WORKSHEET 1- BUSINESS STUDIES (Class 12)-qp 2018

REVISION WORKSHEETS BASED ON PREVIOUS YEARS QUESTION PAPERS (2018)

1. Define ‘decentralization’ ?

Decentralization refers to a specific form of organizational structure where the top management delegates decision-making responsibilities and daily operations to middle and lower subordinates. The top management can thus concentrate on taking major decisions with greater time abundance. For example, panchayats in our country have been given more powers to decide and spend funds granted to them by the government for the welfare of villages. This is decentralization at the national level. 

2. Give the meaning of Method as a type of plan.

Methods provide the prescribed ways or manner in which a task has to be performed considering the objective. It deals with a task comprising one step of a procedure and specifies how this step is to be performed. The Methods may vary from task to task. Selection of proper method saves time, money and effort and increases efficiency. For imparting training to employees at various level from top management to supervisory, different methods can be adopted. For example for higher level management orientation programmes, lectures and seminars can be organised whereas at the supervisory level, on the job training methods and work-oriented methods are appropriate. 

3. Saurabh decided to start a chocolates manufacturing business. He set the target of earning 10% profit on sales in the first year. As a good businessman, he was concerned about the future of the business, which was uncertain. He gathered information that the demand for chocolates is increasing day-by-day. He used this information as the base for future planning and shared it with his team. On the basis of the gathered information, he scheduled a meeting in the following week to find innovative ways to achieve the objectives. List the first two steps, which have been followed by Saurabh that are related to the process of one of the functions of management. 

Planning and organising are the first two steps followed by Saurabh. 

Once the plans have been laid down and objectives specified therein, the next step is to organise resources in a manner which leads to the accomplishment of objectives. A critical issue in accomplishing the goals specified in the planning process is structuring the work of an organisation to adapt to the dynamic business environment. The activities of an enterprise must be organised in such a manner that plans can be successfully implemented. 

4. In the paint industry, various raw materials are mixed in different proportions with petroleum for manufacturing different kinds of paints. One specific raw material is not readily and regularly available to the paint manufacturing companies. Bonler Paints Company is also facing this problem and because of this there is a time lag between placing the order and the actual receipt of the material. But, once it receives the raw materials, it takes less time in converting it into finished goods. Identify the factor affecting the working capital requirements of this industry. 

There are two factors the affects the production process in relation to raw material supply and management.

Operating Efficiency: 

Operating efficiency means efficiently completing the various business operations. Operating efficiency of every organisation happens to be different. 

Some such examples are: (i) converting raw material into finished goods at the earliest, (ii) selling the finished goods quickly, and (iii) quickly getting payments from the debtors. A company which has a better operating efficiency has to invest less in stock and the debtors. Therefore, it requires less working capital, while the case is different in respect of companies with less operating efficiency. 

Availability of Raw Material:

Availability of raw material also influences the amount of working capital. If the enterprise makes use of such raw material which is available easily throughout the year, then less working capital will be required, because there will be no need to stock it in large quantity. 

On the contrary, if the enterprise makes use of such raw material which is available only in some particular months of the year whereas for continuous production it is needed all the year round, then large quantity of it will be stocked to ensure continuous production. Under the circumstances, more working capital will be required. 

5. An investor wanted to invest < 20,000 in Treasury Bills for a period of 91 days. When he approached the Reserve Bank of India for this purpose he came to know that it was not possible. Identify the reason why the investor could not invest in the Treasury Bill.

A treasury bill is an instrument of short-term debt, issued by the RBI on behalf of the Central Government to meet its short-term requirement of funds. .

(i) They are issued in the form of a promissory note, having maturity period of less than one year.

(ii) They are highly liquid and have assured returns and with negligible risk of default. 

(iii) They are available for a minimum amount of Rs 25,000, and in multiples thereof.

(iv) They are also known as ‘zero coupon bonds’ as they do not pay any interest, but since the issue price is less than the redemption value, this difference is the interest receivable on them. 

6. Why is the understanding of Marketing Management Philosophies important?

The concept of Marketing Management Philosophies is essential as it gives the concepts of marketing like production of the product, superior quality product, promotional strategies enhances sale of the product, to fulfill customer needs and satisfaction, and also welfare of the customer and society as whole. 

7. Give the constitution of the District Consumer Disputes Redressal Forum under the Consumer Protection Act, 1986.

The District Consumer Disputes Redressal Forum under the Consumer Protection Act,1986 and section 9 consists of

a) A person who is or who has been or is qualified to be, a District Judge as its President.

b) Two other members who shall be person of ability, integrity and standing and adequate knowledge or experience of or who have shown their capacity in dealing with problems relating to economics, law, commerce accountancy, industry, public affairs or administration. It is insisted in the Act that out of such two other members one shall be a woman. 

8. Buy one get one free is printed on the label of the package of a mosquito repellent. State the labelling function being performed by this statement. 

One important function of labeling is to promote sales. Buy one get one free labels simply attracts the customer to buy the product thereby helping to promote sales. 

9. Differentiate between formal and informal organisations on the basis of (i) origin (ii) authority, and (iii) flow of communication.

Basis of difference
Formal organisation
Informal organisation
Meaning

'Formal organisation' refers to the relationship between authorities as defined by the management. 

Refers to the relationship based on personal and informal relationship among the employees. 

Origin
The structure originates from the rules and policies of the management.
The structure originates from the social interactions among the employees.
Authority
Authority is defined by the profile and managerial positions.
Authority is defined by the personal qualities of the employees.
Flow of communication
Communication flows through the scalar chain.
No planned route of communication is followed.
Nature
Formal organisations are rigid Informal organisations are flexible
10. State the steps in the selection procedure.

1. Meaning of Selection. It is the process of identifying and choosing the best person out of a number of prospective candidates for a job. 

2. Process of Selection.

(i) Scrutiny of applications. applications are received in response to the advertisement or from other sources. They are scrutinized in the light of requirement and suitability and those found unsuitable are dropped or rejected.

(ii) Selection/Employment tests. These tests are developed by psychologists and other experts to assess candidate’s nature, abilities and characteristics. There are several tests such as aptitude test, Intelligence test, Interest test, personality test, trade test, etc.

(iii) Employment interview. In this interview, the ability and suitability of a candidate for a specific job is directly judged by experts or specialists in the board of selection.

(iv) Selection decision. Candidates who are considered suitable are selected after taking the opinion of all the selectors, especially the manager of the concerned department.

(v) Medical or physical test. Selected candidates may be asked to get themselves

thoroughly examined by a prescribed doctor within or outside the organisation.

(vi) Job offer. after satisfactory medical test, a job offer is given to the applicant so that within reasonable time an applicant would be able to report.

(vii) Contract of employment. then after the acceptance of job offer a contract of employment is being given to the employees that includes terms and conditions of employment such as job title, job description, pay, working hours, etc. 

11. Sandhya is a successful manager at Manisons Enterprises. She has a team of twelve people working under her. She encourages them to set their own objectives and take decisions. She respects their opinions and supports them, so that they can perform their duties and accomplish organisational objectives. To manage and exercise effective control she uses forces within the group. As an intelligent manager, at times, she also makes use of positive aspects of informal communication. This way, she is able to unify diverse interests and ensure that targets are met. There are many theories and styles of influencing people’s behavior. Identify the style used by Sandhya which is based on the use of authority. State two positive aspects of the communication discussed above, which Sandhya is using as an intelligent manager. 

Sandhya uses Informal Communication to get feedback about her employees. The network of communication followed in the informal communication is referred to as grapevine network. Some of the popular network used in informal communication are: 

Single strand network
Gossip network
Probability network

Cluster networkInformal communication provides sense of belongingness. It provides the necessary environment for individual creativity and innovation. It promotes the feeling of cooperation among employees.
Sandhya uses Free Rein type of leadership. It involves complete delegation of authority, so that subordinates themselves take decisions. The free-rein leader avoids holding power and surrenders the authority to subordinates. One of the advantages of this method is that the employees will be more motivated and one of the disadvantages is that there could be no specific authority direction in case of crisis for the company.

12. The Return on Investment (ROI) of a company ranges between 10 to 12% for the past three years. To finance its future fixed capital needs, it has the following options for borrowing debt :

OPTION A : Rate of interest 9%
OPTION B : Rate of interest 13%

Which Source of debt, OPTION A or OPTION B, is better? Give reason in support of your answer. Also state the concept being used in taking the decision.

Option A is better as in order to raise fixed capital, the ROI (Rate of return on investment), i.e. 10-12% should be higher than the interest rate on borrowings, i.e. 9% in option A. Return on Investment is inversely related to interest rates. The rate of interest should always be less than Return on Investment. Thus, option A should be opted by the company. The concept that is being used in this decision is Trading on Equity as there is favorable financial leverage involved in the first option. Trading on equity refers to the increase in profit earned by the equity shareholders due to the presence of fixed financial charges like interest. The use of more debt along with equity increases Earning Per Share (EPS).
13. Explain briefly any two points of importance of consumer protection act from the point of view of business.
Consumer protection refers to the consumer education regarding their rights and responsibilities and the redressal of their grievances and complaints. The following points highlight the significance of consumer protection from the point of view of business.

i) Long-Term Interest: With increasing competition and the drive to survive in the market, consumer satisfaction and interest is of prime importance for any business. While taking due care of the interest of the consumers, a business builds goodwill and reputation. A satisfied customer not only comes back and results in repeated sales for the firm, but also pulls new customers by spreading the good word. Thus, it is in long-term benefit of the business to protect consumers’ interest. 

(ii) Use of Resources: A business uses the resources of society for the production of various goods and services. Through the sale of these goods and services to the society, a business earns profits. Thus, it is their duty to supply such goods and services that adhere to the overall interest of the society. 

(iii) Government Interference: A business organisation that indulges in any form of exploitation of consumers such as unfair trade practices, adulteration, etc. draws intervention from the government. Such government interference spoils the goodwill and image of the business. Thus, it is in the interest of the business to voluntarily follow such practices that take care of the interest of the consumers. 

14. Aradhana and Gandharv are heads of two different departments in Yumco Ltd. They are efficient managers and are able to motivate the employees of their respective departments to improve performance. However, their drive to excel in their own sphere of activity instead of giving emphasis on objectives of the enterprise this has hindered the interaction between the departments that Aradhana and Gandharv are heading. Often there are inter-departmental conflicts and they have become incompatible. This has proved to be harmful in the fulfilment of the organisational objectives. The situation has deteriorated to such an extent that the CEO of Yumco Ltd. has hired a consultant, Rashmi, to resolve the problem. After studying the situation closely, Rashmi found that the problem has arisen due to inflexibility and a narrow perspective on the part of both Aradhana and Gandharv. She is of the view that this situation is a result of the type of organisational structure Yumco Ltd. has adopted. From the above information, identify the organisational structure adopted by Yumco Ltd. and state any three advantages of the structure so identified. 

Yumco Ltd has adopted a functional organization structure. It is a commonly used organizational structure in which the organization is divided into smaller groups based on specialized functional areas such as production, marketing and sales. Each function is managed by a departmental head that has a dual responsibility to be accountable to the top management and to direct the respective department to achieve favourable performance. Such functional areas are also referred to as ‘silos’. Functional structures are ‘U-form’ (Unitary form) organizational structures where the operations are categorized based on common expertise and experience. The most significant advantage of this type of a structure is that the company will be able to benefit from specialized functional expertise and enjoy notable cost savings by using shared services. 

On the other hand, the main disadvantage of this structure is that control issues are much likely to arise due to the scale of the organizations and department managers acting upon their own personal agendas without considering working towards a common corporate objective as in case of Yumco Ltd. 

15. In 2015, Naveen left his luxurious life in Mumbai, where he worked as a manager for Blue Birds Ltd. He shifted to Begampur, Chhattisgarh to fulfil his grandmother’s dream of converting the 25-acre ancestral land into a fertile farm. For this he set out specific goals along with the activities to be performed to achieve the goals. Every activity was a challenge since he was clueless about farming. He learnt every activity from filling the land to sowing the seeds. To aid farmers he launched his own company Innovative Agricultural Solutions Pvt ltd. It was difficult initially as no one trusted an urban youth telling farmers about farming. But when everything was discussed in detail the farmers started taking interest. He wanted to ensure that the future events meet effectively the best interests of the company. Through sales forecasting, he prepared an annual plan for production and sales. He also found that the farmers grew only paddy, which was an activity of 3 to 4 months and the land remained idle for the rest 8 to 9 months of the year. He not only identified but evaluated various alternatives through which the farms could be utilised for the remaining months of the year. Through correct foresight and logical and systematic thinking based on analysis of all facts, all alternatives were examined and evaluated. He presented a plan to the farmers, where after harvesting paddy, vegetables could be grown. The above case highlights the features of one of the functions of management. By quoting lines from the above identify and explain these features. 

Naveen was successful because he was good in planning and setting up goals for operations.

Think before you act and look before you leap are some of the usual traditional proverbs which provide a basis or logic for planning. Planning, thus, involves setting objectives and developing appropriate courses of action to achieve these objectives. Objectives provide direction for all managerial decisions and actions. Planning provides a rational approach for achieving predetermined objectives. All members, therefore, need to work towards achieving organisational goals. These goals set the targets which need to be achieved and against which actual performance is measured. Therefore, planning means setting objectives and targets and formulating an action plan to achieve them. It is concerned with both ends and means i.e., what is to be done and how it is to be done.

The plan that is developed has to have a given time frame but time is a limited resource. It needs to be utilised judiciously. If time factor is not taken into consideration, conditions in the environment may change and all business plans may go waste. Planning will be a futile exercise if it is not acted upon or implemented. 

Therefore planning involves (1) setting objectives for a given time period, (2) formulating various courses of action to achieve them, and then (3)selecting the best possible alternative from among the various courses of action available. 

(features of planning is mentioned in page 100 of NCERT text book chapter 4 planning)

16. Explain any four points of importance of the controlling function of management.

Control is an indispensable function of management. Without control the best of plans can go awry. A good control system helps an organisation in the following ways:

(i) Accomplishing organisational goals: The controlling function measures progress towards the organisational goals and brings to light the deviations, if any, and indicates corrective action. It, thus, guides the organisation and keeps it on the right track so that organisational goals might be achieved. 

(ii) Judging accuracy of standards: A good control system enables management to verify whether the standards set are accurate and objective. An efficient control system keeps a careful check on the changes taking place in the organisation and in the environment and helps to review and revise the standards in light of such changes. 

(iii) Making efficient use of resources: By exercising control, a manager seeks to reduce wastage and spoilage of resources. Each activity is performed in accordance with predetermined standards and norms. This ensures that resources are used in the most effective and efficient manner. 

(iv) Improving employee motivation: A good control system ensures that employees know well in advance what they are expected to do and what are the standards of performance on the basis of which they will be appraised. It, thus, motivates them and helps them to give better performance. 

(v) Ensuring order and discipline: Controlling creates an atmosphere of order and discipline in the organisation. It helps to minimize dishonest behavior on the part of the employees by keeping a close check on their activities. 

(vi) Facilitating coordination in action: Controlling provides direction to all activities and efforts for achieving organisational goals. Each department and employee is governed by pre-determined standards which are well coordinated with one another. This ensures that overall organisational objectives are accomplished. 

17. Ram Murthy, the CEO of Goodcare Hospitals a leading chain of hospitals, decided to reward the good work of the doctors of his organisation. For this he instituted two running trophies. As Healthcare Achievers Trophy to acknowledge and appreciate the tireless efforts of the doctors who rendered selfless services to the patients and another ‘Beti Bachao Trophy’ to recognise the outstanding work done by the doctors in saving the girl child. The CEO also wanted to improve the health services in rural areas all over the country. He decided that all doctors must work in rural areas for at least six months. He also decided that the paramedical staff should be employed locally.

(a) Identify the incentive provided by ‘Good care Hospitals’ to its doctors through running trophies.

The incentive provided by ‘Goodcare Hospitals’ to its doctors through running trophies is Employee Recognition Programme.

(b) Which need of the doctors will be satisfied through the incentive identified in part (a)? State.

The Self-esteem of the doctors will be fulfilled through the employee recognition programme

(c) State any two values that the CEO of ‘ Good care Hospitals’ is trying to communicate to the society.

The values that the CEO of ‘Goodcare Hospitals’ is trying to communicate to society are Healthcare to rural people and Upliftment of poor in rural areas.

18. State the protective functions of Securities and Exchange Board of India.

The three protective functions of SEBI are as follows:

(i) Controlling insider trading and imposing penalties for such practices.

Barring insider trading in securities. Prohibiting deceptive and unfair methods used by financial Intermediaries operating in securities markets.

ii) Undertaking steps for investor protection. Safeguarding the interest of investors by means of adequate education and guidance. SEBI makes rules and regulations that must be followed by the financial intermediaries like portfolio exchanges, underwriters and merchants bankers, etc. It takes care of the complaints received from investors. Additionally it issues notices and booklets for the information, assistance and protection of small investors.

iii) Promotion of fair practices and code of conduct in securities market. To prevent price rigging, SEBI keeps active surveillance on the factors which can promote price rigging. To promote fair trade practices, SEBI established rules and regulations and a certain code of conduct in the securities market to restrict fraudulent and unfair trade practices.

19. Sumit purchased an ISI marked washing machine of a famous brand MG FROM TG ELECTRONOCS Ltd. The shopkeeper asked him to wait for two days for installation of the machine. His friend, Vivek, was very fond of experimenting with new electronic products. He told Sumit that there is no need to wait for the company representative to install the machine and that he could do it. So, both of them installed the machine without following the manufacturers instruction. Initially the machine worked effectively and the wash was good. But after two days, the machine stared stopping in between the wash cycle. Sumit and Vivek tried their best to start the machine but failed in their efforts. Sumit, therefore, approached TG Electronics Ltd., which refused to provide any service on the plea that the installation of the machine was not done by the company. 

(a) State the responsibility which Sumit had to fulfill as an aware consumer to get the services of the company.

The responsibility which Sumit had to fulfill as an aware consumer to get the services of the company is to learn the risks associated with the products and services, follow manufacturer’s instructions and use the products safely.

(b) Explain briefly any two rights which Sumit could have exercised had he fulfilled his responsibility identified in part (a).

Two rights which Sumit could have exercised had he fulfilled his responsibility:

Right to be Heard: It is the right of consumers to be heard in an appropriate legal forum in case of any grievance or dissatisfaction faced by them. In other words, a consumer has the right to file a complaint in case of any grievance.
Right to Seek Redressal: It is the right of consumers to seek redressal in case of a grievance and, if required, demand a suitable compensation. The Consumer Protection Act provides for compensation in the form of replacement of the product, cash compensation, and repair/removal of defects.

20. What is meant by co-ordination? State its four features.

Coordination is the orderly arrangement of the efforts of the group or a department to provide unity of action in pursuit of common goal or objective of the company.

The importance of Coordination are:
(1) Growth in Size: As the organization grows, the number of people in the organization also increases. coordination helps to unify the objectives of these individuals working for the organization.
(2) Functional Differentiation: Different departments in the organization have their own policies and objectives, coordination helps to integrate various efforts and activities of the departments.
(3) Continuous process: Coordination is a continuous process and not a onetime task to keep the smooth functioning of the organization.
(4) All persuasive function: Coordinating relationships have to be established among the various groups to enable smooth interaction and clarity about each group’s contribution towards the event.
Coordination is an all persuasive function as there has to be a sense of coordination in all the functions of the business be it planning or organizing or controlling.

21. Konark Ltd. is an electronic goods manufacturing enterprise situated in Shivpuri, Madhya Pradesh. It is earning a very low revenue in comparison to a competing electronic goods manufacturing enterprise, Nova Ltd. situated in Mumbai. Both Konark’s and Nova’s operations are affected directly by the investors, customers, competitors and suppliers, which are unique to their respective locations. In addition to this, individual firms of this field are affected indirectly by the factors like the money supply in the economy, composition of the families, the technological changes, etc.
Identify and state the feature of the concept discussed in the above paragraph. Also, state any four points of importance of this concept.

Business environment is the concept discussed in the above example. Business environment refers to forces and institutions outside the firm with which its members must deal to achieve the organisational purposes. Here,
Forces = economic, social, political, technological etc
Institutions = suppliers, customers, competitors etcIt includes all those constraints and forces external to a business within which it operates. therefore,
The firm must be aware of these external forces and institutions and
The firm must be operated keeping in mind these forces and institutions so that the organisational objectives are achieved.IMPORTANCE OF BUSINESS ENVIRONMENT

1. Identification of opportunities to get first mover advantage: Understanding of business environment helps an organization in identifying advantageous opportunities and getting their benefits prior to competitors, thus reaping the benefits of being a pioneer. 

2. Identification of threats: Correct knowledge of business environment helps an organization to identify those threats which may adversely affect its operations. For example, Bajaj Auto made considerable improvements in its two wheeler when Honda & other companies entered the auto industry. 

3. Tapping useful resources: Business environment makes available various resources such as capital, labor, machines, raw material etc. to a business firm. In order to know the availability of resources and making them available on time at economical price, knowledge of business environment is necessary. 

4. Coping with Rapid changes: Continuous study/scanning of business environment helps in knowing the changes which are taking place and thus they can be faced effectively. 

5. Assistance in planning and policy formulation: Understanding and analysis of business environment helps an organization in planning &policy formulation. For example, ITC Hotels planned new hotels in India after observing boom in tourism sector. 

6. Helps in Improving performance: Correct analysis and continuous monitoring of business environment helps an organization in improving its performance. 

22. After acquiring the necessary knowledge and skills on starting an Aloevera Farm, Ashok wanted to be the leading manufacturer of Aloevera products worldwide. He observed that the products were expensive as the demand of the products was more than the supply. He was also keen to promote methods and practices that were economically viable, environmentally sound and at the same time protecting public health. 

Ashok’s main consideration was about the amount of money paid by the consumers in consideration of the purchase of Aloevera products. He also thought that competitors prices and their anticipated reactions must also be considered for this. 

After gathering and analysing information and doing correct marketing planning, he came to know that the consumers compare the value of a product to the value of money which they are required to pay. The consumers will be ready to buy a product when they perceived that the value of the product is at least equal to the value of money which they would pay. 

Since he was entering into a new market, he felt that he may not be able to cover all costs. He knew that in the long run the business will not be able to survive unless all costs are covered in addition to a minimum profit. 

He examined the quality and features of the products of the competitors and the anticipated reactions of the consumers. Considering the same he decided to add some unique features to the packaging and also decided to provide free home delivery of the products. 

(a)Identify the concept. the concept applied is pricing.
(b)Explain briefly any four factors discussed in the above case related to the concept so identified.

Pricing is the most important decision taken by the business man. It is the decision upon which the success or failure of an enterprise depends to a large extent . Therefore, price must be determined only after taking all the relevant factors into consideration.

Factors affecting Price of a product are both Internal and External.

Internal factors are :
Marketing objectives.
Marketing Mix strategy.
Organizational considerations.
Costs.
Organisation objectives.External factors are:

The market and demand.
Competition.
Customers.
Suppliers.
Legal factors.
Regulatory factors.

23. Karan Nath took over Dnorth Motor Company from his ailing father three months ago. In the past the company was not performing well. Karan was determined to improve the company’s performance. He observed that the methods of production as well as selection of employees in the company were not scientific. 

He believed that there was only one best method to maximize efficiency. He also felt that once the method is developed, the workers of the company should be trained to learn the best methods. 

He asked the Production Manager to develop the best method and carry out the necessary training. The Production Manager developed this method using several parameters right from deciding the sequence of operations, place for men, machines and raw materials till the delivery of the product to the customers. This method was implemented throughout the organisation. It helped in increasing the output, improving the quality and reducing the cost and wastage. 

Identify and explain the principles and the technique of scientific management followed by the Production Manager in the above case. 

The technique of scientific management used is Method study. Karan Nath advocated that there is one best method or way of performing the job which keeps production cost minimum and makes efficient use of resources. To determine the best way there are certain parameters right from procurement of raw material till the final product is delivered. The objective of method study is to minimize the cost of production and maximize the quality and customer satisfaction. 

The principle of scientific management used is Science, Not Rule of Thumb. Karan Nath propounded that substitution of scientific methods in place of Rule of the Thumb will increase organisational efficiency. 

Rule of Thumb refers to decisions taken manager as per their personal judgement. According to Karan Nath even a small production activity like loading iron sheet into box cars can be scientifically planned. This will help in saving time as well as human energy. Decisions should be based on scientific enquiry with cause and effect relationships. 

This principle is concerned with selecting the best way of performing a job through the application of scientific analysis and not by institution or hit and trial methods. The work assigned to any employee should be observed and analysed with respect to each element or part thereof and the time involved therein so as to decide the best way of performing that work and to determine the standard output for same.

24. Moga Industries Ltd. approached a well-established university in the city of Madurai to recruit qualified personnel for various technical and professional jobs. They selected Tanya, Ritu, Garima and Chetan for various vacancies in the organisation. 

After the selection and placement, Moga Industries Ltd. felt the need to increase the skills and abilities, and the development of positive attitude of the employees to perform their specific jobs better. The company also realised that learning new skills would improve the job performance of the employees. Hence, the company decided to take action for the same. 

(a) Name the step of the staffing process regarding which the company decided to take action. 

Training and Development: What people seek is not simply a job but a career. Everyone must have the opportunity to rise to the top. The best way to provide such an opportunity is to facilitate employee learning. Organisations have either in-house training centres or have forged alliances with training and educational institutes to ensure continuing learning of their employees. The organisations too benefit in turn. If employee motivation is high, their competencies are strengthened, they perform better and thus, contribute more to organisational effectiveness and efficiency. By offering the opportunities for career advancement to their members, organisations are not only able to attract but also retain its talented people. 

Thus, we see that as a process, staffing includes acquisition, retention and development of the most important resource of an organisation, that is, its human capital. 

(b) State the benefits of the action to ‘Moga Industries Ltd.’

The benefits of training and development to an organisation are as follows:
(i) Training is a systematic learning, always better than hit and trial methods which leads to wastage of effort and money.
(ii) It enhances employee productivity both in terms of quantity and quality, leading to higher profits.
(iii) Training equips the future manager who can take over in case of emergency.
(iv) Training increases employee morale and reduces absenteeism and employee turnover.
(v) It helps in obtaining effective response to fast changing environment – technological and economic.

25. Explain briefly any four factors affecting the fixed capital requirements of an organisation. 

Investment in fixed assets is for longer duration and is called fixed capital. Fixed capital is financed through long term sources of finance such as equity shares, preference shares, debentures, long term loans, etc. 

The requirement of fixed capital depends upon various factors which are explained below:
1. Nature of Business: The type of business, Company is involved in is the first factor which helps in deciding the requirement of fixed capital. A manufacturing company needs more fixed capital as compared to a trading company, as trading company does not need plant, machinery, etc.

2. Scale of Operation: The companies which are operating at large scale require more fixed capital as they need more machinery and other assets whereas small scale enterprises need less amount of fixed capital. 

3. Technique of Production: Companies using capital-intensive techniques require more fixed capital whereas companies using labor-intensive techniques require less capital because capital-intensive techniques make use of plant and machinery and company needs more fixed capital to buy plants and machinery. 

4. Technology Up-gradation: Industries in which technology up-gradation is fast need more amount of fixed capital as when new technology is invented old machines become obsolete and they need to buy new plants and machinery whereas companies where technological up-gradation is slow they require less fixed capital as they can manage with old machines. 

5. Growth Prospects: Companies which are expanding and have higher growth plan require more fixed capital as to expand they need to expand their production capacity and to expand production capacity companies need more plant and machinery so more fixed capital. 

6. Diversification: Companies which have plans to diversify their activities by including more range of products require more fixed capital as to produce more products they require more plants and machinery which means more fixed capital. 

7. Availability of Finance and Leasing Facility: If companies can arrange financial and leasing facilities easily then they require less fixed capital as they can acquire assets on easy installments instead of paying huge amount at one time. On the other hand if easy loan and leasing facilities are not available then more fixed capital is needed as companies will have to buy plant and machinery by paying huge amount together. 

8. Level of Collaboration/Joint Ventures: If companies are preferring collaborations, joint venture then companies will need less fixed capital as they can share plant and machinery with their collaborators but if company prefers to operate as independent unit then there is more requirement of fixed capital.