MCQ Questions – Page 192

MCQ Questions for Class 12 Business Studies Chapter 5 Organising

January 19, 2023January 18, 2023 by Prasanna

Organising Class 12 MCQ Questions With Answers

Organising Class 12 MCQ Chapter 5 Question 1.

……………….. is the process of dividing work into manageable activities and then grouping the activities which are similar in nature.

(A) Coordination
(B) Departmentalisation
(C) Organisation structure
(D) Delegation of authority
Answer:
(B) Departmentalisation

Explanation:
Once work has been divided into small and manageable activities, then those activities which are similar in nature, are grouped together. This process is called departmentalization. Departments can be created on the basis of products, functions and territory. This brings specialization in operation.

Question 2.

Which of the following importance of organising stimulates creativity amongst the managers?

(A) Development of personnel
(B) Optimum utilization of resources
(C) Expansion and growth
(D) None of the above
Answer:
(A) Development of personnel

Explanation:
Organising stimulates creativity amongst the managers. Effective delegation allows the managers to reduce their workload by assigning routine jobs to their subordinates.

Question 3.

Which of the following is not a benefit of organising?

(A) Clarity in working relationship
(B) Adaptation to change
(C) Expansion and growth
(D) Identification and obtaining competitive personnel O
Answer:
(D) Identification and obtaining competitive personnel O

Explanation:
The significance of the organising function mainly arises from the fact that it helps in the survival and growth of an enterprise and equips it to meet various challenges.

Question 4.

Which of the following importance of organising reduces the workload as well as enhances productivity?

(A) Clarity in working relationships
(B) Benefits of specialisation
(C) Adaptation to change
(D) Effective administration
Answer:
(B) Benefits of specialisation

Explanation:
Organising leads to a systematic allocation of jobs amongst the work force. This reduces the workload as well as enhances productivity because of the specific workers performing a specific job on a regular basis.

Question 5.

Which of the following statements is true about the organizing function of management?

(A) Departmentalisation is the first step in the process of organising.
(B) Organising discourages creativity amongst the managers.
(C) Organising allows a business enterprise to accommodate changes in the business environment.
(D) All of the above
Answer:
(C) Organising allows a business enterprise to accommodate changes in the business environment.

Explanation:
The process of organising allows a business enterprise to accommodate changes in the business environment. It allows the organisation structure to be suitably modified and the revision of inter-relationships amongst managerial levels to pave the way for a smooth transition.

Question 6.

Which of the following is not related to ‘Organising as a Process’?

(A) Initiates implementation of plAnswer
(B) Provides framework for performing managerial and operating tasks.
(C) Clarifies jobs and working relationship.
(D) Effectively deploys resources.
Answer:
(B) Provides framework for performing managerial and operating tasks.

Explanation:
Organising is a process that initiates implementation of plans by clarifying jobs and working relationships and effectively deploying resources for attainment of identified and desired results.

Question 7.

In order to make the ‘Annual Day’ of the school a successful event, the Headmistress of the school segregated all the activities into task groups each one dealing with a specific area. For instance, decorations, refreshments, backstage support, etc. Each group was put under the charge of one teacher. Identify the function of management performed by the Headmistress by dividing the activities and assigning the duties?

(A) Planning
(B) Organising
(C) Staffing
(D) Directing
Answer:
(B) Organising

Explanation:
Organising essentially implies a process which coordinates human efforts, assembles resources and integrates both into a unified whole to be utilised for achieving specified objectives.

Question 8.

An IT company currently employing 5,000 people, plans to expand its business through diversification. It aims to become a global leader. To achieve this goal, it has started shifting to a decentralised management system from a centralized one.
Thus, function of management is being performed by the company to become a decentralised company.

(A) Directing
(B) Staffing
(C) Organising
(D) Planning 0
Answer:
(C) Organising

Explanation:
Organising facilitates growth and diversification of activities through clear division of work. It helps in developing a proper organisation structure and the extent and nature of decentralisation can be determined.

Question 9.

Match the STEPS in the process of organising in Column I with the appropriate EXPLANATION in Column II.

Column I	Column I
(a) Identification and division of work	(i) Dividing work into manageable activities
(b) Departmentalisation	(ii) Establishing a hierarchical structure
(c) Assignment of duties	(iii) Grouping similar activities together
(d) Establishing authority and reporting relationships	(iv) Allocating jobs to the members of each department

(A) (ii),(iii),(iv),(i)
(B) (iii), (iv),(ii), (i)
(C) (i), (iii), (iv), (ii)
(D) (iv), (iii), (i), (ii)
Answer:
(C) (i), (iii), (iv), (ii)

Question 10.

……………… ensures that the heads of separate business units in the organisation are responsible for profit or loss of their unit and have authority over it.

(A) Span of management
(B) Divisional structure
(C) Functional structure
(D) Hierarchy of authority
Answer:
(B) Divisional structure

Explanation:
In a divisional structure, the organisation structure comprises of separate business units or divisions. Each unit has a divisional manager responsible for performance and who has authority over the unit.

Question 11.

Which type of organisational structures is the most suitable when the size of the organisation is large and is producing one line of product?

(A) Functional
(B) Divisional
(C) Both (A) and (B)
(D) None of these
Answer:
(A) Functional

Explanation:
A functional structure is most suitable when the size of the organisation is large, has a diversified activities and operations require a high degree of specialisation.

Question 12.

Which of the following is a disadvantage of divisional structure?

(A) Conflict may arise among different divisions with reference to allocation of funds.
(B) More emphasis on departmental objectives.
(C) Leads to inter-departmental conflict.
(D) Leads to inflexibility.
Answer:
(A) Conflict may arise among different divisions with reference to allocation of funds.

Explanation:
Conflict may arise among different divisions with reference to allocation of funds and further a particular division may seek to maximise its profits at the cost of other divisions.

Question 13.

Which type of organisational structures is the most suitable for those business enterprises where a large variety of products are manufactured?

(A) Functional
(B) Divisional
(C) Both (A) and (B)
(D) None of the above
Answer:
(B) Divisional
Question 14.

Which of the following is an advantage of functional structure?

(A) Leads to occupational specialisation.
(B) Promotes control and coordination within a department.
(C) Helps in increasing managerial and operational efficiency.
(D) All of the above.
Answer
(D) All of the above.

Explanation:
A functional structure leads to occupational specialisation since emphasis is placed on specific functions. It promotes control and coordination within a department because of similarity in the tasks being performed. It helps in increasing managerial and operational efficiency and this results in increased profit.

Question 15.

Which of the following gives shape to the organisation structure?

(A)Extent of delegation
(B) Employee strength
(C) Span of management
(D) None of the above
Answer:
(C) Span of management
Explanation:
The span of management, to a large extent, gives shape to the organisational structure. Span of management refers to the number of subordinates that can be effectively managed by a superior. This determines the level of management in the structure.

Question 16.

Which of the following is true regarding Organisational Structure?

(A) Grouping of jobs of similar nature under functional structure and organising these major functions as separate departments creates a divisional structure.
(B) Span of Management determines the levels of management in the organisation structure.
(C) Divisional structure makes training of employees easier as the focus is only on a limited range of skills.
(D) All of the above
Answer:
(B) Span of Management determines the levels of management in the organisation structure.

Explanation:
Span of management refers to the number of subordinates that can be effectively managed by a superior. This determines the levels of management in the structure.

Question 17.

Yummy Foods Ltd. has its registered office in Lucknow, manufacturing unit in Kanpur and marketing department in Chandigarh type of organisational structure should be adopted by the company to achieve its objectives.

(A) Functional
(B) Divisional
(C) Both (A) and (B)
(D) Neither (A) nor (B)
Answer:
(A) Functional

Explanation:
An organisation structure formed by grouping together all activities into functional departments and putting each department under one coordinating head is called functional structure.

Question 18.

Match the STRUCTURE in an organisation in Column I with the appropriate EXPLANATION in Column II.

Column I	Column II
(a) Organisation Structure	(i) Grouping activities on the basis of products.
(b) Functional Structure	(ii) Framework within which managerial and operating tasks are performed.
(c) Divisional Structure	(iii) Grouping of simitar jobs and organizing them as separate departments.

(A) (ii), (iii), (i)
(B) (iii), (ii), (i)
(C) (ii), (i), (m)
(D) (iii), (i), (ii)
Answer:
(A) (ii), (iii), (i)

Question 19.

…………….. is the obligation of a subordinate to properly perform the assigned duty.

(A) Authority
(B) Responsibility
(C) Accountability
(D) None of these
Answer:
(B) Responsibility

Explanation:
Responsibility is the obligation of a subordinate to properly perform the assigned duty. It arises from a superior-subordinate relationship because the subordinate is bound to perform the duty assigned to him by his superior.

Question 20.

………………….. implies being answerable for the final outcome.

(A) Authority
(B) Responsibility
(C) Accountability
(D) None of these
Answer:
(C) Accountability

Explanation:
Accountability implies being answerable for the final outcome. Once authority has been delegated and responsibility accepted, one cannot deny accountability. It cannot be delegated and flows upwards, i.e., a subordinate will be accountable to a superior for satisfactory performance of work.

Question 21.

Which of the following importance of delegation establishes superior-subordinate relationship?

(A) Employee development
(B) Facilitation of growth
(C) Motivation of employees
(D) Basis of management hierarchy 10
Answer:
(D) Basis of management hierarchy 10

Explanation:
Delegation of authority establishes superior-subordinate relationships, which are the basis of hierarchy of management. It is the degree and flow of authority which determines who has to report to whom.

Question 22.

organisation is ………………….. when decision making authority is retained by higher management levels.

Answer:
(A) Centralised
(B) Decentralised
(C) Both (A) and (B)
(D) None of these
Answer:
(A) Centralised

Explanation:
Centralization refers to that organizational structure where decision-making power is confined to the top management, and the subordinates need to follow the instructions of their seniors.

Question 23.

Which of the following statements is incorrect?

(A) Superior-Subordinate relationship is the source of origin of ‘Responsibility’.
(B) Authority arises from the established ‘scalar chain’ which links various job positions and levels of an organisation.
(C) Centralisation leads to quick decision making.
(D) None of the above
Answer:
(C) Centralisation leads to quick decision making.

Explanation:
In centralisation, the top management directs the day to day operations, and the subordinates have to report directly to the senior management. At times when there is no managerial staff, the subordinates are unable to take immediate decisions, thus, resulting in slowing down of business operations.

Question 24.

Which of the following statements is not applicable to the concept of ‘Accountability’?

(A) It implies being answerable for the final outcome.
(B) It cannot be denied once authority has been delegated and responsibility has been accepted.
(C) It cannot be delegated.
(D) It flows downward.
Answer:
(D) It flows downward.

Explanation:
Accountability element of delegation refers to the answerability of a subordinate to his superior for the job or task that is assigned. Accountability flows in an upward direction, which means the subordinate is accountable to the superior.

Question 25.

“It refers to the right of an individual to command his subordinate and to take action within the scope of his position.” Which element of delegation is ‘ being referred to in the above statement?

(A) Accountability
(B) Responsibility
(C) Authority
(D) None of these
Answer:
(C) Authority

Explanation:
Authority is the power to complete an assigned task. Without authority a subordinate is unable to execute the task perfectly. In order to complete the task as is expected by the manager, the manager has to provide authority of executing that task to the subordinate.

Question 26.

Match the ELEMENTS of Delegation in Column I with the corresponding EXPLANATION in Column II.

Column I	Column II
(a) Authority	(i) Being answerable for the final outcome.
(b) Responsibility	(ii) Right to take decisions inherent in a managerial position.
(c) Accountability	(iii) Obligation of a subordinate to perform the assigned duty properly.

(A) (ii),(iii),(i)
(B) (iii),(ii),(i)
(C) (iii),(i), (ii)
(D) (ii), (i), (iii)
Answer:
(A) (ii),(iii),(i)

Assertion and Reason Based MCQs

Directions: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).
(C) (A) is true, but (R) is false.
(D) (A) is false, but (R) is true.

Question 1.

Assertion (A): Identification and division of work is the first step in the process of organising.
Reason (R): Organising involves identifying and dividing the work that has to be done in accordance with previously determined plAnswer

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
The organising function begins with the division of total work into smaller units. Each unit of total work is called a job.
The division of work into smaller jobs leads to specialization because jobs are assigned to individuals according to their qualifications and capabilities.

Question 2.

Assertion (A): Organising provides a clear description of jobs and related duties.
Reason (R): Organising stimulates creativity amongst the managers.

Answer:
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).

Explanation:
Organising provides a clear description of jobs and related duties. This helps to avoid confusion and duplication, Clarity in working relationships enables proper execution of work.

Question 3.

Assertion (A): Organising leads to the proper usage of all material, financial and human resources. Reason (R): The proper assignment of jobs avoids overlapping of work and also makes possible the best use of resources.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
Avoidance of duplication of work helps in preventing confusion and minimising the wastage of resources and efforts.

Question 4.

Assertion (A): It is essential for effective performance that a proper match is made between the nature of a job and the ability of an individual. Reason (R): It is not necessary to define the work of different job positions and accordingly allocate work to variou
employees.

Answer:
(C) (A) is true, but (R) is false.

Explanation:
Once departments have been formed, each of them is placed under the charge of an individual. Jobs are then allocated to the members of each department in accordance to their skills and competencies.

Question 5.

Assertion (A): A proper organisation structure is essential to ensure a smooth flow of communication and better control over the operations of a business enterprise.
Reason (R): An organisation structure provides the framework which enables the enterprise to function as an integrated unit by regulating and coordinating the responsibilities of individuals and departments. 0

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
The organisation structure can be defined as the framework within which managerial and operating tasks are performed, It specifies the relationships between people, 1 work and resources.

Question 6.

Assertion (A): Delegation of authority allows more time for managers to concentrate on the tasks that are of higher importance for the organisation. Reason (R): Delegation allows for changing of the routine work which brings a sense of freedom.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
By empowering the employees, the managers are able to function more efficiently as they get more time to concentrate on important matters. Freedom from doing routine work provides them with opportunities to excel in new areas.

Question 7.

Assertion (A): Authority refers to the official powers and position required to carry on any task.
Reason (R): Accountability refers to the obligation on the part of the subordinates, to whom responsibility and authority are granted to see to it that the work is done.

Answer:
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).

Explanation:
When duties are assigned to subordinates then the required authority must also be conferred to him. The delegatee is fully answerable to his superior for performance of the task assigned to him. Thus, the superior ensures performance through accountability by his subordinate.

Question 8.

Assertion (A): Responsibility arises from a superior- subordinate relationship.
Reason (R): The subordinate is bound to perform the duty assigned to him by his superior.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
Responsibility is the obligation of a subordinate to properly perform the assigned duty. It arises from a superior-subordinate _ relationship because the subordinate is bound to perform the duty assigned to him by his superior. Thus, responsibility flows upwards, i.e., a subordinate will always be responsible to his superior.

Question 9.

Assertion (A): Delegation helps in developing the talents of the employees.
Reason (R): Delegation does not facilitate the growth of the enterprise.

Answer:
(C) (A) is true, but (R) is false.

Explanation:
Delegation helps in the expansion of an organisation by providing a ready workforce to take up leading positions in new ventures. Trained and experienced employees are able to play significant roles in the launch of new projects by replicating the work ethos they have absorbed from existing units, in the newly set up branches.

Question 10.

Assertion (A): Functional structure makes training of employees easier as the focus is only on a limited range of skills.
Reason (R): Divisional heads are accountable for profits.

Answer:
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).

Explanation:
Divisional heads are accountable for profits, as revenues and costs related to different departments can be easily identified and assigned to them. This provides a proper basis for performance measurement. It also helps in fixation of responsibility in cases of poor performance of the division and appropriate remedial action can be taken.

Case-Based MCQs

I. Read the following text and Answer:the questions given below:

‘Pappu Sweets Makers’ is a sweets making company which has turnover in crores. In order to manage the work in the organisation, the departments have been created on the basis of functions.
Examine the following situations of this organisation and give answers accordingly:

Situation 1: It is expected that employees who are performing similar tasks work under the same department. So the company now has HR, Marketing and Finance departments. The division is based on specific functions.
Situation 2: There are similarities in the tasks performed within the same department.
Situation 3: The profit is increasing month by month due to the success of this structure of the organisation.
Situation 4: There has been minimum duplication of efforts as the same department is taking care of single function.

Question 1.

Which type of organisation structure is discussed in the above case?

(A) Functional
(B) Divisional
(C) Linear
(D) None of these
Answer:
(A) Functional

Explanation:
A functional structure leads to occupational specialisation since emphasis is placed on specific functions. This promotes efficiency in utilisation of manpower as employees perform similar tasks within a department and are able to improve’ performance.

Question 2.

What will be the outcome of Situation 2 ?

(A) Increase in control and coordination
(B) Quick decision-making
(C) More initiatives
(D) Flexibility
Answer:
(A) Increase in control and coordination

Question 3.

Why do you think the profit is increasing as given in Situation 3?

(A) Due to product specialisation
(B) Due to managerial and operational efficiency
(C) Due to flexibility
(D) Due to no repetition of tasks
Answer:
(B) Due to managerial and operational efficiency

Question 4.

What will be the result of Situation 4?

(A) Reduction in cost
(B) Increase in cost
(C) Stability to the organization
(D) None of the above
Answer:
(A) Reduction in cost

II. Read the following text and Answer:the questions given below:

Bimal, the owner of ‘Reliable Constructions’ decided to begin a campaign in order to create awareness among the residents for creating a clean and safe environment. In an effort to develop clean surroundings in the area, he formed a team of 20 members to list the different ways that can be adopted for keeping the area clean.

Different people had different suggestions, someone suggested to take the help of local residents including young children, one suggestion was to involve unemployed youth. The idea to take the help of volunteers was also given. A combination of the most effective strategies after evaluating all options was selected for implementation. To achieve the desired goals and objectives, various activities were identified like:

(i) Purchase of essential items like dustbins, garbage bags, brooms, phenyl, etc.
(ii) Door-to-door collection of garbage.
(iii) Recycling of garbage.
(iv) Disposal of garbage, etc.

Thus, an organisational design was chosen which grouped similar activities together in order to minimize duplication of effort. After identification and grouping of these activities, the work was allocated among the different members.

Question 1.

“To achieve the desired goal various activities were identified like:….” Which step does this represent in the process of organizing?

(A) Identification and division of work
(B) Departmentalisation
(C) Assignment of duties
(D) Establishing reporting relationships
Answer:
(A) Identification and division of work

Explanation:
The process of organising involves identifying and dividing the work that has to be done in accordance with previously determined plans The work is divided into manageable activities so that duplication can be avoided and the burden of work can be shared among the employees.

Question 2.

“Thus, an organisational design was chosen which grouped similar activities together in order to minimize duplication of effort.” Which organisational design is being referred to in this line?

(A) Functional
(B) Divisional
(C) Formal
(D) Informal
Answer:
(A) Functional

Question 3.

“Thus, an organisational design was chosen which grouped similar activities together in order to minimize duplication of effort.” Which step under the process of organizing is being referred to in this line?

(A) Identification and division of work
(B) Departmentalisation
(C) Assignment of duties
(D) Establishing reporting relationships
Answer:
(B) Departmentalisation

Explanation:
Once work has been divided into small and manageable activities then those activities which are similar in nature are grouped together. Such sets facilitate specialisation. This grouping process is called departmentalisation.

Question 4.

“After identification of different activities the work was allocated to different members.” Which step does this represent in the process of organizing?

(A) Identification and division of work
(B) Departmentalisation
(C) Assignment of duties
(D) Establishing reporting relationships
Answer:
(C) Assignment of duties

III. Read the following text and Answer:the questions given below:

Alpha Tonics is a progressive company which has achieved new records in the field of medicines. Recently the company decided to go for a major shift in policy decision by handing over the decision making authority to the lower most level of employees. For this the company went for a thorough planning. Within four months the positive results of this major policy decision was recognizable. The employees felt a lot of development in their skill of taking first step to manage things on their own. Some major newspapers also covered this development. The production of the company increased. The company’s top management could now focus on new areas of innovation as the employees turned more reliable.

One day it so happened that the company’s manufacturing branch in south could not fulfill even half of its production target and the operations manager was held answerable for the assigned target. He was called in the office. When he was questioned it was found that his right to command the workers was insufficient and it should have been more to create results. The management decided to listen to him and he was given more power. When he went to the shop floor he told the workers that the standard of behaviour of the workers should come from the official rules and procedures.

Question 1.

Which concept of management has been related to in the first paragraph of the case?

(A) Delegation
(B) Decentralisation
(C) Both (A) and (B)
(D) None of the above
Answer:
(B) Decentralisation

Explanation:
Decentralisation explains the manner in which decision making responsibilities are divided among hierarchical levels. Decentralisation refers to delegation of authority throughout all the levels of the organisation.

Question 2.

Which of the following advantages of decentralization have been highlighted in the above case?

(A) It helps in development of initiative among subordinates.
(B) It helps in developing managerial talent for the future.
(C) Both (A) and (B)
(D) None of the above
Answer:
(C) Both (A) and (B)

Question 3.

Which elements of delegation have been highlighted in the second paragraph of the case? (A) Accountability

(A) Accountability
(B) Authority
(C) Both (A) and (B)
(D) None of the above
Answer:
(C) Both (A) and (B)

Explanation:
Authority refers to the right of an individual to command his subordinates and to take action within the scope of his position. The concept of authority arises from the established scalar chain which links the various job positions and levels of an organisation. Accountability implies being answerable for the final outcome. Once authority has been delegated and responsibility accepted, one cannot deny accountability.

Question 4.

Which feature of the informal organisation has been opposed by the operations manager in the above case?

(A) The standards of behaviour originate from the group norms.
(B) Independent channels of communication without specified direction of flow of information are developed by group members.
(C) It emerges spontaneously and is not deliberately created by the management.
(D) None of the above.
Answer:
(A) The standards of behaviour originate from the group norms.

MCQ Questions for Class 12 Business Studies with Answers

MCQ Questions for Class 12 Business Studies Chapter 4 Planning

January 19, 2023January 18, 2023 by Prasanna

Planning Class 12 MCQ Questions With Answers.

Planning Chapter 4 MCQ Class 12 Question 1.

Which of the following statements is false with respect to Planning?

(A) It is one of the basic managerial functions.
(B) Planning is closely connected with creativity and innovation.
(C) It requires taking decisions.
(D) None of the above
Answer:
(D) None of the above

Explanation:
Planning lays down the base for other functions of management. Planning involves setting targets and predicting future conditions, thus helping in taking rational decisions.

Question 2.

Which of the following is a feature of Planning?

(A) Provides directions
(B) Reduces the risks of uncertainty
(C) Focuses on achieving objectives
(D) All of the above
Answer:
(D) All of the above

Explanation:
Planning reduces uncertainty, risk and confusion in operation. Planning begins with the determination of objectives and is directed towards their achievement.

Question 3.

‘It is that function of management which is considered as the base of all other functions.’ Identify the function of management stated in the above lines.

(A) Planning
(B) Controlling
(C) Organising
(D) Staffing
Answer:
(A) Planning

Explanation:
Planning precedes all other managerial functions and provides the very basis for organising, staffing, directing and controlling. Planning is deciding in advance what to do and how to do. It is one of the basic managerial functions. Before doing something, the manager must formulate an idea of how to work on a particular task. Thus, planning 5 is closely connected with creativity and innovation.

Question 4.

‘It involves application of high order thinking skills and intellectual faculties, involving vision and foresightedness to decide the things to be done in the future.’Which feature of Planning is stated in the above line?

(A) Planning is futuristic.
(B) Planning is pervasive.
(C) Planning is a mental exercise.
(D) None of the above
Answer:
(C) Planning is a mental exercise.

Explanation:
Planning requires application of the mind involving foresight, intelligent imagination and sound judgement. It is basically an intellectual activity of thinking rather than doing, because planning determines the action to be taken.

Question 5.

‘Planning is required in all organisations, at all levels and in all departments. feature of Planning is stated in the above statement ?

(A) Planning is futuristic.
(B) Planning is pervasive.
(C) Planning is a mental exercise.
(D) None of the above
Answer:
(B) Planning is pervasive.

Explanation:
Planning is required at all levels of management as well as in all departments of the organisation. It is not an exclusive function of top management nor of any particular department.

Question 6.

Meena, a proof reader in Akash Publications, has been given a target of reading at least 40 pages per day. She has a habit of doing things differently. While doing her work, an idea struck her that a summary of a chapter in the form of a map where all the concepts related to that chapter would be interlinked, should be given in starting of each chapter. It will give students a gist of chapter as well as provide a competitive edge over other publishers. But instead of appreciating her idea, her immediate boss scolded her and asked her to complete the work as per prescribed format. Out of the following, identify the limitation of planning stated in above paragraph:

(A) Planning reduces creativity.
(B) Planning involves huge cost.
(C) Planning is a time-consuming process.
(D) Planning does not work in dynamic environment.
Answer:
(A) Planning reduces creativity.

Explanation:
Planning reduces creativity: Planning is an activity which is done by the f top management. Usually the rest of the f members just implements these plAnswer: As a consequence, middle management and other decision makers are neither allowed to deviate from plans nor are they permitted to act on their own. Thus, much of the initiative or creativity inherent in them also gets lost or reduced.

Question 7.

R-Ox Ltd. wants to increase their market share by 4.5% in next two years. It spent a lot of money to hire specialized people for framing their plans, collecting important facts about environment who took lot of time to frame plans for the company. The competition has started increasing, and it is not able to beat its competitors because it has already spent a huge amount. The plan failed and company suffered a huge loss. Identify the limitation of planning stated in the given case.

(A) Planning involves huge cost.
(B) Planning may not work in a dynamic environment.
(C) Planning is a time-consuming process.
(D) All of the above.
Answer:
(D) All of the above.

Explanation:
Planning requires a lot of time to collect information, its analysis and interpretation. So it is a time consuming process. When plans are drawn up huge costs are involved in their formulation. The environment in which a business survives is dynamic as it keeps on changing. The dynamic environment may sometimes lead to failure of plans.

Question 8.

Which of the following statements is true regarding planning?

(A) Once plans are made to decide the future course of action, the management may not be in a position to change them.
(B) Planning is a one-time process.
(C) Planning is required only at Top Level of Management as plans are made by Top Level of Management.
(D) Planning always leads to success.
Answer:
(A) Once plans are made to decide the future course of action, the management may not be in a position to change them.

Explanation:
In an organisation, a well-defined plan is drawn up with specific goals to be achieved within a specific time frame. These plans then decide the future course of action and managers may not be in a position to change it. This kind of rigidity in plans may create difficulty
(A) (ii), (iii), (i)
(B) (iii), (ii), (i)
(C) (ii), (i), (iii)
(D) (iii), (i), (ii)
Answer:
(C) (ii), (i), (iii)

Question 10.

Planning is deciding in advance, what to do and how to do it. The first step of planning process is :

(A) Setting objectives
(B) Follow up
(C) Implementation of plan
(D) Developing premises
Answer:
(A) Setting objectives

Explanation:
The first and foremost step is setting objectives. Every organisation must have certain objectives. Objectives may be set for the entire organisation and each department or unit within the organisation.

Question 11.

Which of the following steps in the process of planning states that the manager is required to make certain assumptions about the future?

(A) Setting objectives
(B) Developing premises
(C) Evaluating alternative courses of action
(D) Implementation of plan
Answer:
(B) Developing premises

Explanation:
Planning is concerned with the future which is uncertain and every planner is using conjecture about what might happen in future. Therefore, the manager is required to make certain assumptions about the future. These assumptions are called premises.

Question 12

…………. are the anticipated environments in which plans are expected to operate.

(A) Planning premises
(B) Forecasting
(C) Objectives
(D) None of these
Answer:
(A) Planning premises

Explanation:
Premises include actual forecast data, policies and plans of the enterprise. Planning involves looking into the future which necessitates the enterprise to know how future conditions will affect its activities.

Question 13.

To see whether plans are being implemented and activities are being performed according to the schedule, is a step of planning process. Identify the step.

(A) Selecting the best alternative
(B) Implementing the plan
(C) Follow up action
(D) valuating alternative courses of action
Answer:
(C) Follow up action

Explanation:
To see whether plans are being implemented and activities are performed according to schedule is also part of the planning process. Monitoring the plans is equally important to ensure that objectives are achieved.

Question 14

…………….. step in the process of planning is considered as the ‘real point of decision making’.

(A) Setting objectives
(B) Selecting an alternative
(C) Implementation of plan
(D) Developing premises
Answer:
(B) Selecting an alternative

Explanation:
The best plan has to be adopted and implemented. The ideal plan, of course, would be the most feasible, profitable and with least negative consequences. Most plans may not always be subjected to a mathematical analysis.

Question 15.

While ‘selecting an alternative’ under the planning process, which of the following are considered?

(A) Combination of plans may be selected instead of one best course.
(B) Subjectivity and manager’s experience or judgment plays a role.
(C) The most feasible, profitable plan with least negative consequences is chosen.
(D) AD of the above
Answer:
(D) AD of the above

Explanation:
The best plan, which is the most profitable plan and with minimum negative effects, is adopted and implemented.
In such cases, the manager’s experience and judgement plays an important role in selecting the best alternative.

Question 16.

Which of the foUowing is true with respect to the step ‘developing premises’ under the planning process?

(A) Base material for assumptions can be in the form of forecasts, existing plans or any past information about policies.
(B) Only a few managers are required to be familiar with and use the same assumptions.
(C) Assumptions need not necessarily be same for aD.
(D) All of the above
Answer:
(A) Base material for assumptions can be in the form of forecasts, existing plans or any past information about policies.

Explanation:
Assumptions are the base material upon which plans are to be drawn. The base material may be in the form of forecasts, existing plans or any past information about policies. The premises or assumptions must be the same for all and there should be total on them. managers involved in planning should be famihar with and use the same assumptions.

Question 17.

Match the STEPS of Planning process in Column I with the appropriate SEQUENCE in Column II

Column I	Column II
(a) Setting Objectives	(i) Fourth step
(b) Implementing the plan	(ii) First step
(c) Evaluating alternative courses	(iii) Sixth step

(A) (iii), (ii), (i)
(B) (ii), (i), (iii)
(C) (ii), (iii), (i)
(D) (iii), (i), (ii)
Answer:
(C) (ii), (iii), (i)

Assertion and Reason Based MCQs

Question 1.

Assertion (A): Planning is a primary function of management.
Reason (R): Planning is required at all levels of management as well as in all departments of the organisation.

Answer:
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).

Explanation:
Planning lays down the base for other functions of management. All other managerial functions are performed within the framework of the plans drawn. Thus, planning precedes other functions.

Question 2.

Assertion (A): Planning is a time-saving process.
Reason (R): The success of an enterprise is possible only when plans are properly drawn up and implemented.

Answer:
(D) (A) is false, but (R) is true.

Explanation:
Planning is a time-consuming process. Sometimes plans to be drawn up take so much of time that there is not much time left for their implementation.

Question 3.

Assertion (A): Planning is futuristic.
Reason (R): Planning is regarded as a forward looking function based on forecasting.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
Planning essentially involves looking ahead and preparing for the future. The purpose of planning is to meet future events effectively to the best advantage of an organisation. It implies peeping into the future, analysing it and predicting it.

Question 4.

Assertion (A): Planning is pervasive at all levels of management.
Reason (R): Planning is required in all types of organisations and at all levels of management.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
Planning is required at all levels of I the management. It is not a function restricted f to top level managers only but planning is done by managers at every level. Formation of major plan and framing of overall policies is the task of top level managers whereas departmental managers form plan for their respective departments. And lower level managers make plans to support the overall objectives and to carry on day to day activities.

Question 5.

Assertion (A): Developing Planning Premises is the primary step.
Reason (R): Objectives are end results which the management wants to achieve by its operations. O Answer: Option (D) is correct.

Answer:
(D) (A) is false, but (R) is true.

Explanation:
Setting Objectives is the primary step in the process of planning which specifies the objective of an organisation, i.e. what an organisation wants to achieve.

Question 6.

Assertion (A): Monitoring of plans is very important to ensure that the plans are being implemented according to the schedule.
Reason (R): Regular checks and comparisons of the results with set standards are done to ensure that objectives are achieved.

Answer:
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A)

Question 7.

Assertion (A): Planning is concerned with the future which is uncertain.
Reason (R): The manager is required to make certain assumptions about the future.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Case-Based MCQs

I. Read the following text and answer the following questions on the basis of the same:

Simplex Limited had been taken over by Mundhra Group immediately following India’s independence. Since then it enjoys a rich record of industry presence and experience. In 2005, with the aim to accelerate growth the company had gone through several rounds of meetingsand discussions before launching ERP system to attract large projects. The management had done effective forecast and critical thinking regarding allocation of resources to reduce wastage.

For this purpose, the company had laid down multiple courses of action to meet the challenge of adverse situations. In 2008, the company suffered loss in many projects due to the great recession despite taking many cost cutting measures. The management had taken utmost care regarding the possible outcome and timely review of the plans to achieve the set target during that hard time. In 2010 the system implemented successfully which subsequently helped the company to execute numerous projects with precision and timeliness.

Question 1.

“In 2005, with the aim to accelerate growth the company had gone through several rounds of meetings and discussions.” What is the objective mentioned here according to the process stated here?

(A) Developing Premises
(B) Growth and development
(C) Launching IT enabled system
(D) Cost cutting
Answer:
(B) Growth and development

Question 2.

“The management had done effective forecast and critical thinking regarding allocation of resources to reduce wastage.” Identify the function of management mentioned here.

(A) Planning
(B) Organising
(C) Controlling
(D) Directing
Answer:
(A) Planning

Question 3.

“In 2008, the company suffered loss in many projects due to the great recession despite taking many cost cutting measures.” Which limitation of the management process is indicated here?

(A) It fails to cope with sudden changes.
(B) It involves huge cost.
(C) It requires critical thinking.
(D) Need to construct multiple action plAnswer:
Answer:
(A) It fails to cope with sudden changes.

Question 4.

“The management had taken utmost care regarding the possible outcome and timely review of the plans to achieve the set target during that hard time.” Which is the last step of the process mentioned here?

(A) Implementation of plan
(B) Timely execution of projects
(C) Followup
(D) To prepare alternative course of action
Answer:
(C) Followup

II. Read the following text and answer the questions given below:

Sana inherited a 20 acre ancestral land from her grandparents. She decided to venture into agriculture. For this purpose she set out specific goals, objectives and activities. Everything was a challenge because she was not aware about farming. She learnt every activity and in the process thought of assisting other farmers as well. She eventually launched her own company Agricultural Solutions Ltd. She wanted to be sure that the activities effectively met the best interests of the company and the farmers. Hence, she prepared an annual plan for production, sales and marketing through sales forecasting.

She also realized that farmers were growing only one or two crops. On account of this; the land remained idle for the rest of the year. Thus, she identified and evaluated different alternatives through which the farms could be utilized throughout the year. She used her foresight and logical and systematic thinking based on analysis of all facts and examined and evaluated all the alternatives. She presented a plan to the farmers union, where after harvesting the primary crop, seasonal vegetables and fruits could be grown.

Question 1.

“For this purpose she set out specific goals, objectives and activities.” Which feature of planning is depicted in the statement?

(A) Planning focuses on achieving objectives.
(B) Planning is a primary function of management.
(C) Planning is pervasive.
(D) Planning is continuous.
Answer:
(A) Planning focuses on achieving objectives.

Explanation:
Specific goals are set out in the plans along with the activities to be undertaken to achieve the goals. Thus, planning is purposeful. Planning has no meaning unless it contributes to the achievement of predetermined organisational goals.

Question 2.

“Hence, she prepared an annual plan for production, sales and marketing through sales forecasting.” Which feature of planning is depicted in the statement?

(A) Planning is continuous
(B) Planning is futuristic
(C) Planning involves decision making
(D) Planning is a mental exercise
Answer:
(B) Planning is futuristic

Question 3.

“Thus, she identified and evaluated different alternatives through which the farms could be utilized throughout the year.” Which feature of planning is depicted in the statement?

(A) Planning is pervasive.
(B) Planning is continuous.
(C) Planning is futuristic.
(D) Planning involves decision-making.
Answer:
(D) Planning involves decision-making.

Explanation:
Planning essentially involves choice from among various alternatives and activities. Planning involves thorough examination and evaluation of each alternative and choosing the most appropriate one.

Question 4.

“She used her foresight and logical and systematic thinking based on analysis of all facts and examined and evaluated all the alternatives.” Which feature of planning is depicted in the statement?

(A) Planning focuses on achieving objectives.
(B) Planning is a primary function of management.
(C) Planning involves decision making.
(D) Planning is a mental exercise.
Answer:
(D) Planning is a mental exercise.

MCQ Questions for Class 12 Business Studies with Answers

MCQ Questions for Class 12 Business Studies Chapter 3 Business Environment

January 19, 2023January 18, 2023 by Prasanna

Business Environment Class 12 MCQ Questions With Answers

Business Environment Class 12 MCQ Question 1.

Even though the political conditions vary from country to country, they impact the sentiment of an investor in the business, if the instability of the political conditions cause uncertainty and make it difficult for him to predict the future. Which feature of the business environment is being highlighted in the above statement?

(A) Specific and general forces
(B) Dynamic nature
(C) Relativity
(D) All of the above
Answer:
(D) All of the above

Explanation:
Business environment includes both specific and general forces. Business environment is dynamic, i.e., it keeps on changing whether in terms of technological improvement, shifts in consumer preferences or entry of new competition in the market. Business environment is a relative concept since it differs from country to country and even region to region.

Business Environment MCQ Class 12 Question 2.

“The increase in the demand for many Ayurvedic medicines, health products and services in the past few months, is related to the need for building immunity and an increased awareness for health care due to the spread of Coronavirus.” Identify the feature of business environment being described above.

(A) Specific and general forces
(B) Inter-relatedness
(C) Relativity
(D) None of the above
Answer:
(B) Inter-relatedness

Explanation:
Different forces of business environment are interrelated to each other. One component of the business environment affects the functioning of other components.

Business Environment MCQ Class 12 Question 3.

Which of the following is the feature of Business Environment?

(A) It is a relative concept since it differs from country to country and even region to region.
(B) It enables the firm to identify opportunities and getting the first mover advantage.
(C) It helps in tapping useful resources.
(D) All of the a bove
Answer:
(A) It is a relative concept since it differs from country to country and even region to region.

Explanation:
Business environment is a relative concept whose impact differs from country to country, region to region and firm to firm. Political conditions in the USA, for instance, differ from those in China or Pakistan. Similarly, demand for sarees may be fairly high India whereas it may be almost non-existent in France.

MCQ Of Business Studies Class 12 Chapter 3 Question 4.

The term ‘Business Environment’ means the sum total of:

(A) All individuals.
(B) Institutions.
(C) Other forces that are outside the control of a business enterprise.
(D) All of the above
Answer:
(D) All of the above

Explanation:
The economic, social, political, technological and other forces which operate outside a business enterprise are part of its environment. So also, the individual consumers or competing enterprises as well as the governments, consumer groups, competitors, courts, media and other institutions working outside an enterprise constitute its environment.

Business Environment MCQs Chapter 3 Question 5.

“The shift of demand from soft drinks to juices is an opportunity for juice companies and threat for soft drink companies.” Identify the feature of business environment:

(A) Relativity
(B) Complexity
(C) Uncertainty
(D) Dynamic
Answer:
(D) Dynamic

Explanation:
Business environment is dynamic, i.e., it keeps on changing whether in terms of technological improvement, shifts in consumer preferences or entry of new competition in the market.

MCQ Of Business Environment Class 12 Question 6.

Which of the following statements is incorrect?

(A) Business environment is a relative concept.
(B) Business environment is the sum total of all things internal to business firms.
(C) Opportunities refer to the positive internal trends or changes that will help a firm to improve its performance.
(D) None of the above
Answer:
(B) Business environment is the sum total of all things internal to business firms.

Explanation:
The term ‘business environment’ means the sum total of all individuals, institutions and other forces that are outside the control of a business enterprise but that may affect its performance.

Class 12 Business Studies Chapter 3 MCQ Question 7.

“The components of business environment keep on changing due to changes in various circumstances.” This shows that business environment is

(A) Dynamic
(B) Uncertain
(C) Complex
(D) Relative
Answer:
(A) Dynamic

Explanation:
Environmental change is concerned with the degree to which an organisation’s environment is dynamic and ever-changing. Change in environment occurs in areas like product, market, law or technology. However, some environmental factors such as technological and competitive environmental factors are changing faster than g the political environment.

Chapter 3 Business Studies Class 12 MCQ Question 8.

Match the FEATURES of Business Environment in Column I with the appropriate EXPLANATION in Column II.

Column I	Column II
(a) Complexity	(i) Very difficult to predict future happenings
(b) Specific forces	(ii) Easier to understand in parts but difficult to grasp in its totality
(c) Uncertainty	(iii) Affect individual enterprises directly and immediately

(A)(ii), (iii), (i)
(B) (iii), (ii), (i)
(C) (ii), (i), (iii)
(D) (iii), (i), (ii)

Answer:
(A)(ii),(iii),(i)

Question 9.

“Even after opening up of the Indian economy in 1991 foreign companies found it extremely difficult to cut through the bureaucratic red tape to get permits for doing business in India, which created a negative impact on business.”Identify the dimension of the business environment which led to creation of the negative impact on business.

(A) Social Environment
(B) Technological Environment
(C) Political Environment
(D) Legal Environment
Answer:
(C) Political Environment

Explanation:
Political Environment means that the actions were taken by the government, which potentially affect the routine activities of any business or company on a domestic or at the global level.

Question 10.

Which of the following is not an element of social environment?

(A) Birth and death rate
(B) Constitution of the country
(C) Population shifts
(D) Life expectancy
Answer:
(B) Constitution of the country

Explanation:
Constitution of the country is an element of legal environment. Legal Environment includes various laws passed by the government, administrative orders issued by government authorities, court judgments as well as decisions rendered by the central, state or local governments.

Question 11.

Which of the following dimensions of Business Environment includes legislations passed by the government administrative orders issued by government authorities?

(A) Technological Environment
(B) Social Environment
(C) Legal Environment
(D) Economic Environment
Answer:
(C) Legal Environment

Explanation:
Legal environment consists of rules and regulations, framed by the “ Parliament, under which business must operate. To exist and grow, business is required to follow all the rules and regulations that constitute this environment.

Question 12.

‘The current government initiated Make in India Programme which is good for the manufacturing sector.’ Out of the following, identify the component of Business Environment quoted in the above lines.

(A) Economic
(B) Political
(C) Legal
(D) Technological
Answer:
(B) Political

Explanation:
Political Environment consists of forces such as political stability and peace in the country and attitude of the ruling party and its representatives towards business. These forces significantly affect the functioning of business.

Question 13.

“Increase in the use of mobile phones and i-pods instead of papers and radio” refers to an example of key component of general environment of business. Identify the component of business environment.

(A) Technological
(B) Political
(C) Legal
(D) Economic
Answer:
(A) Technological

Explanation:
Technological environment includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services and new methods and techniques of operating business.

Question 14.

“Due to enforcement of Euro-IV emission norms, an automobile company had to phase out one of its model.” Identify the dimension of environment highlighted in the given statement.

(A) Technological
(B) Political
(C) Legal
(D) Economic
Answer:
(C) Legal

Explanation:
Legal environment consists of legislation that is passed by the Parliament and state legislatures. Legal environment consists of the legal framework within which business has to function, including legislation passed by the government, administration orders, court judgement, etc.

Question 15.

Which of the following statements is true with respect to political environment?

(A) It include the social forces like customs and traditions, values, social trends, society’s expectations from business, etc.
(B) It includes forces relating to scientific improvements and innovations.
(C) It includes political conditions such as general stability and peace in the country.
(D) None of the above
Answer:
(C) It includes political conditions such as general stability and peace in the country.

Explanation:
Political environment is the outcome of a combination of various ideologies advocated by different political parties. It includes political conditions such as general stability and peace in the country and the % political attitude of elected government towards business.

Question 16.

‘Service sector contributes to almost half of India’s GDP but employs only one-third of its workforce.’ Which of the following dimensions of Business Environment is stated in the above line?

(A) Economic
(B) Social
(C) Political
(D) Legal
Answer:
(A) Economic

Explanation:
Economic environment consists of economic factors that influence the business in a country. It consists of the factors and forces concerning with means of production and distribution of wealth, e.g. Gross Domestic Product, inflation rate, money supply, etc.

Question 17.

Match the DIMENSIONS of Business Environment in Column I with their appropriate COMPONENTS in Column II.

(A) (ii), (iii), (i)
(B) (iii), (ii), (i)
(C) (iii), (i), (ii)
(D) (ii), (i), (iii)
Answer:
(B) (iii), (ii), (i)

Assertion And Reason Based MCQs

Question 1.

Assertion (A): Changes in fashions and tastes of consumers may shift demand in the market from existing products to new ones.
Reason (R): Business environment is dynamic, i.e., it keeps on changing in consumer preferences.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
Business environment is dynamic, i.e., it keeps on changing whether in terms of technological improvement, shifts in consumer preferences or entry of new competition in the market.

Question 2.

Assertion (A): The business environment helps in understanding the threats which are likely to happen in the future.
Reason (R): Environmental awareness can help managers to identify various threats on time and serve as an early warning signal.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
Environment happens to be the source of many threats. Environmental awareness can help managers to identify , various threats on time and serve as an early warning signal.

Question 3.

Assertion (A): Business environment includes both specific and general forces.
Reason (R): General forces such as investors, customers, competitors and suppliers affect individual enterprises directly and immediately in their day-to-day working.

Answer:
(C) (A) is true, but (R) is false.

Explanation:
General forces such as social, political, legal and technological conditions have an impact on all business enterprises and thus, may affect an individual firm only f indirectly.

Question 4.

Assertion (A): Interest rates, taxes, inflation, stock market indices, value of rupee, personal disposable income, unemployment rate, etc. are the factors which affect the economic environment.
Reason (R): The economic environment consists of an economic system, economic policies and economic conditions prevailing in a country.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).
Explanation:
Economic Environment consists of factors like inflation rates, interest rates, consumers’ incomes, economic policies, market conditions, etc. which affect the performance of a business firm.

Question 5.

Assertion (A): Understanding of legal knowledge is a pre-requisite for the smooth functioning of business and industry.
Reason (R): Legal environment includes various legislations passed by the Government, administrative orders issued by government authorities, court judgments as well as the decisions rendered by various commissions and agencies at every level of the government; Centre, State or Local.

Answer:
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).

Explanation:
Non-compliance with the laws of the land can put business firms into legal problems.

Question 6.

Assertion (A): Shift in demand from propeller airplanes to jets and from typewriters to computer based word processors have all been responsible and creating new business.
Reason (R): Technological environment includes forces relating to scientific improvements and innovations, which provide new ways and techniques of operating a business.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
Technological environment includes the discovery of new methods and techniques for the production of goods and services. Technological changes make available better methods of production and that makes the optimum use of the raw material possible.

Question 7.

Assertion (A): Economic environment includes economic policies of the Government, including industrial, monetary and fiscal policies.
Reason (R): Business enterprises in India do realise the importance and impact of the economic environment on their working.

Answer:
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).

Explanation:
The economic environment in India consists of various macro level factors related to the means of production and distribution of wealth which have an impact on business and industry.

Case-Based MCQs

I. Read the following text and answer the following questions on the basis of the same:

The name and taste of Coca-Cola is known to almost each and every individual in India as well as throughout the world. This carbonated soft drink holds the most market share in the soft drink market and got itself a special seat in each and every gathering. The Coca-Cola Company has on occasion introduced other cola drinks under the Coke name. The most common of these are Diet Coke, along with others including Caffeine free Coca-Cola, Diet Coke Caffeine free, Coca-Cola Zero Sugar, CocaCola Cherry, Coca-Cola Vanilla and the list goes on.

It has capitalized on each and every opportunity to market itself effectively and place itself in the middle of every gathering. The main reason for such an outstanding placement of product goes to the way they have established the connection between every occasion and the need for Coke to be present there, product design and creative advertising.

Question 1.

In the context of the above given case, identify one valid importance of Business Environment.

(A) Enables a firm to identify opportunities and getting first mover advantage
(B) Uncertainty
(C) Delay in action
(D) Pervasive function
Answer:
(A) Enables a firm to identify opportunities and getting first mover advantage

Explanation:
Environment provides numerous opportunities for business success. Early identification of opportunities helps an enterprise to be the first to exploit them instead of losing them to competitors.

Question 2.

Identify the feature of Business Environment which the Coca-Cola Company managed to get in their favour.

(A) Complex
(B) Specific and general forces
(C) Futuristic
(D) Mental Exercise
Answer:
(B) Specific and general forces

Explanation:
Business environment includes both specific and general forces. Specific forces (such as investors, customers, competitors and suppliers) affect individual enterprises directly and immediately in their day-to-day working. General forces (such as social, political, legal and technological conditions) have an impact on all business enterprises and thus, may affect an individual firm only indirectly.

Question 3.

Which business environment did Coca-Cola majorly tap into ?

(A) Technological Environment
(B) Social Environment
(C) Political Environment
(D) Economic Environment
Answer:
(B) Social Environment

Explanation:
The social environment of business include the social forces like customs and traditions, values, social trends, society’s expectations from business, etc.

Question 4.

Which of the following is not a product of COCA- COLA?

(A) Diet Coke Caffeine free
(B) Coca-Cola Zero Sugar
(C) Coca-Cola Avocado
(D) Coca-Cola Cherry
Answer:
(C) Coca-Cola Avocado

II. Read the following text and answer the questions given below:

As the government has opened up its economy to Multinational Corporations, it has encouraged foreign companies to invest in some sectors of retailing. It has also put in place new rules and regulations for FDI (Foreign Direct Investment) in the retail sector. The FDI policy allows foreign investment through two modes. It may be either under the ‘automatic route’ or under the ‘approval route’ where prior approval of the Indian Government is required for any foreign investment in an Indian company which is carrying on retailing business in India.

Moreover, the policy also talks about ‘Single brand retailing’ like Nike or ‘Multi-brand retailing’ like Walmart. The argument is that customers can afford to purchase the products of these companies as their income is rising gradually. It will increase research and innovations in the retail sector which will provide new ways of producing goods as well as increase the variety of goods in the market. This will eventually improve the quality of life.

Question 1.

“As the government has opened up its economy to Multinational Corporations, it has encouraged foreign companies to invest in some sectors of retailing.” Identify which dimension of business environment is depicted here.

(A) Political environment
(B) Legal environment
(C) Technological environment
(D) Economic environment

Answer:
(A) Political environment

Explanation:
Political environment includes political conditions such as general stability and peace in the country and specific attitudes that elected government representatives hold towards business.

Question 2.

“Customers can afford to purchase the products of these companies as their income is rising gradually.” Identify which dimension of business environment is depicted here.

(A) Social environment
(B) Legal environment
(C) Technological environment
(D) Economic environment
Answer:
(D) Economic environment

Explanation:
Economic environment refers to factors like interest rates, inflation rates and changes in disposable income of people, etc.which have an impact on business enterprise.
Question 3.

“It will increase research and innovations in the retail sector…” Identify which dimension of business environment is depicted here.

(A) Social environment
(B) Political environment
(C) Technological environment
(D) Economic environment
Answer:
(C) Technological environment

Question 4.

“This will eventually improve the quality of life.” Identify which dimension of business environment is depicted here.

(A) Social environment
(B) Legal environment
(C) Technological environment
(D) Economic environment
Answer:
(A) Social environment

Explanation:
The social environment of business includes the social forces like customs and traditions, values, social trends, society’ expectations from business, etc.

III. Read the following text and answer the questions given below:

The Government is considering an innovative proposal to launch a single card having the features of both debit and credit card in order to improve the existing card facility and to increase the ease and usage for the consumers to carry out monetary transactions. The card will have unique advantages as it could be used for making a variety of payments like utility bills, metro and bus tickets, parking fee, etc., other than shopping and cash withdrawal facility. After this announcement was made, many banks decided to bring out a similar product i.e., a debit-cum-credit card.

Your Bank Ltd., a private bank became the first one to exploit this opportunity. They launched a card called ‘DRCR Card’ in this era of increasing digitization. In order to improve their sales, a unique feature was added to the card that it could also be used for making international transactions within the home country and abroad as well. In order to meet the increasing demand of the customers and to capture the market, they planned to hire more sales force and marketing personnel to reach the end customer. They also trained their staff and prepared guidelines regarding the issue, usage, renewal, withdrawal and charges related to the new card.

Question 1.

” Your Bank Ltd., a private bank became the first one to exploit this opportunity.” Identify which of the following importance of understanding the business environment is discussed here:

(A) It helps in coping with rapid changes.
(B) It enables the firm to identify opportunities and getting the first mover advantage.
(C) It helps the firm to identify threats and early warning signals.
(D) It helps in improving performance.
Answer:
(B) It enables the firm to identify opportunities and getting the first mover advantage.

Question 2.

“…order to improve the existing card facility and to increase the ease and usage …” Identify which of the following importance of understanding the business environment is discussed here:

(A) It helps in assisting in planning and policy formulation.
(B) It enables the firm to identify opportunities and getting the first mover advantage.
(C) It helps the firm to identify threats and early warning signals.
(D) It helps in improving performance.
Answer:
(C) It helps the firm to identify threats and early warning signals.

Explanation:
Environmental awareness can help managers to identify various threats on time and serve as an early warning signal.

Question 3.

“In order to improve their sales, a unique feature was added to the card…” Identify which of the following importance of understanding the business environment is discussed here.

(A) It helps the firm to identify threats and early warning signals.
(B) It helps in coping with rapid changes.
(C) It helps in assisting in planning and policy formulation.
(D) It helps in improving performance.
Answer:
(D) It helps in improving performance.

Question 4.

“… they planned to hire more sales force and marketing personnel…” Identify which of the following importance of understanding the business environment is discussed here.

(A) It helps in assisting in planning and policy formulation.
(B) It enables the firm to identify opportunities and getting the first mover advantage.
(C) It helps the firm to identify threats and early warning signals.
(D) It helps in improving performance.
Answer:
(A) It helps in assisting in planning and policy formulation.

Explanation:
Since environment is a source of both opportunities and threats for a business enterprise, its understanding and analysis can be the basis for deciding the future course of action (planning) or training guidelines for decision making (policy).

MCQ Questions for Class 12 Business Studies with Answers

MCQ Questions for Class 12 Business Studies Chapter 6 Staffing

January 19, 2023January 18, 2023 by Prasanna

Staffing Class 12 MCQ Questions With Answers

Staffing MCQ Class 12 Chapter 6 Question 1.

staffing is a process which involves a series of steps. arrange the following steps in correct order:

(i) Placement and Orientation
(ii) Recruitment
(iii) Selection
(iv) Estimating manpower requirement

(A) (iv), (ii), (iii), (i)
(B) (iv), (iii), (ii), (i)
(C) (i), (ii), (iii), (iv)
(D) (ii), (iv), (iii), (i)
Answer:
(A) (iv), (ii), (iii), (i)

Explanation:
The staffing process is a systematic attempt to implement the human resource plan by recruiting, evaluating and selecting qualified candidates for the job-positions in the organization.

Question 2.

Which of the following steps in the process of staffing involves the process of searching for prospective employees and stimulating them to apply for respective jobs in the organization?

(A) Recruitment
(B) Selection
(C) Training and Development
(D) Placement and Orientation
Answer:
(A) Recruitment

Explanation:
Recruitment refers to searching for suitable candidates for the various job positions to be filled up from time to time in the organisation. It is the process of finding and attracting suitable applicants for I employment.

Question 3.

Which aspect of staffing is concerned with upgradation of the knowledge and skills of the employees?

(A) Placement and Orientation
(B) Training and Development
(C) Selection
(D) Estimating manpower requirement
Answer:
(B) Training and Development

Explanation:
Training helps employees to improve their knowledge and skill and make them perform their tasks more efficiently. It also helps them in promotion and improves their attitudes and confidence levels.

Question 4.

What does workforce analysis reveal?

(A) Number of human resources available.
(B) Type of human resources available.
(C) Both number and type of human resources available.
(D) None of the above.
Answer:
(C) Both number and type of human resources available.

Question 5.

‘Workload Analysis’ includes which of the following.

(A) The number and type of human resources already available.
(B) The number and type of human resources necessary in future.
(C) Both (A) and (B)
(D) Neither (A) nor (B)
Answer:
(B) The number and type of human resources necessary in future.

Explanation:
Workload analysis would enable an assessment of the number and types of human resources necessary for the performance of various jobs and accomplishment of organisational objectives. Workforce analysis would reveal the number and type available.
Answer:
(D) Neither (A) nor (B)

Question 6.

For an enterprise, staffing is the ……………………function in the series of management functions?

(A) First
(B) Second
(C) Third
(D) Fourth
Answer:
(C) Third

Explanation:
After planning and organising of the organisation structure, the next step in the management process is to fill the various posts provided in the organisation. This is termed as the management of staffing function. Thus, it is the third function in the series of management functions.

Question 7.

Staffing is considered as a ………………… process.

(A) Continuous
(B) One-time
(C) Random
(D) None of these
Answer:
(A) Continuous

Question 8.

Match the STEPS in the staffing process in Column with their correct EXPLANATION in Column II:

Column I	Column II
(a) Placement and Orientation	(i) Opportunity for higher position with more pay, responsibility, etc.
(b) Performanc Appraisal	(ii) Employee occupies the post and gets familiar with the organisation.
(c) Promotion and Career Planning	(iii) Search prospective employees and stimulate them to apply for the job.
(d) Recruitment	(iv) Employee’s performance is evaluated for salary hike, promotion, etc.

(A) (i), (iii), (ii), (iv)
(B) (ii), (iv), (i), (iii)
(C) (iii), (i), (iv), (ii)
(D) (ii), (i), (iii), (iv)
Answer:
(B) (ii), (iv), (i), (iii)

Question 9.

Which of the following internal sources of recruitment involves shifting of an employee from one job to another, one department to another?

(A) Transfer
(B) Promotion
(C) Both (A) and (B)
(D) None of the above
Answer:
(A) Transfer

Explanation:
Transfer involves shifting of an employee from one job to another, one department to another or from one shift to another, without a substantive change in the responsibilities and status of the employee.

Question 10.

Which of the following statements is true with respect to internal source of recruitment?

(A) Simplifies the process of selection and placement.
(B) Employees are motivated to improve their performance.
(C) This is a more reliable way of recruitment.
(D) All of the above
Answer:
(D) All of the above

Question 11.

In which of the following external source of recruitment, applicants are introduced by the present employees:

(A) Labour Contractors
(B) Recommendations of Employees
(C) Campus Recruitment
(D) lacement Agencies and Management Consultants
Answer:
(B) Recommendations of Employees

Explanation:
Applicants introduced by present employees, or their friends and relatives may prove to be a good source of recruitment. Such applicants are likely to be good employees because their background is sufficiently known.

Question 12.

Real Tech Builders has to deliver the flats to its buyers for possession on time. Due to this, there is a sudden increase in workload. Therefore, the company needs to arrange workers to work at the sites at a short notice. The source of recruitment which may be used by the company to tap the casual vacancy is:

(A) Direct recruitment
(B) Advertisement
(C) Recommendation of employees
(D) Employment exchange
Answer:
(A) Direct recruitment

Explanation:
Under the direct recruitment, a notice is placed on the notice-board of the enterprise specifying the details of the jobs available. It is suitable for filling casual vacancies when there is a rush of work or when some permanent workers are absent.

Question 13.

Which of the following is true regarding Transfers?

(A) Involves shifting of an employee from one job to another.
(B) Involves shifting of an employee from one department to another or from one shift to another.
(C) There is no substantive change in the responsibilities and status of the employee.
(D) All of the above
Answer:
(D) All of the above

Question 14.

Which of the following is true regarding Promotion?

(A) Involves more pay
(B) Involves higher responsibility
(C) Gives job satisfaction
(D) All of the above
Answer:
(D) All of the above

Question 15.

Which of the following statements is incorrect?

(A) Through internal sources of recruitment employees may become lethargic if they are sure of time-bound promotions.
(B) A new enterprise cannot use internal sources of recruitment.
(C) Frequent transfers of employees improves the productivity of the organization.
(D) None of the above.
Answer:
(C) Frequent transfers of employees improves the productivity of the organization.

Explanation:
Transfer is a tool of training the employees to prepare them for higher jobs.Frequent transfers of employees may often reduce the productivity of the organisation.

Question 16.

…………………. source of recruitment brings in new blood in the organisation ?

(A) Transfers
(B) Promotions
(C) Campus recruitment
(D) All of these
Answer:
(C) Campus recruitment

Explanation:
Campus recruitment is a external source of recruitment.

Question 17.

Match the EXTERNAL SOURCE of recruitment in Column I with its correct EXPLANATION in Column II:

Column I	Column II
(a) Direct Recruitment	(i) List of job-seekers is prepared from a database of unsolicited applicants and is screened to fill the vacancies.
(b) Casual Callers	(ii) Help to match personnel demand and supply by serving as link between job-seekers and employers.
(c) Advertisement	(iii) Job-seekers assemble outside the premises of the organisation on the specified date and selection is done on the spot.
(d) Employment Exchange	(iv) Vacancies are published in newspapers or trade and professional journals.

(A) (i),(iii),(ii),(iv)
(B) (ii),(iv),(i),(iii)
(C) (iii), (i), (iv), (ii)
(D) (ii), (i), (iii), (iv)
Answer:
(C) (iii), (i), (iv), (ii)

Question 18.

Which of the following type of selection test provides clues to a person’s emotions, reactions, maturity and value system, etc.?

(A) Aptitude Tests
(B) Personality Tests
(C) Intelligence Tests
(D) Interest Tests
Answer:
(B) Personality Tests

Explanation:
These tests judge the psychological make up of any person. These tests check a person’s motivational level, emotions, integrity, sympathy, sensitivity, etc. These traits in an individual provide the manager with an overall picture of his personality.

Question 19.

Which of the following steps in the process of selection, helps the manager to eliminate unqualified or unfit job-seekers based on the information supplied in the application form?

(A) Preliminary Screening
(B) Employment Interview
(C) Reference and Background Checks
(D) Selection Decision
Answer:
(A) Preliminary Screening

Explanation:
Preliminary screening help reject misfits for reasons, which did not appear in the application forms.

Question 20.

Selection is a process which involves a series of steps. Arrange the following steps in correct order.

(i) Interview
(ii) References check
(iii) Preliminary screening
(iv) Selection test

(A) (iii), (iv), (i), (ii)
(B) (iv), (iii), (ii), (i)
(C) (i), (ii), (iii), (iv)
(D) (ii), (iv), (iii), (i)
Answer:
(A) (iii), (iv), (i), (ii)

Question 21.

Rajan Ltd. decided to change their organization structure and shift to functional structure. So, it decided to hire four different Heads for Sales, Accounts, Purchase and Production from outside the company to bring fresh talent. It publishes advertisement and shortlists 20 candidates for each position after conducting various selection tests. Out of the following, identify the next step to be followed by Rajan Ltd.

(A) Employment interview
(B)Preliminary screening
(C) Reference and background check
(D) Selection decision
Answer:
(A) Employment interview

Explanation:
Interview is a formal, in-depth conversation conducted to evaluate the applicant’s suitability for the job. The role of the interviewer is to seek information and that 1 B of the interviewee is to provide the same.

Question 22.

Security Agents Ltd. provides security services. They gave an advertisement in newspaper for hiring males for the post of Security Guard who are reliable and keep client information confidential. 75 candidates approached them and Security Agents Ltd. finalized 10 candidates to be selected after conducting required test and interview. Out of the following, identify the next step to be followed by Security Agents Ltd.

(A) Medical examination
(B) Job offer
(C) Reference and background check
(D) Selection decision
Answer:
(C) Reference and background check

Explanation:
After interview, reference and background of the employee is checked. Many employers request names, addresses, and telephone numbers of references for the purpose of verifying information and, gaining additional information on an applicant. Previous employers, known persons, teachers and university professors can act as references.

Question 23.

Which of the following is correct about Aptitude Tests?

(A) Measures individual’s potential for learning new skills
(B) Measures person’s capacity to develop
(C) Good index of a person’s future success score
(D) All of the above
Answer:
(D) All of the above

Question 24.

The last step in the selection process is ………………… .

(A) Selection decision
(B) Medical examination
(C) Job offer
(D) Contract of employment
Answer:
(D) Contract of employment

Explanation:
After the job offer has been made and candidate accepts the offer, certain documents need to be executed by the employer and the candidate. There is also a need for preparing a contract of employment. Basic information that should be included in a written contract of employment will vary according to the level of the job.

Question 25.

Interest Tests measures ……………………… .

(A) Actual skills possessed
(B) Potential skills to be acquired
(C) Involvement of inclination of a person
(D) None of the above
Answer:
(C) Involvement of inclination of a person

Question 26.

Match the SELECTION TEST in Column I with its correct EXPLANATION in Column II:

Column I	Column II
(a) Intelligence Tests	(i) Measure of individual’s potential for learning new skills.
(b) Aptitude Test	(ii) Provide clues to a person’s emotions, his reactions, maturity and value system.
(c) Personality Tests	(iii) Measure the level of knowledge and proficiency in the area of professions or technical training.
(d) Trade Test	(iv) Indicator of a person’s learning ability or the ability to make decisions and judgements.

(A) (i), (iii), (ii), (iv)
(B) (ii), (iv), (i), (iii)
(C) (iii), (i), (iv), (ii)
(D) (ii), (i), (iii), (iv)
Answer:
(B) (ii), (iv), (i), (iii)

Question 27.

Which of the following statements is false with respect to training ?

(A) Enhances employee productivity
(B) Equips the future manager
(C) Increases employee morale
(D) None of the above
Answer:
(D) None of the above

Question 28.

Which of the following on-the-job training method puts the trainee under the guidance of a master worker ?

(A) Apprenticeship Programmes
(B) Coaching
(C) Internship Training
(D) Job Rotation
Answer:
(A) Apprenticeship Programmes

Explanation:
Apprenticeship programmes put the trainee under the guidance of a master worker. These are designed to acquire a higher level of skill.

Question 29.

Which of the following statements is incorrect ?

(A) When jobs are simple, easy to learn and influenced to only a small degree by technological changes, there is little need for employees to upgrade or alter their skills.
(B) Training and development help only the organisation and not the individual.
(C) Training attempts to improve their performance on the current job or prepare them for any intended job.
(D) Development is any process by which the aptitudes, skills and abilities of employees to perform specific jobs are increased.
Answer:
(B) Training and development help only the organisation and not the individual.

Question 30.

Which of the following is true about development ?

(A) It increases executive’s professional talent.
(B) It helps in tackling the complex management working problems.
(C) It is wider than training.
(D) All of the above
Answer:
(D) All of the above

Question 31.

The quality of production is not as per standards. On investigation, it was observed that most of the workers were not fully aware of the proper operation of the machinery. What could be the way to improve the accuracy ?

(A) Training
(B) Development
(C) Both training and development
(D) Neither training nor development
Answer:
(A) Training

Explanation:
Training is any process by which the aptitudes, skills and abilities of employees to perform specific jobs are increased. It is a f process of learning new skills and application of knowledge. It attempts to improve their performance on the current job or prepare them for any intended job.

Question 32

……………………. method of training is suitable when employees are required to handle sophisticated machinery.

(A) Apprenticeship Programmes
(B) Internship Training
(C) Vestibule Training
(D) Induction Training
Answer:
(C) Vestibule Training

Explanation:
Employees learn their jobs on the equipment they will be using, but the training is conducted away from the actual work floor. Actual work environments are created in a class rooom and employees use the same materials, files and equipment. This is usually done when employees are required to handle sophisticated machinery and equipment.

Question 33.

Match the TERMS in Column I with their correct EXPLANATION in Column II:

Column I	Column II
(a) Education	(i) Process by which the aptitudes, skills and abilities of employees to perform specific jobs are increased.
(b) Training	(ii) Process of increasing the knowledge and understanding of employees.
(c) Development	(iii) Learning opportunities designed to help employees grow towards maturity and actualisation of their potential.

(A) (i), (ii), (ii)
(B) (i), (ii), (iii)
(C) (iii), (i), (ii)
(D) (ii), (i), (ii)
Answer:
(D) (ii), (i), (ii)

Question 34.

Soler Horse Ltd. decided to import new hi-tech machines from Korea to decrease the cost of production and increase quality of work. It decided to give one month training to 5 supervisors and 10 workers to provide technical knowledge and skills to operate those machines. For this, dummy models of machinery were provided to them to practice on it. Identify the type of training provided by Soler Horse Ltd.

(A) Internship Training
(B) Apprenticeship Training
(C) Induction Training
(D) Vestibule Training
Answer:
(D) Vestibule Training

Explanation
In vestibule training, the workers are trained in a prototype environment on specific jobs in a special part of the plant. An attempt is made to create working condition similar to the actual workshop conditions.

Assertion and Reason Based MCQs

Question 1.

Assertion (A): Staffing is the most fundamental and critical drive of organisational performance.
Reason (R): No organisation can be successful unless it can fill and keep filled the various positions
provided for in the structure with the right kind of people.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
Staffing is ‘putting people to jobs’. Human resources are the foundation of any business. The right people can help you take your business to the top; the wrong people can break your business. Hence, staffing is the most fundamental and critical drive of organisational performance.

Question 2.

Assertion (A): Internal recruitment simplifies the process of selection and placement.
Reason (R): Filling vacancies in higher jobs from within the organisation motivates the employees to improve their performance through learning and practice.

Answer:
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).

Explanation:
Internal recruitment also simplifies the process of selection and placement. The candidates that are already working in the enterprise can be evaluated more accurately and economically. This is a more reliable way of recruitment since the candidates are already known to the organisation.

Question 3.

Assertion (A): Direct method of recruitment is very inexpensive as it does not involve any cost of advertising for the vacancies.
Reason (R): Under direct recruitment, a notice is placed on the notice-board of the enterprise specifying the details of the jobs available.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
Job seekers assemble outside the premises of the organisation on the specified date and selection is done on the spot. Certain workers present themselves at the factory gate every day for employment. Thus, it does not involve any cost of advertising for the vacancies.

Question 4.

Assertion (A): Advertisement is an internal source of recruitment.
Reason (R): Advertisement gives the management a wider range of candidates from which to choose.

Answer:
(D) (A) is false, but (R) is true.

Explanation:
Advertising is an external source of recruitment. Advertisement in newspapers or trade and professional journals is generally used when a wider choice is required.

Question 5.

Assertion (A): Trade tests are used to know the pattern of interests or involvement of a person.
Reason (R): Selection test is a mechanism that attempts to measure certain characteristics of individuals.

Answer:
(D) (A) is false, but (R) is true.

Explanation:
Every individual has fascination for some job than the other. Interest tests are used to know the pattern of interests or involvement of a person.

Question 6.

Assertion (A): Training helps the employees in promotion.
Reason (R): Training makes employees perform their tasks more efficiently.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
Training helps employees to improve their knowledge and skill and make them perform their tasks more efficiently It also helps them in promotion and improves their attitude and confidence levels.

Question 7.

Assertion (A): On-the-job methods refer to the methods that are applied to the workplace, while the employee is actually working.
Reason (R): On-the-job methods means learning before doing.

Answer:
(C) (A) is true, but (R) is false.

Explanation:
In these methods, the employees learn about their jobs while doing the work duly assisted by their supervisors or seniors. These methods encourage self-learning through practice. On-the-job methods means learning while doing.

Question 8.

Assertion (A): Staffing ensures the continuous survival and growth of the enterprise through the succession planning for managers.
Reason (R): The function of staffing enables the manager to find out as to how many workers are required and with what qualifications and experience.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
Staffing helps in getting right people for the right job at the right time. Staffing contributes to improved organisational productivity. Through proper selection the organisation gets quality workers, and through proper training the performances level of the workers can be improved.

Case-Based MCQs

I. Read the following text and answer the following questions on the basis of the same:

Mr. Vikas Goel is an H.R. Manager of “Sanduja Furniture Private Limited.” At the beginning of the new year he anticipated that the company will need 30 new additional persons to fill up different vacancies. He gave an advertisement in the newspaper inviting applications for filling up different vacant posts. As many as 120 applications were received. The same were scrutinized. Out of these, conditions of 15 applicants were not acceptable to the company. Letters of regret, giving reasons, were sent to them. Remaining candidates were called for preliminary interview.

The candidates called for were asked to fill up blank application forms. Thereafter, they were given four tests. The objective of the first test was to find out how much interest the applicant takes in his work. The objective of the second test was to find out ‘specialization’ of the applicant in any particular areaThird test aimed at making sure whether the applicant was capable of learning through training or not. The purpose of the fourth test was to find out how much capability a person has to mix-up with other persons, and whether he can influence other persons and get influenced by them.

Question 1.

“The purpose of the fourth test was too find out how much capability a person has to mix-up with other persons, and whether he can influence other persons and get influenced by them.” Which tests is indicated in this situation?

(A) Personality Test
(B) Intelligent Test
(C) Aptitude Test
(D) Trade Test
Answer:
(A) Personality Test

Explanation:
Personality tests provide clues to a person’s emotions, his reactions, maturity and value system, etc. These tests probe the overall personality.

Question 2.

“At the beginning of the new year he anticipated that the company will need 30 new additional persons to fill up different vacancies.” Identify the first step of staffing.

(A) Placement and Orientation
(B) Training and Development
(C) Recruitment
(D) Estimating Manpower Requirement
Answer:
(D) Estimating Manpower Requirement

Explanation:
Manpower planning refers to the process of estimating the manpower requirement of an organisation. While estimating the manpower requirement, the management generally keeps in mind the available infrastructure including the technology, production schedule, market fluctuation, demand forecasts, government’s policies and so on.

Question 3.

From the given lines, ‘Out of these, conditions of 15 applicants were not acceptable to the company. Letters of regret, giving reasons, were sent to them’. Which aspect of staffing is highlighted in the statement?

(A) Recruitment
(B) Selection
(C) Training
(D) Education
Answer:
(B) Selection

Explanation:
Selection is the process of identi fying and choosing the best person out of a number of prospective candidates for a job.

Question 4.

The applicants were given four tests like intelligent test to interest test after filling up blank application form. Identify which step of selection process was followed by the management.

(A) Selection decision
(B) Selection test
(C) Job offer
(D) Medical examination
Answer:
(B) Selection test

II. Read the following text and answer the questions given below:

Motorcycles Rides Pvt. Ltd. decided to modernize the plant as they are going to manufacture on large scale and cater to the export market as weE as the domestic market. So, it has become necessary to provide knowledge and skills to the existing workers to cope with new technology. The company believes that training wEl help its workers to improve their functioning and performance in many areas. Thus, the company has decided to train its workers so as to equip them with the latest production technology. But the company is in a dilemma with respect to the training method to be adopted. The HR department wants to adopt a training method which is more suitable for a manufacturing concern than a trading concern as the workers will be involved in operating many sophisticated machines, majority of which the company is planning to import from Japan.

Thus, they have decided to create actual work environments in a class room and employees to use the same materials, files and equipment in order to equip themselves with the imported new technology. Some of the employees are kept under guidance of a master worker for a prescribed period of time. This will enable firm to reduce accidents as employees will be more efficient to handle machines. They also plan to recruit more people especially freshers to meet the rise in demand and train them accordingly. For this purpose they have decided to select candidates who are studying but will also work in their factory or office to acquire practical knowledge and skills.

Question 1.

Identify the benefit of training stated in the above paragraph.

(A) Makes employees more efficient to handle machines.
(B) Prepare them for any intended job.
(C) Equips the future manager who can take over in case of emergency.
(D) All of the above
Answer:
(A) Makes employees more efficient to handle machines.

Question 2.

Which training method has been choosen by Motorcycles Rides Pvt. Ltd. to train its existing workers?

(A) Apprenticeship Training
(B) Internship Training
(C) Vestibule Training
(D) None of the above
Answer:
(C) Vestibule Training

Explanation:
In vestibule training, the workers are trained in a prototype environment on specific jobs in a special part of the plant. An attempt is made to create working condition similar to the actual workshop conditions. After training workers in such condition, the trained workers may be put on similar jobs in the actual workshop.

Question 3.

Which training method has been chosen by Motorcycles Rides Pvt. Ltd to train its new workers?

(A) Lectures
(B) Internship Training
(C) Vestibule Training
(D) Apprenticeship Training
Answer:
(B) Internship Training

Explanation:
It is a joint programme of training in which educational institutions and business firms cooperate. Selected candidates carry on regular studies for the prescribed period. They also work in some factory or office to acquire practical knowledge and skills.

Question 4.

“Some of the employees are kept under guidance of a master worker for a prescribed period of time.”Which method is the company following?

(A) Internship Training
(B) Vestibule Training
(C) Apprenticeship Training
(D) None of the above
Answer:
(B) Vestibule Training

Explanation:
This kind of training involves shifting the trainee from one department to another or from one job to another.
This enables the trainee to gain a broader understanding of all parts of the business and how the organisation as a whole functions. The trainee gets fully involved in the departments operations and also gets a chance to test her own aptitude and ability.

III. Read the following text and answer the questions given below:

Mrs. Ambika Lamba founded ‘Professional University’ for undergraduate and postgraduate courses in diverse disciplines. The University is among the top universities of India and has a tie-up with many other organizations which visit the campus annually in order to hire its future employees during its placement season and offer handsome salary packages. On the basis of the reputation and performance of its students performance in the practical world, the Information Technology department of the Lalit Power Ltd., had few vacancies related to Cyber Security. The Human Resource Department of the company decided to recruit fresh engineering graduates from ‘Professional University’ for the same after they received certain recommendations from other industry players about the institution.

For this purpose, they conducted ’employment interviews’ of many engineering graduates who applied and were keen to join their company. There were five vacant positions which were duly filled after the company undertook approximately 60 employment interviews. Thus, they gave a ‘job offer’ to the final five students who cleared all the steps they undertook in order to till the vacancies. They also decided to hire a Chartered Accountant for their Finance and Accounts department. For this the company plans to undertake a series of steps in order to ensure that a person with sound knowledge and experience is selected. They finally hired Satnam who worked only for four months and left the company citing his inability to continue further on account of not having adequate experience to handle huge projects. This proved costly for the Finance and Accounts department of Lalit Power Ltd. and they realized that they went wrong in the initial step to select the candidate. Thus, they had to conduct the whole process again in order to select a new Chartered Accountant.

Question 1.

What is the source of recruitment chosen by Lalit Power Ltd. for hiring engineering graduates?

(A) Direct Recruitment
(B) Campus Recruitment
(C) Placement Agencies and Management Consultants
(D) Employment Exchange
Answer:
(B) Campus Recruitment

Explanation:
Colleges and institutes of management and technology have become a popular source of recruitment for technical, professional and managerial jobs. Many big organisations maintain a close liaison with the universities, vocational schools and management institutes to recruit qualified personnel for various jobs.

Question 2.

What was the company’s first or initial step towards hiring a Chartered Accountant where they went wrong?

(A) Selection Tests
(B) Interview
(C) Preliminary Screening
(D) Selection Decision
Answer:
(C) Preliminary Screening

Explanation:
Preliminary screening helps the manager eliminate unqualified or unfit job seekers based on the information supplied in the application forms. Preliminary interviews help reject misfits for reasons, which did not appear in the application forms.

Question 3.

Why did Lalit Power Ltd. conduct ’employment interviews’ in the process of selection of the cyber security professionals?

(A) To evaluate the applicant’s suitability for the job.
(B) To ask for names, addresses, and telephone numbers of references for the purpose of verifying information.
(C) To check if the candidate is medically fit.
(D) To give the candidate the letter of appointment.
Answer:
(A) To evaluate the applicant’s suitability for the job.

Question 4.

Which of the following is true about the job offer which Lalit Power Ltd. provided to its five prospective employees hired for the IT department?

(A) Only those applicants were given the job offer who passed all the previous hurdles.
(B) Job offer was made through a letter of appointment.
(C) It contains a date by which the appointee must report on duty.
(D) All of the above.
Answer:
(D) All of the above.

MCQ Questions for Class 12 Business Studies with Answers

MCQ Questions for Class 12 Business Studies Chapter 2 Principles of Management

January 19, 2023January 18, 2023 by Prasanna

Principles of Management Class 12 MCQ Questions With Answers

Principles Of Management Class 12 MCQ Question 1.

Management principles are very ………. whereas pure science principles are rigid.

(A) Flexible
(B) Contingent
(C) Dependent
(D) Absolute
Answer:
(A) Flexible

Explanation:
The principles of management are not rigid prescriptions, which have to be followed absolutely. They are flexible and can f be modified by the manager when the situation so demands.

Principles Of Management MCQ Chapter 2 Question 2.

Which of the following does not apply to Principles of Management?

(A) Applicable in large firms
(B) Formed by practice and experience of managers
(C) Flexible
(D) Contingent
Answer:
(D) Contingent

Explanation:
The principles of management are intended to apply to all types of organisations, business as well as non-business, small as well as large, public sector as well as private sector, manufacturing as well as the service sectors.

Principle Of Management Chapter 2 Class 12 MCQ Question 3.

The principles of management are significant because of:

(A) Providing managers with useful insights into reality.
(B) Optimum utilization of resources and effective administration.
(C) Meeting changing environment requirements.
(D) All of the above.
Answer:
(D) All of the above.

Explanation:
The application of principles of management helps the managers to take right decisions at the right time. By applying the management principles, the managers can focus on optimum use of available resources so as to achieve productive results at minimum cost and maximum profits. They also help managers to meet the changing requirements of the environment.

MCQ Of Business Studies Class 12 Chapter 2 Question 4.

Which of the following statements is false with respect to principles of management?

(A) The principles of management are formed by experience and collective wisdom of managers as well as experimentation.
(B) The principles of management are not rigid prescriptions, which have to be followed absolutely.
(C) Management principles aim at influencing behaviour of human beings.
(D) The application of principles of management is not possible in contingent situations.
Answer:
(D) The application of principles of management is not possible in contingent situations.

Explanation:
The application of principles of management is contingent or dependent upon the prevailing situation at a particular point of time. The application of principles has to be changed as per requirements. The principles of management are not fixed or permanent. They are affected by situations or circumstances.

Question 5.

Principles of management provide managers with useful insights into reality. Which of the following statements explain this appropriately?

(A) Adds to managerial knowledge
(B) Enables managers to learn from past mistakes
(C) Helps managers conserve time by solving recurring problems quickly
(D) All of the above
Answer:
(D) All of the above

Explanation:
The principles of management provide the managers with useful insights into real world situations. Adherence to these principles will add to their knowledge, ability and understanding of managerial situations and circumstances. It will also enable managers to learn from past mistakes and conserve time by solving recurring problems quickly.

Question 6.

Management principles are contingent or dependent upon the situations prevailing in the organization. Which is the correct explanation associated with this statement?

(A) Application of principles is suitable in similar situations in a large number of cases.
(B) Application of principles has to be changed as per requirements.
(C) Principles of management can be modified.
(D) None of the above.
Answer:
(B) Application of principles has to be changed as per requirements.

Explanation:
The principles of management are not fixed or permanent. They are affected by situations or circumstances. Therefore, the decision to implement them or not is taken according to the situations or circumstances.

Question 7.

How are the Management principles derived?

(A) Observation
(B) Experimentation
(C) Personal experiences
(D) All of the above
Answer:
(D) All of the above

Explanation:
The management principles are developed only after deep and thorough research work. They are not developed overnight or they are not the personal feelings of any person. Proper observations and experiments are conducted before developing them. These are the expressions of deep experiences of the leaders of management thoughts.

Question 8.

Why accurate cause and effect relationship cannot be established by principles of management?

(A) Because they mainly apply to human behaviour
(B) Because real life, situations are not identical
(C) Both (A) and (B)
(D) Neither (A) nor (B)
Answer:
(C) Both (A) and (B)

Explanation:
The principles of management are less than perfect since they mainly apply to human behaviour. In real life, situations § are not identical. So, accurate cause and effect f relationships may be difficult to establish. However, principles of management assist managers in establishing these relationships to some extent and are therefore useful.

Question 9.

Match the NATURE of PRINCIPLES OF MANAGEMENT in Column I with their correct EXPLANATION in Column II.

Column I	Column II
(a) Universal applicability	(i) Direct but do not provide readymade, straitjacket solutions
(b) General guidelines	(ii) Not rigid prescriptions, can be modified as per the situation
(c) Flexible	(iii) Aim at influencing behaviour of human beings
(d) Behavioural	(iv) Applicable to all types of organizations

(A) (i), (ii), (iii), (iv)
(B) (iii), (ii), (iv), (i)
(C) (iii), (iv), (i), (ii)
(D) (iv), (i), (ii), (iii)
Answer:
(D) (iv), (i), (ii), (iii)

Question 10.

Which of the following principles of management by Fayol states that there should be one and only one boss for every individual employee?

(A) Unity of direction
(B) Order
(C) Unity of command
(D) Division of work
Answer:
(C) Unity of command

Explanation:
The principle of unity of command states that each employee in an organisation should receive orders from one superior only and he should be responsible to only one superior. It prevents confusion regarding tasks to be done.

Question 11.

Gang Plank is a term associated with which principle of Fayol.

(A) Equity
(B) Order
(C) Scalar Chain
(D) Initiative E
Answer:
(C) Scalar Chain

Explanation:
Fayol defines scalar chain as “The chain of superiors ranging from the ultimate authority to the lowest”. Every orders, instructions, messages, requests, explanation etc. has to pass through scalar chain. But, for I the sake of convenience and urgency, this path can be cut short and this short cut is known as Gang Plank.

Question 12.

In a cotton textile mill, various tasks viz. spinning, weaving, sizing, bleaching, etc. were divided to different groups of persons. Identify the principle of management stated here.

(A) Unity of command
(B) Division of work
(C) Stability of personnel
(D) Unity of direction
Answer:
(B) Division of work

Explanation:
Dividing work among the workforce helps improve the quality of the overall product. Henri Fayol said 1 that specialization in work increases the productivity and improves efficiency.of labour also leads to the specialization, accuracy and speed of the workers.

Question 13.

Which statement is correct regarding division of work?

(A) Intent is to produce more and better work from the same effort.
(B) Work is divided into small tasks.
(C) Trained specialists are required to perform each jobs.
(D) All of the above
Answer:
(D) All of the above

Question 14.

Which of the following statements is true?

(A) Authority is only formal.
(B) Authority is only informal.
(C) Authority is both formal and informal.
(D) Authority is neither formal nor informal.
Answer:
(C) Authority is both formal and informal.

Question 15.

Which of the following statements are true about ‘Authority’?

(A) Authority can be official authority or personal authority.
(B) Authority can be formal or informal.
(C) Authority should be commensurate with responsibility.
(D) All of the above.
Answer:
(D) All of the above.

Explanation:
Managers require authority commensurate with their responsibility. There should be a balance between authority and responsibility. An organisation should build safeguards against abuse of managerial power. At the same time a manager should i have necessary authority to carry out his responsibiliti

Question 16.

According to Fayol, the interests of an should take priority over the interests of an

(A) organization, individual
(B) individual, organization
(C) individual, group
(D) group, organization
Answer:
(A) organization, individual

Explanation:
The interest of the organisation must prevail upon the personal interests of individuals. The standard rule for any g organization is the work on the collective interest of the organization as a whole rather than personal interest of an individual.

Question 17.

principle of management isbeing violated if management does not fulfill its promise to increase wages of the workers after the mission is accomplished.

(A) Order
(B) Equity
(C) Discipline
(D) Initiative
Answer:
(C) Discipline

Explanation:
Discipline is the obedience to organisational rules and employment agreement which are necessary for the working of the organisation. According to Fayol, discipline requires good superiors at all levels, clear and fair agreements and judicious application of penalties.

Question 18.

Match the PRINCIPLES OF MANAGEMENT in Column I with their correct EXPLANATION in Column II.

Column I	Column II
(a) Unity of command	(i) Prevents hindrance in activities
(b) Unity of direction	(ii) Prevents overlapping of activities
(c) Stability of Personnel	(iii) Prevents dual sub-ordination
(d) Order	(iv) Prevents insecurity among employees

(A) (i),(ii),(iii),(iv)
(B) (iii), (ii), (iv), (i)
(C) (iii), (iv), (i), (ii)
(D) (iv), (i), (ii), (iii)
Answer:
(B) (iii), (ii), (iv), (i)

Question 19.

Which study is the study of movements?

(A) Method
(B) Motion
(C) Time
(D) None of these
Answer:
(B) Motion

Explanation:
motion study refers to the studyof movements like lifting, putting objects, II sitting and changing positions, etc., which are I undertaken while doing a typical job.

Question 20.

Which of the following statements is false?

(A) Functional foremanship is an extension of the principle of division of work and specialisation to the shop floor.
(B) Under planning incharge four personnel namely speed boss, gang boss, repair boss, and inspector would work.
(C) Time Study determines the standard time taken to perform a well-defined job.
(D) Cooperation, not individualism is an extension of the principle of harmony, not discord.
Answer:
(B) Under planning incharge four personnel namely speed boss, gang boss, repair boss, and inspector would work.

Explanation:
Under planning incharge four personnel namely instruction card clerk, route clerk, time and cost clerk and a disciplinarian worked. These four personnel would draft instructions for the workers, specify the route of production, prepare time and cost sheet and ensure discipline respectively.

Question 21.

Shashi joined ‘Fashion Ltd.’ as Head of Production Department and realized that company was not performing well. She developed the best method using several parameters right from deciding the sequence of operations, place of men, machines and raw materials till the delivery of the product to the customers. Identify the technique of scientific management being followed by Shashi.

(A) Motion study
(B) Fatigue study
(C) Method study
(D) Time study
Answer:
(C) Method study

Explanation:
The objective of method study is to find out one best way of doing the job. To conduct this study, process chart and operation research techniques are used. The main objective of this study is to minimise the cost of production and maximise the quality and level gj of consumer satisfaction.

Question 22.

Why did F.W Taylor propose eight specialists under Functional Foremanship?

(A) Because all qualities like intelligence, education, tact, grit, manual dexterity, energy, etc., could not be found in a single person.
(B) Because the number of foremen or supervisors in a factory set-up is very large.
(C) Because the number of workers in a factory set¬up is very large.
(D) All of the above.
Answer:
(A) Because all qualities like intelligence, education, tact, grit, manual dexterity, energy, etc., could not be found in a single person.

Explanation:
Taylor concentrated on improving the performance of this role in the factory set- up. In fact, he identified a list of qualities of a good foreman supervisor and found that no single person could fit them all. This prompted him to suggest functional foremanship through f eight persons.

Question 23.

Which of the following is an objective of standardization?

(A) To reduce a given line or product to fixed types, sizes and characteristics.
(B) To establish interchange ability of manufactured parts and products.
(C) To establish standards of excellence and quality in materials and of performance of men and machines.
(D) All of the above
Answer:
(D) All of the above

Explanation:
In order to ensure uniformity in work operations, work should be standardised. It ensures that everyone works according to same standards framed in respect of time, cost, amount of work, working conditions, quality of work, etc.

Question 24.

Motion study refers to the study of movements like lifting, putting objects, sitting and changing positions, etc., which are undertaken while doing a typical job. This helps to classify motions as:

(A) Productive
(B) Incidental
(C) Unproductive
(D) All of these
Answer:
(D) All of these

Explanation:
Motion study helps to find out the best way of doing the work. It studies the motions that a worker carries out while performing a job, eliminates unnecessary or wasteful’motions that result in fatigue and extra time to perform the work, arrives at the best combination of motions or the minimum time required to perform the work to improve efficiency and determine the standard motion for performing the given task.

Question 25.

Which of the following activities are associated with ‘Mental Revolution’ on the part of management and workers?

(A) Trade unions not going on strike.
(B) Management sharing the gains of the company with the workers.
(C) Workers working hard and be willing to embrace change for the good of the company.
(D) All of the above
Answer:
(D) All of the above

Explanation:
Mental revolution involvesa change in the attitude of workers and management towards one another from competition to cooperation. Both should realise that they require one another. Both should aim to increase the size of surplus. This would eliminate the need for any agitation, Management should share a part of surplus with workers. Workers should also contribute their might so that the company makes profits.

Question 26.

Name the principle of Scientific Management which suggests the introduction of scientific investigation and analysis.

(A) Science, not rule of thumb
(B) Harmony not discord
(C) Cooperation not individualism
(D) Development of each person to her/his greatest efficiency and prosperity
Answer:
(A) Science, not rule of thumb

Explanation:
This rule focuses on increasing the efficiency of an organisation through scientific analysis of work and not with the ‘Rule of Thumb’ method.

Question 27.

Which technique of Taylor differentiates between an efficient worker and an inefficien workre

(A) Standardisation and simplification of work
(B) Differential piece wage system
(C) Time study
(D) Fatigue study
Answer:
(B) Differential piece wage system

Explanation:
Taylor has advised the adoption of differential wage systems in order to motivate the employees. According to this system, the efficient workers should be paid more wages than inefficient one. This system is a source of incentive to workers whoimprove their efficiency in order to get more wages. It also encourages inefficient workers to improve their performance and achieve their standards.

Question 28.

Amrita keeps machines, materials, tools, etc. ready for operations by concerned workers. Whose work is described by this statement under functional foremanship?

(A) Gang Boss
(B) Repair Boss
(C) Route Clerk
(D) Speed Boss
Answer:
(A) Gang Boss

Explanation:
Gang boss performs the preliminary operations regarding how workers should work on the machine. He also decides f about which physical resources such as tools and equipment, etc. are required at the work place and arranges for them.

Question 29.

Match the PERSONNEL UNDER PRODUCTION INCHARGE in Column I with their RESPONSIBILITIES in Column II.

Column I	Column II
(a) Speed boss	(i) Keeping machines and tools, etc., ready for operation by workers.
(b) Gang boss	(ii) Ensuring proper working condition of machines and tools.
(c) Repair boss	(iii) Checking the quality of work.
(d) Inspector	(iv)Timely and accurate completion of job.

(A) (i), (ii), (iii), (iv)
(B) (iv), (i), (ii), (iii)
(C)(iii),(iv),(i),(ii)
(D) (iv), (i), (iii), (ii)
Answer:
(B) (iv), (i), (ii), (iii)

Question 30.

Match the PERSONNEL UNDER PLANNING INCHARGE in Column I with their RESPONSIBILITIES in Column II.

Column I	Column II
(a) Instruction card clerk	(i) Specify the route of production
(b) Route clerk	(ii) Ensure discipline
(c) Time and cost clerk	(iii) Draft instructions for the workers
(d) Disciplinarian	(iv) Prepare time and cost sheet

(A) (i), (ii), (iii), (iv)
(B) (iv), (i), (ii), (iii)
(C) (iii), (iv), (i), (ii)
(D) (iv), (i), (ii), (iii)
Answer:
(B) (iv), (i), (ii), (iii)

Assertion and Reason Based MCQs

Question 1.

Assertion (A): Principles of management are universally applicable.
Reason (R): The principles of man agement can be applied to all types of organisations.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
The principles of management are universal in nature that means they can be applied to all types of organisations irrespective of their size and nature. Their results may vary and application may be modified but these are suitable for all kinds of organisations.

Question 2.

Assertion (A): The application of principles of management is contingent.
Reason (R): The principles of management are not rigid prescriptions, which have to be followed absolutely.

Answer:
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).

Explanation:
The application of principles of management is dependent upon the prevailing situation at a particular point of time. It has to be changed as per the requirements. Principles of management are flexible and can be modified by the manager when the situation so demands.

Question 3.

Assertion (A): Managerial principles help the management to come out with the methods that help in reducing wastages.
Reason (R): Principles of management cannot be modified.

Answer:
(C) (A) is true, but (R) is false.

Explanation:
As the principles of management can be modified, they help the managers to meet the changing environment requirements.

Question 4.

Assertion (A): Principles of management help the managers in taking decisions based on the objective assessment of the situation.
Reason (R): Managerial decisions must be timely and realistic.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
An effective decision must be based on facts, thoughtful and justifiable in terms of the required purpose. Decisions must be timely and realistic. Principles of management help the managers in taking decisions based on the objective assessment of the situation, free of any bias and prejudice.

Question 5.

Assertion (A): Segregating work in the workforce amongst the worker will enhance the quality of the product.
Reason (R): Division of work leads to specialization.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
Division of work leads to specialization, and specialization helps to increase efficiency, which results in improvement in the productivity and profitability of the organization.

Question 6.

Assertion (A): In an organization, there should be a chain of superiors ranging from the ultimate authority to the lowest.
Reason (R): Managers require authority commensurate with their responsibility.

Answer:
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).

Explanation:
There should be a balance between Authority and Responsibility. Authority facilitates the management to work efficiently, and responsibility makes them responsible for the work done under their guidance or leadership.

Question 7.

Assertion (A): There should be one and only one boss for every individual employee.
Reason (R): If an employee has to follow more than one boss, there begins a conflict of interest and can create confusion.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
According to Fayol there should be one and only one boss for every individual employee. If an employee gets orders from two superiors at the same time the principle of unity of command is violated. He felt that if this principle is violated “authority is undermined, discipline is in jeopardy, order disturbed and stability threatened”.

Question 8.

Assertion (A): Managerial activities should be divided into two parts, i.e., planning and production.
Reason (R): In a functional organisation, work is divided into many small parts and each part is assigned to an expert.

Answer:
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).

Explanation:
Functional foremanship is an extension of the principle of division of work § and specialisation to the shop floor. In order to improve the quality of the supervision of workers at the supervisor level, Taylor developed the concept of functional foremanship. He advocated the separation of planning and execution functions.

Question 9.

Assertion (A): Method study make the use of many techniques like process charts and operations research to achieve its main objective.
Reason (R): The main objective of the method study is to minimise the cost of production and maximise the quality and level of consumer satisfaction

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
The managers come across numerous ways of performing a particular task or carrying out the production of goods or services. Out of all these possible methods, selection of the most appropriate way, which is cost-effective and also increases the production is considered a method study.

Question 10.

Assertion (A): Time study helps in deciding the number of workers to be employed, frame suitable incentive schemes and determine labour costs.
Reason (R): It is a technique to determine the standard time taken by a worker of reasonable skill and efficiency to perform a well-defined job.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Question 11.

Assertion (A): There should be complete co-operation between the labour and the management instead of individualism.
Reason (R): The employees in an organization must work together, keeping aside their objectives and ego to achieve the common goals set by the management.

Answer:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).

Explanation:
Cooperation, mutual confidence, sense of goodwill should prevail among both, managers as well as workers. he intention is to replace internal competition with cooperation.

I. Read the following text and answer the following questions on the basis of the same:

After completing her Bachelors in Fashion Designing from a well-known college in France, Aditi has opened a boutique in a posh market in Kolkata. She has divided the work in smaller units and each employee is well trained to perform his/ her task efficiently. The sales persons are allowed to close a deal with a buyer by giving a maximum of 5 percent discount, whereas the decision to give any further discount rests with Aditi as the final authority.

In the earlier period of her business venture, employees were asked to put in extra hours of work. In return she had promised to give them a special incentive within a year. Therefore, when the business was doing well, she honour her commitment by giving bonus to her employees.

She also instructed her employees that communication from top to bottom should follow the official lines of command. However, she tends to be more biased towards her female employees, when it comes to solve the conflicts among employees.

Case-Based MCQs

Question 1.

Aditi has divided the work in smaller units and each employee is well trained to perform his/ her task efficiently. Which principle of management is being followed here?

(A) Centralization and Decentralization
(B) Division of work
(C) Discipline
(D) Order
Answer:
(B) Division of work

Explanation:
Henri Fayol has stressed on the specialization of jobs. He recommended that work of all kinds must be divided and subdivided and allotted to various perso according to their expertise in a particular area. Subdivision of work makes it simpler and results in efficiency.

Question 2.

The sales persons are allowed to close a deal with a buyer by giving a maximum of 5 percent discount, whereas the decision to give any further discount rests with Aditi as the final authority.” Identify the principle of Management being followed here:

(A) Centralization and Decentralisation
(B) Authority and Responsibility
(C) Unity of Command
(D) Unity of Direction
Answer:
(A) Centralization and Decentralisation

Explanation:
Centralization meansconcentration of authority at the top level. In f other words, centralization is a situation in which top management retains most of the decision making authority. Decentralization means disposal of decision making authority to all the levels of the organization. In other words, sharing authority downwards is decentralization.

Question 3.

“Therefore, when the business was doing well, she honoured her commitment by giving bonus to her employees.” Which principle of management is being highlighted here?

(A) Discipline
(B) Order
(C) Remuneration to Employees
(D) Unity of Direction
Answer:
(A) Discipline

Explanation:
This principle applies that subordinate should respect their superiors and Obey their order.Discipline is an important requisite for smooth running of the enterprise.

Question 4.

Aditi tends to be more biased towards her female employees, when it comes to solve the conflicts among employees. Which principle is being violated here?

(A) Discipline
(B) Order
(C) Equity
(D) None of these
Answer:
(C) Equity

Explanation:
Equity means combination of fairness, kindness and justice. The employees should be treated with kindness and equity if devotion is expected of them. It implies that managers should be fair and impartial while dealing with the subordinates.

II. Read the following text and answer the questions given below:

Shruti, a student of management at MDI, Gurgaon, likes to relate what she has learnt in her classes during study to real life situations around her. She observed many situations while watching educational programmes on television that remind her of concepts of Scientific Management. In one such programme, factories manufacturing parts for products like automobiles, computers and mobile phones were being telecast.

These factories had defined benchmarks during production and were continuously aiming at eliminating unnecessary diversity of products. Thus, they aimed at eliminating superfluous varieties, sizes and dimensions and devising new varieties instead of the existing ones. While watching the programme, Shruti realized that these companies could adopt one best way of doing the job in order to be more productive.

She also felt that the employees of these companies were working for long hours continuously and needed to adopt certain strategies in order to improve their efficiency. The programme also showed a few interviews where some workers were found to be highly efficient as compared with a few others.

Question 1.

Name the technique of Scientific Management that these factories are adhering to while manufacturing parts for such products.

(A) Method Study
(B) Motion Study
(C) Standardisation and simplification of work
(D) Time Study
Answer:
(C) Standardisation and simplification of work

Question 2.

Which Scientific Management technique would Shruti recommend for these factories if they have to find out one best way of doing the job?

(A) Motion Study
(B) Time Study
(C) Method Study
(D) Fatigue Study
Answer:
(C) Method Study

Explanation:
The objective of method study is to find out one best way of doing the job. There are various methods of doing the job.

Question 3.

Which Scientific Management technique would Shruti suggest for these factories if they have to help the workers regain their stamina and enable them to work again with the same capacity?

(A) Motion Study
(B) Time Study
(C) Method Study
(D) Fatigue Study
Answer:
(D) Fatigue Study

Explanation:
Fatigue study seeks to determine I the amount and frequency of rest intervals in I completing a task.

Question 4.

Which Scientific Management technique would Shruti advise these factories to implement in order to motivate the inefficient workers to perform better?

(A) Functional foremanship
(B) Method Study
(C) Time Study
(D) Differential Piece Wage System
Answer:
(D) Differential Piece Wage System

Explanation:
This technique of wage payment is based on efficiency of workers. The efficient workers are paid more wages than inefficient one. On the other hand, those workers who produce less than standard number of pieces are paid wages at lower rate than prevailing rate i.e. worker is penalized for his inefficiency.

III. Read the following text and answer the questions given below:

Tasty Ice Creams Ltd. is a very famous company in Indore and has many branches in different parts of the dty. They also have major expansion plans as they expect that their customers will increase in number in the next two years. Tasty Ice Creams Ltd. produces a variety of ice-creams which are extremely popular in the city and one brand of ice-cream ‘Magic’ sells the most.

Thus, the company undertakes the maximum production for ‘Magic’
and it contributes to their revenue to the extent of 25% and has the largest market share. The company has undertaken different strategies to ensure that they remain the market leader in Indore. One of the methods it follows is Differential Piece Wage System to differentiate between efficient and inefficient workers. It is so because the company believes that in this way its inefficient workers would be encouraged to perform better and improve their productivity.

This will motivate them to be at par with the efficient workers. Thus, Tasty Ice Creams Ltd. has determined the standard time and other parameters on the basis of the work-study techniques of Scientific Management. It has been determined that the standard output per worker per day is 10 units and those who made standard or more than standard will get ? 50 per unit and those below will get ? 40 per unit

Question 1.

What will be the earnings of a worker producing 15 units?

(A) ₹ 600
(B) ₹ 750
(C) ₹ 400
(D) ₹ 500
Answer:
(B) ₹ 750

Explanation:
Output is more than standard Earnings 15 units X ₹ 50 = ₹ 750

Question 2.

Such a worker producing 15 units is termed as………

(A) Efficient
(B) Inefficient
(C) Both Efficient and Inefficient
(D) Neither Efficient nor Inefficient
Answer:
(A) Efficient

Question 3.

What will be the earnings of a worker producing 7 units?

(A) ₹ 350
(B) ₹ 400
(C) ₹ 280
(D) ₹ 500
Answer:
(C) ₹ 280

Explanation:
Output is less than standard. Earnings 7 units x ₹ 40 = ₹ 280

Question 4.

Such a worker producing 7 units is termed as ………..

(A) Efficient
(B) Inefficient
(C) Both Efficient and Inefficient
(D) Neither Efficient nor Inefficient
Answer:
(B) Inefficient

IV. Read the following text and answer the questions given below:

Amisha did her MBA from IIM Bangalore and decided to begin her own company. Now she is the proprietor of ABC Foods Pvt. Ltd. which is into the production of packaged foods and beverages. She has started on a small-scale but decided that there will be separate departments for finance, marketing, production and sales in her company so that later on when the scale of operations increases, the functions and processes are streamlined.

She has plans for expansion over the next 5 years but plans to limit the major decision making powers to herself as she is yet to build a strong and reliable team. She has also worked out a fair and reasonable structure for the overall pay and compensation to be paid to the employees on the basis of a combination of various methods. She also wants to ensure that her employees stay with the company for longer durations so that the funds invested in their training do not go waste. Thus, she has taken some measures to minimize employee turnover.

Identify the principles of management that Amisha is adhering to from the following sentences given in the passage.

Question 1.

“…………… there will be separate departments for finance, marketing, production and sales ………..”

(A) Division of Work
(B) Discipline
(C) Scalar Chain
(D) Unity of Direction
Answer:
(A) Division of Work

Question 2.

“…………. but plans to limit the major decision making powers to herself.”

(A) Order
(B) Discipline
(C) Centralisation and Decentralisation
(D) Unity of Command .
Answer:
(C) Centralisation and Decentralisation

Question 3.

“………….. fair and reasonable structure for the overall pay and compensation to be paid to the employees…”

(A) Remuneration of Employees
(B) Discipline
(C) Esprit de Corps
(D) Stability of Personnel
Answer:
(A) Remuneration of Employees

Explanation:
Remuneration plays an important role in motivating the workers of a company. Remuneration can be monetary or non- monetary. However, it should be according to an individual’s efforts they have made.

Question 4.

“………… she has taken some measures to minimize employee turnover.”

(A) Remuneration of Employees
(B) Order
(C) Initiative
(D) Stability of Personnel
Answer:
(D) Stability of Personnel

Explanation:
An employee delivers the best if they feel secure in their job. It is the duty of the management to offer job security to their employees. So stability in tenure of personnel is good for the business.

Organising Class 12 MCQ Questions With Answers

……………….. is the process of dividing work into manageable activities and then grouping the activities which are similar in nature.

Which of the following importance of organising stimulates creativity amongst the managers?

Which of the following is not a benefit of organising?

Which of the following importance of organising reduces the workload as well as enhances productivity?

Which of the following statements is true about the organizing function of management?

Which of the following is not related to ‘Organising as a Process’?

Match the STEPS in the process of organising in Column I with the appropriate EXPLANATION in Column II.

……………… ensures that the heads of separate business units in the organisation are responsible for profit or loss of their unit and have authority over it.

Which type of organisational structures is the most suitable when the size of the organisation is large and is producing one line of product?

Which of the following is a disadvantage of divisional structure?

Which type of organisational structures is the most suitable for those business enterprises where a large variety of products are manufactured?

Which of the following is an advantage of functional structure?

Which of the following gives shape to the organisation structure?

Which of the following is true regarding Organisational Structure?

Yummy Foods Ltd. has its registered office in Lucknow, manufacturing unit in Kanpur and marketing department in Chandigarh type of organisational structure should be adopted by the company to achieve its objectives.

Match the STRUCTURE in an organisation in Column I with the appropriate EXPLANATION in Column II.

…………….. is the obligation of a subordinate to properly perform the assigned duty.

………………….. implies being answerable for the final outcome.

Which of the following importance of delegation establishes superior-subordinate relationship?

organisation is ………………….. when decision making authority is retained by higher management levels.

Which of the following statements is incorrect?

Which of the following statements is not applicable to the concept of ‘Accountability’?

“It refers to the right of an individual to command his subordinate and to take action within the scope of his position.” Which element of delegation is ‘ being referred to in the above statement?

Match the ELEMENTS of Delegation in Column I with the corresponding EXPLANATION in Column II.

Assertion (A): Identification and division of work is the first step in the process of organising. Reason (R): Organising involves identifying and dividing the work that has to be done in accordance with previously determined plAnswer

Assertion (A): Organising provides a clear description of jobs and related duties. Reason (R): Organising stimulates creativity amongst the managers.

Assertion (A): Organising leads to the proper usage of all material, financial and human resources. Reason (R): The proper assignment of jobs avoids overlapping of work and also makes possible the best use of resources.

Assertion (A): It is essential for effective performance that a proper match is made between the nature of a job and the ability of an individual. Reason (R): It is not necessary to define the work of different job positions and accordingly allocate work to variou employees.

Assertion (A): Delegation of authority allows more time for managers to concentrate on the tasks that are of higher importance for the organisation. Reason (R): Delegation allows for changing of the routine work which brings a sense of freedom.

Assertion (A): Authority refers to the official powers and position required to carry on any task. Reason (R): Accountability refers to the obligation on the part of the subordinates, to whom responsibility and authority are granted to see to it that the work is done.

Assertion (A): Responsibility arises from a superior- subordinate relationship. Reason (R): The subordinate is bound to perform the duty assigned to him by his superior.

Assertion (A): Delegation helps in developing the talents of the employees. Reason (R): Delegation does not facilitate the growth of the enterprise.

Assertion (A): Functional structure makes training of employees easier as the focus is only on a limited range of skills. Reason (R): Divisional heads are accountable for profits.

Which type of organisation structure is discussed in the above case?

What will be the outcome of Situation 2 ?

Why do you think the profit is increasing as given in Situation 3?

What will be the result of Situation 4?

“Thus, an organisational design was chosen which grouped similar activities together in order to minimize duplication of effort.” Which organisational design is being referred to in this line?

“Thus, an organisational design was chosen which grouped similar activities together in order to minimize duplication of effort.” Which step under the process of organizing is being referred to in this line?

“After identification of different activities the work was allocated to different members.” Which step does this represent in the process of organizing?

Which concept of management has been related to in the first paragraph of the case?

Which of the following advantages of decentralization have been highlighted in the above case?

Which elements of delegation have been highlighted in the second paragraph of the case? (A) Accountability

Which feature of the informal organisation has been opposed by the operations manager in the above case?

MCQ Questions for Class 12 Business Studies with Answers

Planning Class 12 MCQ Questions With Answers.

Which of the following statements is false with respect to Planning?

Which of the following is a feature of Planning?

‘It is that function of management which is considered as the base of all other functions.’ Identify the function of management stated in the above lines.

‘It involves application of high order thinking skills and intellectual faculties, involving vision and foresightedness to decide the things to be done in the future.’Which feature of Planning is stated in the above line?

‘Planning is required in all organisations, at all levels and in all departments. feature of Planning is stated in the above statement ?

Which of the following statements is true regarding planning?

Planning is deciding in advance, what to do and how to do it. The first step of planning process is :

Which of the following steps in the process of planning states that the manager is required to make certain assumptions about the future?

…………. are the anticipated environments in which plans are expected to operate.

To see whether plans are being implemented and activities are being performed according to the schedule, is a step of planning process. Identify the step.

…………….. step in the process of planning is considered as the ‘real point of decision making’.

While ‘selecting an alternative’ under the planning process, which of the following are considered?

Which of the foUowing is true with respect to the step ‘developing premises’ under the planning process?

Match the STEPS of Planning process in Column I with the appropriate SEQUENCE in Column II

Assertion (A): Planning is a primary function of management. Reason (R): Planning is required at all levels of management as well as in all departments of the organisation.

Assertion (A): Planning is a time-saving process. Reason (R): The success of an enterprise is possible only when plans are properly drawn up and implemented.

Assertion (A): Planning is futuristic. Reason (R): Planning is regarded as a forward looking function based on forecasting.

Assertion (A): Planning is pervasive at all levels of management. Reason (R): Planning is required in all types of organisations and at all levels of management.

Assertion (A): Developing Planning Premises is the primary step. Reason (R): Objectives are end results which the management wants to achieve by its operations. O Answer: Option (D) is correct.

Assertion (A): Monitoring of plans is very important to ensure that the plans are being implemented according to the schedule. Reason (R): Regular checks and comparisons of the results with set standards are done to ensure that objectives are achieved.

Assertion (A): Planning is concerned with the future which is uncertain. Reason (R): The manager is required to make certain assumptions about the future.

“In 2005, with the aim to accelerate growth the company had gone through several rounds of meetings and discussions.” What is the objective mentioned here according to the process stated here?

“The management had done effective forecast and critical thinking regarding allocation of resources to reduce wastage.” Identify the function of management mentioned here.

“In 2008, the company suffered loss in many projects due to the great recession despite taking many cost cutting measures.” Which limitation of the management process is indicated here?

“The management had taken utmost care regarding the possible outcome and timely review of the plans to achieve the set target during that hard time.” Which is the last step of the process mentioned here?

“For this purpose she set out specific goals, objectives and activities.” Which feature of planning is depicted in the statement?

“Hence, she prepared an annual plan for production, sales and marketing through sales forecasting.” Which feature of planning is depicted in the statement?

“Thus, she identified and evaluated different alternatives through which the farms could be utilized throughout the year.” Which feature of planning is depicted in the statement?

“She used her foresight and logical and systematic thinking based on analysis of all facts and examined and evaluated all the alternatives.” Which feature of planning is depicted in the statement?

MCQ Questions for Class 12 Business Studies with Answers

Business Environment Class 12 MCQ Questions With Answers

Which of the following is the feature of Business Environment?

The term ‘Business Environment’ means the sum total of:

Assertion (A): Identification and division of work is the first step in the process of organising.
Reason (R): Organising involves identifying and dividing the work that has to be done in accordance with previously determined plAnswer

Assertion (A): Organising provides a clear description of jobs and related duties.
Reason (R): Organising stimulates creativity amongst the managers.

Assertion (A): It is essential for effective performance that a proper match is made between the nature of a job and the ability of an individual. Reason (R): It is not necessary to define the work of different job positions and accordingly allocate work to variou
employees.

Assertion (A): Authority refers to the official powers and position required to carry on any task.
Reason (R): Accountability refers to the obligation on the part of the subordinates, to whom responsibility and authority are granted to see to it that the work is done.

Assertion (A): Responsibility arises from a superior- subordinate relationship.
Reason (R): The subordinate is bound to perform the duty assigned to him by his superior.

Assertion (A): Delegation helps in developing the talents of the employees.
Reason (R): Delegation does not facilitate the growth of the enterprise.

Assertion (A): Functional structure makes training of employees easier as the focus is only on a limited range of skills.
Reason (R): Divisional heads are accountable for profits.

Assertion (A): Planning is a primary function of management.
Reason (R): Planning is required at all levels of management as well as in all departments of the organisation.

Assertion (A): Planning is a time-saving process.
Reason (R): The success of an enterprise is possible only when plans are properly drawn up and implemented.

Assertion (A): Planning is futuristic.
Reason (R): Planning is regarded as a forward looking function based on forecasting.

Assertion (A): Planning is pervasive at all levels of management.
Reason (R): Planning is required in all types of organisations and at all levels of management.

Assertion (A): Developing Planning Premises is the primary step.
Reason (R): Objectives are end results which the management wants to achieve by its operations. O Answer: Option (D) is correct.

Assertion (A): Monitoring of plans is very important to ensure that the plans are being implemented according to the schedule.
Reason (R): Regular checks and comparisons of the results with set standards are done to ensure that objectives are achieved.

Assertion (A): Planning is concerned with the future which is uncertain.
Reason (R): The manager is required to make certain assumptions about the future.

Assertion (A): Changes in fashions and tastes of consumers may shift demand in the market from existing products to new ones.
Reason (R): Business environment is dynamic, i.e., it keeps on changing in consumer preferences.

Assertion (A): The business environment helps in understanding the threats which are likely to happen in the future.
Reason (R): Environmental awareness can help managers to identify various threats on time and serve as an early warning signal.

Assertion (A): Business environment includes both specific and general forces.
Reason (R): General forces such as investors, customers, competitors and suppliers affect individual enterprises directly and immediately in their day-to-day working.

Assertion (A): Economic environment includes economic policies of the Government, including industrial, monetary and fiscal policies.
Reason (R): Business enterprises in India do realise the importance and impact of the economic environment on their working.