Planning — Business Studies STD 12 Commerce — Question

Why does the principle of unity of command not hold good in an organisation using technique of functional foremanship?

Mr. Vikas Mehra was the Chairman of 'IBM Bank.' The Bank was earning good profits. Shareholders were happy as the bank was paying regular dividends. The market price of their shares was also steadily rising. The bank was about to announce the taking over of 'UK Bank.' Mr. Vikas Mehra knew that the share price of 'IBM Bank' would rise on this announcement. Being a part of the Bank, he was not allowed to buy shares of the bank. He called one of his rich friends Mukand and asked him to invest Rs.4 crores in shares of his bank promising him the capital gains.
As expected after the announcement, the share price went up by 50% and the market price of Mukand's shares was now Rs.6 crores. Mukand earned a profit of Rs.2 crores. He gave Rs.1 crores to Vikas Mehra and kept Rs.1 crores with him. On regular inspection and by conducting enquiries of the brokers involved, Securities and Exchange Board of India (SEBI) was able to detect this irregularity. SEBI imposed a heavy penalty on Vikas Mehra.
Quoting the lines from the above para identify and state any two functions performed by SEBI in the above case.

In a company all recruiting, screening and training process for data entry, etc. are done by one officer only. Their competitor was attracting most qualified employees. As a result this company had to choose from candidates who have soft skills and less qualifications. On the basis of above case answer the following questions:(i) What problem do you see company is facing?(ii) How can this problem be solved?

After competing his education, Arun joins his father in their family business of manufacturing cookware. As a businessman, his father is rigid in his approach and has fixed ideas about various issues. He tends to maintain a distance from the factory workers. However, Arun is more receptive to the needs of the workers and doesn’t seem to believe in any class- differences. He believes that the prosperity of their business greatly depends upon the prosperity of their workers and vice versa. At the same time, he has a good understanding of the business environment. Therefore, he introduces a new range of green pans that provide a healthy cooking surface, as they are manufactured with all ceramic or silicon coating and are considered safer than the traditional petroleum based nonstick surfaces which may contain toxic substances. Although, the new cookware range is highly priced/, he expects a ready market for it as both the purchasing power of people and their preference for better quality products has increased over the years.
In the context of the above case :

1. Identify the nature of management which is being reflected in the different styles of management in practice adopted by Arun and his father.
2. Name and explain the related principle of scientific management.
3. State the related dimensions of business environment.

Briefly explain ‘rigidity’ as a limitation of planning.

A ready-to-eat food manufacturing company uses lead in excess of the prescribed limits in its products. The usage of an excess quantity of lead in the products could cause severe health issues to the consumers.
a. Identify and explain the consumer right violated by the company.
b. Identify any two values overlooked by the company.

‘Stock Exchange not only contributes to the economic growth, but performs many other functions.’ Explain any three such functions.

Explain the following feature of planning:
Planning is a mental-exercise.

A pharmacy company doesn’t provide information about the expiry date on the packet of his drug.
Which values does this manufacturer violates?

Explain any two factors affecting price of a product.