Plus Two Business Studies Previous Year Question Paper March 2018

Kerala Plus Two Business Studies Previous Year Question Paper March 2018 with Answers

Time : 2 1/2 Hours
Cool off time : 15 Minutes
Maximum : 80 Score

General Instructions to Candidates:

• There is a ‘cool off time’ of 15 minutes in addition to the writing time of 2 hrs.
• Your are not allowed to write your answers nor to discuss anything with others during the ‘cool off time’.
• Use the ‘cool off time’ to get familiar with the questions and to plan your answers.
• Read questions carefully before you answering.
• All questions are compulsory and only internal choice is allowed.
• When you select a question, all the sub-questions must be answered from the same question itself.
• Calculations, figures and graphs should be shown in the answer sheet itself.
• Malayalam version of the questions is also provided.
• Give equations wherever necessary.
• Electronic devices except non programmable calculators are not allowed in the Examination Hall.

Answer the following questions from 1 to 7. Each carries 1 score. (Scores: 7 × 1 = 7)

Question 1.
Policy formulation is the function of ………….
a) Top level management
b) Lower level management
c) Middle level management
d) All of these
Answer:
a) Top level management

Question 2.
Identify the management principle which emphasis on ‘one head and one plan’.
a) Order
b) Equity
c) Unity of command
d) Unity of direction
Answer:
d) Unity of direction

Question 3.
Which of the following is not an element of delegation?
a) Accountability
b) Authority
c) Responsibility
d) Punctuality
Answer:
d) Punctuality

Question 4.
Which of the following is an example of grapvine network of communication?
a) Inverted V
b) Freeflow
c) Circular
d) Gossip
Answer:
d) Gossip

Question 5.
Budgetary control requires the preparation of …………
a) Budgets
b) Network diagram
c) Breakeven chart
d) Training schedules
Answer:
a) Budgets

Question 6.
Long term investment decisions are also called ………..
a) Working capital decisions
b) Dividend decisions
c) Financing decisions
d) Capital budgeting decisions
Answer:
d) Capital budgeting decisions

Question 7.
Complete as per the hint given:
a) Money Market – RBI
b) Capital Market – …….?…….
Answer:
SEBI

II. Answer any four of the following questions from 8 to 12, carries 2 scores each. (Scores: 4 × 2 = 8)

Question 8.
Give two reasons that management is called as a science.
Answer:

1. Management has a systematised body of knowledge.
2. Management principles are developed after scientific enquiry, experimentation and observation.
3. Management principles are applicable to all types of organizations.
4. So management is also called a science.

Question 9.
There is heavy demand for fast food restaurants in Kerala due to the change in life style of the people. Describe the environment affected here.
Answer:
Social Environment

Question 10.
What do you mean by a blank application form used in relation with staffing function?
Answer:
An application blank or form is the most universal mechanism used to screen (select) the applicants to be called for interview and other tests for selection purpose. After preparing the list of candidates suitable for job, blank application forms will be sent to the candidates. In this application form information should be given about the name and address of the candidate, educational qualification, experience, salary expected, etc.

Question 11.
Describe the concept of ‘control by exception’.
Answer:
Control by exception or management by exception (MBE) is a practice where only significant deviations from a budget or plan are brought to attention of management. The idea behind its is that management’s attention will be focused only on those areas in need of action.

Question 12.
Give four examples for current assets.
Answer:
Current Assets:

1. Cash in hand
2. Cash in bank
3. Sundry Debtors
4. Closing Stock

III. Answer any six of the following questions from 13 to 19, each carries 3 scores. (Scores: 6 × 3 = 18)

Question 13.
Classify the following personnels under different levels of management.
a) Marketing Manager
b) Foreman
c) Supervisor
d) General Manager
e) Chairman
f) Personnel Manager
Answer:
a) Top Level Management:

• General Manager
• Chairman

b) Middle Level Management:

• Marketing Manager
• Personnel Manager

c) Lower Level Management

• Foreman
• Supervisor

Question 14.
Differentiate between single use plan and standing plan with example.
Answer:
1) Single use plan: A single use plan is developed for a one-time event or project. Such plans are not to be repeated in future. E.g. budgets, programmes, projects, etc.
2) Standing plan: A standing plan is used for activities that occur regularly over a period of time. E .g. policies, procedures, methods and rules.

Question 15.
Manu Associates is a company with several departments like production, marketing, Research & development, personnel, etc. Suggest a suitable form of organisation structure to them and suggest two merits of it.
Answer:
Functional Structure: The functional structure is formed by grouping together the entire work to be done into functional departments. Eg. Production department marketing department, etc.

• It promotes division of work which leads to specialization.
• It promotes control and coordination within a department.

Question 16.
Differentiate between on the job training and off the job training.
Answer:
Difference between on the job training and off the job training.
On the job training:

1. Employee is given training when he is on the job.
2. Learning the works while doing it.
3. Less expensive method of training.

Off the job training:

1. Employee is provided training away from the work place.
2. Doing the work after learning it.
3. More expensive method of training.

Question 17.
Draw a diagram showing the communication process.
Answer:

Question 18.
Explain the concept of ‘span of control’ with an example.
Answer:
The span of management or span of control refers to the number of subordinates controlled directly by a superior. In a wider span of control, a manager has many subordinates who report to him. In a narrow span of control, a manager has fewer subordinates under him. It is also known as management ratio.

Question 19.
Packaging is called as the silent salesman in the market. Why?
Answer:

1. Packaging helps in identification of the products.
2. Packaging protects the product from spoilage, breakage, leakage, etc.
3. It facilitates easy transfer of goods to customers.
4. Packaging provides convenience in the storage of the product.

IV. Answer any 4 of the following questions from 20 to 24. Each carries 4 scores. (Scores: 4 × 4 = 16)

Question 20.
Describe any four dimensions of business environment with suitable examples.
Answer:

1) Economic Environment: Interest rates, inflation rates, changes in disposable income of people, stock market indices and the value of rupee are some of the economic factors that can affect the business enterprise.

2) Social Environment: The social environment of business includes the social forces like customs and traditions, values, social trends, literacy rate, educational levels, lifestyle, etc.

3) Technological Environment: Technological environment consists of new products, new technologies, new approaches to product, new methods and equipments, etc.

4) Political Environment: Political environment includes constitution, political parties and their ideology, types of govt., political stability, attitude towards business, etc.

Question 21.
Planning is the first step to success. Comment on the statement by illustrating the importance of planning in management.
Answer:

1. Planning provides directions: By stating in advance how work is to be done planning provides direction for all actions.
2. Planning reduces the risk of uncertainty: Planning enables an organisation to predict future events and prepare to face the unexpected events.
3. Planning reduces wasteful activities: Planning serves as the basis of coordinating the activities and efforts of different departments and individuals. It helps to eliminate useless and redundant activities.
4. Planning promotes innovative ideas: Since planning is thinking in advance, there is scope for finding better and different methods to achieve the desired objectives.

Question 22.
Differentiate between fomnal organisation and informal organisation.
Answer:
Formal organisation:

1. It is deliberately created by top level management.
2. It has pre-determined purpose.
3. It is highly rigid.
4. Communication is allowed through the scalar chain.

Informal organisation:

1. It arises automatically as a result of social interaction among the employees.
2. It has no pre-determined purpose.
3. It is more flexible.
4. Communication is allowed through all channels networks.

Question 23.
Explain the 4 P’s in marketing.
Answer:
1. Product: Product means goods or services or ‘anything of value’, which is offered to the market for sale. The important product decisions include deciding about the features, quality, packaging, labelling and branding of the products.

2. Price: Price is the amount of money paid by the customers to pay to obtain the product. In most of the products, price affects the demand of the products. Desired profits, cost of production, competition, demands, etc. must be considered before fixing the price of a product.

3. Place: Place or Physical Distribution includes activities that make firm’s products available to the target customers. Important decision areas in this respect include selection of dealers, storage, warehousing and transportation of goods from the place of production to the place of consumption.

4. Promotion: Promotion includes activities that communicate availability, features, merits, etc. of the products to the target customers and persuade them to buy it. It includes advertising, personal selling, sales promotion and publicity to promote the sale of products.

Question 24.
Illustrate the functions of the entrepreneur in relation with the economic development of a nation.
Answer:
1) Contribution to GDP: Entrepreneurs explore and exploit opportunities, encourage effective resource mobilization of capital and skill, bring in new products arid services and develops markets for growth of the economy. In this way, they help increasing gross national product (GDP) as well as per capita income of the people in a country.

2) Capital Formation: Entrepreneurs promote capital formation by mobilising the idle savings of public. They employ these resources for setting up an enterprise.

3) Generation of Employment: With the setting up of more and more business units by entrepreneurs, a large number of employment opportunities are created.

4) Promotes Balanced Regional Development: Entrepreneurs help to remove regional disparities through setting up of industries in less developed and backward areas.

V. Match the following, which carries 5 scores. (Scores: 5 × 1 = 5)

Question 25.

Answer:

VI. Answer any two of the following questions from 26 to 28. Each carries 5 scores. (Scores: 2 × 5 = 10)

Question 26.
Moon Ltd., a newly established company requires different categories of employees to their organisation. Explain the various sources available to them.
Answer:
1) Direct Recruitment: Under the direct recruitment, a notice is placed on the notice-board of the enterprise specifying the details of the jobs available. Jobseekers assemble outside the premises of the organisation on the specified date and selection is done on the spot. It is suitable for filling casual vacancies.

2) Casual callers: Many reputed business organisations keep a database of unsolicited applicants in their office. These list can be used for recruitment.

3) Advertisement: Advertisement in newspapers or trade and professional journals is generally used when a wider choice is required.

4) Employment Exchange: Employment exchanges keep records of job seekers and will be supplied to business concern on the basis of their requisition.

5) Placement Agencies and Management Consultants: These agencies compile bio-data of a large number of candidates and recommend suitable names to their clients.

Question 27.
SEBI is the regulating agency in Indian stock exchange. Discuss their major functions.
Answer:
1) Regulatory Functions:

• Registration of brokers and subbrokers and other players in the market.
• Registration of Mutual Funds.
• Regulation of stock brokers, portfolio exchanges, underwriters, etc.

2) Development Functions:

• Training of intermediaries of the securities market,
• Conducting research and publishing information useful to.all market participants.
• Undertaking measures to develop the capital markets by adapting a flexible approach.

3) Protective Functions:

• Prohibition of fraudulent and unfair, trade practices.
• Controlling insidertrading price rigging etc. and imposing penalties for such practices.
• Undertaking steps for investor protection.

Question 28.
The Consumer Protection Act, 1986 envisages certain rights to consumers. Illustrate them.
Answer:

1. Right to Safety : The consumer has a right to be protected against goods and services which are hazardous to life arid health.
2. Right to be Informed: The consumer has a right to have complete information about the product he intends to buy including its ingredients, date of manufacture, price, quantity, directions for use, etc.
3. Right to Choose: The consumer has the freedom to choose from a variety of products at competitive prices.
4. Right to be Heard: The consumer has a right to file a complaint and to be heard in case of dissatisfaction with goods or services.
5. Right to seek Redressal: The consumer has a right to get relief in. case the product or service falls short of his expectations.

VII. Answer any two of the following questions from 29 to 31. Each carries 8 scores. (Scores: 2 × 8 = 16)

Question 29.
‘A manager must be a good leader.’ Describe the various qualities to be possessed by him to co-ordinate the activities of the business organisation.
Answer:
Leadership: Leadership can be defined as the process of influencing the behaviour of employees at work towards the accomplishment of organisational objectives.

Qualities of Good Leader:

• Physical Features: Physical features like height, weight, health, appearance determine the physical personality of a leader.
• Knowledge: A good leader should have required knowledge and competence.
• Honesty: A leader should possess high level of honesty.
• Initiative: A leader should have courage and initiative.
• Communication Skills: A leader should have the capacity to clearly explain the ideas.
• Motivation Skills: The leader should have the ability to motivate the subordinates by satisfying their needs.
• Self Confidence: A leader should have high level of self confidence.

Question 30.
What do you mean by capital budgeting? Describe various factors affecting capital budgeting decisions.
Answer:
Capital Structure: Capital structure refers to the mix between owners funds and borrowed funds. Owners fund consists of equity share capital, preference share capital and reserves and surpluses or retained earnings. Borrowed funds can be in the form of loans, debentures, public deposits, etc.

A capital structure will be said to be optimal when the proportion of debt and equity is such that it results in an increase in the value of the equity share.

Fixed Capital: Fixed capital refers to the capital needed for the the acquisition of fixed assets to be used fora longer period.

Factors affecting Fixed Capital:

• Nature of Business: A trading concern needs lower investment in fixed assets compared with a manufacturing organization.
• Scale of Operations: An organisation operating on large scale require more fixed capital as compared to an organisation operating on small scale.
• Choice of Technique: A capital-intensive organisation requires more amount of fixed capital than labour intensive organisations.
• Technology Upgradation: Organisations using assets which become obsolete faster require more fixed capital as compared to other organisations.
• Growth Prospects: Higher growth of an organisation generally requires higher investment in fixed assets.
• Diversification: The firms dealing in number of products (Diversification) requires more investment in fixed capital.
• Use of Fixed Assets: Companies acquiring fixed assets on hire purchase or lease system require lesser amount as against cash purchases.

Question 31.
Pricing of a product is the crucial decision to be taken by a producer. Do you agree? Illustrate the different factors affecting price determination of a product.
Answer:
Yes/agreeing.

Pricing: Price may be defined as the amount of money paid by a buyer in consideration of the purchase of a product or a service.

Factors Affecting Price Determination:

• Product Cost: One of the most important factors affecting price of a product or service is its cost of production and distribution. Fixed Costs, Variable Costs and Semi-Variable Costs are to be considered for determining the price.
• Demand: The price of a product is affected by the elasticity of demand of the product. If the demand of a product is inelastic, the firm is in a better position to fix higher prices.
• Competition: Competitors’ prices and their anticipated reactions must be considered before fixing the price of a product. In case of high competition, it is desirable to keep price low.
• Government and Legal Regulations: In order to protect the interest of public against unfair practices, prices of some essential products are regulated by the government under the Essential Commodities Act., e.g. Medicines.
• Pricing Objectives: Another important factor affecting the fixation of price of a product is pricing objectives, e.g. maximisation of profit, market share, etc.

Plus Two Business Studies Previous Year Question Papers and Answers