QUESTION PAPER -2109- BUSINESS STUDIES (CLASS 12)CBSE

                                                                    Question paper 2019 set 1

SECTION B (3 MARKS EACH)

a. JTM Ltd. launched ‘Buddy line’, an exercise book and comprehensive stationery brand name comprising of ball pens, gel pens and geometry boxes after identifying the target market and understanding the needs and wants of the consumers of that market. All their products were of good quality and eco-friendly but expensive. They wanted to distinguish their products from that of their competitors. They spent lot of efforts, time and money in creating the brand name, as they knew that without a brand name, they can only create awareness for the generic products and can never be sure of the sale of their products. The effort paid off and the demand for the products started growing. The customers liked the brand and became habitual to it. They did not mind paying a higher price. Over a period of time, it became a status symbol to buy ‘Buddyline’ brand because of its quality. The consumers felt pride in using them. 

(1)Identify the marketing management philosophy followed by JTM Ltd.

Product philosophy- his concept works on the assumption that customers prefer products of ‘greater quality’ and ‘price and availability’ doesn’t influence their purchase decision. Hence the company devotes most of its time in developing a product of greater quality which usually turns out to be expensive.

(2) Explain the advantages of branding to the marketeers highlighted in the above case.

 Image of quality :Branding helps the company to showcase the unique selling propositions and the differentiating factors such as quality that sets it apart from its competitors building the image of a qualitative brand in the industry.

b. Mita has a successful ice cream business at Bikaner, namely ‘Smart flavours’. Her ice creams are utterly delicious. She makes ice creams from fresh milk and the same are available in a wide range of flavours and packs. She sets viable business objectives and works with the same in mind in order to ensure that the customers will come back for purchasing. 

Having the first mover advantage, her business was doing well. To earn higher profits, she started cutting costs. This would sometimes lead to delay in delivery and the ice cream was not reaching the market in time. Over a period of time, the demand for her ice cream declined and because of it the competitors entered the market. She lost some of her market share to competitors. 

At the beginning of summer season, she got back to back orders for supply of 4,000 ice cream packs of different flavours for special occasions. To ensure that the task was completed and orders delivered in time she hired additional workers. She was, thus able to produce and deliver the ice cream packs but at a high production cost. While completing activities and finishing the given task for achieving goals, Mita realized that she was ignoring one of the important aspects of management. 

Identify the aspects of management that has been ignored by Mita. Also explain the same with the help of an example.
Mita ignored the concept of cost effectiveness. Cost effectiveness is obtained only when more benefit is derived by the business man at low cost of production.

State ‘Job Enrichment’ and ‘Employee Participation’ as non-financial incentives. How do they motivate employees ?

As per this incentive, allowing more participation of employees in policy and decision-making matters acts as an important non-financial incentive as it allows them to feel a part of the organisation through joint management committees, work committees, etc.

Job enrichment attempts to give employees greater responsibility by increasing the range and complexity of tasks they are called upon to complete and giving them the necessary authority. Job enrichment motivates by giving employees the opportunity to use their abilities to the fullest. 

d. Explain the objectives of Financial Planning. 

The objectives of Financial Planning are enumerated as follows - 

To Ensure availability of Funds whenever required:

The foremost objective of financial planning is assuring the sufficient fund is available with the company for different purposes. 

To Check if the Firm raises the Resources Unnecessarily:

Excess funding is as bad as inadequate funds. If there is a surplus amount of money, then the financial planning is to invest it in the best possible manner as keeping financial resources idle is a great loss for an organization as it will be in vain.

e. What is meant by ‘Financial Management’ ? State the primary objective of Financial Management.

Financial management refers to the strategic planning, organising, directing, and controlling of financial undertakings in an organisation or an institute. It also includes applying management principles to the financial assets of an organisation, while also playing an important part in fiscal management.

The primary objective of financial management is to maximise the wealth of the owners of the business to the maximum extent. Wealth maximisation means to increase the capital invested in the business by the shareholders.

f. ‘Science is a systematized body of knowledge that explains certain general truths or the operation of general laws.’ In the light of this statement, describe management a science.

Management as Science

Universal Acceptance

Scientific principles are universally accepted principles and can be applied across all situations, locations, and times. For example, Newton’s law of motion applies to every object in motion irrespective of their location and state. Similarly, management as well comprises specific fundamental principles that are accepted worldwide. For instance, the principle of unity of command applies to all organisations, large and small.

Cause and Effect Relationship

In science, every cause results in an effect. This phenomenon is known as causality. To put simply, every event occurs due to reason. For instance, rusting of iron is due to the reaction between iron and oxygen in the presence of water molecules. Similarly, management follows the same rule. Every action has consequences, like if employees aren’t treated well, then the productivity will degrade. Conversely, an organisation can attain increased productivity if the workers are given a bonus and satisfactory remuneration.

Experimentation and Observation

Science is all about facts and logic and deduces results through experimentation and observation. The principles of management have been formed along the same lines. For instance, equal work opportunities and fair remuneration for the work are known to improve one’s productivity at work. This idea was derived through scientific observation.

Test of Validity and Predictability

Every scientific principle and law is tested for validity and can be verified at any given point in time, and it shall provide similar result each time. Likewise, one can test the principles of management and expect the same results every time. Consider two companies A and B. Let’s say, company A has one boss who administers that company’s operations, whereas, company B has two bosses and they both try to manage the organisation as per their judgement. An experiment will show that company A performs better with one superior to direct all. 

g. Management is a complex activity that has three main dimensions. Explain these dimensions.

Management has a multidimensional nature. It's main dimensions are:

Management of Work : This dimension relates to the nature of work being done in an organisation. For example, the work of a factory may be to produce something, a hospital may aim at treating the patients, a trading enterprise may be busy in buying and selling something, etc. The task of management is getting work done by applying suitable means. Management does all this with the help of the functions of management.

Management of People : Management has to deal with different types of people. Some are efficient, others are less efficient. Some are willing- workers, others have a tendency to go slow. Some have positive work attitude, others feel less attached to their organisation. Management has to get the work done by employing suitable means, like organising training programmes, motivating the employees and providing job-satisfaction. It has to deal the people as individuals and as groups.

Management of Operations : The first dimension is 'Management of work'. Under this dimension, the objectives of an organisation are achieved. For achieving the objectives some operations are required. For example, the production process of a factory, the export process of an exporting house, etc. Management envisages, how such processes or operations should be undertaken effectively. Management of operations is inter-linked with both–management of work and management of operations.