Test Unit 1(Ch- 1, 2, 3)

MM: 47 Time 1 hour 30 min

1. Sahni garments produce 20000 shirts a month at a cost of 170 per shirt. Due to a sudden rise in the
labour cost due to Diwali season, the cost of production went up to 190 per shirt. The production
manager had the option of making less than the target to save cost but he decided to meet the
target at the higher cost because they didn’t want to loose sales. Which concept of management
has the manager followed and which has he ignored? (1)
2. In an organisation sales department wants to increase the sale by 20% so sales department planned
to offer extra discounts to customers. Finance department raised objection on it as they say it will
result in loss of revenue and company may face liquidity problem. What quality of management is
lacking in the above case? (1)

3. X Ltd, a tyre manufacturing concern has been established for more than ten years. Having made
good profits in the past, company wanted to expand further and hence did not declare bonus for
the previous year. With this decision the workers got agitated but management promised that the
bonus will be declared once the projects achieves a stable position. State relevant management
principle of Fayol used by management. (1)

4. Which level of managers are responsible for coordination?(1)

5. Alia Enterprises, a company was initially producing grinders and mixers. Now, with the changing
scenario and emerging trends of working women there is a greater demand for a product which is
more efficient and a multi-tasker. On analyzing the situation, the company decided to penetrate
into the market for producing Food Processor.
a. Which feature of management is highlighted here?
b. Which level of management will take this decision? (1)
6. Successful organisations do not achieve their goals by chance but by following a process. Name
the process. (1)
7. The aim of this study is to eliminate unnecessary movement so as to ensure timely completion of
work”. Which study is emphasized in above statement?(1)
8. What changes were made in the industrial policy in the recent past?(3)
9. Soni Traders is a chain of retail stores engaged in buying and selling of electronic gadgets in India.
Due to increased competition, dynamic technology, ever-changing tastes and preferences of
customers and of course turbulent political and legal environment, the survival of business is at
stake. Discuss what the managers of Sony Traders should do in response to such dynamic business
environment.(3)
10. Why is it said that knowledge of principles of management are essential for the success of an
organization?(3)
11. It is common now to see CD-ROM’s, computerized information kiosks, and Internet/ World
Wide Web multimedia pages highlighting the virtues of products. Identify dimension of business
environment related to following situations and explain (4)
12. Kolkata rice foods ltd is a big rice manufacturing firm. From the beginning of the year its sales are
falling. Being worried about the situation, the MD appointed a research committee to find the
reasons. They submitted the following report after the survey:
a. Due to increase in export duty by the government the foreign demand has gone down.
b. Due to substitutes available the attention of people has shifted from rice.
c. Some other rice manufacturing firms have imported machines which are producing better
quality rice.
d. Also the relations of their country have turned bitter with one main importing country.
Identify the dimensions of business environment identified above, by quoting the relevant lines.
Which importance of business environment has the manager missed out? (4)
13. Simmi Ltd. manufactures fashionable and designer clothes. Recently it finds that the demand for
its products has been declining. After market research it was discovered that fashion and tastes of
the consumers is changing at a fast pace. Customers' demand is increasing. New competitors have
entered the market with new designs. It is very difficult for the company to predict future
happenings. Also, it is difficult to know the extent of the relative impact of the social, economic,
political, technological or legal factors on decrease in demand of its products in the market.
A meeting was held in which managers from different functional levels heading Production,
Marketing, Finance etc, e.g. CEO, CFO, VP (Marketing) were present to discuss how to deal with
the situation. After a long discussion, it was decided that they would study and analyse the market
first to identify customer tastes and fashion and then manufacture garments accordingly. It was
also decided to increase expenditure on advertising, after- sales services etc.
a. Identify any two features of business environment by quoting the lines from the above
case.
b. Identify any two impacts of government policy changes on business, quoting lines from
the above case.
c. State the importance of understanding of environment by business managers in the light of
the above para.(5)
14. (a)One of technique given by F.W. Taylor is extension of principle given by Henry Fayol.
Identify that and explain
(b) Mohan always comes 1 hour late in the office and leave half an hour before the scheduled
time. No penal action is taken against him. Other employees also started coming late in the office.
Management is very disturbed with this and has started scolding the employees.
(1) Which management principle is being violated in the given case?
(2) Explain the principle.
(3) Mention one probable adverse consequence of violation of the given principle (3+3)
15. (a)Explain the principle of management which advocated paternalistic style of management.
(b)Suresh is working under supervisor Ramesh. Suresh always give useful ideas which have
resulted in gains for organisation but Suresh never acknowledges him and he also use to take
credit for suggestions given by Ramesh. Which Principle of management is being violated and
what values are ignored by Ramesh and what will be the consequences.(2+4)

16. M Ltd was manufacturing water heaters. In the first year of its operations, the revenue earned by
the company was barely sufficient to meet its costs. The firm had also taken no steps to ensure
proper arrangement of things, i.e. materials, tools etc and also did not have a fixed place for every
employee. This led to a fall in productivity and efficiency and wastage of time and cost. To
increase the revenue, the company analysed the reasons for less revenue. After this analysis, the
company decided to:
 To reduce labour costs by shifting the manufacturing unit to a backward area where labour was
available at a low rate.
 To start manufacturing solar water heaters and reduce the production of electric water heaters
slowly. This will not only help in covering risks, but will also help in meeting other objectives too.
 It also decided to ensure proper arrangement of things, i.e. materials, tools etc and a fixed place
for every employee to increase productivity and efficiency and minimization of wastage of time
and cost.
a. Identify and explain the objectives of management discussed above giving 3 examples of each.
b. Identify the principle of Fayol that has not been followed in M Ltd. What are the benefits of
following this principle and the adverse effects of not following this principle? (6)