Business Organisation and Management BOM Solved Question Paper' 2019, Dibrugarh University, B.Com 1st Sem Non Hons

 Business Organisation and Management BOM
Solved Question Paper 2019 (December)
COMMERCE
(Discipline Specific Course)
Paper: CC - 103
Full Marks: 80
Pass Marks: 32
Time: 3 hours

The figures in the margin indicate full marks for the questions

1. Answer the following as directed:

a) When was ‘Make in India’ concept launched?               1

Ans: September’ 2014

b) Which Policy of the Government has moved India towards globalization?        1

Ans: Industrial Policy 1991

c) “Management is what a manager does.”The statement was given by F.W. Taylor. (Write True or False)1

Ans: False, Luis Allan

d) Which function of management is considered as the base of all other functions?         1

Ans: Planning

e) Mention two organizational communication barriers in the communication process.   2

Ans: Status barriers: Status is a barrier of communication in a formal organization. Organizational interaction and communication are influenced by the status and the expectations.

Goal conflicts: Goal conflict acts as communication reducers. Different goal lead to bifurcation of interest. Due to this communication suffers.

f) Write down one difference between ‘marketing’ and ‘selling’.              1

Ans: Marketing starts and ends with the consumers. Selling starts and ends with the seller.

g) What do you mean by ‘human resources’?     1

Ans: Human resources is the set of people who make up the workforce of an organization, business sector, industry, or economy. 

2. Give short accounts on the following (any four):         4x4=16

a) Significance of Venture Capital.

Ans:

b) Importance of International Business.

Ans: Benefits of International Business: Notwithstanding greater complexities and risks, international business is important to both nations and business firms. It offers them several benefits. Growing realisation of these benefits over time has in fact been a contributory factor to the expansion of trade and investment amongst nations, resulting in the phenomenon of globalisation. Some of the benefits of international business to the nations and business firms are discussed below.

Benefits to Nations

(i) Earning of foreign exchange: International business helps a country to earn foreign exchange which it can later use for meeting its imports of capital goods, technology, petroleum products and fertilisers, pharmaceutical products and a host of other consumer products which otherwise might not be available domestically.

(ii) More efficient use of resources: International business operates on a simple principle-produce what your country can produce more efficiently, and trade the surplus production so generated with other countries to procure what they can produce more efficiently.

Benefits to Firms

(i) Prospects for higher profits: International business can be more profitable than the domestic business. When the domestic prices are lower, business firms can earn more profits by selling their products in countries where prices are high.

(ii) Increased capacity utilisation: Many firms setup production capacities for their products which are in excess of demand in the domestic market. By planning overseas expansion and procuring orders from foreign customers, they can think of making use of their surplus production capacities and also improving the profitability of their operations.

c) Scope of E-commerce.

Ans:

d) Advantages of Written Communication.

Ans: Advantages of written communication

1. Permanent Record: Written communication provides a permanent record for future reference and serves as a good guide for decision making and planning in future.

2. Precise and Accurate: The writer tries to organize his ideas logically before penning them down. As a result written communication tends to be more accurate, precise and reliable.

3. Legal evidence: Written messages provide a permanent record and as such are used as legal evidence in a court of law. Written records are more reliable and acceptance as documentary proof.

4. Wide coverage: Written communication has the widest possible coverage. It is perhaps the only means of communication when the sender and the receiver are separated by long distance.

e) Objectives of Departmentation.

Ans: It is an established fact that there is a limitation on the number of personnel an enterprise or a supervisor can directly control. This limitation of control restricts the size of the enterprise unless it divides and groups its activities into departments. Departments comprise a framework for an organisation and enables it to expand indefinitely. Departmentation aims at:

(i) Specialization of activities for efficient performance;

(ii) Simplifying the task of management within a workable span; and

(iii) Maintaining co-ordination and control of the various activities.

3. (a) Discuss about the impact of globalization and liberalization in Indian industry and trade.  11

Ans: Liberalisation and Globalisation of Indian economy through industrial policy change in 1991 have created both challenges and opportunities for the Indian business. Impact of Government Policy Changes on Business and Industry can be studied under the following heads:

Positive Impact of Liberalisation and Global

a)      Increasing competition: As a result of changes in the rules of industrial licensing and entry of foreign firms, competition for Indian firms has increased especially in service industries like telecommunications, airlines.

b)      More demanding customers: Customers today have become more demanding because they are well-informed. Increased competition in the market gives the customers wider choice in purchasing better quality of goods and services.

c)       Necessity for change: In a regulated environment of pre-1991 era, the firms could have relatively stable policies and practices. After 1991, the market forces have become turbulent as a result of which the enterprises have to continuously modify their operations.

d)      Access to Technology: Globalization has drastically, improved the access to technology. Internet facility has enabled India to gain access to knowledge and services from around the world. Use of Mobile telephone has revolution used communication with other countries.

e)      Growth of international trade: Tariff barriers have been removed which has resulted in the growth of trade among nations. Global trade has been facilitated by GATT, WTO etc.

f)       Increase in production: Globalization has resulted in increase in the production of a variety of goods. MNCs have established manufacturing plants all over the world.

g)      Employment opportunities: Establishment of MNCs have resulted in the increase of employment opportunities.

Negative Impact of Liberalisation and Global

1. Rise in demand for labor and the rise in wage rates leading to some increase in costs. 

2. Weakening power of the trade unions over labor in emerging industries and growth sectors like IT, entertainment, internet and mobile services, airlines, banking, insurance, banking services. 

3. Too much competition in the market leading to continuous pressure on raising productivity, enhancing consumer service, improving product quality, in order to survive. 

4. Voluntary retirement for many public sector units. 

5. Too many sales person chasing customers. 

6. Too many cars on the road and traffic congestion. 

7. Growth of consumerism. 

Or

(b) What do you mean by social responsibility? Discuss the social responsibilities of a business organization towards the various sections of the society.                 11

Ans: Social responsibility is the duty of businessman to help the society to solve its major problems. Every enterprise is fully connected with society. He takes many things from society in the form of raw material, work from employees and also pollute environment of society. After this, many social problems rise due to pollution. So businessman's prime duty is to support in the form of plantation near the area of factory providing free health facilities to employees and also donate some part of profit for welfare of poor community to uplift them. These days trends shows that almost all companies are taken steps for becoming responsible toward society.

Responsibility towards shareholders or owners:

Ø  To provide fair return on their investment

Ø  Ensure safety of their investment

Ø  To provide regular, accurate and full information about the business.

Responsibility towards the workers

Ø  To provide opportunities for meaningful work

Ø  Create the right kind of working conditions

Ø  Respect the democratic rights of the workers and

Ø  Ensure a fair wage deal from the management.

Responsibility towards the consumer

Ø  To provide right quality and quantity of goods and services at reasonable prices

Ø  To avoid adulteration, hoarding, dishonest and misleading advertisements.

Responsibility towards the government & community

Ø  To respect the laws of the country and

Ø  To pay taxes regularly and honestly

Ø  To act according to well accepted values of the society and to protect environment.

4. (a) Describe the place and the role of public enterprises in the mixed economy of India.         11

Ans:

Or

(b) Discuss the role of the Multinational Corporations in the economic development of a country.            11

Ans:

5. (a) “Delegation of authority is necessary in all types of organizations.” Give reasons in support of your answer.  11

Or

(b) Discuss the various steps involved in the process of organizing.        11

Ans: Steps or Process of Organising

Organization is the process of establishing relationship among the members of the enterprise. The relationships are created in terms of authority and responsibility. To organize is to harmonize, coordinate or arrange in a logical and orderly manner. Each member in the organization is assigned a specific responsibility or duty to perform and is granted the corresponding authority to perform his duty. The managerial function of organising consists in making a rational division of work into groups of activities and tying together the positions representing grouping of activities so as to achieve a rational, well coordinated and orderly structure for the accomplishment of work. The various steps involved in this process are:

a) Determination of Objectives: It is the first step in building up an organization. Organization is always related to certain objectives. Therefore, it is essential for the management to identify the objectives before starting any activity. Organization structure is built on the basis of the objectives of the enterprise. That means, the structure of the organization can be determined by the management only after knowing the objectives to be accomplished through the organization. This step helps the management not only in framing the organization structure but also in achieving the enterprise objectives with minimum cost and efforts.

b) Enumeration of Objectives: If the members of the group are to pool their efforts effectively, there must be proper division of the major activities. The first step in organising group effort is the division of the total job into essential activities. Each job should be properly classified and grouped. This will enable the people to know what is expected of them as members of the group and will help in avoiding duplication of efforts. For example, the work of an industrial concern may be divided into the following major functions – production, financing, personnel, sales, purchase, etc.

c) Classification of Activities: The next step will be to classify activities according to similarities and common purposes and functions and taking the human and material resources into account. Then, closely related and similar activities are grouped into divisions and departments and the departmental activities are further divided into sections.

d) Assignment of Duties: Here, specific job assignments are made to different subordinates for ensuring a certainty of work performance. Each individual should be given a specific job to do according to his ability and made responsible for that. He should also be given the adequate authority to do the job assigned to him.

e) Delegation of Authority: Since so many individuals work in the same organization, it is the responsibility of management to lay down structure of relationship in the organization. Authority without responsibility is a dangerous thing and similarly responsibility without authority is an empty vessel. Everybody should clearly know to whom he is accountable; corresponding to the responsibility authority is delegated to the subordinates for enabling them to show work performance. This will help in the smooth working of the enterprise by facilitating delegation of responsibility and authority.

6. (a) What is ‘motivation’? Discuss its importance in business management.    3+8=11

Ans: Motivation: The word motivation is derived from ‘motive', which means an active form of a desire, craving or need that must be satisfied. Motivation is the key to organisational effectiveness. The manager in general has to get the work done through others. These 'others' are human resources who need to be motivated to attain organisational objectives.

According to George R. Terry, "Motivation is the desire within an individual that stimulates him or her to action."

According to Berelson and Steiner “A motive is an inner state that energizes activates, or moves and directs or channels behavior goals".

According to Lills "It is the stimulation of any emotion or desire operating upon one's will and promoting or driving it to action".

According to Encyclopedia of Management  "Motivation refers to the degree of readiness of an organism to pursue some designated goals and implies the determination of the nature and locus of force inducing a degree of readiness."

Importance of Motivation

a)      High Performance: - Motivated employee’s writ put maximum efforts for achieving organisational goals. The untapped reservoirs of physical and mental abilities are taped to the maximum. Better performance will also result in higher productivity. The cost of production can also be brought down if productivity is raised.

b)      Low employee Turnover and Absenteeism: -When the employees are not satisfied with their job then they will leave it whenever they get an alternative offer. The dissatisfaction among employees also increases absenteeism. The employment training of new employees costs dearly to the organisation.

c)       Better Organisational Images: -Those enterprises which offer better monetary and non-monetary facilities to their employees have a better image among them. Such concerns are successful in attracting better qualified and experienced persons. Since there is a better man-power to development programme, the employees will like to join such organisations. Motivational efforts will simplify personnel functions also.

d)      Better Industrial Relations: -A good motivational system will create job satisfaction among employees. The employment will offer them better service conditions and various other incentives. There will be an atmosphere of confidence among employers and employees. There will be no reason for conflict and cordial relations among both sides will create a healthy atmosphere. So motivation among employees will lead to better industrial relations.

e)      Acceptability to Change: -The changing social an industrial situations will require changes and improvements in the working of enterprises. There will be a need to introduce new and better methods of work from time to time. Generally employees resist changes for fear of an adverse effect on their employment.

Or

(b) Discuss about the various styles of leadership.  11

Leadership Styles or Types of Leaders

1.       Autocratic or Authoritarian Style leader:An autocratic also known as authoritarian style of leadership implies wielding absolute power. Under this style, the leader expects complete obedience from his subordinates and all decision-making power is centralized in the leader. No suggestions or initiative from subordinates is entertained. The leader forces the subordinates to obey him without questioning. An autocratic leader is, in fact, no leader. He is merely the formal head of the organisation and is generally disliked by the subordinates who feel comfortable to depend completely on the leader.

Advantages:

a)      Reduced stress due to increased control

b)      A more productive group ‘while the leader is watching’

c)       Improved logistics of operations

d)      Faster decision making

Disadvantages:

a)      Short-termistic approach to management.

b)      Manager perceived as having poor leadership skills

c)       Increased workload for the manager

d)      People dislike being ordered around

e)      Teams become dependent upon their leader

2.       Laissez-faire or Free-rein Style Leader:Under this type of leadership, maximum freedom is allowed to subordinates. They are given free hand in deciding their own policies and methods and to make independent decisions. The leader provides help only when required by his subordinates otherwise he does not interfere in their work. The style of leadership creates self-confidence in the workers and provides them an opportunity to develop their talents. But it may not work under all situations with all the workers, may bring problems of indiscipline. Such leadership can be employed with success where workers are competent, sincere and self-disciplined.

Advantages:

a)      No work for the leader

b)      Frustration may force others into leadership roles

c)       Allows the visionary worker the opportunity to do what they want, free from interference

d)      Empowers the group

Disadvantages:

a)         It makes employees feel insecure at the unavailability of a manager.

b)         The manager cannot provide regular feedback to let employees know how well they are doing.

c)          Managers are unable to thank employees for their good work.

d)         The manager doesn’t understand his or her responsibilities and is hoping the employees can cover for him or her.

3.       Democratic or Participative Style leader:The democratic or participative style of leadership implies compromise between the two extremes of autocratic and laissez-fair style of leadership. Under this style, the supervisor acts according to the mutual consent and the decisions reached after consulting the subordinates. Subordinates are encouraged to make suggestions and take initiative. It provides necessary motivation to the workers by ensuring their participation and acceptance of work methods. Mutual trust and confidence is also created resulting in job satisfaction and improved morale of workers. It reduces the number of complaints, employee's grievances, industrial unrest and strikes. But this style of leadership may sometimes cause delay in decisions and lead to indiscipline in workers.

Advantages

a)      Positive work environment

b)      Successful initiatives

c)       Creative thinking

d)      Reduction of friction and office politics

e)      Reduced employee turnover

Disadvantages:

a)      Takes long time to take decisions

b)      Danger of pseudo participation

c)       Like the other styles, the democratic style is not always appropriate. It is most successful

d)      when used with highly skilled or experienced employees or when implementing operational changes or resolving individual or group problems.

4.       Paternalistic Style leader: This style of leadership is based upon sentiments and emotions of people. A paternalistic leader is like a father to these subordinates. He looks after the subordinates like a father looks after his family. He helps guides and protects all of his subordinates but under him no one grows. The subordinates become dependent upon the leader.

7. (a) What do you mean by ‘Product life-cycle’? Explain briefly the different stages of product life-cycle. 3+9=12

Ans: Product Life Cycle

A product is like a human being. It is born, grows up fast, matures and then finally passes away. Product life cycle is the stages through which a product or its category bypass. From its introduction to the marketing, growth, maturity to its decline or reduce in demand in the market. Not all products reach this final stage, some continue to grow and some rise and fall. In short, The PLC discusses the stages which a product has to go through since the day of its birth to the day it is taken away from the market.

However, the basic difference in case of human beings and products is that a product has to be killed by someone. Either the company (to bring better products) or by competition (too much external competition). There are several products in the market which have lived on since ages (Light Bulbs, Tubelights), whereas there are others which were immediately taken off the shelf (HD DVD).


Product Life Cycle

Thus the Product life cycle deals with four stages of a products life.

Stages of Product life cycle:

A) Introduction: The stage 1 is where the product is launched. A product launch is always risky. You never know how the market will receive the product. There have been numerous failures in the past to make marketers nervous during the launch of the product. The length of the introduction stage varies according to the product.

If the product is technological and receives acceptance in the market, it may come out of the introductory phase as soon as it is launched. Whereas if the product is of a different category altogether and needs market awareness, it may take time to launch.

Characteristics of Introductory stages of Product life cycle

Ø  Higher investment, lesser profits

Ø  Minimal Competition

Ø  Company tries to Induce acceptance and gain initial distribution

Ø  Company needs Promotions targeted towards customers to increase awareness and demand for product

Ø  Company needs Promotions targeted towards channel to increase confidence in the product

B) Growth: Once the introductory phases are over, the product starts showing better returns on investment. Your customers and channels begin responding. There is better demand in the market and slowly the product starts showing profits.

This is a stage where competition may step in to squash the product before it has completely launched. Any marketing mistakes done at this stage affect the product considerably as the product is being exposed to the market and bad news travels fast. Thus special care has to be taken in this stage to ensure competition or bad decisions do not affect the growth stage of the product.

Characteristics of Growth stage of Product life cycle

Ø  Product is successfully launched

Ø  Demand increases

Ø  Distribution increases

Ø  Competition intensifies

Ø  Company might introduce secondary products or support services.

Ø  Better revenue generation and ROI

C) Maturity stage: One of the problems associated with maturity stages in a technologically advanced environment is the problem of duplication. Not only is the product available in duplicate markets, but also there are several competing products which arise with the same features and capabilities. As a result, the USP’s of the product become less attractive.

Along with competition, Penetration pricing becomes a weapon for competitors. Competitors sell products with the same features at lesser prices thereby trying to penetrate in the market. Nonetheless, The sales of a product (especially sales from return customers) is at its peak point during the maturity stages. The growth of sales may be lesser, but the sales revenue of the organization is maximum during the maturity stage of product life cycle.

Characteristics of Maturity stages of Product life cycle

Ø  Competition is high

Ø  Product is established and promotion expenditures are less

Ø  Little growth potential for the product

Ø  Penetration pricing, and lower profit margins

Ø  The major focus is towards extending the life cycle and maintaining market share

Ø  Converting customers product to your own is a major challenge in maturity stage

D) Decline: 1 product, 10 competitors, minimum profits, huge amount of manpower and resources in use – A typical scenario which a product might face in its last stage. In this stage the expenditures begin to equal the profits or worse, expenses are more than profits.

Thus it becomes a typical scenario for the product to exit the market. It also becomes advantageous for the company as the company can use resources it was spending on the declining product on an altogether different project.Characteristics of Decline stages of Product life cycle

Ø  Market is saturated

Ø  Sales and profits decline

Ø  Company becomes cost conscious

Ø  A lot of resources are blocked in rejuvenating the dead product.

Strategies for the differing stages of the Product Life Cycle

A) Introduction: The need for immediate profit is not a pressure. The product is promoted to create awareness. If the product has no or few competitors, a skimming price strategy is employed. Limited numbers of product are available in few channels of distribution.

B) Growth: Competitors are attracted into the market with very similar offerings. Products become more profitable and companies form alliances, joint ventures and take each other over. Advertising spend is high and focuses upon building brand. Market share tends to stabilise.

C) Maturity: Those products that survive the earlier stages tend to spend longest in this phase. Sales grow at a decreasing rate and then stabilise. Producers attempt to differentiate products and brands are key to this. Price wars and intense competition occur. At this point the market reaches saturation. Producers begin to leave the market due to poor margins. Promotion becomes more widespread and use a greater variety of media.

D) Decline: At this point there is a downturn in the market. For example more innovative products are introduced or consumer tastes have changed. There is intense price-cutting and many more products are withdrawn from the market. Profits can be improved by reducing marketing spend and cost cutting.

Or

(b) Discuss the nature and objectives of human resource management.                               6+6=12

Ans: Meaning and Definition of Human Resource Management (HRM)

Human Resource Management (HRM) can be defined as the set of programs, functions, and activities designed and performed in order to maximize both employee as well as organizational effectiveness. It is a management function that helps organization in recruiting, selecting, training, developing and managing its members. HRM is concern with the management of people in the organization from Recruitment to Retirement.

Nature/Characteristics of HRM

Human Resource Management is a process of bringing people and organizations together so that the goals of each are met. The various features of HRM include:

1.       Universal in nature: It is pervasive in nature as it is present in all enterprises. It is universal and affects all levels of management.

2.       It is a management Discipline: HRM Involves the Application of Management Functions and Principles. The functions and principles are applied to acquiring, developing, maintaining and providing remuneration to employees in organization.

3.       Continuous: Human resource management is a continuous process. It cannot be practised one hour or one day or one week. It requires constant and continuous awareness of human relations and their importance in every day operations.

4.       Directed towards achievement of objectives: It helps an organization meet its goals in the future by providing for competent and well-motivated employees.

5.       Development oriented: It tries to help employees develop their potential fully. It encourages employees to give their best to the organization. It tries to put people on assigned jobs in order to produce good results.

6.       Multi-disciplinary activity: HRM Functions are not confined to Business Establishments Only but applicable to non-business organizations such as education, health care, recreation and like.

7.       Integration: HRM tries to build and maintain cordial relation between people working at different levels in the organisation. Decisions on different aspects of employees must be consistent with other human resource (HR) decisions.

8.       Decisions Made Influence the Effectiveness of an Organization: Effectiveness of an organization will result in betterment of services to customers in the form of high quality products supplied at reasonable costs.

Objectives of HRM

The primary objective of HRM is to ensure the availability of competent and willing workforce to an organization. The specific objectives include the following:

1) Human capital : Human resource management assist the organization in obtaining the right number and types of employees to fulfill its strategic and operational goals.

2) Developing organizational climate: It helps in creating a climate in which employees are encouraged to develop and utilize their skills to the fullest and to employ the skills and abilities of the workforce efficiently.

3) Helping to maintain performance standards and increase productivity through effective job design; providing adequate orientation, training and development; providing performance-related feedback; and ensuring effective two-way communication.

4) Helping to establish and maintain a harmonious employer/employee relationship

5) Helping to create and maintain a safe and healthy work environment

6) Developing programs to meet the economic, psychological, and social needs of the employees and helping the organization to retain the productive employees

7) Ensuring that the organization is in compliance with provincial/territorial and federal laws affecting the workplace (such as human rights, employment equity, occupational health and safety, employment standards, and labour relations legislation). To help the organization to reach its goals

8) To provide organization with well-trained and well-motivated employees

9) To increase the employees satisfaction and self-actualization

10) To develop and maintain the quality of work life

11) To communicate HR policies to all employees.

12) To help maintain ethical polices and behavior.

The above stated HRM objectives can be summarized under four specific objectives: societal, organizational, and functional and personnel.

1)      Societal Objectives: seek to ensure that the organization becomes socially responsible to the needs and challenges of the society while minimizing the negative impact of such demands upon the organization. The failure of the organizations to use their resources for the society’s benefit in ethical ways may lead to restriction.

2)      Organizational Objectives: it recognizes the role of HRM in bringing about organizational effectiveness. It makes sure that HRM is not a standalone department, but rather a means to assist the organization with its primary objectives. The HR department exists to serve the rest of the organization.

3)      Functional Objectives: is to maintain the department’s contribution at a level appropriate to the organization’s needs. Human resources are to be adjusted to suit the organization’s demands. The department’s value should not become too expensive at the cost of the organization it serves.

4)      Personnel Objectives: it is to assist employees in achieving their personal goals, at least as far as these goals enhance the individual’s contribution to the organization. Personal objectives of employees must be met if they are to be maintained, retained and motivated. Otherwise employee performance and satisfaction may decline giving rise to employee turnover.

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