The correct answer is All of the Above

Key Points

Training

• It is the systematic development of knowledge, skills and attitudes required by an individual to perform adequately a given task or job.
• Development
• It denotes the process by which the employees acquire skills and competence to do their present job and increase their capabilities for handling higher jobs in the future.

The benefits of training and development to an organization are as follows: 

1. Training is a systematic learning. It is always better than hit and trial methods which lead to wastage of efforts and money. 
2. Training enhances employee productivity both in terms of quantity and quality, leading to higher profits. 
3. Training equips the future manager who can take over in case of an emergency. 
4. Training increases employee morale and reduces absenteeism and employee turnover. 
5. It helps in obtaining effective response to fast changing environment – technological and economic.
    

The benefits of training and development activity to the employees are as follows:

1. Improved skills and knowledge due to training lead to a better career of the individual. 
2. Increased performance by the individual helps him to earn more. 
3. Training makes the employee more efficient to handle machines. Thus, less prone to accidents. 
4. Training increases the satisfaction and morale of the employees

The correct answer is Safety

Key Points
Rights of the Consumer

• Right to Safety- Before buying, a consumer can insist on the quality and guarantee of the goods. They should ideally purchase a certified product like ISI or AGMARK.
• Right to Choose- Consumer should have the right to choose from a variety of goods and in a competitive price.
• Right to be informed- The buyers should be informed with all the necessary details of the product, make her/him act wise, and change the buying decision.
• Right to Consumer Education- Consumer should be aware of his/her rights and avoid exploitation. Ignorance can cost them more.
• Right to be heard- This means the consumer will get due attention to express their grievances at a suitable forum.
• Right to seek compensation- The defines that the consumer has the right to seek redress against unfair and inhumane practices or exploitation of the consumer.

• Responsibility to be aware – A consumer has to be mindful of the safety and quality of products and services before purchasing.
• Responsibility to think independently– Consumer should be well concerned about what they want and need and therefore make independent choices.
• Responsibility to speak out- Buyer should be fearless to speak out their grievances and tell traders what they exactly want
• Responsibility to complain- It is the consumer’s responsibility to express and file a complaint about their dissatisfaction with goods or services in a sincere and fair manner.
• Responsibility to be an Ethical Consumer- They should be fair and not engage themselves with any deceptive practice

The correct answer is Pricing of security

Key Points

• A stock exchange is an important factor in the capital market.
• It is a secure place where trading is done in a systematic way. Here, the securities are bought and sold as per well-structured rules and regulations.
• Securities mentioned here includes debenture and share issued by a public company that is correctly listed at the stock exchange, debenture and bonds issued by the government bodies, municipal and public bodies

Role of an Economic Barometer:

• The stock exchange serves as an economic barometer that is indicative of the state of the economy.
• It records all the major and minor changes in the share prices. It is rightly said to be the pulse of the economy, which reflects the state of the economy.

Valuation of Securities:

• The stock market helps in the valuation of securities based on the factors of supply and demand.
• The securities offered by companies that are profitable and growth-oriented tend to be valued higher.
• Valuation of securities helps creditors, investors and government in performing their respective functions.

Transactional Safety:

• Transactional safety is ensured as the securities that are traded in the stock exchange are listed, and the listing of securities is done after verifying the company’s position. All companies listed have to adhere to the rules and regulations as laid out by the governing body.

Contributor to Economic Growth:

• The stock exchange offers a platform for trading of securities of the various companies.
• This process of trading involves continuous disinvestment and reinvestment, which offers opportunities for capital formation and subsequently, growth of the economy.

Making the public aware of equity investment:

• Stock exchange helps in providing information about investing in equity markets and by rolling out new issues to encourage people to invest in securities. 

Offers scope for speculation:

• By permitting healthy speculation of the traded securities, the stock exchange ensures demand and supply of securities and liquidity.

Facilitates liquidity:

• The most important role of the stock exchange is in ensuring a ready platform for the sale and purchase of securities.
• This gives investors the confidence that the existing investments can be converted into cash, or in other words, stock exchange offers liquidity in terms of investment.

Better Capital Allocation:

• Profit-making companies will have their shares traded actively, and so such companies are able to raise fresh capital from the equity market.
• Stock market helps in better allocation of capital for the investors so that maximum profit can be earned.

Encourages investment and savings:

• Stock market serves as an important source of investment in various securities which offer greater returns. Investing in the stock market makes for a better investment option than gold and silver.

The correct answer is By all corporates with net worth of atleast Rs. 4 crore

Key Points

• Commercial Paper (CP) is an unsecured money market instrument issued in the form of a promissory note.
• CP was introduced in India in 1990 with a view to enabling highly rated corporate borrowers to diversify their sources of short-term borrowings and to provide an additional instrument to investors.
• Guidelines for the issue of CP are presently governed by various directives issued by the Reserve Bank of India, as amended from time to time.
• In pursuance of the Statement on Monetary and Credit Policy for the Year 2000 - 2001, to keep pace with several developments in the financial markets, it has been decided to modify the guidelines in the light of recommendations made by an Internal Group.
• Accordingly, the following guidelines are issued, replacing all earlier directions/guidelines on the subject :
• Highly rated corporate borrowers, primary dealers (PDs) and satellite dealers (SDs) and all-India financial institutions (FIs) which have been permitted to raise resources through money market instruments under the umbrella limit fixed by Reserve Bank of India are eligible to issue CP.

A company shall be eligible to issue CP provided -

1. The tangible net worth of the company, as per the latest audited balance sheet, is not less than Rs. 4 crore;
2. The working capital (fund-based) limit of the company from the banking system is not less than Rs.4 crore and
3. The borrowal account of the company is classified as a Standard Asset by the financing bank/s.

• CP can be issued for maturities between a minimum of 15 days and a maximum upto one year from the date of issue. If the maturity date is a holiday, the company would be liable to make payment on the immediate preceding working day
• CP can be issued in denominations of Rs.5 lakh or multiples thereof.
• CP may be issued to and held by individuals, banking companies, other corporate bodies registered or incorporated in India and unincorporated bodies, Non-Resident Indians (NRIs) and Foreign Institutional Investors (FIIs). However, investment by FIIs would be within the 30 per cent limit set for their investments in debt instruments.

The correct answer is The business risk involved is low

Key Points

Fixed Capital

• Fixed capital refers to investment in long-term assets. 
• Management of fixed capital includes allocating a firm’s capital to different projects/assets.
• Such decisions are known as investment decisions or capital budgeting decisions. 
• These decisions affect the growth, profitability and risk of the business in the long run. 

Fixed assets should be financed through long-term sources of capital:

• Equity or preference shares  
• Debentures 
• Long-term loans 
• Retained earnings
• Examples: Purchase of land, building, plant and machinery o Launching of a new product line o Investment in advance techniques of production 
• Expenditure on advertising campaigns and research and development which have long-term implications for the organisation 

Factors affecting the requirement of fixed capital

Nature of business: 

• Nature of business is a very essential factor which helps in determining the capital requirements of a company. For example, fixed capital requirement is more in a manufacturing company than in a trading company. 

The scale of operation:

• Companies functioning on a large scale require more fixed capital than smallscale companies because large-scale companies purchase more machinery and plants for their operations and require more space. 

The technique of production: 

• When a company adopts capital intensive technology, it relies less on manual work and the requirement of fixed capital is more. On the other hand, a company based on labour-intensive technology will require less fixed capital as it makes less investments in fixed assets.

Technology upgradation: 

• When industrial upgradation takes place in the fast phase, the company requires more fixed capital for replacing old machinery with new machinery to upgrade technology. While upgradation is slow, the fixed capital requirement will be less. 

Growth prospects: 

• Companies expanding their activities to attain higher growth will require more fixed capital than companies having no such activities. 

Diversification: 

• Companies diversifying their range of production activities will require more fixed capital to produce goods. 

Availability of finance and leasing facility: 

• When companies are provided leasing facilities, they can avoid purchase of fixed assets. This leads to reduction in fixed capital requirements. 

Level of collaboration: 

• Companies which prefer collaborations will require less fixed capital as they can share available machinery with their collaborators

The correct answer is Incorporate debt in its capital structure to a greater extent

Key Points

• Capital structure simply implies a combination of different financial sources which a firm uses to raise funds. 
• There are two broad categories of sources of funds, namely borrowed funds and owner’s funds.
• Borrowed funds refer to borrowings in the form of loans, borrowings from banks, public deposits etc. In general, ‘borrowed funds’ are simply called debt.
• On the other hand, owner’s funds can be in the form of reserves, preference share capital, retained earnings etc. In general, owner’s funds can be called equity. 
• Capital structure can be simply stated as the combination of debt and equity used by a firm. 
• The capital structure of a company affects the profitability as well as the financial risk of the company. 
• It needs to be taken after considering various aspects.
• The way capital structure is framed by the company depends on three main factors—cost, risks and returns.

Cost considerations

• Debt is a cheaper source of finance than equity. The low cost of debt is because the lenders are assured of the return amount, i.e. it involves a low risk. Low risk, in turn, implies a lower rate of return. This implies a lower cost to the company. The interest to be paid on debt is tax deductible. 
• Equities are more expensive than tax as they involve flotation cost as well. Moreover, dividends paid to shareholders are not tax deductible (i.e. dividends are paid from profits after tax).

Financial risk

• Debt involves financial risk in the sense that there is compulsion to repay the debt amount in a fixed period of time. Any default in repayment may even lead to liquidation of the firm.
• In case of equity, there is no such risk as it is not mandatory to pay dividends to shareholders.

Return

• Debt offers higher return in the sense that in case of debt, the difference between cost and return is greater. Accordingly, the earning per share is greater.
• Thus, we can say that while debt is cheaper and offers higher return, it also increases the financial risk of the company. Hence, the decision regarding the capital structure must be taken after careful consideration of the factors of cost, return and risk involved

The correct answer is Preparation of a sales forecast, Preparation of financial statements, Estimation of expected profit.

Key Points

• The Financial Plan portrays all of the activities, assets, machinery, and materials that are required to accomplish these targets, within a stipulated time frame.
• Preparation of a sales forecast,
• Preparation of financial statements,
• Estimation of expected profit is the correct sequence of the financial planning process
• Financial planning is the process of taking a comprehensive look at your financial situation and building a specific financial plan to reach your goals.
• Financial planning often delves into multiple areas of finance, including investing, taxes, savings, retirement, your estate, insurance and more.
• Financial planning is the practice of putting together a plan for your future, specifically around how you will manage your finances and prepare for all of the potential costs and issues that may arise.
• The process involves evaluating your current financial situation, identifying your goals and then developing and implementing relevant recommendations.
• Financial planning is holistic and broad, and it can encompass a variety of services,
• Rather than focusing on a single aspect of your finances, it views clients as real people with a variety of goals and responsibilities.
• It then addresses a number of financial realities to figure out how to best enable people to make the most of their lives.
• Financial planning is not the same as asset management. Asset management generally refers to managing investments for a client.
• This includes choosing the stocks, bonds, mutual funds and other investments in which a client should invest their money
• Financial planning is undertaking the responsibility of deciding how a business will stand to accomplish its primary objectives and goals.

The correct answer is Financial risk

Key Points

• Financial risk is the possibility of losing money on an investment or business venture. Some more common and distinct financial risks include credit risk, liquidity risk, and operational risk.
• Financial risk is a type of danger that can result in the loss of capital to interested parties
• For governments, this can mean they are unable to control monetary policy and default on bonds or other debt issues. Corporations also face the possibility of default on debt they undertake but may also experience failure in an undertaking the causes a financial burden on the business.
• Financial risk generally relates to the odds of losing money.
• The financial risk most commonly referred to is the possibility that a company's cash flow will prove inadequate to meet its obligations.
• Financial risk can also apply to a government that defaults on its bonds.
• Credit risk, liquidity risk, asset-backed risk, foreign investment risk, equity risk, and currency risk are all common forms of financial risk.
• Investors can use a number of financial risk ratios to assess a company's prospects.

The correct answer is Controlling

Key Points

• Controlling refers to the process of evaluation and assessment of the work done. Under the process of controlling, standards are set for various tasks and activities. 
• Accordingly, the various tasks and activities are evaluated against the set standards. 
• Deviations from the set targets are identified, and corrective actions to be taken are decided. 
• controlling refers to the process of ensuring that the various activities and tasks in the organisation are carried out according to the pre-defined goals and objectives. 
• It ensures that deviations if any are identified and appropriate corrective action is taken

Importance of Controlling in an Organisation

Achieving goals:

• Controlling ensures that various activities are carried out correctly according to the plans.
• It ensures that deviations if any are identified and appropriate corrective action is taken.
• This helps the organisation to be on track and achieve its goals.

Reviewing standards:

• An effective control system ensures that the standards are set accurately.
• As the business environment changes, it ensures that the standards are also reviewed so as to adapt to the changes taking place.

Enables efficiency in resource utilisation:

• An effective control system ensures that there is minimum wastage of resources.
• In other words, it ensures that the resources are utilized optimally and in the most efficient manner.

Better motivation:

• With controlling, employees know what is expected from them and how their performance would be evaluated.
• This clarity motivates employees to perform better.

Maintain order:

• Controlling helps to keep a close watch on the activities and behavior of employees.
• In this way, it helps in maintaining order and discipline in the organisation.

Ensures coordination:

• With proper controlling, the efforts of the various departments can be unified towards the common goals and objectives of the organisation.
• The existence of predefined standards of evaluation ensures coordination in the activities of various departments

The correct answer is Unsatisfied need, tension, drives, search behaviour, satisfied behaviour, reduction of tension.

Key Points

• Motivation is an element of directing. It means the simulation, inducement or incitement a person to act in a certain way.
• Motivation pushes people to work in a way so that the targets are achieved. In an organization, motivation is very important so that people work towards achieving organizational goals.
• Many a times, people do not work to the fullest of their potential or they do not feel like doing so, this is because they lack the motivation to do so.
• When they are motivated then they get a push in right direction.
• This push element can be different things like increased salary, bonus, incentives, recognition, better working conditions, promotion etc

Process of Motivation

• Unsatisfied need. Motivation process begins when there is an unsatisfied need in a human being.
• Tension. The presence of unsatisfied need gives him tension.
• Drive. This tension creates an urge of drive in the human being an he starts looking for various alternatives to satisfy the drive.
• Search Behavior. After searching for alternatives the human being starts behaving according to chosen option.
• Satisfied need. After behaving in a particular manner for a long time then he evaluates that whether the need is satisfied or not.
• Reduction of tension. After fulfilling the need the human being gets satisfied and his tension gets reduced

The correct answer is Leadership

Key Points

• Leadership is that element of directing that involves motivation and persuasion in order to achieve the desired goals. 
• A leader is defined as a person who is able to influence other people and inspires them to follow the instructions provided.
• In other words, leadership is the act of leading, guiding, and motivating subordinates to achieve organizational goals.

Leadership:

• Leadership is that element of directing that involves motivation and persuasion in order to achieve the desired goals. 
• A leader is defined as a person who is able to influence other people and inspires them to follow the instructions provided.
• In other words, leadership is the act of leading, guiding, and motivating subordinates to achieve organizational goals

The correct answer is Option 4.

Key Points

• Staffing is the function of management which takes care of the manpower requirement of an organisation.
• In the complex business environment where rapid continuous changes take place in technology,
• Market preferences and size of organization, it becomes essentially critical to find appropriate and suitable personnel for the job.
• Thus, proper staffing is important for an organization

Staffing Process:

Manpower requirements

• The very first step in staffing is to plan the manpower inventory required by a concern in order to match them with the job requirements and demands. Therefore, it involves forecasting and determining the future manpower needs of the concern.

Recruitment

• Once the requirements are notified, the concern invites and solicits applications according to the invitations made to the desirable candidates.

Selection 

• This is the screening step of staffing in which the solicited applications are screened out and suitable candidates are appointed as per the requirements.

Orientation and Placement-

• Once screening takes place, the appointed candidates are made familiar to the work units and work environment through the orientation programs.
• Placement takes place by putting the right man on the right job.

Training and Development-

• Training is a part of incentives given to the workers in order to develop and grow them within the concern.
• Training is generally given according to the nature of activities and scope of expansion in it.
• Along with it, the workers are developed by providing them extra benefits of in-depth knowledge of their functional areas.
• Development also includes giving them key and important jobs as a test or examination in order to analyze their performances.

Performance Appraisal:

• After the employees have undergone a period of training and they have been on the job for some time, there is a need to evaluate their performance.
• All organisations have some formal or informal means of appraising their employee’s performance.
• Performance appraisal means evaluating an employee’s current and/or past performance as against certain predetermined standards.

Promotion and career planning:

• It becomes necessary for all organisations to address career related issues and promotional avenues for their employees.
• Managers need to design activities to serve employees’ long-term interests also.
• They must encourage employees to grow and realise their full potential. Promotions are an integral part of people’s career. 

Compensation: 

• All organisations need to establish wage and salary plans for their employees.
• There are various ways to prepare different pay plans depending on the worth of the job.
• Basically the price of the job needs to be determined. Compensation, therefore, refers to all forms of pay or rewards going to employees.

The correct answer is Pricing objectives

Key PointsPackaging is one of the most important functions in marketing. The task of keeping any product in container, carton, or wrapping in, binding with, or keeping in boxes etc. for freshness and protection of products is called packing. But packaging does not mean only this task. Packaging has broad meaning.

The important functions of packaging are as follows:

Containment

• To provide proper and safe container or place for keeping any product is an important function of packaging.
• The functions of designing, producing and providing containers, boxes, packets, bottles, paper, or paper-bags, or plastic bags etc. according to the nature of products to put them include in packaging.
• Suitable kind of containers or boxes are used according to the nature of products for transporting or keeping them in warehouse or in showroom.

Protection

• The main or important function and objective of packaging is to keep the products safe and fresh.
• Packaging helps to protect products from the possibility of loss, damage, decline in quantity and quality, color, size, etc. that may be caused by sun, rain, dust, insect, air and so on.
• The products are packed in proper materials to carry them from one place to another in right condition. Some cases, package increases the life span of the products.
• Glass made goods, food products and many other goods can be kept safe from crack and break, damage, decaying, adulteration etc. by packaging.

Identification

• Packaging gives short introduction of different kinds of products and their producers. Every producer or middlemen select color, size, design of container or box, and package their products in a way that they look different from competitors' products.
• This makes customers easy to identify the same-nature products of different firms. The customers can recognize and may buy the products of their favorite company or brand as soon as see the package.
• Mostly, information such as name of the product, name of manufacturing company, ingredients used the product, weight, quality of the product, its using method are printed or written on the package.

Promotion

• The other important objective and function of packaging is to promote sales of the product.
• If the product has been packaged in attractive material nicely, it plays important role in sales promotion. Attractive packaging draws attention of customers, stimulates their interest toward the product and motivates them to buy.

Prestige

• The other function of packaging is to create brand prestige of product.
• A quality product properly packaged in good material becomes prestigious.
• Even though the product is good in quality, but its packaging is not attractive, customers' attitude becomes negative towards the product itself.
• Packaging is an important function of the firm to increase reputation and prestige.

The correct answer is ​The satisfaction of customer needs

Key Points

• Marketing concept is a set of strategies that the firms adopt where they analyse the needs of their customers and implement strategies to fulfil those needs which will result in an increase in sales, profit maximisation and also beat the existing competition.
• The marketing concept has been widely used by companies all over the world in the present age, but the situation was not the same earlier.
• This concept, it is said that for an organisation to satisfy the objectives of the organisation, the needs and wants of the customer should be satisfied.
• This theory was first mentioned in Adam Smith’s book “The Wealth of Nations” in 1776 but came into widespread use only 200 years later.
• Therefore, marketing can be said as a process of acquiring customers and maintaining relations with them and at the same time matching needs and wants with the services or product offered by the organisation, which ensures that the organisation will become profitable.

Marketing concept focuses on the needs, wants and demands of customers.

• Needs: Needs are basic requirements that enable a healthy and active life. If needs are not fulfilled, it will result in the dysfunction of the system, which can result in disability or death. It can be objective as well as physical as in need of food, water and shelter.
• Wants: Wants are something that is desired by the person. These are not required for day to day functioning. Wants are not necessary for basic survival and are mostly moulded by cultural influence.
• Demands: When the needs and wants are supported by an ability to pay, it becomes a demand.

Key Points

• Decentralisation is referred to as a form of an organorganizationalcture where there is the delegation of authority by the top management to the middle and lower levels of management in an organisation.
• In this type of organisation structure, the duty of daily operations and minor decision-making capabilities are transferred to the middle and lower levels which allow top-level management to focus more on major decisions like business expansion, diversification etc.
• Delegation refers to the assigning a portion of work and the associated responsibility by a superior to a subordinate. In simple words, when delegation is expanded on an organisational level, it is called decentralisation.

Rapid decision making –

• Most of the decisions are taken on the spot, and approval from the higher authority is not required.
• The ability to make a prompt decision allows an organisation to function its operation quickly and effectively. 

Administrative development –

• The decentralisation process questions the manager’s judgement and techniques, when responsibility and challenges to develop solutions are given to them.
• This questioning method grows confidence, encourages self-reliance, and make them good decision-maker resulting in the development of the organisation.

Development of executive skills –

• It allows the employee to perform task individually, giving them invaluable exposure.
• This individual performance creates an environment where an
• individual can enhance their expertise, take ownership & more significant responsibilities, and be suitable for promotion.

Promotes growth –

• Decentralisation also allows the heads of the department to work independently.
• This independence helps the department to grow, have a healthy competition between other departments.
• Ultimately, the competition will lead to an improvement and enhancement in productivity.

Higher control –

• It also evaluates and reviews the performances of each department and gives them a comprehensive perspective of their work.
• However, controlling is the biggest challenge of decentralisation and stabilised management and scorecard are being developed.

The correct answer is Formal

Key PointsOrganisation refers to a collection of people who are working towards a common goal and objective. In other words, it can be said that organisation is a place where people assemble together and perform different sets of duties and responsibilities towards fulfilling the organisational goals.

Types of Organisation and their Structure

1. Formal Organisation
2. Informal Organisation

• Formal organisation is that type of organisation structure where the authority and responsibility are clearly defined.
• The organisation structure has a defined delegation of authority and roles and responsibilities for the members.
• The formal organisation has predefined policies, rules, schedules, procedures and programs.
• The decision making activity in a formal organisation is mostly based on predefined policies.
• Formal organisation structure is created by the management with the objective of attaining the organisational goals.

• The formal organisational structure is created intentionally by the process of organising.
• The purpose of formal organisation structure is achievement of organisational goal.
• In formal organisational structure each individual is assigned a specific job.
• In formal organisation every individual is assigned a fixed authority or decision-making power.
• Formal organisational structure results in creation of superior-subordinate relations.
• Formal organisational structure creates a scalar chain of communication in the organisation.

• Systematic Working: Formal organisation structure results in systematic and smooth functioning of an organisation.
• Achievement of Organisational Objectives: Formal organisational structure is established to achieve organisational objectives.
• No Overlapping of Work: In formal organisation structure work is systematically divided among various departments and employees. So there is no chance of duplication or overlapping of work.
• Co-ordination: Formal organisational structure results in coordinating the activities of various departments.
• Creation of Chain of Command: Formal organisational structure clearly defines superior subordinate relationship, i.e., who reports to whom.
• More Emphasis on Work: Formal organisational structure lays more emphasis on work than interpersonal relations.

• Delay in Action: While following scalar chain and chain of command actions get delayed in formal structure.
• Ignores Social Needs of Employees: Formal organisational structure does not give importance to psychological and social need of employees which may lead to demotivation of employees.
• Emphasis on Work Only: Formal organisational structure gives importance to work only; it ignores human relations, creativity, talents, etc

The correct answer is Planning

Key Points

• Planning is the function of management that involves setting objectives and determining a course of action for achieving those objectives.
• Planning requires that managers be aware of environmental conditions facing their organization and forecast future conditions
• Planning is ascertaining prior to what to do and how to do. It is one of the primary managerial duties. Before doing something, the manager must form an opinion on how to work on a specific job.
• Planning is an essential step that managers at all levels take. It needs holding on to the decisions since it includes selecting a choice from alternative ways of performance.

Importance of Planning

• Planning is definitely significant as it directs us where to go, it furnishes direction and decreases the danger of risk by making predictions.
• The significant advantages of planning are provided below:
• Planning provides directions: Planning assures that the objectives are certainly asserted so that they serve as a model for determining what action should be taken and in which direction. If objects are well established, employees are informed of what the company has to do and what they need do to accomplish those purposes.
• Planning decreases the chances of risk: Planning is an activity which permits a manager to look forward and predict changes. By determining in prior the tasks to be completed, planning notes the way to deal with changes and unpredictable effects.
• Planning decreases overlapping and wasteful activities: Planning works as the foundation of organising the activities and purposes of distinct branches, departments, and people. It assists in avoiding chaos and confusion. Since planning guarantees precision in understanding and action, work is conducted on easily without delays.
• Planning encourages innovative ideas: Since it is the primary function of management, new approaches can take the form of actual plans. It is the most challenging project for the management as it leads all planned actions pointing to growth and of the business.
• Planning aids decision making: It encourages the manager to look into the future and make a decision from amongst several alternative plans of action. The manager has to assess each option and pick the most viable plan.

The correct answer is Management should share the gain of the company with workers

Key Points

• Harmony not discord:
• According to Taylor there should not be any conflict between the managers and the workers. 
• He emphasized that there should be complete harmony between the managers and the workers. 
• Both should realize that each or-re is important to achieve the objectives of the organization
• Taylor emphasised that managers and workers should maintain a harmonious work environment.
• They should realise their interdependence and work in amity.
• He was well acquainted with the fact that a friendly working environment will help in developing relations between workers and managers.
• He introduced this principle to maintain a peaceful kinship between people.
• If workers are deprived of their wishes or demands, they generally go on strike. This affects the productivity and the working environment.
• To dismiss such a situation, Taylor was ardent about a mental revolution. It implies a change in the thinking of both workers and managers.
• For example, if a worker is having a problem with the working hours, he should talk to the manager about it, instead of letting it affect production (by going on a strike). Similarly, managers shout listen to the worker's suggestions and demands rather than ignoring them.

The correct answer is Time study

Key Points

• Time study is concerned with the determination of the amount of time required to pet form a unit of work.
• It consists of the process of observing and recording the time required to perform each element of an operation so as to determine the reasonable time in which the work should be completed.

Objectives of Time Study
The main objective of time study is to determine by direct observation, the quantum of human work in a specified task and hence to establish the standard time, within which an average worker working at a normal pace should complete the task using a specified method

The other objectives are:

1. To fix a fair output rate for workers
2. To furnish a basis of comparison for determining operating effectiveness.
3. To set labour standard for satisfactory performance.
4. To compare alternative methods in motion study in order to select the best method 
5. To determine standard costs.
6. To determine equipment and labour requirements.
7. To determine basic times/normal times.
8. To determine the number of machines an operator can handle.
9. To balance the work of operators in production or assembly lines.
10. To set the completion schedule for individual operations or jobs.
11. To determine the cycle time for completion of a job.

Advantages of Time Study
The following are the main advantages of time study:

• Output standards are easily convertible into standard labour cost per unit of output.
• Output standards serve as yardsticks guiding managerial comparisons of actual and standard hourly production rates.
• An operations manager prepares lists showing actual-to-standard output ratios for each operator and each operator’s group. These reports enable the supervisor to identify substandard workers, so that they may be brought up to standard production efficiency.
• Output standards facilitate scheduling and controlling the flow of production, through the determination of numbers of machines and operators required to maintain production schedules and through balancing line production for the several line operations.
• Output standards also facilitate evaluation of machine capacities, a knowledge of which aids plant engineers in selecting replacement machines for purchase and use.
• Time study may be taken for checking operators’ complaints about tight rates.
• Observation during a time study may enable the engineer to suggest further improvement in work methods and work-place output.
• During a time study, the engineer may note inconsistencies in motion sequences used by individual operators, leading to retraining recommendations. The men involved may then more easily attain standard output status.

Key Points

• Henry Fayol, also known as the ‘father of modern management theory’ gave a new perception of the concept of management.
• He introduced a general theory that can be applied to all levels of management and every department.
• The Fayol theory is practised by the managers to organize and regulate the internal activities of an organization.
• He concentrated on accomplishing managerial efficiency.

• Discipline
• Without discipline, nothing can be accomplished.
• It is the core value for any project or any management. Good performance and sensible interrelation make the management job easy and comprehensive.
• Employees good behaviour also helps them smoothly build and progress in their professional careers.
• Division of Work
• Henri believed that segregating work in the workforce amongst the worker will enhance the quality of the product. Similarly,
• he also concluded that the division of work improves the productivity, efficiency, accuracy and speed of the workers.
• This principle is appropriate for both the managerial as well as a technical work level.
• Authority and Responsibility
• These are the two key aspects of management. Authority facilitates the management to work efficiently, and responsibility makes them responsible for the work done under their guidance or leadership.
• Unity of Command
• This means an employee should have only one boss and follow his command.
• If an employee has to follow more than one boss, there begins a conflict of interest and can create confusion.
• Unity of Direction-
• Whoever is engaged in the same activity should have a unified goal.
• This means all the person working in a company should have one goal and motive which will make the work easier and achieve the set goal easily.
• Subordination of Individual Interest
• This indicates a company should work unitedly towards the interest of a company rather than personal interest.
• Be subordinate to the purposes of an organization.
• This refers to the whole chain of command in a company.
• Remuneration
• This plays an important role in motivating the workers of a company.
• Remuneration can be monetary or non-monetary.
• However, it should be according to an individual’s efforts they have made.
• Centralization
• In any company, the management or any authority responsible for the decision-making process should be neutral.
• However, this depends on the size of an organization.
• Henri Fayol stressed on the point that there should be a balance between the hierarchy and division of power.
• Scalar Chain
• Fayol on this principle highlights that the hierarchy steps should be from the top to the lowest.
• This is necessary so that every employee knows their immediate senior also they should be able to contact any, if needed.
• Order
• A company should maintain a well-defined work order to have a favourable work culture.
• The positive atmosphere in the workplace will boost more positive productivity.
• Equity
• All employees should be treated equally and respectfully.
• It’s the responsibility of a manager that no employees face discrimination.
• Stability
• An employee delivers the best if they feel secure in their job.
• It is the duty of the management to offer job security to their employees.
• Initiative
• The management should support and encourage the employees to take initiatives in an organization.
• It will help them to increase their interest and make then worth.
• Esprit de Corps
• It is the responsibility of the management to motivate their employees and be supportive of each other regularly.
• Developing trust and mutual understanding will lead to a positive outcome and work environment.

The correct answer is Top management

Key Points

• Management is the process of coordination and administration of tasks that is required to achieve the goals of the organization. It is also referred to as the art of making things happen with the help of resources.
• Management is required for an established life and is essential for managing all types of organization. A sound management system is the fortitude of thriving companies.
• Managing life implies getting everything done to accomplish the aspirations of life and maintaining an establishment. This means getting things done with and by other people to fulfill its objectives.

There are 3 levels in the ranking order of an establishment and they are:

1. Top-level management
2. Middle-level management
3. Lower-level management

Top Level Management

• They comprise of the senior-most executives of the company. 
• They are normally regarded as the Chairman, the Chief Executive Officer, the Chief Operating Officer, President and Vice-president
• Top management is a team consisting of managers from various operational levels, managing marketing, finance, etc., 
• These top-level managers are accountable for the progress and continuation of the establishment. 
• They investigate the trading atmosphere and its connections for the survival of the company. 
• They form the overall organizational aims and approaches for their accomplishment. 
• They are held responsible for all the pursuits of the company and for its influence on society.
•  The job of the top manager is difficult and stressful, necessitating long hours and dedication to the company
• For instance, the Chief Finance Officer (CFO), and Vice President (marketing) whose primary task is to combine various components and regulate the actions of different units according to the overall objectives of the company.

The correct answer is Personalised application

Key PointsManagement as an Art:

• Art is the experienced and personal utilisation of subsisting information to accomplish solicited outcomes.
• It can be procured via education, research and practice. 
• As art is involved with the personal utilisation of data some kind of inventiveness and creativity is needed to follow the fundamental systems acquired. 

The essential characteristics of art are as follows:

• The presence of theoretical knowledge: 
• Art assumes the presence of specific academic knowledge. Specialists in their particular fields have obtained specific elementary postulates which are appropriate to a specific sort of art. For instance, the literature on public speaking, acting or music, dancing is publicly acknowledged.
• Personalised application: 
• The application of this primary information differs from person to person. Art, hence, is a highly personalised notion.
• Based on custom and creativity: 
• Art is practical. Art includes the creative practice of subsisting intellectual knowledge. We know that music is based on 7 notes. However, what makes the style of a musician different or distinctive is his performance of these notes in an artistic way that is uniquely his own solution.

The correct answer is Fulfilling social and financial needs of the employees

Key PointsManagement is the process by which a co-operative group directs actions of others toward common goals.” Management is defined as the process of planning, organizing, and controlling an organization's operations in order to achieve the target efficiently and effectively.

• Management is accountable for establishing and attaining objectives for the company.
• It has to deliver a variety of objectives in all operations contemplating the interest of all shareholders including, stakeholders, consumers, the government, and employees.
• The principal objective of any company must be to use material and human resources to the maximum potential benefit, i.e., to meet the financial objectives of a firm. And, they are survival, profit, and growth

• It includes the establishment of benefits for the community.
• As a part of the community, every business whether it is a trade or non-trading concern has a social responsibility to meet.
• This applies to consistently generating financial value for many components of society.
• This includes using environmentally beneficial technologies of production, providing job opportunities to the disadvantaged sections of the community, and furnishing primary facilities like crèches and schools to employees.

• Establishments are made up of resources who possess different backgrounds, experiences, objectives, and personalities.
• They all become part of the establishment to meet their several demands.
• These differ from economic necessities such as ambitious perks and salaries, social obligations such as equal attention, and higher-level demands such as individual growth and progress.

The correct answer is Positive

Key Points

• Recruitment is a positive process because it involves searching for prospective employees and stimulating them to apply for the job. here, the company is making all candidates to apply for the job, hence it is a positive action.
• Recruitment is a positive process of searching for prospective employees and stimulatingthem to apply for the jobs in the organisation.
• When more persons apply for jobs then therewill be a scope for recruiting better persons.
• The job-seekers too, on the other hand, are in search of organisations offering them employment. 
• Recruitment is a linkage activity bringing together those with jobs and those seeking jobs.
• The term recruitment refers to discovering the source from where potential employees may be selected.
• The scientific recruitment process leads to higher productivity, better wages, high morale, reduction in labour turnover and enhanced reputation. It stimulates people to apply for jobs; hence it is a positive process.
• Recruitment is concerned with reaching out, attracting, and ensuring a supply of qualified personnel and making out selection of requisite manpower both in their quantitative and qualitative aspect. It is the development and maintenance of adequate man- power resources.
• This is the first stage of the process of selection and is completed with placement. 

The correct answer is All of the Above

Key Points

• Directing is one of the principal elements of management along with planning, organising and controlling.
• Directing is a very essential function which helps ensure that the employees perform to the best of their abilities and achieve the organisational goals effectively.
• The lack of a direction in an organisation will result in the employees being clueless about what to do next and will increase inefficiency, thereby resulting in a devastating impact on the business and revenue generation.

Elements of Directing
Directing as a management function comprises the following elements.

Communication:

• Communication is one of the most basic functions of management, it is the process by which a piece of information is transferred from one person to another in an organisation.
• The person who conveys the information is known as the sender and the one to whom the information is conveyed is known as the receiver.
• The purpose of communication in an organisation is to send across any set of instructions, orders or information related to the improvement of the operational efficiency.
• Communication is essential for conveying the state of performance of the employees and ways to improve them.
• Proper communication occurs when subordinates understand what was conveyed to them by the supervisor and act accordingly, whereas miscommunication occurs when the information conveyed is not clear and understandable, leading to misunderstanding and loss of performance.
• Communication can always be two sided, where the flow of information is from supervisor to subordinates and vice versa.

Supervision:

• Supervision is the next step after information is conveyed by the supervisor to the employees regarding the work that needs to be done.
• It is that stage where the supervisor oversees if the subordinates are following what has been instructed to them.
• Managers act as supervisors and they ensure that the work is going as per their instructions.
• It is the duty of a supervisor to make sure that all instructions are properly followed and the subordinates are doing as they are instructed.
• Supervisors act as problem solvers of the subordinates regarding any issues with the instructions or the process.

Motivation:

• Motivation is one of the key elements of directing. Issuing of order to the subordinates by the supervisor does not guarantee that it will be followed exactly as was asked for.
• For getting the desired outcome, the employees need to be motivated by the managers which leads to the task being completed efficiently.
• Motivation is a force that makes an individual perform to the best of his abilities in order to complete a set of tasks or instructions.
• Motivation can be in the form of monetary gains such as incentives or bonus, it can be non-monetary such as appreciation or growth.

Leadership:

• Leadership is that element of directing that involves motivation and persuasion in order to achieve the desired goals.
• A leader is defined as a person who is able to influence other people and inspires them to follow the instructions provided

The correct answer is It is an overnight loan in the Money Market

KeyPoints

Call money:

• Call money is any type of short-term, interest-earning financial loan that the borrower has to pay back immediately whenever the lender demands it.
• Call money allows banks to earn interest, known as the call loan rate, on their surplus funds.
• Call money is typically used by brokerage firms for short-term funding needs
• Call money, also known as "money at call," is a short-term financial loan that is payable immediately, and in full, when the lender demands it.
• Unlike a term loan, which has a set maturity and payment schedule,
• Call money does not have to follow a fixed schedule, nor does the lender have to provide any advanced notice of repayment.
• Call money is a short-term, interest-paying loan from one to 14 days made by a financial institution to another financial institution.
• Due to the short term nature of the loan, it does not feature regular principal and interest payments, which longer-term loans might.
• The interest charged on a call loan between financial institutions is referred to as the call loan rate.

The correct answer is Trader and Manufacturer

Key Points

• Consumer protection is the practice of safeguarding buyers of goods and services, and the public, against unfair practices in the marketplace.
• Consumer protection measures are often established by law.
• The Consumer Protection Act (CPA) seeks to protect and promote the consumers’ interest through speedy and inexpensive redressal of their grievances.
• The scope of the Act is very wide.
• It is applicable to all types of undertakings, big and small, 
• Whether in the private or public sector, or in the co-operative sector, 
• whether a manufacturer or a trader, and 
• whether supplying goods or providing services.
• The Act confers certain rights to consumers with a view to empowering them and to protect their interests
• “complaint” means any allegation in writing made by a complainant that
• an unfair trade practice or a restrictive trade practice has been adopted by any trader or service provider
• The goods bought by him or agreed to be bought by him] suffer from one or more defects;
• The services hired or availed of or agreed to be hired or availed of by him] suffer from deficiency in any respect;

A trader or the service provider, as the case may be, has charged for the goods or for the services mentioned in the complaint, a price in excess of the price—

1. fixed by or under any law for the time being in force;
2. displayed on the goods or any package containing such goods;
3. displayed on the price list exhibited by him by or under any law for the time being in force;
4. agreed between the parties
5. goods which will be hazardous to life and safety when used are being offered for sale to the public,—

The correct answer is The funds are raised for a short period of time

Key Points

• A capital market is a monetary market wherein long-term equity or debt securities are purchased and sold. A capital market is where new issues are made that are bought and sold
• Capital market consists of primary market and secondary market.
• Primary market deals with trade of new issues of stocks and other securities whereas secondary market deals with the exchange of existing or previously-issued securities.
• Capital markets refer to the venues where funds are exchanged between suppliers of capital and those who demand capital for use.
• Primary capital markets are where new securities are issued and sold.
• The secondary market is where previously issued securities are traded between investors.
• The best-known capital markets include the stock market and the bond markets

A commercial bank is a kind of financial institution that carries all the operations related to deposit and withdrawal of money for the general public, providing loans for investment, and other such activities.

• These banks are profit-making institutions and do business only to make a profit.
• The two primary characteristics of a commercial bank are lending and borrowing.
• The bank receives the deposits and gives money to various projects to earn interest (profit).
• The rate of interest that a bank offers to the depositors is known as the borrowing rate, while the rate at which a bank lends money is known as the lending rate

Development bank, national or regional financial institution designed to provide medium- and long-term capital for productive investment, often accompanied by technical assistance, in poor countries.

• Development banks are specialized financial institutions.
• They provide medium and long-term finance to the industrial and agricultural sector.
• They do term lending, investment in securities and other activities.
• They even promote saving and investment habit in the public

The correct answer is Fair market conduct

Key Points

• The Securities and Exchange Board of India (SEBI) has recently constituted a committee on fair market conduct, which will be headed by former Lok Sabha secretary and law secretary T K Viswanathan.
• The panel will have representations from SEBI, mutual funds, brokers, audit firms, stock exchanges, data analytics firms and legal firms.
• The committee has been tasked with suggesting improvements to the existing SEBI norms, including on insider trading and Fraudulent and Unfair Trade practices (FUTP).
• It has been specifically asked to look at trading plans, handling of price-sensitive information during takeovers and aligning of insider-trading rules with provisions of the Companies Act.
• The committee has also been tasked with suggesting short-term and medium-term measures for improved surveillance of the markets, as well as issues of high-frequency trades and harnessing of technology and analytics in surveillance. The committee will submit its report within 4 months.

The correct answer is Capital structure decisions

Key Points

• Capital Structure means arranging capital from various sources in order to meet the need for long-term funds for the business.
• It combines equities, preference share capital, long-term loans, debentures, retained earnings, and various other long-term sources of funds.
• Capital structure refers to the proportion of each of these sources of funds in the capital, which the company should raise or arrange to carry out its business effectively.
• Capital structure is extremely important. 
• Capital structure decisions or practices have a significant role to play in corporate financial management

• A company’s financing decision or capital structure decision is concerned with the sources of funds from where long term finance is raised and the proportion in which the total amount is raised using these sources of funds.

It involves determining how the selected assets/project will be financed. Broadly, financing decisions involve the following three issues-

1. The amount of total long term capital requirement. This is related with capital budgeting decision of the company.
2. Sources of funds from where funds are raised.
3. Composition of total funds i.e. the proportion of each specific source in total capitalization

The correct answer is It tries to delink the present with the future

Key Points

• Financial Planning is the process of estimating the capital required and determining it’s competition.
• It is the process of framing financial policies in relation to procurement, investment and administration of funds of an enterprise.
• Financial Planning is process of framing objectives, policies, procedures, programmes and budgets regarding the financial activities of a concern.
• This ensures effective and adequate financial and investment policies.

The importance can be outlined as- 

1. Adequate funds have to be ensured.
2. Financial Planning helps in ensuring a reasonable balance between outflow and inflow of funds so that stability is maintained.
3. Financial Planning ensures that the suppliers of funds are easily investing in companies which exercise financial planning.
4. Financial Planning helps in making growth and expansion programmes which helps in long-run survival of the company.
5. Financial Planning reduces uncertainties with regards to changing market trends which can be faced easily through enough funds.
6. Financial Planning helps in reducing the uncertainties which can be a hindrance to growth of the company. This helps in ensuring stability an d profitability in concern.

The correct answer is All of the above

Key Points

• Business finance is the money required for the business - to carry out different activities of the business.
• Business finance plays a very important role in any business, be it, retail, wholesale, public, private, economic business, social business, or political. Finance is required everywhere, even in nongovernment organizations (NGOs).

Need for business finance

There are various areas in the business where business finance is required. These areas are an integral part of the business's work. They are:

Starting a business

• Finance is required at each stage of the business. The first step is setting up a business and before starting, finance is required.
• Finance is needed to accumulate the resources for the business. These resources include raw materials, machinery, and manpower.
• Other assets are also acquired by business finance such as patents, copyrights, etc.

Day to day activities of the businesses

• Businesses not only require finance at the first stage but also require finance in day-to-day operations such as buying raw material from the supplier, paying wages to the workers, buying liquid assets, etc.

Growth and expansion

• Business finance is needed for the growth and expansion of the business. When the business starts running efficiently, then it is time to grow the business in size or variety or investment in more fixed capital. Higher growth or expansion will require a higher investment of finance.

Diversification

• When any business finds the idea of diversifying the business into other areas then they will require the finance.
• It becomes similar to starting up a new business but with an already established brand name.

Technological up-gradation

• Many times, businesses require technological up-gradation for their business to run smoothly or to cut the cost.
• For adopting the new/modern technology, investment is required and thus business finance comes into the scene.

The correct answer is Communication

Key Points

• Communication that takes place without following the formal lines of communication is said to be informal communication. 
• Informal system of communication is generally referred to as the ‘grapevine’
• because it spreads throughout the organization with its branches going out in all directions in utter disregard to the levels of authority.
• grapevine communication is informal in nature taking place within the organization linking the members like they are gossipping.
• Grapevine is an informal channel of business communication. It is because it stretches throughout the organization in all directions irrespective of the authority levels.

Process of Communication

Communications is a continuous process that mainly involves three elements viz. sender, message, and receiver. The elements involved in the communication process are explained below in detail:

Sender

• The sender or the communicator generates the message and conveys it to the receiver. He is the source and the one who starts the communication

Message

• It is the idea, information, view, fact, feeling, etc. that is generated by the sender and is then intended to be communicated further.

Encoding

• The message generated by the sender is encoded symbolically such as in the form of words, pictures, gestures, etc. before it is being conveyed.

Media

• It is the manner in which the encoded message is transmitted. The message may be transmitted orally or in writing. The medium of communication includes telephone, internet, post, fax, e-mail, etc. The choice of medium is decided by the sender.

Decoding

• It is the process of converting the symbols encoded by the sender. After decoding the message is received by the receiver.

Receiver

• He is the person who is last in the chain and for whom the message was sent by the sender. Once the receiver receives the message and understands it in proper perspective and acts according to the message, only then the purpose of communication is successful.

Feedback

• Once the receiver confirms to the sender that he has received the message and understood it, the process of communication is complete.

Noise

• It refers to any obstruction that is caused by the sender, message or receiver during the process of communication. For example, bad telephone connection, faulty encoding, faulty decoding, inattentive receiver, poor understanding of message due to prejudice or inappropriate gestures,etc.

The correct answer is Direct recruitment

Key Points

Internal sources of recruitment refers to the recruitment of employees who are already a part of the existing payroll of the organisation. The vacancy for the position can be informed to the employee through internal communication.

There are different types of internal hiring in the organisation and they are as follows:

Promotion:

• Promotion is referred to as the change of designation of the employee. It involves shifting of the existing employee to a higher position within the organisation and providing that employee with more responsibility and a raise in pay.
• Promotion helps in motivating the other employees of the organisation to work hard so that they also become eligible for promotion.

Transfer:

• Transfer refers to the shifting of an existing employee from one department to another department in an organisation.

Employee Referrals:

• It can happen that the organisation in an effort to cut down costs on hiring is looking for employee referral. The employees are well aware of the job roles in the organisation for which manpower is required. These employees will refer potential candidates by screening them based on their suitability to the position.

Former employees:

• Some organisations have the provision of hiring retired employees willing to work part time/full time for the organisation.

Advantages of Internal Sources

Following are the advantages of the internal sources:

1. The organisation saves money on hiring programmes which translates to higher revenue for business.
2. It makes selection and transfer of employees very easy.
3. Internal source of recruitment serves as a morale booster for the existing employees.
4. It provides a sense of loyalty towards the business which results in improved productivity.
5. As existing employees will be aware of the working pattern of the organisation, therefore it will take much less time for the re-hires to get adapted to working conditions.

Disadvantages of Internal Sources
Following are some of the disadvantages of the internal sources:

1. Internal recruitment causes reduction in the morale of those employees who are not selected or considered for appraisal.
2. It discourages capable persons from outside to join to work in the company.
3. It can lead to conflict if one employee is selected for promotion, while the others are not considered.

The correct answer is All of the Above

Key Points

• Directing is regarded as the heart of the management process. Other functions like planning, organising and staffing cannot function properly without proper direction.
• Directing is a high level management function that is concerned with providing direction to the goals of the organisation, from there it moves on to the lower levels in form of actions.
• Direction exists as a management function as long as there is existence of the business. It is a continuous process.
• It binds all the efforts done by the management in the form of organising and planning and brings together all of the organisation towards achieving the goals of the organisation.

Initiates Action:

• Directing is the starting point of action. It initiates action based on planning, organising and staffing. Action is initiated when the managers provide direction to their subordinates for carrying out the task. Therefore, the directing function provides a set of guidelines to the employees on how to start working towards achieving the goals of the organisation.

Integrates efforts of employees:

• The activities and works of the employees across an organisation are integrated towards achieving the objectives set by management. As all the activities of the organisation are integrated by directing, it leads to efficiency and effectiveness in the organisation.

Provide motivation:

• Directing acts as a source of motivation for the employees. It helps in motivating the employees in contributing their efforts for the realization of organisational objectives.

Accommodates changes:

• Directing helps in steering the organization towards success by accommodating the various changes in the business environment that can be brought about by changes in competitors, changing market conditions.

Maintaining balance:

• Directing brings about stability and balance in the organization which is essential for long term survival of the business. Balance and stability can be achieved by following a persuading leadership style coupled with effective communication, motivating employees and strictly supervising the work of employees and suggesting improvements.

Efficient use of resources:

• Directing provides individual roles to each employee. Therefore, the resources are utilised efficiently that leads to less wastage of resources, reduces duplication of efforts by maintaining a clear set of work for each employee

The correct answer is Basic Physical Needs

Key Points

• ​The levels of hierarchy in Maslow’s need hierarchy theory appear in the shape of a pyramid, where the most basic need is placed at the bottom while the most advanced level of hierarchy is at the top of the pyramid.
• Maslow was of the view that a person can only move to the subsequent level only after fulfilling the needs of the current level. The needs at the bottom of the pyramid are those which are very basic and the most complex needs are placed on the top of the pyramid.

The various steps in Maslow’s hierarchy of needs theory.

Physiological needs:

• The physiological needs are regarded as the most basic of the needs that humans have. These are needs that are very crucial for our survival. The examples of physiological needs are food, shelter, warmth, health, homeostasis and water, etc.
• In addition to all the above needs, Abraham Maslow also included sexual reproduction as one of the most common needs as it is essential for the survival of the species.

Safety Needs:

• Once the basic needs of food, shelter, water, etc are fulfilled, there is an innate desire to move to the next level. The next level is known as the safety needs. Here the primary concern of the individual is related to safety and security.
• Safety and security can be regarding many things like a stable source of income that provides financial security, personal security from any kind of unnatural events, attacks by animals and emotional security and physical safety which is safety to health.
• The various actions taken by an individual in ensuring safety and security are finding a job, getting an insurance policy, choosing a secure neighborhood for staying with family, etc.

Social Needs (Also known as Love and Belonging Needs):

• This is the third level in the need hierarchy theory. It is that stage where an individual having fulfilled his physiological needs as well as safety needs seeks acceptance from others in the form of love, belongingness.
• In this stage, human behaviour is driven by emotions and the need for making emotional relationships is dominant here.

The following examples can satisfy this need:

1. Friendship
2. Family
3. Intimacy
4. Social Groups

• When an individual is deprived of the above needs, he/she feels lonely and depressed.

Esteem needs:

• This is considered as the fourth level of the hierarchy of needs theory. It is related to the need of a person being recognised in the society. It deals with getting recognition, self respect in the society.
• The need for recognition and acceptance arises when a person has fulfilled their need for love and belongingness.
• In addition to recognition from others, there is a need for the person to develop self esteem and personal worth.

Self-actualization needs:

• This is the final level of the theory of hierarchy of needs as proposed by Maslow. It is the highest level of needs and is known as the self-actualization needs. It relates to the need of an individual to attain or realise the full potential of their ability or potential.
• At this stage, all individuals try to become the best version of themselves. In other words, self actualisation is the journey of personal growth and development.

The correct answer is Advertising

Key Points

• Promotion is the process of making the customers aware of the product by presenting it to customers across various channels of promotion and entice them to buy the product.
• The major channels of promotion are: advertising, media, personal selling and promotion (publicity). An ideal promotion mix will be a combination of all or some methods.

Advertising

• The masses of customers dispersed geographically can be reached with the Promotional Tools of advertising. Actually which can be repeated for a number of times.
• The popularity, size and success of, the selling organization are enhanced by the large scale advertising. Therefore the customers consider the advertising products as most legitimate due to the public nature.
• It’s the quickest way to promote a product to a large portion of diversified customers. Another important feature of advertising is that it is much more expressive. In such a way that the selling organization dramatizes its products by applying certain impressive print, sound, visuals, and colors, etc.
• On the one hand, advertising is very beneficial. However on the other hand, it has some disadvantages too. Thus the advertising cannot stimulate the customers directly, because it is impersonal.
• The advertising is based on one way of communication. Actually, this means that the audience of the advertisement has not the option to give feedback or respond to the advertising messages. One of the biggest drawbacks of advertisements is that they are very expensive.
• There are some types of advertising, like radio and newspaper advertising that can be utilized within a range of smaller budgets. However, the other kinds of advertising, like network television advertising, are not covered in smaller budgets, but in larger budgets.

Personal Selling

• At certain stages of the buying process, personal selling is the most effective promotion tool in creating customers’ preferences, convictions, and actions. In personal selling, personal interactions between two or more people take place.
• Actually that can allow both parties to understand the characteristics and needs of one another. Therefore then make immediate adjustments.
• All types of relationships are also flourishing in personal selling like selling relationships of the matter of fact and personal friendship etc.
• The salespersons have professional expertise by which they focus on the interests of the customers. Although then develop a healthy relationship over it.
• The customer also gives extra time and attention to listening to the offerings of salespersons even though his final decision is no. Personal selling is also faced with extra cost and effort in training salespersons to make them committed to the given tasks.
• The advertising can be altered by continuing and discontinuing it in certain conditions. However, the size of the sales force is much harder to change in the case of personal selling.

Sales Promotion

• These Promotional tools include sales promotion which further contains a broad assortment of elements like:

1. Coupons
2. Cent-off Deals
3. Premiums
4. Other Tools

• The tools of sales promotion are applied to boost sagging sales by attracting customers and offerings distinct incentives of purchase. A quick response is generated by using this promotion tool for sales promotion. If advertising is related to “buy our product” then sales promotion is the representation of “buy the product now”.
• In the short run, sales promotion can be regarded as an effective promotion tool. However, in the case of the long run, it is not favorable for developing long-lasting customer relationships. Brand preference is just like advertising and personal selling do.

Public Relations

• Public relations are much different from the ads and they are more influential than these ads. So public relations consist of news stories, events, and features. Actually, they are considered more real. Therefore the readers also consider them more believable.
• Many prospects avoid advertisements and personal selling. However, they can also be influenced by public relations. So the real message in public relations is considered to be “news” by the customers rather than a sales-centered communication.
• The product of an organization is also dramatized by public relations. Public relations should not be used too much or it should be used as an afterthought. It is combined with the elements of the other promotional mix to use it in an effective and economical way.

Direct Marketing

• Direct marketing may take the following forms.

1. Telemarketing
2. Electronic Marketing
3. Online Marketing
4. Direct Mail

• There are four distinct characteristics that are shared in all of the above forms. The first characteristic is direct marketing, which is non-public in nature.
• It means that a specific person is addressed in this form of promotion tool rather than focusing on the general public.
• Direct marketing is customized and immediate, which means that the messages can be fitted to the specific requirements of the customers and they are developing very quickly. At last, direct marketing is interactive which means that customers and Marketing may show a dialogue with each other.

The correct answer is Medical Test

Key Points

Staffing

• Staffing is one of the essential functions of management that is concerned with acquiring, hiring, developing, motivating and retaining the best talent for achieving the goals of the organisation.
• Staffing is a process of keeping the best resources in an organisation that will result in accomplishing the objectives of the business.
• Staffing is essential as without proper human resources, the organisation will not perform as effectively and business will witness downfall.
• Selection is the process of identifying and choosing the best person out of a number of prospective candidates for a job.

A well organised selection process of personnel involves the following steps:

 Preliminary screening:

• It helps the manager to eliminate unqualified or unfit job seekers, based on the information supplied in the application forms.

Selection tests:

• An employment test is a mechanism (either a paper and pencil test or exercise) that attempts to measure certain characteristics of individuals. These characteristics range from aptitudes, such as manual dexterity, to intelligence, to personality, etc.

Employment interview:

• Interview is a formal, in-depth conversation, conducted to evaluate the applicant's suitability for the job. Through an interview, an interviewer seeks to obtain maximum information about the interviewee and the interviewee seeks information about the job and the company.

Reference and background checks:

• Many employers request names, addresses and telephone numbers of references for the purpose of verifying information and gaining additional information of an applicant.

Selection decision:

• The final decision has to be made from among the candidates, who pass the tests, interviews and reference checks.

Medical examination:

• After the selection decision and before the job offer, the candidate is required to undergo a medical fitness test. The job offer is given to the candidate, who is physically and mentally fit for the job.

Job offer: 

• The next step in the selection process is issuing job offer to those applicants, who have passed all the previous hurdles. It is made through a letter of appointment to confirm his acceptance, and communicating to him the reporting date and time.

Contract of employment:

• When a candidate accepts the job offer, the contract of employment is made, which is in a written form and includes job title, duties, responsibilities, date when continuous employment starts and the basis for calculating service, rates of pay, allowances, hours of work, leave rules, sickness, grievance procedure, etc 

The correct answer is Age of an organization

Key PointsThe factors that affect the fixation of price of a product:

Cost of the product:

• Cost of the product includes the cost of producing, distributing and selling the product.
• The cost sets the floor price at which the product may be sold.
• The firm aims at earning a margin of profit over and above the costs.
• Total costs are the sum total of the fixed, variable and semi-variable costs for the specific level of activity.

The Utility and Demand:

• While the product costs set the lower limits of the price, the utility provided by the product and the intensity of demand of the buyer sets the upper limit of the price, which a buyer would be prepared to pay.
• According to the law of demand, consumers usually purchase more units at a low price than at high price.
• The price of a product is also affected by the elasticity of demand of the product.
• If the demand of a product, is inelastic, the firm can fix higher prices and vice versa.

Extent of competition in the market:

• Price is affected by the nature and the degree of competition. If less competition is there in the market, prices can reach the upper limit.
• Thus, competitor prices and their anticipated reactions must be considered before fixing the price of a product.

Government and legal regulations:

• In order to protect the interest of public against unfair practices in the field of price fixing, Government can intervene and regulate the price of commodities.
• Government can also declare a product as essential product and regulate its price.

The correct answer is Commercial paper

Key Points

​Commercial Paper (CP)

• Commercial Paper (CP) is an unsecured money market instrument issued in the form of a promissory note.
• CP was introduced in India in 1990 with a view to enabling highly rated corporate borrowers to diversify their sources of short-term borrowings and to provide an additional instrument to investors
• Commercial paper is issued by a firm to raise funds for a short period of time, the time can be ranging from 90 days to 364 days after which it has to be redeemed. Commercial paper is an unsecured promissory note.
• Commercial paper is an unsecured form of promissory note that pays a fixed rate of interest.
• It is typically issued by large banks or corporations to cover short-term receivables and meet short-term financial obligations, such as funding for a new project.
• Commercial paper is a money-market security issued by large corporations to obtain funds to meet short-term debt obligations (for example, payroll) and is backed only by an issuing bank or company promise to pay the face amount on the maturity date specified on the note.

The correct answer is Delegation

Key Points

• Delegation of authority refers to the transfer of authority from the level of supervisor to the level of subordinates.
• Delegation is the downward transfer of authority from the manager to the subordinate.
• Delegation of authority is important as the superior in an organization is not able to manage all the work by himself.
• Delegation of authority helps the managers to focus on more important functions of the organization that need to be taken care of on priority.
• Delegation is the transfer of responsibility which is less important and can be performed by the subordinates.
• This also brings a sense of responsibility to the work done by the subordinates and paves the way for growth of the subordinates.
• Transfer of authority to subordinates does not mean that the subordinate is accountable for the actions, it is the superior who will be accountable for all the actions. Only tasks that can be completed effectively by the subordinates are delegated without the actual transfer of accountability.

Elements of Delegation

• Delegation consists of the following elements.

1. 1. Authority
2. 2. Responsibility
3. 3. Accountability

Authority:

• One of the essential elements of delegation is authority which is the power to complete an assigned task.
• Without authority a subordinate is unable to execute the task perfectly. In order to complete the task as is expected by the manager, the manager has to provide authority of executing that task to the subordinate.

Responsibility:

• Responsibility is another element of delegation which is assigning the subordinate a task that needs to be executed.
• When the superior assigns any task to the subordinate it becomes the obligation of the subordinate to perform that task with responsibility.
• The feeling of responsibility arises from the superior subordinate relationship where a subordinate is obliged to perform the job as assigned by the superior.

Accountability:

• Accountability element of delegation refers to the answerability of a subordinate to his superior for the job or task that is assigned.
• Accountability flows in an upward direction, which means the subordinate is accountable to the superior.
• Although the subordinate is accountable to the superior, the actual accountability of that task and its outcome rests with the superior as accountability is not transferred to the subordinate, it is just imposed till the time the task is completed.

The correct answer is Departmentalization

Key PointsThe following steps are to be undertaken in the organizing process.

Identification and Division of Work: 

• The first step in the process of organizing involves identifying and dividing the work that has to be done in accordance with previously determined plans. Work is divided into manageable tasks so that duplication can be avoided and workload can be shared among employees.

Departmentalization: 

• Once, work has been divided into small and manageable activities, then those activities which are similar in nature, are grouped together. This process is called departmentalization. Departments can be created on the basis of products, functions and territory.

Assignment of Duties: 

• Once the departments are created, each department is placed under the charge of an individual, called departmental head.Then,each job is allocated to an individual, according to his knowledge and skill. There should be a proper match between the nature of jobs and the ability of an individual.

Establishing Reporting Relationships: 

• In the organization, each employee has some authority as well as responsibility. It is necessary that every individual must know whom he has to take orders from and to whom he is answerable. This creates superior-subordinate hierarchy and helps in coordinating various activities in the organisation

The correct answer is Formal

Key Points

Formal Organisation:

1. Formal organisation is that type of organisation structure where the authority and responsibility are clearly defined.
2. The organisation structure has a defined delegation of authority and roles and responsibilities for the members.
3. The formal organisation has predefined policies, rules, schedules, procedures and programs.
4. The decision making activity in a formal organisation is mostly based on predefined policies.
5. Formal organisation structure is created by the management with the objective of attaining the organisational goals.

1. The formal organisational structure is created intentionally by the process of organising.
2. The purpose of formal organisation structure is achievement of organisational goal.
3. In formal organisational structure each individual is assigned a specific job.
4. In formal organisation every individual is assigned a fixed authority or decision-making power.
5. Formal organisational structure results in creation of superior-subordinate relations.
6. Formal organisational structure creates a scalar chain of communication in the organisation.

Advantages of Formal Organisation:

• Systematic Working: Formal organisation structure results in systematic and smooth functioning of an organisation.
• Achievement of Organisational Objectives: Formal organisational structure is established to achieve organisational objectives.
• No Overlapping of Work: In formal organisation structure work is systematically divided among various departments and employees. So there is no chance of duplication or overlapping of work.
• Co-ordination: Formal organisational structure results in coordinating the activities of various departments.
• Creation of Chain of Command: Formal organisational structure clearly defines superior subordinate relationship, i.e., who reports to whom.
• More Emphasis on Work: Formal organisational structure lays more emphasis on work than interpersonal relations.

Disadvantages of Formal Organisation:

• Delay in Action: While following scalar chain and chain of command actions get delayed in formal structure.
• Ignores Social Needs of Employees: Formal organisational structure does not give importance to psychological and social need of employees which may lead to demotivation of employees
• Emphasis on Work Only: Formal organisational structure gives importance to work only; it ignores human relations, creativity, talents, etc

The correct answer is Employees

Key PointsCharacteristic Features of Business Environment

Complex

• A business environment has a plethora of factors, events, conditions, and influences arising from a variety of sources. Therefore, it is very difficult to understand all the factors affecting a given environment at any time. Although we can understand it in parts, it is impossible to grasp it in totality.

Dynamic

• Like the natural environment, a business environment also keeps changing constantly. This is due to a wide range of influencing factors. These factors create dynamism in the environment causing it to continuously change its shape and character.

Multi-faceted

• Due to the complexity and dynamism of a business environment, it continuously changes its shape and character. However, different observers view the changes differently. Therefore, a particular observer might see a specific change in the environment as an opportunity while someone else might perceive it as a threat.

Far-reaching impact

• A business environment has a far-reaching impact on the organization. Businesses who realize the impact of the environment on their growth and profitability ensure that they adapt constantly to be in sync with it.

The correct answer is Motion study

Key Points

• Motion study refers to the study of movements like lifting, putting objects, sitting and changing positions, etc., which are undertaken while doing a typical job. Unnecessary movements are sought to be eliminated so that it takes less time to complete the job efficiently

Motion study can be divided into three components or types:

1. Therblig analysis: a therblig is a small part of a job. Gilbreath gave 17 basic motions of a worker each motion is known as therblig.
2. Micro motion study: it is the study of elements of an operation with the help of a high-speed movie camera in order to eliminate the unnecessary motions involved in the operation and balance the necessary motions.
3. Principles of micro-economy: this motion study find out the correct application of theories behind motion elements to achieve synchronization of human body movements, the best layout of workplaces, and optimum design of equipment.

• The main aim of this study is to eliminate unproductive and unnecessary movements so as to ensure timely completion of work.
• The main aim is to find one best method of doing the job or performing a task

The correct answer is Management is a group activity

Key PointsManagement is the process by which a co-operative group directs actions of others toward common goals.” Management is defined as the process of planning, organizing, and controlling an organization's operations in order to achieve the target efficiently and effectively

• Management means a group of people involved in managerial activities.
• Management functions cannot be performed in an isolation.
• Even if the results of management affect every individual and every department of the organization,
• It always refers to a group effort and not the individual effort of a single person.
• In order to be successful, it is important that a business adapts itself to the changes in the taste and preferences of the consumers.
• Management has been described as a social process involving responsibility for economical and effective planning & regulation of the operation of an enterprise in the fulfillment of given purposes.

​Management is a dynamic function:

• Management has to make changes in goals, objectives and other activities according to changes taking place in the environment. 
• The external environment such as the social, economic, technical, and political environment has great influence over the management.
• Management is a dynamic process because it keeps on changing with the changes that takes place in the environment.
• It is continuous process because it is the act of coordinating the efforts of people to accomplish desired goals and objectives using available resources efficiently and effectively. It continues till the goals are achieved by organization.
   

Management is goal oriented process:

• Management always aims at achieving the organizational objectives.
• The functions and activities of the manager lead to the achievement of organizational objectives

Management is a universal phenomenon.

• The use of management is not restricted to business firms only.
• It is applicable in profit-making, non-profit-making, business or non-business organizations; even a hospital, school, club, and house has to be managed properly.

Management is Multidimensional:

• Management does not mean one single activity but it includes three main activities:
• Management of work
• Management of people
• Management of operations

​Management is a continuous process:

• Management is a continuous or never-ending function.
• All the functions of management are performed continuously.
• For example planning, organizing, staffing, directing, and controlling are performed by all the managers all the time.

Management is a group activity:

• Management always refers to a group of people involved in managerial activities.
• The management functions cannot be performed in isolation.
• Each individual performs his/her role at his/her status and department, and then only management function can be executed.

Intangible:

• Management function cannot be physically seen but its presence can be felt.
• The presence of management can be felt by seeing the orderliness and coordination in the working environment.
• It is easier to feel the presence of mismanagement as it leads to chaos and confusion in the organization

The correct answer is the All of the Above.

Key Points

Management as a Profession:

• The profession can be described as an occupation upheld by specific education and practice, in which entry is limited. 
• A profession has the following features:

The well-defined theory of knowledge: 

• All services are based on a well-defined form of education that can be procured through education.

Restricted entry: 

• The entrance to a profession is defined through an examination or through obtaining an educational degree. For instance, to become a chartered accountant in India an aspirant has to clear a detailed examination regulated by the Institute of Chartered Accountants of India (ICAI).

Professional community: 

• All professions are affiliated to a professional association which controls entry, presents a certificate of training and expresses and supports a system of government. To be qualified to study in India, lawyers have to become members of the Bar Council which monitors and regulates their actions

The correct answer is Both 1 and 2

Key Points

• Management is the process by which a co-operative group directs actions of others toward common goals.” Management is defined as the process of planning, organizing, and controlling an organization's operations in order to achieve the target efficiently and effectively.

Objectives can be categorized into organizational objectives, social objectives, and personal or individual objectives.

Organizational Objectives: 

• Management is accountable for establishing and attaining objectives for the company.
• It has to deliver a variety of objectives in all operations contemplating the interest of all shareholders including, stakeholders, consumers, the government, and employees.
• The principal objective of any company must be to use material and human resources to the maximum potential benefit, i.e., to meet the financial objectives of a firm. And, they are survival, profit, and growth

Survival: 

• The essential objective of any industry is survival. Management must attempt to assure the continuation of the business. In order to survive, an industry must gain enough funds to meet the costs that would be incurred.

Profit: 

• Poor survival is not sufficient for the industry. Management has to make sure that the company earns a profit. Profit contributes to a necessary catalyst for the sustained successful performance of the firm. Profit is crucial for meeting the costs and uncertainties of the business concern.

Growth:

• A firm requires to add to its chances, in the long run, for this it is necessary for the concern to develop. To prevail in the business, management must utilise adequately the growth potential of the firm

The correct answer is Leader enforces and relies on discipline

Key Points

​Leadership

• Leadership is that element of directing that involves motivation and persuasion in order to achieve the desired goals. 
• A leader is defined as a person who is able to influence other people and inspires them to follow the instructions provided.
• In other words, leadership is the act of leading, guiding, and motivating subordinates to achieve organizational goals.
• Democratic Leadership, also known as Participative Leadership, involves the input of all members of a group.
• The leader provides an opportunity for all employees to participate in setting the goals and objectives of an organisation.
• The employees also get to decide the methods and activities that the company will use to achieve those goals.
• The advantage of this form of leadership is that there are lesser conflicts between employees and the management.
• It is because the workers are allowed a say in most, if not all, important decisions concerning the organisation.
• The leader has to coordinate between different departments to ensure that the organisation functions effectively.
• Authoritarian or Autocratic Leadership, a democratic leader is not a key figure in the company. Although they still have the final say in decision making, the whole process is much more collaborative than other forms of leadership.
   

Additional InformationBenefits of Democratic Leadership

• Work Environment: The work environment is significantly more positive and collaborative in Democratic Leadership than other styles.
• Inclusivity: The employees are a more substantial part of the decision-making process in this leadership style and can provide their inputs on various issues.
• Improvement in decision making: Everyone who belongs within a group is involved in the decision-making process under the Democratic Leadership style. It helps the leader get a broader perspective on any issue, which leads to more holistic decisions.

The correct answer is Peter F. Drucker

Key Points

• Peter Drucker (1909-2005) was one of the most widely-known and influential thinkers on management, whose work continues to be used by managers worldwide. He was a prolific author, and among the first (after Taylor and Fayol) to depict management as a distinct function and being a manager as a distinct responsibility.
• Peter Drucker revolutionized the approach to business management by suggesting that successful leaders should put people and ethics first rather than focusing entirely on profits and rigid rules and work structures.
• The pillars of Drucker’s theory of management are decentralization, prioritization of knowledge work, management by objectives, and SMART goals.