4. Technology Up gradation: In certain industries, assets become obsolete sooner. Consequently, their replacements become due faster. Higher investment in fixed assets may, therefore, be required in such cases. 5. Growth Prospects: Higher growth of an organisation generally requires higher investment in fixed assets. 6.Diversification: A firm may choose to diversify its operations for various reasons, With diversification, fixed capital requirements increases. 7. Financing Alternatives: A developed financial market may provide leasing facilities as an alternative to outright purchase. Availability of leasing facilities, thus, may reduce the funds required to be invested in fixed assets, there by reducing the fixed capital requirements. Such a strategy is specially suitable in high risk lines of business. 8. Level of Collaboration: At times, certain business organisations share each other’s facilities. For example, a bank may use another’s ATM or some of them may jointly establish a particular facility. Such collaboration reduces the level of investment in fixed assets for each one of the participating organisations. Net working capital may be defined as the excess of current assets over current liabilities. FACTORS AFFECTING WORKING CAPITAL REQUIREMENTS 1. Nature of Business: Trading Organisations – Less working capital Manufacturing Organisations – more working capital 2. Scale of Operations: Large scale organizations – more working capital Small scale organizations – less working capital 3. Business Cycle: Boom period - more working capita Depression period - less working capital 4. Seasonal factors: Peak season – more working capital Lean season – less working capital 5. Production cycle: Longer production cycle – more working capital Shorter production cycle – less working capital 6. Credit allowed: Conservative/strict credit policy – less working capital Liberal credit policy – more working capital 7. Credit availed: If credit is available easily from suppliers - less working capital If credit is not available easily from suppliers – more working capital 8. Operating efficiency: If current asses are managed efficiently – less working capital If current assets are not managed efficiently – more working capital 9. Availability of Raw Material: Easy and timely availability of raw material – less working capital Difficulty and lengthy time period are involved in getting raw materials – more working capital
CHARACTERISTICS OF GOOD BRAND NAME : Simple and short Easily pronounceable Suggestive Distinctive VARIOUS LEVELS OF CHANNELS OF DISTRIBUTION Direct channel / Zero level channel Indirect channels One level channel – Manufacturer to Retailer Two level channel – Manufacturer to Whole Saler to Retailer Three level channel – Manufacturer to Agent – Wholesaler – Retailer - Consumer FUNCTIONS OF PACKAGING : Protection Identification Convenience FUNCTIONS OF LABELLING : Identification Classification Promotion ADVANTAGES OF BRANDING : Brand name helps in advertising in easier way Brand name establishes the permanent identify of the product. Brand name promotes repurchasing. Competition becomes easier with the help of brand loyalty.
KEY/MARKING SCHEME 1. Management is a dynamic function. 1M 2. It aims at eliminating unnecessary diversity of products. 1M 3. Coordination 1M 4. Subordination of Individual Interest to General Instruct. 1M 5. Training 1M 6. The company might have ignored ‘Personality Tests’ as part of their Selection Process. 1M 7. Infosys company needs less working capital; because it is a service industry. There is no manufacturing activity. 1M 8. No, trading on equity is possible only when the rate of return is higher than the rate of interest on debt capital. In case of losses or low profits, it is not possible. 1M 9. ‘HallMark’ 1M 10. No, He is not consumer as per the Consumer Protection Act. He didn’t pay any fees or money for the service provided. 1M 11. ‘Strategy’ . It provides the broad contours of an organisation’s business. It will also refer to future decisions defining the organisations direction and scope in the long run. 3M
{OR} 6 Differences between formal & informal communication. {6*1 =6 marks} 27.6 points on process of staffing {6*1 = 6 marks} {OR} Training – its benefits to the employees & the organization 6 points {6*1 = 6 marks} 28. Any 6 barriers to communication. {6*1 = 6 marks} [OR] Six measures to make communication effective. {6*1 = 6 marks} 29. Meaning of W.C --[2 MARKS] four factors explained – [4 marks] {2+4=6} [OR] Meaning of fixed capital – 2 marks four factors affecting fixed capital -- 4 marks {2+4=6} 30.[i] Rebate [ii]refund [iii] premium /product combination [iv] quantity deals/gifts [v]lucky draw [vi]usable benefits {6*1 = 6 marks] {OR} [I]Durable goods – explanation with example. [ii] Consumer goods [iii] specified goods. {3*2 =6 marks} MODEL QUESTION PAPER WITH KEY Time allowed : 3 hours Maximum Marks : 100 General Instructions: 1. Answer to questions carrying 1 mark may be from one word to one sentence. 2. Answer to questions carrying 3 marks may be from 50 - 75 words. 3. Answer to questions carrying 4 - 5 marks may be about 150 words. 4. Answer to questions carrying 6 marks may be about 200 words. 5. Attempt all parts of question together.
1. List any two organisational objectives of management. 1 2. Give anyone reason why principles of management do not provide readymade solution to all managerial problems. 1 3. Volvo Ltd.’s target is to produce 10,000 shirts per month at a Cost of Rs. 100/- per shirt. The Production Manager achieved this target at a cost of Rs. 90/- per shirt. Do you think the ‘Production Manager’ is effective? Give one reason in support of your answer. 1 4. State the objective of ‘Method Study’. 1 5. Give anyone limitation of internal sources of recruitment. 1 6. Name the method of training in which trainees learn on the equipments they will be using. 1 7. Name the financial decision which will help a business man in opening a new branch of its business. 1 8. “Cost of debt” is lower than the cost of “Equity share capital”. Give reason why even then a company can not work only with the debt. 1 9. Which Act of Consumer Protection provides for the formation of ‘Consumer Protection Councils’ in every district and the State of the country? 1 10. Why consumer protection is important for consumers? Give anyone reason. 1 11. What is meant by ‘Planning’ ? List any two features of planning. 3 12. Explain by giving any three reasons why delegation is important in an organisation. 3 13. Explain when and why the need is felt for having a framework, within which managerial and operating tasks are performed to accomplish desired goals. Name this ‘framework’ also. 3 14. Explain the following money market instruments: 3
(a) Treasury Bill (b) Commercial Paper 15. What is meant by ‘Production concept’ of marketing? 3 16. Explain “Policy” and “Procedure” as types of plans. 4 17. Ayasha Ltd., assured their employees that inspite of recession no worker will be retrenched from the job. 4 (i) Name and explain the type of incentive offered to the employees. (ii) Explain one more incentive of the same category. 18. Explain the meaning and the objective of Financial Management. 4 19. State any four advantages of formal organisation. 4 20. Explain the following ‘Rights’ of Consumers: 4 (i) Right to Safety (ii) Right to Choose 21. Is ‘management’ a full fledged ‘profession’? Give any three reasons in support of your answer. 5 22. (i) Name and explain the principle of management which requires judicious application of penalties by the management. (ii) Name and explain the technique of scientific management which helps in establishing interchangeability of manufactured parts and products. 2½ + 2½ = 5 23. Explain any five impacts of Government Policy changes on Business and Industry in India. 5 24. State any five functions of ‘Stock Exchange’. 5 25. ‘An important task in the marketing of goods relates to designing the label as it provides useful and detailed information about the product.’ In the light of the above statement draw a label for a ‘liquid soap’ and highlight the important information to be provided on it. 5 26. Explain the process of staffing. 6 OR
(c) Career advancement opportunity (d) Job enrichment (e) Employee recognition programme (f) Employee participation (g) Employee empowerment. 18 Q. Explain the meaning and the objective of Financial Management. Ans. Financial Management is concerned with management of flow of funds and involves decisions relating to procurement of funds, investment of funds and distribution of earnings. OR Financial Management may be defined as planning, organising, directing and controlling the financial activities of an organisation. Objective of Financial Management: The objective of financial management is to maximize shareholders wealth i.e. to maximize the market price of equity shares of the company This is because a company’s funds belong to the shareholders and the manner in which these are invested and the return earned on them determines the market value or price of shares. 19 Q. State any four advantages of formal organisation. Ans. Advantages of formal organisation (Any four): 1. It is easier to fix responsibility. 2. It avoids duplication of efforts. 3. It maintains unity of command 4. It leads to effective accomplishment of goals. = 4 marks 5. It provides stability to the organisation. 20 Q. Explain the following rights of the consumers:
1. Earnings are a major determinant of dividend decision as dividends are paid out of current and past earnings. 2. Stability of earnings is another factor affecting dividend decision as a company having stable earnings is in a position to declare higher dividends. 3. Companies generally prefer to maintain stability of dividends while taking dividend decision. 4. If a company has good growth opportunities, it pays out less dividend. 5. A good cash flow position is necessary for declaration of dividend. 6. Shareholder’s preference is kept in mind by the management before declaring dividends. 7. Taxation policy affects the dividend decision as a higher dividend distribution tax will lead to lesser dividend payout. 8. The possible stock market reaction on the share price to dividend policy is one of the important factors affecting dividend decision. 9. While taking dividend decision, companies take into consideration their access to capital market. 10. Certain provisions of the Companies Act i.e. legal constraints place restrictions on payout of dividend. 11. While taking dividend decision, companies keep in mind the restrictions imposed by the lenders i.e. contractual constraints. OR Financing decision is the decision about the quantum of finance to be raised from various long term sources and how much is to be raised from each source. Factors affecting financing decision are (Any four): 1. Cost of different sources of finance as some sources may be cheaper than others. 2. Risk associated with different sources of finance is different. 3. Higher the floatation costs, less attractive the source. 4. A stronger cash flow position may make debt financing more viable than funding through equity. 5. With higher fixed operating costs, lower fixed financing costs should be opted for.