Karnataka State Open University Modern Question Paper:-
First Year B.Com. Degree Examination, Oct./Nov. 2011
(R.S.S.)
BUSINESS ORGANISATION AND OFFICE MANAGEMENT
Time : 3 Hours Max. Marks : 90
PART – A
Answer any three questions. 15 Marks each : (15×3=45)
1. Define Joint Stock Company. Explain the different stages of formation of a Joint Stock Company.
2. What is business combination ? Explain the different types of business combinations.
3. Define stock exchange. List out the functions of stock exchange. Briefly explain the causes of price fluctuation in the stock market.
4. What is Management ? Briefly explain the functions of management.
5. Explain the various modern office appliances.
PART – B
Answer any three questions 10 marks each : (3×10=30)
6. What is a partnership ? Briefly explain the types of partners.
7. What are the objectives of office layout ? Explain the principles of office layout.
8. Define public utility. Explain the basic characteristics of public utilities.
9. Explain the causes of Business combinations.
10. Define Leadership. State the qualities of a good leader.
PART – C
Answer any three questions 5 marks each : (5×3=15)
11. What do you mean by office management ?
12. Write a note on Co-operative society.
13. List out any five stock exchangs in India.
14. Write a note on Memorandum of association.
15. Define location.
Answers :-
Answers Sheet for Oct./Nov. 2011
BUSINESS ORGANISATION AND OFFICE MANAGEMENT
1. Meaning (or) Definition of joint stock compnay :-
A joint –stock company is a Business Entry. Which is Owned by Shareholders.
Each shareholder owns the portion of the company in proportion to his her ownership of the company's shares.
Stages (or) Types (or) Kinds of Joint Stock Company :-
1) Chartered Company
2) Statutory Company
3) Registered Corporation a) Unlimited Company b) Limited Company/Limited Corporation
1) Chartered Company :- A Company which is created by the Royal order is called Chartered Company. It's powers, rights and functions are governed by the charter.
Ex :- East India Company, Chartered Bank of England, Reserve Bank of India.
2) Statutory Company :- A Company which is formed by the order of Governor General, President of Prime Minister, or by the special act of parliament is called Statutory Company.
Ex:- State Bank of Pakistan, National Bank of Pakistan, Industrial Devt Corp of Pakistan.
3) Registered Corporation :- Those company which are formed under the companies ordinance 1984. are called Registered Company.
Ex :- Colony Textile Mills Ltd., Adam Jee Industrial Ltd.,
a) UnLimited Company :- The Shareholders of the Unlimited Company are liable to pay the debts and other obligations of the business.
b) Limited Company :- In this Company the liability of each members is limited to the amount of the shares which he holds. it has two kinds.
2. Meaning (or) Definition of Business Combination :-
A Business combination is a transaction in which the acquirer obtains control of another business (the acquiree). Business combinations are a common way for companies to grow in size, rather than growing through organic (internal) activities.
Types (or) Kinds (or) Methods of Business Combination :-
1) Horizontal Combination :- It is also known as parallel (or) trade unit Integration.
It is also voluntary association which two or more than two similar nature business units combined them selves under the one management, it is called horizontal combination.
Ex :- if four tea industrial units are at the same stage of production.
2) Vertical Combination :- It is also known as sequence (or) industry (or) Process
When various departments large industrial units combine together under single management is called vertical combination.
3) Circular (or) Mixed Business Combination :- When different types of business units combine themselves under the one management is called circular combination.
Ex :- If a cloth industry combining with shoes industry and sugar industry is an example of mixed combination.
4) Diaonal Business Combination :- When two or More than two business units performs subsidiary services, if they combine themselves under the main industry it is called diagonal combination.
Ex :-If designing and tailoring business units are combined with the garments industry it is called diagonal combination.
3. Meaning (or) Definition of Stock exchange :-
Stock Exchange also called Stock Market (or) Share Market is one important constituent of capital market. Stock exchange is an organized market for the purchase and sale of industrial and financial secutiry. It is convenient place where trading in securities is conducted in systematic manner i.e. as per certain rules and regulations.
Functions of Stock Exchange :-
1. Continuous And ready market for securities :- Stock Exchange provides a ready and continuous market for purchase and sale of securities. It provides ready outlet for buying and selling of securities. Stock Exchange also acts as an outlet/conter for the sale of listed securities..
2. Facilitates evaluation of Securities :- Stock Exchange is useful for the evaluation of industrial securities. This enables investors to know the true worth of their holdings at any time. Comparison of companies in the same industry is possible through stock exchange quotation (i.e. price list).
3. Encourages Capital Formation :- Stock Exchange accelerates the process of capital formation. it creates the habit of saving, investing and risk taking among the investing class and converts their savings into profitable investment. It acts as an instrument of capital formation. In addition, it also acts as a channel for right (sage and profitable) investment.
4. Provides Safety And security in dealings :- Stock Exchange provides safety, security and equity (justice) in dealings as transaction are conducted as per well defined rules and regulations. The managing body of the exchange keeps control on the members. Fraudulent practices are also checked effectively. Due to Various rules and regulations, stock exchange functions as the custodian of funds of genuine investors.
5. Regulates Company Management :- Listed companies have to comply with rules and regulations of concerned stock exchange and work under the vigilance (i.e. Supervision) of stock exchange authorities.
6. Facilitates Public Borrowing :- Stock Exchange serves as a platform for marketing Government securites. It enables government to raise public debt easily and quickly.
7. Provides Clearing house facility :- Stock Exchange provides a clearing house facility to members. It settles the transaction among the members quickly and with ease. The members have to pay or receive only the net dues (balance amounts) because of the clearing house facility.
8. Facilitates healthy speculation :- Healthy speculation, keeps the exchange active. Normal speculation is not dangerous but provides more business to the exchange. However, excessive speculation is undesirable as it is dangerous to investors & the growth of corporate sector.
9. Serves as Economic Barometer :- Stock Exchange indicates the state of health of companies and the national economy. It acts as a barometer of the economic situation / conditions.
10.Facilitates Bank Lending :- Banks easily know the prices of quoted securities. They offer loans to customers against corporate securies. This gives convenience to the owners of securities.
The causes of Price fluctuation in the Stock Market.
1. Political Condition :- The price of shares is directly affected by the political developments taking place both at home and abroad. The political instability in the country, the fear of war with
neighbours country,
2. Business Condition :- Political stability brings economic stability in country. If a government carries on ecomomic policies in the planned manner, it then establishes strong Industrial base in country, the price of shares tend to move up. In case there are a rapid change in economic policies and budget are announced and revised time and again the price of securities go down.
3. Fear of nationalization :- If a government adopts a policy of nationalization of industries, the investment on the part of the private sector will be at the lower ebb. The price of the securities are bound to go down. In case the private sector is encouraged for investment by going them due to concessions, the prices of the securities shoot up.
4. Trade Activities :- The prices of the securities are directly influenced by the conditions of boom and slump. In the da's business prosperity, the prices of the securities move up. If the depression is hovering over the country, it leads to a fall in the security prices.
5. Monopoly :- If the firm has monopoly in the production of a commodity, the share prices of that firm will go up. In case stiff competition by the competing firms for the production of a particular commdity, there will be a decline or a nominal rise in the stock pieces of the competing firms depending on the situation.
6. Bank Rate :- Bank rate exercises a powerful influence on security price. If the interest rate on the short term loans fall, the speculatiors borrow money and purchase the securities which leads to the rise in the price of shares. When the money is dear, there is a fall in the prices of securities.
4. Meaning (or) Definition of Management :-
Management is the process of reaching organizational goals by working with and through people and other organizational resources.
Management has the following 3 Characteristics :-
1. It is a process (or) series of continuing and related activities.
2. It involves and concentrates on reaching organizational goals.
3. It reaches these goals by working with and through people and other organizational resources.
Functions of management :-
1. Planning
2. Organizing
3. Influencing
4. Controlling
1. Planning :- Planning involves choosing tasks that must be performed to attain organizational goals, outlining how the tasks must be performed, and indicating when they should be performed.
Planning activity focuses on attaining goals. Managers outline exactly what organizations should do to be successful. Planning is concerned with the success of the organization in the short term as well as in the long term.
2. Organizing :- Organizing can be thought of as assigning the tasks developed in the planning stages, to various individuals or groups within the organization. Organizing is to create a mechanism to put plans into action.
3. Influencing :- Influencing is also reffered to as motivating, leading or directing, influencing can be defined as guiding the activities of organization members in he direction that helps the organization move towards the fulfillment of the goals.
4. Controlling :- Controlling is the following roles played by the manager ;
a) Gather information that measures performance
b) Compare present performance to pre established performance norms.
c) Determine the next action plan and modifications for meeting the desired performance parameters.
5. The following are the various modern office appliances (or) Equipment :-
1. Tape (Dispenser)
2. Paper Clip holder
3. Ruler
4. Paper Clips
5. Pushpins
6. Bulldog clip
7. Scissors
8. Correction Fluid (White-out)
9. Pencil Sharpener
10.Calculator
11.Stapler
12.Staples
13.Pen
14.Pencil
15.Eraser (=Rubber)
16.Highlighter
17.Hole-Punch
18.Rubber Bands (Elastic Bands)
A Paper Clip is a small piece of wire that holds pieces of paper together. A bulldog clip is bigger and works better when you have to keep large amounts of paper together.
When you need to cut paper or other objects you should use scissors. They safely cut paper and are easy to use.
A Calculator is a small electronic device that helps you to solve math problems.
A Carbon Paper is a type of blue paper that you put between two pieces of normal paper. When you write on the top sheet of paper, it will make a copy of what you wrote on the bottom sheet of paper.
A Printer allows for information from the computer to be printed onto a piece of paper.
A Rubber Band is a circular piece of rubber that stretches and holds things together, or closer a bag.
PART – B
6. Meaning (or) Definition of Partnarship :-
A Business organization in which two (or) more individuals manage and operate the business. Both owners are equally and personally liable for the debts from the business.
Types (or) Kinds (or) Methods of Partnarship :-
a) General Partnership :- A General partnership involves two (or) more owners carrying out a business purpose. General partners share equal rights and responsibilities in connection with management of the business, and any individual partner can bind the entire group to a legal obligation.
b) Limited Liability Partnership (LLP) :- Limited Liability partnership (LLP) retain the tax advantages of the general partnership from, but offer some personal liability protection to the participants. Individual partners in a limited liability partnership are not personally responsible for the wrongful acts of other partners, or for the debts or obligations of the business.
c) Sleeping Partners :- Invest money in the business and share in its profits, but do not take part in running it. Like general partners, they are fully liable for the partnership's debts.
d) Limited Liability Company (LLC) :- A Limited Liability Company (LLC) is formed by 1 or more individuals or entities through a special written agreement. The agreement details the organization of the LLC, including provisions for management, assignability of interests, and distribution of profits and losses. LLCs are permitted to engage in any lawful, for-profit business or activity other than banking or insurance.
e) Association :- An Association is an organized group of people who share in a common interest, activity, or purpose.
7. The objectives of office layout :-
The scientific arrangement of the available floor space and proper placement of equipment and furniture is called office layout. The broad objectives in connection with layout are :
(a) It should ensure proper and effective utilisation of space.
(b) It should ensure steady and effective workflow.
(c) It should facilitate for better supervision and control.
(d) It should provide comfort and satisfaction to employees.
(e) It should facilitate better inter-communication.
(f) It should provide safety to office employees.
(g) It should have provisions for future expansions.
The Principles of Office Layout :-
a) Office that face north have more natural light and are warmer;
b) Desks should be placed in such a way that staff do not sit with their backs or faces to the windows;
c) Office Staff should ideally not face one another – this can lead to unnecessary disruption of work. This is especially important when adopting the landscape design approach;
d) Where possible, the number of people approaching the field of vision of an employee should be restricted;
e) Work should ideally flow in one direction only but not necessarily in a straight line; and
f) The design should not only be functional but also pleasant in appearance.
8. Meaning or Definition of Public utility :-
A Public utility is an Organization that maintains the infrastructure for a public service (Often also providing a service using that infrastructure). It is an organization supplying a community with electricity, Gas, Water, (or) Sewerage.
Typically a public utility has a Monopoly on the service it provides. It is more economically efficient to have only one buusiness provide the service because the infrastructure required to produce and deliver a product such as electricity or water is very expensive to build and maintain.
The following are the characteristics of Public utilites :-
a) Supply of essential services :- Public utilities are engaged in the supply of products (or) services which are indispensable to the community. In the absence of these services, the normal life of the community is dislocated.
b) Inelastic demand :- As the public utilities supply essential public services, the demand for their products or services is inelastic. In other words, the demand for their services, e.g. water or electricity, does not change substantially with a change in price.
c) Non-Transferable demand :- The demand for the services of public utilities is non-transferable. If a consumer is not satisfied with the services or rates charged by the concern, he cannot change over to another concern unless he shifts to another city. due to regular demand, the earnings of a public utility concern do not fluctuate vary widely.
d) Heavy fixed investment :- As large amount of capital expenditure is required for the establishment and operation of a public utility concern. For instance, an electricity undertaking has to install a generating plant, build up a network of cables and other apparatus for the distribution of electircity to the public.
e) Local area of operation :- A public utility concern is usually allowed to operate within a defined and limited market area. For instance, a water supply concern provides services to a particular area. Therefore, there is little scope for the expansion of market.
f) Monopoly position : A public utility concern enjoys a natural monopoly due to the essential nature of its services. As competition is not desirable in the supply of essential public services, only one concern is allowed to operate in a particular area.
g) Public regulation and control :- Public utility concerns are subject to strict regulation and control by the State. As these concerns enjoy a monopoly power and their services are of an essential nature, the Governement regulates their policies and working in public interest.
h) Special Franchise :- Since the public utilities are recognised as natural monopolies, a franchise is generally granted to protect them from competition. A franchise is a charter containing special powers, privileges and immunities.
9. The causes of Business Combinations :-
a) Elimination of Competition :- Due to hard competition among the firms rate of profit decreases. Some firms may suffer a loss also. So the industrialsts feels pleasure to set up combination to avoid the competition.
b) To Solve Capital Problem :- Small units of production face the problem of capital shortage. These can not expand the business. So small units may form a combination to over come this problem.
c) To Achieve Economies :- Some small units cmbine themselves to achieve the economies of large scale. They purchase the raw material on low prices and sell the product on large scale coast of production falls and profit increases.
d) Effective Management :- Generally small units are unable to hire the services of experts and experianced managers. So small industrial units combine themselves to hire the services of effective management.
e) Tariff Facilities :- To compete with external firms some industrial units combine themselves. Government also provide protection and tarrif facilities. Government also imposes heavy duties to protect the domestic producers.
f) Uniform Policy :- All the units adopt uniform policy due to business combination. It regularizes the business activities of all the units.
g) Use of Technology :- The business combination can use the latest technology and new methods of production because it's sources are sufficient. While a single unit can not do so.
h) Growth of Joint Stock Companies :- The growth of joint stock companies has also made possible for various industrial units to form combination.
i) Status in Market :- A big firm enjoy higher status and respect then the smaller. So small business units prefer to combine themselves for higher status.
j) Demand and Supply Balance :- Business combination is very useful in controlling the over production. It adjust the supply according to the demand of the market. So over production can not take place and prices remain stable.
k) Transport and Communication Development Activities :- It has made economic activities fast. Now there is a close contact of businessman with the others. So it has also contributed to the growth of combination.
l) Research Facilities :- A Small firm can not set up the research department, while through business combination these facilities can be enjoyed.
m) Economic Instability :- In case of economic and political instability there is chance of loss in every moment. To reduce the risk small industrial units combine themselves.
10. Meaning (or) Definition of Leadership :-
Leadership is a process by which an executive can direct, guide and influence the behavior and work of others towards accomplishment of specific goals in a given situation. Leadership is the ability of a manager to induce the subordinates to work with confidence and zeal.
Leadership can be defined as one's ability to get others to willingly follow.
The Qualities (or) Characteristics of Succesful Good Leader :-
a) Mission : Leaders must know about their mission. They know why the organization exists. Mission must not be esoteric or abstract, but descriptive, clear and understandable. Every employee should be able to identify with the mission and strive to achieve it.
b) Vision :- A Vision needs to be concrete, understandable to fulfill it.
c) Goal :- Like a vision, goals need to be operational; specific and measurable.
d) Competency :- Leader must be an expert in his field or an expert in leadership. It will be more difficult you to be respected, admired, or followed, unless you possess with specialized experience.
e) A Strong team :- A leader should always be supported by a strong team, If he lacks certain abilities he should trust his colleagues to complement those deficiencies.
f) Communication Skills :- The Leader must possess effective communication skills. He must regularly be in touch with key individuals, by email, v-mail, meetings, or other forms of correspondence. These are the few of the many effective approaches leaders can use to develop positive contacts with employees.
g) Interpersonal skills :- Successful leaders develop interpersonal skills. These skills help leaders seem approachable, likeablle, and comfortable in their position. Those who lack these skills must take a course to build them. Interaction with employees with a positive attitude help to develop morale.
h) Inspiration :- Leader must always give direction, guidance, and motivation. The leader always ready to offer a suggestion or encouragement to his employees to perform their jobs in an optimal manner.
i) Ambition :- Leader needs to be constantly striving for improvement and success.
j) Integrity :- If Leader is a person of integrity he can be trusted. A Leader must have the trust of followers and therefore must display integrity. Honest dealings, predictable reactions, well-controlled emotions, and an absence of tantrums and harsh outbursts are all signs of integrity..
k) Dedication :- Leader completes his assignment with full dedication. He inspires dedication among his team to get opportunities to achieve something great.
l) Magnanimity :- It means giving credit where it is due. A magnanimous leader ensures that credit for successes is spread as widely as possible. A good leader takes personal responsibility for failures. To spread the fame and take the blame is a hallmark of effective leadership.
m) Enthusiastic :- A Good leader is enthusiastic about his role as leader. Leaders need to be able to be a source of inspiration, and be a motivator towards the required action or cause.
n) Confidence :- A Good leader must be confident. In order to lead and set direction a leader needs to appear confident as a person and in the leadership role.
o) Trust :- Team members trust makes people feel empowered, gives them the courage to innovate, take risks, and to push themselves beyond their comfort zones to find success.
p) Empathy :- Showing empathy towards your colleagues brings good results. Emotional intelligence is widely recognized as a leadership quality.
q) Mentorship :- No matter how talented we may be, we crave the guiding hand, the mentor who will teach us the rules of the game. When people are perplexed about what the future holds for their organization and themselves, mentorship is critical.
PART - C
11.Meaning (or) definition of Office Management :-
Office management refers to planning, Administering and Organising activities in an office. This work is often done by clerks in main offices where there is much work load and a lot of activities going on in the particular office.
12.Meaning (or) Definition of Co-operative Society :-
A Co-operative society is an association of individuals who voluntarily pool their resources and carry on the business for their own welfare and not for a profit seeking business. It is democratic form of organization in which the consumers are the owners of the business. From manager to clerk all are the owners of the business and all the management is in their hands. In this organisation capitalist is not involved.
13.The list of Stock of Stock Exchange in India :-
1. Bombay Stock Exchange (BSE) Mumbai (1875)
Emerges as the premier Indian Stock exchange by establishing global benchmarks.
2. National Stock Exchange of India (NSE) Mumbai (1992)
It is mutually owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in india but its ownership and management operate as separate entities.
3. Calcutta Stock Exchange (CSE) Kolkata (1908)
It is the second largest bourse in india.
4. Madras Stock Exchange (MSE) Chennai (1937)
The MSE is the fourth stock exchange to be established in the country and the first in South india.
5. Interconnected Stock Exchange Ltd Mumbai (1998)
It is a national level stock exchange, provideing trading, clearing, settlement, risk management and surveillance support to its trading clearing, settlement, risk management and surveillance support to its trading members.
6. United Stock exchange of India Mumbai (2010)
It is the fourth pan India exchange to be launched for trading financial instruments in india over the last 140 years.
7. OTC Exchange of India Mumbai (1990)
It is the First Exchange for small companies.
8. MCX Stock Exchange Mumbai (2008)
it is an india wide electronic platform for trading in currency futures under the regulatory control of securities and Exchange Board of India (SEBI) and Reserve Bank of India (RBI).
9. Multi Commodity Exchange of India Ltd (MCX) Mumbai (2003)
It is an independent commodity exchange based in India.
10.Bangalore Stock Exchange (BgSE) Bangalore (1963)
The stock exchange is managed by a council of management, consisting of members appointed by the Securities and Exchange Board of India.
14.Meaning (or) Definition of Memorandum of Association.
The memorandum of association is a statement made by each subscriber confirming their intention to form a company and become a member of that company. If the company is to have a share capital on formation, each member also agrees to take at least one share. The from of memorandum is included in schedules 1 and 2 of the companies (Registration) Regulations 2008 (SI 3014). You can download pro-forma memorandum for a company limited by shares or guarantee from our forms online page.
15.Meaning (or) definition of Location
Named geographical place (such as an airport, seaport, container freight station or terminal) that provides permanent facilities for movement of goods (Such as customs, storage, and other support services) or is designated for a stated purpose.
The marking out of the boundaries, or identitying the place or site of, a piece of land, according to the description given in an entry, plan map, etc.,,,,
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