Organisation of Commerce and Management
Solved Paper (Subject Code: 51) - 2024
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General Instructions
- All questions are compulsory.
- Figures to the right indicate full marks for the question.
- Figures to the left indicate question numbers.
- Answer every new question on a new page.
- F.W. Taylor was regarded as the father of scientific management.
- Start-up India is an initiative of the Government of India.
- Door-to-door service is provided by Road transport.
- For economic growth and National Security, Political stability is required.
- In India, the Consumer Protection Act was initiated in the year 1986.
| Group 'A' | Group 'B' |
|---|---|
| (a) Principle of Unity of direction | (1) Right to information |
| (b) Planning | (2) Last function of Management |
| (c) Warehousing | (3) District Name |
| (d) Consumer Right | (4) One head, one plan |
| (e) Registered brands | (5) Seller |
| (6) Basic function of management | |
| (7) Time Utility | |
| (8) General guidelines | |
| (9) Trademark | |
| (10) Place Utility |
| Group 'A' | Correct Answer from Group 'B' |
|---|---|
| (a) Principle of Unity of direction | (4) One head, one plan |
| (b) Planning | (6) Basic function of management |
| (c) Warehousing | (7) Time Utility |
| (d) Consumer Right | (1) Right to information |
| (e) Registered brands | (9) Trademark |
- Co-operation is not necessary for smooth flow of organizational activities. False
- Current Account is opened by salaried persons. False
- With the help of an outsourcing company, we can focus on core areas. True
- The seller has to recognize the rights of consumers. True
- The term market is derived from the Latin word "mercatus." True
- Selecting, training, co-ordinating, placing.
Answer: Co-ordinating - NABARD, RBI, SIDBI, EXIM
Answer: RBI - Debit card, Credit card, Aadhar card, ATM card
Answer: Aadhar card - Job security, Health and safety measures, Good working condition, Reasonable profit.
Answer: Reasonable profit - Price, People, Promotion, Product.
Answer: People
(1) Principle of Discipline: Discipline refers to obedience, good conduct, and respect for the rules and regulations of an organization. According to Henri Fayol, discipline is essential for the smooth functioning of any organization. It requires good supervision at all levels, clear and fair agreements, and the sensible application of penalties.
(2) Communication: Communication is the process of exchanging information, ideas, facts, and emotions between two or more people. It is a fundamental two-way process in management, involving a sender, a message, a channel, and a receiver, crucial for directing, coordinating, and motivating employees.
(3) Business Ethics: Business ethics are the moral principles and values that guide the actions and decisions of a business. It involves distinguishing between right and wrong in business conduct and choosing the ethical course of action, such as fair pricing, honesty, and stakeholder respect, to build long-term trust and success.
(4) Corporate Social Responsibility (CSR): CSR is a business model where a company takes responsibility for its impact on society and the environment. It involves operating ethically and contributing to economic development while improving the quality of life for its workforce, the local community, and society at large.
(5) Right to Choose: This fundamental consumer right ensures that consumers have access to a variety of goods and services at competitive prices. It protects consumers from monopolistic practices and coercive selling techniques, guaranteeing that they cannot be forced to buy a specific product or service.
(6) Market: A market is any arrangement where buyers and sellers interact to exchange goods and services for money. In a modern context, a market is not just a physical location but can also be a virtual platform (like an e-commerce site) where the forces of demand and supply determine prices.
Opinion:
- (i) Organising: Mr. Desai is performing the Organising function by arranging necessary resources.
- (ii) Directing: Mr. Lele is performing the Directing function by guiding and motivating employees.
- (iii) Co-ordinating: Mr. Sayyad is performing the Co-ordinating function by harmonizing the work of different departments.
Opinion:
- (i) Which right has been violated? The Right to Choose has been violated as he was forced into the purchase. The Right to be Heard was also violated when his complaint was denied.
- (ii) Is Mr. Ashok a buyer or an ultimate consumer? Mr. Ashok is an ultimate consumer as he purchased the shoes for personal use.
- (iii) Where can Mr. Ashok file his complaint? Since the value is ₹700, Mr. Ashok can file his complaint with the District Consumer Disputes Redressal Commission.
Opinion:
- (i) From where does Mr. A borrow money? Mr. A borrows money from a Commercial Bank.
- (ii) Name the market where Mr. A invests his funds. Mr. A invests his funds in the Capital Market (specifically, the stock market).
- (iii) Which type of currency is required for the international market? Foreign Currency (e.g., USD, EUR, JPY) is required for international trade.
| Basis | Directing | Co-ordinating |
|---|---|---|
| Meaning | The process of instructing, guiding, and motivating employees to achieve goals. | The process of integrating the activities of different units to achieve common goals. |
| Objective | To get the work done by giving instructions. | To ensure harmony and smooth functioning across departments. |
| Scope | It is one of the functions of management. | It is the essence of management, required in all functions. |
| Order | Follows Planning and Organising. | A continuous process performed alongside all other functions. |
| Basis | Road Transport | Rail Transport |
|---|---|---|
| Capacity | Limited carrying capacity, suitable for smaller loads. | Very large carrying capacity, ideal for bulky goods. |
| Flexibility | Highly flexible, providing door-to-door service. | Inflexible, operating on fixed routes and schedules. |
| Cost | Cheaper for short distances. | More economical for long distances and bulk transport. |
| Suitability | Best for perishable goods over short distances. | Best for heavy goods like coal and steel over long distances. |
| Basis | Bonded Warehouse | Duty-Paid Warehouse |
|---|---|---|
| Customs Duty | Goods are stored *before* the payment of customs duty. | Goods are stored only *after* the customs duty has been paid. |
| Control | Operates under the strict control of customs authorities. | Not under the direct control of customs authorities. |
| Purpose | Allows deferment of duty payment until goods are needed. | Functions as a regular storage facility for cleared goods. |
| Withdrawal | Goods can be withdrawn in parts after paying proportionate duty. | The entire lot of goods can be withdrawn at any time. |
| Basis | District Commission | State Commission |
|---|---|---|
| Pecuniary Jurisdiction | For claims up to ₹1 Crore. | For claims from ₹1 Crore up to ₹10 Crore. |
| Composition | A President and at least two other members. | A President and at least four other members. |
| Appeals | Appeals against its order are filed with the State Commission. | Appeals against its order are filed with the National Commission. |
| President's Qualification | Must be qualified to be a District Judge. | Must be a former Judge of a High Court. |
Henri Fayol proposed 14 principles of management. Four key principles are:
- Division of Work: Work should be divided into small tasks, with each performed by a specialist. This leads to increased efficiency and expertise.
- Authority and Responsibility: Authority (the right to give orders) must be balanced with responsibility (the obligation to perform). This ensures accountability without misuse of power.
- Discipline: This refers to obedience and respect for organizational rules. Fayol emphasized that discipline requires good leadership and clear agreements.
- Unity of Command: An employee should receive orders from only one superior. This prevents confusion, conflict, and a breakdown of authority.
An entrepreneur is an individual who creates a new business. Four key characteristics are:
- Innovator: Entrepreneurs constantly seek new ideas, products, or processes to create value and gain a competitive edge.
- Risk-Taker: They take calculated financial and personal risks to pursue their business vision, understanding that risk is inherent to new ventures.
- Visionary: Entrepreneurs have a clear, long-term vision for their business. This vision guides their decisions and motivates them to overcome obstacles.
- Decision-Maker: They must make frequent and critical decisions about all aspects of the business, often with incomplete information.
BPO involves contracting non-core business activities to third-party providers. Its key advantages are:
- Cost Reduction: Outsourcing reduces costs related to labor, infrastructure, and technology, as specialized providers can achieve economies of scale.
- Focus on Core Activities: It allows a company to concentrate its resources and energy on its primary business functions, improving overall strategy and performance.
- Access to Expertise: Companies gain access to specialized skills, advanced technology, and refined processes without having to build them in-house.
- Increased Efficiency: BPO providers are experts in their specific tasks, leading to higher quality, greater productivity, and faster turnaround times.
Justification: Yes, this statement is correct. Management principles provide a framework for making decisions that lead to the efficient use of physical, financial, and human resources. For example, the principle of 'Division of Work' ensures tasks are done by specialists, reducing waste. 'Science, not Rule of Thumb' promotes finding the best way to perform a job, minimizing wasted time and materials. By ensuring systematic planning, organization, and control, these principles help an organization achieve maximum output with minimum resources.
Justification: Yes, this statement is justified. Setting up an e-business typically involves lower initial investment as there is no need for expensive physical premises. The setup process is faster, as creating a website is quicker than constructing a physical store. Furthermore, an e-business is not limited by geography and can reach a global audience from day one. These factors make the entry barrier for e-business significantly lower than for traditional businesses.
Justification: Yes, this statement is correct. Allowing worker participation in management leads to numerous benefits. Workers possess valuable ground-level knowledge that can lead to better, more practical decisions. Participation increases employee motivation, morale, and commitment to the organization's goals. It also reduces resistance to change, as employees are more likely to support decisions they helped create, fostering a harmonious industrial environment.
Justification: Yes, this statement is justified. In a competitive market, branding is essential for creating a distinct identity. A strong brand helps consumers identify and remember a product, differentiating it from rivals. It builds trust and credibility by promising consistent quality. This recognition fosters customer loyalty, encourages repeat purchases, and makes marketing efforts more effective, ultimately turning a generic product into a valued asset.
Planning is the primary function of management, involving deciding in advance what to do and how to do it. Its importance is as follows:
- Provides Direction: Planning sets clear objectives, giving a unified direction to the entire organization and aligning all efforts towards common goals.
- Reduces Uncertainty: It helps managers anticipate future changes and risks, allowing them to prepare contingency plans and minimize potential disruptions.
- Promotes Innovation: As a forward-thinking process, planning encourages creativity and the exploration of new ideas to find the best course of action.
- Facilitates Decision Making: By evaluating various alternatives, planning enables rational and informed decision-making rather than relying on guesswork.
- Establishes Standards for Control: Planning provides the benchmarks against which actual performance is measured, making the controlling function effective.
E-banking (Electronic Banking) refers to banking services delivered through electronic channels. Key services include:
- Automated Teller Machine (ATM): Machines that allow customers to perform transactions like cash withdrawal, balance inquiry, and fund transfers 24/7.
- Credit/Debit Cards: Plastic cards enabling cashless transactions. Debit cards use funds from the account, while credit cards provide a short-term loan.
- Internet Banking: Allows customers to manage their accounts, transfer funds, and pay bills via the bank's website.
- Mobile Banking: An extension of internet banking through a dedicated mobile app, offering banking on the go.
- Electronic Funds Transfer (EFT): Systems like NEFT, RTGS, and IMPS that facilitate the electronic transfer of money between bank accounts.
The Consumer Protection Act grants several rights to safeguard consumer interests:
- Right to Safety: Protection against goods and services that are hazardous to health and life.
- Right to be Informed: The right to have complete information about a product's quality, quantity, and price before making a purchase.
- Right to Choose: The right to access a variety of goods and services at competitive prices, free from coercion.
- Right to be Heard: The right to have one's complaints and interests considered in appropriate forums.
- Right to Seek Redressal: The right to get relief, such as compensation or replacement, for faulty products or poor services.
- Right to Consumer Education: The right to acquire the knowledge and skills needed to be an informed and assertive consumer.
Insurance is a legal contract in which an individual or entity (the insured) receives financial protection or reimbursement against losses from an insurance company (the insurer). The insured pays a regular amount called a premium, and the insurer agrees to compensate for a specified loss, damage, or death. It is a form of risk management used to hedge against the risk of an uncertain loss.
Types of Life Insurance Policies:
- Term Insurance: A pure protection plan that provides a death benefit if the insured dies during the policy term. No benefit is paid if the insured survives the term. It offers high coverage for a low premium.
- Whole Life Policy: This policy provides coverage for the entire lifetime of the insured. The death benefit is paid to the nominee upon the insured's death.
- Endowment Policy: A dual-benefit plan combining insurance and savings. It pays the sum assured on a fixed date (maturity) or upon the insured's death, whichever is earlier.
- Money-Back Policy: A type of endowment plan that provides periodic payments (survival benefits) of the sum assured during the policy term and the remaining amount at maturity.
- Annuity (Pension) Policy: Designed for retirement, this policy provides a regular income (pension) to the insured after a certain age, in exchange for premiums paid during their working years.
- Unit Linked Insurance Plan (ULIP): A combination of insurance and investment. A portion of the premium covers life insurance, and the rest is invested in market-linked funds (equity or debt).
Marketing Mix is the set of controllable, tactical marketing tools that a company combines to produce the desired response from its target market. It encompasses all the key decisions a company makes to bring its product or service to the market.
The 7Ps of Marketing Mix are:
- Product: The good or service offered to the customer. This includes its design, features, quality, and branding.
- Price: The amount customers pay for the product. This involves pricing strategies, discounts, and payment terms.
- Place (Distribution): The channels and locations used to make the product available to customers.
- Promotion: The communication activities used to inform and persuade customers, including advertising, PR, and sales promotions.
- People: The employees and staff who deliver the service. Their skills and attitude directly impact the customer experience.
- Process: The systems and procedures involved in delivering the service, designed to ensure consistency and efficiency.
- Physical Evidence: The tangible elements that represent the service, such as the store's ambiance, website design, and staff uniforms, which help customers evaluate the service.
Glossary of Difficult Words
- Annuity
- A fixed sum of money paid to someone each year, typically for the rest of their life; a form of retirement income.
- Branding
- The process of creating a unique name and image for a product in the consumers' mind, mainly through advertising campaigns.
- Coercive
- Using force or threats to persuade someone to do something against their will.
- Corporate Social Responsibility (CSR)
- A company's sense of responsibility towards the community and environment in which it operates.
- E-business
- Any business or commercial transaction that includes sharing information across the internet.
- Entrepreneur
- A person who sets up a business, taking on financial risks in the hope of profit.
- Esprit de Corps
- A feeling of pride, fellowship, and common loyalty shared by the members of a particular group; team spirit.
- Indemnity
- A principle of insurance where the insurance company provides compensation to protect someone from financial loss.
- Jurisdiction
- The official power or authority to make legal decisions and judgments.
- Marketing Mix
- A set of marketing tools (Product, Price, Place, Promotion, etc.) that the firm uses to pursue its marketing objectives in the target market.
- Monopolistic
- A market condition where one company is the only supplier of a particular commodity or service.
- Outsourcing (BPO)
- Hiring an outside party to perform services and create goods that were traditionally performed in-house.
- Pecuniary
- Relating to or consisting of money; financial.
- Redressal
- A remedy or compensation for a wrong or grievance.
- Scalar Chain
- The line of authority or chain of command from the top management to the lowest rank.
- Unit Linked Insurance Plan (ULIP)
- A product that offers a combination of both insurance and investment, where part of the premium pays for life cover and the rest is invested in funds.
- Warehousing
- The practice or process of storing large quantities of goods prior to their sale or distribution.