Rail transport provides door-to-door services | Aster Classes

HSC OCM Question Paper 2020 – With SOLUTION Std 12th Commerce – Maharashtra Board

ORGANIZATION OF COMMERCE & MANAGEMENT

Q.1. (A) Select the proper option from the probable options given below and rewrite the complete statements:

(1) The liability of Karta in a Joint Hindu Family Firm is _______.

(a) unlimited

(b) limited

(c) joint

(2) In India railways are owned and managed by_______.

(a) private companies

(b) government

(c) individuals

(3) In the modern competitive market, consumers are regarded as the _______.

(a) king

(b) representative

(c) superintendent

(4) Henry Fayol is called the father of _______ management. 

(a) modern

(b) scientific

(c) technical

(5) Ultimate goal of business must be satisfaction of the _______.

(a) shareholders

(b) consumers

(c) owners

(B) Match the words from the following group ‘A’ and group ‘B’ correctly:

Group ‘A’ Group ‘B’
(a) Common seal
(b) E-business
(c) Principle of unity of command
(d) Cold storage
(e) Controlling
(1) One man many bosses
(2) Perishable goods (4)
(3) Primary function of management
(4) Joint stock company (1)
(5) Electronic business (2)
(6) Last function of management (5)
(7) One man one boss (3)
(8) Partnership firm
(9) Encryption
(10) Durable goods

(C) Write a word / phrase / term which can substitute the following statements:

(1) ‘Duties, obligations of business directed towards welfare of the society.

Sol: –  Social Responsibility of Business towards the welfare of society

(2) A partner in a partnership firm who takes active participation in day-to-day work.

Sol: –  Active Partner

(3) The right of a consumer which allows him to express his reviews.

Sol: –  “Right to Be Heard”

(4) Name of the modern process of contracting a business function to someone else.

Sol: –  Outsourcing

(5) A function of management where managers instruct, guide and communicate with the employees.

Sol: –  Directing

Q.2. Distinguish between the following (Any THREE): [15] 

Sole Trading Concern Partnership firm

Sr.No.Basis of Difference
Sole Trading Concern

Partnership firm

1.

Meaning

Owned and controlled by only one person.
In this form of business organization two or more persons come together to undertake a business activity and share profits.

2.

Formation
It can be formed at any time when proprietor decides.It can be formed by an agreement between two more competent persons.

3.

Ownership

Sole trading concern has only one owner.
Minimum number of members is 2 and maximum 10 in banking and 20 in other firm.

4.

Registration

Registration is not necessary.
Registration is not necessary, but it is useful. (compulsory in Maharashtra)

5.

Secrecy
A sole trading concern ensures maximum secrecy.
Secrecy is shared by the partners.

6.

Managerial
The entire burden of management lies on owner.All partners contribute these skills so there is division of work and expertise.

7.

Capital
Because of only one owner, amount of capital is very small.
Contribution of all partner’s capital increases.

8.

Profit& Loss
A proprietor is himself receiver of all the profit and loss.Profit is shared by partners as per their agreements.

Current Account Saving Account

Sr.No.Basis of Difference
Current Account

Saving Account

1.

Meaning
It is that account which is maintained by businessman and others who have regular transaction.It is that account which is opened by individuals in order to save a part of their income.

2.
WithdrawalsCustomers can withdraw money by cheques.Customers can withdraw either by cheques or by withdrawals slip along with passbook.

3.
FacilitiesThe bank gives a passbook, cheque book, statement of account and pay-in-slip book to the customers.The bank gives a pas book, cheque book and pay-in-slip book to the customers.

4.
Who takes itIt is suitable for traders, businessmen, firms or institutions.It is suitable for fixed income group, wage or salary earners.

5.
Constraintson operation and withdrawalsThere are no restrictions on the operation of a current account as long as there is balance in the account.The customers have certain restrictions on withdrawals.

6.
Rate of interestNormally, interest is not given.Interest rate is low.

7.
Nature of AccountIt is of continuous nature.It is of continuous nature.

8.
FacilitiesTemporary overdraft facility is givenNo overdraft facility is given.

District Forum State Commission

Sr.No.Basis of DifferenceDistrict ForumState Commission

1.

Meaning
A Consumer disputes redressal forum working at district levelA consumer disputes redressal forum working at state level.

2.

Monetary Jurisdiction
It can entertain the cases where the value of goods and services and the compensation claimed is less than rupees twenty lakhs.It can entertain the cases where the value of goods and services and the compensation claimed is more than rupees twenty lakhs and less than 1 crore.

3.

Duration
Every member should hold office for a term of five years or up to the age of sixty five years, whichever is earlier.Every member should hold office for a term of five years or up to the age of sixty seven years, whichever is earlier.

4.
Nature of ComplaintsOnly original cases can be entertained which are within the local limits of a district.It can entertain original cases and also appeals against the order of District Forum within the geographical limits of the state.
5.MembersOther than president it has minimum two members.Other than president it has minimum two members.

6.
Area CoveredIt covers a particular district.It covers a particular state.

7.

President
District judge or equivalent.High court Judge or equivalent.

Current Account Saving Account

Sr.No.Basis of Difference
Current Account

Saving Account

1.

Meaning
It is that account which is maintained by businessman and others who have regular transaction.It is that account which is opened by individuals in order to save a part of their income.

2.
WithdrawalsCustomers can withdraw money by cheques.Customers can withdraw either by cheques or by withdrawals slip along with passbook.

3.
FacilitiesThe bank gives a passbook, cheque book, statement of account and pay-in-slip book to the customers.The bank gives a pas book, cheque book and pay-in-slip book to the customers.

4.
Who takes itIt is suitable for traders, businessmen, firms or institutions.It is suitable for fixed income group, wage or salary earners.

5.
Constraintson operation and withdrawalsThere are no restrictions on the operation of a current account as long as there is balance in the account.The customers have certain restrictions on withdrawals.

6.
Rate of interestNormally, interest is not given.Interest rate is low.

7.
Nature of AccountIt is of continuous nature.It is of continuous nature.

8.
FacilitiesTemporary overdraft facility is givenNo overdraft facility is given.

Co-operative Society Joint Stock Company

Sr.No.Basis of Difference
Co-operative Society

Joint Stock Company

1.

Meaning
A Co-operative society is a voluntary association of people who come together on the basis of unity and equality to protect and promote their common economic interest.It is voluntary association of individuals for profit having capital divided into transferable shares, the ownership which is the condition of membership.

2.

Formation
Formation of co-operative society is comparatively cheaper.Formation of a joint stock company involves many legal formalities. It is lengthy and costly.

3.

Motive
The main motto of a co-operative is to provide services to members. Profit making is its secondary objective.The main motto of a joint stock company is to earn profit. Providing service is the secondary motive.

4.

Transferability of shares
Shares are not transferable to other members though they can be surrendered to the society.Shares are freely transferable in a public limited company. But it is restricted in private limited company to a certain extent.

5.
Number of membersA minimum 10 members are required for formation of a co-operative society though there is no maximum limit.The minimum of number of members are 2 in private limited company and a maximum of 50. In a public limited company, minimum number of members is 7 and there is no maximum limit.

6.

Voting Rights
The principle of voting is one member one vote.The principle of voting is one share is one vote.

7.
Capital raising capacityIt can raise limited capital since the dividend is fixed and there is no capital appreciation.It can raise large capital since attractive dividend is paid and there is capital appreciation.

Q.3. Write short notes on the following (Any THREE):           [15] 

(1) Disadvantages of e-business. 

Ans. Disadvantages of e- business are


1. No personal touch: Seller and consumer cannot have face to face contact while purchasing goods and services from e – business. The personal touch in doing business i.e. meeting face to face is not possible in e – business.

2. Lack of Inspection: Buyer cannot physically inspect the goods at the time of purchase. The consumer is unable to touch or feel the goods before buying.

3. Government Interference: To set us an e – business there are some minimum procedures to be followed. There may be a monitoring from the government and authorities that could lead to increase the interference in selling the goods.

4. Transaction Risk: In e – business system, transaction risks such as supply of inferior quality of goods, supplied products not matching with the sample expected, high prices, defects in products, cheating, etc. may happen and we cannot be denied.

5. Delay in deliver of goods: If we go to shop and purchase the goods then we will get the goods immediately. But in case of e – business there could be difficulty in delivering the goods. Lack of communication can cause wrong delivery of goods. 

(2) Importance of consumer protection. 

Importance of Consumer Protection?

Introduction: -Even though, in the modern competitive market consumer is regarded as the king but in reality he gets exploited by manufacturers and sellers. They are in superior position than consumers. So, consumers need to be protected. Consumer protection means safeguard the interest of the consumers and allowing him to exercise his rights. Protection of the interest of consumers with the help of various laws is a recent development. But history shows that even in ancient time’s kings and emperors have taken note of protection of consumer rights.
The following extract from the book “Consumer Protection Administration, organization and Working” by Cheena Gambhir talks about Consumer Protection in ancient times.


“Arthashastra of Kautilya details the precepts and practices of the Mauryan State where it was the duty of the superintendents to put government products in the market under favorable conditions and to supervise their sales at reasonable rates. Merchants who cheated or interfered generally with the normal functioning of the market (prices) were open to heavy punishment.”


The following points emphasis the importance of consumer protection:

1.       Seller dominant market: -If the market is dominated by sellers than the consumer’s choice as well as his welfare gets the last preference. All the transactions are finalized in favour of sellers, middlemen and manufacturers. E.g. if there is shortage of goods then the buyer will have to buy a product at the price quoted by the seller.

2.       Ignorance of consumers: -Ignorance of consumers about their rights, market conditions, price levels, product details, etc. result into consumer exploitation. Many times consumers do not even realize that they are being cheated. E.g. a shopkeeper may sell a product which is actually received by him as free sample; fee gifts offered by company may not reach upto the consumer.
3.       Tendency of the Consumers: –Majority of the consumers get attracted towards the products of cheap prices, discounts, various schemes, etc. this weakness of the consumers leads to their exploitation without their knowledge.
4.       Unorganized Consumers: -Consumers are neither organized nor united. Compared to them the producers and sellers are in a superior position. An individual consumer cannot fight against powerful traders. Thus, it is easy to exploit unorganized and widely spread consumers.


5.       Nature of Products: -Modern products are the end results of complicated production processes. It is beyond the capacity of poor and illiterate consumers to judge the quality or safety aspects of a product. Moreover these consumers/customers cannot take legal help even though they realize that they are being cheated because they do not understand production process thoroughly.

6.       Lack of Information:- Today’s consumer lives in a complex world. Distance between producer and consumer is vast. It is impossible to establish direct contact between producer and consumer. After globalization and liberalization policy of the government, the market is full of domestic as well as imported products. But it is difficult for the consumer to get reliable information about the product before it is purchased.


7.       Lack of Participation of Consumers: -It is observed that certain decisions, which directly affect consumer’s interest, are taken without any consultation with consumers or their organizations. E.g. charges of daily necessities such as public transport, cooking gas, telephone, electricity, etc. only a strong consumer movement can pressurize various organizations to allow consumer participation in the decision making process.


8.       Increase in consumption rate: –compared to earlier period, consumption rate is increased due to increase in population as well as tendency of the people to lead a comfortable life. It results into mass production, many varieties, increased prices, unfair trade practices, etc. such a situation in the market confuses the consumers and they fall prey (victim) to exploitation.

9.       To restrict unfair trade practices:-When more and more consumers start talking support of Consumer Protection Act (1986) to resolve their grievances then it will automatically pressurize the manufacturers, middlemen and traders for not conducting the trade by unfair means.  

(3) Types of life insurance policies. 

following are the Types of Life Insurance

Meaning: -Under Life Insurance contract, the human life is insured against death, old age, sickness, accident etc. Life Insurance contract is not a contract of indemnity. Therefore, the insurer has to pay a definite sum on the maturity of the policy. The sum has to be paid after the death of insured or at the expiry of the term.


Life Insurance is not for the person who passes away, but it is for those who survive. It is the responsibility of every member to guard against the events that could affect the family in the unfortunate circumstances of his demise. Thus, having a Life Insurance policy is very vital.


Definition: – Life Insurance can be defined as “A contract where an insurance company undertakes the consideration of regular payment of premium to pay certain sum of money to the assured on maturity of policy or death, whichever is earlier”.Types of Life Insurance Policy:


1.       Whole Life Policy: –The whole life of a person is insured under this policy. The insured cannot receive the money from the insurance company till he is alive. The rate of premium is normally very low. The money becomes payable on the death of the insured person to the nominee or the legal heir of the deceased policy holder.

2.       Endowment Insurance Policy: -Under this policy, insurance is taken for a specific period. The sum assured along with bonus is given on his death to the dependents of family or on the expiry of the specific period; the insured himself receives the sum assured along with bonus. It is a popular plan as it protects the family of the deceased or provided old age pension to the insured.

3.       Term Insurance Policy: -Term insurance policy is taken for a specific period. It has lowest premium among all Insurance plans. Premium is fixed and does not change during the term of the policy. In case of an untimely death, the dependents will receive the benefit amount specified in the term life insurance agreement.

4.       Money-Back Policy: -Money-back policy provides a regular percentage of the sum assured during the life time of the policy and also guarantee the benefit of full sum assured in the event of the death of the insured to the dependents of the family. This policy is for those people who like to have savings and Insurance Cover.

5.       Joint Life Policy: -Under Joint Life Policy, two or more persons are jointly assured. The person who takes joint life policy must have insurable interest in each other. It is useful for individuals having common interest, requiring joint safety and security to their lives. It can be taken by the partners of the firm or husband and wife.

6.       Annual Policy: -The insured has to pay the premium in lump sum or installments over a certain period of time. The insured will receive back a specific sum periodically from a specified date onwards, either for life or for a fixed number of years. Generally, life annuity (pension) is opted (choose) by a person having surplus wealth and wants to use this money after his retirement.  

7.       Pension Plan Policy: -Pension policy is different from all other forms of life insurance, as it does not provide any life insurance cover but merely offers a guaranteed income either for a life or for a certain period. (therefore, this type of insurance is taken so as to get income after retirement)

ULIP (Unit Linked Insurance Plans): -ULIPs is introduced by the private companies and are very popular as they combine the benefits of life insurance policies with mutual funds. 

(4) Significance of principles of management. 

following are the significance of principles of management:

Introduction: -Management principles are applicable in every business organization and in every situation. These principles are tested and practiced for years in all parts of the world. Therefore, it is important to study its importance or significance. It can be studied with the help of following points:

1.       Management principles help to improve understanding: -The principles of management help the manager to understand the organization. The study of the principles of management helps to improve the understanding of the situations and problems. It further helps the manager to find out the solutions to the problems and handle situations.

2.       Help in increasing the efficiency: -By using these principles the organization can increase the efficiency of the employees. Principles can guide the mangers about handling the human resource, reducing the wastage, co-ordinate the activities of different departments, etc. all this helps to improve the productivity in the organization,

3.       Help to develop the objective approach: -The principles of management help the manager to develop an objective approach. Thus the manager can identify the problem in correct manner and he can provide solutions in an objective manner. This approach builds confidence in the minds of the managers.

4.       Help to co-ordinate and control: -Management principles give the guidelines for better co-ordination and control. While practicing management the managers can make use of thee principles to co-ordinate the activities of different departments. Manager can exercise better control over the organization. Thus the given target can be achieved easily.

5.       Understanding social responsibility: -In Modern world more importance is given to understand the social responsibility of business organizations. It is because business organizations are the part of the society. Business organizations should not only emphasize on making profit but they should discharge their responsibility towards the society also. E.g. payment of good remuneration/wages is one of the principles of management which is the responsibility towards employees.

6.Research and Development: -Principles of management are dynamic. Their natures go on changing along with the changes in the business world. Over years they have developed to suit the current needs. Therefore these principles give encouragement to research and development in the organization.

(5) Social responsibilities of business organizations towards the government. 

Introduction: –Government provides incentives for industrialization. Government has passed many acts and has laid down many rules and regulations for this purpose. It also declares various policies related to business. E.g. government has passed policy for entry of foreign traders in retail trade.

Definitions: – “The personal obligations of the people as they act in their own interest to assure that the rights and legitimate interests of others are not ignored.” Defined by………. (Koontz and O’Donnell)

Responsibilities towards Government:

1.       Timely Payment of Proper Taxes: -The Government has levied various taxes on business units such as excise duty, sales tax, corporate tax, etc. business units should give proper information of product and should pay taxes accurately as per the provisions. The tax revenue helps the government to provide infrastructure and other welfare facilities.

2.       Respecting rules and Regulations: –Business unit should follow various laws and regulations created by government. While setting up the business, they must follow guidelines set by the government. However, they can make suggestions to government to modify the rules if it is in interest of the society.

3.       Earning Foreign Exchange: –Especially large scale business should enter in export trade to earn foreign exchange. They should enable the government to import capital goods and technical know-how. All rules and regulations pertaining to imports and exports should be strictly followed.

4.       Political Stability: –For economic growth the national security, political stability is required. A stable government often brings more returns and peace in a democratic society. Business units should not support those groups or individuals who are interested in creating political disturbance.

5.       Implementation of Socioeconomic Programmes: –The Government declares various policies for achieving economic, social and industrial progress of society. Business organization is expected to help the government in the implementation of various socio-economic programmes.

6.       Miscellaneous: – Helping government during natural calamities. They should not seek any favour from government officials by bribing or influencing them

Q.4. State with reasons whether the following statements are True or False (Any THREE) [15] 

(1) Maximization of profit is the main motto of co-operative society.

This Statement is False.


i. A Co-operative society is a voluntary association of people who come together on the basis of unity and equality to protect and promote their common economic interest.


ii. The nature of co-operative organization is service oriented. Each for all and all for each is the principles of a co-operative society.


iii. Co-operative society is a society which has its objectives for the promotion of economic interests of its members in accordance with co-operative principles.”    (Indian Co-operative Societies Act1912)

iv. Thus the motto or object of a Co – operative Organization is not to earn profit but to render service to its members.

(2) The Consumer Protection Act was passed in the interest of the sellers. 

The above statement is False.

The correct statement is “Consumer Protection Act was Passed in the interest of Consumers” and not for the sellers.


The following points emphasis the importance of consumer protection:


1.       Seller dominant market: –If the market is dominated by sellers than the consumer’s choice as well as his welfare gets the last preference. All the transactions are finalized in favour of sellers, middlemen and manufacturers. E.g. if there is shortage of goods then the buyer will have to buy a product at the price quoted by the seller.


2.       Ignorance of consumers: –Ignorance of consumers about their rights, market conditions, price levels, product details, etc. result into consumer exploitation. Many times consumers do not even realize that they are being cheated. E.g. a shopkeeper may sell a product which is actually received by him as free sample; fee gifts offered by company may not reach upto the consumer.

3.       Tendency of the Consumers: –Majority of the consumers get attracted towards the products of cheap prices, discounts, various schemes, etc. this weakness of the consumers leads to their exploitation without their knowledge.


4.       Unorganized Consumers: –Consumers are neither organized nor united. Compared to them the producers and sellers are in a superior position. An individual consumer cannot fight against powerful traders. Thus, it is easy to exploit unorganized and widely spread consumers.


5.       Nature of Products: –Modern products are the end results of complicated production processes. It is beyond the capacity of poor and illiterate consumers to judge the quality or safety aspects of a product. Moreover these consumers/customers cannot take legal help even though they realize that they are being cheated because they do not understand production process thoroughly.


6.       Lack of Information:- Today’s consumer lives in a complex world. Distance between producer and consumer is vast. It is impossible to establish direct contact between producer and consumer. After globalization and liberalization policy of the government, the market is full of domestic as well as imported products. But it is difficult for the consumer to get reliable information about the product before it is purchased.


7.       Lack of Participation of Consumers: –It is observed that certain decisions, which directly affect consumer’s interest, are taken without any consultation with consumers or their organizations. E.g. charges of daily necessities such as public transport, cooking gas, telephone, electricity, etc. only a strong consumer movement can pressurize various organizations to allow consumer participation in the decision making process.


8.       Increase in consumption rate: –compared to earlier period, consumption rate is increased due to increase in population as well as tendency of the people to lead a comfortable life. It results into mass production, many varieties, increased prices, unfair trade practices, etc. such a situation in the market confuses the consumers and they fall prey (victim) to exploitation.


9.       To restrict unfair trade practices:-When more and more consumers start talking support of Consumer Protection Act (1986) to resolve their grievances then it will automatically pressurize the manufacturers, middlemen and traders for not conducting the trade by unfair means.  

(3) Rail transport provides door-to-door services. 

Rail transport provides door to door services- False

Explanation: Rail transport does not provide door-to-door services. Door to door service is offered by the road transport.

(4) E-business allows you to work in any field across the globe. 


THIS STATEMENT IS TRUE.


REASONS: All of you must have seen your parents buying things for you at different times. They may have gone to different shops for different goods.

Today the world of shopping has changed so drastically that one need not go to any shop for purchase of goods.

All you need is a basic computer with an internet facility. The goods can be purchased on the internet, payments can be made through the internet and the goods are physically delivered at your doorstep.

This entire process comes under the subject of e-business.
e-business means using the internet to connect people and processes. It allows you to work across the globe in any field.

It opens new doors to customers around the world. So also in business and improves efficiency, increase profits and provides better customer services of business.

e-business is web-enabling existing business processes to conduct transactions over the Internet.

e-business establishes more closer and responsive relationship with partners, employees and suppliers.

It connects, adapts and integrates IT system, so companies are able to manage their business efficiently.

(5) Business organizations are liable to control pollution. 

The given statement is True. This is because.

1. Protection of Environment: –Business uses natural wealth and human resources to produce goods and services. 

2. Business organizations should make proper use of country’s natural resources. 
3. They should avoid environmental pollution and ecological imbalance. 

4.  It becomes moral duty of business to take care of welfare of society. 

5. “Syngenta” has started a project “Krishi Shakti Kendra” to various places in India to protect environment.

Q.5. Write short answers of the following (Any TWO):       [10] 

(1) State the types of warehouses. 

Introduction: –Warehouse is a storage structure constructed for the protection of the quality and quantity of the stored goods. A businessman has to keep different kinds of goods, so there is always a need for different types of warehouses, which are as follows.


1.       Private warehousing: -Private warehousing are owned and managed by the manufacturers or traders to store their own goods. Big business firms which need large storage capacity on a regular basis construct their warehousesGenerally, these warehouses are constructed by farmers near their fields, by wholesalers and retailers near their business areas and by manufacturers near their factories to store their products.


2.       Public/commercial warehouses: –This type of warehouses is established to provide storage facilities to the general public for payment of certain fees. It may be owned by an individual, partnership firm, company, etc. these warehouses have to obtain the license from the government. They are generally located near railway stations, highways, airport, seaport, etc.


3.       Government warehouses: -These warehouses are owned, managed and controlled by Central and State government or public corporations or local authorities. It is difficult for the small traders, farmers, businessmen, etc. to own a warehouse, so these government warehouses assist them in storing their goods at a nominal charge.


4.       Bonded Warehouses: -Bonded warehouses are licensed by the government for storing imported goods till the custom duty is not paid. They are located near the ports. They are either operated by the government or custom authorities. The goods are held in bond and cannot be withdrawn without paying the custom duty. Such warehouses are very useful to importer and exporters

5.       Duty paid warehouses: -If an importer faces any problem in transportation of goods, after making payment of duty, then goods can be stored at Duty Paid Warehouses. All duty paid warehouses are public warehouses which are available to all the importers whether big or small. These warehouses are more helpful for some businessman, who re-exports the goods.

6.       Co-operative warehouses: -These warehouses are owned, managed, and controlled by the co-operative societies. They provide warehousing facilities at the rural areas. These types of warehouses are very useful for farmers and traders. They provide warehousing facilities at the most economical rates to the members of the society and also to the public.

(2) State the types of partners. 

Introduction: – When a person who deals with the firm, must know the partners of the firm and to what extent each partner is liable. Some partners in a partnership take active part in firm and they are also directly related with the firm. They invest money in the firm and have a share in its profits and loss. Some partners who do not have full interest in the partnership firm. It is compulsory to make investment in the business, so they don’t get any share in the profit.

Following are the types of partners:

1.       Active partners/ Actual Partners: -he partners who take active participation in the day to day work of the firm or take active part in the conduct of the business are called Active partners.  They contribute money in the firm and they have a share in its profits or loss. They have unlimited liability.
2.       Sleeping Partners or Dormant Partners: -Sleeping or dormant partners are those who do not take active part in the conduct of business. They have invested money in the business and have share in profits and loss. They do not give public notice of their retirement. They have unlimited liability.


3.        Nominal Partners: -They lend their names to the firm without having any real interest in the firm. They neither contribute to the capital nor share the profits or take part in the conduct of the business of the firm. The firm make them partners to join form, to use personal goodwill.

4.       Minor Partners: – According to the Indian contract Act, 1872, a person below 18 years is called minor. But according to the provision in the Indian Partnership Act, 1932, a minor can be a partner in the profit of the firm if all the other partners give their consent. Minor has limited liability and is not liable for losses.


5.       Partners in profits only: – He can share the profits of the firm. But his liability is unlimited like other partners. He must give public notice of his retirement. Such partners have no right to take part in the daily work.

6.       Limited Partners: -A person whose liability of the firm A person whose liability of the firm is limited to the extent of his investment is called limited partner. He has no right to take part in day to day work. But such a partnership must have at least one partner having unlimited liability.


7.       Partner by Holding out: –A person who is not a partner in the firm but he represents himself to be a partner by word spoken or written or by his conduct is called a partner by holding out.

8.       Secret Partner: – When the relation of the partner with the firm is unknown to the general public is known as secret partner. Secret partners have all the features like other partners. His liability is unlimited.

(3) State the functions of an entrepreneur. 

Meaning: -An entrepreneur is one who organizes the factors of production and takes necessary actions to run the business.The new Encyclopaedia of Britannica defines “An entrepreneur is an individual who bears the risk of operating a business in the face of uncertainty about the future conditions”.


Peter F Drucker defines: – “one, who always searches for change, responds to it and exploits it as an opportunity”.


The entrepreneur performs vital functions. The main functions are as briefly stated as follows:


1.      Initiates Business Enterprises: – The foremost function of an entrepreneur is that he in initiates the business enterprise. For this purpose, he performs the following:·         Generates ideas to set up a business unit.·         Plans for the setting up of business unit.·         Organises the factors of production- land, labour, and capital.


2.      Risk Bearing: – The entrepreneur assumes the risks of his business. A person who can take risk can become an entrepreneur. Risk taking is the heart of entrepreneurship. Those who are not inclined (of a mind) to take risk cannot become entrepreneurs. It is to be noted that successful businessman take calculated risks.


3.      Decision Making: – An entrepreneur is required to take several decisions. The decisions in respect of·         Location of the business unit, Selection of employees, Obtaining of funds, Production decisions.· Marketing and distribution decisions.


4.      Coordination: -An entrepreneur performs the functions of coordination. He coordinates the working of the business enterprise. He has to coordinate the various functional departments such as production, marketing, finance, etc.


5.      Combines the factors of production: -The entrepreneur has to combine the factors of production in such a way that he gets maximum return on investment. Therefore, there should be a maximum return on investment. Therefore, the should be a proper mix of land, labour and capital to get highest possible returns.


6.      Innovation: – The entrepreneur should be imaginative and innovative. He should be dynamic in nature. Therefore, a successful entrepreneur is always on the book out for·         New ideas, new products, new processes or methods, etc.


7.      Maintain Relations: -An entrepreneur has to maintain good relations with several parties such as:·         Employees,·         Government authorities,·         Customers, Suppliers,·         Other relevant section of the society.


8. Motivation: -The entrepreneur performs the role of a motivator. He has to motivate his employees to perform effectively and efficiently. Therefore, the entrepreneur should try to blend (merge) monetary and non-monetary incentives to motivate the subordinates.

(4) State Henry Fayol’s ‘any five’ principles of management. 

following are the Henri Fayol’s Principles of Management (14 Principles)

Introduction: –Henry Fayol was a French mining engineer. He worked as the director of mines also. After conducting many experiments in management, he developed 14 principles of management. These principles are explained in his famous book ‘General and Industrial Administration’. Due to his contribution to management, he is called the father of Modern Management‘.

The Principles laid down by Fayol are explained below:

1.       Principle of Division of Work: -According to this principle the total work should be divided into small sub parts. The divided work should be assigned to different employees, as per their capacities, skills and interests. Fayol says division of work leads to specialization.

2.       Principle of Authority and Responsibility: –When the work is assigned to a person, he should be given proper authority to carry out that work. E.g. a manager should be given authority is always accompanied by responsibility. When a person is given the authority, he should be held responsible for the same task. Authority and responsibility always go hand in hand. If the manager is given the authority to complete the task within a given time, he should be held responsible if he does not do that in time.

3.       Principle of Discipline: -According to Fayol, discipline is the most essential thing in the organization. Employees must obey and respect the rules that govern the organization. Discipline helps to achieve the goals set in the organization. Good discipline is the result of effective leadership. For that there must be a clear understanding between the management and workers regarding the organization’s rules.

4.       Principle of Unity of Command: -In any organization every employee should receive orders from the superior (boss) only. This is applicable from top management to bottom. The principle of unit of command tries to avoid confusion. If an employee receives orders from more than one superior he will be confused and will not be able to work with concentration. The work will not be performed properly. Whereas if he gets orders from only one person, he will finish his work accurately.

Q.6. Define ‘co-operative society’. Explain the features of a co-operative society.        [10] 

Introduction: – A Co-operative society is a voluntary association of people who come together on the basis of unity and equality to protect and promote their common economic interest. The nature of co-operative organization is service oriented. Each for all and all for each is the principles of a co-operative society..

Definition: – “Co-operative society is a society which has its objectives for the promotion of economic interests of its members in accordance with co-operative principles.”    (Indian Co-operative Societies Act1912)

The following are some of the features of a Co-operative Society

1.Voluntary association and open membership: – Co-operative organization is a voluntary association of individual. In other words the membership of a Co-operative society is voluntary i.e. the membership is open to all. Normally, there is no restriction of caste, creed, race, religion, etc. At Least 10 Members are required to form a Co-operative Society 

2.Equal Voting Rights: – There is equality in voting rights. The principle of voting is ‘one member one vote’ unlike a company which is follows the principles of ‘one share one vote’. Thus the co-operative society members having a very large capital cannot dictate their terms.

3.Service motive: – Co-operative organization differs from other forms of organization in the sense that the main purpose of co-operative organization is not to maximize profits but to provide services to its members.

4.Limited Liability: -The liability of a member in a Co-operative organization is limited to the extent of the unpaid amount of shares held by him. I.e. if the business assets are not sufficient to pay off the debts, the personal property of members cannot be utilized for the purpose.

5.Democratic Management: – The management of a Co-operative organization is based on democratic principles. Each member is given an opportunity to express his opinion. The principles of “one member     onevote’. Decisions are taken by majority of votes.

6. Independent existence: – According to the Co-operative societies’ Act, 1912, a co-operative society has an independent legal status different from its members. Therefore, it enjoys a stable and continuous life.

7. Surplus profit: -After payment of dividend and bonus, a part of the profit is transferred to statutory reserve and remaining is utilized for the welfare of the locality where the co-operative society is situated.

8. Registration: -The registration of a co-operative society is compulsory as per the relevant act in the concerned state e.g. a c Co-operative organization in the state of Maharashtra has to be registered under Maharashtra State Co-operative Societies’ Act 1960. 

OR 

Define ‘controlling’. Explain the importance of controlling.

Definitions : 1.       Donnell : “Just as a navigator continually takes reading to ensure whether he is relative to a planned action, so should a business manager continually take reading to assure himself that his enterprise is on right course.”

2.       Philip Kotler : “Control is the process of taking steps to bring actual results and desired results closer together.”

3.       Harold Koontz : “Controlling is the measurement and correction of performance in order to make sure that enterprise objectives and the plans devised to attain them are accomplished.”

IMPORTANCE OF CONTROLLINGImportance of Controlling is as follows :

1.       Fulfilling Organizational Goals : Controlling function helps to measure the progress towards the organizational goals and points out the deviations, if any and then suggests the corrective action towards the fulfilment of the organizational goals. In this way controlling helps to achieve the goals of the organization.

2.Accuracy of Standards : A good control system helps management to verify the standards set are accurate or not. An efficient control system keeps a careful check on the changes taking place in the organization and helps to review the standards in light of such changes 

 3.Efficient Use of Resources : By using control techniques, a manager helps to reduce wastage and spoilage of resources. This ensures that resources are used in the most efficient and effective manner so as to achieve organizational objectives.

4.Improving Employee Motivation : A good control system ensures that employees knows well in advance what they are expected to do and what are the standards of performance. Once the organizational objectives are achieved then they are rewarded with monetary and non-monetary incentives. This motivation helps the employees to perform more better in future.

5.       Ensures Order and Discipline : Controlling function brings about order and discipline in an organization. It helps to reduce the bad behaviour on the part of the employees. Under this system, regular checking is done by the authorities concerned and preventive actions are taken to avoid any deviations in already set targets.

6.Facilitates Co-ordination : Control systems are designed in such a way that they focus not only on operating responsibilities of a manager but also on his ultimate responsibility. All the departments in the organization are ‘interdependent on each other. There is always a possibility of having a good relationship between all the department managers. Co-ordination between the heads of departments can help to find out any deviations- in their respective departments and use the remedial measure so that desired results can be achieved.

7.Psychological Pressure : Control pressure puts a psychological pressure on the individuals to perform better. Their performance is evaluated with the targets set for them. Everyone is likely to put on their best performance as they are aware that it will be evaluated. They may also have a pressure to achieve the results according to the standards fixed for them.

8.Organizational Efficiency and Effectiveness : Proper control ensures organizational efficiency and effectiveness. Factors of control like making managers responsible, motivating them for higher performance and achieving co-ordination in their performance ensures that the organisation works efficiently. An organization is effective if it is able to achieve its desired objectives.

9.Corporate Image : Controlling function helps to improve the overall performance of the organization. Progress in the business is measured in terms of planned standards and actual performance, if there is any deviation then corrective measures are applied and desired results can be achieved. This builds a good corporate image and brings goodwill for the business.

10.Managerial Responsibility : Managerial responsibility is created through assignment of activities to various individuals. This process starts at the top level and goes to the lower level. A manager assigns some activities to his subordinates and controls them

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