Bihar Board 12th Entrepreneurship Important Questions Long Answer Type Part 2

BSEB Bihar Board 12th Entrepreneurship Important Questions Long Answer Type Part 2 are the best resource for students which helps in revision.

Bihar Board 12th Entrepreneurship Important Questions Long Answer Type Part 2

Question 1.
What is the importance of break-even point in business management?
Answer:
Break-even analysis facilitates solution to various administrative problems in an effective manner:

It facilitates in evaluating the effects of price-change and oh break-even point.
To anticipate the possible influences of the changes in sales strategies and break-even point.
It ensures a control on the expenditure with regard to construction, administrative, general, sales and distribution expenses.
In pressuring the effects of change in the shape or size of the plant and processes and their resulting advantages and the possible effects on break-even point etc.
In evaluating the possible effects of any change in product or in launching a new product.
An assessment of the impact or its forecasting due to the changes in workers’ wage structure and on the B.E.P.
To analyse the effects on the benefit of taxation.
A comparison between the profitability of two or more enterprises.
To analyse the advantages of the economy in the operation of business according to the management strategies in this context.
To evaluate the operational and financial status.

Question 2.
What is sales promotion? Write in brief the importance of sales promotion.
Answer:
Sales promotion means changing of ownership and providing attraction to consumers towards commodities and services. It gives to consumers related information about the product.

The importance of sales promotion are the following:

The producer provides the information regarding quality, uses, different uses of products and its price etc.
It is also helpful in increasing the number of new customers.
The main purpose of sales promotion is to increase the sales of the product of the company.
One of the objectives of the sales promotion is to keep the memory of the product alive in the minds of the present customers.
In sales promotion salesmen keep themselves in touch with customers listen to their complaints and get them removed, which boosts sales of the company.

Question 3.
Differentiate between shares and debentures.
Answer:
The following are the differences between shares and debentures:

Shareholders are the owners of the company but debenture holders of the creditors of the company.
Dividents are paid on shares by a fixed ratio but divident is not paid by a fixed ratio.
Shares are normally not redeemed unless the company faces winding up debentures are redeemed on the date of their maturity.
Money raised through issue of shares is company’s capital funds obtained through issue of debentures from company’s land.
Shareholders are paid only after the payment has been made to debenture holders during the process of liquidation of a company. Debenture holders however, are prior claimants of company assets at the time of its liquidation.
Share holders have voting rights but debenture holders have no such rights.

Question 4.
Distinguish between equity shares and preference shares.
Answer:
The following are the differences between equity shares and preference shares:

The rate of divident on equity shares is not fixed on the hand preference shares have a fixed rate of divident.
Equity shares do not have any preferential rights in the company. On the other hands preference shares have a preferential right to payment of divident and repayment of captial.
Dividends not paid on equity shares but preference shares are entitiled to rcciever accumulated dividend in future year.
Equity shares are not redeemed till the company is going concern. But preference shares may be redeemed during the life time of the company.
Equity shares have voting rights to corporate decisions. But preference shares have a voting right only in respect of their own participation and dividend payment.
Equity shareholders may be issued rights shares or bonus shares by the company. But preference shareholders can not be given rights shares or bonus shares.

Question 5.
What are the major function of management?
Answer:
All enterprises need an effective, efficient and economical management. Management is a process of achieving the defined goals of a business.

Management performs a number of function which are as under:

Planning: Deciding in advance the priority of action and sequence of operations.
Organisation: Creations of duties, relationship, responsibilities and authority in the business framework.
Staffing: Recruitment, selection training, compensation and development of appropriate human resources.
Direction: Guidance and supervision to the desired action enforcement of an acceptable level of performance by the subordinates, this includes leadership, motivation and communication.
Control: Evalution and appraisal of executions in order to ensure proper standard of performance application of corrective measures to improve the level of action.

Question 6.
What is the purpose of sales promotion?
Answer:
Sales promotion is a form of short term incentive to encourage consumers to buy our products. It creates a quicker response to goods and services.

The following are the major tools of sales promotion:

Contests
lucky coupons
trade shows
display and exhibition
free samples.

The main purpose of such efforts are as under:

To enhance buying response by ultimate consumers.
To increase selling efforts by dealers and sales personnel.
It creates attraction, calling attention, product information and brand support. It improves attitudes towards the product, offers extra incentive to customers and induces immediate actions to make purchase.

Question 7.
What are the methods of inventory control?
Answer:
Methods of inventory control are as under:

Economic order quantity.
Fixation of stock level.
Two Bin system.
Inventory turn over ratio.
Uses of perpetual inventory records and continuous stock verification.
Selection inventory control.

Question 8.
Differentiate between selling and marketing.
Answer:
The following are the difference between selling and marketing:

Selling means to sell the goods as services to the consumers. On the other hand marketing means searching the needs and wants of consumers.
Selling aims as maximising sale but marketing aims at maximising sales as providing maximum satisfaction to customers.
Selling concentrates upon the volume and value of sales but marketing concentrates upon the satisfaction of customers.
Selling activities start after the production but marketing activities start with the searching of needs and wants of consumers.
Selling activities come to an end with sales but marketing activities and with the satisfaction of consumers.
Selling’s scope is limited but marketing’s scope is very wide.
Selling stresses upon maximising profits but marketing stresses upon providing maximum satisfaction of consumers.

Question 9.
Explain the various types of difficulties faced by developing countries in choice of techniques.
Answer:
Difficulties in the Way of Choice of Technology: Following are the deterents in this context:
1. Any new or latest technology appears to be expensive which involves a large capital finance which is not suitable for India or any other developing nation.

2. Since there always occurs a rapid change in the scientific knowledge and technology but this cannot be consistently brought about or adopted by the under-developed countries.

3. Any latest technology is subjected to social antagonism. It is not easy to incorporate such technological advancement in the face of traditional values, conservatism and rituals or conventions.

4. In case of the developing economy the level of education remains below the mark as such in the developing nations the adoption of the technology of the developed nation is a difficult process.

5. While implementing the new technology the under-developed countries are in need of foreign expertise and professional but owing to their exorbitant charges and other expenses they remain inadequate in affording to it.

6. The needs and the conditions are opposite between the developing and the developed countries and it is therefore difficult for the developing nations to resort to the technology of the developed nations.

7. It is not so easy to bring about transformation in the economical, financial, constitutional and political organisations, as such the use of latest technology in the under-developed countries is a difficult dream.

Question 10.
Define management and describe its essential characteristics.
Or, Explain the nature of management.
Or, State any three characteristics of Management.
Answer:
Concept of Management: Different scholars have attempted to define management in different ways. In short and conventional manner, “Management refers to a work which is to be get done by others”. Thus, the person who possesses this trait, can be acknowledged as a manager. But in the contemporary era, management is not restricted to get the work done form others, rather it is joining the people at work and get the same done by others, is an art or technique.

In other words, “The meaning of the word management, not only in terms of business rather in the area of all activities involving the human resources, are carried on.” Another point of view expressed in this context by Harold Koontz and O’ Donnell status, “Management is the art of getting things done through and with the people informally organised groups.”

Following are the major characteristics of Management:
1. Management is a Process: Management is a process that includes various activities which lead to the attainment of pre-determined objectives. It is a social phenomenon because managing of the activities is linked to the people who manage them. Management is also an economic activity because it uses economic sources. As such, it is of the utmost importance in relation to human activities.

2. Management is a Group Activity: Management is a group activity. It is a team work, or the management always support a joint endeavour. Management is a group of people that operates the activities of an enterprise and the attainment of the objectives is possible by the collected efforts of a group of people, rather than by an individual’s efforts. Management and the use of this word is used in context of a co-endeavour because the expectation of an individual and the objectives of his enterprise can be efficiently accomplished with the help of many people when work in tandem.

Appley calls it is “other people’s effort” and Harold Koontz says that it is an “informally organised group.”

3. Related with Human efforts: Management is akin to human activities. It gives an impetus to human planning, organising, commanding, co-ordinating and controlling the important resources of an enterprise. According to Koontz and Donnel there is hardly any important area of the human activities more than the management, since it is related to human activities, it is rightly termed as ‘social science’.

4. Management is a Continuous Activity: In business there is a constant endeavour of commission and omission of activities is, therefore, known as a perpetual or a continuous phenomenon. The size and the varying circumstances, has further complicated the process of management.

5. Management a Hierarchy of Authority: In an organisation, there are several levels of management. Every level receives its authority from its higher up (tier) thus accountable to it. As a result comes up with an organisation.

6. Universal Process: Notwithstanding the kinds of an organisation in terms of its being business, social, political or religious, the process of management remains the same. Any organisation of which the objectives are attainable by a co-endeavour of several persons, has to plan its activities, organise, direct and control the activities in an efficient manner. The principles or the fundamentals of a management are universal. In any form of organisation, where the activities are co-ordinated at different levels, the general principles of management are implemented.

7. Management is an Art and Science as well: Management is both an art and science, as well and are so well knitted, that are inseparable. As an art, the management refers to behavioural sense, efficiency, skill, constructive thoughts ideas and development through practice etc. and in form of a science, it refers to cause and effect, experimentation of rules, ability and a sense of forecast, etc. Thus, management is a dichotomy of art and science.

8. Management as a Social Process: In business, management is related to the human aspect. All the workers in an organisation are the organs of the society. Thus, their leadership and management are the part of social activities. In the contemporary age even the business has also acknowledged its social responsibilities. In this context, Brech remarks, “Presence of human element in management is its testimony of a social activity.” In fact, management is a social activity because of its relationship with human element.

9. Management as a Profession: In view of the constantly growing complexities in any business, depends no longer, on the general knowledge, common sense and experience only but the deep knowledge of in management is the need of the hour. In management science, an extra knowledge, training facility, sense of dedication, good behaviour sense and code-of-conduct, all in totality along with all the essential characteristics of a profession are involved. Thus, management is a profession of which the education is imparted in various universities and academic institutions.

10. Management has a Distinct Entity: The subject of management has now acquired a distinct entity. In any business other than owners and the employees, it is a section of people in whose hands lies the rein of the management. In fact, management involves decision-making, leadership and to ensure a control over whatever goes on in a business venture and it is ensured by a separate group of people/professionals.

11. Management is an Integrating Force: Management is an integrating force that always ensures a unity and a co-ordination among various segments and departments for the well-being of all sides and strives towards the attainment of the organisational objectives.

12. Management is a Creative Force: Management being a creative force that facilitates the creation of employment opportunities in the social orbit and strengthens the economy which is conductive to efficiency level, creative ideology, initiative and business interest, etc.

13. Management is a Practice: Making a comment on ‘practice’ in the context management of Drucker remarks, “Management is a practice and the essence of it lies in not knowing rather than doing it. One of its area is linked to performance that led to the emergence of management and its focus is riveted on practice.”

14. Management is Needed at all Levels: Irrespective of the size of an enterprise, the management is to be enforced at all levels of an organisation.

15. Management is to Determine the Object: Management is a gateway to the achievement of the objectives, it is just a means rather than an end in itself. Its aim is to exploit to the hilt, for the optimum benefit, the factors like material, labour, machine, land, society and the government, and by taking into account all these factors to ensure the optimum level of production and by means of the maximum sales, the maximum profits be earned.

Question 11.
What is the difference between management and administration? Is administration a part of management?
Answer:
Difference between Administration and Management

Question 12.
What is quality control? Discuss its techniques.
Answer:
Meaning and Definition of Quality Control; Quality control refers to the finer characteristics of a product for the acquisition of which the control over the human resources and manufacturing technological equipment and other related material and the manufacturing conditions and factors, is acquired which can influence the finer qualities of the product.

All the ingredients required for the manufacturing of a product are, directly or indirectly, procured from the nature itself and affect their characteristics due to some natural reasons, on the other hand, the manufacturing conditions like temperature, moisture, dust impurity in air, movement or disturbance in the equipments, and wear-out of machines, etc., can bring about some changes in the manufacturing process.

As such, the right composition and to ensure an authentically quality product, a complete control over such conditions must be taken care of by which the quality may not get affected. Following are some of the important definitions of ‘Quality Control’.

(i) According to Bethal Atwater Smith and Stackman, “Quality control refers to the control over the changing factors during the production process, which adversely affect the durability and finer characteristics of a product such variable factors generate due to variation in material, manpower, machinery and manufacturing process. These factors must be kept under control so that they must not affect, during the production process, the standard quality of then product, only then presence of quality control should be realised.”

(ii) According to Alfred and Beety. “In an broad sense, quality control is a technique of industrial management by which a quality product as per the requisite standard is manufactured. In fact, it is a technique through which a product is made according to the consumers’ demand on the basis of a laid down standard. Its purpose is not to find fault with so as it is to be rejected, rather to improve upon the quality of the product.”

(iii) According to Dalton MacFarland, “By means of quality control the main objective is to determine, as far as possible the customer should get the products which are defect-free and each product must follow the standard which an organisation sees to have.”

(iv) According to G J. Deshmund, “Quality control is a scientific technique the objective of which is to enhance the industrial or manufacturing efficiency which must satisfy the projected standards.”

Principles of Quality Control:
Following are the important principles of quality control:

The standard of quality is determined in that way which provides satisfaction to the consumers, which must exist the quality constituents.
The products should be manufactured as per the laid down standards so as the quality be discernible in the desired product.
The factors which badly affect the authenticity or the durability of a product must be kept under control so that the projected standard be maintained.
The product must be designed by an efficient designer who should be quite conversant with the acceptable standards which must cater to its consumer’s aspiration.
The finished product must be manufactured strictly in conformity with the laid down Standards, and deviation from the standard must be examined and rectified.
In the production process, it should be an endeavour to ensure the maximum economy as a result, the production cost be minimised.
The personnels of high calibre should be employed for*the purpose of quality control.

Question 13.
Discuss the steps for quality control.
Answer:
Steps for Quality Control: An organisation should take the
following steps in the process of quality control:
(i) Control over Production Process: It is imperative necessary to check manufacturing process and methods to maintain quality of goods product and there must be a regular monitoring to see to it that the techniques being used in production, whether or not the standard is adhered to.

(ii) Examination and Control of the Material to be Used: To maintain the quality and standard of the finished merchandise, it is necessary for the company to take care of the quality of the raw material at the time of its purchase and procurement that must satisfy the desired standard and while using the raw material, its quality once again should be verified.

(iii) To Determine the Standard and Quality: The standard and quality both are determined by the engineering department of the company that determines the shape, size, colour and chemical specification of the merchandise after discussing with planning, control, sales and purchase departments, so that all the peculiar characteristics could be attributed to the finished products that can get consumers approval and the approval or the demand should go on increasing. Therefore, the quality of the finished and final product could be assessed on the basis of the approved parameters and the shortcomings, if any, could be ascertained.

(iv) Selection of Efficient Supervisors: It is the paramount importance to examine or supervise the quality of raw material, production process, other paraphernalia and the ultimate merchandise, etc., because any amount of carelessness can result into the deterioration of quality. Therefore, right from the purchase of raw material into the finished product, at all levels, the most efficient staff for looking into the quality control should be employed who possess all the requisite qualifications.

(v) Testing of the Accuracy of Machines and Equipments: Testing of the accurate streamlining of machines and other equipments is also very important for obtaining the standard product for consumers acceptance because if the machine is not in proper order or not functioning well the quality of product will not satisfy the desired standards.

(vi) Control over Marketing, Installing and Acceptance of Product: The extent of acceptance or demand of the product depends upon the characteristics and excellence of quality of the product in terms of satisfaction of the consumers which can be ensured by a good marketing system of the finer quality product which must be segregated from other defective or nor standard merchandise and a good quality product reach the consumers and by doing so, they will feel content that whatever is being given to them, has all the desirable characteristics.

(vii) System or Monitoring the Production Process: At the time of purchase of the raw material its quality is examined and while one thing undergoes through the production process, at every phase the quality is checked against the proposed standards and also prior to the delivery of merchandise to the market for sales, the purity and authenticity is closely examined and a certificate of quality control is also issued by segregating the goods from defective ones.

Question 14.
Define entrepreneurship. Explain its main feature.
Answer:
We can define entrepreneurship by dividing it in three categories:
I. Classical view: As per thinkers of this view point entrepreneurship promotion of business and industry, organisation and capacity to under risks.

1. According to Higgins, “Entrepreneurship is meant the function seeking investment and production opportunity, organising an enterprise to undertake a new production process, raising capital, hiring labour, arrant g the supply of raw material, finding site, introducing new techniques commodities, discovering new sources of raw materials and selecting up managers for day-to-day operations of an enterprise.”

2. According to A. H. Cole, “Entrepreneurship is the purposeful activity of an individual or a group of associated individuals, undertaken to initiate, maintain or aggrandise profit by production or distribution of economic goods or services.”

II. Neo-classical view: The thinkers of this category have defined entrepreneurship in reference to managerial skills and innovations.

According to Peter F. Drucker “Maximisation of opportunities is meaningful in business, indeed a precise definition of entrepreneurship job.”
According to H. W. Johnson “Entrepreneurship is a composite of three basic elements – invention, innovation and adoption.”
According to Joseph Schumpeter “Entrepreneurship is an innovative function. It is a leadership rather than an ownership.”

III. Modern view: According to modem thinking entrepreneurship is defined in practical sense. It has been related to social innovations and dynamic leadership. Entrepreneurship links business, society and environment.

According to Robert Lamb “Entrepreneurship is that form of social decision making performed by economic innovators.”
According to Richman and Kappan, “Entrepreneurship implies more creative, external or open system orientation. It involves innovation, risk bearing and relatively dynamic leadership.”

Features of entrepreneurship:
(i) Managerial skills and leadership: According to Hoselitz managerial skills and leadership are the most important features of entrepreneurship. An entrepreneur has to be something more than just a drive to earn profits. Financial skills have secondary importance and just a strong desire to make profits is not enough to succeed in entrepreneurship. There has to be ability to lead and manage. If an enterprise has these abilities other skills automatically develop.

(ii) Creative activity: The nature of entrepreneurship is creative. Work culture and qualitative improvement are developed only through creative thinking by promoter, organisation and management. According is Joseph Schumpeter “Basically entrepreneurship is a creative activity.” Creative thinking always motivates to execute positive fundamental and practical thinking.

Question 15.
What do you mean by planning? Discuss its features.
Answer:
Meaning and definitions of Planning: Generally speaking, act of planning is the product of thoughts. In other words, the tomorrow’s job is to be determined right now or today, itself, is the planning. For accomplishing the objectives, it is to be seen that what is to be done, why; who, when and how is to be done, and by exploiting which resources etc. To determine these points in advance, constitutes the planning. There may be various alternatives to achieve the objectives. The right option from the available alternatives, itself, is planning.

According to Allen, “Planning is a cage to arrest the future.”
According to Billie E. Ghoj, ‘Planning’ primarily means ‘to choose’ and the problem of planning emerges amidst various alternatives.

Following are the major features of planning:
1. Definite object and goal: Planning aims at achieving the certain objectives and every entrepreneur keeps such objectives in mind and plans accordingly.

2. Forecasting: The second important phase of planning is to look towards future with a sense of anticipation. According to Fayol, “Planning is a synthesis of the forecasts, be they be long term or short term, general or particular forecasts.” As such, he recommends from one year to ten years forecasting. As a Chinese saying goes, “Plan your annual strategies in the spring season and day-to-day strategy is to be planned in every day morning.”

3. Unity: In Fayol’s words, unity is also an essential feature of planning. At one time only one planning can be executed as any dual planning at one time can lead to chaos and uncertainty.

4. Selection of the best among alternative course of action: The fourth important phase of planning refers to the option of the best alternatives available with the entrepreneur who has several options, policies and methods for managing the affairs. To meet such factors, the best among alternative course of action needs to be prioritised. The success to a larger extent depends on the basis of selection of the finest option.

5. Pervasiveness of planning: The fifth characteristic of the planning process refers to its pervasiveness. Not with standing the status, be it the director of the company or an ordinary foreman, planning at every stage is indispensable. For example, the job of planning at the Director’s level is related to the determination of general planning whereas the foreman’s job is related to the daily planning. Thus, higher is the level of management, more extensive is the area of planning. Planning is all pervasive. Even a teacher before entering a classroom is also required to set a plan.

6. Planning is a continuous and a flexible process: Future remains unpredictable. No body can assert with certainty what will happen tomorrow since planning is also related to future, it is obvious that the future planning is riddled with uncertainty. Any planning must have an element of flexibility allowing room for change in conformity with the ever changing conditions.

7. Interdependence: An important ingredient of the planning process refers to its interdependence. As a matter of convenience, the planning of an enterprise is split into various segments, eg., production department, sales and purchase department, personal administrative department, etc. Although each department has its own plannings yet these planning collectively are an essential organ of the master plan. Such department plannings are interdisciplinary hence, interdependent.

8. Primary function: Planning of course is the primary function. In any commercial venture planning is placed on the highest pedestal and the rest of the jobs are accorded a secondary priority. The objective of a venture and its attainment involves all the managerial activities but are determined on the basis of planning. For the accomplishment of this objective, all the plannings are executed accordingly.

9. Intellectual and mental process: The job of planning, in other words, is an intellectual and mental phenomenon for a manager or an executive has to opt one of the best alternatives in relation to the proposed targets and the success of this job is attributive to the higher intellectual degree and intelligence which might not be otherwise possible for a person of an average calibre. Even eyns and Massey have acknowledge, “Planning is an intellectual and mental process for which a constructive, positive and imaginative perception is required.”

10. Miscellaneous:

The practicability of planning is essential
Time factor is significant
Planning acts like a torch or a bacon
Planning is the basis of management’s efficiency
Decision is a part of planning or the area of planning is vaster than that of the decision
The limited resources must be taken into consideration while planning.