Class 12 OCM Important Justify (2024) (STATE BOARD)

 

1) Principles of management are flexible in nature. 

Answer: 

a) Principle is defined as a fundamental truth or proposition that serves as the foundation for a system of belief or behaviour or for a chain of reasoning. 

b) Management principles are flexible in nature. It means they can be changed or modified according to the situation. 

c) Managers can be flexible while implementing principles to suit the requirement. 

d) The business situations keep on changing. Management principles can be adjusted or modified and can be used in the organization according to its need. 

e) Thus it is rightly justified that, Principles of management are flexible in nature. 

2) Management principles are helpful in optimum utilization of resources. 

Answer: 

a) In every organization two types of resources are used i.e. physical resources (material, machines, money etc.) and human resources (manpower). 

b) The basic function of management is to make proper balance between these resources by putting them to optimum use and control on wastage of resources. 

c) While maintaining discipline and healthy working environment, management always uses techniques and principles. 

d) It helps in establishing a cordial relationship between management and employees which increases the efficiency level of employees and also affects effective administration. 

e) Therefore, management principles are helpful in optimum utilization of resources. 

3) Principle of equity is important. 

Answer: 

a) Management should be fair as well as friendly to the subordinates. 

b) While dividing the work, delegating the authorities, deciding the monetary terms, etc. there should not be any discrimination between the employees. 

c) It is also suggested that the remuneration should not depend on the department but at the level on which subordinates are working. 

d) The employees working on the same level but in different departments should be paid same wages. This equity will help in avoiding conflicts in the organisation. 

e) Therefore, the Principle of equity is important.

4) Taylor emphasized on standardization of tools and equipment. 

Answer: 

a) Taylor’s management theory is based on scientific experiments. This theory involves the application of scientific approach to decision making and solving them at the same time. 

b) With the result of experiments conducted at workplace, Taylor advocated standardization of tools and equipments. 

c) Standardized 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. 

d) Therefore, Taylor emphasized on standardization of tools and equipment. 

5) Differential piece wage rate plan is necessary. 

Answer: 

a) Remuneration should be fixed in such a way that average worker is motivated to attain a standard output. 

b) 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. 

c) On the other hand if an employee is performing below the standard; he shall be given lower rate of wages. 

d) This technique motivates the employees to attain higher standard performance and earn wages i.e. remuneration at a higher rate. 

e) Thus, a Differential piece wage rate plan is necessary. 

6) Entrepreneurship is the best source for self-employment. 

Answer: 

1) Intellectual Capabilities An entrepreneur is a creative thinker. 

 2) Future Vision The entrepreneur has a good foresight about future market situation. 

 3) Technical Knowledge An entrepreneur has good technical knowledge about his business. 

 4) Risk bearing capacity A successful entrepreneur takes calculated risks.  

7) Successful businessman takes calculated risk. 

Answer: 

a) He is ready to face challenges and always seeks new and more opportunities. 

b) An entrepreneur has self-confidence. He has positive desires to achieve his goals. 

c) Passion is the most important trait of a successful entrepreneur. He genuinely loves his work. 

d) He is willing to put in those extra hours to make the business succeed because there is a joy his business gives which goes beyond the money. 

e) The successful entrepreneur will always be reading and researching ways to make the business better. Thus, a successful businessman takes a calculated risk. 

8) Entrepreneurs must be good communicators. 

Answer: 

a) An entrepreneur needs to communicate with different people like customers, suppliers, creditors, employees, etc. 

b) He must be able to express his ideas and strategies effectively. 

c) It is necessary that there is a proper understanding between the sender and the receiver of the message. 

d) It is one of the qualities of a good entrepreneur. 

Thus, Entrepreneur must be a good communicator. 

9) An entrepreneur must be an innovator. 

Answer: 

a) An entrepreneur is basically an innovator. He introduces new combinations of means of production. b) He must introduce new products or bring changes to the existing products. 

c) Customers are satisfied with new products or new features in the existing products. 

d) Innovation is also necessary to solve problems that arise in the business. 

Thus, an entrepreneur must be an innovator. 

10) With creativity, farmers can expand their Agro-tourism Business. 

Answer: Agro tourism is the new concept in the industry of the Indian tourism, it provides the opportunity to the tourists to experience authentic contact with life in rural areas. The valuable activities, which the farmers could do creatively are: 

i) Outdoor recreation (Trekking, fishing, hunting, wildlife study, horseback riding). 

ii) Educational experiences (farming experiences like Rice plantation, cooking experience on chulha). iii) Entertainment (harvest festivals like ‘Hurda Party’ in Maharashtra). 

iv) Hospitality services (farm stays, guided tours or outfitter services). 

v) On-farm direct sales (u-pick operations or roadside stands). 

11) Air transport is fastest mode of transport. 

Answer: 

a) Air transport carries the goods and passengers through airways by using different aircraft like passenger aircraft, cargo aircraft, helicopters, etc. 

b) This is the fastest mode of transport but it does not provide door-to-door service. 

c) In hilly or mountainous areas where other modes of transport is not accessible, air transport is an important and convenient mode. 

d) Air transport is also suitable mode in case of emergencies like war, medical, natural calamities, rescue operations etc. 

12) Communication is essential for growth of business. 

Answer: 

a) Communication is the art of exchanging ideas, facts, information, etc. from one person or entity to another. 

b) The process of passing any information from one person to another with the help of some medium is termed as communication. 

c) Communication is very simple process where message is being transferred from a sender to the receiver. 

d) Communication is essential for coordination and coordination helps in the growth of the business. 

e) It also improving managerial efficiency that induces the employees in an organization to develop a spirit of cooperation. Thus, communication is essential for growth of business. 

13) Principle of subrogation is applicable to all contracts of indemnity. 

Answer: 

a) As per the principle of subrogation, after the insured is compensated for the loss due to damage of the property insured, then the right of ownership of such property passes on to the insurer. 

b) This principle is applicable only when the damaged property has any value after the event causing the damage. 

c) Indemnity means a guarantee or assurance to put the insured in the same financial position in which he was prior to the happening of the uncertain incident. 

d) Principle of indemnity is applicable to fire, marine, and general insurance. It is not applicable to life insurance as loss of life can never be measured in monetary terms. Thus, the principle of subrogation is applicable to all contracts of indemnity. 

14) Warehousing is important. 

Answer: 

a) Warehousing refers to storage of goods and consists of all those activities which are connected with storage and preserving of goods. 

b) It is a means of storing the goods. 

c) Warehousing helps in timely delivery and proper distribution resulting in increased labour productivity and increased customer satisfaction. 

d) It performs wide range of functions such as price stabilization, risk bearing, financing, transportation etc. 

e) Warehouses create time utility by preserving the goods till they are demanded. Thus, warehousing is important. 

15) Cash can be withdrawn from ATMs at any time. 

Answer: 

a) ATM is the abbreviation of Automated Teller Machine. It is popularly known as All Time Money or Any Time Money. 

b) There is no specific time limit for withdrawals of cash from ATMs. 

c) To avail of this facility, bank installs ATM terminals at places of a public utility such as railway stations, shopping malls, airports, post offices, busy streets, etc. 

d) ATM also provides other information like cash deposits, withdrawals, balance in the account, etc. 

e) ATM avails twenty-four hours service. Hence, the accountholder can withdraw cash at any time. 

16) It is easy to set up e-business as compared to traditional business. 

Answer: 

a) Traditionally trading by the buyers and sellers is done through three channels like face to face, mail, and phone. 

b) The internet has become the fourth channel for trade. E-Business is booming and allowing businesses to sell more and at a lower cost. 

c) In E-business investment requirement is low as compared to traditional business as the store does not have physical existence. 

d) The formation of a traditional business is difficult, whereas forming an e-business is relatively easy to start. Hence, it is easy to set up e-business as compared to traditional business. 

17) E-business allows user to work across the globe in any field. 

Answer: 

a) The internet and web support together provide opportunities in selling, customer relationship, geographic expansion, logistic,s and supply chain integration. 

b) Internet is truly without boundaries. 

c) On one hand, it allows the seller access to the global market. On the other hand, it offers a freedom to the buyer to choose products from almost any part of the world. 

d) No need of face to face interaction between buyer and seller. 

e) And there is no need for any retailer or wholesalers, it results in reducing the costs and increase the profits. Hence, E-business allowed users to work across the globe in any field. 

18) Online transaction is done with the help of the internet. 

Answer: 

a) Online transactions occur when a process of buying and selling takes place through the internet. 

b) When a consumer purchases a product or a service online, he/she pays for it through online transaction. 

c) Before online shopping one has to register with the online vendor by filling up a registration form. Registration is the first step in online transaction. 

d) When a customer likes a product or service he/she puts the product in the shopping cart. 

e) Payment is the last step in online transaction. The buyer has to select the payment option. Hence, Online transaction is done with the help of the internet. 

19) It is easy to set up e-business as compared to traditional business. 

Answer: 

a) Traditionally trading by the buyers and sellers is done through three channels like face to face, mail, and phone. 

b) The internet has become the fourth channel for trade. E-Business is booming and allowing businesses to sell more and at a lower cost. 

c) In E-business investment requirement is low as compared to traditional business as the store does not have physical existence. 

d) The formation of a traditional business is difficult, whereas forming an e-business is relatively easy to start. Hence, it is easy to set up e-business as compared to traditional business. 

20) E-business allows user to work across the globe in any field. 

Answer: 

a) The internet and web support together provide opportunities in selling, customer relationship, geographic expansion, logistic,s and supply chain integration. 

b) Internet is truly without boundaries. 

c) On one hand, it allows the seller access to the global market. On the other hand, it offers a freedom to the buyer to choose products from almost any part of the world. 

d) No need of face to face interaction between buyer and seller. 

e) And there is no need for any retailer or wholesalers, it results in reducing the costs and increase the profits. Hence, E-business allowed users to work across the globe in any field. 

21) Online transaction is done with the help of the internet. 

Answer: 

a) Online transactions occur when a process of buying and selling takes place through the internet. 

b) When a consumer purchases a product or a service online, he/she pays for it through online transaction. 

c) Before online shopping one has to register with the online vendor by filling up a registration form. Registration is the first step in online transaction. 

d) When a customer likes a product or service he/she puts the product in the shopping cart. 

e) Payment is the last step in online transaction. The buyer has to select the payment option. Hence, Online transaction is done with the help of the internet. 

22) Role of media has major influence on business organisations. 

Answer: 

a) Media refers to the various means used by advertisers to inform the public about products or services. 

b) Media has the efficiency to disburse any information, wrong policy, or unfair trade practice adopted by any business organization at a very fast pace to the public at large that too at every corner of the world. 

c) Media connects the people and creates an influence on the masses 

d) Newspapers, radio, television, the internet, social media, etc. can easily give publicity to unfair practices of business organizations. 

23) Business should allow workers participation in management. 

Answer: 

a) Workers are the real architects of success in any business unit. Investments in human resources (capital) gives rich rewards in the long run. 

b) The success and failure of the business organizations to a greater extent depend on the support and participation of employees. 

 c) When workers are given the opportunity to participate in the management, it will raise their morale d) Workers’ participation in management enables the organization to win the confidence of employees. 

 24) Expectations of society towards business are changing. 

Answer: 

a) Today the world is changing and expanding very fast. Social demands have changed gradually over the years. 

 b) Now people all over the globe are well aware of their rights. The overall knowledge level has also increased. In order to fulfill the growing needs of the people, the business firm must operate as per the expectations of society. Business units must give society what it actually wants

25) Business organizations should avoid environmental pollution and ecological imbalance. 

Answer: 

1) The functioning of business units and industrialization creates air, water, and sound pollution. The carbon particles, dust, harmful gases, chemicals, etc. create air pollution 

2) Harmful chemicals, untreated sewage, industrial waste, fertilizers, pesticides, refuse, ewaste, etc. when get mixed with water, creates water pollution. Airplanes, motor vehicles, construction machines, and industrial equipment create sound pollution. 

3) Business organizations are expected to take all possible measures to prevent air, water, and sound pollution and to maintain the ecological balance. 

26) All sorts of unfair practices related to stock exchange should be avoided. 

Answer: 

a) The persons who provide finance for the short term as well as for the long term to the company are called owners or investors. They invest their money and accept the risk factors. Management is expected to provide full and factual information about the financial performance of the company to the owners and investors. 

b) The Securities and Exchange Board of India (SEBI) plays a pivotal role in regulating and maintaining the interests of investors in the securities market. Law prohibits any sort of activity that is manipulative or unfair in the securities market. Thus, business organizations must avoid unfair practices related to stock exchange like insider trading providing wrong and secret information about buying/selling or dealing with securities, etc. Any breach in the abovementioned practices may be considered unlawful and be made accountable by SEBI. 

c) Therefore, a business organization should consider responsibilities toward the owners and should avoid all sorts of unfair practices related to the stock exchange. 

27) Business ethics contains moral and social values for doing business. 

Answer: 

a) Business Ethics refers to the code of conduct that a business organization is expected to follow while doing business. According to “Wheeler’, “Business ethics is an art or science of maintaining a harmonious relationship with society, its various groups, and institutions as well as recognizing the moral responsibility for right or wrong conduct of business.

b) Moral values are based on perceptions of right and wrong. They provide the general guidelines for distinguishing between wrong and right path of business, between good and bad, fair and unfair, just and unjust, legal and illegal, proper and improper in respect to human actions. Ethics contain moral values for doing business, Honesty, transparency, fairness, integrity, etc. are moral values that create goodwill and give an economic gain in the long run. 

c) Social values form an important part of the culture of society. They provide general guidelines for social conduct. Values such as fundamental rights, patriotism, respect for human dignity, rationality, sacrifice, equality, democracy, etc. influence our behavior in many ways. These social values made the business socially acceptable. As business is a part of society, it can be successful in the long run by adopting social values. 

28) Business ethics can be considered as a tool for social development. 

Answer: 

a) Business ethics is a code of conduct that evolved for regulating the activities of business towards society and others. 

b) It calls for the importance of fair treatment to be given to the consumers, workers, suppliers, shareholders, competitors, government, and the community at large. Business ethics promote the principles of honesty, sincerity, fairness, justice in business dealings. 

c) It protects the interests of all the constituents of society. It creates a healthy and competitive business atmosphere. It induces businessmen to introduce social security and welfare measures. 

d) The businessmen promote activities enhancing the cultural values of the society. Thus, business ethics, if practiced by businessmen in the right spirit, can be considered as a tool for social development. 

29) The Consumer Protection Act was passed in the interest of consumers. 

Answer: 

a) The Central Government initially passed the consumer protection Act on 24th December 1986. In 2019, the Ministry of Law and Justice proposed a new act ‘Consumer Protection Act, 2019’ 

b) The act has recognized six rights of consumers, 

 The right to be informed about the quantity, quality, purity, price, etc. 

 The right to be protected from hazardous goods and services. 

 The right to make a choice out of a variety of goods. 

 The right to make a complaint about unsatisfactory goods 

 The right to seek redressal from unfair or restrictive trade practices. 

 The right to consumer education. 

c) Under the Consumer Protection Act, 2019, a system has been set up to deal with consumer grievances and disputes at the district, state, and national levels. 

d) The basic aim of the Consumer Protection Act is to save the rights of the consumers by establishing authorities for timely and effective administration and settlement of consumers’ disputes. 

e) The strict enforcement of these rights creates competition among the sellers. Consequently, consumers will get the quality of goods at fair prices. Hence, The Consumer Protection Act was passed in the interest of consumers. 

30) Consumers have many responsibilities. 

Answer: 

Consumers have many responsibilities such as: 

a) Consumer should use his rights: Consumers have many rights with regard to goods and services. They must be aware of their rights while buying. 

b) Cautious consumer: While buying, the consumer should enquire about the quality, quantity, price, utility of goods and services, etc. 

c) Filing of complaint: It is the responsibility of a consumer to approach the officer concerned if consumers have some complaints about the goods and services. 

d) Quality conscious: Consumers should never compromise on the quality of goods. They should not buy inferior stuff out of greed for less prices. 

31) Aim of a consumer organization is to protect the rights of the consumer. 

Answer: 

The aim of Consumer organizations & NGOs is explained as follows: 

i) To organize campaigns and various programmes on consumer issues to create social awareness

ii) To organize training programmes for the consumers and make them conscious of their rights and modes of redressal of their grievances. 

iii) To publish periodicals to enlighten the consumers about various consumer-related developments. 

iv) To provide free legal advice to members on matters of consumer interest and help them to take up grievances. 

32) Marketing is significant to the consumers. 

Answer: 

a) Marketing creates awareness among the consumers. It helps the consumer in making a buying decision. 

b) Marketing creates moral pressure on businesses to provide quality goods to the consumers. 

c) Marketing ensures businessmen provide a variety of goods to cater to the needs of the different market segments of the consumers. 

d) Marketing helps the consumer to choose the best products and services from the different options available. 

e) Marketing leads to consumer satisfaction through honest advertising, assurance of quality products, and availability of innovative products. 

f) It helps to maintain the balance between demand and supply. It results into stable prices. Thus, marketing is significant to the consumers. 

33) Promotion plays an important role in marketing. 

Answer: 

a) Promotion is the process of informing the consumers about the products, their features, uses, prices, etc, and encouraging them to buy these products. 

b) Advertising, Personal selling, Publicity, and Sales Promotion are some of the important tools of promotion. 

c) Business uses a combination of all or some of these four methods for promotion as per the need of the business. 

d) Promotional activities help to increase brand awareness in the market. 

e) Promotion is an important element of marketing as it creates brand recognition and sales. Thus, promotion plays an important role in marketing. 

34) Market can be classified on the basis of competition. 

Answer: 

The market can be classified on the basis of competition as follows 

a) Perfect Market A perfect market is a market where a large number of buyers and sellers buy and sell their homogeneous products. These buyers and sellers have perfect knowledge about market conditions and therefore, one single price prevails in the market. 

b) Imperfect Market An imperfect market refers to a market situation that is characterized by market imperfection such as a single seller, adjustment in demand and supply, imperfect knowledge on the part of buyers or sellers, etc. Imperfect markets are further divided into the following markets : 

1) Monopoly: In a monopoly, there is a single producer or seller who controls the market. There are no close substitutes for the product. Monopoly controls the supply and can fix the price. 

2) Duopoly: In a duopoly, there are two sellers, selling either a homogeneous product or a differentiated product. These two sellers enjoy a monopoly in the sale of the product produced by them. 

3) Oligopoly: In an oligopoly, there are only a few sellers. They may be producing and selling either a homogeneous or a differentiated product. 

4) Monopsony: Monopsony refers to a market situation when there is a single buyer of a commodity or service. 

35) Marketing helps in increasing consumer awareness. 

Answer: 

a) Through different marketing activities companies promote their products and services. 

b) This helps consumers to know about different products and services available in the market. 

c) Marketing helps the consumer in making a buying decision. 

d) It also creates awareness among the consumers about different brands and features of the product available in the market. 

36) There is a need of branding to get recognition among the consumers. 

Answer: 

a) Every businessman wants to have a special identity in the market for his product. 

b) Branding is a process of giving a special identity to a product through a unique brand name to differentiate it from competitors’ products. 

c) In simple words giving of a distinct name to one’s product is called as branding. Registered brands are known as Trademarks. 

d) Trademarks can not be copied. 

e) Branding helps to get recognition among the consumers. It can help to get new business and increase brand awareness in the market.