Business Studies 2015 CBSE [ All India] Set 1
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Q1
What is meant by ‘business environment’?
Marks:1View AnswerAnswer:
Business environment refers to sum total of all individuals or institutions and other aspects outside the control of a business enterprise which may affect its performance.
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Q2
Explain, how management helps in well-being of the society?
Marks:1View AnswerAnswer:
Management helps in development of society by supplying good quality products at reasonable prices, providing employment opportunities and facilitating basic amenities like schools, hospitals, etc.
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Q3
Give the meaning of ‘objectives’ as a type of plan.
Marks:1View AnswerAnswer:
Objectives are the ends which management aims to achieve within a given period of time. For instance, cutting cost by 3% by the end of quarter.
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Q4
‘Himalaya Ltd.’ is engaged in manufacturing of washing machines. The target of the organisation is to manufacture 500 machines a day. There is an occupational specialisation in the organisation which promotes efficiency of employees. There is no duplication of efforts in such type of organisation structure described above. Identify the type of organisation structure discussed above.
Marks:1View AnswerAnswer:
‘Functional Structure’ is being discussed above.
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Q5
How does ‘cost of equity’ affect the choice of capital structure of a company? Explain.
Marks:1View AnswerAnswer:
‘Cost of Equity’ refers to the expected rate of return on capital for assuming risk. On the other hand, cost of debt refers to the return to lenders. Cost of debt is less than cost of equity. However if a company uses more debt, the cost of equity will increase. Moreover, a high cost of equity indicates that the market views the company's future as risky. Hence, an optimum combination of equity and debt is desirable in the capital structure.
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Q6
‘Bharat Express’ specialised in Courier Services. Its wide range of express package parcel services help business firms to make sure that goods are made available to customers at right place and at the right time.
State with reason, whether the working capital requirements of ‘Bharat Express’ will be high or low?
Marks:1View AnswerAnswer:
Bharat Express is a part of service industry where it does not need to maintain any inventory. Hence, the requirement of working capital would be low. It shall only be incurring the costs of salary, electricity, other overheads, etc. which are common to every organisation.
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Q7
‘Maruti Vega Ltd.’ entered into the market with coloured television and has introduced products like audio systems, air conditioners, mashing machines, etc. The company is not only offering the products but also handling complaints and offering after-sales services.
Identify the element of marketing-mix discussed here.
Marks:1View AnswerAnswer:
The element of marketing mix being discussed is ‘Product’.
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Q8
Himanshu purchased a new car from ‘Galaxy Motors’ for Rs. 25 lakhs. He was offered free insurance for the first year and three free servicing to be availed after the car had covered 5,000 km, 10,000km and 15,000 km respectively. When Himanshu took the car for the first free servicing, he was told that the car was not new and first service had already been availed on this car. He felt cheated and filed a complaint in Sate Commission. Being not satisfied with the decision of the State Commission, after 2 months he decided to file an appeal against it.
Can Himanshu appeal against the decision of the State Commission? Give reason in support of your answer.
Marks:1View AnswerAnswer:
No, Himanshu cannot appeal againt the order of State Commission as the stipulated time frame for making the appeal before Naitonal commission is 30 days of passing the order. In this case, that time period has already passed.
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Q9
What is meant by ‘formal organisation’. State it’s any two advantages.
Marks:3View AnswerAnswer:
Formal organisation is an organisational structure which is designed by management with well defined jobs bearing authority, responsibility and accountability.
It has the following advantages:
- Fixation of responsibility: Clearly defined relationships make it easier to fix responsibility.
- Unity of command: It is maintained through established chain of command.
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Q10
How do the ‘company related factors’ affect the choice of channels of distribution? Explain.
Marks:3View AnswerAnswer:
Following are the company related factors that affect the choice of channel of distribution:
Financial strength of company: If the firm has large financial resources, it may go for direct distribution as it demands huge investment in retail chains, etc. But in case of limited finances, it should go for indirect channels.
Degree of control: If the aim is to have high control over middlemen, the company should opt for short channels. Else, the company can go for longer channels
