NIOS CLASS 12 BUSINESS STUDIES NOTES APRIL 2020 EXAM
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Q. Explain the four characteristics of Partnership form of Business Organisation.
- Two or More Persons: To form a partnership firm at least two persons are required. The maximum limit on the number of persons is ten for banking business and 20 for other businesses. If the number exceeds the above limit, the partnership becomes illegal and the relationship among them cannot be called partnership.
- Contractual Relationship: Partnership is created by an agreement among the persons who have agreed to join hands. Such persons must be competent to contract. Thus, minors, lunatics and insolvent persons are not eligible to become the partners. However, a minor can be admitted to the benefits of partnership firm i.e., he can have share in the profits without any obligation for losses.
- Sharing Profits and Business: There must be an agreement among the partners to share the profits and losses of the business of the partnership firm. If two or more persons share the income of jointly owned property, it is not regarded as partnership.
- Principal Agent Relationship: There must be an agency relationship between the partners. Every partner is the principal as well as the agent of the firm. When a partner deals with other parties he/she acts as an agent of other partners, and at the same time the other partners become the principal.
Q. Explain the four characteristics of Joint Hindu Family form of Business Organisation.
- Formation: In JHF business there must be at least two members in the family, and family should have some ancestral property. It is not created by an agreement but by operation of law.
- Legal Status: The JHF business is a jointly owned business. It is governed by the Hindu Succession Act 1956.
- Membership: In JHF business outsiders are not allowed to become the coparcener. Only the members of undivided family acquire co-partnership rights by birth.
- Profit Sharing: All coparceners have equal share in the profits of the business.
- Liability: The liability of coparceners is limited to the extent of their share in the business. But the Karta has an unlimited liability. His personal property can also be utilised to meet the business liability.
Q. Explain the various objectives of management.
- Optimum Utilisation of Resources: Management should try to secure maximum outlay with minimum efforts and resources by utilising the human and material resources available in an organisation for deriving the best results.
- Increase in Productivity of All Factors of Production: Management should minimise the wastage of time, money and efforts through proper utilisation of various factors of production like capital and labour. This will lead to increase in efficiency of all factors of production. It should also try to set higher standards of productions every year and should strive higher to reach these targets.
- Fair Return on Capital: Management has to provide a fair return to the owners on the capital invested by them. Management must maintain the investment and should also attract further investments for growth and expansion.
- Create Goodwill: Management should aim at building the reputation of the firm through various activities like popularising products by advertising, reasonable price, good quality products etc. Business environment is dynamic and is influenced by a number of factors.
- Meet Challenges of the Changing Environment: Enterprises which are unable to adopt itself to the changing situations will not be able to survive. Management should frame steps to meet the challenges of the changing environment. Thus, management can help an organisation for its survival and growth.
Q. ‘Management as a Process’ – Explain.
Management consists of a series of inter-related activities of planning, organising and controlling. All activities are undertaken in a proper sequence with a systematic approach so as to ensure that all actions are directed towards achievement of common goals. Thus, it is regarded as a process of organising and employing resources to accomplish the predetermined objectives.
Q. ‘Management as a Science as well as an Art’ – Discuss.
Management is regarded as a science as well as an art. Science refers to a systematic body of knowledge with reference to understanding of some phenomenon or subject or object of study. It establishes a cause and effect relationship between variables. It is based on systematic explanation, experimental analysis, critical evaluation and logical consistency. Any subject of study is called a science should have the following characteristics:
1. There must be a systematised body of knowledge that includes concepts,people and theories.
2. We should be able to establish a cause and effect relationship
3. Its principles should be verifiable.
4. It should ensure predictable results.
5. It should have universal application.
It is a personalised process and states that there is no best way of doing a thing. It is creative and it improves by practice. Thus, management is a combination of both science and art.
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