2nd PUC Business Studies Model Question Paper 3 with Answers

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Karnataka 2nd PUC Business Studies Model Question Paper 3 with Answers

Time: 3 Hrs 15 Min
Max. Marks: 100


I. Answer any ten of the following questions in a word or a sentence each.
Each questions carries one mark. (10 × 1 = 10)


Question 1.
State the first function of management?

Question 2.
Who is called the father of scientific management?
F. W. Taylor.

Question 3.
Liberalization Means

  1. Integration among economics.
  2. Reduced government controls and restrictions.
  3. Policy of planned disinvestments
  4. None of them

2. Reduced government controls and restrictions.

Question 4.
What are policies?
Policies are general statements that guide thinking towards a particular direction.

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Question 5.
Grouping process in management is known as ___________________?

Question 6.
What is4 manpower planning?
Manpower planning is an estimation of manpower required for the organisation.

Question 7.
State any one style of leadership?
Autocratic leadership.

Question 8.
What do you mean by zero deviation?
If the actual performance is equal to standard performance, it is treated as zero deviation.

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Question 9.
The cheapest source of finance is

  1. Debenture
  2. Equity share capital
  3. Preference share
  4. Retained earning.

4. Retained Earning.

Question 10.
Expand SEBI.
Securities and Exchange Board of India.

Question 11. What is a brand?
A brand is a name, term, sign, symbol, design or some combination of them, used to identify the products.

Question 12.
State any one reason for consumer protection?
Ignorance of the Consumers.


II. Answer any ten of the following questions in two or three sentences each.
Each question carrier two marks: (10 x 2 = 20)

Question 13.
Define coordination.
“Co-ordination is the process whereby an executive develops an orderly pattern of group efforts among his subordinates and secure unity of action in the pursuit of common purpose”- McFarland.

Question 14.
Give two differences between unity of command and unity of direction.

Unity of Command Unity of Direction
This principle advocates that there should be only one boss for every individual employee. This principle advocates that all units of an organization should be moving towards the same objectives of the organization.
This principle is related to the people and their relationship in the organization. This principle relates to the work and the direction of the work towards the objectives of the organization.

Question 15.
What is privatisation?
The new set of economic reforms aimed at giving greater role to the private sector in the nature building process and a reduced role to the public sector is known as privatisation.

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Question 16.
Mention any two features of planning.

  1. Planning focuses on achieving objectives
  2. Planning is a primary function of management.

Question 17.
Define Organising?
According to Henry Fayol,” To organize a business is to provide it with everything, useful to its functioning – raw materials, machines, tools, capital, and personnel”.

Question 18.
Give two differences between training and development

Training Development
It is a process of increasing knowledge and skills It is a process of learning and growth
It is to enable the employee to do the job better. It is to enable the overall growth of the employee
It is a job oriented process It is a career oriented process

Question 19.
What is Supervision?
Supervision is an element of directing. It means overseeing what is being done by subordinates and giving instructions to them. It is also considered an important function to be performed by supervisor.

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Question 20.
What is responsibility accounting?
Responsibility accounting is a system of accounting in which different sections, divisions and departments of an organization are set up as “Responsibility Centres”. The head of the centre is responsible for achieving the target set for his center.

Question 21.
What is personnel selling?
Personal selling involves oral presentation of message in the form of conversation with one or more prospective customers for the purpose of making sales. It is a personal form of communication.

Question 22.
State any two objectives of pricing.
1. Obtaining Market Share Leadership:
If a firm’s objective is to obtain larger share of the market; it will keep the price of its products at lower levels so that greater number of people are attracted to purchase the products.

2. Surviving in a Competitive Market:
If a firm is facing difficulties in surviving in the market because of intense competition or introduction of a more efficient substitute by a competitor, it may lead to discounting its products or running a promotion campaign to liquidate its stock.

Question 23.
Who can file a complaint before the appropriate consumer forum?

  1. A Consumer
  2. Any Registered Consumer Association

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Question 24.
State any two differences between entrepreneurship and management?

Entrepreneurship Management
The focus is on start-up The focus is on ongoing operations of an existing business.
There is an informal approach The approach is formal


III. Answer any seven of the following questions in 10 – 12 sentences.
Each question carrier 4 Marks: (7 x 4 = 24)

Question 25.
Explain briefly the importance of management.
Management is considered important due to the following reasons:

1. Management helps in achieving group goals:
Management is required to give a common direction to the individual effort, in order to achieve the group goals of the organisation.

2. Management increases efficiency:
The main aim of every manager is to increase efficiency i.e., to maximise output with minimum cost. This is achieved through better planning, organising, directing and controlling the activities of the organisation.

3. Management creates a dynamic organisation:
All organisations have to function in an environment which is constantly changing. Resistance to change is often observed with individuals management helps people adapt to these changes, so that an organisation is able to maintain its competitive edge.

4. Management helps for achieving personal objectives:
A manager motivates and leads his team in such a manner that individual members are able to achieve personal goals while contributing to the overall organisational objective. Through motivation and leadership the management helps individuals to develop team spirit, cooperation and commitment to group success.

Question 26.
Explain briefly the features of business environment.
Business environment has the following features:
1. Totality of external forces:
Business environment’s the sum total of all things external to business firms and, as such, is aggregative in nature.

2. Specific and general forces:
Business environment includes both specific and general forces. Specific forces such as investors, customers, etc, affect individual enterprises directly and immediately in their day-to-day working. General forces such as social, political conditions have impact on all business enterprises and thus may affect an individual firm only indirectly.

3. Inter-relatedness:
Different elements of business environment are closely interrelated. One element of the environment affects the other. For example, new health aware products such as diet coke, fat-free cooking oil, etc changed people’s lifestyles.

4. Dynamic nature:
Business environment is dynamic. It keeps on changing whether in terms of technological improvement, shifts in consumer preferences, etc.

5. Uncertainty:
Business environment is largely uncertain because it is difficult to predict future happenings.

6. Complexity:
Since business environment consists of numerous interrelated and dynamic forces which arise from different sources, it is relatively easier to understand in parts but difficult to grasp in its totality.

7. Relativity:
Business environment is a relative concept. It differs from country to country and even from region to region.

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Question 27.
Briefly explain the limitations of Planning?
The major limitations of planning are given below:

1. Planning leads to rigidity:
In an organization, a well-defined plan is drawn up with specific goals to be achieved within a specific time frame. These plans then decide the future course of action. The managers may not be in a position to change these plans. This kind of rigidity in plans may create difficulty. This rigidity restricts the individual freedom, initiative and creativity.

2. Planning may not work in a dynamic environment:
The business environment is dynamic. Planning anticipates future. It takes into consideration the possible changes in economic, political, legal and social dimensions. But it becomes difficult to accurately assess the future trends. Competition in the market can also upset the plans. Planning cannot foresee everything and thus, there may be obstacles to effective planning.

3. Planning reduces creativity:
Planning is an activity which is done by the top management. Usually the rest of the members just implement these plans. Middle management and other decision makers are neither allowed to deviate from plans nor are they permitted to act on their own. Thus, much of the initiative or creativity inherent in them also gets lost or reduced.

4. Planning involves huge costs:
When plans are drawn up, huge costs are involved in their formulation. These may be in terms of time and money. The cost incurred sometimes may not justify the benefits derived from the plans.

Question 28.
What is delegation? Explain the elements of delegation?
Delegation of authority is necessary for the smooth functioning of a business. It increases the working capacity of a manager. Effective delegation can lead to the following benefits:

1. Effective management:
Delegation enables superiors to assign the routine activities to the subordinates and he can concentrate on other important functions. Thus, a manager can increase his effectiveness by using the skills of subordinates through delegation of authority.

2. Employee development:
Employees get more opportunities to utilize their talent. It motivates them to develop themselves for higher positions, as they are given opportunities to use their skills and talents for gaining excellence in their jobs.

3. Facilitates growth:
Delegation facilitates growth and expansion by providing trained and experienced personnel for taking up leading positions in new project.

4. Basis of management hierarchy:
Delegation of authority determines who has to report to whom. It creates the chain of superior-subordinate relationship which is the basis for hierarchy of management.

5. Better co-ordination:
The elements of delegation namely authority, responsibility and accountability clearly define powers, duties answerability related to various departments. This helps to avoid overlapping of duties and brings better co-ordination among various departments and functions of management.

6. Quick decision making:
The subordinates are given authority to take decisions. They need not go to their superiors from time to time for taking decision on routine matters. This increases speed of decision making.

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Question 29.
Explain briefly any four types of selection tests?
After screening the applications, eligible candidates are asked to appear for selection tests. The following tests are usually conducted to measure the intelligence, aptitude, proficiency, personality, etc.

a. Intelligence tests:
These tests are used to judge the mental capacity of the applicant. Intelligence tests evaluate the ability of an individual to understand instructions and make decisions.

b. Aptitude tests:
Aptitude means the potential which an individual has for learning new skills. Aptitude test indicate the person’s capacity and his potential for development.

c. Trade or proficiency tests:
These tests are designed to measure the skills already acquired by the individuals. They measure the level of knowledge and proficiency in the area of profession or technical training.

d. Personality tests:
These tests probe for the overall qualities of a person as a while. They provide clues to a person’s emotional reactions, maturity level, value system, etc.

e. Interest tests:
These tests identify the areas in which a candidate has special concern, fascination, involvement, etc. These tests suggest the nature of job liked by a candidate which may bring him job satisfaction.

Question 30.
Explain briefly any four semantic barriers to communication process?
Semantic barriers are concerned with problems and obstructions in the process of encoding and decoding of message into words or impressions. Some Semantic barriers are as follows:

1. Badly expressed massage:
Badly expressed massages may be on account of inadequate vocabulary, usage of wrong words, omission of needed words, etc.,

2. Symbols with different meanings:
A word may have several meanings. Receiver has to perceive the right meaning of the word used by communicator. Wrong perception leads to communication problems.

3. Faulty translations:
Sometimes, the communications originally drafted in one language need to be translated to the language understandable by the receivers. If the translator is not proficient with both the languages, mistakes may creep in causing different meanings to the communication.

4. Unclarified assumptions:
Some communication may have certain assumptions which are subject to different interpretations. These assumptions may lead to wrong understanding between the speakers.

Question 31.
Briefly explain the controlling process?
Controlling is a systematic process involving the following steps:

1. Setting performance standards:
The first step in the controlling process is setting up of performance standards. Standards are the criteria against which actual performance would be measured. Standards can be set in both quantitative as well as qualitative terms.

2. Measurement of Actual Performance:
Once performance standards are set, the next step is measurement of actual performance. It is generally believed that measurement should be done after the task is completed.

3. Comparing actual performance with standards:
This step involves comparison of actual performance with the standard. Such comparison will reveal the deviation between actual and desired results. Comparison becomes easier when standards are set in quantitative terms.

4. Analysing deviations:
Some deviation in performance can be expected in all activities. After identifying the deviations that demand managerial attention, these deviations need to be analysed for their causes. These causes may be unrealistic standards, defective process, inadequacy of resources, structural drawbacks, etc. It is necessary to identify the exact cause of deviation, failing which an appropriate corrective action might not be possible.

5. Taking corrective action:
The final step in the controlling process is taking corrective action. No corrective action is required when the deviations are within acceptable limits. When the deviations go beyond the acceptable range, it demands immediate managerial attention. Corrective action might involve training of employees if the production target could not be met.

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Question 32.
Explain any four factors which may influence the amount of fixed capital requirements in a business?
Factors affecting the requirement of Fixed Capital:

1. Nature of Business:
The type of business has-a bearing upon the fixed capital requirement. A trading concern needs lower investment in fixed assets compared with a manufacturing organization.

2. Scale of Operations:
A larger organization operating at a higher scale needs the bigger plants, more space, etc and therefore, requires higher investment in fixed assets. A smaller organization requires less fixed capital.

3. Choice of Technique:
Some organizations are capital intensive which require higher investment in plant and machinery. Therefore the requirements of such capital intensive business units are more. Labour intensive organizations require less fixed capital comparatively.

4. Technology Up-gradation:
Higher investment in fixed assets requires more fixed capital. The organizations which use assets which are prone to obsolescence require higher fixed capital to purchase such assets repeatedly.

Question 33.
Explain briefly the functions of financial market?
Financial market plays an important role in the allocation of scarce resources in an economy by performing the following four important functions:

1. Mobilisation of savings and channelizing them into the most productive uses:
A financial market facilitates the transfer of savings from savers to investors. It gives savers the choice of different investments and thus helps to channelize surplus funds into the most productive use.

2. Facilitating price discovery:
In the financial market, the households are suppliers of funds and business firms represent the demand. The interaction between them helps to establish a price for the financial asset which is being traded-in that particular market.

3. Providing liquidity to financial assets:
Financial markets facilitate easy purchase and sale of financial assets. In doing so they provide liquidity to financial assets, so that they can be easily be converted into cash whenever required.

4. Reducing the cost of transactions:
financial markets provide valuable information about securities being traded in the market. It helps to save time, effort and money to both buyers and sellers of a financial asset.

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Question 34.
Explain briefly the importance of packaging?
Packaging has acquired great significance in the marketing of goods and services, due to the following reasons:

a. Rising standards of health and sanitation:
Because of the increasing standards of living in the country, more and more people have started purchasing packed goods as the chances of adulteration in such goods are minimised.

b. Self-service Outlets:
The self-service retail outlets are becoming very popular, particularly in major cities and towns. Because of this, some of the traditional role assigned to personal selling in respect of promotion has gone to packaging

c. Innovational Opportunity:
Some of the recent developments in the area of packaging have completely changed the marketing scene in the country. The scopes for the marketing of many products have increased due to modern packaging.

d. Product Differentiation:
Packaging is one of the very important means of creating product differentiation. The color, size, material of package makes real difference in the perception of customers about the quality of the product.


IV. Answer any four of the following questions in 20 – 25 sentences each.
Each question carrier 8 marks: (4 × 8 = 32)

Question 35.
Explain the functions of Management?
Management is described as the process of planning, organising, directing and controlling the efforts of organisational members and of using the resources of the organisation to achieve specific goals. Luther Gulick has given a keyword “PODSCORB”.
2nd PUC Business Studies Model Question Paper 2 with Answers Sec D img 1

  1. P → Planning
  2. 0 → Organising
  3. S → Staffing
  4. D → Directing
  5. Co → Coordination
  6. R → Reporting and
  7. B → Budgeting

The most widely accepted classification of management functions is given by Koontz and O’Donnell which includes planning, organizing, staffing, Directing and Controlling.

1. Planning:
Planning is the basic and first function of management. It is the function of determining in advance what is to be done and who is to do it. A plan is a future course of action. Planning implies setting goals in advance and developing a way of achieving them efficiently and effectively. Planning is necessary to ensure proper utilisation of human and non-human resources.

2. Organisaing:
It is the process of bringing together, physical, financial and human resources. It develops productive relationship amongst them for achievement of organisational goals. Organising is the management function of assigning duties, grouping tasks, establishing authority and allocating resources required to carry out a specific plan. Organising as a process involves.

  • Identification of activities
  • Classification of activities
  • Assignment of duties
  • Delegation of authority and creation of responsibility
  • Coordinating authority and responsibility relationships.

3. Staffing:
It includes finding the right people for the right job. This is also known as the human resource function and has assumed greater importance in the recent years staffing involves.

  • Manpower planning
  • Recruitment, selection, and placement
  • Training and Development
  • Remuneration
  • Performance appraisal
  • Promotions and Transfer.

4. Directing:
The directing function involves leading, influencing and motivating employees to perform the tasks assigned to them. It is that part of managerial function that actuates the organisational methods to work efficiently for achievement of organisational objectives Directing has the following elements:

  • Supervision
  • Motivation
  • Leadership
  • Communication
  • Delegation
  • Coordination

5. Controlling:
It is the management function of monitoring organisational performance towards the attainment of organisational goals. It implies the measurement of actual performance against the set standards and connecting the deviations if any so as to ensure the achievement of organisations goals. Controlling has the following steps:

  • Establishment of standards
  • Measurement of actual performance
  • Comparison of actual performance with the set standards and finding out deviations if any
  • Taking corrective action.

Theoretically, the management functions can be separated but practically these functions are overlapping in nature. Hence they are inseparable. Each function blends into the other and each function affects the performance of other functions.

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Question 36.
Explain any four types of plans.
In order to accomplish the targets, the management of a business organization chalks out different types of plans. The important types of plans are explained below:
Types of plans
1. Single-use plans:
A single-use plan is developed for a one-time event or project. The examples are

  • Budgets
  • Programmes
  • Projects

2. Standing Plans:
A standing plan is used for activities that occur regularly over a period of time. The examples are

  1. Policies
  2. Procedures
  3. Methods
  4. Rules

3. The other plans include strategies and objectives.
2nd PUC Business Studies Model Question Paper 3 with Answers Sec D img 1

Brief explanation of the various types of plans are as follows:
1. Objectives:

1. Objectives are the end points towards which the activities of an organization are directed. They are said to be the desired future position that the management would like to reach.

2. Objectives are very basic to the organization which the organization wants to achieve by its operations.

3. Objectives are set by the top management. They lay down guidelines for the activities and serves as a bench mark for measuring the performance of an organization.

4. Objectives need to be expressed in specific terms. They should be expressed in quantitative and measurable terms. They are also to be put in the form of written statements and they represent the desired results to be achieved in a given period of time.

2. Strategies:
A strategy provides the broad contours of an organization’s business. Strategies are the specific programmes of action for achieving the objectives of the organization by employing the organization’s resources efficiently and effectively.

A strategy is a comprehensive plan which acts as a guideline to handle specific problems. Major strategic decisions will include decisions like whether the organization will continue to be in the same line of business, or combine new lines of activity with the existing business or seek to acquire a dominant position in the same market.

3. Policy:

  • Policies are general statements that guide thinking.
  • Policies provide a basis for interpreting strategy.
  • Policy is a guide to managerial action and decision in the implementation of strategy. Strategies are formulated by top management.

Formulation of strategy involves the following aspects:

  1. Determination of the long term objectives
  2. Adopting a course of action to achieve the objectives and
  3. Allocating resources necessary to achieve the objectives.

4. Procedure:

  • Procedures are routine steps on how to carry out activities. They detail the exact manner in which any work is to be performed.
  • Procedures are the guidelines to action and they are usually intended to the works which are repetitive in nature.
  • Examples of procedure include procedure for execution of the customer’s order for supply of goods and procedure for recruitment of employees in an organisation.

5. Methods:

  • Methods provide the prescribed ways in which a task has to be performed considering the objective.
  • It deals with a task comprising one step of a procedure and specifies how this step is to be performed.
  • Method has a limited scope compared to the procedure.
  • Examples of methods include training the employees under off the job training method, remunerating the salesmen under bonus and commission method, etc.

6. Rules:

  • Rules are specific statements that inform what is to be done.
  • Every organization likes to operate in an orderly way. For this purpose it is necessary for the business organization to lay down certain rules.
  • Rules are the specific statements which prescribe the code of behavior to the people of an organization.
  • Rules are rigid. Their violation attracts penalty and disciplinary action.
  • An example of a rule is ‘wear identity cards compulsorily at the work place

7. Programmes:

  • Programmes are detailed statements about a project which outlines the objectives, policies, procedures, rules, tasks, human and physical resources required.
  • A program is a precise plan which lays down the operations to be carried out to accomplish a given task with in a specified period of time.
  • Programmes are framed for the works which are non-repetitive in nature.
  • An example for a programme includes sale of 5000 cars in the month of March, 2019.

8. Budget:

  • Budget is a statement of expected results expressed in numerical terms.
  • Budget is a plan which expresses the future facts and figures in quantitative terms for a specified period.
  • Budget is considered a control device: An example for a budget is a sales budget which forecasts the sales of different products in each area for a particular period.

The success of the business depends to a large extent on the effective planning. Thus, the logical and scientific planning must go through the above steps.

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Question 37.
Explain the benefits of training and development to the organisation and to the employees.
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 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 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.

Question 38.
Suggest the suitable measures to improve communication effectiveness.
Perfect and complete communication does not take place many times due to certain obstacles which are known as barriers to communication. Following are the barriers to effective communication:

1. Physical barriers:
Internal structure of the organization and layout of office machines and equipments creates physical barriers in communication. Physical barriers include:

  • Distance
  • Noise
  • Physical arrangement.

2. Semantic barriers:
The use of difficult and multiple uses of languages, words, figures, and symbols create semantic barriers. Some semantic barriers are:

  • Language
  • Jargons.

3. Organisational barriers:
These arise from the organizational goals, regulations, structure, and culture. Organisational barriers include:

  • Poor planning
  • Structure complexities
  • Status differences
  • Organisational distance
  • Information overload
  • Timing

4. Psychological barriers:
These are the barriers to effective communication created due to lack of interest in the people for whom the communication is meant. People do not pay attention to the communication in which they are not interested. Examples for psychological barriers are:

  • Perception
  • Filtering
  • Distrust
  • Emotions
  • Viewpoint

Following are the ways to overcome barriers to effective communication:

1. Clarity of ideas:
The problem to be communicated to subordinates should be clear in all aspects. The entire problem should be studied in-depth, analysed and stated in such a manner that is clearly conveyed to subordinates.

2. Communicate according to the needs of receiver:
The level of understanding of receiver should be crystal clear to the communicator. Manager should adjust his communication according to the education and understanding levels of subordinates.

3. Consult others before communicating:
Before actually communicating the message, it is better to involve others in developing a plan for communication. Participation and involvement of subordinates may help to gain ready acceptance and willing cooperation of subordinates.

4. Be aware of languages, tone, and content of message:
The contents of the message, tone, and language used, manner in which the message is to be communicated are the important aspects of effective communication. The language used should be understandable to the receiver and should not offend the sentiments of listeners.

5. Convey things of help and value to listeners:
While conveying message to others, it is better to know the interests and needs of the people with whom you are communicating. If the message relates directly or indirectly to such interests and needs it certainly evokes a response from communicate.

6. Ensure proper feedback:
The communicator may ensure the success of communication by asking questions regarding the message conveyed. The receiver of communication may also be encouraged to respond to communication. The communication process may be improved by the feedback received to make it more responsive.

7. Communicate for present as well as future:
Generally, communication is needed to meet the existing commitments to maintain consistency; the communication should aim at future goals of the enterprise also.

8. Follow up communications:
There should be regular follow up and review on the instructions given to subordinates. Such follow up measures help in removing hurdles if any in implementing the instructions.

9. Be a good listener:
The manager should be a good listener. Patient and attentive listening solves half of the problems. Managers should also give indications of their interest in listening to their subordinates.

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Question 39.
Explain the different functions of stock exchange?
Stock Exchange means any body of individuals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying and selling or dealing in securities. The following are the important functions of stock exchange:

1. Providing liquidity and marketability to existing securities:
The basic function of a stock exchange is the creation of a continuous market where securities are bought and sold. It gives investors the chance to disinvest and reinvest. This provides both liquidity and easy marketability to already existing securities in the market.

2. Pricing of Securities:
Share prices on a stock exchange are determined by the forces of demand and supply. A stock exchange is a mechanism of constant valuation through which the prices of securities are determined. Such a valuation provides important instant information to both buyers and sellers in the market.

3. Safety of Transaction:
The membership of a stock exchange is well regulated and its dealings are well defined according to the existing legal framework. This ensures that the investing public gets a safe and fair deal on the market.

4. Contributes to Economic Growth:
A stock exchange is a market in which existing securities are resold or traded. Through this process of disinvestment and reinvestment, savings get channelized into their most productive investment avenues. This leads to capital formation and economic growth.

5. Spreading of Equity Cult:
The stock exchange can play a vital role in ensuring wider share ownership by regulating new issues, better trading practices and taking effective steps in educating the public about investments.

6. Providing scope for speculation:
The stock exchange provides sufficient scope within the provisions of law for speculative activity in a restricted and controlled manner. It is generally accepted that a certain degree of healthy speculation is necessary to ensure liquidity and price continuity in the stock market.

7. Regulates company management:
Listed companies have to comply with rules and regulations of concerned stock exchange authorities. Thus, stock exchanges put the burden on the company to have healthy practices.

8. Price Stability:
There are many operators who buy from a stock exchange where securities are cheaper and sell in other stock exchanges where the prices for the same securities are higher. This process is known as arbitrage. These operators bring about stability in the prices of securities among various stock markets.

9. Capital Mobility: The trading of various securities enables an investor to move his funds from one sector to another or from one industry to another. Investors can divert their investments from less profitable enterprises to more profitable enterprises.

10. Serves as economic barometer:
A Stock Exchange is not only an indicator of the state of health of individual companies but also of the overall situation and economy as a whole. Even a small change in the internal environment of any company or in the political, economic and social environment of the country gets reflected in the prices of securities on the stock exchange.

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Question 40.
Explain the functions of marketing.
Marketing is concerned with exchange of goods and services from producers to consumers in such a way that maximises the satisfaction of customers’ needs. The various functions of marketing include:

1. Gathering and Analysing marketing information:
One of the important functions of a marker is to gather and analyse market information. This is necessary to identify the needs of the customers and take various decisions for the successful marketing of the product and services.

2. Marketing planning:
Another important area of work of marketers is to develop appropriate marketing plans so that the marketing.objectives of the organisation can be achieved A complete marketing plan covering aspects like plan for increasing production, promotion of the products etc, and action programmes to achieve these objectives are to be developed.

3. Product Designing and Development:
The design of the product contributes to making the product attractive to the target customers: A good design can improve performance of a product and also give it a competitive advantage in the market.

4. Standardisation and Grading:
Standardisation refers to producing goods of Predetermined specifications, which helps in achieving uniformity and consistency in the output. Standardisation ensures the buyers that goods confirm to the pre-determined standards of quality, price, and packaging.

Grading is the process of classification of products into different groups, on the basis of some of the important characteristics such as quality, size, etc., Grading ensures that goods belong to a particular quality and helps in realising higher prices for high quality output.

5. Packaging and Labeling:
Packaging refers to designing and developing the package for the products. Labeling refers to designing and developing the label to be put on the package. Packaging and labeling have become so important in marketing that these are considered as the pillars of marketing. Packaging protects the products and also acts as an effective promotion tool.

6. Branding:
brand name helps in creating product differentiation. It provides basis for distinguishing the product of a firm with that of the competitor. Branding also helps in building customer’s loyalty and promotes sales of a product.

7. Customer support services:
These include after sales services, handing customer complaints, procuring credit services, maintenance services, technical services and consumer information. All these services aim at providing maximum satisfaction to the customers. Which is the key to marketing success in modern days.

8. Pricing of product:
Price of product refers to the amount of money customers have to pay to obtain a product the marketers have to properly analyse the factors determining the price of a product and then take several other decision such as setting the pricing objectives, determining the pricing strategies, determining the price and changing the prices etc.

9. Promotion:
It involves informing the customers about the firms product, its features etc, and persuading them to buy these products. The four important methods of promotion include advertising, personal selling, publicity and sales promotion. Deciding the budget for promotion, promotional tools to be used, etc are important decisions to be taken by a marketer in this area.

10. Physical Distribution:
The two major areas under this function include

  • Decision regarding channels of distribution.
  • Physical movement of the product from the place of its production to the ultimate consumer’s place.

Managing Inventory, storage, and warehousing, transportation, etc, are key areas under this physical distribution function.

The modern functions of marketing emphasises more on customer satisfaction. Customer satisfaction itself leads to survival and growth of an organisations. From the view point of management function, the above activities are referred to as the functions of marketing.


V. Answer any two of the following questions.
Each question carrier five marks: (2 × 5 = 10)

Question 41.
Show the different Elements of Business Environment that influence the success of business Enterprises with a neat diagram.
2nd PUC Business Studies Model Question Paper 3 with Answers Sec E img 2

Question 42.
Assuming that you are the HR Manager of an organisation, state any ten sources you would look into while recruiting employees.
2nd PUC Business Studies Model Question Paper 3 with Answers Sec E img 3

KSEEB Solutions

Question 43.
As a Marketing manager, suggest any five Sales Promotion activities to boost up the sales.

  1. Rebate
  2. Discount
  3. Refunds
  4. Product Combinations
  5. Quantity gift

1. Rebate: Offering products at special prices
2. Discount: Offering products at less than list price
3. Refunds: Refunding a part of price paid by customer
4. Product Combinations: Offering another product as a gift along with the purchase of a product.
5. Quantity Gift: Offering an extra quantity of the product.