating them about their rights and reliefs available to them.

Question 78. Which kind of appeals can be taken to the supreme court?
Answer: Only those appeals where the aggrieved party was not satisfied with the order of the National Commission and where the value of goods and services in question, along with the compensation claimed, exceeded Rs. 1 crore.

Question 79. List any three consumer organisations in India.
Answer: Consumer Guidance Society of India, Mumbai, Citizens Action Group, Mumbai, Consumer Protection Council (CPC), Ahmedabad.

Question 80. Differentiate between ‘Management’ and ‘Administration’.
Answer: Difference between ‘Management’ and ‘Administration’:

Basis of Difference	Administration	Management
1. Natural of work	It is primarily related to the determination of objectives and laying down of policies and it is a thinking function.	This is a executive function to give practical shape to the policies to achieve pre-determined objectives.
2. Scope	Important decisions are taken and it is wider than management.	Decisions are taken within the limits laid down by the administration.
3. Consideration	Owners who called administrators are given profits.	Managers are given salary for their services and sometimes they get a part of the profit.
4. Level of function	Administrative functions are performed by top level managers.	Managerial functions are performed by middle level and lower level managers.