Question 1
Which of the following best describes "effectiveness" in management?
✅ Correct Answer: Achieving predetermined goals
Explanation: Effectiveness means completing the right task and successfully achieving organisational objectives.[cite: 9]
Question 2
Which function of management helps in assigning duties and establishing reporting relationships?
✅ Correct Answer: Organising
Explanation: Organising involves dividing work, assigning responsibilities, and establishing authority relationships.[cite: 9]
Question 3
Which principle of Fayol promotes fairness and kindness in managerial treatment of employees?
✅ Correct Answer: Equity
Explanation: The principle of equity emphasizes fair and just treatment of employees by managers.[cite: 9]
Question 4
Which of the following is a feature of directing?
✅ Correct Answer: It initiates action in the organisation
Explanation: Directing activates employees to work toward organisational objectives through guidance and motivation.[cite: 9]
Question 5
Which financial instrument is generally traded in the money market?
✅ Correct Answer: Treasury Bills
Explanation: Money market deals in short-term financial instruments such as Treasury Bills and commercial papers.[cite: 9]
Question 6
A manager observed that employees were unclear about their duties because responsibilities were not defined properly. Which function of management should be improved?
✅ Correct Answer: Organising
Explanation: Organising clearly defines roles, responsibilities, and authority relationships within the organisation.[cite: 9]
Question 7
A company regularly trains employees to adapt to new technology introduced in production. Which importance of staffing is highlighted?
✅ Correct Answer: Employee development
Explanation: Staffing includes training and development to improve employee competence and adaptability.[cite: 9]
Question 8
A manager gave complete freedom to employees to suggest solutions during meetings. Which leadership style is being followed?
✅ Correct Answer: Democratic
Explanation: Democratic leadership encourages employee participation in decision-making processes.[cite: 9]
Question 9
Which of the following is an example of "economic environment"?
✅ Correct Answer: Consumer income and inflation rates
Explanation: Economic environment includes structural market factors like inflation, income levels, and core economic policies affecting operational systems.[cite: 9]
Question 10
A consumer purchased an electrical appliance that caused electric shock during normal use. Which consumer right is MOST directly violated?
✅ Correct Answer: Right to safety
Explanation: Consumers have a strict legal right to protection against hazardous goods and volatile service delivery formats.[cite: 9]
Question 11
Assertion (A): Motivation improves employee efficiency.
Reason (R): Motivated employees willingly contribute toward organisational goals.
✅ Correct Answer: Both A and R are true, and R is the correct explanation of A.
Explanation: Motivated employees consistently perform better because they are naturally committed to achieving structural milestones.[cite: 9]
Question 12
Assertion (A): Decentralisation eliminates the need for delegation.
Reason (R): Delegation is the basis of decentralisation.
✅ Correct Answer: A is false, but R is true.
Explanation: Delegation is essential for decentralisation because administrative authority must first be explicitly delegated before being systematically distributed across operations.[cite: 9]
Question 13
Read the following case carefully:\nA manufacturing firm introduced a system where workers producing above standard output received higher wages, while inefficient workers received lower wages. Which scientific management technique is being used?
✅ Correct Answer: Differential piece wage system
Explanation: F.W. Taylor's differential piece wage system rewards highly efficient workers with accelerated wages to naturally drive overall production scales.[cite: 9]
Question 14
Read the passage carefully:\nBright Future Ltd. started using solar energy, reduced water wastage, and provided scholarships to underprivileged students in nearby villages. Which objective of management is mainly highlighted?
✅ Correct Answer: Social objective
Explanation: Social objectives focus closely on ecological sustainability, environmental protection, and community welfare parameters.[cite: 9]
Question 15
Which of the following situations BEST represents "informal communication"?
✅ Correct Answer: Employees sharing information through personal conversations
Explanation: Informal communication networks develop dynamically among operational teammates outside standard formal reporting structures.[cite: 9]
Question 16
A company fixed production targets without consulting workers. As a result, employees resisted the targets and productivity declined. Which principle of scientific management was ignored?
✅ Correct Answer: Harmony, not discord
Explanation: Taylor strongly emphasized active strategic cooperation and cognitive alignment between internal management tiers and ground workers.[cite: 9]
Question 17
Which of the following BEST differentiates "authority" and "accountability"?
✅ Correct Answer: Authority can be delegated; accountability remains fixed.
Explanation: This is a highly critical exam concept. Operational managers can easily delegate decision-making authority, but ultimate accountability for final productivity benchmarks remains fixed and non-transferable.[cite: 9]
Question 18
A company expanded rapidly but decision-making became slow because all approvals were handled by top management only. Which concept should the company adopt?
✅ Correct Answer: Decentralisation
Explanation: Decentralisation prevents operational latency by shifting operational authority across varying execution levels instead of hoarding checkpoints at the top.[cite: 9]
Question 19
Which of the following is the BEST example of "primary market"?
✅ Correct Answer: Issue of new shares to public for the first time
Explanation: The primary market specifically deals with fresh issuances of equity or debt directly by corporations to retail or institutional investors.[cite: 9]
Question 20
A company prepared detailed sales forecasts, fixed sales targets, monitored monthly sales reports, and revised strategies when targets were not achieved. Which combination of management functions is MOST clearly involved?
✅ Correct Answer: Planning and controlling
Explanation: Advanced forecasting and milestone setting are core elements of planning, whereas asset monitoring and remedial actions belong directly to controlling frameworks.[cite: 9]
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