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NOORUL ISLAM COLLEGE OF ENGINEERING

DEPARTMENT OF INFORMATION TECHNOLOGY

PRINCIPLES OF MANAGEMENT (MG1351)


SAMPLE 2 MARKS

COMPILED BY: Mr. P. MOHAMED SHAMEEM Class: S6 IT

UNIT-I

1. Define Sole proprietorship.


A sole proprietorship is a form of private sector enterprise that is owned, managed
and controlled by an individual entrepreneur.

2. Define Partnership.
Partnership is the relationship between two or more persons who have agreed to
share the profits of a business carried on by all or any of them acting for all.

3. Define partnership deed.


The document which contains the terms of a partnership as agreed among the
partners is called partnership deed. The deed is required to be duly stamped as per the
Indian stamp Act and duly signed by all the partners.

4. What is meant by Registration of a partnership?


Registration of partnership means getting the partnership, Registered with the
Registrar of the area in which the place of business of the firm is situated or proposed to
be situated.

5. Define Company.
A Company is an association of many persons who contribute money or money’s
worth to a common stock and employs it in some trade or business, and who share the
profit and loss arising therefore.

6. Define Statutory Company.


A statutory company is one, which is created by special act of parliament or a
state legislature. The nature and powers of such companies are laid down in the special
act under which they are created.

7. Define Registered Company.


A registered company is one, which is registered in accordance with the
provisions of the companies act, 1956.

8. Define Government Company.


According to the companies act, a government company is that in which not less
than 51 percent of the paid-up share capital is held by the central government or any state
government.
9. What is a principle?

A principle can be defined as a fundamental statement of truth providing a guide


to thought and action.

10. What is scientific management?


Scientific management implies the application of science to the management of a
business concern. It means the management based on careful observation, objective
analysis and innovative outlook.

11. What is management?


Management is the art of getting things done through others.

12. What are the types of the partner?


Active partner
Sleeping partner
Nominal partner
Partner in profit only
Partners by estoppels and holding out

13. What is partnership at will?


It is a partnership where no fixed period has been specified for the duration of
partnership.

14. What is particular partnership?


A firm formed only for a specified venture of temporary nature or only for certain
period is called particular partnership.

15. What is limited partnership?


It is a partnership where the liability of all the partners, with the exception of at
least one partner is limited.

16. Define active partner.


Active partner contribute and take active part in administration.

17. Define sleeping partner


Sleeping partner only contributes.

18. Define secret partner

A partner who wants that his name should be kept secret is called secret partners.

19. Define silent partner.

Silent partner is those who do not have any voice in the management of the firm.
But they share the profits and losses.
20. Define nominal partner.
Those people who only lend their name to the firm are known as nominal partner.
They neither contribute capital nor do take active part in the management.

21. Define partners in profit only.


If a person is entitled to a certain share of profits without being liable for the
losses, he is known as partner in profits only.

22. Define partners by estoppels and holding out.


If a person conducts or behaves in such a way or represents to third parties
through spoken or written words that he is a partner of the firm called a partner by
estoppels.
If such a person who is considered as a partner by another and does not deny this
fact that he is a partner being fully aware of the use of his name in the partnership he is
called partner by holding out.

23. Define share.


The capital of a company is usually divided into certain indivisible units of
definite sum. These units are called shares.

24. Define debenture.


Debenture is a certificate issued by a company under its seal acknowledging a
debt due by it to the holders of debentures.

25. Define liability.


Liability of a business means what it owes to others.

26. A husband and wife, who were the only 2 members of a private limited company, are
shot dead by dacoits. Does the company also die with them?

No, The Company has perpetual succession.

27. Define Joint Stock Company.


A joint stock company is an incorporated association which is an artificial person
created by law, having a separate entity, with a perpetual succession and a common seal.

28. Define co-operative societies.


A voluntary organization of persons with unrestricted membership and
collectively owned funds, consisting of wage earners and small producers, united on a
democratic basis for the establishment of enterprises under joint management for the
purpose of improving their household or business economy.

29. Define holding company.


A company is known as the holding company of another company if it has control
over that company.
UNIT-II

1. Define Planning.
Planning is the selection and relating of facts and making and using of
assumptions regarding the future in the visualization and formalization of proposed
activities believed necessary to achieve desired result.

2. Define single use plan.


A single use plan is one, which is specific to a particular situation of a non-
repetitive nature. It may not have use for different situations. It becomes obsolete once its
purpose is over.

3. Define standing plans.


Standing plans are those, which are of a relatively long standing by nature. They
are meant to serve as standing guidelines, criteria and constraints on managerial decision-
making and action.

4. Define objectives.
Objectives are the goals, aims or purpose that organizations wish to achieve over
varying periods of time.

5. Define management by objectives.


MBO is a result-centered, non-specialist, operational managerial process for the
effective utilization of material, physical, and human resources of the organization by
integrating the individual with the organization and organization with the environment.

6. Define policy.
Policy is a means of encouraging discretion and initiative but within units. They
are predetermined decision rules applicable for a range of managerial decisions and
action.

7. Define procedures.
Procedure is defined as a set of sequential steps determined advance and
standardized for initiating, carrying through and completing a certain routine and
repetitive activity.

8. Define rules.
Rules are prescriptive directives to people in organizations and elsewhere to do or
not to do things, to behave or not to behave in particular ways. They are in the nature of
commandments, cautions, taboos and norms to discipline, to structure, standardize and
restrain individual and group behavior and task performance.

9. Define strategy.
A strategy is the determination of the basic long term goals and objectives of an
enterprise and the adoption of courses of action and the allocation of resources necessary
to carry out these goals.
10. Define program.
A program is a precise plan which lays down the operations to be carried out to
accomplish a given work. It includes all activities necessary to achieve the given
objectives and prescribes how the enterprise resource should be used.

11. Define project.


A project is a sequence of unique, complex, and connected activities having one
goal or purpose and that must be completed by a specific term, within budget, and
according to specifications.

12. Define budget.


A budget is a statement of expected results expressed in numbers.

13. Define variable budget.


Budget that vary according to the organization level of output are called variable
or flexible budgets.

14. Define program budgets.


Program budgets are budgets in which the agency identifies goal, develops
detailed programs to meet the goal, and estimates the cost of each program.

15. What is commitment principle?


Logical planning encompasses a future period of necessary to fulfill, through a
series of actions, the commitments involved in decisions made today.

16. What is short-range plan?


Short range planning also known as operations or tactical planning, usually covers
one year.

17. What is long-range plan?


Long range planning also known as strategic planning, involves more than one-
year period extending to twenty years.

18. What are benefits of MBO?


• Improvement of managing
• Clarification of organization
• Encouragement of personal commitment
• Development of effective controls.

19. Give TOWS matrix.

Internal /External S W
O SO WO
T ST WT
S-Strengths ; W-Weaknesses ; O-Opportunities ; T-Threats
20. Give PORTFOLIO matrix.

Business growth rate


High Stars ?

Low Cash Cows Dogs

Strong Weak

Market share

21. Give the three generic strategies by Porter.


• Overall cost leadership strategy
• Differentiation Strategy
• Focused Strategy

22. Give examples of policies.


• Purchasing policy
• Quality control policy
• Dividend policy

23. Differentiate objectives and policies.

Objectives Policies
1. Single use plan Standing plan
2. What to achieve
3. Formulated at top level Formulated at top level, middle level, lower level

24. Differentiate policies and procedures.

Policies Procedures
1. Guide to decision Guide to action
2. Allow discretion Do not allow discretion
3. General Statement Specific terms

25. Differentiate policies and strategies.

Policies Strategies
1. Standing plan Single use plan
2. Decision oriented Action oriented
3. Situation is known Situation is unknown
UNIT-III
1. Define staffing.
Filling and keeping the positions provided for by the organization structure filled
with the right people is the staffing phase of the management function. It includes several
sub-functions
• Recruitment
• Selection
• Transfers and promotions
• Training

2. Define recruitment.
Recruitment is the process of searching for prospective employees and stimulation
them to apply for jobs in the organization

3. Define selection.
Selection is a deliberate effort of the organization to select a fixed number of
personnel from a large number of applicants.

4. Define psychological test.


Psychological tests are essentially an objective and standardized measure of
behavior of an individual.

5. Define interview.
Interview is a selection technique that enables the interviewer to view the total
individual and to appraise him and his behavior. It consists of interaction between
interviewer and the applicant.

6. Define programmed decisions.


Programmed decisions are those that are made in accordance with some policy,
rule or procedure so that they do not have to be handled each time they occur. These
decisions are generally repetitive, routine and are obviously the easiest for managers to
make.

7. Define individual decisions.


Individual decisions are taken when the problem is of a routine nature, where the
analysis of variables is simple and where definite procedures to deal with the problem
already exist.

8. Define Simple decisions.


When variables to be considered for taking a decision are few, the decision is
termed as a simple decision.

9. Define directing.
Direction may be defined as a function of management which is related with
instructing, guiding and inspiring human factor in the organization to achieve the
objectives of the organization.
10. Define leadership.
Leadership is the quality of behavior of individuals whereby they guide people or
their activities in organizing efforts.

11. Define formal leader.


A formal leader is a person who possesses organizational authority to direct and
control the activities of his subordinates. He can issue orders and instructions to his
subordinates by virtue of his formal authority in the organization.

12. Define informal leader.


An informal leader is one who is selected by the workers and does not hulk any
managerial post in the organization.

13. Define motivation.


Motivation is the act of stimulating someone or oneself to get a desired course of
action, to push the right button to get a desired reaction.

14. Define communication.


Communication is the process of passing information and understanding from
one-person to another.

15. Define incentive.


Incentive is defined as the stimulation of effort and effectiveness by offering
monetary inducement or enhanced facilities.

16. Define formal communication.


Formal communication is one, which takes place in a formal organization
structure. It represents the flow of information along the lines of authority formally
established in the organization. Members of the organization are expected to
communicate as per the channels laid down in the organization.

17. Define Informal communication.


Informal communication is the communication between the members of the group
on the basis of informal relations and understanding among people at the basis of
informal relations and understanding among people at the same or different levels of the
organization. It does nit follow the lines of authority.

18. Define upward communicating.


It is the flow of communication from the subordinates to the superior position.
Reports, suggestions, complaints and grievances are instances of this type of
communication.

19. Define controlling.


Controlling is the measurement for performance against the standards and the
correction for deviations to ensure accomplishment at goals as per plan.
20. Define feedback.
Feedback is the reaction of the receiver to the message of the communicator
before and after, as well as during, the process of carrying out the instructions.

21. List the different types of budgets.

• Sales budget
• Production or output budget
• Materials budget
• Labor budget
• Factory overhead budget
• Personal budget
• Administrative overhead budget
• Selling and distribution expenses budget
• Cash budget
• Master budget.

22. Define Peter Principle of staffing.


Manager tends to be promoted to the level of their incompetence.

23. Define decision-making.


Decision-making is defined as selection of a course of action form among
alternatives.

24. What is satisfying?


Picking a course of action that is satisfactory or good enough under
circumstances.

25. Give the principle of limiting factor.


By recognizing and overcoming those factors that stand critically in the way of a
goal, the best alternative course of action can be selected.

UNIT-IV

1. Define financial management.


Financial management is that area of business management devoted to a judicious
use of capital and careful selection of sources of capital in order to enable a spending unit
to move in the direction of reaching goals.

2. Define shares.
The capital of a company is usually divided into certain indivisible units of a
definite sum. These units are called shares.

3. Define preference shares.


Preference shares are those shares which carry preferential rights in respect of
dividend and repayment of capital in the event of the company being roundup.
4. Define cumulative preference shares.
Preference shares which guarantee a fixed rate of dividend are known as
cumulative preference shares. If the dividend at a fixed rate cannot be paid in any year on
account of inadequate profits, the arrears of dividend will accumulate and will have to be
paid out of the profits of future years.

5. Define equity shares.


Shares, which do not enjoy any of the preference attached to the preference
shares, are known as equity shares or ordinary shares.

6. Define debenture.
Debenture is a certificate issued by a company under its seal acknowledging a
debt due by it to the holders of debentures.

7. Define secured debentures.


When debentures are secured by a charge on the assets of the company, they are
known as secured or mortgaged debentures .The charge may be fixed or floating.

8. Define convertible debentures.


These are debentures which give an option to the debentures holders to convert
them into preference or equity shares at a stated rate of exchange.

9. Define public deposits.


The deposits made by the public with the joint-stock companies are known as
public deposits.

10. Define financial statements.


Financial statements are organized summaries of detailed information about the
financial position and performance of an enterprise. Traditionally, the term financial
statements is used to denote only two basic statements which are under Balance sheet or
position statement that shows the financial position of an enterprise at a particular point
of time. Trading and profit and Loss Account Or Income statement that shows the results
of business operation during an accounting period.

11. Define trading account.


Trading account is one of the financial statements, which show the result of
buying and selling of goods and/or services during an accounting period. Trading account
is prepared to know the gross profit or loss during the accounting period.

12. Define Manufacturing account.

Manufacturing account is prepared by an enterprise engaged in manufacturing


activities .It is prepared to ascertain the cost of goods manufactured during an account
period. This account is closed by transferring its balance to the debit of the debit of the
Trading account.
13. Define profit and loss account.
The profit and loss account is one of the financial statements. It shows the net
results of the business operation during an accounting period. The profit and Loss
account is prepared to ascertain the Net Profit earned or Net Loss incurred by the
business entity as a result of business operations doing an accounting period.

14. Define balance sheet.


A Balance sheet is a financial statement. It is a statement of assets and liabilities
of an enterprise at a given date.

15. Define fixed assets.


Fixed assets refer to those assets which are held for the purpose of providing or
producing goods or services and those which are not held for resale in the normal course
of business.

16. Define current assets.


Current assets are those assets, which are held in the form of cash e.g. cash in
hand and cash at bank. For their conversion into cash e.g. stock of finished foods,
debtors, bill receivable, accrued income; for their consumption in the production of goods
or rendering of services in the normal course of business e.g. stock of raw materials.

17. Define long-term liability.


Long-term liability refers to that liability which does not fall due for payment in a
relatively short period (i.e. normally not more than 12 months from the date of balance
sheet) e.g. loan from a financial institution, debentures.

18. Define production.


Production is defined as the step-by –step conversion of one form of material into
another form through chemical or mechanical process to create or enhance the utility of
the product to the user.

19. Define production management.


Production management deals with decision-making related to production
processes so that the resulting goods or services are produced according to specifications,
in the amounts and by the schedule demanded and at minimum cost.

20. Define production planning.


Production planning is a series of related and co-ordinate activities performed by
not one but a number of different departmental groups, each activity being to systematize
in an advance the manufacturing efforts in its area.

21. What is the basic purpose of scheduling?


The basic purpose of scheduling is to execute a customer’s order well in time. It is
to ensure that the right things are done at the right time.
22. Define purchasing.
Purchasing is the activity responsible for getting the right material to the right
time, in the right q quality at the right price.

23. Define tender.


A tender or Quotation is a written offer to do a work or to provide a material at a
given price within a prescribed period and under certain specific conditions.

24. Define inventory.


Inventory is the stock of goods, commodities, supplies components and parts,
finished products, or other economic resources that are stored for future production, sale
or for meeting future demand.

25. What are the different types of inventories?


Raw material inventory, supply inventory, purchased parts inventory, work in
process inventory and finished products inventory

26. Define inventory control.


Inventory control is the function of directing the movement of goods through the
entire manufacturing cycle from the requisitioning of raw materials to the inventory of
finished goods with minimum investment and efficient plant operation.

UNIT-V
1. Define marketing.
Marketing is the business process by which products are matched with the
markets and through which transfers of ownership are affected.

2. Define marketing mix.


Marketing mix is a combination of factors which a company uses as tools for
pursuing its marketing objectives in the identical markets for achieving its targets. These
factors have to be strategically mixed in the marketing planning for optimizing profit,
market expansion and customer satisfaction.

3. Mention the four stages in the life cycle of a product.


Introduction, growth, maturity, decline.

4. List the major media used for advertising.


Television, radio, newspaper, magazines, films, transit advertising, direct mail
and advertising specialties are the major media for advertising

5. Define personnel management.


Personnel management is the process of bringing people and organizations
together for accomplishing the goals of each.

6. Define performance appraisal.


Performance appraisal is a systematic evaluation of personnel by superiors or
others familiar with their performance.
7. Define conflict.

Conflict may be is defined as a process in which an effort is purposefully made by


one person or unit to block another that results in frustrating the attainment of others
goals or the furthering of his or her interests

8. Define training.

Training is the act of increasing the knowledge and skills of an employee for
doing a particular job.

9. Define organizational development.

Organizational development is a planned, managed and systematic process to


change the culture, systems and behavior of an organization in order to improve the
organization’s effectiveness in solving its problems and achieving its objectives.

10. Define TQM.

TQM is an integrated management approach in satisfying customer needs in


totality on a continuing basis through involvement of each and every employee in the
organization making continuous improvement on one side and on appropriate cost
effective technology along with proper solving methodology.

11. Define Quality circle.

A Quality circle is a small group of volunteers doing similar work. They meet
regularly under the leadership of their immediate supervisor, or some one chosen among
the circle to identify problems, set priorities, discovers causes and proposes solutions.
These may concern quality, productivity, safety, Jon structure, process flow, and control
mechanism, aesthetics of the work area.

12. Give Price-promotion matrix.

Promotion

High Low

High High skimming strategy Low skimming strategy


Price

Low High penetration strategy Low penetration strategy


13. Give few pricing methods.

• Cost based pricing


• Value pricing
• Penetration pricing
• Geographical pricing
• Discriminating pricing

14. Define pricing.

STAR PROBLEM
CHILD
CASH COW DOG

Pricing is a logical proposition keeping in view the competitive products in the


markets.

16. Give pricing matrix.


Price
Product quality & brand

High Med Low


High Premium High value Super value

Med Over price Average Reasonable

Low Rip-off Unjust Sick

17. Give little performance appraisal method.

• Confidential report
• Rating scales
• Ranking system
• Paired-comparison method
• Forced-choice method
SAMPLE BIG QUESTIONS

UNIT – I

1. What are the characteristics of a company?


• An artificial person created by law
• Separate legal entity
• Perpetual existence
• Common seal
• Limited liability
• Free transferability of shares

2. Discuss the features of a partnership form of business.


• Two or more persons
• Agreement
• Business
• Sharing of profits
• Mutual Agency
• Unlimited liability
• Joint ownership and control.
• Non-transferability of share.
• Duration of partnership

3. Give Henri Fayol’s principles of management.


1. Division of work
2. Authority and responsibility
3. Discipline
4. Unity of command
5. Unity of direction
6. Subordination of individual interest to general interest
7. Remuneration of personnel
8. Centralization
9. Scalar chain
10. Order
11. Stability of tenure
12. Initiative
13. Equality
14. Esprit de corps

4. What are the functions of manager?


• Planning ; Organizing
• Staffing ; Directing
• Co-coordinating
• Reporting
• Budgeting
5. Explain different types of partners.
• Actual partner
• Sleeping partner
• Nominal partner
• Partner in profits only
• Sub-partner
• Partner by estoppels and holding out
• Incoming partner
• Outgoing partner, etc

UNIT – II

1. Explain the steps in planning?

• Perception of opportunities
• Establishing objectives
• Planning premises
• Identification of alternatives
• Evaluation of alternatives
• Choice of alternative plans
• Formulation of supporting plans
• Establishing sequence of activities

2. Define MBO and describes its essential elements.

MBO is a result-centered, non-specialist, operational managerial process for the


effective utilization of material, physical, and human resources of the organization by
integrating the individual with the organization and organization with the environment.
Diagram
Elements
Setting of Organizational purpose and objectives
Key Result Areas
Setting subordinates objectives
Matching resources with objectives
Appraisal
Recycling

3. Explain the importance of planning.

• Primacy of planning
• To offset uncertainty and change
• To focus attention on objectives
• To help in co-ordination
• To help in control
• To increase organizational effectiveness
4. What is the importance of procedures ?

• Procedures provide a basis for operators to know how to process the activity
without leaving loose ends in the best interests of the organization.
• Procedures help in structuring, standardizing, streaming and smoothing the
day-to-day activity in organizations and in creating a management by system.
• A standard set of operating procedure promote tidy working habit patterns in
the various units of the organization.
• They are the means of implementing organizational decisions and policies.
• They help reduce or remove administrative bottlenecks in the work flow on
a day to day basis.
• They also help expedite and accelerate clerical and paper work without
duplication and waste motion.
• A coherent set of procedures governing administrative action enables
personnel to actively involve themselves in work without feeling confused and
harassed, etc..

5. Explain how strategy is formed.

Definitions, rules to be followed

UNIT – III

1. What do you mean by Recruitment? Explain the process of recruitment.


Recruitment is the process of searching for prospective employees and stimulation
them to apply for jobs in the organization
ƒProcess
ƒScreening of applications
ƒSelection tests
ƒInterview
ƒChecking of references
ƒPhysical examination
ƒApproval by appropriate authority
ƒPlacement

2. What are the characteristics of good leader?

• Intelligence
• Initiative and creative ability
• Power of judgment
• Vision and foresight
• Mental and emotional maturity
• Flexibility
• Technical competence
• Self-confidence
• Human relations attitude.
3. What is budget? Explain few non-budgetary control methods.
A budget is a statement of expected results expressed in numbers.

• PERT, CPM, Statistical data


• Personal observation ; Break-even point analysis, etc.

4. What are the barriers of communication? How it can be overcome?

Barriers
Badly expressed messages ; Faulty translations ; Technical language
Unclarified assumptions ; Loss of transmission and poor retention
Inattention ; Premature evaluation ; Distrust of communicator
Filtering ; Different backgrounds ; Faulty organization
Fear ; Failure to communicate
Building effective communication
Clarity ; Objective ; Empathetic listening
Feedback ; Proper language
Consistency ; Credibility ; Adequacy

5. Explain different leadership styles.


• Autocratic
• Democratic or Participative
• Free rein leaders
UNIT – IV

1. What are the functions of financial management?


• Managerial functions
Financial planning, organizing, directing, etc..
• Operating functions
Raising funds, allocating and investing funds, etc…
• Incidental or Routine financial function

2. Explain long-term sources of funds.


Shares, Debentures, retained earnings, long term debt from bank..

3. Explain Discounting Cash Flow (DCF) technique capital budgeting.


• Net Present Value (NPV)
• Internal Rate of Return (IRR)
• Profitability Index (PI)
• Discounted Pay back period

4. What is tender? Explain different types of tenders.


A tender or Quotation is a written offer to do a work or to provide a material at a
given price within a prescribed period and under certain specific conditions.
Types
Single tender ; Limited tender ; Open tender.
5. Explain the types of inventory.
• Raw material
• Supplies
• Purchased parts
• Work-in-progress materials
• Finished products

UNIT – V

1. Discuss different types of sales promotion?

Dealer’s Level
Sales meetings, Advertising materials, Contests, Store demonstrations, Dealer gifts.
Consumer’s Level
In-Store demonstrations, samples, coupons, refunds, contests, etc..
Salesman’s Level
Sales manual, contests, product demonstration, etc..

2. What are the benefits of quality circle?

• Promoted high level of productivity and quality –mindedness


• Self and mutual development of employees
• Creating team spirit and unity of action
• Increased motivation, job satisfaction and pride in their work.

3. Give different methods of performance appraisal.

• Confidential report ; Rating scales ; Ranking system


• Paired-comparison method ; Forced-choice method
• Critical incident method ; Cost accounting method
• Forced distribution method

4. Explain few pricing methods.


• Cost based pricing ; Value pricing ; Pricing with demand curve
• Penetration pricing ; Geographical pricing ; Discriminating pricing
• Conspicuous pricing ; Psychological pricing ; Value-added pricing
• Complementary product pricing ; Promotional pricing

5. List few advertising techniques and explain.

• Comprehensive advertisement ; Positive & Negative advertisement ;


• Social theme-based techniques ; Future project base techniques
• Entertaining and family oriented ; Gender sensitive
• Product-customer age cohesive ; High frequency insertion –drive
• Average frequency insertion cue ; Scientific message ; Abstract message

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