Business Studies 2004 CBSE [ All India ] Set I

Management as a GROUP refers to the Board of Directors or Executive Directors who are responsible for effectively managing the affairs of the business by guiding and controlling the work of other managers such as production, sales, finance, personnel, quality control managers, etc.
This approach focuses on a team rather than individuals.
This is because it is believed that management as a team can contribute more effectively and efficiently than an individual.

The impact of changes in Economic Environment are as follows:
a. Rapid increase of production capacity after partial decontrol of cement in 1982.
b. Banking sector reforms led to attractive deposit avenues, easier credit terms, better service and above all an effective and reliable banking system

Supervision is made up of two words- Super and vision. Super means over and Vision means the art of looking over or seeing the objects.
Supervision means overseeing the subordinates at work by their superiors. In other words, supervision implies looking after the work of subordinates from a higher level. A supervisor guides his subordinates so that they produce the desired quantity of work within the desired time.

The societal concept of marketing means that companies should perform marketing to enhance societal well being. Societal concept emphasises social welfare along with the interests of the firm and its customers. This concept includes social implications in the decision making.

Following points highlight the nature of principles of management:
1.Universal: The principles of management are universally applicable to all types of organisations. They are applicable to any kind of organisation whenever there is a need of coordinated efforts of human beings.
2. Flexible: The principles of management are flexible guides and provide ample scope for taking into consideration the requirement of a given situation. The principles of management are applied in the light of changing conditions and special situations.
3.Evolutionary: The principles of management are developed on the basis of organised or  quantitative facts or from the accumulated experiences.

Three advantages of formal communication are:
1.      Formal Communication ensures systematic and orderly flow of information and ideas.
2.      Formal Communication provides support to the authority of superior over subordinates.
3.      The source of Formal Communication can be easily located.
Three advantages of formal communication are:
1.      Formal Communication is slow.
2.      Formal Communication is impersonal in nature.
3.      Formal Communication provides bottlenecks in the flow of information.

I do not agree with the statement that leadership is required only for less efficient subordinates. In fact leadership is required for all due to following reasons:

•   Development of team work: Different employees have different economic, social and cultural background and they have varied interest and goals. An effective leader can reconcile the conflicting interests and goals of individuals and organisations.
•    Link between subordinate and top management: With the help of leadership, individual member of any group is able to identify themselves with the goals of organisation or has a commitment. A good leader can inspire the subordinates to develop commonness of interests and persuade the top management to satisfy various needs and motives of his subordinates.
•    Promotion of effectiveness: A good leader acts as a friend and can understand the psychology of the employees and can lead them in a desired way. He guides them and creates a healthy environment to work.
•  Effective direction: If a leader is able he can enable subordinates to perform their duties efficiently. A leader thus can play an important role to make the subordinates perform better.

Following are the three factors that are considered while fixing the price of a product:
1. Cost: It is an important factor that is to be considered before fixing the price of a product. The price must enable the businessman to cover his total cost including a reasonable profit.
2. Competition: Competition is another important factor. If there is no competition the business firm can fix the price freely. But if there are competitors in the market the firm must consider the factor before fixing the price.
3.Government Control: Sometimes the government may announce a policy about pricing of goods or may specifically fix and control the prices of goods. Under such circumstances, a seller has little or no control over the prices.

Following are the three techniques of sales promotion:
1. Sample: A sample is the small quantity of a product given to a customer in order to promote the sales of the product. This helps a consumer to verify the quality of the product. Free samples are distributed to promote the sales of soap, medicines, tooth paste etc.
2. Coupons: A coupon is a certificate that enables the customer to a specified saving on the purchase of a product. Coupons are given directly to the customers.
3.Price-off Offers: Under this offer the products are offered for sale at a price lower than the normal price of the product. This offer is intended to stimulate the sales during a slump period.