1.

Planning helps in achieving the objectives of the organisation by directing resources and efforts towards the
common objectives. In the light of this statement, explain any four points on the importance of Planning.

a. Goal Achievement: Planning ensures that organizational resources and efforts are directed towards specific
objectives. It helps in setting clear goals, which guides the actions of individuals and teams towards achieving
those goals.
b. Resource Utilization: Planning involves identifying and allocating resources effectively. This prevents wastage of
resources and ensures their optimal utilization, contributing to cost-effectiveness.
c. Risk Management: Through planning, organizations can anticipate potential challenges and risks. This allows for
the development of strategies to mitigate these risks, enhancing the organization's ability to adapt to changing
circumstances.
d. Coordination and Control: Planning facilitates coordination among various departments and functions. It
establishes a framework for measuring performance against objectives, enabling effective control and
adjustment of activities to stay on course.

2. Business Environment exercises tremendous influence on the working and success of business firms. Justify this
statement by explaining any five benefits of Business Environment

a. Opportunity Identification: The business environment helps firms identify opportunities for growth and
innovation by analyzing market trends, customer preferences, and emerging technologies.
b. Risk Assessment: By understanding the business environment, firms can identify potential threats and risks. This
enables proactive risk management and strategic decision-making to mitigate adverse impacts.
c. Competitive Advantage: Awareness of the external environment allows businesses to adapt quickly to market
changes and gain a competitive edge. This adaptability is crucial for long-term success.
d. Regulatory Compliance: Understanding the regulatory environment ensures that businesses operate within
legal frameworks, avoiding legal issues and potential damage to the reputation of the organization.
e. Stakeholder Relationships: The business environment influences relationships with stakeholders, such as
customers, suppliers, and investors. Maintaining positive relationships with these stakeholders is vital for
sustainable business success.

3. State any three components of the Economic Environment

a. Economic System: The prevailing economic system, whether it is capitalist, socialist, or mixed, influences
business operations and decision-making.
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b. Economic Policies: Government policies related to taxation, trade, and monetary regulations impact businesses.
Changes in economic policies can have significant effects on the business environment.
c. Economic Indicators: Key economic indicators, such as GDP, inflation rates, and unemployment rates, provide
insights into the overall health of the economy and impact business planning and strategies.

4. Delegation is the means by which managers assign a part of their jobs to other employees and gives them the
authority to perform the assigned task. Justify this statement by providing any four advantages of delegation of
authority.

a. Workload Distribution: Delegation allows managers to distribute work among team members, preventing
overburdening and ensuring that tasks are handled by those with the appropriate skills.
b. Employee Development: Delegating tasks provides employees with opportunities to develop new skills and gain
experience, fostering their professional growth and contributing to succession planning.
c. Focus on Core Responsibilities: Managers can focus on strategic and high-priority tasks when they delegate
routine activities. This enhances overall productivity and efficiency within the organization.
d. Quick Decision-Making: Delegating authority empowers employees to make decisions within their areas of
responsibility. This results in quicker decision-making, especially in situations that require immediate attention.

5. A company has large undistributed profits which it wants to capitalise. Name and explain the security which
should be issued by the company.

When a company has large undistributed profits and intends to capitalize them, it can issue Bonus Shares. Bonus
shares are additional shares given to existing shareholders at no additional cost based on the number of shares they
already hold. The company capitalizes its undistributed profits by converting them into additional shares,
distributing them among existing shareholders in proportion to their current holdings. This increases the company's
share capital without affecting its overall financial position, and shareholders benefit from increased equity without
having to invest additional funds.

6. Effectiveness of leadership depends on the qualities of the Leader. Explain any four qualities that a good leader
should possess.

a. Visionary: A good leader has a clear vision and long-term goals for the organization. They can articulate a
compelling vision that inspires and motivates the team.
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b. Effective Communication: Communication is key to leadership. A good leader communicates clearly, listens
actively, and ensures that everyone in the team understands the goals and expectations.
c. Adaptability: Leadership often involves navigating through challenges and changes. A good leader is adaptable
and can make informed decisions in dynamic and uncertain situations.
d. Empathy: Understanding and empathizing with the team members is crucial. A leader with empathy can build
strong relationships, foster collaboration, and create a positive work environment.

7. Explain any four features of a budget

a. Financial Planning: A budget serves as a financial plan, outlining the expected revenues, expenses, and
allocation of resources over a specific period.
b. Control Mechanism: Budgets act as a control mechanism, providing a standard against which actual
performance can be compared. Deviations can be identified and corrective actions can be taken.
c. Allocation of Resources: Budgets allocate resources efficiently, ensuring that funds are distributed to various
departments and activities based on their importance and organizational goals.
d. Performance Evaluation: Budgets facilitate the evaluation of organizational performance. By comparing actual
results with the budgeted figures, management can assess the effectiveness of its strategies and make informed
decisions.

8. Differentiate between marketing and selling

9. Equity shares constitute an important part of the share capital of the company. Yet they have some pros and cons
in the business. Discuss any five disadvantages of issuing equity shares.

a. Ownership Dilution: Issuing equity shares results in the dilution of ownership for existing shareholders. The
more shares issued, the smaller the ownership percentage of each existing shareholder becomes.
b. Dividend Payments: Companies issuing equity shares are obliged to pay dividends to shareholders. This can be a
financial burden, especially during challenging economic periods when profits may be lower.
c. External Control: A large number of equity shareholders may lead to external control and influence on the
company's decision-making processes. Shareholders may demand changes in management or strategic
direction.
d. Market Price Volatility: Equity shares are subject to market forces, and their prices can be volatile. Fluctuations
in market conditions can impact the value of equity shares, affecting both investors and the company's financial
stability.
e. High Cost of Issuance: The process of issuing equity shares involves costs such as underwriting fees, legal fees,
and administrative expenses. These costs can be substantial and reduce the funds available for business
operations.

10. Preference shares are called hybrid securities in the capital market. Justify the statement by giving any three
types of Preference shares.

a. Cumulative Preference Shares: Holders of cumulative preference shares are entitled to receive unpaid dividends
from previous years before any dividends are paid to other shareholders. The unpaid dividends accumulate and
must be cleared before common shareholders receive dividends.
b. Non-Cumulative Preference Shares: In contrast to cumulative preference shares, non-cumulative preference
shares do not accumulate unpaid dividends. If the company skips a dividend payment in a particular year, the
shareholders do not have a claim on those unpaid dividends in the future.
c. Convertible Preference Shares: Convertible preference shares allow shareholders to convert their preference
shares into equity shares after a predetermined period or under specific conditions. This provides an
opportunity for investors to participate in the company's growth.

11. Both RTGS and NEFT are secure but contrasting methods of transferring money electronically. In the light of this
statement, give any three points of differences between RTGS and NEFT.
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12. Explain any four objectives of communication.

a. Information Sharing: One of the primary objectives of communication is to share information, ensuring that
relevant details are conveyed to the intended audience.
b. Influence and Persuasion: Communication aims to influence and persuade individuals or groups to adopt
specific ideas, opinions, or actions.
c. Building Relationships: Effective communication fosters positive relationships within and outside the
organization. It enhances collaboration and teamwork.
d. Decision-Making: Communication supports decision-making processes by providing necessary data, insights,
and feedback, enabling informed choices.

13. Give three points of difference between Taylor’s and Fayol’s Principles of Management.
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14. Explain any five points of importance of controlling, as a function of management.

a. Goal Achievement: Controlling ensures that organizational goals are achieved by monitoring performance
against predetermined standards and taking corrective actions when necessary.
b. Efficiency and Effectiveness: Controlling helps in evaluating the efficiency and effectiveness of operations,
ensuring that resources are utilized optimally to achieve desired outcomes.
c. Adaptability: Through regular monitoring and feedback, controlling enables organizations to adapt to changing
internal and external environments, maintaining relevance and competitiveness.
d. Decision Making: Controlling provides critical information for decision-making by identifying deviations and
allowing management to make informed adjustments to strategies and plans.
e. Employee Motivation: Fair and transparent control mechanisms contribute to employee motivation by
providing clear expectations, recognition of achievements, and a sense of accountability.

15. Mr. Raj, the CEO of a company, ‘tried to control everything in his organisation but ended up controlling nothing’.
Also, he did not focus on certain crucial areas like productivity. Briefly explain the two aspects of Controlling that
were overlooked by Mr. Raj as the CEO of the company.

a. Micromanagement: Mr. Raj's attempt to control everything suggests micromanagement, where excessive focus
on minor details can hinder overall organizational efficiency. Effective control involves overseeing key aspects
without stifling operational autonomy.
b. Neglect of Productivity: Mr. Raj overlooked the crucial area of productivity, which is a key performance
indicator. Controlling should include measures to enhance productivity and efficiency, aligning with overall
organizational goals.
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16. Management is a human activity which directs and controls the organisation and operation of a business
enterprise. In the light of this statement, explain any five objectives of Management.

a. Profit Maximization: Management aims to maximize profits to ensure the financial sustainability and growth of
the organization.
b. Employee Satisfaction: Fostering a positive work environment and ensuring employee satisfaction is a
management objective to enhance productivity and reduce turnover.
c. Customer Satisfaction: Meeting customer needs and expectations is a crucial objective, as satisfied customers
contribute to business success and long-term viability.
d. Innovation and Adaptability: Management seeks to encourage innovation and adaptability, ensuring the
organization remains competitive in dynamic markets.
e. Social Responsibility: Recognizing and fulfilling social responsibilities, such as environmental sustainability and
community engagement, is an essential objective for modern management.