Nature & Significance of management

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  • Q1

    (a) Explain any three types of training that can be given to an employee. [3]

    (b) What is Branding? Give any three advantages of branding to the marketers.[4]

    (c) Explain the various steps involved in the process of organising. [5]


    (a) Three types of training that can be given to an employee are:

    (b) Vestibule Training –Vestibule training is an off the job training method where employees are trained in an actual work environment in a class room where employees use the same materials and equipment. Employees learn their jobs on the equipment they would be using, but the training is conducted away from the actual work floor. Though expensive, vestibule training allows employees to get a full feel of doing their task without the real world pressures.
    This is usually done when the employees are required to handle expensive machinery and equipment.

    (c) Internship Training – Internship is an opportunity to integrate career related experience into undergraduate education by participating in a planned, supervised work. It is a joint programme of training in which educational institutions and business firms join together to impart training.
    Candidates while carrying on their studies also work in factory or office to acquire practical knowledge.
    d) Induction Training – This training is given to a new employee for a few hours or a few days. Its purpose is to help a new employee settle down quickly into the job by becoming familiar with the people, the surroundings, the job and the business. An effective induction programme includes organisation’s goals, mission, vision, rules, procedures, policies such as promotion, health etc., terms and conditions of employment.

    (b) Branding refers to the process of creating and assigning a distinctive identity to a product through a name or symbol so that it is imprinted on the minds of a consumer.

    Following are the advantages of branding to marketers:
    i. Product Differentiation – It acts as means of distinguishing a product from the rival products and helps a firm in securing and controlling the market for its product.
    ii.Ease of introduction of a new product – A new product introduced under an already established and known brand is likely to get a good response from customers.

    iii.Wider market: Branding helps to widen the market. Product can be sold by description.

    (c) Organising is a process of bringing together physical, financial and human resources and establishing productive relations among them for the achievement of specific goals. Organising is concerned with building up a stable framework or structure of various interrelated parts of an enterprise, each part having its own function and being centrally regulated.

    Organising involves following steps:

    1. Division of work – The first step in organising is to divide the total work to be done into specific jobs. Each job consists of certain related tasks which can be carried out by an individual.

    2. Grouping jobs and departmentation – The second step in organising is to combine or group similar or related jobs into larger units called departments, divisions or sections. This grouping process is called departmentation

    3. Establishing authority relationships – The third step in the process of organising is the creation of authority relationships among the job-holders or job positions. The various members of the organisation, who perform the jobs are linked by authority responsibility relations through the process of organising.

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  • Q2

    (a) Explain any three disadvantages of borrowing funds from specialised financial institutions. [3]

    (b) Briefly explain any four types of working capital required by a business concern. [4]

    (c) Explain Maslow’s theory. [5]


    (a)Various financial institutions have been established by the government to provide finance to business organisations. These institutions provide funds to the businesses by way of loans or equity for long and medium term finance requirements.

    Disadvantages of borrowing funds from specialised financial institutions are:
    a) Businesses are required to fulfill numerous formalities and do a lot of paperwork for obtaining loans.
    b) Financial institutions may have their nominees on the Board of Directors of the borrowing company thereby restricting the powers of the company.

    c) These institutions impose certain restrictions such as restriction on dividend payment by the company, which affects free running of an organisation.

    (b) Four types of working capital are:

    Initial working capital: It is the part of permanent working capital that is required at the time of commencement of business.

    Regular working capital: This is required for the continuous business operation and represents excess of current assets over current liabilities.

    Seasonal working capital:Extra working capital required during the season. In the busy season, additional working capital is required to buy raw material and pay to labour.

    Special working capital:It is the funds required to meet future contingencies.

    (c) Motivation may be defined as the process of stimulating people to work enthusiastically for the attainment of organisational goals. It involves arousing needs and desires in people to initiate and direct their behaviour in a particular manner. Motivation is a psychological phenomenon which arouses the feeling of needs and wants of individuals. It causes a behavioural pattern which is goal oriented.

    Abraham Maslow, a psychologist, propounded the 'Maslow's Need Hierarchy Theory', which was based on human needs.

    As per Maslow, there is a hierarchy of five needs which governs human motivation:

    Physiological needs: These needs are basic for human survival and include need for food, water, air, shelter, sleep, thirst, sex etc.

    Security or Safety needs: These are the needs for physical safety as well as psychological security and include safety of person and property, security of job and need for a predictable, secure and safe environment.

    Social/ Belonging needs: These are needs for belongingness, friendship, love, affection, attention and social acceptance.

    Esteem or ego needs: These needs are needs for self esteem and need for other esteem. Self-esteem needs include needs for self-respect, self- confidence, competence, autonomy and knowledge.

    Self-actualisation needs: This is the need ‘to be what one is capable of becoming’ and includes need for optimal development of potential abilities, knowledge and skills, need to be creative and achieve self-fulfillment.

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  • Q3

    (a) Discuss the features of good packaging. [3]

    (b) Explain the advantages of equity shares, as a source of finance.


    (c) Discuss any five functions of marketing. [5]


    (a) Features of good packaging are:

    Convenient: Package should be convenient to handle, easy to open and close, etc.

    Safe: Package should be capable of protecting and covering the product.

    Build confidence: It should build customers confidence by depicting the true story on it.

    Distinguished: It should provide distinct status to the product.

    Economical:It should be economical in relation to value of product.

    (b) Equity shares are a source of long term funds for a company. The capital raised from issue of equity shares in called 'owner's funds'. The shareholders receive dividend on the basis of earnings of the company. They bear the risk and reward of ownership.

    Followings are the advantages of issuing equity shares:

    1. Higher Returns: If an investor wants to earn extra returns on his investments, he should opt for equity shares. After giving a fixed amount on the securities having fix charges, whole of remaining profits are available for equity shareholders.

    2. No Fixed Burden: Payment of dividends to the equity shareholders is not compulsory for a company, as there is no fixed rate of return on equity shares. That is why equity shares are considered less risky in comparison to fixed charge securities from the company’s point of view.

    3. Permanent Capital: Equity shares provide a permanent capital to a company. A company can utilise the funds acquired by issuing equity shares into long term projects. It is to be repaid only in case of liquidation of a company, after all the claims of creditors have been paid off.

    4. Credit Worthiness: Equity capital is a base for any company. It provides credit worthiness to the company and confidence to prospective loan providers. A company’s capacity to raise loan increases with the issue of equity shares.
    5. No Charge on Assets: Equity shares are issued without creating any charge on the assets of the company. Thus, the assets of a company are free to be mortgaged for the purpose of borrowings, if required.
    6. Democratic Control: Holders of equity shares have the right to vote in company's meetings and thus can affect the decisions. Equity shareholders have control over the company democratically.

    (c) Functions of marketing can be categorized as:
    i. Buying & Assembling-Buying means procurement of raw materials, components & finished products. It involves several activities such as determination of needs, selecting the sources of supply, ascertaining the suitability of goods, negotiating the terms of purchase etc.
    Assembling involves collection of goods already purchased from
    different sources at one common place.It reduces the costs of transportation & handling. It widens the market & enables producers to secure higher prices.

    ii. Marketing Research- It refers to systematic gathering, recording, and analysing of data about the marketing problems to facilitate decision making. It helps in determining the actual needs, tastes & preferences of customers.

    iii. Product Planning and Development-It refers to designing & planning the product as per the needs & demand of the customer.A good design of product improves the product’s performance and provides competitive edge in the market.

    iv. Pricing- It refers to the process of determining the price of a product or service. It includes crucial decisions like determining pricing strategies, setting the pricing objectives, determination & change in prices.

    v. Selling and Distribution- Selling is a process of finding the customers, creating demand & transferring the goods for value or money. It involves negotiating terms of sale, sales forecasting and choice of channel of distribution.It makes use of advertising & sales promotion activities.

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  • Q4

    Write short notes on the following:

    (a) Meaning and Elements of Product Mix. [4]

    (b) Core banking solutions. [4]

    (c) Coordination, as the essence of management. [4]


    (a) Product mix is a combination of various features related to the product to be offered for sale. Elements of product mix are:

    Branding:Branding can be defined as the process of using a name, term, symbol, or design individually or in some combination, for identification of a product. Branding creates a distinct identity of the product, helps in advertising of the product and also eases the introduction of new products.

    Labelling:Labelling refers to designing of label required to be put on the package to provide information regarding the product’s nature, contents, price, manufacturer’s details etc.

    Packaging:Packaging refers to the act of designing and producing the container or wrapper of product in order to prevent it from any damage, spoilage, etc.

    (b): Customer is the customer of bank and not of the branch under this system. A unique ID for the CBS customer is created that provides following benefits:

    • Cash withdrawal from any of the CBS branches
    • Instant transfer of funds
    • Centralised corporate limits

    (c):Coordination is not a separate function of management but the very essence of management. It is inherent in all functions of management. It permeates entire process of management.
    i. In planning, coordination is required between the master plan of the enterprise and the plans of different departments and divisions.

    ii. During organising there should be coordination between authority and responsibility of every individual.
    iii. While staffing coordination is achieved by balancing the skills and abilities of employees with the jobs assigned to them.
    iv. While directing, supervision, motivation and leadership are used to ensure harmonious working of the organisation.
    v. During controlling, coordination is achieved by ensuring that actual results confirm to plans as closely as possible.

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  • Q5

    Answer briefly each of the questions (i) to (x).

    (i) Name the two dimensions of business environment.

    (ii) What is meant by factoring?

    (iii) What is a debit card?

    (iv) Why is management considered to be a discipline?

    (v) Explain any two sources of external recruitment used in today’s world.

    (vi) Name the four elements of directing, as a function of management.

    (vii) Distinguish between advertisement and publicity.

    (viii) Mention two types of markets, on the basis of the position of buyers and sellers.

    (ix) The producer of ‘Lime Fresh’ tea introduces ‘Buy one Get one’ scheme on all the products of ‘Lime Fresh’. Identify the promotional strategy used by the producer. State any one objective that could be met by this strategy.

    (x) Expand the following terms:

    (a) RTGS

    (b) NEFT


    (i) Two dimensions of business environment are:

    1. Social environment
    2. Legal environment

    (ii) Factoring implies raising finance through sale or mortgage of book debts. Finance companies provide finance through purchase of accounts receivable.

    (iii) Debit card is the card that a customer gets by depositing money in the bank. Cardholder has to deposit money with the issuer of the debit card.

    (iv) Management is specialized branch of knowledge that involves principles and practices of management. As a discipline, management comprises specialized functional areas such as financial management, marketing management, personnel management, etc.

    (v) Two sources of external recruitment are:
    Advertisement: Advertisement in newspapers or trade and professional journals is generally used when a wider choice is required. Advertisement gives the management a wider range of candidates from which to choose. Advertisements may be placed in leading newspapers.

    2. Employment Exchange: Employment exchanges run by the Government are regarded as a good source of recruitment for unskilled and skilled operative jobs. In some cases, compulsory notification of vacancies to employment exchange is required by law. Thus, employment exchanges help to match personnel demand and supply by serving as link between job-seekers and employers.

    (vi) Elements of directing are:

    (a) Supervision

    (b) Leadership

    (c) Motivation

    (d) Communication






    Identity of sponsor not clear

    Identity of sponsor clearly known


    Non-paid form of promotion, company doesn’t have to pay directly

    Paid from of promotion, advertiser pays to the media owners

    (viii) On the basis of the position of buyers and sellers, market can be primary or secondary.

    Primary market: where primary producers sell their agricultural products to wholesalers.

    Secondary market: where wholesalers sell their products to retailers.

    (ix) The promotional strategy used by the producer is sales promotion.

    Objective: Sales promotion inspires on-the spot buying and increases immediate sales.


    (a) RTGS is Real Time Gross Settlement. Transfer of funds takes place from one bank to another on a real time basis.

    (b) NEFT is National Electronic Funds Transfer. Transfer takes place at a particular period of time.

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