XII - STANDARD

COMMERCE
STUDY MATERIAL
(AS PER NEW EDITION -2024)

PREPARED BY:
M.SHIYAMALA
VELAMMAL VIDHYASHRAM MATRIC HR.SEC SCHOOL
SEVVAPET,
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 XII - STANDARD
COMMERCE
CHAPTER -1 PRINCIPLES OF MANAGEMENT
I. Choose the Correct answers:
1. Management is what a does?
a) Manager b) Subordinate c) Supervisor d) Superior
2. Management is an
a) Art b) Science c) Art and Science d) Art or Science
3. Scientific management is developed by
a) Fayol b) Taylor c) Mayo d) Jacob
4. Dividing the work into small tasks is known as
a) Discipline b) Unity c) Division of work d) Equity
5. With a wider span, there will be _ hierarchical levels.
a) More b) Less c) Multiple d) Additional
ANSWERS
1. a 2. c 3. b 4. c 5. b
II. Very short answer questions:
1. What is Management?
Management is goal oriented and it is an art of getting things done with and through others.
2. List out the management tools.
1. Accounting, 4. Statistics
2. Business law 5. Econometric
3. Psychology 6. Data processing
3. State the meaning of Authority.
Authority means the right of a superior to give the order to his subordinates.
4. What do you mean by Span of management?
The Span of Management refers to the number of subordinates who can be managed
efficiently by a superior.
III. Short answer questions:
1. Define the term management.
“To manage is to forecast, to plan, to organise, to command, to co-ordinate and to control.”
- Henry Fayol.
(Or)
“Management is a multipurpose organ that manages a business and manages manager, and
manages worker and work.” - Peter F. Drucker:
2. Differentiate management from Administration. (any 3)
BASIS MANAGEMENT ADMINISTRATION
1. Authority Middle and Lower Level Top level
2. Role Executive Decisive
3. Concerned with Policy Implementation Policy Formulation
4. Key person Manager Administrator
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3. What are the principles of Taylor?
1. Science, Not Rule of Thumb
2. Harmony, Not Discord
3. Mental Revolution
4. Cooperation, Not Individualism
5. Development of each and every person to his or her greatest efficiency and prosperity.
4. What determines the span of management?
 There is a wide and a narrow span of management.
 With the wider span, there will be less hierarchical levels, and thus, the organizational
structure would be flatter.
 Whereas, with the narrow span, the hierarchical levels increase, hence the organizational
structure would be tall.
IV. Long answer questions:
1. Explain the concept of management. (Any 5)
1. Body of Knowledge:
Management has now developed into a specialised body of management theory and
philosophy. Management literature is growing in all countries.
2. Management Tools:
1. Accounting, 2. Business law 3.Psychology
4. Statistics 5. Econometric 6. Data processing
3. Separate Discipline:
Management studies in many universities and institutions of higher learning are recognised
as a separate discipline. Since 1951, many specialised schools of management offering
master„s degree in business management and administration.
4. Specialisation:
There is a growing tendency to select and appoint highly qualified, trained and experienced
persons to manage the business in each functional areas of management.
5. Code of Conduct:
Enlightened businessmen have recognised that business management is a social institution
and it has social responsibilities to be fulfilled - towards customers, employees, and the
public or community.
6. Professional Association:
The Business Management Associations in many countries to promote the spread of
knowledge in all management areas and to build up the bright public image of managerial
profession.
2. Explain the principles of modern management. (any 5)
1. Division of Work:
According to this principle the whole work is divided into small tasks. The specialization
of the workforce according to the skills of a person, creating specific personal and
professional development within the labour force and therefore increasing productivity;
leads to specialization which increases the efficiency of labour.
2. Authority and Responsibility:
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Authority means the right of a superior to give the order to his subordinates whereas
responsibility means obligation for performance.
3. Discipline:
It is obedience, proper conduct in relation to others, respect of authority, etc. It is essential
for the smooth functioning of all organizations.
4. Unity of Command:
This principle states that each subordinate should receive orders and be accountable to one
and only one superior. If an employee receives orders from more than one superior, it is
likely to create confusion and conflict.
5. Unity of Direction:
All related activities should be put under one group, there should be one plan of action for
them, and they should be under the control of one manager.

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 CHAPTER - 2 FUNCTIONS OF MANAGEMENT
I. Choose the Correct answers:
1. Which is the primary function of management?
a) Innovating b) Controlling c) Planning d) Decision-making
2. Which of the following is not a main function?
a) Decision-making b) Planning c) Organising d) Staffing
3. is included in every managerial function.
a) Co-ordinating b) Controlling c) Staffing d) Organising
4. Which of the following is verification function?
a) Planning b) Organising c) Staffing d) Controlling
5. The goals are achieved with the help of
a) Motivation b) Controlling c) Planning d) Staffing
ANSWERS
1. c 2. a 3. a 4. d 5. a
II. Very Short Answer Questions:
1. Write a short note about Planning.
Planning refers to deciding in advance. Planning is a constructive reviewing of future needs
so that present actions can be adjusted in view of the established goal.
2. What is meant by Motivation?
The goals are achieved with the help of motivation. Motivation includes increasing the speed
of performance of a work and developing a willingness on the part of workers.
3. List the subsidiary functions of management.
1. Innovation 2. Representation 3. Decision-making 4. Communication
4. What is the Traditional proverb used in planning?
“Think Before you Act” (or) “Look Before you Leap”
III. Short Answer Questions:
1. List out the main functions of management?
1. Planning 2. Organising 3. Staffing 4. Directing,
5. Motivating 6. Controlling 7. Co-ordination
2. State the importance of staffing.
 Staffing function comprises the activities of selection and placement of competent
personnel.
 In other words, staffing refers to placement of right persons in the right jobs.
 The success of any enterprise depends upon the successful performance of staffing
function.
3. How the employees are informed about important matters in a company?
Communication is the transmission of human thoughts, views or opinions from one person to
another person. Employees are kept informed of all necessary matters by circulars,
instructions manuals, newsletters, notice-boards, meeting, participative mechanism etc.,
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IV. Long Answer Questions:
1. Explain the various functions of management. (Any 5)
1. Planning:
Planning refers to deciding in advance. “Think Before you Act” (or) “Look Before you
Leap” are the some of the traditional proverbs for planning.
2. Organising:
Organising is the process of establishing harmonious relationship among the members of
an organisation and the creation of network of relationship among them.
3. Staffing:
Staffing function comprises the activities of selection and placement of competent
personnel. In other words, staffing refers to placement of right persons in the right jobs.
4. Directing:
Directing denotes motivating, leading, guiding and communicating with subordinates on
an ongoing basis in order to accomplish pre-set goals.
5. Motivating:
The goals are achieved with the help of motivation. Motivation includes increasing the
speed of performance of a work and developing willingness on the part of workers. This is
done by a resourceful leader.
6. Controlling:
Controlling is performed to evaluate the performance of employees and deciding
increments and promotion decisions.
7. Co-ordination:
Grouped activities are co-ordinated towards the accomplishment of objectives of an
organisation.

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 CHAPTER-3 MANAGEMENT BY OBJECT (MBO)
MANAGEMENT BY EXCEPTION (MBE)
I. Choose the Correct answers:
1. System gives full Scope to the Individual Strength and Responsibility.
a) MBO b) MBE c) MBM d) MBA
2. Which is the First step in Process of MBO?
a) Fixing Key Result Area b) Appraisal of Activities
c) Matching Resources with Activities d) Defining Organisational Objectives
3. keeps Management Alert to Opportunities and Threats by Identifying
Critical Problems.
a) MBA b) MBE c) MBM d) MBO
4. Delegation of Authority is Easily Done with the Help of .
a) MBM b) MBE c) MBO d) MBA
5. MBO is popularised in the USA by
a) Prof. Reddin b) George Odiorne c) Henry Fayol d) F.W Taylor
ANSWERS
1. a 2. d 3. b 4. c 5. b

II. Very Short Answer Questions:

1. What are the objectives of MBO?
 To measure and judge performance
 To relate individual performance to organisational goals
2. Bring out the meaning of MBE.
Management by exception is a style of business management that focuses on identifying and
handling cases that deviate from the norm.
3. Mention any two advantages of MBO?
1. Systematic evaluation of performance is made with the help of MBO.
2. Delegation of authority is easily done with the help of MBO.
4. What is known as KRA?
Key result areas are fixed on the basis of organisational objectives premises. Key Result
Areas (KRA) are arranged on a priority basis. KRA indicates the strength of an organisation.
III. Short Answer Questions:
1. Write the features of MBO.
1. MBO tries to combine the long run goals of organisation with short run goals.
2. Management tries to relate the organisation goals with society goals.
3. MBO‟s emphasis is not only on goals but also on effective performance.
2. What are the Process of MBE?
 Primarily, it is necessary to set objectives or norms with predictable or estimated results.
 These performances are assessed and get equated to the actual performance.
 Next, the deviation gets analysed. With an insignificant or no deviation, no action is
required and senior managers can concentrate on other matters.
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3. List out any three process of MBO.
1. Defining Organisational Objectives
2. Goals of Each Section
3. Fixing Key Result Areas
IV. Long Answer Questions:
1. What are the major advantages of MBO? (Any 5)
1. Systematic evaluation of performance is made with the help of MBO.
2. MBO gives the criteria of performance. It helps to take corrective action.
3. Delegation of authority is easily done with the help of MBO.
4. MBO motivates the workers by job enrichment and makes the jobs meaningful.
5. The responsibility of a worker is fixed through MBO.
2. What are the advantages of MBE? (Any 5)
1. It saves the time of managers because they deal only with exceptional matters.
2. It focuses managerial attention on major problems.
3. It facilitates delegation of authority.
4. It is a technique of separating important information from unimportant one.
5. MBE keeps management alert to opportunities and threats by identifying critical problems.
6. Management by exception provides better yardsticks for judging results. It is helpful in
objective performance appraisal.
3. Discuss the disadvantages of MBE.
1. Only managers have the power over really important decisions, which can be demotivating
for employees at a lower level.
2. Furthermore, it takes time to pass the issues to managers.
3. Managing employees who deviate from the normal procedures.
4. Because of compliance failures are considered difficult to manage.
5. Typically find themselves with limited job duties and ultimately dismissed/terminated.