Maharashtra State Board Class 12th OCM Sample Paper Set 2 with Solutions Answers Pdf Download.
Maharashtra Board Class 12 OCM Model Paper Set 2 with Solutions
Time: 3 Hours
Max. Marks: 80
Note:
(i) All questions are compulsory.
(ii) figures to the right indicate full marks for the questions.
(iii) figures to the left indicate question numbers.
(iv) Answer to every question must be started on a new page.
Question 1.
l. From the given sub questions attempt any four:
(A) Select the appropriate option from options given below and rewrite them:
(i) __________ was regarded as Father of Scientific Management. (b)
(a) Henry Fayol
(b) F.W. Taylor
(c) Philip Kotler
Answer:
(b) FW Taylor
(ii) Medium term loans are taken for a period of __________ to meet the working capital requirements. (b)
(a) 1 to 3 years
(b) 1 to 5 years
(c) 1 to 6 years
Answer:
(b) 1 to 5
(iii) ‘Entreprendre’ means to __________ . (a)
(a) undertake
(b) enterprise
(c) businessman
Answer:
(a) undertake
(iv) The minimum age of a member of District Commission shopld be __________ . (c)
(a) 32 years
(b) 30 years
(c) 35 years
Answer:
(c) 35 years
(v) Business should provide periodic information to __________ . (b)
(a) customers
(b) owners
(c) employees
Answer:
(b) Owners
(B) Give one word or phrase for the following sentences:
(i) When is World Consumer Day celebrated?
Answer:
15th March
(ii) Type of market where durable commodities which are generally non-perishable in nature are sold.
Answer:
Long-period market
(iii) A rail system in which the track consists of a single rail or a beam.
Answer:
Monorail
(iv) An employee who has an authority and support of the organisation to implement his creative ideas.
Answer:
Intrapreneur
(v) Last function of management.
Answer:
Controlling
(C) True or false:
(i) Standards are not set for every performance in controlling function.
Answer:
False
(ii) Henry Fayol has proposed 15 principles of management.
Answer:
False
(iii) The internet is the global system of interconnected computer networks that use the internet protocol suite to link devices worldwide.
Answer:
True
(iv) Businessmen are the trustees of the society.
Answer:
True
(v) Lok Adalat is also referred to as ‘People’s Court’.
Answer:
True
(D) Match the pairs:
| Group “A” | Group “B” |
| 1. Market | a. Single seller |
| 2. Registered brands | b. Stock Market |
| 3. Monopoly | c. Distinct name |
| 4. Branding | d. Mercatus |
| 5. Digital marketing | e. Single buyer |
| f. ISI | |
| g. Trademark | |
| h. Use of traditional media | |
| i. Multiple seller | |
| j. Use of digital media |
Answer:
| Group “A” | Group “B” |
| 1. Market | d. Mercatus |
| 2. Registered brands | g. Trademark |
| 3. Monopoly | a. Single seller |
| 4. Branding | c. Distinct name |
| 5. Digital marketing | j. Use of digital media |
Question 2.
Explain the following terms/concepts in detail (Any 4 out of 6):
(i) Differential piece rate wage plan
(ii) Staffing
(iii) Business to Business (B2B)
(iv) Consumer Welfare Fund
(v) Oligopoly and Monopsony
(vi) Central Bank
Answer:
(i) Remuneration should be fixed in such a way that average worker is motivated to attain a standard output Taylor suggested the differential piece-wage system. Higher rates are offered to employees who complete the work more than the standard quantity under this system. On the other hand, if an employee is performing below the standard: he shall be given lower rate of wages. This technique motivate the employees to attain higher standard of performance and earn wages i.e. remuneration at higher rate.
(ii) Staffing is the function of execution according to plan and organisational structure. It is the process of attracting, recruiting, selecting, placing, appraising, remunerating, developing and retaining the best workforce. Overall growth and success of every venture is based on appropriateness of staffing function. It is very challenging for organisation to focus on best utilisation of workforce by using their talents and skills, retaining them and arranging training and development programmes. The function emphasises managing human and not material or financial resources. The need of staffing arises since the initial period of organisation. Due to promotion, transfer, business expansion, retirement, resignation, accidents, death of employee etc. vacancies are created in organisation. In this context, staffing function plays very important role in organisation. Right person at right job with right pay is the basic principle of staffing.
(iii) In this form the buyer and seller are both business entities and do not involve individual consumers. Here, both the parties involved in e-commerce transactions are business firms and hence they are called as B2B i.e., business to business.
Transactions between business firms come underthis category. Business firms interact with each otherfor a variety of services. These include supplying ancillary parts/components to manufacturers providing value added services like catering and also providing man power.
(iv) Department of Consumer Affairs has created Consumer Welfare Fund for providing financial assistance to strengthen the voluntary consumer movement particularly in rural area. This fund is used fortraining and research in consumer education, complaint handling, counselling and guidance mechanisms, product testing labs and so on.
(v) Oligopoly: In oligopoly, there are only a few sellers. They may be producing and selling either a homogeneous or a differentiated product. Monopsony: Monopsony refers to a market situation when there is a single buyer of a commodity or service.
(vi) The Central Bank is the apex financial institution in the country. Every country has their own Central Bank. In India, The Reserve Bank of India (RBI) is the Central Bank. The RBI was established in 1945 under the Reserve Bank of India Act, 1944. Some functions of RBI are as follows:
(a) Frames monetary policy
(b) Issues currency notes
(c) Acts as a banker to the Government
(d) Acts as a banker’s bank to commercial and other banks in India.
Question 3.
Study the following case/situation and express your opinion (Any 2):
(i) Meena a home science graduate has recently done a cookery course. She wished to start her own venture with a goal to provide ‘healthy food’ at reasonable price. She discussed her idea with her teacher (mentor) who encouraged her. After analysing various options for starting her business venture, they shortlisted the option to sell readymade and ‘ready to make’ vegetable shakes and milk shakes. Then they both weighed the pros and cons of both the shortlisted options.
(a) Name the function of management being discussed above and give any one of its characteristics.
(b) Also briefly discuss any two limitations the function discussed in the case.
(ii) Mr. Sumedh is a young MBA degree holder and Mr. Mayur is a B.Com graduate. Mr. Sumedh is willing to start a dairy farm at his village. Mr. Mayur is willing to work as a cashier in a private company.
(a) Find out the dream of MR. Sumedh and Mr. Mayur.
(b) State any 1 feature of entrepreneur.
(c) To become a successful entrepreneur, which qualities Mr. Sumedh should have?
(iii) Organisation manufacturing paint has been enjoying a prominent market position for many years. It has been dumping its untreated poisonous waste on the river bank which has created many health problems for the nearby villages.
(a) Which responsibility is neglected by the manufacturing organisations?
(b) What kind of pollution they are doing?
(c) What precautionary measures do they need to take?
Answer:
Study the following case / situation and express your opinion.
(i) Planning.
Characteristics of Planning.
(a) Improves performance
(b) Reduces risk
(c) Provides Path of action
(Students can give any 1 from the text).
Limitations of Planning:
(a) Planning leads to rigidity
(b) Planning reduces creativity
(c) Planning is a time-consuming process (Students can give any 2 limitations)
(ii) The dream of Mr. Sumedh is to become an entrepreneur and the dream of Mr. Mayur is to take up a job in a private company and get a fixed salary income.
(a) An entrepreneur is a person who is willing to take risk in order to earn money and start a business.
(b) To become a successful entrepreneur Mr. Sumedh should have qualities like innovator, creator, reactive and risk bearer.
(iii) (a) Responsibility towards the protection of the environment is neglected by the manufacturing industry.
(b) They are creating water pollution by dumping the untreated poisonous waste in the river bank.
(c) Proper waste management techniques should be adopted by the organisation under which waste should be reduced, effort should be made to reuse the waste. Waste that cannot be reduced or reused should be recycled.
Question 4.
Distinguish between (Any 3):
(i) E-commerce and E-business
(ii) Planning and Coordination
(iii) Fire Insurance and Marine Insurance
(iv) Commercial Bank and Central Bank
Answer:
Distinguish Between
(i) E-Commerce and E-Business
| Point of Distinction | E-commerce | E-business |
| Meaning | E-commerce involves commercialtransactions done over internet. | E-business is conduct of business processes on the internet. |
| What is it? | E-commerce is subset of e-business. | E-business is superset of e-commerce. |
| Features | E-commercejust involves buying and selling of products and services. | E-business includes all kinds of resale and post-sale efforts. |
| Concept | E-commerce is narrower concept and restricted to buying and selling. | It is broader concept that involves market surveying, supply chain and logistic management and using data mining. |
| Transaction | It is more appropriate in B2C context. | It is used in the context of B2B transactions. |
| Which network is used? | E-commerce involves the mandatory use of internet. | E-business can involve the use of internet intranet or extranet. |
(ii) Planning and Organising
| Point of Distinction | Planning | Organising |
| Meaning | Planning is deciding in advance what to do, how to do it, when to do it and who is to do it. | Organising is the process of identifying and bringing all the resource together and arranging them for achieving the objective. |
| Objective | To set goals and choosing the means to achieve these goals. | To identify and bring together all required resources. |
| Area of function | It includes setting objectives by Identifying the ways of attaining the goal and selecting the best plan. | It includes identification and grouping of activities, assigning the work and establishing the authority and relationship among them. |
| Factors | Internal and external factors are considered in planning process. | Internal and external factors are considered in arrangement of resources. |
| Order | It is the basic function of management process. | It is based on planning. |
| Resources | Planning is done as per the requirement and availability of resources. | All available resources i.e. men, money, material, machine and method are arranged in a systematic manner. |
| Nature | It is continuous in nature. It exists in the whole life of organisation. | It takes place till the time all the resources are collected and arranged. |
| Level of management | Top management is concerned with planning the activities. | Top and middle level management is related with organising the required resources. |
(iii) Fire insurance and Marine insurance
| Point of Distinction | Fire Insurance | Marine Insurance |
| Meaning | A contract in which insurer promises to pay compensation to insured if something happens to the subject matter due to fire or related events. | A contract where bu the insurance company undertakes to pay compensation to insured in case of loss to him due to dangers (perils) of the sea. |
| Policy taken by | It can be taken by individual for their properties or by businessman for their goods, properties and business liabilities. | It can be taken by exporters, importers and shipping companies etc. |
| Subject-matter | In fire insurance, the goods and assets or property of the insured is the subject matter. | In marine insurance, goods in ship, cargo and freight is the subject-matter. |
| Insurable interest | It must exist both at the time of contract and also at the time of loss. | It must exist at the time of contract and also at the time of loss. |
| Tenure | It is generally for a short-period like one year. | It is generally for a short-period and may range from one month to a year. Normally, it does not exceed one year. |
| Compensation | It is paid only if there is loss due to fire during the term of policy. | It is paid only if there is loss causing event during the term of the policy. |
| Principle of Indemnity | It is applicable as insurance company compensates for the financial loss and the insured is brought back to the same financial condition that he was before the event. | It is applicable as insurance company compensates for the financial loss and the insured is brought back to the same financial condition that he was before the voyage. |
| Beneficiary | The beneficiary is the person who has insured the property or goods. | The beneficiary is the insured person or company. |
(iv) Commercial Bank and Central Bank
| Point of Distinction | Commercial Bank | Central Bank |
| Function | The main function is to accept deposits from public for lending to industry and others. | The main function of the Central Bank (RBI) is to regulate the money supply in the country. |
| Printing of Currency | The commercial banks cannot print currency. | The Central Bank can print currency notes. |
| Acceptance of Deposits | The commercial bank accept deposits from public | The Central Bank does not accept deposits from public. |
| Loans | The commercial banks provide loan to industry and commerce. | The Central Bank provide loans to bankers and financial institutions. |
| Ownership | It can be owned by private and /or by the government agencies. | It is owned and controlled by the Government of India. |
| Number of Banks | There are many commercial banks in India. | There is only one Central Bank (RBI) in India. |
| Monetary Policy | The commercial banks do not frame any monetary policy. | The Central Bank frames the monetary and credit policy. |
Question 5.
Answer the following questions in brief (Any 2):
(i) State any four modes of transport.
(ii) Explain the following functions of marketing:
(a) Standardisation and Grading
(b) Packaging and Labelling
(iii) Define outsourcing with its advantages and disadvantages.
Answer:
(i) Modes of Transport:
(a) Road Transport:
Roads are means that connect people and places on the surface of the land. It provides all over connectivity in any terrain as compared to other modes of transport. Various means of transport are used under road transport such as bullock, cart, cycles, rickshaws, buses, cars etc.
Bus Rapid Transit (BRT) systems have been introduced in many states to improve public transport system in India. India has a network of village roads, district roads, state highways and national highways which form the economic backbone ofthe country. In India, Ministry of Road Transport and Highways (MoRTH) looks after development of surface transport throughout the country.
(b) Rail Transport:
Transportation of goods and passengers on rail lines through trains is called as rail transport It occupies an important place in land transport system of our country and is most dependable mode of transport to carry goods and passengers over long distance.
In India, Ministry of Railways looks after the development of rail transport throughout the country. Indian railway runs various type of trains like passenger trains, mails , express and cargo or goods trains. Some popular trains are Rajdhani Express, Duronto Express, Shatabdi Express, Intercity Express, Vande Bharat Express and holiday special trains etc.
Indian railways also runs some luxury trains such as Palace on Wheels, Deccan Odyssey, Ramayana express. Maharaja express to promote domestic tourism.
(c) Air Transport:
Air transport carries the goods and passengers through airways by using different aircrafts like passenger aircrafts, cargo aircraft, helicopters etc. This is the fastest mode of transport but it does not provide door to door service. In hilly or mountainous areas where other modes of transport is not accessible, air transport is important and convenient mode. Air transport is also suitable mode in case of emergency Like war, medical, natural calamities, rescue operations etc. Air transport is classified into domestic transport and international transport. Air transport is carried out in fixed air routes. Various national and international public sector and private sector air ways companies are giving services on domestic and international routes.
(d) Water Transport:
Water transport refers to movement of goods and passengers on waterways by using various means like boats, steamers, ships etc. With the help of these means goods and passengers are carried to different places, both within as well as outside the country. When the goods and passengers move inside the country, it is known as inland water transport. When the different means of transport are used to carry goods and passengers in the ocean or sea route, it is known as ocean or sea, transport In India, Ministry of Shipping looks after development of ocean transport throughout the country. Students can also write about Pipelines, Monorail etc.
(ii) (a) Standardisation and Grading:
Standardisation means to determine standards related to process,’ size, quality, design, weight, colour etc. of the product. It helps in ensuring uniformity in the quality of the product. It helps in achieving customers loyalty towards the product. Grading is the process of classification of products according to similar characteristics and/or quality. Grading is done on the basis of their features like size, shape quality etc. Generally grading is done in case of agricultural products Like wheat, rice, potatoes etc..
(b) Packaging and Labelling:
Package and label creates the first impression on the consumer about the product. Attractive package and label can help to make product successful. Packaging means designing the package for the product. It helps to avoiding breakage, damage and destruction of the product. Packing material includes bottles, container, plastic bags, tin, wooden boxes, jute bags, bubble bags, packing foam etc. Label is a slip which is found on the product and provides all the information regarding the product and its producer. The slip on which all this information is provided is called as label and its process is called as labelling. Packaging and labelling not only provide protection to the product but also act as an effective tool of marketing.
(iii) Outsourcing Meaning / Concept:
Outsourcing is the process of contracting some business functions to specialised agencies. The company benefits in two ways.
(a) It reduces its own cost.
(b) It uses the expertise of the firm which specialises in a particular kind of service.
Examples of Outsourcing: The establishments such as shops, malls, housing societies, offices etc. outsource facilities like canteen, sanitation, security etc. In the same way arrangements for wedding, anniversary, birthday celebration can also be outsourced.
Need for Outsourcing: Today services all over the world are becoming highly specialised. Most services require finely tuned skills. With increasing global competition, most companies are focusing on showcasing their product or improving the quality of their goods. This has forced the companies to concentrate on their hard core activities, therefore companies are taking a fresh look at their business processes. Due to this, many non-core areas are being outsourced to firms who have an especially skilled workforce. The concept of outsourcing has emerged as a result of this thinking.
Advantages of Outsourcing:
(a) Overall Cost Advantages: It reduces the cost and also saves time and efforts on training cost.
(b) Stimulates Entrepreneurship, Employment and Exports: Outsourcing stimulates entrepreneurship, employment and exports in the country.
(c) Low Manpower Cost: The manpower cost is much lower than that of the host company.
(d) Access to professional, expert and high Quality Services: Mostly the tasks are given to people who are skilled in that particular field. This provides us with a better level of service and fewer chances of errors.
(e) Emphasis on Core Process Rather than the Supporting Ones: With its help companies can focus on their core areas which lead to better profits and increase the quality of their products.
(f) Investment Requirements are Reduced: The organisation can save on investing in the latest technology, software and infrastructure and let the outsourcing partner handle the entire infrastructure.
(g) Increased Efficiency’ and Productivity: There is an increased efficiency and productivity in the non core areas of an organisation.
(h) Knowledge Sharing: Outsourcing enables the organisation to share knowledge and best practices with each other, it helps develop both the companies and also boosts goodwill in the industry.
Disadvantages of Outsourcing / Limitations of Outsourcing
(a) Lack of Customer Focus: An outsourced vendor may be catering to the needs of multiple organisations at a time. In such a situation, he may lack complete focus on an individual organisation. As a result the organisation may suffer.
(b) A Threat to Security and Confidentiality: The confidential information of the organisation may be leaked to the third party, so there are security issues.
(c) Dissatisfactory Services: Some of the common problem areas with outsourcing include stretched delivery time and sub standard quality.
(d) Ethical Issues: The major ethical issue is taking away employment opportunities from one’s own country, when the function- is outsourced to a company from another country.
(e) Other Disadvantages:
1. Misunderstanding of the contracts.
2. Lack of communication.
3. Poor quality and delayed services.
Question 6.
Justify the following statements (Any 2):
(i) Marketing is important to the society.
(ii) The aim of the consumer organisation is to protect the rights of the consumer.
(iii) Market can be classified on the basis of time and volume.
(iv) State the importance of controlling.
Answer:
(i) Importance of Marketing to the Society:
(a) Increase in Standard of Living:
The prime objective of marketing is to provide goods and services to the customers to satisfy their needs. Paul Mazur defined marketing as, “the delivery of standard of living to the society”. Marketing helps to identify the needs of the ” customers and take an initiative to provide the quality goods at the cheaper prices. This will help ” to increase and maintain the standard of living-of the customers. In the modern times, large scale production of goods and services reduced its prices due to which even the poorer sections of society can attain a reasonable level of living.
(b) Provides Employment:
Modern marketing is a total system which covers almost all functions of organisation such as buying, selling, financing, transport warehousing, risk bearing, research and development etc. To run this system there is a need of people. Thus, marketing generates job opportunities to the people. In the modern era of automation, lesser employments are available in production function and the role of marketing has widened. It gives more opportunities for employment in marketing. Converse, Huegy and Mitchell have rightly pointed out that “In order to have continuous production, there must be continuous marketing, only then employment can be sustained and high level of business activity can be continued”.
(c) Decreases Distribution Costs:
Marketing activities help to provide cheap goods and services to the society. Effective utilisation of channel of distribution can help in reducing the cost prices of the products and services. Reduction of cost will help to increase the potential consumers for the products or services. It also assures timely availability of the product.
(d) Consumer Awareness:
Marketing helps the society by informing and educating consumers. The function of marketing is to fulfil the needs of the consumers. Marketing helps consumers to know about new product and service available in the market and its usefulness to the customer. Marketing provides satisfaction to the society by supplying relevant information, goods, and services to the people of society according to their demand and taste. Marketing also include conveying information to assists consumers in making a purchase, such as addresses, phone numbers, product release dates, store hours and web addresses.
(e) Increase in National Income:
Every economy revolves around marketing, production and finance to the industry. The scientifically organised marketing activities help in the economic development of the country. Effective marketing of products and services result into industrialisation, more jobs and makes the economy stronger and stable. Marketing can bring about rapid development of the country by integration of agriculture and industry.
(f) Managing Consumer Expectations:
Marketing research helps the organisations to understand the needs of the consumers. It helps in developing the products which fulfills customer’s expectations. Customers’ reviews are collected through different sources can help the organisations to make necessary changes in the products. Businesses use marketing to make consumers aware of major changes, such as mergers and transfers in ownership that affect product offerings or seek to improve quality. Government regulations prevent marketers from making false or misleading claims.
(ii) “Non-Government Organisation (NGO) are non-profit and non-political organisation which aim at promoting the welfare of the people.” The main aim of these NGOs is to study the trend of prices in the market and publish them for the information of consumers and to agitate against the malpractices of traders.
Role of Consumer organisations and NGOs in Consumer protection and Education:
(a) To organise campaigns and various programmes on consumer issues to create social awareness.
(b) To organise training programmes for the consumers and make them conscious of their rights and modes of redressal of their grievances.
(c) To publish periodicals to enlighten the consumers about various consumer related developments.
(d) To provide free legal advice to members on matters of consumer interest and help them to take up grievances.
(e) To interact with businessmen and Chambers of Commerce and Industry for ensuring a better deal for consumers.
(f) To file Public Interest Litigation on important consumer issues, such as ban on a product injurious to public health.
The following are examples of NGOs
(a) Consumer a Guidance Society of India. (CGSI)
(b) Voluntary Organisation in Interest of Consumer Education. (VOICE)
(c) Consumer Education and Research Centre. (CERC)
(d) Consumer Association of India. (CAI)
(e) Mumbai Grahak Panchayat. (MGP)
(f) Grahak Shakti. (GS)
(iii) Classification of Market:
(a) On the Basis of time:
1. Very Short Period Market: This type of market exists for a short time viz., for few hours or for a day at a particular time and place. In this type of market perishable goods such as vegetables, fruits, milk products etc. are sold.
2. Short Period Market: This type of market, has existence for a short period viz. weekly • markets, festival market, market during fairs etc. Perishable or semi-durable goods are sold
in this market.
3. Long Period Market: This type of market has „ existence for long period. In this type of market • durable commodities which are generally non-perishable in nature are sold.
(b) On the Basis of Volume of Transaction
- Wholesale Market: In wholesale market the activity of buying and selling goods is undertaken in large quantities at cheaper prices. Goods are sold to retailers who then sell them to the consumers. It refers to the market for bulk purchase and sale of goods. In such a market sellers are known as wholesalers and buyers are known as retailers.
- Retail Market: Retail market is the market where retailer sells goods directly to the consumer in small quantities.
(iv) Importance of Controlling:
Controlling is important in maintaining standards and to achieve desired goals effectively and efficiently.
It is a function of checking the performances of employees at every stage of their work in process. Importance of controlling function in an organisation is as follows:
(a) Fulfilling Goals of Organisation:
Controlling is the function of measuring the performances at every possible stage, finding out the deviations, if any; and taking corrective actions according to planned activities for the organisation. Thus, it helps in fulfilling the organisational goals.
(b) Making Efficient Utilisation of Resources:
Various techniques are used by managers to reduce wastage of material and spoilage of other resources. Standards are set for every performance. Employees have to follow these standards. As the effect of this, the resources are used by employees in the most efficient and effective manner so as to achieve organisational objectives.
(c) Accuracy of Standards:
An efficient control system helps management in judging the accuracy of standards whether they are accurate or not. Controlling measures are flexible to some extent. So after reviewing them according to changing circumstances, they are revised from time to time which is beneficial for checking performances accurately.
(d) Motivates Employee:
After setting standards of checking performance, they are communicated to employees in advance. Due to this, employees get an idea about what to do and how to do. Performances are evaluated and on that basis employees are rewarded in theform of increment, bonus, promotion etc. It motivates the employees to perform at their best level.
(e) Ensures Order and Discipline:
Controlling is the function of order and maintaining discipline. It works for reducing unprofessional behaviour of the employees. Discipline is maintained by continuous checking of performances by the superiors and preventive actions are taken to minimise the gap between actual and standards.
(f) Facilitates co-ordination:
Control is a function in which the roles and responsibilities of all departmental managers and the subordinates are designed clearly. Co-ordination between them helps to find out the deviations in their respective departments and to use remedial measure for desired results of the organisation.
(g) Psychological pressure:
The performances are evaluated with the standard targets. The employees are very well aware that their performance will be evaluated and they will be rewarded accordingly. This psychological pressure works as a motivational factor for employees to give their best performance.
(h) Ensures Organisational Efficiency and Effectiveness:
Factors of control include making managers responsible, motivating them for higher performance and achieving departmental coordination. It ensures about organisational efficiency and effectiveness.
(i) Builds Good Corporate Image:
Controlling function helps to improve the overall performance of the organisation. Minimum deviation in predetermined standards and actual performance results into the progress of business. It can be achieved with the help of proper control. This builds good corporate image and brings goodwill for the business.
(j) Acts as a Guide:
Controlling function provides set of standard. Managers as well as subordinates work according to it. Wherever necessary, they can take the help of these standards and can achieve desired results. Thus, controlling function acts as a guide for everyone.
Question 7.
Answer the following questions in detail (Any 2):
(i) Explain marine insurance policies.
(ii) Need for social responsibility
(iii) Define the primary functions of bank
Answer:
(i) Types of Marine Insurance Policies:
(a) Voyage Policy: It is a policy in which the subject matter is insured for a specific voyage irrespective of time involved in it. In this case, risk begins only when the ship starts the voyage.
(b) Time Policy: In this policy the subject matter is insured for a definite period of time. A time policy cannot be for a period exceeding one year, but it may contain continuation clausg. The continuation clause means that if the voyage is not completed within the specified time, the risk shall be covered until the voyage is completed.
(c) Mixed Policy: This policy is the combination of voyage and time policy. It therefore, cover the risk of both, particular voyage and for specified period of time.
(d) Valued Policy: Under this policy, goods are insured for an agreed value between the insurer and insured at the time of taking policy. This facilitates easy settlements of claims in case of such items where it is difficult to assess the real’ market value.
(e) Blanket Policy: This policy is taken for maximum limit of the required amount of protection and full amount of premium is paid in the beginning of the policy. This policy describe the nature of goods insured, specific route, ports and places of voyage.
It covers multiple risks on one property or it covers many properties under the policy.
(f) Port Risk Policy: Port risk policy covers all types of risks of a vessel while it is anchored at the port for a particular period of time. This policy is applicable till the departure of the vesselfromthe port.
(g) Composite Policy: This type of policy is purchased from more than one insurers. The liability of each insurer is separate and distinct. This policy is taken when the amount of insurance is very high.
(h) Single Vessel Policy: This policy is suitable for small ship owner having only one ship or having one ship in different fleets. It covers the risk of one vessel of the insured.
(I) Fleet Policy and Block Policy: In fleet policy, several ships belonging to one owner are insured under the same policy. In block policy, the cargo owner is protected against damage or loss of cargo in all modes of transport through which his/ her cargo is carried i.e., Covering all the risks of rail, road, and sea transport etc.
(ii) Need for Social Responsibility
Business organisation is run by profit motive but profit maximisation should not be the sofe aim. Commitment to society is also important. The following points bring out the need for social responsibility of business.
(a) Concept of Trusteeship:
Trusteeship is a socio-economic philosophy that was propounded by Mahatma Gandhi. It provides a means by which the wealthy people would be the trustees of trusts that looked after the welfare of the people in general. Businessmen are considered to be trustees of society.
(b) Changing Expectations of Society:
Society’s expectations from business firms have undergone a drastic change over the years. In the early days, business were viewed only as a provider of goods and services.
But today society expects business to be a responsible citizen and contribute towards social welfare.
(c) Reputation:
Businesses spend huge amount of resources in brand building and strengthening their image. A socially responsible company enjoys a good reputation in the society. It results in increased sales, profitability, attraction oftaLent and sustained growth.
(d) Protection of Environment:
Business organisation / should make proper use of country’s riatural resources. They should avoid environmental degradation such as contamination of water resources, depletion of the ozone layer etc., which have been caused by businesses. These have resulted in poor health of the community and placed a question mark on the survival of human species.
(e) Optimum Utilisation of Resources:
Modern businesses have huge amount of resources at their disposal. With such large resources businesses are in a better position to protect society’s interests. Wastage of resources should be avoided.
(f) Pressure of Trade Union:
Nowadays, workers have become conscious of their rights. Trade unions are growing fast and play important role in business environment. Workers expect management to provide fair wages, bonus etc. To avoid conflicts between trade unions and management business should understand responsibility and act accordingly.
(g) Growth of Consumer Movement:
Development of education and mass media and increasing competition in the market have made the consumers conscious of their rights and powers in determining market forces. So, business enterprises have to follow consumer oriented policies.
(h) Government Control:
From the point of view of a business, government regulations are undesirable because they limit freedom. Government have enacted various laws. This has put moral as welL as legal pressure on business.
(i) Long-term self Interest:
A firm and its image stands to gain maximum profits in the long run when it has its highest goal as ‘service to society’ when increasing number of members, of society- including workers, consumers, shareholders and government officials, feel that business enterprise is not serving their interest, they will tend to withdraw their cooperation to the enterprise concerned so in their own self interest, a firm fulfils its social responsibility.
(j) Complexities of Social Problems:
Some of the social problems have been created by business firms themselves such as pollution, unsafe work places, discrimination etc. It is the moral obligation of business to solve such social problems.
(k) Globalisation:
The entire globe is the market place nowadays. It provides more opportunities and challenges to business. International trade barriers have reduced and it resulted in global distribution of goods and services. Countries who have adopted good practices are influencing the world.
(l) Role of Media:
Media plays important role in public life. Due to internet, it is easier to reach a common man. Media is very vibrant and active.
It can influence masses in society. Media can raise voice against business malpractices and exploitation of consumers. Business should not ignore social values.
(iii) Primary Functions of Bank:
The primary functions of commercial banks are known as core banking functions. The primary functions are as follows:
(1) Accepting Deposits: Commercial banks collect deposits from individuals and organisations. The deposits can be classified into two types i.e,. Time Deposits and Demand deposits.
(A) Time Deposits: Time deposits are called as time deposits because they are repaid to the customers after the expiry of decided time. These are of two types:
(a) Fixed Deposit: Fixed deposit account is an account where fixed amount is kept for fixed period of time bearing fixed interest rate. Rate of interest is more as compared to saving bank account and varies with the deposit period.
Normally, withdrawal of amount is not permitted before maturity date. However, depositor can withdraw amount before maturity date for which bank will reduce the interest rate.
(b) Recurring Deposit: It is operated by salaried persons and businessmen having regular income. A certain fixed sum of money is deposited into the account every month.
(B) Demand Deposits: Demand deposits
are those which are repaid to customers whenever they demand. That means, money can be withdrawn as per the wish of the customer through withdrawal slips, cheques,
ATM cards, online transfer etc.
Two types of demand deposits are:
(a) Saving Account: It is generally operated by those who earn regular orfixed income such as salary or wages. The main aim of this deposit account is to encourage habit of savings among people.
(b) Current Account: This account is operated by business firms and other commercial organisations such as 8. hospitals, educational institutions etc. who have regular banking transactions.
In this account there is no restriction on deposits and withdrawals of amounts. No interest is paid by the bank on this type of account. Overdraft facility is available for this account. For current account, banks provide statement of account every month.
(2) Granting Loans and Advances: Banks grant loans and advances to business firms and others who are in need of bank funds. The loans are provided for longer period of time from 1 year and more. Advances are provided for shorter period from 4 months to 1 year.
(A) Loans: Commercial banks provide loans to businessmen and others. The borrowers can use entire amount sanctioned or can withdraw in installments. Interest is charged on the amount sanctioned. The loans are as follows:
(a) Short-Term Loans are for a period upto 1 year to meet working capital requirements of the borrower.
(b) Medium-Term Loans are for a period of 1 year to 5 years to meet working capital as well as fixed capital requirements of the borrower.
(c) Long-Term loans are for a period of 5 years or more to meet long term capital requirements of the borrower.
(B) Advances: Advances are small term fund provided to businessman to satisfy different financial requirements of the business. Advances are as follows:
(a) Cash Credit: The cash credit advances are provided to current account and savings account holders. It provides working capital for longer period of time. Interest rate is higher on cash credit. Separate cash credit account has to be maintained by the borrower.
(b) Overdraft: This facility is offered to current account holders to meet their working capital requirements. The period can vary from 15 to 60 days. Interest is charged on actual amount withdrawn.
No separate account is maintained, and entries are shown in current account. It is a temporary arrangement for a short period.
(c) Discounting of Bills of Exchange: The drawer of bills of exchange or beneficiary can discount the bill with bank and obtain an advance. On the due date of the bill, the bank will recover the amount from the drawee.
Question 8.
Answer the following questions in detail (Any 1):
(i) What are the principles and techniques of scientific management? Explain in detail.
(ii) Explain in detail the three tier Quasi judicial machinery under the Consumer Protection Act.
Answer:
(i) Scientific Management Theory of Principle.
Definition of Scientific Management by Fredrick Taylor: “Scientific Management consists of knowing what you (i.e. management) want men to do exactly; and seeing it that they do it in the best and the cheapest manner.”
Principles of Scientific Management: These principles are as follows:
(a) Science, Not Rule of Thumb:
In order to increase organisational efficiency, the ‘Rule of Thumb’ method should be substituted with the methods developed through scientific analysis of work. Rule of thumb decisions are based on personal ’ judgments of the manager. Taylor insisted upon scientific method for every small work. This principle is concerned with selecting the best way of performing a job after scientific analysis of that job and not by trial and error methods. Standard required time and standard output should be defined by the manager. This will help in saving time and human energy and will result into expected standard output. According to Taylor, even a small production activity like loading iron sheets into box cars can be scientifically planned.
(b) Harmony, Not Discord:
According to this principle, there should be harmony between the employees and management. This coordination will help in minimising conflicts between them. Perfect understanding between employees and management will be helpful in creating healthy work environment for achieving the desired goal i. e. success. Organisation should think about maximum prosperity of employees also.
(c) Mental Revolution:
Taylor introduced the concept of “Mental Revolution’. This principle focuses on change in the attitude of employees and management towards each other. Both should realise their equal importance in organisation. They should give full cooperation for achieving goal of organisation. This will increase productivity and profits.
(d) Cooperation, Not Individualism:
This principle emphasises on mutual cooperation between workforce i.e., employees and management. Due to cooperation, trust, team spirit etc. internal competition will turn into healthy working environment. Management should always consider the suggestions given by employees in decision making process. Employees should be treated as an integral part of organisation in all respects. At the same time employees should resist themselves from going on strikes and making unnecessary demands from management. They should treat each other as two pillars of organisation.
(e) Division of Responsibility:
Proper division of work should always be accompanied with division of responsibilities between the managers and employees. Major planning is done by the top and middle level management authorities whereas employees are concentrating on its execution. The reporting is done as per the instructions given by their superiors. Managers should always help, encourage and guide the employees. It helps for best performances of managers as well as employees.
(f) Development of Employer and Employees for Greater Efficiency and Maximum Prosperity: Best performance of any organisation always depends op the skills and capabilities of its employees to a great extent Thus, providing training and development programmes to the employees whenever required, is very essential It ultimately affects the profitability of the, organisation. Each employee should be given proper opportunity to attain greater efficiency and maximum prosperity.
Some of the major techniques of scientific management are as follows:
1. Work Study: Before assigning the work to the available workforce, proper work study should be done by management. Work study consists of an organised, systematic and critical assessment of the various activities or functions. Work study is based on the techniques such as time study, motion study, method study and fatigue study.
(A) Time Study: It is the technique of observing and recording the time taken by an employee to complete a given task. With the help of time study, the precise time required for each element of work is determined. It is the technique used for fixing the standard time required to do a particular task under given condition. It is useful to measure the efficiency of an employee and to control the cost of work.
(B) Method Study: There are always various methods of completing the task. For best quality and cost effectiveness, identifying the best method of doing a particular job is very important but challenging task for a manager. It helps in reducing the wastage of time, raw material and in improving the utility of all resources as per predefined objectives.
It is helpful in determining the methods for handling the raw materials, transportation, inspection, storage etc.
(C) Motion Study: The study of required motion means movement of an employee as well as of machine while completing a particulartask is very important. It is helpful in eliminating unnecessary motions and finding the best method of doing a particularjob. It also helps in improving the efficiency of the employees. Motion technique is used to know whether some elements of a job can be eliminated or their sequence can be “changed for smooth flow of task.
(D) Fatigue Study: Generally long working hours without sufficient breaks, target pressure, heavy working tools, and poor working conditions result into physical and mental stress i.e., fatigue. It has an adverse effect on the health and efficiency ofthe employees. The study of fatigue and steps to reduce ‘ the level of fatigue is very important to maintain the operational efficiency of the employees.
2. Standardisation of Tools and Equipments:
With the result of experiments conducted at work place, Taylor advocated standardisation of tools and equipments. Standardised working environment and methods of production help to reduce spoilage and wastage of material cost of production, fatigue among the workers and it improves quality of work.
3. Scientific Task Setting: Taylor emphasised the need for fixing a fair day’s work. Scientific work setting is important to prevent the employees from doing work much below their capacity. By using this technique, employees will complete the task according to standards given and management can keep proper control on optimum utilisation of workforce.
4. Scientific Selection and Training: Management can select right persons forthe rightjobs by using scientific selection procedures. It needs to fix job specifications as per requirement. Employees are selected according to predetermined standards in an impartial way. After selection, management should provide the proper training programmes to increase their efficiency.
5. Functional Organisation: In this concept of Taylor, planning is separated from implementation. That means, planning is done by different people and actual work is supervised by different people. Thus, every worker will be supervised by two different sets of supervisors.
He recommended total eight foremen to control the various aspects of production. They are categorised as follows:
(A) At Planning Level:
a. Route Clerk- tells how work moves from one machine to other.
b. Instruction Clerk- records instructions to complete the work.
c. Time and Cost Clerk- determines time in which work should be completed and workout the cost.
d. Discipline- ensures that the workers are working as per factory rules.
(B) At implementation Level:
a. Gang Boss-actually gets the work done.
b. Speed Boss-ensures that the work is completed in specified time.
c. Repair Boss-handles security and maintenance of mechanism.
d. Inspector-ensures that the work is done as per the specified standards.
According to Taylor, with the help of proper division of all activities into planning and implementation: management can definitely achieve the required performance from the employees.
6. Differential Piece-Rate Wage Plan:
Remuneration should be fixed in such a way that average worker is motivated to attain a standard output Taylor suggested the differential piece-wage system. Higher rates are offered to employees who complete the work more than the standard quantity under this system. On the other hand, if an employee is performing below the standard; he shall be given lower rate of wages. This technique motivate the employees to attain higher standard performance and earn wages i.e. remuneration at higher rate.
(ii) Following are consumer dispute redressal forums established under the Act.
1. District Commission:
Meaning: A consumer dispute redressal commission at each district established by the State Government is known as District Commission.
Composition: Each District commission shall consist of the following:
(A) President: A person who is sitting or retired or qualified to be a District Judge.
(B) Member: Not less than two and not more than such number of members as may be prescribed, in consultation with the Central Government.
Tenure: Any person appointed as President or a member of the District Commission shall hold office as such as President or as a member till the completion of his term for which he has been appointed. The members will hold office for a term of five years or upto the age of sixty five years, whichever is earlier.
Qualification: The members of National Commission shall have the following qualifications:
a. Age: Members should not be less than 35 years of age.
b. Education: They should possess a Bachelors Degree from a recognised University.
c. Experience: They should have adequate knowledge and at least ten years experience in dealing with problems related to economics, law, commerce, accountancy, industries.and public affairs or administration.
Territorial Jurisdiction: Territorial Jurisdiction of district commission is entire district in which it is established.
Monetary Jurisdiction: District Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration does not exceed ₹ one crore.
Appeal: Any person aggrieved by an order made by the District Commission may prefer an appeal against such order to the State Commission within a period of forty-five days from the date of the order, in such form and manner, as may be prescribed.
The State Government, by notification may make rules about qualifications, method of recruitment,’ term of office, resignation and removal of president and members of District Commission. However, any person already appointed as a President or member of District Commission immediately before the commencement of this Act, will remain on the same post till the completion of his term for which he has been appointed.
2 State Commission:
Meaning: A consumer dispute redressal commission at the state level established by the State Government is known as State Commission, it is also called as State Consumer Disputes Redressal Commission.
Composition: Each State Commission shall consist of
(A) President: A person who is sitting or retired Judge of High Court, shall be appointed by the State Government as the president of State Commission in consultation with Chief Justice of High Court
(B) Member: Not less than four or not more than such number of members as may be prescribed in consultation with the Central Government.
Tenure: The members will hold office for a term of five years or up to the age of sixty seven years, whichever is earlier. ‘* Qualification: The members of state commission shall have the following qualifications:
a. Age: Members should not be less than 35 years of age.
b. Education: They should possess a Bachelors Degree from a recognised University.
c. Experience: They should have adequate knowledge and at least ten years experience in dealing with problems related to economics, law, commerce, accountancy, industries and public affairs or administration.
Territorial Jurisdiction: It can entertain original cases as well as appeals against the order of District Commission which are within the geographical limits of the state.
Monetary Jurisdiction: To entertain complaints where the value of the goods or services paid as consideration, exceeds ? one crore, but does not exceed ₹ ten crore.
Appeal: Any person aggrieved by an order made by the State Commission may prefer an appeal against sueh order to the National Commission within a period of thirty days from the date of the order in such form and manner as may be prescribed.
The Central Government, by notification may make rules about qualifications, method of recruitment, term of office, resignation and removal of President and Members of State Commission.
However, any person already appointed as a President or member of State Commission immediately before the commencement of this Act, will remain on the same post till the completion of his term for which he has been appointed.
3. National Commission:
Meaning: A consumer dispute redressal forum at the National level established by the Central Government by notification is known as National Commission. It is also called as the National Consumer Disputes Redressal Commission.
Composition: National Commission shall consist of.
(A) President: A person, who is or has been a Judge of the Supreme Court, shall be appointed by the Central Government as the president of National Commission in consultation with Chief Justice of India.
(B) Member: Not less than four and not more than such number of members as may be prescribed.
Tenure: The members will hold office for a term of five years or up to the age prescribed, whichever is earlier.
Qualification: The members of national commission shall have the following qualifications:
a. Age: Members should not be less thpn 35 years of age.
b. Education: They should possess a Bachelors Degree from a recognised University.
c. Experience: They should have adequate knowledge and at least ten years experience in dealing with problems , related to economics, law, commerce, accountancy, industries and public affairs or administration.
Territorial Jurisdiction:
It can entertain original cases as well as appeals against the order’ of State Commission which are within the geographical limits of the state.
Monetary Jurisdiction:
To entertain complaints where the value of the goods or services paid as consideration exceeds ? ten crore.
Appeal:
Any person, aggrieved by an order made by the National Commission may prefer an appeal against such order to the Supreme Court within a period of thirty days from the date of the order.
The Central Government, may by notification make rules about the qualification, appointment, term of office, salaries, resignation and removal of the President and Members of the National Commission. However, the President and the members shall hold the office for maximum five years, but are eligible for reappointment. The Act further provides that the President can workupto the age of seventy years and members can work upto the age of sixty seven years.