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SAMPLE PAPER-5

Organisation of Commerce & Management

Questions

1. From the given sub questions attempt any four:

(A) Select the appropriate option from options given below and rewrite them:

(i) Organisation function is important for execution of the plans which have been prepared by management.

(a) top Level

(b) middle Level

(c) lower Level

(ii) policy covers all types of risks of a vessel while it is anchored at the port for a particular period of time.

(a) Port risk

(b) Voyage

(c) Floating

(iii) is the technique of observing and recording the time taken by an employee to complete a given task.

(a) Method study

(b) Time study

(c) Motion Study

(iv) Perfect market is a type of market based on

(a) importance

(b) nature of goods

(c) competition

(v) At least ___ of the average net profit should be spent on C.S.R.

(a) 5

(b) 2

(c) 3

(B) Give one word or phrase for the following sentences:

(i) The year in which start up India initiative was launched.

(ii) Number of members in State Commission.

(iii) Name the 4 work study techniques.

(iv) Process which helps in avoiding breakage, damage, and destruction of the product.

(v) Name the philosophy related to social responsibility propounded by Mahatma Gandhi.

54. (C) True or false:

(i) Henry Fayol put forth the technique of standardisation of tools and equipments.

(ii) Short Term loans are for a period upto 1 year.

(iii) Controlling measures are rigid to some extent

(iv) In a duopoly, there is a single seller.

(v) Management principles are applied differently under different situations.
(D) Match the pairs:

1. Explain the following terms/concepts in detail (Any 4 out of 6 ):
   (i) EXIM
   (iv) Organising
   (ii) Grading
   (v) Co-ordinating:
   (iii) KPO
   (vi) Central Bank
2. Study the following case / situation and express your opinion (Any 2):

(i) A vehicle manufacturing company has adopted the following practices?

(a) Only those components will be used by the company which are environment friendly.

(b) There will be discharge of harmful wastes only after their proper treatment.

(c) Pollution level of every vehicle will be maintained as per international standards.

1. By doing this, business organisation follows social responsibility towards which interest group?
2. What kind of pollution do they want to avoid?
3. What kind of message do they want to convey?

(ii) Ms. Vidya deals in import and export business so he needs different foreign currencies.

For the expansion of his business, he borrows money from bank. He invests his funds in the equity shares..

(a) Name the market from where Ms. Vidya borrow money?

(b) Name the market where Mr. X invest his funds?

(c) Which type of currency is required for international market?
(iii) Ms. Shraddha visited a shop to buy a pair of sandals for ₹ 700 . The salesman forced her to buy a pair of bigger size shoes of ordinary company by claiming that this size would be suitable to her. After reaching home, she discovered that shoes are still too big for her. She complained about the shoes to the shopkeeper. It was denied by the shopkeeper to replace the shoes despite of availability of stock.

(a) Which right of the consumer has been violated?

(b) Comment on the right which has been violated.

(c) Where can Ms. Shraddha file her complain?

1. Distinguish between (Any 3):

(i) Fixed Deposit Account and Current Account.

(ii) District Commission and National Commission.

(iii) E-business and Traditional business.

(iv) Planning and Controlling.

1. Answer the following questions in brief (Any 2):

(i) Explain the terms: Insurered, Insurer, Premium, Policy.

(ii) Explain utility functions of banks.. (iii) What are the roles of NGOs? Give two examples of NGOs.

1. Justify the following statements (Any 2):

(i) Marketing plays a vital role for firms.

(ii) Managerial skills and leadership are the most important feature of entrepreneurship.

(iii) E-business is a boon for sellers as well as buyers.

(iv) Awarehouse is an establishment for the storage of goods.

1. Answer the following questions in detail (Any 2):

(i) What are the different ways and means of consumer protection?

(ii) Explain the responsibilities of businesses towards government.

(iii) Define controlling and state its importance.

1. Answer the following questions in detail (Any 1):

(i) State the nature and importance of principles of management.

(ii) Explain in brief various functions of marketing.

55. [A] Answer Key

1. (A) (i) (a) top level

(ii) (a) Port risk

(iii) (b) Time study

(iv) (c) competition

(v) (c) 2

(B) (i) 2016

(ii) Four

(iii) Time study. Method study, Motion study, Fatigue study
(iv) Packaging
(v) Trusteeship
(C) (i) False
(ii) True
(iii) False
(iv) False
(v) True

(D)

1. (i) Export and Import bank provides financial assistance to exporters and importers and functions as the principal financial institution for co-ordinating the working of institutions engaged in financing export and import of goods and services with a view to promoting the country’s international trade. (ii) Grading is the process of classification of products according to similar characteristics and/or quality. Grading is done on the basis of their features like size, shape quality etc. Generally grading is done in case of agricultural products like wheat, rice, potatoes etc.

(iii) is described as the functions related to knowledge and information outsourced, to third party service providers. The outsourcing of core information related to business activities which are competitively important or form an integral part of a company’s value chain is desirable. KPO is the allocation of relatively high level tasks, to an outside organisation or a different group usually in a different geographic location. KPO is a subset of BPO. KPO involves outsourcing of core functions which may or may not give cost benefit to the parent company but surely helps in value addition. The processes which are outsourced to KPO are usually more specialised and knowledge based as compared to BPO’s.

(iv) Organising is the process of identifying, bringing the required resources together such as men, money. material, machine and method, grouping and arranging them properly for achieving the objectives. In planning, the management decides what is to be done in future whereas organising function decides the ways and means to achieve what has been planned. This function is important for execution of the plans which have been prepared by top level management people.

The synchronisation and combination of workforce, physical, financial and information resources are established in the process of organising.

(v) Co-ordination between different functions and all levels of employee is the essence of organisation success. It is an integration of different activities.
which is essential for their smooth flow. It establishes harmony among all the activities of an organisation in achieving desired goal. In an organisation, a number of persons are working together to achieve a common goal. Their work is closely linked with each other. Therefore, it becomes necessary to bring together the group efforts and harmonise them carefully. Co-ordination will not exist unless efforts are taken to achieve it.

(vi) The Central Bank is the apex financial institution in banking industry in the country. Every country has their own Central Bank. In India, the Reserve Bank of India (RBI) is the Central Bank. The RBI was established in 1945 under the Reserve Bank of India Act, 1944. Some functions of RBI are as follows:

(a) Frames monetary policy

(b) Issues currency notes

(c) Acts as a banker to the government

(d) Acts as a banker’s bank to commercial and other banks in India.

1. (i) (a) The business organisation follows social responsibility towards society for the protection of the environment.

(b) They want to avoid air pollution.

(c) They want to convey the message that businesses should be committed to protecting the environment and should not create an imbalance in nature.

(ii) (a) Ms. Vidya borrows money from the capital market.

(b) Ms. Vidya invests his funds in the regulated market.

(c) The different foreign currencies are required by Ms. Vidya for the international market.

(iii) (a) In this case, the Right to Choose has been violated.

(b) In India, the choices are available to consumers to select goods and services like tele communications, travel and tourism, banking. electronics, consumer goods, etc.

(c) According to the right to choose, a consumer should be given full liberty to select an article as per his requirements, liking, and purchasing power. The seller cannot force or compel the customer to buy specific products or services. In this manner monopoly is avoided and prevented. According to the Right to be Heard, Ms. Shraddha can lodge a complaint to the consumer forum. Ms Shraddha can also file an online complaint through the portal or mobile applications to the trader as well as to the appropriate consumer commission or forum.

56. Distinguish Between

(i) Fixed Deposit Account and Current Account

(ii) District Commission and National Commission

(iii) E-Business and Traditional Business

(iv) Planning and Controlling

57. Explain in brief:

(i) Insured: The person who is protected against certain losses. Insured is known as assured in case of life insurance contracts. He is the policy holder.

Insurer:The firm or person who agrees to compensate the insured against losses for a consideration. Insurer is known as assurer in case of life insurance contracts, because he is bound to get the sum assured on the maturity of the policy or the nominee will get the sum assured on the death of the policy holder.

Premium: The consideration for which the insurer agrees to insure the insured. It is paid by the insured to the insurer.

Policy: The statement of contract between the insured and insurer. It contains the terms and conditions of the insurance contract.

(ii) Utility Functions:

A commercial bank performs utility functions for the benefits of its clients. It provides certain facilities or products to its clients which are as follows:

(a) Issue of Drafts and Cheques: draft/cheque is an order to pay money from one branch of bank to another branch of the same bank or other bank. A bank issues drafts to its account holders as well as non account holders whereas cheques are issued only to the account holders. Bank charges commission for issuing a bank draft. (b) Locker Facility: This is common utility function of any commercial bank. The bank provides locker facility for the safe custody of valuables, documents, gold ornaments etc.

(c) Project Reports: A bank may prepare project reports and feasibility studies on behalf of the clients. Project reports enable the business firm to obtain funds from the market and to obtain clearance from government authorities.

(d) Gift Cheques: Banks issue gift cheques and gold coins to account holders as well as to non account holders. The git cheques/ coins can be used by the clients for the purpose of gifting on occasions like weddings, birthdays etc.

(iii) Non-government organisation (NGO) are nonprofit and non political organisation which aim at promoting the welfare of the people. The main aim of these NGOs is to study the trend of prices in the market and publish them for the information of consumers and to agitate against the malpractices of traders.

Role of Consumer Organisations and NGOs in Consumer Protection and Education:

(a) To organise campaigns and various programmes on consumer related issues to create social awareness..
(b) To organise training programmes for the consumers and make them conscious of their rights and modes of redressal of their grievances.

(c) To publish periodicals to enlighten the consumers about various consumer related developments.

(d) To provide free legal advice to members on matters of consumer interest and help them to take up grievances.

58. The following are examples of NGOs:

(a) Consumer Guidance Society of India. (CGSI)

(b) Voluntary Organisation in Interest of Consumer Education. (VOICE)

(c) Consumer Education and Research Centre. (CERC)

(d) Consumer Association of India. (CAL)

(e) Mumbai Grahak Panchayat. (MGP)

(d) Grahak Shakti. (GS)

1. (i) (a) Increases Awareness: Marketing helps in creating awareness about the existing products, new arrivals as well as the company which sells a particular product in the market. This raises awareness among the potential consumers. It creates brand image among the consumers.

(b) Increases Sales: Once marketing creates awareness about the products or services among the consumers, it attracts them to purchase the same. Successful marketing campaign helps to increase the sales of the organisation. Increase in sale generates profit for the organisation. This income and profit are reinvested in the business to earn more profits in future. In modern business, survival of the organisation depends on the effectiveness of the marketing function.

(c) Creates Trust:People want to buy from a business that has a trustworthy reputation. Creating trust among the customers is a time consuming process. Creating trust among the consumers helps the business to earn loyal customers. Once a business can establish this trust with the clients, it creates customer loyalty. Happy customers enhance the brand image in the market. Effective marketing plays an important role in building a relationship between the customers and the organisation. Effective pricing policy and timely after sales services improve image of the organisation. Majority of the activities of the marketers are directed towards building the brand equity of the business.

(d) Source of New Ideas: Marketing helps business to understand the needs of the consumers. Feedbacks from the consumers help in the improvement of the existing products. There is rapid change in tastes and preference of people. Marketing helps in understanding these changes it helps to understand new demand pattern emerged in the market. Research and development department develop products accordingly. The 4p’s of marketing mix i.e. product, price, place and promotion play a huge role in the product development. Inventions and innovations are taken place as per the need by the Research and development team of the business.

(ii) A person who wants to be a successful entrepreneur should have more passion of doing something new than just earning profit. Leadership and managerial skills are the most important facets of entrepreneurship. Other skills can be considered secondary. An entrepreneur must have the ability to lead and manage. The success of any entrepreneurship depends on the management of the organisation. With professional management and skilled managers, entrepreneurship becomes a successful activity.

(iii) Benefits of E-business: The main advantage of e-business is people get product information online and order the product online through cash on delivery or pre payment. In this way seller and buyer both get advantage of internet platform. Traditionally trading by the buyers and sellers is done through three channels like face to face, mail and phone. The internet has become the fourth channel for trade. Internet trade is booming and allowing business to sell more and at a lower cost. Thus, internet offers a great opportunity over traditional channels as it has some advantages or strengths.

(a) Ease of Formation: The formation of traditional business is difficult, whereas e-business is relatively easy to start.

(b) Lower Investment Requirements: Investment requirement is low as compared to traditional business as the store does not require to exist in the market and can be managed with less manpower so if trade does not require much of the investment the success of the business becomes more.

(c) Convenience: Internet offers the convenience of days a year. Business can be conducted any time and flexibility is available. E-business is a business that has enabled and enhanced by electronics and offers the advantage of accessing anything, any where, any time.

(d) Speed: This benefit becomes all the more attractive when it comes to information. Much of the buying or selling involves exchange of information that internet allows at the click of mouse.

(iv) A warehouse is defined as “an establishment for the storage or accumulation of goods.”

59. Functions of Warehouses:

(a) Storage: This is the basic function of warehousing surplus commodities which are not needed immediately can be stored in warehouses. They can be supplied as and when needed by the customers.

(b) Price Stabilisation: Warehouses play an important role in the process of price stabilisation. It is achieved by the creation of time utility by warehousing. In warehouses, usually large stock of goods are kept. Whenever, there is shortage in the market, goods can be immediately supplied
through warehouses, which helps in price stabilisation to avoid rise in price due to demand and supply difference.

(c) Risk Bearing: When the goods are stored in warehouses they are exposed to many risks in the form of theft, deterioration, fire etc. Warehouses are constructed in such a way that they minimise these risks. A warehouse keeper has to take the reasonable care of the goods and safeguard them against various risks. For any loss or damage sustained by goods, warehouse keeper shall be liable to the owner of the goods.

(d) Financing: Loans can be raised from the warehouse keeper or from financial institutions against the goods stored by the owner. Goods act as security for the warehouse keeper or for financial institutions. In this manner, warehousing acts as a source of finance for the businessmen for meeting business operations.

1. (i) Various ways and means of consumer protection:

(a) Lok Adalat: Lok Adalat is the effective and economical system for quick redressal of the public grievances. It can also be referred to as ‘People’s Court’. It is established by the government to settle disputes by compromise.

The aggrieved party can directly approach the adalat with grievance, and issues are discussed on the spot and decisions are taken immediately. Resolution of disputes by Lok Adalat gets statutory recognition. e.g. MSEDCL, MSRTC, railway authority, Insurance companies, banks etc. organise regular Lok Adalat.

(b) Public Interest Litigation (Janahit Yachika): Public Interest Litigation means a legal action initiated in a court of law regarding a matter of general public interest. It is a legal facility under which any person can approach the court of law in the interest of the society. Its aim is to provide legal remedy to unrepresented groups of society. The party which is not related to grievance can also file public interest litigation. It is filed in the High Court as well as Supreme Court directly in some cases.

(c) Redressal Forums: Under the Consumer Protection Act, 2019, a system has been set up to deal with the consumer grievances and disputes at district, state and national level. Any individual consumer or association of consumers can file a complaint with respective commission depending on the value of goods and claim for compensation. The main aim of these commissions is to provide for simple, speedy and inexpensive redressal of consumer’s grievances.

As per the Act, Consumer Protection Councils at district, state and national level are set up for promotion and protection of rights of consumers.

(d) Awareness Programme: To increase the level of awareness among the consumers the Government of India has initiated various publicity measures. State and Central Government regularly publishes journals, brochures, booklets and various posters depicting the rights and responsibilities of consumers, redressal machineries etc.

Several audio-video programmes on consumer awareness are broadcasted on various channels and through social media. 15th March is observed as ‘International Consumer Rights Day’ and 24th December is observed as ‘National Consumer Day:

(e) Consumer Welfare Fund (CWF): Department of Consumer Affairs has created consumer Welfare Fund for providing financial assistance to strengthen the voluntary consumer movement particularly in rural area. This fund is used for training and research in consumer education, complaint handling, counselling and guidance mechanisms, product testing labs and so on.

(ii) Responsibilities of Business Towards Government: The government regulates and controls the business with the objectives of systematic economic development of the country and safeguarding the interests of the common man. Government provides incentives and subsidies to business. Following are the responsibilities of organisation towards government.

(a) Timely Payment of Taxes: The government imposes various types of taxes like sales tax, income tax, wealth tax etc. Business units should pay these taxes from time to time. It would be difficult for the government to undertake development projects without availability of funds.

(b) Observing Rules and Regulations: The rules framed by the government for business should be fully complied with. The business should follow the laws regarding obtaining license for a specified business, the operation of the business, price determination and production etc. They should conduct business in lawful manner.

(c) Earning Foreign Exchange: The government also expects from business organisation that it will earn foreign exchange by exporting goods. The government requires this foreign exchange for importing various valuable and important products.

(d) Economic Development: The government sets the targets for balanced and rapid economic development of the country. The business organisation should provide necessary cooperation to the government.

(e) Implementing Socio Economic Policies: The government expects cooperation and help from the business sector in implementing socioeconomic programmes and policies.

(iii) Controlling is a function of comparing the actual performance with the predetermined standard performance. It measures deviation, if any, identifies
the causes of deviation and suggests corrective measures. The process of controlling helps in formulation of future plans also.

60. Definitions:

(a) Koontz and O’Donnell: “Managerial control implies the measurement of accomplishment against the standard and the correction of deviations to assure attainment of objectives according to plans”.

(b) Dale Henning: “Control is the process of bringing about conformity of performance with planned action:

(c) Philip Kotler: “Control is the process of taking steps to bring actual results and desired results closer together:”

61. Importance of Controlling:

Controlling is important in maintaining standards and to achieve desired goals effectively and efficiently. It is a function of checking the performances of employees at every stage of their work in process. The importance of controlling function in an organisation is as follows:

(a) Fulfilling Goals of Organisation: Controlling is the function of measuring the performances at every possible stage, finding out the deviations, if any: and taking corrective actions according to planned activities for the organisation. Thus, it helps in fulfilling the organisational goals.

(b) Accuracy of Standards: An efficient control system helps management in judging the accuracy of standards whether they are accurate or not. Controlling measures are flexible to some extent. So after reviewing them according to changing circumstances, they are revised from time to time which is beneficial for checking performances accurately.

(c) Ensures Order and Discipline: Controlling is the function of order and maintaining discipline. It works for reducing unprofessional behaviour of the employees. Discipline is maintained by continuous checking of performances by the superiors and preventive actions are taken to minimize the gap between actual and standards.

(d) Facilitates Co-ordination: Control is a function in which the roles and responsibilities of all departmental managers and the subordinates are designed clearly. Coordination between them helps to find out the deviations in their respective departments and to use remedial measure for desired results of the organisation.

(e) Psychological Pressure: The performances are evaluated with the standard targets. The employees are very well aware that their performance will be evaluated and they will be rewarded accordingly. This psychological pressure works as a motivational factor for empolyees to give their best performance.

1. (i) The nature of management principles is given below:

(a) Universal Application: The principles of management are universal in nature. That means they can be applied to all types of organisations, irrespective of their size and nature. Their results may vary and application may be modified but these are suitable for all kinds of organisations. Similarly, they are applicable to all levels of management.

(b) General Guidelines: Management principles provide general guidelines in tackling the organisational situations wisely as well as in solving the problems. They are not rigid. Which management principles are to be applied depends upon the situation, size and nature of organisation. For example, when we say fair remuneration, then the term ‘fair’ can vary as per the nature, size and financial condition of the organisation.

(c) Principles are Formed by Practice and Experiments: The management principles are developed gradually with thorough research work. Systematic observations and experiments are conducted before developing them. The results of such experiments have been developed as a principle after its practice in organisations..

(d) Flexibility: Management principles are flexible in nature. It means they can be changed or modified according to the situation. Managers can be flexible while implementing principles to suit the requirement. The business situations keep on changing. Management principles can be adjusted or modified and can be used in the organisation according to its need.

The significance or importance of management principles are:

(a) Helpful in Efficient Utilisation of Resources: In every organisation two types of resources are used i.e. physical resources (material, machines, money etc.) and human resources (manpower). The basic function of management is to make proper balance between these resources by putting them to optimum use and control on wastage ofresources. While maintaining discipline and healthy working environment, management always uses techniques and principles. It helps in establishing cordial relationship between management and employees which increases the efficiency level of employees and also affects the effective administration. For example, Use of
standard tools and machinery helps in increasing quality or productivity as well as in increasing level of efficiency of human resources.

(b) Scientific Decisions: In business organisation, a scientific decision means systematic or balanced decision. Principles train the managers to handle critical situations tactfully otherwise the managers have to work always with trial and error method. With the use of various management principles, one can get an idea about how to analyse the situations, to search alternative options and their results.

(c) Understanding Social Responsibility: Management principles are based on every aspect of organisation. They are not developed only from view point of handling the resources effectively but they guide management in understanding social responsibility of organisation. So that they can focus on providing quality products at reasonable prices, avoiding artificial monopolistic situations in market, fair competition, fair remuneration, change in environment, healthy working place, standard tools and machinery etc.

(d) Helps to Co-ordinate and Control: Management principles are the guidelines for better coordination and control. It is very challenging to create coordination and cooperation among different employees working in different departments. It is also difficult task for manager to keep control on the performances of employees. Management principles offer suitable systems while establishing coordination and control.

(ii) Functions of Marketing: Success of business is difficult without effective marketing. Marketing deals with exchange of goods and services to satisfy needs of consumers. Marketing functions help to study the needs of the consumers and facilitate to satisfy it. Following are some of the important functions of marketing:

(a) Marketing Research: Effective marketing is possible when business takes initiative to identify the needs and wants of the consumers in the market. To identify the needs of the consumers, there is a need to collect information from the consumers and analyse the same is known as market research. Analysis of the information helps in the assessment of the need in the market. It helps to find out what do consumers want to buy, when do consumers buy, in what quantity they want to buy and at what price. Marketing research helps to take various decisions regarding successful marketing of products. (b) Buying and Assembling: It involves collecting raw material from different sources at one place for production. This function is important as quality and price of raw material determine cost and quality of the final product.

(c) Market Planning: After assessing the need of the marketing, business needs to chalk out the marketing plan and strategies to achieve the desired objective. Market planning is the process of organising and defining the marketing objectives of the business and creating strategies to achieve them. It is the comprehensive blueprint that will help to draw outline of business’s overall marketing efforts.

(d) Packaging and Labelling: Package and label creates the first impression on the consumer about the product. Attractive package and label can help to make product successful. Packaging means designing the package for the product. It helps to avoiding breakage, damage and destruction of the product. Packing material includes bottles, container, plastic bags, tin, wooden boxes, jute bags, bubble bags, packing foam etc.

Label is a slip which is found on the product and provides all the information regarding the product and its producer. The slip on which all this information is provided is called as label and its process is called as labeling. Packaging and labelling not only provide protection to the product but also act as an effective tool of marketing.

(e) Branding: Every businessman wants to have special identity in the market for his product. Branding is a process of giving special identity to a product through unique brand name to differentiate it from competitor’s products. In simple words giving of distinct name to one’s product is called as branding. Registered brands are known as trademarks.

Trademarks can not be copied. Branding helps to get recognition among the consumers. It can help to get new business and increase brand awareness in the market.

(f) Customer Support Service: Customer is the king of the market hence business needs to take necessary steps for the satisfaction of the customer. Business needs to take every possible effort to provide support services to the customer. Timely support services help to gain customer’s loyalty.

The business can provide the support services like pre-sales service, consumer helpline, after sales service, technical assistance, product demo etc.
to the customers. These services help in getting, retaining and growing the customers.

(g) Pricing of Product: Pricing is one of the most important as well as challenging function of the marketing. Many times price of the product decides the success or failure of the product. Pricing plays an important role in the market where there is cut throat competition. While determining the price of the product businessman needs to consider factors like cost, desired profit, price of the competitor’s product, demand for the product, market conditions etc. Business needs to change prices as per the need of the market. If prices are too high, it might lose customers but if prices are too low, it might suffer losses. So deciding the right price needs extensive market research.

(h) Promotional Channels: Promotion is the process of informing the consumers about the products, their features, uses, prices etc and encouraging them to buy these products. Advertising, personal selling, publicity and sales promotion are some of the important tools of promotion. Business uses combination of all or some of these four methods for promotion as per the need of the business. Promotional activities help to increase brand awareness in the market.