CBSE Class 12 Business Studies Case Study Questions Principles of Management MCQs Set 01

Read the source given below and answer the following questions :
Amar is the Managing director in a garment manufacturing company. He is an experienced manager and firmly believes in application of principles of management in day to day managerial situations. He believes that management principles are flexible to adapt to dynamic business environment. He believes in producing more and better work for the same effort. He always hires specialists for various job positions. This results in efficient and effective output. Hence the organization has separate departments for finance, marketing, production and human resource. Being a management expert, Amar believes in the concept of having one and only one boss for every individual employee. He always aims at avoiding dual subordination within the organization. Under his direction and supervision, his company has achieved new heights within a short span of time. As the Managing director, he formulates policies that aims at minimizing employee turnover and maintaining organizational efficiency. Hence his organization selects personnel after due and rigorous procedure, and once a person is selected, he is kept at his post for a minimum fixed tenure. This helps in improving the overall efficiency of the organization.

Question. Identify which importance of principles of management is mentioned here?
(a) Providing managers with useful insights into reality
(b) Meeting changing environment requirements
(c) Fulfilling social responsibility
(d) Scientific decisions

Answer: B

Question. ‘He always aims at avoiding dual subordination within the organization’. Name the principle of management that aims at avoiding dual subordination.
(a) Order
(b) Equity
(c) Unity of direction
(d) Unity of command

Answer: D

Question. Identify the principle of management that suggests setting up of separate departments for finance, marketing, production etc. within an organization.
(a) Discipline
(b) Centralization and Decentralisation
(c) Division of work
(d) Authority and responsibility

Answer: C

Question. “As a Managing Director, he formulates policies that aim at minimizing employee turnover and maintaining organizational efficiency”. Which principle of management Amar is following?
(a) Order
(b) discipline
(c) Equity
(d) Stability of personnel

Answer: D

Read the source given below and answer the following questions :
After completing her Bachelors in Fashion Designing from a well-known college in France, Aditi has opened a boutique in a posh market in Kolkata. She has divided the work in smaller units and each employee is well trained to perform his /her task efficiently. The sales persons are allowed to close a deal with a buyer by giving a maximum of 5 percent discount , whereas the decision to give any further discount rests with Aditi as the final authority. In the earlier period of her business venture, employees were asked to put in extra hours of work. In return she had promised to give them a special incentive with in a year. Therefore, when the business was doing well, she honoured her commitment by giving bonus to her employees. She also instructed her employees that communication from top to bottom should follow the official lines of command. However, she tends to be more biased towards her female employees, when it comes to solving the conflicts among employees. 

Question. “Therefore, when the business was doing well, she honoured her commitment by giving bonus to her employees.” Which principle of management is being highlighted here?
(a) Discipline
(b) Order
(c) Remuneration to Employees
(d) Unity of Direction

Answer: A

Question. Aditi tends to be more biased towards her female employees, when it comes to solving the conflicts among employees. Which principle is being violated here?
(a) Discipline
(b) Order
(c) Equity
(d) None of these

Answer: C

Question. Aditi has divided the work in smaller units and each employee is well trained to perform his/ her task efficiently. Which principle of management is being followed here?
(a) Centralization and Decentralization
(b) Division of work
(c) Discipline
(d) Order

Answer: B

Question. “The sales persons are allowed to close a deal with a buyer by giving a maximum of 5 percent discount, whereas the decision to give any further discount rests with Aditi as the final authority”. Identify the principle of Management being followed here:
(a) Centralization and Decentralisation
(b) Authority and Responsibility
(c) Unity of Command
(d) Unity of Direction

Answer: A

Read the source given below and answer the following questions :
Ramesh is day and night involved in the organizing of his business. He has given job to every employee based upon his capability and experience. As there has been proper division of work and systematic allocation of tasks the productivity is increasing. The size of the company has increased in the recent past. The related activities which are similar in nature are grouped together. Everything was going well in the organisation until recently. The company has recently seen a deficit of exchange of information across functionally different departments. 

Question. Now the related activities which are similar in nature are grouped together. Which step of organising is highlighted in the above case:
(a) Identification and division of work
(b) Departmentalisation
(c) Assignment of duties
(d) Establishing authority relationship

Answer: B

Question. The company has recently seen a deficit of exchange of information across functionally different departments. Which one disadvantage of functional structure is highlighted above:
(a) Function allocative
(b) Conflict of interests
(c) Inflexibility
(d) Problems in coordination

Answer: D

Question. Which importance of organizing is highlighted in be above case:
(a) Optimum utilisation of resources
(b) Effective administration
(c) Benefits of specialisation
(d) Expansion and growth

Answer: C

Question. Identify the type of organisational structure which facilitates occupational specialisation.
(a) Functional structure
(b) Horizontal structure
(c) Network structure
(d) Divisional structure

Answer: A

Read the source given below and answer the following questions :
Ganesh Leathers is a shoe manufacturing company. The firm has decided to increase the productivity of its workers. For this the firm has chalked out a plan. It will be hiring operational managers to work at the lower levels of management. It has decided to keep eight managers over a group of workers. Thus every worker has to report to all these eight managers. The managing director of the company Mr. Ganesh Tiwari is of the view that the principles of management are guidelines to action but do not provide readymade straitjacket solutions to all managerial problems. This is so because real business situations are very complex and dynamic and are a result of many factors. According to him it is necessary to differentiate between efficient and inefficient workers. Hence, he introduced specific rate of wage payment for those who performed above standard and for those who performed below standard. The basic idea behind is to improve the productivity of all the workers.

Question. Which technique of scientific management is employed by Ganesh leathers by keeping eight managers.
(a) Time study
(b) Motion study
(c) Functional foremanship
(d) Standardisation of work

Answer: C

Question. Which principle of Henri Fayol is followed by the company in the above case.
(a) Unity of direction
(b) Unity of command
(c) Initiative
(d) Discipline

Answer: B

Question. Which nature of principles of management is mentioned in the given para.
(a) Universal applicability
(b) Flexibility
(c) General guidelines
(d) Contingent

Answer: C

Question. Which technique of scientific management is used by the firm to differentiate between efficient and inefficient workers.
(a) Time study
(b) Motion study
(c) Differential piece rate system
(d) method study

Answer: C

Read the source given below and answer the following questions :
Care Ltd. is a well known cement company in India. It is able to earn adequate revenues to cover costs. Its capital base, number of employees and production turnover has increased manifolds over the years. The rate of profitability of the business is also creditable. The employees of the company are happy and satisfied. The overall pay and compensation paid by the company is fair to both- employees and the organisation. There is complete cooperation between the workers and management. The spirit of competition has been replaced by the spirit of cooperation within the organisation. As a part of its moral obligation, the company has taken many initiatives for providing employment to specially abled persons and promoting literacy in the rural areas. 

Question. ‘It is able to earn adequate revenue to cover costs’.the company in the given statement.
(a) Growth
(b) Survival
(c) Profit
(d) Diversification

Answer: B

Question. Which importance of management is discussed in the given case.
(a) Management increases efficiency
(b) Management helps in the development of society
(c) Management creates a dynamic organisation
(d) Management is an intangible force

Answer: B

Question. Name the principle of Fayol followed by the company in the given case.
(a) Discipline
(b) Order
(c) Remuneration of employees
(d) Unity of direction

Answer: C

Question. Which principle of scientific management is followed by the company in the given case:
(a) Scientific not rule of thumb
(b) Harmony not discord
(c) Cooperation not individualism
(d) Development of each and every person to his or her greatest efficiency and prosperity.

Answer: C

Read the source given below and answer the following questions :
Rajat Joined as a CEO of Bharat Ltd. a firm manufacturing computer hardware. On the first day he addressed the employees. He said that he believed that a good company should have an employee suggestion system and he wished to minimize employee turnover to maintain organisational efficiency. He informed all employees that he would ensure that all agreements were clear, fair and there was judicious application of penalties. However, he said that he believed that lazy personnel should be dealt with sternly to send the message that everyone was equal in the eyes of management . Also that he would want to promote a team spirit of unity and harmony among employees, which would give rise to a spirit of mutual trust and belongingness among team members and eventually minimize need for using penalties. He told all present that the interests of the organization should take priority over the interests of any one individual employee.

Question. Identify the principal of management in the following line. “ He said that he believed that a good company should have an employee suggestion system”
(a) Unity of command
(b) Unity of direction
(c) discipline
(d) initiative 

Answer: D

Question. Identify the principal of management in the following lines “Which would give rise to a spirit of mutual trust and belongingness among team members.
(a) Discipline
(b) Unity of command
(c) Initiative
(d) Esprit de corps. 

Answer: D

Question. Identify the principal of management in following line. “He wished to minimize employee turnover to maintain organizational efficiency.”
(a) Stability of personnel
(b) Discipline
(c) Centralization and Decentralization
(d) Remuneration of employees 

Answer: A

Question. Identify the principal of management in the following lines. “He informed all employees that he would ensure that all agreements were clear, fair and there was judicious application of penalties.”
(a) Initiative
(b) Equity
(c) Discipline
(d) Esprit de corps.

Answer: C

Read the source given below and answer the following questions :
Radhika opens a jewellery showroom in Jaipur after completing a course in jewellery designing. She has employed eleven persons in her showroom. For greater productivity, she divides the work into small tasks and each employee is trained to perform his/ her specialised job. The sales persons are allowed to close a deal with a buyer by giving a maximum of 10% discount, whereas the decision to give any further discounts rests with Radhika as the final authority. In the earlier days of starting of the business, five of her employees were asked the put in extra hours of work. In return she had promised to give them a special incentive within a year. Therefore, after six months when the business was doing well, she awarded a cash bonus to each of these employees to honour her commitment. However, when it comes to settling the conflicts among her employees, she tends to be more biased towards her female employees.

Question. Identify the principal of management in the following lines. “Therefore after six months when the business was doing well, she awarded a cash bonus to each of these employees to honour her commitment.
(a) Discipline
(b) Initiative
(c) Scalar chain
(d) Remuneration 

Answer: A

Question. Which principle is violated in the following lines. “However when it comes to setting the conflicts among her employees, She tends to be more biased towards her female employees.”
(a) Discipline
(b) Equity
(c) Division of work
(d) Justice 

Answer: B

Question. Identify the principal of management in “She divided the work into small tasks and each employee is trained to perform his/her specialised job”
(a) Unity of command
(b) Unity of direction
(c) Division of work
(d) Discipline 

Answer: C

Question. Identify the principal “The sales persons are allowed to close a deal with a buyer by giving a maximum of 10% discount, whereas the decision to give any further discount rests with Radhika as the final authority”
(a) Division of work
(b) Discipline
(c) Initiative
(d) Centralisation and decentralisation 

Answer: D

Read the source given below and answer the following questions :
As students of a management course Karan and Kunal were asked to prepare a project report on applicability of principles of management in real business situations. In order to conduct the survey Kunal had selected an outlet of a popular chain of fast food restaurant whereas Karan visited a nearby department store. When Kunal presented his report to class, Karan realised that their observations were matching on various grounds. In both the business units, work is divided into small tasks and each is performed by a trained employee. A set of rules are predetermined and communicated to employees for compliance and these is a fixed place for every thing and all employees have been allotted individual space. Moreover, the manager encourage a spirit of mutual trust and belongingness among the employees so that need for imposing penalties is reduced.

Question. Identify the principles of management in the following lines: “There is a fixed place for everything and all employees have been allotted individual space”
(a) Unity of direction
(b) Order
(d) Scalar chain
(d) Equity 

Answer: B

Question. Identify the principal of management in the following lines “work is divided into small tasks and each is performed by a trained employee.”
(a) Unity of direction
(b) Unity of command
(c) Division of work
(d) Initiativ

Answer: C

Question. Identify the principal of management in following lines “A set of rules are predetermined and communicated to the employees for compliance.”
(a) Discipline
(b) Scalar chain
(c) Unity of command
(d) Unity of direction 

Answer: B

Question. Identify the principle of management in the following lines: “Managers encourage a spirit of mutual trust and belongingness among the employees”
(a) Unity of command
(b) order
(c) Equity
(d) Esprit de corps 

Answer: D