Business Studies 2005 CBSE [ All India ] Set II

The product concept proposes that the way to realising business goals lies in making products that are of high quality. That is, the customers favour high quality products.

Two functions of middle level management are –
(i)    Interpretation of policies framed by top management.
(ii) Preparing the organizational set up in their departments for fulfilling the objectives implied in various business policies.

Two functions of lower level management are –

•      To prepare plans regarding their work and make distribution of work.
•       Representing the workers’ grievances before the management.

The fundamental assumption in this concept is that customers can be lured, coaxed and persuaded into buying. Firms practicing selling concept relies upon the power of advertising and other persuasion techniques to influence customers.

Following are the six features of directing function of management:
(1)   It is a pervasive function of management i.e., it is performed at every level of management.
(2)   It provides a link between preparatory functions (planning, organising and staffing) and controlling function of management.

Adverse affects of the following principles of management on the organisation are :
(i)    Unity of command- Sometimes it is found that it is necessary and possible that an employee should receive orders from more than one superior to perform the task properly and in time. But this principle in certain situation is the cause of delay in work. It also results in wastage of time and duplication of efforts.

(ii)   Order- It creates rigidity regarding the position of resources and manpower employed.

The importance of leadership in organisation may be derived from the following points :
 (a)    Leadership helps in guiding and inspiring employees to perform well and accomplish the goals.

(b)   It helps in persuading employees to work co-operatively and enthusiastically towards common goals of an organisation.

(c)    By his exemplary character and conduct, a leader instills confidence is subordinates and shows the right way.

(d)  Leader develops and maintains an environment conductive to maximum work effort.

Features of personal selling are:
(a)   Personal selling involves individual’s personal communication.
(b)   It relies on oral messages only.
(c)   It implies contact with limited number of people.

(i) Scalar chain- It is the chain of superiors ranging from top management to the lowest ranks. The chain also determines the line of authority. The managers are linked together in their positions from highest to the lowest. The following is the diagram of scalar chain- 

(ii)  Principle of Equity- The principle of equity suggests that similar treatment is assured to people in similar positions. This principle implies that managers should be fair and initial while dealing with their subordinates
(iii)  Division of Work- This principle implies that every employee should be assigned only on type of work so as to bring about specialisation in every activity.

Features of public relations are :
(i)     Planned effort- Public relations activity has to be deliberately planned to achieve specified objectives.

(ii)  Creation and Maintenance of understanding- Public relations is a sort of communication where creation and maintenance of understanding is of utmost importance.