Business Studies Solved Question Paper 2025 [AHSEC Class 12 Business Studies Solved Question Papers]

AHSEC Class 12 Business Studies Solved Question Papers

Code: 35T BUST (EN) 2025

Full Marks: 80

Pass Marks: 24

Time: Three hours

1. Answer any six questions: (1×6 = 6)

(a) Which function of management is considered as the base of all other functions?

Ans: Coordination - Because it is not a separate function of Management rather it forms a major part of all the other functions of Management. It is the base of all other function of management.

(b) Name the book authored by Henry Fayol on management.

Ans: Ans: General and industrial management in the year 1949

(c) In which year was Indian economy opened up?

Ans: 1991

(d) Mention one responsibility of a consumer under the Consumer Protection Act.

Ans: Quality conscious: while making purchase, consumer should look for quality certification.

(e) Give an example of Speciality products.

Ans: Photographic equipment with high price, Designer clothes

(f) What type of instruments are traded in the money market?

Ans: Short term financial instruments such as Call money, Commercial Papers, Certificates of deposits, Bills of exchange.

(g) What is the other name of long-term investment decision?

Ans: Capital Budgeting Decisions

(h) Grapevine is associated with which form of communication?

Ans: The network of informal communication is called grapevine.

2. Answer any four questions: (2×4 = 8)

(a) Mention any two features of planning.

Ans: Following are the features of Planning:

a) Planning contributes to objectives: Planning starts with the process of setting up the objectives. We cannot think of planning without objectives. After setting up the objectives various activities are decided which would help in the achievement of the same.

b) Pervasive: Planning is required at all levels of management. It is not a function restricted to top level managers only but planning is done by managers at every level.

(b) Write two differences between formal and informal organisation.

Ans: Distinguish between Formal and Informal Organisation.

Basis	Formal Organisation	Informal Organisation
Creation	It is created by the Management in the form of structure of authority.	It is created spontaneously by the mutual relations of the employees.
Origin	It is established because of the rules and policies of the organization.	It is established due to the social relationship.
Flow of Communication	Communication is defined. It moves according to the chain of command.	Communication can move in any direction.

(c) Write two qualities of a leader.

Ans: Qualities of a Leader:

- Physical Qualities: Good physical features like height, weight, health and look of person attract an individual. Healthy and smart leader can work hard and also induce his subordinates to work hard.

- Judgement skills: A good leader should be able to examine problems in right perspective. His judgement and decision making abilities should be superior to others.

(d) Mention two importance of control.

Ans: Importance of Controlling:

(i) Accomplishing organisational goals: The controlling function measures progress towards the organisational goals and brings to light the deviations, if any, and indicates corrective action.

(ii) Judging accuracy of standards: A good control system enables management to verify whether the standards set are accurate or not. An efficient control system keeps a careful check on the changes taking place in the organisation and in the environment and helps to review and revise the standards in light of such changes.

(iii) Making efficient use of resources: By exercising control, a manager seeks to reduce wastage and spoilage of resources. This ensures that resources are used in the most effective and efficient manner.

(e) State two importance of supervision.

Ans: Importance of Supervision

a) Planning the work: The supervisor has to determine work schedule for even and steady flow of work. If work is not properly arranged and assigned among subordinates, it may cause frustration among the subordinates.

b) Issuing orders: The supervisor issues orders and instructions to the workers for achieving coordination. In the absence of supervision, the subordinate may not understand his duties properly.

c) Providing guidance and leadership: The supervisors lead the workers of his department. He fixes production targets for them & provides them the necessary guidance for doing the work assigned to them.

(f) Explain two factors affecting the requirement of working capital.

Ans: Following factors are to be considered before determining the requirement of working capital.

- Scale of operations: There is a direct link between the scale of business and working capital. Larger business needs more working capital as compared to the small organizations.

- Credit allowed: If the inventory is sold only for cash, it requires less working capital as money is not blocked in debtors and bills receivable. But due to increased competition, credit is usually allowed. A liberal credit policy results in higher amount of debtors, so needs more working capital.

- Nature of Business: The manufacturing organizations are required to purchase raw materials, convert them into finished goods, maintain the stock of raw materials; semi-finished goods and finished goods before they are offered for sale. They have to block their capital for labour cost, material cost etc., so they need more working capital. In the trading firm processing is not performed. Sales are affected immediately after receiving goods for sale. Thus they do no block their capital and so needs less working capital.

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3. Answer any four questions: (3×4 = 12)

(a) Write any three factors affecting dividend decision.

Ans: Factors affecting dividend decision: A firm's dividend policy is influenced by the large numbers of factors. Some factors affect the amount of dividend and some factors affect types of dividend. The following are some major factors which influence the dividend policy of the firm.

1. Legal requirements: There is no legal compulsion on the part of a company to distribute dividend. However, there certain condition imposed by law regarding the way dividend is distributed.

2. Firm's liquidity position: Dividend payout is also affected by firm's liquidity position. In spite of sufficient retained earnings, the firm may not be able to pay cash dividend if the earnings are not held in cash.

3. Repayment need: A firm uses several forms of debt financing to meet its investment needs. These debts must be repaid at the maturity. If the firm has to retain its profits for the purpose of repaying debt, the dividend payment capacity reduces.

(b) Explain any three factors affecting pricing of a product.

Ans: Factors affecting price of a product

i) Cost of the product: Cost of the product is the main component of the price. No company can sell its product or service at less than the cost of the product. A Fixed and variable cost are to be considered for determining the price.

ii) The utility and demand for the product: Intensive study for the demand for product and service in the market is to be undertaken before the fixation of the price of the product. If demand is relatively more than supply, higher price can be fixed.

iii) Extent of competition in the market: It is necessary to take into consideration prices of the product of the competing firms prior to fixing the price. In case of cut throat competition it is desirable to keep price low.

(c) Mr. Hazarika has retired as the Managing Director of a manufacturing company. At what level of management was he working? Write two basic functions at that level.

Ans: Top management is the 3rd line of management, which consists of Chairman, Directors, Managing Director, General Manager and other top-level executives required to achieve the goals of the enterprise. For example: Mr. Hazarika has retired as the managing director of a manufacturing company. He is said to be working at top level of management.

The functions of top management are:

1. Determining the objectives of the enterprise: They determine both long term as well as short term objective of the enterprise.

2. Framing of plans and policies: They formulate plans and policies to achieve the desired objectives.

3. Assigning activities to different individuals: They assign jobs to different individuals working at middle level.

(d) Explain any three principles of scientific management.

Ans: Principles of Scientific management

1. Harmony in group action: This principle states that there should be cooperation between the management and the workers. In order to achieve the best possible results from the business operations, it is essential that there should be harmonious relations between the management and the workers.

2. Division of responsibility between workers and management: According to this principle there should proportionate division of the responsibility between the managers and the workers, clearly defined, and predetermined.

3. Maximum Output: Scientific Management aims for the continuous production and productivity. According to this principle management and the workers should try to increase the production at the minimum cost.

(e) Write three limitations of planning.

Ans: Limitations of Planning

1. Planning is a time consuming process: Planning is a time consuming process. It requires collection of information, its analysis and interpretation. These activities may take considerable time.

2. Planning involves huge costs: Planning is an expensive process in terms of money. When plans are drawn up, huge costs are involved in the formulation of plans. If the costs are not justified by the benefits derived from the plan, it may have adverse effect on the enterprise.

3. Planning creates rigidity: Planning leads to rigid mode of functioning for managers. This has adverse effect on the initiative to be taken by them.

(f) Explain any three rights ensured to consumers in India.

Ans: Rights of Consumers:

1. The right to safety: It refers to the right to be protected against products which are hazardous to health or life.

2. The right to be informed: Consumers have a right to be informed about the quality, quantity and price of goods or services so that they can make the right decision.

3. The right of choice: The consumer has the right to be assured of a choice of various goods and services of satisfactory quality and competitive price.

4. Answer any six questions: (5×6 = 30)

(a) Discuss briefly any five important functions of marketing.

Ans: Functions of Marketing / Marketing activities

1. Product Planning: It involves development and commercialisation of new products, the modification of existing lines and discontinuation of unprofitable products.

2. Packaging: The main purpose of packaging is to preserve the quality and quantity of the contents during storage and transit. Besides, it has tremendous advertisement value, and facilitates the sale of a product. Example: Sachet packing has created a revolution in the shampoo industry.

3. Product Pricing: Product Pricing is an important component of marketing. Pricing decisions affect all the parties involved in production, distribution, selling, and consumption of goods. Price affects the volume of sales and profit.

4. Advertising and Sales Promotion: Advertising is a paid method of business communication to the prospective customers and the main objective is to promote the products. Sales promotion includes activities such as demonstrations, displays, dealer schemes that stimulate purchases by dealers/consumers. The marketing manager has to take decisions regarding the advertisement/sales promotion activities.

5. Distribution: Distribution includes distribution channel, area coverage, channel remuneration, warehousing, inventories, banking and transportation.

(b) Explain the various steps involved in a controlling process.

Ans: Following are the steps of controlling process:

(i) Setting Performance Standards: the first step of controlling is to set performance standards. Standards are those criteria s on the basis of which the actual performance is measured. Thus, standards serve as benchmarks towards which an organization strives to work. Standards can be set in both quantitative as well as qualitative terms.

(ii) Measurement of Actual Performance: the second step in the controlling process is the measurement of actual performance. The measurement of actual performance is done on the basis of pre-determined standards. The measurement of actual performance tells the manager whether the work has been done according to the plan or not.

(iii) Comparison of Actual Performance with Standards: At this step, actual performance is compared with the standards and deviations are found out.

(iv) Analyzing Deviations: Deviations are examined the light of pre-determined Deviation Tolerance Limits. If the deviations are within limits they can be avoided. But if they cross the limits, they should be reported to the higher level managers without any delay. There are two important principles regarding this:

(a) Principle of Critical Point Control: According to this principle, those activities should be determined in the very outset which have an important role to play in ensuring the actual work progress in accordance with the plans. These are known as Key Result Areas – KRAs. It means that the managers should not be involved in small insignificant activities but should pay more attention to those activities where unfavourable results can cause heavy loss to the enterprise.

(b) Management by Exception; Management by exception, is an important principle of management control based on the belief that an attempt to control everything results in controlling nothing. Thus, only significant deviations which go beyond the permissible limit should be brought to the notice of management.

(v) Taking Corrective Action: The last but the most important step in the controlling process is taking corrective action. By now the deviations and their causes become known. Now is the turn of removing the hurdles in the actual work progress. The purpose of corrective action is to bring the actual work progress to the level of expected progress.

(c) Explain briefly the various money market instruments.

Ans: Money market is the short term security market. Following are the instruments dealt in money market.

a) Treasury bills: T-bills short term government security ranging from 14 days to 364 days issued by RBI on behalf of the government to meet its short-term financial needs. No fixed interest in payable on Treasury bills. Normally TBs are issued at the lowest interest rate agreed on competitive bidding. These bills are negotiable instruments and freely transferable.

b) Commercial Paper: Commercial papers are unsecured promissory notes issued by highly creditworthy companies to raise funds for short term. It usually has a maturity period of 15 days to one year. CPs are normally issued at a discount and redeemed at par.  The commercial banks and mutual funds are the main investors of commercial papers.

c) Call money and short notice money: Call money refers to money given for a very short period ranging from 1 day to 7 days. Surplus funds of the commercial banks and other institutions are usually given as call money. Banks are the borrowers as well as lenders for the call funds. If the loan is given for one day and can be called back on demand, it is called money at call but if the loan cannot be called back on demand and will require 3 days’ notice, it is called money at short notice. Money at short notice can be of maximum 14 days.

d) Certificate of deposit (CD): Certificate of deposit is a time deposit having a maturity period from 91 days to 12 months. CDs are issued only by a bank. It is a bearer certificate which is freely transferable and can be sold in secondary market. Banks are not allowed to discount these documents.

e) Commercial bills: These are the trade bills which are drawn at the time of credit sales by the Drawer (Supplier) and accepted by the Drawee (Debtor). It is an acknowledgment of debt normally having a maturity period of 90 days. It is a negotiable instrument and can also be endorsed from one person to another.  It can also be discounted with the bank before maturity.

(d) Explain how coordination is an essence of management.

Ans: Coordination, no doubt is the essence of management because all the managerial functions cannot be completed without proper coordination. It makes coordination as the soul of managerial operations. The significance of co-ordination can be verified by the fact that management experts such as Henry Fayol, R.C. Davis and Allen regard co-ordination as separate function of management. Coordination aims at creating harmonious relationship between departments, employees, manager and between workers and management. Effective coordination results in unity of action, In spite of individual differences. It also results in integrated and balanced development, avoids overlapping and duplication of work and creates thrilling atmosphere of mutual confidence and co-operation. This is why; coordination is rightly said as the essence of management. Coordination exists in every function of management which is discussed below: (Process of coordination)

a) Coordination through Planning: Planning facilitates coordination by integrating the various plans through mutual discussion, exchange of ideas. e.g., Coordination between finance budget and purchases budget.

b) Coordination through Organizing: Coordination is very important at the time of organising. It is necessary when a manager groups or departments and assigns various activities to his subordinates or the departmental head.

c) Coordination through Staffing: A manager should bear in mind that the right number of personnel in various positions with right type of education and skills are taken which will ensure right men on the right job.

d) Coordination through Directing: The purpose of giving orders, instructions and guidance to the subordinates is served only when there is a harmony between superiors and subordinates.

e) Coordination through Controlling: Manager ensures that there should be coordination between actual performance and standard performance to achieve organizational goals.

Now we can conclude that all the functions of management are affected by coordination. Hence coordination is essential for achieving the objectives of the organisation. It is also required for the survival, growth and profitability of the organisation. Coordination encourages team spirit, gives right direction, motivates employees, and makes proper utilisation of resources. Therefore, Coordination is rightly called the "Essence of Management".

(e) Discuss the key components of business environment.

Ans: The business environment can be classified into two major categories:

- Economic environment (VVI – 2010, 2011, 2013, 2014, 2017)

- Non-economic environment

ECONOMIC ENVIRONMENT: Economic environment consist of Grosse national product, corporate profits, inflation rate productivity, employment rates, interest rates, debt and spending economic environment has stronger influence over organization policies and action. The survival and success of each and every business enterprise depend fully on its economic environment. The three main factors/components that affect the economic environment are:

a) Economic Conditions: The economic conditions of a nation refer to a set of economic factors that have great influence on business organisations and their operations. These include gross domestic product, per capita income, markets for goods and services, availability of capital etc.

b) Economic Policies: All business activities and operations are directly influenced by the economic policies framed by the government from time to time. Some of the important economic policies are: Industrial policy, Fiscal policy, Monetary policy, Foreign investment policy, Export –Import policy (Exim policy)

c) Economic System: The world economy is primarily governed by three types of economic systems, viz., (i) Capitalist economy; (ii) Socialist economy; and (iii) Mixed economy. India has adopted the mixed economy system which implies co-existence of public sector and private sector.

d) Economic Planning: The management of national economy must begin with national level economic planning within the framework provided by the general economic policy of the government. An economic planning is a mechanism for allocation of available resources and encourages efficient decision making process in an economy to achieve pre-determined objectives of plans like increasing growth rate, reducing inflation, creating employment, obtaining self-sufficiency etc. A government plays an important role as it has the authority of drafting and implementing financial plans keeping in mind the interest of various business industries and social welfare.

e) Regional economic groups: They promote cooperation and free trade among members by removing tariff and other restrictions. They provide opportunities to member countries and threats to non-member counties. Examples are: SA ARC: South Asian Association for Regional Cooperation. ASIAN: Association of South East Asian Nations. EU: European Union.

NON-ECONOMIC ENVIRONMENT: Non-economic environment refers to social, cultural, political, legal, technological factor etc. that have a significant effect on the business activities of our country. The various elements of non-economic environment are as follow:

(a) Social Environment: The social environment of business includes social factors like customs, traditions, values, beliefs, poverty, literacy, life expectancy rate etc. The businessman cannot overlook the components of social environment of social environment as these components may not have immediate impact on the business but in the long run the social environment has great impact on the business.

(b) Political Environment:  This includes the political system, the government policies and attitude towards the business community and the unionism. The political environment has immediate and great impact on the business transactions so businessman must scan this environment very carefully. All these aspects have a bearing on the strategies adopted by the business firms.

(c) Legal Environment: This refers to set of laws, regulations, which influence the business organisations and their operations.  Every business organisation has to obey, and work within the framework of the law. The important legislations that concern the business enterprises include Companies Act, 1956; Foreign Exchange Management Act, 1999; The Factories Act, 1948 etc. Besides the above legislations, Provisions of the Constitution and Judicial Decisions are also form part of the legal environment of business.

- Recent changes in India legal environment:

- Deregulation of capital market.

* Removal of control from the foreign exchange market

- Delicensing policy of industries.

(d) Technological Environment: Technological environment include the methods, techniques and approaches adopted for production of goods and services and its distribution. In the modern competitive age, the pace of technological changes is very fast. Hence, in order to survive and grow in the market, a business has to adopt the technological changes from time to time. The recent technological changes of the Indian market are:     2018

- Shift from steam locomotives to electric engines.

- Shift from typewriter to word processors.

- Shift from demand of vacuum tubes to transistors.

(e) Demographic Environment: This refers to the size, density, distribution and growth rate of population. All these factors have a direct bearing on the demand for various goods and services.

(f) Natural Environment:  The natural environment includes geographical and ecological factors that influence the business operations. These factors include the availability of natural resources, weather and climatic condition, location aspect, topographical factors, etc. Business is greatly influenced by the nature of natural environment.

(f) Discuss five principles of Management evolved by Henry Fayol.

Ans: Fayol suggested the following 14 principles:

1. Division of work: According to this principle the whole work must be divided into small tasks instead of assigning the whole task to one person. Division of work is important for reducing work burden of an employee and improves his skills. This helps an individual to get specialization in his area of expertise and thereby improves the productivity of an individual.

2. Authority and Responsibility: Authority is the right to issue command and make decisions. Responsibility is obligation towards organization and decisions made. According to this principle, there must be balance in authority and responsibility. If there is no authority, he cannot fulfill his responsibility and if an individual has an authority he must have equal responsibility.

3. Discipline: Discipline is important for the success of an organization. According to this principle, there must be rules and regulations for systematic working in the organisation and both subordinate and superior must follow these rules. There must be good employee-employer relationship. Employees must obey orders and employer must provide good leadership.

4. Unity of command: According to this principle of Fayol, every employee should receive orders and instructions from one boss and he should be responsible and accountable to him only. This principle will be violated if an employee is asked to receive orders from more than on superior.                       (2009), 2017, 2022

5. Unity of Direction: According to this principle “One unit means objective and one plan. There must be one plan for an organization at a time and should be directed by one manager using the same plan. This principle leads to good coordination in the organisation.              (2011), 2017, 2023

(g) Discuss briefly the importance of Delegation.

Ans. Delegation of authority is necessary in all types of organizations. Reasons can be seen through the importance. The importance of delegation of authority may be outlined as follows:

1. Reduced workload of managers: Delegation of authority permits a manager to share his workload with his subordinates. By passing on the routine work to the subordinates, the manager is able to concentrate on policy matters and decision-making. This would increase his effectiveness.

2. Effective management: The manager who delegates’ authority can perform much more than the one who does not. This is because the manager can get some work done by his subordinates and is able to concentrate on policy matters and decision-making. This would increase his effectiveness.

3. Motivation of employees: Delegation implies grant of authority to the subordinates along with responsibility for work. As a result, subordinates have a sense of recognition. They are motivated to work for higher performance.

4. Employee development: As a result of delegation, employees get more opportunities to utilize their talent. It allows developing those skills which will improve their career prospects.

5. Reduce the work load of managers: Managers can reduce their workload by sharing their responsibilities and work with the subordinates.

(h) Discuss the elements of directing.

Ans: Four Elements of directing are Supervision, leadership, Motivation and communication:

a) Supervision means instructing, guiding, monitoring and observing the employees while they are performing jobs in the organisation. The word supervision is the combination of two words i.e., super+vision where super means over and above and vision means seeing.

b) Leadership means influencing the behaviour of the people at work towards realising the specified goals.  It is the ability to use non-coercive (no force) influence on the motivation, activities and goals of others in order to achieve the objectives of the organisation.

c) Motivation is a process of stimulating people to action to achieve desired goal. It is psychological term. It comes automatically from inside the employees as it is the willingness to do the work.

d) Communication means exchange of messages between two or more persons. These messages could mean idea, opinions, facts, information, instructions and anything that conveys a meaning. These may be conveyed in words, pictures, and actions or gestures. In the words of Newman, Summer & Warren, “communication is an exchange of facts, ideas, and opinions by two or more persons.”

5. Answer any three questions: (8×3 = 24)

(a) Define financial management. What are the objectives of financial management? (2+6)

Ans: Business Finance or Financial management refers to that part of the management activity which is concerned with the planning, raising, controlling and administration of the funds used in the business. Its main objective is to use the funds of the business in the most appropriate way.

In simple words we can say financial management refers to “Efficient acquisition of finance, efficient utilisation of finance and efficient distribution and disposal of surplus funds for smooth working of company.”

Objectives of financial management:

Efficient financial management requires existence of some objectives or goals because judgment as to whether or not a financial decision is efficient is to be made in light of some objective. The two main objectives of financial management are:

1) Profit Maximisation: It is traditionally being argued, that the objective of a company is to earn profit, hence the objective of financial management is profit maximisation. Each alternative is to be seen by the finance manager from the view point of profit maximisation. Profit maximization causes the efficient allocation of resources in competitive market condition and profit is considered as the most important measure of firm performance.

2) Wealth maximisation: The second objective of financial management is wealth maximization. The concept of wealth in the context of wealth maximization objective refers to the shareholders’ wealth as reflected by the price of their shares in the share market. Therefore, wealth maximization means maximization of the market price of the equity shares of the company. The objective of wealth maximization implies long-run survival and growth of the firm.

In addition to the above, there are some other objectives of financial management which are stated below:

- Financial management helps in ensuring the regular supply of funds to the related concern.

- Financial management ensures the optimum utilization of funds.

- It helps in investing in safe areas, so that the great R.O.I. can be achieved.

- Financial management helps in planning a good Financial Structure. There should be maintained a fair balance between the debt and Equity Capital.

(b) What is marketing mix? Explain four leading elements of marketing mix. (2+6)

Ans: Marketing mix refers to one of the major concept in modern marketing. According to Philip kotler “marketing mix is a set of controllable marketing variables that the firm blends to produce the response it wants in the target market”. It is the combination of four controllable variables which constitutes the company’s marketing system. The four controllable variables are:

a) The product

b) The price structure

c) The promotional activities

d) The distribution system

However, as marketing evolved and became more consumer-focused, three additional elements were introduced, especially in the service sector. These include People, Process, and Physical Evidence, expanding the traditional 4 Ps to 7 Ps of Marketing. Each of these elements plays a crucial role in formulating effective marketing strategies, ensuring customer satisfaction, and driving business success. These elements are inter-related and inter dependent since decisions in one area usually actions in other area.

4+3 P’s of Marketing Mix:

1. Product: Product is one of important part of marketing mix because it reflects the good or bad reputation of any organization.  The products represent any business efficiently.  Successful organizations always search out the buying habits of their customers and designed their products based on those buying habits in order to meet the customer’s requirements. They also design their products based on important factors such as purchasing power and geographical locations etc.  

2. Price: It is the worth of product on which customers are agreed to buy the products.  Price of the product should be according to the range of regular customers.  Prices are fluctuating according to seasonal requirements. Marketers always try to satisfy their clients at any cost.  

3. Place: Products always design based on geographical place because customers buy products according to their traditions and seasons.  Companies which are going to spread their business networks throughout the world must visit the place where they want to open their branches. They need to study the traditions and seasonal changes of the country where they want to initialize their products.

4. Promotion: Promotion activities involve marketing and advertising.  Promotional activities are used to create awareness about the products.  Customers know about products and their specification through social marketing media. Companies adopt social marketing media in order to create awareness about their products and services.  Promotional activities and techniques are important if companies initialize new products or make some changes in product’s specifications. Promotional activities include advertising, selling, public relations and sales promotions.  

5. People: People refer to the employees and staff members of an organization who interact with customers and contribute to service delivery. In the service sector, customer satisfaction is heavily dependent on the attitude, skills, and behavior of employees. Well-trained and motivated staff can enhance customer experience and build a positive brand image. Businesses must invest in employee training, customer service excellence, and team development to ensure that employees effectively represent the company’s values and goals.

6. Process: Process refers to the systems and procedures involved in delivering a product or service to customers. A well-structured process ensures efficiency, consistency, and customer satisfaction. It includes steps such as order processing, payment methods, service delivery, and customer support. Companies must streamline their operations to provide a seamless customer experience, reduce waiting times, and enhance service quality. Efficient processes contribute to brand trust and customer loyalty.

7. Physical Evidence: Physical evidence refers to the tangible and visual aspects that reinforce a company’s brand identity and assure customers of the quality of its products or services. It includes elements such as store layout, website design, packaging, uniforms of employees, and customer testimonials. In service-based industries, where intangible products are offered, physical evidence plays a crucial role in building credibility and influencing consumer perception. A well-designed store, professional branding, and positive customer feedback enhance consumer trust and satisfaction.

(c) What is communication? Explain the different barriers to effective communication. (2+6)

Ans: Communication means exchange of messages between two or more persons. These messages could mean idea, opinions, facts, information, instructions and anything that conveys a meaning. These may be conveyed in words, pictures, and actions or gestures.

In the words of Newman, Summer & Warren, “communication is an exchange of facts, ideas, and opinions by two or more persons.”

According to Keith Davis, “Communication is the process of passing information and understanding from one person to another.”

Barriers to effective communication:

The barriers to communication in an organization may be broadly categorized into following groups:

a) Physical Barriers: There are the environmental factors that also reduce the sending and receiving of communication, such as physical distance, noises and other interferences difficulty arises in communicating a message.

b) Socio-psychological or personal Barriers: There are certain socio psychological factors which restrict the free flow of communication. They are the attitude and opinions, status consciousness, one’s relations with fellow workers, seniors, and junior’s etc. family background.

c) Organizational Barriers: Organisational barriers arise due to defects in the organization structure and the communication system of an organization. Such barriers include hierarchical distance, diversion, status barriers, goal conflicts etc. 

d) Semantic Barriers: Semantic means the relationships of signs of their reference. Semantic barrier arises from the disadvantages of the symbolic system. Symbols have got number of meaning and one has to choose any one of them according to the requirement of communication.

e) Mechanical Barriers: Mechanical barriers include inadequate arrangement for transmission of news, facts and figures. Example poor office layout and defective procedure and the use of wrong media led to poor communication.

(d) What is staffing? What are the various steps involved in staffing process? (2+6)

Ans: Meaning: It is the process of management which is concerned with obtaining and maintaining a satisfactory and satisfied work force. It involves finding the right person for the right job having the right qualification, doing the right job at the right time.

In the words of French Wendell, “Staffing or Human resource management is the recruitment, selection, utilisation and motivation of human resource of the organisation”.

Steps involved in Staffing Process:

1) Enumerating man power requirement: Staffing process begins with the estimation of man power requirement which means finding out number and type of employees need by the org. in future.

2) Recruitment: After man power planning, the manager tries that more and more people should apply for the job so that the org. can get more choice and select better candidates.

3) Placement and Orientation: Placement refers to placing the right person on the right job for which he is selected. Orientation refers to introducing the new employees with the existing employees.

4) Selection refers to choosing the most suitable candidate to fill the vacant job position. It is a negative process because a number of candidates are rejected under it.

5) Training and Development: The process of training helps to improve the job knowledge and skill of the employees. Training and Development not only motivate the employees but these improve efficiency of work also.

6) Performance Appraisal: At this step the capability of the employees is judged and for that his actual work performance is compared with the work assigned to him. Performance and career planning: It is a process through which employees get better salary, status, position and also get promotion to higher post.

7) Compensation: For deciding the compensation the works are evaluated. Compensation must be reasonable and related with the work.

(e) Discuss the significance of motivation in business. (8)

Ans: Motivation is a process of stimulating people to action to achieve desired goal. It is psychological term. It comes automatically from inside the employees as it is the willingness to do the work.

In the words of Dubin,” Motivation is the complex of force starting and keeping a person at work in an organisation.”

Features of Motivation:

a) It is a psychological phenomenon which generates within an individual.

b) Motivation can be positive or negative. Positive motivation is done giving incentives, rewards or promotions. Negative motivations are based on force or fear.

c) Motivation produces goal directed behaviour.

d) Motivation is dynamic and continuous process.

e) Motivation is mainly based on needs.

Importance of motivation within organisation is given below:

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 employee’s 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 situation 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.

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✅ Conclusion

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