Students must start practicing the questions from CBSE Sample Papers for Class 12 Business Studies with Solutions Set 3 are designed as per the revised syllabus.
CBSE Sample Papers for Class 12 Business Studies Set 3 with Solutions
Time : 3 hrs Max.
Marks : 80
Instructions
- This question paper contains 34 questions.
- Marks are indicated against each question.
- Answers should be brief and to the point.
- Answers to the questions carrying 3 marks may be from 50 to 75 words.
- Answers to the questions carrying 4 marks may be about 150 words.
- Answers to the questions carrying 6 marks may be about 200 words.
- Attempt all parts of the questions together.
Question 1.
What is meant by ‘selecting an alternative’ as a step in the planning process? [1]
(a) Choosing the best course of action
(b) Implementing the best course of action
(c) Planning the best course of action
(d) Managing the best course of action
Answer:
(a) Choosing the best course of action
Question 2.
Which of the following is the highest level need in hierarchy of Abraham Maslow? [1]
(a) Social need
(b) Safety need
(c) Exteem need
(d) Self-actualisation need
Answer:
(d) Self-actualisation need
Question 3.
Fabmart is a private limited company with several branches all over the country. It needs a team of designers and crafts people. Similarly, another company Infosys Technologies which develops software needs systems analysts and programmers. Identify that which function of management is needed to satisfy the need of the above companies. [1]
(a) Planning
(b) Organising
(c) Staffing
(d) Controlling
Answer:
(c) Staffing
Question 4.
MD of Perk Ltd, Paul suggested that since the economy is buoyant, the company should invest in market to take advantage of economy. [1]
(a) primary
(b) secondary
(c) money
(d) capital
Answer:
(d) capital
Question 5.
Assertion (A) People working in the same department can work in good coordination.
Reason (R) Organising promotes effective control and coordination within a department due to similarity of task performed. [1]
Alternatives
(a) Both Assertion (A) and Reason (R) are incorrect
(b) Assertion (A) is correct, but Reason (R) is incorrect
(c) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A)
(d) Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A)
Answer:
(c) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A)
Question 6.
One of the common irregularities noted by the Securities and Exchange Board of India during the inspection of a stock exchange was that it was dealing with unregistered sub-brokers. Identify the related function of the Securities and Exchange Board of India. [1]
(a) Regulatory function
(b) Developmental function
(c) Protective function
(d) None of the above
Answer:
(a) Regulatory function
Question 7.
Managers need to be dynamically competent for all the changes happening in the environment. In the music industry, video cassettes were major source of entertainment in the past but gradually CDs replaced them. So, managers had to adopt in their organisation accordingly. Identify the environment change highlighted here. [1]
(a) Social environment change
(b) Technological environment change
(c) Economic environment change
(d) Both (a) and (b)
Answer:
(b) Technological environment change
Question 8.
Ashu, a Professor of management conducted a Class on ‘management principles’ and explained to his students the significance of management principles. In the next class, the Professor asked his students to play roles of different managers. He gave them various situations and asked them to think like managers and provide solutions to the problems given in these situations. Each student applied the principles of management to the given situation in his own personalised manner, depending upon his creativity. The nature of management highlighted in the above case is [1]
(a) management as a science
(b) management as an art
(c) management both as an art and as a science
(d) management as a profession
Answer:
(b) management as an art
Question 9.
The training methods used by Chetan Enterprises include job rotation, coaching. vestibule training, conferences, lecture and role playing. Determine the type of plan that is being discussed here. [1]
(a) Strategy
(b) Programme
(c) Procedure
(d) Method
Answer:
(d) Method
Question 10.
Match the following on the basis of ‘type of test’. [1]
Column I | Column II |
A. Trade test | (i) Measures the existing skills |
B. Aptitude test | (ii) Measures the person’s emotions |
C. Personality test | (iii) Measures the learning potential of individual |
Codes
(a) (i) — (ii) –(iii)
(b) (ii) — (iii) — (i)
(c) (iii) — (ii) — (i)
(d) (i) — (iii) — (ii)
Answer:
(d) (i) (iii) (ii)
Question 11.
EDC Ltd is a highly reputed company and many people want to join this company. The employees of this company are motivated and happy by the working of the company. The employees are rewarded in a way that it creates a feeling of ownership among them and at the same time, makes them contribute towards the growth of the organisation.
Bishnoi, seeing the immense growth opportunities started reaching out to the employees of this company to understand how can he get an offer from the company. On enquiring, Aayush said that he was introduced by the present marketing manager, Mr Joe. Tushar said that he was directly recruited from IIM, Banglore from where he was about to complete his MBA. Through which way of recruitment, Tushar was recruited? [1]
(a) Campus placement
(b) Advertisement
(c) Recommendation from present employees
(d) Placement agencies
Answer:
(a) Campus placement
Question 12.
Identify the incorrect statement about marketing among the following [1]
(a) Marketing mix is a wider term than product mix.
(b) Marketing is a social process.
(c) The focus of marketing activities is on customer needs.
(d) Marketing is merely a post production activity.
Answer:
(d) Marketing is not only a post production activity but it starts even before the production is started.
Question 13.
Statement I Labelling is also an important feature of the product. [1]
Statement II It not only protects the product but also serves as a promotional tool.
Alternatives
(a) Statement I is true and Statement II is false
(b) Statement I is false and Statement II is true
(c) Both the statements are true
(d) Both the statements are false
Answer:
(a) Labelling is that function which provides information about the product. It does not protect it.
Question 14.
Wove is a washing machine manufacturing company. The company decides to enter into the music system manufacturing industry. The company has a committed top management. [1]
It knows that there are various challenges in the market where its decisions regarding the new industry might fail.
Still the top management doesn’t want to waste a lot of resources on its plans. It knows that sometimes plans take more time in making than getting implemented. However, the company wants to proceed with a positive approach. It has decided to study all the aspects of its competitors, to set all its objectives and to allocate the required resources.
The company did well in its previous business. At that time, they took planning very seriously as they knew, everything the company would do had to be based on concrete plans. The company will start its operations from next month. Which function of management has been discussed in the above case?
(a) Planning
(b) Organising
(c) Staffing
(d) Controlling
Answer:
(a) Planning
Question 15.
Running a political organisation and an economic organisation both require effective management. Which management trait is reflected in the given statement? [1]
(a) Management is goal-oriented
(b) Management is multi-dimensional
(c) Management is all pervasive
(d) Management is a group activity
Answer:
(c) Management is all pervasive
Question 16.
Ben works in a private sector retail bank. He sets objectives and goals for the whole bank. He is also responsible for formulating strategies of the bank. He realised that different individuals had their own style of working and differs in their day-to-day approach towards work. They apply their own creativity. However, he felt that there is no harmony in the work done by each leading to overlapping or duplication of work and wastage of lot of time. He integrated the efforts of these individuals into a unified plan of action to achieve better organisational results. Ben is a leader who consults the workers before taking important decisions. The workers are also satisfied because of this behaviour as they are taken into confidence before important decisions. Which principle of management is highlighted in last part of the above case? [1]
(a) Science, not rule of thumb
(b) Harmony, not discord
(c) Cooperation, not individualism
(d) Development of each and every person to his or her greatest efficiency and prosperity
Answer:
(c) Cooperation, not individualism
Question 17.
Identify the function of management illustrated by the picture given above in which the manager ‘Mr. Johns’ is discussing about taking some remedial plans of action to stop the downfall in sales in the coming financial year.
(a) Planning
(b) Organising
(c) Controlling
(d) Directing
Answer:
(c) Controlling
Question 18.
Arrange the steps of controlling in correct sequence. [1]
(i) Measure performance
(ii) Set performance standards
(iii) Analyse deviations
(iv) Take corrective actions
(v) Compare actual performance with standards
Codes
(a) (iv), (v), (ii), (i), (iii)
(b) (ii), (v), (iv), (iii), (i)
(c) (ii), (i), (v), (iii), (iv)
(d) (ii), (i), (iv), (iii), (v)
Answer:
(c) (ii), (i), (v), (iii), (iv)
Question 19.
On account of continuing Coronavirus, for months together there remained the lockdown. During this period, the people remained confined to their houses. The articles of food and drink which used to be ordered from the market began to be prepared at home. From the ‘YouTube’ and ‘Google’, the home makers learnt to prepare everything at home, which earlier used to be available at the sweet-maker’s shop and restaurants. [1]
The people realised that every food item prepared at home was more tasty and nutritious than that of the market. Now, the people have become used to it. Even when the lockdown was lifted, the people preferred the home-made food and sweets. It so appears that now the consumption habits of people have changed. This habit of the people has affected the market. To which particular dimension of the business environment, is the above stated incident related?
(a) Economic environment
(b) Social environment
(c) Technological environment
(d) Political environment
Answer:
(b) Social environment
Question 20.
Identify the incorrect statement among the following [1]
(a) Business plan must be concise and well written.
(b) Business plan should emphasise people, not ideas or concepts.
(c) At all stages of development, organisation needs to prepare plAnswer:
(d) None of the above
Answer:
(b) Business plan should emphasise on ideas and concepts, not people.
Question 21.
Over the years, Brook Bond Taj Mahal tea has been a choice of millions of customers. The company uses the slogan ‘Waah Taj’ on its label. Their price range, quality and taste are different and unique from their competitors. What are the advantages of labelling a product highlighted in this case?
Answer:
Advantages of labelling which are shown in this case are as follows
- It helps to assess the supremacy of a product over other competing products.
- It raises the prestige of a product and guarantees the standard of the product.
- It helps to establish brand loyalty of the customers towards the product.
Question 22.
A car manufacturing company sets a goal that in future they will expand their production by 15%. After measuring the performance, they noticed that the production has declined by 10% and the raw material is wasted by the production department. Can you find out, to which concept of controlling does it relate? Also explain it. [3]
Answer:
The concept of controlling which is being quoted is comparing actual pertormance with standards.
After measuring the actual performance, it is being compared with the standards. In this case, the standard set is to increase production by 15% but actually it has declined by 10%. Infact the next step, i.e. analysing deviations has also been undertaken and it is found out that raw materials have been wasted by the production department.
Question 23.
Explain any three factors affecting capital budgeting decisions. [3]
Or
Name the process which helps in estimating the future finance requirements of an organisation. Also, give four importance of that process.
Answer:
Following are the three factors affecting capital budgeting decision
(i) Cash Flows of the Project When a company takes an investment decision involving huge amount, it expects to generate some cash flows ower a period. The amount of these cash flows should be carefully analysed before considering a capital budgeting decision.
(ii) The Rate of Return It is the most important criteria to decide the investment proposal, as a higher rate of return would induce more investment and vice-versa.
(iii) Investment Criteria The manager must compare and analyse the amount of investment, cash flows, interest rate, etc of various proposals and then take a decision.
Or
Financial planning is the process of estimating the future finance requirements of an organisation.
Importance of financial planning are
- By forecasting what may happen in future. company prepares plans for future through financial planning
- It helps in avoiding business shocks and surprises by preparing a blueprint of organisation’s future preparations.
- Financial planning helps in linking the present with the tuture.
- Through financial planning, wastage of human as well as physical resources is reduced.
Question 24.
Explain briefly any three measures to overcome the communication barrier. [3]
Or
Why a manager thinks that motivation is the only source to stimulate employee?
Answer:
The three measures to overoom the communication barriers are
(i) Be Aware of Languages, Tone and Content of Message The language, tone and content used for conveying the message must be understandable to the receiver and should not offend the sentiments of the listener.
(ii) Convey things of Help and Value to Listeners To get good response from the subordinates, it should be ensured that the message relates to their interest.
(iii) Ensure Feedback For success of communication, response of the listeners should be encouraged by the manager.
Or
Motivation is necessary for the following reasons
- It helps to improve the performance level of employees.
- It helps to change negative attitude of employees to positive attitude.
- It helps to reduce employee turnover and absenteeism.
Question 25.
Millenium is a reputed B-school of Jaipur. It is offering lots of management degree programmes in the fields of finance. marketing, human resource, rural development, hospitality and information technology. The institute advertises that it has a 100% placement records, with many of its students being placed in top MNCs across the globe. The highest salary package to a student of the institute was ₹ 12.5 lakh per annum. The advertisement also shows the campus to be well infrastructured. [4]
Influenced by this advertisement, hundred of students take admission in this institute.On taking admissions, the students learn that the campus shown in the advertisements was not the one that they were studying in and also that the institute is running only diploma and certificate courses, as it is not recognised by AICTE and therefore, cannot issue degrees. The placement statistics were also misleading. What steps should be taken by the students against these frauds?
Answer:
Following steps should be taken by the students
- Students should boycott against this and provide all information of cheating and fraud to the local print media.
- Students should not blindly believe on the words of counsellors. They should collect all relevant information from different possible sources.
- They should ask for redressal against unfair practices of the institute and can also ask for the compensation.
- They should also form societies to éducate other students about such fraud schools and colleges.
Question 26.
Distinguish between fixed capital and working capital. [4]
Or
Explain the following steps in the trading and settlement procedure
(i) Issuing contract note
(ii) Delivery of shares by investor
Answer:
Difference between fixed and working capital
Basis | Fixed Capital | Working Capital |
Time Period | Required for long-term. | Required for short-term. |
Purpose | Money needed to buy fixed assets | Money needed to buy current assets. |
Nature | Remaws sunk in business. | Revolves in business. |
Source | Ratsed through shares, debentures and term loans. | Raised through banks, trade credit, shares and debentures. |
Or
(i) Issuing Contract Note Within 24 hours of execution of order, the broker issues a contract note, containing details of the number of shares, their price, date and time of deal and the
brokerage charged. A unique order code number is assigned to each transaction by the stock exchange and is printed on the note.
Contract note is an important document as it is legally enforceable and helps to settle disputes between the investor and broker.
(ii) Delivery of Shares by Investor Investor has to deliver the shares sold or pay cash for the shares bought. This should be done immediately after receiving the contract note or before the day when the broker shall make payment or delivery of shares to the exchange. This is called pay-in day.
Question 27.
Rajneesh has been running a successful business of manufacturing traditional Indian wear for women including sarees and lehengas. His friend Anuj, who provides web designing solutions to his clients, suggests him to explore the option of selling his products online.
Rajneesh agrees to his suggestion and decides to venture into online business, keeping in view the various e-commerce regulations in order to avoid imposition of any penalty. In order to facilitate sale of products, he offers multiple payment options such as cash on delivery, net banking, etc. [4]
(i) Identify one importance of planning in the given case.
(ii) Also, mention any other three points of importance of planning.
Answer:
(i) One importance of planning in the given case is Planning promotes Innovative Ideas it is an intellectual process, which involves linding better ideas and methods to perform a particular job. In planning, new ideas can take the shape of concrete plans.
(ii) Other points of importance of planning are as follows
(a) Planning Facilitates Decision-making It helps the manager to look into the fluture and choose amongst the various alternative courses of action, in order to find out the most viable, economical and suitable plan.
(b) Planning establishes Standards for Controlling It provides the standards against which actual performance is measured. it helps in finding deviations between desired and actual results, and take corrective action depending upon the level and type of deviations. Thus, planning facilitates controlling.
(c) Planning reduces the Risk of Uncertainties It is an activity, which enables a manager to look ahead and anticipate changes. By deciding in advance, planning shows the way to deal with changes and uncertain events. Such changes can only be anticipated but not eliminated altogether.
Question 28.
Identify the dimension of business environment, in each of the following cases, and explain them. [4]
(i) The project of Nano car re-established in Gujarat.
(ii) Decrease in the repo rate to overcome recession.
(iii) Increase in the number of working women.
(iv) Prohibition of advertisement of alcoholic beverages on Doordarshan.
Answer:
Dimension of business environment are as follows
(i) Political Environment : It includes political condition of the country and attitude of the government towards business policy.
(ii) Economic Environment : it includes economic factors like inflation, interest rates, tax rates, GDP etc that affect business enterprises.
(iii) Social Environment : It consists of all the social forces within which business operates such as trends, customs and traditions.
(iv) Legal Environment: In includes legislations passed by the courts, government, commissions and administrative bodies.
Question 29.
Explain any four features of management. [4]
Or
Give any two positive and any two negative effects of the following principles of management
(i) Equity
(ii) Stability of personnel
Answer:
Features of management are as follows
(i) Management is a Goal-oriented Process Objectives refer to the end result to be achieved through operations. They are set for the organisation as well as all departments. Management seeks to achieve these objectives through co-ordinated efforts.
(ii) Management is all Pervasive Management is necessary to conduct all types of activities whether it is a business or non-business activity. It is equally applicable in private and public enterprises, small and large enterprises, government and non-government enterprises.
So, it is equally required in a petrol pump, a hospital, an office, whether in India, USA or Japan.
(iii) Management is a Continuous Process Management is an ongoing process of planning. organising. staffing. directing and controlling which brings the management cycle back to planning.
(iv) Group Activity An organisation is a collection of diverse activities and different individuals. Through coordination and teamwork. management unites the efforts of individuals to achieve organisational goals, along with the fulfillment of personal goals of the individuals.
Or
(i) Equity
Two positive effects of equity are given below
- It ensures loyalty among the workers.
- It emerges cordial relation between workers and managers.
Two negative effects of equity, if violated are given below
- Dissatisfaction among employees leading to greater employee turnover.
- It emerges poor relations between workers and managers.
(ii) Stability of Personnel
Two positive effects of stability of personnel are stated below
- It encourages job security in the organisation.
- It increases motivation among employees.
Two negative effects of stability of personnel, if violated are stated below
- It leads to increase in labour absenteeism.
- It increases job insecurity thus, emplayees tend to leave jobs frequently leading to high employee turnover.
Question 30.
Riya and Jiya are working in different departments, but are very close friends. During lunch time, Riya informs Jiya that due to the impact of Covid-19 on business organisations, many people have lost their jobs. Identify the type of communication highlighted in the above said case. Also, state any two advantages and one disadvantage of this type of communication. [4]
Answer:
Communication between Riya and Jiya is informal communication.
Advantages of informal communication are
- It helps individuals to communicate on matters, which cannot be transmitted through the formal communication.
- It enables the employees to develop friendly relations and get social satisfaction. It satisfies their urge to know, what is happening in the organisation.
Disadvantages of informal communication are (any one)
- It tends to be unsystematic, irregular and untimely. It is neither reliable nor predictable.
- It is not easy to fox responsibility for actions taken on the basis of informal communication. The origin of such communication in not easily traceable.
Value Points
For getting maximum marks, following value points can be included in the answer
- Social satisfaction
- Source of origin not easily traceable.
Question 31.
Read the statements given in point (i) and (ii), answer the questions that follows
(i) Neelam is engaged in ‘transport business’ and transports fruits and vegetables to different states.
(a) Identify the working capital requirement of Neelam.
(b) Explain any two factors that will affect her fixed capital requirements.
(ii) American Logistics warehousing services help business firms to reduce their overheads, increase efficiency and cut down distribution time.
(a) State whether the working capital requirement of ‘American Logistics’ will be high or low.
(b) Explain any two factors that will affect its working capital requirement
Answer:
(i) (a) In the transport business, lower amount of working capital is required as it is a service industry. Working capital requirement of Neelam would include payment of salaries, fuel charge, maintenance of vehicles, etc.
(b) Factors affecting fixed capital requirements are:
- Growth Prospects Businessman wants to expand his business, in such situation company requires higher investment to meet the anticipated demand in future. Thus, the requirement of fixed capital will be higher.
- Diversification If the businessman diversities his business, this means large amount of fixed capital is required.
(ii) (a) Since, ‘American Logistics’ provides warehousing services which forms part of service industry therefore, working capital requirement would below.
(b) Factors affecting working capital are:
- Business Cycle Different phases of business cycle affect the requirement of working capital by a firm, In case of a boom, the sales as well as production are likely to be larger and, therefore, larger amount of working capital is required.
- Credit Availed Just as a firm allows credit to its customers, it also may get credit from its suppliers. To the extent, it avails the credit on purchases, the working capital requirement is reduced.
Question 32.
(i) Explain any two steps in the process of controlling from the following
(a) Setting performance standards
(b) Measurement of actual performance
(c) Comparing actual performance with standards
(ii) Differentiate between planning and controlling on any three basis. (3+3=6)
Or
(i) Explain any two characteristics of directing from the following
(a) Directing initiates action
(b) Directing takes place at all levels
(c) Directing is a continuous process
(ii) Differentiate between formal and informal communication on any three basis.
Answer:
(i) The steps in the process of controling are (any two)
(a) Setting Performance Standards The first step in the controlling process is setting up of performance standards. Standards are the criteria against which actual performance would be measured. Thus, standards serve as benchmarks towards which an organisation strives to work. Standards can be set in both quantitative as well as qualitative terms.
(b) Measurement of Actual Performance Once performance standards are set, the next step is measurement of actual performance. Performance should be measured in an objective and reliable manner. There are several techniques for measurement of performance. These include personal observation, sample checking, performance reports, etc. As far as possible, performance should be measured in the sane units in which standards are set as this would make comparison easier.
(c) Comparing Actual Performance with Standards This step ïnvolves comparison of actual performance with the standards. Such comparison will reveal the deviation between actual and desired results. Comparison becomes easier when standards are set in quantitative terms.
(ii)
Basis | Planing | Controlling |
Emphasis | It empilasises more on non-personal abstract and long-range problems | It emphasises more on personal, concrete and immediate problems. |
premise | It is based on estimates | It is based on actual facts. |
Management Level involved | It is done by top level executives | It is done by operating and lower level executives |
Or
(i) Two characteristics of directing are (any two)
(a) Directing Initiates Action Directing is an executive function of management. While the other functions prepare a setting for action, directing initiates action in the oganisation. Therefore, a manager has to perform this function according to planning, organising. staffing and controlling.
(b) Directing takes place at all Levels Every manager from top to bottom performs the function of directing or in other words, we can say, directing takes place wherever superior-subordinate relationship exists.
(c) Directing is a Continous Process It is an ongoing process. It does not mean issuing an order or instruction but a manager must continuously guide, inspire and supervise his subordinates, so that organisational goals are achieved on time. This function continues throughout the lifetime of an organisation If direction in the organisation stops, it cease to work and grow.
(ii)
Basis | Formal Communication | Informal Communication |
Mutual Relationship among Members | Based on formal superior-subordinate relationship. | Based on interpersonal contracts. |
Nature | Systematic and oderly communication | Unsystematic and irregular communication. |
Speed of Communication | It is slow and time consuming. | It is fast and time saving. |
Question 33.
Tikasha Ltd is a laptop manufacturing company. The company is spending substantial amount of money to persuade the target customers to buy its laptops through the help of various component of promotion mix. In the light of the above said case, explain the term ‘promotion mix’. Also, explain it’s components.
Or
Define advertising and explain the three major features revealed through definition of advertising. [6]
Answer:
Promotion Mix it refers to combination of promotional tools used by an organisation to achieve its communication objectives. It consists of all the activities aimed at persuading customers to buy the product. It includes communication activities undertaken to inform and convince customers.
Various components used by the marketers are given below
- Advertising It is a non-personal visible communication which is paid for by an identified sponsor.
- Sales Promotion It refers to short-term activities or incentives which are aimed at encouraging purchase of products.
- Personal Selling It involves direct and face to face personal interactions between the sales person and potential customers.
- Public Relations This is the communication of a product, brand or business by placing information about it in the media without paying for the time or media space directly.
Or
Advertising refers to any paid form of impersonal presentation and promotion of goods, services or ideas by an identified sponsor (marketer). According to Frank Presbrey, “Advertising is a printed, written, oral and illustrated art of selling. Its objective is to encourage sales of the advertiser’s products and to create in the mind of people, individually or collectively, an impression in favour of the advertiser’s interest.”
Three major features of advertising are
- Paid Form Since, the advertiser pays advertising media for space or time used to communicate the message, it is a paid form.
- Impersonality Advertising is an impersonal tool of promotion as no face-to-face contact is involved between advertiser and customers.
- Identified Sponsor Name or identify of advertiser is disclosed in advertisement, i.e. advertising is issued by an identified sponsor.
Question 34.
Akshay Bansal started ‘Anti Cure’ a company for providing cyber security solutions to businesses. It’s objective is to prevent, detect and respond to cyber attacks and protect critical data. He was a hardworking software engineer and an expert in cyber security.
His business started growing and he was offered a big project by the Ministry of Defence. While working on the project, he found that the volume of work made it impractical for him to handle all the work by himself. He decided to expand the team.
For this purpose, he appointed Akhil and Shivam through campus placement. He found the new employees capable, enthusiastic and trustworthy. He was thus, able to focus on objectives and with the help of Akhil and Shivam, project was completed on time. Akshay also extended his areas of operations, and both the new employees also got opportunities to develop and exercise initiative.
(i) Identify and explain the concept in the given case which helped Akshay to focus on objectives.
(ii) Also, state any five points of importance of the concept identified in point (i) above. [6]
Answer:
(i) The concept in the given case is delegation. It is a downward transfer of authority from a superior to subordinate.
It is a pre-requisite to the functioning of an organisation as it enables the manager to use his time on high priority activities.
(ii) Delegation is important because of the following reasons
(a) Effective Management By empowering the employees, the managers are able to function more efficiently as they get more time to concentrate on important matters.
(b) Employee Development Delegation provides more opportunities to the employees to utilise their talent and develop latent abilities. It helps to make them better leaders and decision-makers, thus, creating future managers.
(c) Motivation of Employees Delegation provides a feeling of status and recognition to subordinates, as it is not only a process of sharing workload, but also involves trust of the superior on his subordinate.
Entrustment of responsibility builds up his esteem and encourages him to perform better.
(d) Facilitation of Growth Delegation helps in the expansion of an organisation by providing a ready workforce to take up leading positions in new ventures.
Trained and experienced employees are able to play significant role in launching new projects of the organisation.
(e) Basis of Management Hierarchy Delegation of authority establishes superior subordinate relationships, which helps employees to know ‘who has to report to whom’. Thus, duties and powers of each individual becomes clear.