Business Studies 2015 CBSE [ Delhi] Set 2
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‘Indian Logistics’ has its own warehousing arrangements at key locations across the country. Its warehousing services help business firms reduce their overloads, increase efficiency and cut down distribution time.
State with reason, whether the working capital requirements of ‘Indian Logistics’ will be high or low?Marks:1
Indian logistics is a part of service industry where it does not need to maintain any inventory. Hence, the requirement of working capital would be low. It shall only be incurring the costs of salary, electricity, other overheads, etc. which are common to every organisation.
‘Beauty Products Ltd’ is a natural and ethical beauty brand famous for offering organic beauty products for men and women. The company uses plant based materials for its products and is No. 1 beauty brand in the country. It not only satisfies its customers but also believes in overall protection of the planet.
Identify the marketing management philosophy being followed by ‘Beauty Products Ltd.’Marks:1
The focus of ‘Beauty Products Ltd.’ is on customer’s needs and well-being of Society. The Company follows Societal Concept of marketing.
On Sonika’s birthday her mother gave her a pair of gold earrings. After one month Sonika observed that the ear-rings are losing their shine. She checked the mark in the earrings and found that it was not a proper Hallmark and her mother had been cheated by the shopkeeper. So, she filed a complaint in the district forum which rejected it. Not satisfied by the decision of district forum, she was very much disturbed and after 2 months decided to appeal further.
Can Sonika appeal against the decision of the district forum? Give reasons in support of your answer.Marks:1
No, Sonika cannot appeal againt the order of district forum as the stipulated time frame for making the appeal before state commission is 30 days of passing the order. In this case, that time period has already passed.
How does management help in achieving personal objectives? State.Marks:1
By providing motivation and leadership, management helps individuals to develop team spirit, cooperation and commitment towards their group and hence achieve personal objectives.
Alliance Ltd. is engaged in manufacturing plastic buckets. The objective of the company is to manufacture 100 buckets a day. To achieve this, the efforts of all departments are co-ordinated and interlinked and authority-responsibility relationship is established among various job positions.
There is clarity on who is to report to whom.
Name the function of management discussed above.Marks:1
The function of management discussed here is ‘Organising’.
Explain how ‘cost of debt’ affects the choice of capital structure of a company.Marks:1
Debt is a cheaper source of finance than equity as interest paid on it is tax deductible. Hence, if cost of debt is low, more debt can be used in the capital structure.
What is meant by 'co-ordination' in management?Marks:1
Co-ordination refers to synchronising the efforts by unifying, integrating and harmonising the activities of different departments and individuals, to achieve the organisational objectives.
Planning refers to setting objectives and targets and making action plans to achieve them
What is meant by ‘divisional structure’ of an organisation? State it’s any two advantagesMarks:3
Divisional structure refers to the organisation design which comprises of separate business units or divisions. Here, manpower is grouped on basis of different products manufactured by the firm.
Divisional structure has the following advantages:
- Product Specialisation: A divisional head becomes expert in the product that he handles and better prepared for higher roles.
- Greater Accountability: The costs and benefits accruing from a department can be easily identified and hence a divisional head can be held accountable.
‘Financial market plays an important role in the allocation of scarce resources in an economy by performing many important functions.’ Explain any three such functions.Marks:3
Following are three main functions of financial markets:
- Mobilisation of savings and channeling into productive uses: Financial markets facilitate transfer of savings from savers to investors; i.e. from households to businesses.
- Aid in price discovery: The interaction between the supply (households) and demand (business firms) helps in establishing the price of financial asset being traded in market.
- Providing liquidity to financial assets: Financial markets facilitate easy purchase and sale of financial assets, implying a greater liquidity to the asset.