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UGC-NET Management, June 2015

PAPER–II
Note: This paper contains fifty (50) objective type 4. For an economy which consists of single
questions of two (2) marks each. All questions are automobile maker and that in year 2014,
compulsory. 30,000 vehicles are produced with an average
price of ` 5 lakh. For this economy what would
1. If the demand for using the Noida express way be the increase in the nominal GDP for 2015
is given by: compared with 2014 with the 4% greater
Q = 40,000 – 2500 P automobile production and 8% inflation.
Where Q is the number of users (vehicles) and A. 4.0% B. 12.0%
P is the amount of toll collected per unit who C. 6.0% D. 12.32%
uses the express way. In light of this
information which of the following is true: 5. Demand policies targeted to reduce the
unemployment become ineffective in presence
A. At P = ` 6 and Q = 14,000; demand is
of the following:
price inelastic.
A. Vertical phillips curve
B. At P = ` 7 and Q = 16,500; demand is
B. Money illusion and ignorance among
unitary elastic. workers
C. At P = ` 4 and Q = 9,500; demand is price C. Horizontal phillips curve
elastic. D. None of the above
D. All of the above
6. An individual’s involvement with, satisfaction
2. If a 100% scale-efficient plant has 92% and enthusiasm for, the work he does, is known
technical efficiency and 88.5% allocative- as:
efficiency, then its overall efficiency will be: A. Employee engagement
A. 88.5% B. 90.25% B. Job involvement
C. 93.0% D. 81.42% C. Job satisfaction
D. Organisational commitment
3. The market share data for an industry,
comprising five companies, is given below: 7. Which of the following is not perceived as the
Company Market Share (%) basic element of motivation?
A. Direction B. Intensity
A 35 C. Performance D. Persistence
B 25
C 18 8. A theory of motivation that is concerned with
D 12 the beneficial effects of intrinsic motivation
E 10 and the harmful effects of extrinsic motivation,
is termed as:
This industry’s three-firms Herfindahl- A. Cognitive Evaluation Theory
Hirschman index shall be: B. Self-efficiency Theory
A. 0.234 B. 0.217 C. Self-determination Theory
C. 0.151 D. 0.0175 D. Two-factor Theory

1 UGC-Mang. J'15–1
 2 UGC-Mang. J'15–1-II

9. Match the items of List-I with those of List-II. (c) Depth interview is also known as Directive
List-I List-II Interview
Behavioural science Contribution (d) Job evaluation is carried out for promoting
(a) Anthropology (i) Attitude change job satisfaction
(b) Psychology (ii) Attitude Which of the following statements are true?
measurement A. only (a) and (c) B. only (a) and (b)
(c) Social psychology (iii) Conflict C. (a), (b) and (c) D. (b), (c) and (d)
(d) Sociology (iv) Organisational
14. Behaviourally Anchored Rating Scale (BARS)
culture
consists of the following steps:
Codes: (a) Reallocate incidents
(a) (b) (c) (d) (b) Develop performance dimensions
A. (i) (ii) (iii) (iv) (c) Generate critical incidents
B. (iv) (ii) (i) (iii) (d) Develop final statements
C. (iv) (ii) (iii) (i)
D. (ii) (iv) (iii) (i) The correct chronological order of these steps
is:
10. A relatively stable set of characteristics that A. (a), (b), (c), (d) B. (b), (c), (a), (d)
influence an individual’s behaviour is known C. (c), (b), (a), (d) D. (a), (c), (b), (d)
as:
A. Attitude B. Learning 15. Consider the following elements:
C. Perception D. Personality (a) Actors (b) Inputs
(c) Context (d) Output
11. Assertion (A): The more differentiated the HR (e) Ideology
environment, the more uncertain it shall be:
Which of these are not the elements of John
Reason (R): Organisations are dependent in T. Dunlop’s Framework of Industrial Relatives
an environment where human resources are
System?
not widely available.
A. (a) and (b) B. (a) and (e)
A. Both (A) and (R) are correct
C. (b) and (d) D. (a) and (d)
B. (A) is correct and (R) is the right
explanation of (A) 16. State the price of the share for the year t, if the
C. (A) is correct but (R) is not the right rate of growth of the firm is 10%, EPS and
explanation of (A) DPS for the year t + 1, are ` 3 and ` 2
D. Both (A) and (R) are incorrect respectively and the investors’ required rate
of return is 20%.
12. Which one of the following is a type of
A. ` 30 B. ` 20
interview where a series of job-related
C. ` 25 D. ` 10
questions are asked that focus on how the
candidate would behave in a given situation? 17. In which of the following appraisal criteria of
A. Behavioural interview capital budgeting, the use of varying
B. Job-related interview opportunity cost of capital as a discount factor
C. Situational interview is possible?
D. Structured interview (a) NPV (b) IRR
(c) Pay-back period (d) ARR
13. Consider the following statements:
A. Only (a) is correct
(a) Sensitivity training was developed by Kurt
B. (a) and (b) both are correct
Lewin
C. (b) and (d) both are correct
(b) In-basket exercise is a simulated training
D. Only (c) is correct
method
 3

18. According to the CAPM model, the cost of 23. The type of marketing that is the most recent
equity is represented by: to emerge is:
A. Rm + (Rm – Rf)j A. Person marketing B. Product marketing
B. Rf + (Rm – Rf)j C. Services marketing D. Social marketing
C. j + (Rm – Rf)Rm 24. According to the ...................., marketers can
enhance demand for a product by associating
D. Rm + Rf + j
it with strong drives, using motivating cues
Where Rm indicates market rate of return, Rf and providing positive re-enforcement.
indicates risk free rate of return and j indicates A. Demand theory
beta of stock j. B. Learning theory
19. Anticipated annual dividend divided by the C. Psychological theory
market price of the stock is referred as: D. Two-factors theory
A. Dividend Pay-out 25. The most scientifically valid research is:
B. Dividend yield A. Experimental Research
C. Return on Equity B. Observation Research
D. Regular dividend C. Focus-Group Research
20. If the existing shareholder does not exercise D. Survey Research
his/her right or does not sell the right 26. Which of the following statements is not
entitlement: correct?
A. his/her wealth will remain unaffected A. Product Layout generally has continuous
B. his/her wealth will increase
and Mass Production, mainly assembly
C. his/her wealth will decrease
function.
D. his/her wealth may increase or decrease
B. Process Layout generally has Intermittent,
21. What are the four main components of holistic Job-Shop, Batch Production, mainly
marketing? fabrication function.
A. Integrated Marketing, Internal Marketing, C. Product Layout usually has general
Product Positioning and Performance purpose equipment.
Marketing D. Process Layout is generally driven by
B. Integrated Marketing, Relationship fluctuating demand.
Marketing, Social Marketing and
Performance Marketing 27. Six-SIGMA quality indicates:
C. Relationship Marketing, Integrated A. 2.4 defects per thousand
Marketing, Internal Marketing and B. 2.7 defects per thousand
Performance Marketing C. 3.4 defects per thousand
D. Relationship Marketing, Integrated D. 3.7 defects per thousand
Marketing, Internal Marketing and Social 28. A manufacturing firm has four work stations,
Marketing A, B, C and D in series with individual
22. Which of the following category of goods and capacity of processing 450, 390, 360 and 400
services is most likely to require an aggressive units per day respectively and the actual
use of the selling concept? output of the firm is 306 units per day. The
A. Complementary Goods system capacity and system efficiency of the
B. Luxury Goods firm shall respectively be:
C. Speciality Goods A. 400 and 100% B. 450 and 120%
D. Unsought Goods C. 360 and 85% D. 390 and 95%
 4

29. In the simplex method of solving an LP C. File server

Problem, the product-mix column of the initial D. Computer-based modelling process
solution contains:
35. Give the correct order of the stages in ‘System
A. Artificial variables only
B. Slack variables only Development’.
C. Slack and artificial variables only A. Testing  Programming  Systems
D. Real variables only Design  Systems Analysis  Conversion
 Production and Maintenance
30. If the optimal solution of an LP Problem is B. Programming  Testing  Systems
degenerate then: Analysis  Systems Design  Conversion
A. The problem has multiple optimal  Maintenance
solutions C. Systems Analysis  Systems Design 
B. The solution is not feasible Programming  Testing  Conversion
C. The solution is useless to the manager
 Production and Maintenance
D. None of the above
D. Production and Maintenance  Testing 
31. If your score in an exam was 80, with a mean Conversion  Programming  Systems
of 60, what would be the standardised score Design  Systems Analysis
for this exam if the standard deviation is 15?
36. Which of the following statements is correct?
A. 1.33 B. 1.25
A. Balanced score cards always report using
C. 1.52 D. 1.72
the same time periods as the financial
32. Spurious relationship between two variables accounting system
refers to: B. One fundamental idea of balanced score
A. Very poor relationship between the card is to increase the number of
variables performance indicators used to manage the
B. Statistically insignificant relationship business
between the variables C. Organisations some times use a “traffic
C. Relationship happens only due to third light” system on their balanced score card
variable which is common to both the to help them prioritise their activities
variables
D. The fundamental idea of balanced score
D. The relationship which is impossible to
cards is to create corporate strategy
measure
37. What metaphor is used to describe the
33. In a medical test, where the null hypothesis is:
competitive space where products are not yet
‘The patient does not have the disease’ and
well defined, competitors are not well-
the alternative hypothesis is: ‘The patient has
the disease’. Suppose a patient has a disease organised and the market is relatively
and needs treatment. In the hypothesis testing unknown?
process, which of the following errors is more A. Blue Lagoon B. Blue Ocean
serious than the others. C. Red Sea D. Red Ocean
A. Type-I error 38. Michael E. Porter’s five generic strategies are:
B. Type-II error A. Differentiation (Best Value), Differentia-
C. Both Type-I and Type-II errors tion (Low Cost), Cost Leadership (Large),
D. r-error Cost Leadership (Small), Focus
34. Decision support system does not use: B. Focus (Large), Focus (Small), Cost
A. Analytical models Leadership (Small), Cost Leadership
B. Specialized databases (Large), Differentiation
 5

C. Cost Leadership (Low Cost), Cost does not respond much to changes in the
Leadership (Best Value), Differentiation, environment?
Focus (Low Cost), Focus (Best Value) A. Fabian entrepreneur
D. Cost Leadership (Large), Cost Leadership B. Adoptive entrepreneur
(Small), Differentiation (Large), Differen- C. Drone entrepreneur
tiation (Small), Focus D. Innovative entrepreneur
39. One of the strategic decisions relating to the 44. SFURTI (Scheme of fund for regeneration of
value chain concerns vertical integration. This traditional industries) is implemented by:
would involve: A. Union Ministry of Traditional Industries
A. Deciding to link all activities using B. National Agricultural Cooperative
Enterprise Resource Planning Marketing Federation
B. Deciding whether the activity should be C. Federation of Indian Chamber of
performed within the organisation or by a Commerce and Industry
different firm D. Union Ministry of Micro, Small and
C. Deciding whether to locate operation in Medium Enterprises
the home country or in a foreign location 45. According to the Tiwari Committee report,
D. Deciding whether to share certain activities which one of the following is not an internal
across different products and markets cause of industrial sickness in India?
40. “PepsiCo launched a hostile take over of Pepsi A. Lack of manpower planning
Bottling Group after its $ 4.2 billion offer was B. Lack of control systems
rejected”. Which strategy was used in this C. Excessive expenditure
case? D. Excessive tax policies
A. Market Penetration 46. Which of the following is/are the component(s)
B. Backward Integration of Ethics by field of interest?
C. Horizontal Integration A. Descriptive ethics
D. Forward Integration B. Normative ethics
C. Meta ethics
41. Who viewed entrepreneur as a non-fixed
D. All of the above
income earner with known costs of production
but uncertain income and therefore, operating 47. What is the right sequence of four
at a risk? psychological sub-processes in ethical action
A. Adam Smith given by James Rest?
B. Richard Contillon A. Moral sensitivity, moral focus, moral
C. Jean-Baptiste Say judgment, moral character
D. Francis Wolker B. Moral focus, moral character, moral
sensitivity, moral judgment
42. Which of the following is not a major area of
C. Moral sensitivity, moral judgment, moral
entrepreneurial innovation as suggested by focus, moral character
Joseph Schumpeter? D. Moral character, moral focus, moral
A. Product innovation judgment, moral sensitivity
B. Process innovation
C. Market innovation 48. A new approach “Learning Model” which is
D. Structural innovation helpful to strengthen the decision-making
process was developed by:
43. Which one of the following types of A. Arthur Rich B. Bob Garratt
entrepreneurs is not proactive in nature and C. Christian Wolff D. Lord Keynes
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19. Assertion (A): Corporate behaviour towards D. (A) is true, but (R) is not the correct
stakeholders is an important concept in explanation of (A)
practice and a central part of corporate
50. CSR is important because:
Governance.
A. It influences all aspects of company’s
Reason (R): It has to be ethical, legal and operation
responsible behaviour for organisation, B. It gives company’s mission and strategy
stakeholders and society. C. It increases the general affluence and
A. Both (A) and (R) are true societal expectation
B. Both (A) and (R) are False D. All of the above
C. (A) is false, but (R) is true

ANSWERS
1 2 3 4 5 6 7 8 9 10
C D B D A A C C B D
11 12 13 14 15 16 17 18 19 20
C C B C C B A B B C
21 22 23 24 25 26 27 28 29 30
C D D B A C C C C D
31 32 33 34 35 36 37 38 39 40
A C B C C C B C B D
41 42 43 44 45 46 47 48 49 50
B D A D D D A B A D

SOME SELECTED EXPLANATORY ANSWERS

2. Overall production efficiency is defined as the 0.182 = 0.0324
product of technical, scale, and allocative HHI (Industry’s three firms)
efficiency. If a 100 per cent scale-efficient plant = 0.352 + 0.252 + 0.182
has 92 per cent technical efficiency and = 0.1225 + 0.0625 + 0.0324
88.5 per cent allocative efficiency, then its = 0.217
overall production efficiency is 1.00 × 0.92 × 4. The nominal GDP measures the value of all the
0.885 = 0.8142 or 81.42% per cent. commodities produced in an economy at current
3. Herfindahl-Hirschman Index (HHI) (scale = 0 – prices, when the real GDP measures it at the
10,000) refers to the level of market price of some base year.
concentration. It is calculated on the basis of Product value in 2014 = 30000 × 5 = 150000
the market shares of each company operating Product value in 2015 = 31200 × 5.4 = 168480
in the industry. The market share for each ( Price increase by 8% and production
company is squared; these are then added up to increases by 4%)
get the HHI.
168480  150000
0.352 = 0.1225 Nominal GDP =  100
150000
0.252 = 0.1225 = 12.32%
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6. The term employee engagement is a more a relatively stable set of characteristics that
specific form of engagement and ‘refers to the influence an individual’s behaviour. Perso-
individual’s involvement and satisfaction with nality is a very diverse and complex psycho-
as well as enthusiasm for work’. Harter and logical concept. It is concerned with external
colleagues’ (2002) meta-analysis demonstrates appearance and behaviour, self, measurable
that employee engagement is positively and traits, and situational interactions. Personality
strongly related to critical business performance appears to be a result of heredity and
outcomes, including customer satisfaction, environment.
productivity, profit, employee retention, and 12. The situational interview is a type of structured
safety, all of which are indicators of sustained, interview which includes a set of questions
veritable performance. (based on the job analysis) asking candidates
7. Motivation is a set of energetic forces that to predict how they would behave in various
originate both within and outside an individual situations likely to occur in the job, for example,
to initiate work-related behaviour and to in a customer service role, applicants might be
determine the direction, intensity and duration asked how they think they would deal with an
thereof. aggressive customer in a certain situation. All
The definition of motivation has three key applicants would be asked such standardised
elements, namely intensity, direction and questions as part of the overall interview. The
persistence. Intensity describes how hard a consistency of this approach enables more valid
person tries; direction entails whether effort is comparison and discrimination between
channelled in areas that benefit the organization, candidates.
while persistence refers to how long a person 14. A Behaviourally Anchored Rating Scale (BARS)
can maintain effort. combines the benefits of narratives, critical
8. Self-determination theory (SDT), originally incidents, and quantified (graphic rating type)
formulated in 1985, has received considerable scales.
recent attention in exercise psychology. In Developing BARS typically requires five steps:
contrast to the family of social cognitive 1. Generate critical incidents: Ask persons who
theories, which focus mostly on cognitive know the job (job holders and/or supervisors)
determinants of behaviour, SDT focuses on the to describe specific illustrations (critical
distinction between intrinsic and extrinsic incidents) of effective and ineffective
motivation, their social and cognitive performance.
antecedents, and their relative effects on 2. Develop performance dimensions: Have
behaviour. Intrinsically motivated behaviour is these people cluster the incidents into a
performed for the inherent enjoyment and smaller set of (5 or 10) performance
satisfaction associated with the behaviour and, dimensions, and define each dimension,
in turn, is more likely to lead to continuation of such as “conscientiousness.”
the behaviour (e.g., adherence to exercise 3. Reallocate incidents: Another group of
programs). Extrinsically motivated behaviour people who also know the job then reallocate
is performed for the purposes of obtaining the original critical incidents. They get the
external rewards or avoiding punishment, cluster definitions and the critical incidents,
consistent with behavioural learning theory. and must reassign each incident to the cluster
10. When psychologists talk of personality, they they think it fits best. Retain a critical
mean a dynamic concept describing the growth incident if some percentage (usually 50% to
and development of a person’s whole 80%) of this second group assigns it to the
psychological system. Personality is defined as same cluster, as did the first group.
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4. Scale the incidents: This second group then 18. Capital Asset Pricing Model (CAPM)
rates the behaviour described by the Approach: According to CAPM approach, the
incident as to how effectively or ineffectively ke is is a function of (i) the riskless rate of return
it represents performance on the dimension (normally represented by the rate of return/yield
(7- to 9-point scales are typical). available on long-term treasury bonds of the
5. Develop a final instrument: Choose about government of the country), (ii) market rate of
six or seven of the incidents as the return (average rate of return on market
dimension’s behavioural anchors. portfolio—represented in India, by say, the
15. Environmental or External Theories or System National Stock Exchange Index, NIFTY, and so
Model is developed by economists. This is the on) and (iii) the beta is the measure of non-
systems’ approach developed by John Dunlop. deversible/systematic risk. Symbolically,
He views the IR system as a subsystem of society. ke = Rf + b(Rm – Rf)
According to Dunlop, the core elements of the
systems model of industrial relations are actors, Where Rf = Rate of return required on a risk-free
certain contexts, an ideology which binds the investment; Rm = Rate of return expected on the
IR system together and body or rules created to market portfolio; b = Beta coefficient. The value
govern the actors at the workplace. of beta is measured as per Equation.
(i) Actors of parties: (a) Workers and their Co-variance (R m , R f )
trade unions, (b) employers and their b=
Variance R m
organizations, and (c) the government
agencies The CAPM based equation of determining the
(ii) An environmental context: Actors are cost of equity is in conformity with the basic
confronting an environmental context finance theory related to risk and return, that is,
comprised of factors such as technology, the higher the risk, the higher the cost of equity,
market constraints, relative distribution of or vice versa. Clearly, this is a logical approach
power relations, etc.
to determine ke.
(iii) The ideologies: Ideas and beliefs held by
the actors which, when consensus reached, 19. Dividend yield: The expected annual dividend
help bind or integrate the stable industrial of a share divided by its current price; the
relations system. percentage return an investor expects to earn
(iv) The rules: Rules framed to govern the actors from the dividend paid by the share.
at the workplace—such as agreements,
The dividend yield:
labour laws, awards, customs, etc.
Dividend per Share
16. Following the standard constant growth Gordon Dividend Yield =
model, the stock price of a firm can be expressed Market Price per Share
as: The dividend yield on a stock equals the annual
Pt = E(DPSt + 1)/(ke – g) dividend divided by the market price of the
where E(DPSt + 1) is the expected dividend in stock. The dividend yield plus gains or losses
the next year, ke is the required rate of return on determine the return to the investor on a
equity, and g is the expected long-term common stock.
sustainable growth rate in dividends. The payout ratio:
2 2 Cash Dividends
Pt =  = 20 Payout Ratio =
2  1 1 Net Income
 9 UGC-Mang. J'15–2

21.

Fig.: Holistic Marketing Dimensions

22. The selling concept holds that consumers and 24. When people act, they learn. Learning involves
businesses, if left alone, will ordinarily not buy changes in an individual’s behaviour arising
enough of the organization’s products. The from experience. Learning theorists believe that
organization must, therefore, undertake an learning is produced through the interplay of
aggressive selling and promotion effort. The driver, stimuli, cues, responses and reinforce-
selling concept is epitomized in the thinking ment. Learning theory teaches marketers that
of Sergio Zyman, Coca-Cola’s former vice they can build up demand for a product by
president of marketing. The purpose of associating it with strong drives, using
marketing is to sell more stuff to more people motivating cues and providing positive rein-
more often for more money in order to make forcement.
more profit. 25. Experimental research: The most scienti-
The selling concept is practiced most fically valid research technique. Experimental
aggressively with unsought goods, goods that research involves statistical analyses where
buyers normally do not think of buying, such independent variables are controlled or
as insurance, encyclopedias, and funeral plots. manipulated to observe changes in a dependent
Most firms practice the selling concept when variable—that is, to identify cause-and-effect
they have overcapacity. Their aim is to sell what relationships between those variables.
they make rather than make what the market Experimental research involves selecting
wants. However, marketing based on hard equally matched sets of respondents (“test
selling carries high risks. It assumes that groups” and “control groups”) and exposing
customers who are coaxed into buying a product them to different treatments. The goal is to
will like it; and that if they do not, they will not determine whether observed differences
return it or bad-mouth it or complain to between those groups are statistically
consumer organizations, or they might even buy significant. See also: exploratory research;
it again. survey research.
 10

27. Six Sigma Quality is a movement that inherits information support to managers and business
directly from TQM, or Total Quality Manage- professionals during the decision-making
ment. The Six Sigma name was coined by process. Decision support systems use
Motorola, Inc. and is a federally registered (1) analytical models, (2) specialized databases,
trademark and service mark of Motorola, Inc. (3) a decision maker’s own insights and
Motorola, has spent over a decade using Six judgments, and (4) an interactive, computer-
Sigma improvement techniques and has based modelling process to support semi-
enjoyed tremendous long-term success and also structured business decisions.
won the prestigious Malcolm Baldridge 35. System Development: The activities that go
National Quality award. The Greek letter into producing an Information System solution
sigma(s) is used as a symbol to denote the
to an organizational problem or opportunity.
standard deviation or the measure of variation
in a process. Activities of Systems Development:
• Systems Analysis
Six Sigma is a business method for improving
• Systems Design
quality by removing defects. It concentrates on
• Programming
those outputs which are important to customers.
• Testing
The method uses various statistical tools to
• Conversion
measure business processes. In technical terms,
Six Sigma means that there are 3.4 defects per • Production & Maintenance
million events. The main goal is continuous 36. The Balanced Scorecard, developed by Robert
improvement. Kaplan and David Norton in the 1990s, has
28. Actual Output emerged as the most prominent strategic
management and performance measurement
360 system used by organizations today. The
450  390  360  400  units Balanced Scorecard derives its name, and
A B C D per day achieves its thrust, by balancing traditional
 Slowest one decides the output capacity, performance measures with more forward-
so system capacity is 360 units. looking indicators in four key dimensions:
 System efficiency = Actual output/system • Financial: To succeed financially, how
capacity should we appear to our shareholders?
306 • Integration/Operational Excellence: To
 SE = = 0.85 = 85%. satisfy our shareholders and customers, at
360
what business processes must we excel?
Score  mean • Learning and Growth: To achieve our
31. Standardised Score (z) = vision, how will we sustain our ability to
Standard deviation
change and improve?
80  60 • Customers: To achieve our vision, how
= = 1.33.
15 should we appear to our customers?
32. “Spurious” relationship—two variables related 37. Kim and Mauborgne (2005a, b, c) use the ocean
by their common association with another as a metaphor to describe the competitive space
variable that each causes them, but the two in which an organization chooses to swim. Red
original variables not causally linked, even oceans refer to the frequently accessed
indirectly. marketspaces where the products are well-
34. Decision support systems are computer-based defined, competitors are known and competition
information systems that provide interactive is based on price, product quality and service.
 11

In other words, red oceans are an old paradigm creation on the basis of technological change
that represents all the industries in existence and innovation. Schumpeter (1931) describes
today. five distinctive areas of innovation in a
In contrast, the blue oceans denote an company:
environment where products are not yet well- • Creation of new products or modification of
defined, competitors are not structured and the product quality: product innovation.
market is relatively unknown. Companies that • Implementation of new production methods:
sail in the blue oceans are those beating the today’s process innovation.
competition by focusing on developing • Development of new markets: addressing
compelling value innovations that create new customers.
uncontested marketspace. Adopters of blue • Development of new sources: finding new
ocean strategy believe that it is no longer valid suppliers.
for companies to engage in head-to-head • Development of new organizational
competition in search of sustained, profitable structures.
growth. 43. Clarence Danhof classifies entrepreneurs into
40. Vertical Integration: When an organisation four types.
starts making new products that serve its own 1. Innovative: Innovative entrepreneur is one
needs, vertical integration takes place. In other who assembles and synthesises information
words, any new activity undertaken with the and introduces new combinations of factors
purpose of either supplying inputs (such as raw of production.
materials) or serving as a customer for outputs 2. Immitative: Immitative entrepreneur is also
(such as marketing of firm’s product) is vertical known as adoptive entrepreneur. He simply
integration. adopts successful innovation introduced by
other innovators.
Vertical integration could be of two types:
3. Fabian: The Fabian entrepreneur is timid
backward and forward integration. Backward
and cautious. He immitates other inno-
integration means retreating to the source of
vations only if he is certain that failure to do
raw materials. Forward integration moves the
so may damage his business.
organisation ahead, taking it nearer to the
4. Drone: His entrepreneurial activity may be
ultimate customer.
restricted to just one or two innovations. He
41. The word “entrepreneurship” originated from refuses to adopt changes in production even
the French word “entrepreneuriat” which means at the risk of reduced returns.
“to undertake.” In 1730, the French economist
44. The Ministry of Micro, Small and Medium
Richard Cantillon defined “entrepreneurship” Enterprises is implementing the ‘Scheme of
as an activity with uncertain returns. Fund for Regeneration of Traditional Industries
Subsequently, some western economists (SFURTI)’ for regeneration of traditional
described “entrepreneurs” as people who are industry clusters in khadi, village industries and
risk-takers in the fields of infrastructure, coir sectors.
agriculture, and industry. The current prevailing
The Scheme envisages need-based assistance
definition of an “entrepreneur” is a person who
for replacement of production equipment,
organizes and manages a business and
setting up of common facility centres (CFC),
undertakes risks in doing the business.
product development, quality improvement,
42. Joseph Schumpeter (1931) initiated the theory improved marketing, training and capacity
of business development and new ways of value building, etc.
 12

46. There are three main approaches to ethics: positions respond to it. If you ask the question,
(i) normative ethics, (ii) descriptive ethics, and “Is premarital sex right?”, a normative ethical
(iii) metaethics. answer would be more concerned with the
Normative Ethics: Normative ethics was the reasons why it might be right or wrong, and
prevalent form of ethics in philosophy till the how they relate to certain teachings, or with
end of the 19th century. To decide what things religious traditions of, say, Christianity, or some
are good or bad and what kind of actions/ other group. A metaethical response would be
behaviour are right or wrong involves how more interested in what you mean by right, and
people ought to act on the principles, how they what it means by a right sexual action as
make moral choices, and how rules apply to opposed to a wrong one. Metaethics has
individual lives. It includes a consideration of produced a number of different schools of
the importance of human freedom, and a thought.
discussion of the limits of a human’s 47. According to James Rest, ethical behaviour is a
responsibility for moral decisions and for the result of four processes: (1) moral sensitivity or
consequences of his actions. the ability to interpret situations, recognize the
Descriptive Ethics: Descriptive ethics is the ethical issue, and understand consequences;
study of ways in which different people and (2) moral judgement or the ability to decide
societies have answered moral questions. Can which act is morally justified; (3) moral
it be described as moral sociology or moral motivation or the commitment to doing what is
anthropology, a description of the moral code ethical, using ethical standards, and taking
prevailing in different societies? It involves responsibility for consequences; and (4) moral
different approaches inside one society for the character or the courage, determination, and
resolution of ethical problems. confidence to execute ethical behaviour.
Metaethics: Mataethics is, sometimes called 48. Bob Garratt developed ‘learning model’. This
moral philosophy or philosophical ethics. This approach is relative to strategic thinking and is
group attracts considerable interest today. It based on the board’s decision-making cycle. In
seeks to understand the meaning and function this approach, there is no single standard
of moral language, and of ethical terms such as solution for decision-making. Boards also differ
good and bad. It looks at the logic used in in their strengths of their directors—their
arriving at the conclusion of an argument that personality, competence, conceptual under-
justifies a moral choice. Posing an ethical standing and other factors—which impact the
question illustrates the different ways the two board’s final decisions.

PAPER–III
Note : This paper contains seventy-five (75) objective A. 8.0 B. 7.5
type questions of two (2) marks each. All questions C. 10.5 D. 12.5
are compulsory. 2. Match the production functions List-I with
the return to scale List-II.
1. The demand function for commodity X, is List-I List-II
QD = 300 – 20P; where P is the price in rupees (Production function) (Return to scale)
per unit and QD is the quantity demanded in (a) Q = 10 K0.5L0.4E0.15M0.1 (i) increasing
units per period. Which of the following is the (b) Q = 12 K0.5L0.5 (ii) constant
price level at which total revenue of a firm (c) Q = 100 K + 15 L (iii) decreasing
facing this demand function is maximised? (d) Q = 40 K0.3L0.5
 13

Indicate the correct answer: be the benefit cost ratio and net benefits value
Codes: while considering the disbenefits as a cost?
(a) (b) (c) (d) A. 1.70 and ` 10 million
A. (ii) (ii) (i) (i) B. 1.57 and ` 5 million
B. (i) (i) (ii) (ii) C. 1.60 and ` 6 million
C. (ii) (i) (i) (iii) D. 1.07 and ` 5 million
D. (i) (ii) (ii) (iii) 7. The ability to integrate new ideas with the
3. It costs a firm ` 90 per unit to produce product existing processes and to innovate on the job
A, and ` 60 per unit to produce B individually. is a crucial ............ for today’s managers.
If the firm can produce both products together A. Conceptual skill
B. Human skill
at ` 160 per unit of product A and B, this
C. Soft skill
exhibits signs of:
D. Technical skill
A. economies of scope
B. diseconomies of scale 8. An individual’s involvement in work primarily
C. diseconomies of scope indicates his/her:
D. economies of scale A. Attitude
B. Behaviour
4. In the context of Prisoner’s dilemma, which
C. Motivation
one of the following is correct?
D. Perception
A. rational choices can lead to bad outcomes
B. rational choices can lead to good outcomes 9. As per Lewin’s Three-Step Change Model,
C. co-operation can lead to sub-optimal changing to overcome the pressures of both
results individual resistance and group conformity is
D. None of the above termed as:
A. Movement B. Refreezing
5. Find the most appropriate sequence of life- C. Restraining D. Unfreezing
cycle of price for a product, from the initial
stage to the mature stage. 10. Out of the following, identify the four major
A. Target price  penetration price  value- functions which communication serves within
based price  limit price  niche price a group or organisation:
B. Penetration price  limit price  value- (a) Control
based price  target price  niche price (b) Co-ordination
C. Penetration price  target price  limit (c) Emotional expression
price  value-based price  niche price (d) Information
D. Penetration price  niche price  target (e) Motivation
price  limit price  value-based price (f) Organisation

6. A public works project is proposed that has Codes:

total present-worth benefits of ` 75 million A. (a), (b), (d) and (f)
and total present-worth cost of ` 55 million. B. (b), (d), (e) and (f)
In deliberating this proposal, some members C. (a), (b), (d) and (e)
of the Municipal Board have suggested that D. (a), (c), (d) and (e)
the project has a total present-worth disbenefits 11. The conflict process usually has—
of ` 15 million; other members feel that ` 15 A. Three stages B. Four stages
million should be treated as a cost. What will C. Five stages D. Seven stages
 14

12. The .................. proposes that the effective (b) Job evaluation provides a basis for
group performance depends on the proper measuring individual performance.
match between the leader’s style and the (c) Human Relations Theory respects formal
degree to which the situation gives the leader institutionalisation.
control. (d) Minimum wages are not guaranteed under
A. Behavioural approach incentive plan.
B. Fiedler contingency model (e) Job enrichment amounts to expanding
C. Leader-member exchange theory vertical and horizontal dimensions of a
D. Trait Approach job.
A. (a) and (d) B. (c) and (d)
13. ................ is a process of system wide change, C. (d) and (e) D. (a) and (e)
designed to make an organisation more
adaptive. 17. Under which method of performance appraisal
A. Change Management many evaluators join together to judge
B. Refreezing employee’s performance in several situations
C. Business Process Reengineering with the use of a variety of criteria?
D. Organisation Development A. Graphic Rating Scales
B. Critical Incident
14. ................ is a profile of job holders department- C. Assessment Centre
wise and offers a snapshot of who will replace D. MBO
if there is a job opening.
18. According to ‘The Hot Stove Rule’ pro-
A. Career plan
pounded by Douglas Mcgregor, a sound dis-
B. Replacement chart
ciplinary system in an organisation does not
C. Promotion graph
include:
D. Selection plan A. Advance warning
15. Following steps are undertaken for developing B. Immediacy of action
a workforce score card. C. Immediacy in retrenchment
(a) Identify critical and carefully defined D. Impersonal
outcome measures. 19. What is not required for termination of
(b) Translate the measures into specific actions employees under the Industrial Disputes Act,
and outcomes. 1947?
(c) Identify high and low performing A. Seek prior approval of the appropriate
employees. Government
(d) Develop and communicate detailed B. Seek prior consent of the employees
description of what is expected. C. Hold consultation with employees
(e) Develop supporting HRM and D. Pay compensation to employees
measurement systems.
20. Which one of the following is not a form of
What is the correct chronological order of these Government intervention in industrial
steps? relations?
A. (a), (b), (c), (d) B. (a), (b), (d), (c) A. Assurance of decent working conditions
C. (a), (b), (d), (e) D. (a), (c), (d), (e) B. Provision of income security
16. Which of the following statements are not C. Facilitating social dialogue
correct? D. Protection of child labour
(a) Pay of an employee includes actual money 21. With respect to collective bargaining match
that employee receives in exchange of his the items in List-I with those in List-II, using
work. the codes at the end of the items.
 15

List-I List-II Select the correct code:

(a) Win - Lose (i) Winning is A. Only (a)
everything B. Sum total of (a) and (b)
(b) Lose - Win (ii) Nothing for C. Sum total of (b) and (c)
nothing D. Sum total of (c) and (d)
(c) Lose - Lose (ii) Everything for
everything 24. Select the correct statement/s from the
(b) Win - Win (ii) Relationship is following:
paramount Statement I: The slope of the NPV profile
Codes: reflects how sensitive the
(a) (b) (c) (d) project is to discount rate
A. (ii) (i) (iii) (iv) changes.
B. (i) (iv) (ii) (iii) Statement II: To find total NPV of more than
C. (i) (ii) (iii) (iv) one projects, their NPV cannot
D. (iv) (iii) (ii) (i) be added.
22. ‘A fair day’s wage for a day’s work’ is the Statement III: The certainty equivalent coeffi-
motto of ............ conceptualisation concerning cient applies adjustments to
Trade Union movement. both, the cash flows (in the
A. Karl Marxian notion of class conflict numerator) and the discount
B. Socialist pattern of society factor (in the denominator).
C. American capitalist system Statement IV: The risk-adjusted discount
D. Gandhian concept of Trusteeship factor applies adjustment for
23. In case where a company is likely to have the risk only to the discount factor
supernormal growth for a limited finite period (denominator).
and the normal growth thereafter, the value of Codes:
the share can be computed as: A. Only Statement I is correct
n
D 0 (1  gs )t B. Statements II and III are correct
(a) P0   C. Statement III and IV are correct
t 1 (1  ke )t
D. Statements IV and I are correct

D n (1  gN )t n
(b) P0   (1  ke )t
25. EBIT-EPS indifference point is the level of:
t n 1 A. EBIT that produces the same level of EPS
(c) P0  D n  1 for two alternative capital structures
k e  gN B. EBIT that maximises EPS
C. EPS that optimises EBIT
Dn  1  1  D. Capital structure that does not affect Kd
(d) P0   n
ke  gN  (1  ke ) 
26. Let the face value of commercial paper be
Where g s = supernormal growth rate denoted by F.V., net amount realised from the
n = number of years for supernormal commercial paper be NAR, maturity period of
growth rate commercial paper be MP. The effective pre-
gN = normal growth rate tax cost of commercial paper shall be:
P0 = price of share at time 0 A. F.V. – NAR
t = year
D = Dividend (F.V.  NAR) 1
B. 
ke = cost of equity NAR MP
 16

(F.V.  NAR) 32. If rF and rD are the interest rates of a foreign

C.  360 country and domestic country, respectively,
NAR
and if SF/D and fF/D are spot exchange rate and
(F.V.  NAR) 360 forward exchange rate between the countries
D. 
NAR MP F and D, the interest rate parity is indicated
27. When the target company uses the tactic of by:
divestiture, to defend itself from a hostile (1  rD ) fF/D (1  rF ) SF/D
takeover, it is said to sell the: A. (1  r )  S B. (1  r )  f
F F/D D F/D
A. Crown jewels
B. Green mail (1  rF ) fF/D
C. Golden parachutes C. (1  r )  S D. None of the above
D F/D
D. White knight
28. The average spread between the cost of goods 33. Consider the following statements:
sold and the sales revenue is indicated by: (a) Brand equity is essentially the same as
A. Operating Expense ratio brand valuation.
B. Gross Profit ratio (b) Market segmentation and product differ-
C. Net Profit ratio entiation are alternative marketing
D. Return on Equity strategies.
(c) Durable goods normally require less
29. If the rate of return on investment opportunity
personal selling, after sales service and
is likely to be 15 per cent, the opportunity
seller guarantees, than the non-durable
cost of capital is 10 per cent, the earnings per
goods.
share is ` 10 and if the pay-out ratio is 40 per
(d) Price discrimination in all forms is illegal
cent, the price of share according to Walter
in India.
Model will be:
A. ` 40 B. ` 130 Indicate the correct answer:
C. ` 148 D. ` 400 A. (a) and (b) B. (b) and (d)
C. Only (d) D. None
30. If the total cash requirement of a company is
` 2 crore next year, the opportunity cost of 34. A consumer consults the company websites to
funds is 15 per cent per annum and the cost gather information about various models of a
of conversion from securities to cash per car. Which type of source of information is he
transaction is ` 150, the optimum cash balance using?
as per Baumol’s Model will be: A. Commercial B. Experimental
A. ` 2 lakhs B. ` 4 lakhs C. Personal D. Public
C. ` 20 lakhs D. ` 40 lakhs
35. Consider the following statements:
31. An Indian company is importing machine at a (a) All marketing strategy is built on
price of $ 5,00,000, payable after six months. segmentation, targeting and positioning.
The current exchange rate is ` 63 per US $. (b) A brand mantra must communicate both
The forward contract for six months is what a brand is and what it is not.
available @ ` 64 per US $. If the rate turns out (c) Goal incompatibility is one of the major
to be ` 64.25 per US $, the net gain to the causes of conflict among distribution
importer in case he has entered into contract channel members.
will be: (d) Physical goods, services and stores can
A. $ 1,25,000 B. $ 2,50,000 have a brand name, but ideas and people
C. $ 5,00,000 D. $ 6,25,000 cannot.
 17 UGC-Mang. J'15–3

Which of these statements are true? A. Encirclement B. Flank

A. All of them B. (a) and (b) C. Frontal D. Guerrilla
C. (b) and (c) D. (a), (b) and (c)
43. A ‘defective raw material’ causing major
36. The practice of selling below cost, with an variation in quality characteristics is called:
intention to destroying the competitor is A. Chance cause of variation
referred to as: B. Assignable cause of variation
A. Loss-leader pricing C. Acceptable cause of variation
B. Predatory pricing D. Tolerable cause of variation
C. Price discrimination 44. Which of the following is the correct order for
D. Penetration pricing sequential design?
37. After determining its pricing objectives, what A. Product concept  Performance specifica-
is the next logical step a company should tions  Design specifications  Manu-
take in setting its pricing policy? facturing specifications
A. Analyse its competitor’s cost, price and B. Manufacturing specifications  Product
offer concept  Design specifications 
B. Determine the demand of the product Performance specifications
C. Estimate the cost of the product C. Product concept  Design specifications
D. Select the pricing method  Performance specifications  Manu-
facturing specifications
38. Marketers have traditionally classified D. Design specifications  Performance
products on the basis of three characteristics: specifications  Product concept 
................, tangibility and use. Manufacturing specifications
A. availability B. affordability
C. durability D. necessity 45. Which of the following statements is not true
in the context of demand forecasting?
39. Which one of the following can be legally A. The time frame indicates, how far into the
protected? future the demand is forecasted
A. Brand name B. Trade Mark B. A trend is gradual, long-term upward or
C. Brand mark D. Package downward movement of demand
40. Which one of the following marketing C. A trend is intermittent, short term upward
practices is outside the purview of the or downward movement of demand
Competition Commission? D. Random variations are movements in
A. Exclusive dealing demand that do not follow a definite
B. Misleading advertising pattern
C. Predatory pricing 46. Consider the following statements:
D. None of the above (a) In the Game theory, the saddle point is the
41. The major advantage of the direct mail largest value in its row and the smallest in
marketing is: its column.
A. High target - market selectivity (b) The classical EOQ model is very sensitive
B. Low cost of transaction to changes in the variables.
C. Privacy of the buyer (c) In LP problem, an optimal solution does
D. Speedy delivery not necessarily use all the limited
resources.
42. In this attack strategy, the marketer must back (d) In PERT, it is assumed that the distribution
it with a stronger attack to beat the opponent. of completion time for a project is normal
Identify the strategy. distribution.
 18 UGC-Mang. J'15–3-II

Indicate the true answers. X : –2 0 2

A. Statements (c) and (d) Probability : 0.25 0.50 0.25
B. Statements (a), (c) and (d) The mean and variance of X shall be:
C. Statements (a), (b) and (d) A. 0.50 and 1 B. 0 and 1
D. All are true C. 0.50 and 2 D. 0 and 2
47. Consider the following statements: 50. Match the following, considering the state of
(a) When there is no saddle point in a conclusion for each of the situation at  =
competitive game, the players adopt mixed 0.05.
strategies. List-I
(b) The EOQ model of inventory control can (a) H0 : P1 – P2 = 0, Ha : P1 – P2 < 0; P = 0.0233
also be applied to the production process, (b) H0 : P1 – P2 = 0, Ha : P1 – P2 > 0; P = 0.0672
with appropriate modifications. (c) H0 : P1 – P2 = 0, Ha : P1 – P2  0; P = 0.0322
(c) If the price of an item of inventory (b) H0 : P1 = P2, Ha : P1  P2; P = 0.0233
increases, the EOQ will also increase List-II
proportionately. (i) reject H0
(d) In an LP problem, an equation is more (ii) accept H0
restrictive than an unequality. (iii) no decision
Indicate the correct statements. Codes:
A. All of the above (a) (b) (c) (d)
B. (a), (b) and (d) A. (ii) (i) (i) (ii)
C. (a) and (b) B. (i) (iii) (i) (i)
D. None of the statements is true C. (ii) (iii) (ii) (i)
48. Consider the following statements: D. (i) (ii) (ii) (i)
(a) In the single-channel queuing model, if 51. Which of the following is possible in a chi -
 = , the queue length would be infinite. square goodness-of-fit test?
(b) In the simplex solution procedure for an A. The chi-square statistic is 0.
LP problem, the shadow prices of the B. The observed counts are not whole number
resources are identified with the variables C. The probabilities specified in the null
which are included in the optimal solution. hypothesis sum to less than one
(c) In the case of gradual receipt of the ordered D. The degree of freedom are larger than the
quantity, the EOQ will be larger than the number of categories.
EOQ in the case of instantaneous receipt. 52. Match the following IT terminologies and
(d) Time is the only variable in PERT. functions supported by them.
Indicate the correct answer. List-I List-II
A. Statements (a) and (b) are true, others are (a) Four-part numeric address (i) DNS
not indicating a unique
B. Statements (b) and (c) are true, others are computer location
not on the internet.
C. Statements (a), (c) and (d) are true, but (b) (b) A hierarchical system of (ii) Gopher
is false servers maintaining
D. All the statements are true databases enabling the
conversion of domain
49. A Random variable X has the following names of their
probability distribution: IP address.
 19

(c) Tool for retrieving and (iii) IP 57. Who among the following has given the
transferring files from a statement: “transition from single function
remote computer. focus to a multi function focus is essential for
(d) A tool that enables the user (iv) FTP successful strategic management”?
to locate information stored A. Robert Grant B. J.B. Barney
on Internet Servers through a C. Igor Ansoff D. Edgar Schein
series of easy-to-use
hierarchical menus. 58. ............. signals a strategic inflection point
necessitating a radical strategic shift.
Codes:
(a) (b) (c) (d) A. Ambidexterity
A. (i) (iii) (ii) (iv) B. Strategic Dissonance
B. (ii) (i) (iv) (iii) C. Stretch Targets
C. (iii) (iv) (i) (ii) D. Organizational Adaptation
D. (iii) (i) (iv) (ii) 59. Grand Strategy Matrix refers to .......... .
53. The language used to develop interactive 3D A. development of analysis for the strengths,
modelling on World Wide Web is called as: weakness, opportunities and threats of
A. XML B. JAVA organisation.
C. HTML D. VRML B. development of strategic position and
action evaluation
54. Software that stores credit card and other
C. development of strategy for plotting orga-
information to facilitate payment for goods
nization division in a schematic diagram
on the web:
A. Electronic Cash B. Digital Wallet D. development of a popular tool for
C. Smart Card D. Electronic Cheque formulating alternative strategies

55. Pan Amsat developed a joint venture with Jsat 60. Which one of the following is not an
Corporation to develop and send into orbit a entrepreneurial competency?
small satellite. Which type of alliance the A. Tolerance of ambiguity and uncertainty
above statement represents? B. Motivation to excel
A. Diversifying Alliance C. External locus of control
B. Franchising D. Self-efficacy
C. Synergistic Alliance
61. As per the RBI guidelines (November 2012),
D. None of the above
an MSE would be considered sick if any of
56. Which of the following alternatives represents the borrowal account of the enterprise remains
the Five-Forces Model of Competition non-performing assets (NPA) for:
developed by Michael Porter? A. Three months B. Six months
A. Suppliers, buyers, competitive rivalry C. Nine months D. Twelve months
among firms in industry, product substitutes
and potential entrants. 62. Which one of the following idea generation
B. Employees, buyers, competitive rivalry methods focusses on developing new ideas
among firms in industry, product when the individuals are unaware of the
substitutes and potential entrants. problem?
C. Suppliers, buyers, employees, product A. Gordon method
substitutes and potential entrants. B. Checklist method
D. Buyers, employees, suppliers, product C. Creative problem solving
substitutes and potential entrants. D. Brain-storming
 20

63. Which one of the following is not a part of the 68. An approach to managing, where managers
industry analysis for a business plan? are guided by organisations shared values in
A. Analysis of competitors their management practices, is called:
B. Market segmentation A. Greening of management
C. Distribution of the products/services B. Value-based management
D. Industry and market forecasts C. Socially responsible management
D. Social impact management
64. Which one of the following is an apex
organisation under the union ministry of 69. The Gaia hypothesis was propounded in 1999
MSME engaged in Training, Consultancy, by:
Research and Publication to promote A. James Lovelock
entrepreneurship? B. Friedman
A. NIESBUD B. NIMSME C. Lord Keynes
C. IIE D. MGIRI D. Jean-Jacques Rousseau

65. Which one of the following is true in case of 70. Assertion (A): When a corporation acts
an Intrapreneur? ethically and socially responsible in its
A. He is a job provider business decisions and strategic planning, then
B. He is independent in his operations the corporation will be more sustainable.
C. He assumes risk and uncertainty Reason (R): Socially responsible corporate
D. He does not raise funds required for the behaviour is increasingly seen as essential to
enterprise long-term survival of companies.
66. Which of the following is not a principle of A. Both (A) and (R) are true and (R) is the
Corporate Governance? correct explanation
A. Transparency B. Accountability B. Both (A) and (R) are true, but (R) is not
C. Feasibility D. Responsibility the correct explanation
C. (A) is true, but (R) is False
67. Match the items given in the List-I and List- D. (A) is false, but (R) is True
II and suggest the correct code:
71. Match the items given in List-I and List-II
List-I List-II
List-I List-II
(a) Ethics (i) Right code of beha-
(a) Beggar thy (i) Having low factor
viour for a group or
Neighbour of interdependence
profession
Trade Policy
(b) Morality (ii) Prescribes right con-
(b) Mercantilism (ii) Having an advan-
duct for everyone
Theory tage of earning a
(c) Moral standard (iii) Needs some inclina-
return on knowledge
tion to follow mo-
assets
rality
(c) Multi-Domestic (iii) Alleviating some
(b) Meta Moral (iv) Practical and
Strategy domestic economic
Standard pragmatic problem by expor-
Codes: ting to foreign
(a) (b) (c) (d) countries
A. (i) (ii) (iii) (iv) (b) Turnkey Project (iv) Propagates encoura-
B. (iii) (i) (ii) (iv) gement of exports
C. (ii) (i) (iv) (iii) and discouraging
D. (i) (ii) (iv) (iii) imports
 21

Codes: B. Same and equal economic treatment

(a) (b) (c) (d) C. Same tariff rates applicable
A. (iii) (i) (ii) (iv) D. Uniform civil code
B. (iii) (ii) (i) (iv)
73. Which of the following organizations play an
C. (iii) (iv) (i) (ii)
active role to prevent the contagion situation
D. (iii) (i) (iv) (ii)
of crisis, such as the Greek Sovereign debt
72. The Most Favoured Nation status doesn’t crisis?
necessarily refer to: A. IMF B. World Bank
A. Non-discriminatory treatment C. WTO D. UNCTAD

74. The whole channel concept for International Marketing is represented as:
A. Seller  Seller’s  Channels  Channels  Final
International within foreign between Buyers
Marketing nations nations
Headquaters
B. Seller  Seller’s  Channels  Channels  Final
International between within foreign Buyers
Marketing nations nations
Headquaters
C. Seller  Channels  Seller’s  Channels  Final
between foreign International within foreign Buyers
nations Marketing nations
Headquaters
D. Seller  Channels  Channels  Seller’s  Final
between foreign within foreign International Buyers
nations nations Marketing
Headquaters
75. As a part of the WTO Guidelines, the Agreement on Agriculture (AOA) does not include:
A. Direct payments to farmers are permitted
B. Indirect assistance and support to farmers including R and D support by Government are not
permitted
C. Domestic policies which directly affect production and trade have to be cut back
D. Least developed countries do not need to make any cuts

ANSWERS
1 2 3 4 5 6 7 8 9 10
B D C A A D A C D D
11 12 13 14 15 16 17 18 19 20
C B D B B B C C B C
21 22 23 24 25 26 27 28 29 30
B D B D A D A B B A
31 32 33 34 35 36 37 38 39 40
A C D A D B B C B B
 22

41 42 43 44 45 46 47 48 49 50
A D B A C A B C D D
51 52 53 54 55 56 57 58 59 60
A D D B C A C B D C
61 62 63 64 65 66 67 68 69 70
A A C A D C A B A B
71 72 73 74 75
C D A B B

SOME SELECTED EXPLANATORY ANSWERS

3. Diseconomies of scope: When the cost of evaluate those alternative solutions, and select
producing two products jointly is more than the best one. After they have selected a course
the cost of producing those two products of action, managers must be able to organize a
separately. plan of action and then execute it. The ability
Economies of scope: When the cost of to integrate new ideas with existing processes
producing two outputs jointly is less than the and innovate on the job are also crucial
conceptual skills for today’s managers.
cost of producing them separately
9. Kurt Lewin, the father of change processes,
Thus, Cost (Q1, Q2) < Cost (Q1) + Cost (Q2).
identified three phases in initiating and
4. The Prisoner’s Dilemma was first presented by establishing any change—unfreezing, chan-
Merrill Flood and Melvin Dresher in the year ging or moving, and refreezing. Kurt Lewin
1950. Later it was formalized by Albert W. argued that successful change in organisations
Trucker. Many articles have been published should follow these three steps: unfreezing the
about this game. It is a zero sum game. It is status quo, movement to a new state, and
often applied in situations where there are two refreezing the new change to make it permanent.
entities who could actually gain if they The status quo can be considered to be a state
cooperate with each other but due to of equilibrium. To move from this equili-
circumstances are not able to do so. brium—to overcome the pressures of both
6. BCR (Benefit Cost Ratio) individual resistance and group conformity—
unfreezing is necessary.
Present Value of Benefits (PVB)
= 10. Functions of Communication: Communica-
Present Value of Costs (PVC) tion serves four major functions within a group
or organisations:
75 75
=  = 1.07 (i) Control: Communication acts to control
55  15 70
member behaviour in several ways.
And, Net Benefit = PVB – PVC
Organisations have authority hierarchies
= 75 – (55 + 15) = 5
and formal guidelines that employees are
7. Conceptual Skills: Managers must have the required to follow. When employees, for
mental ability to analyze and diagnose complex instance, are required to first communicate
situations. These tasks require conceptual skills. any job-related grievance to their
Decision-making, for instance, requires immediate boss, to follow their job
managers to identify problems, develop description, or to comply with company
alternative solutions to correct those problems, policies, communication is performing a
 23

control function. But informal communica- performance can only be understood in relation
tion also controls behaviour. When work to the context in which it occurs and that success
groups tease or harass a member who is achieved when there is a good leader–
produces too much (and makes the rest of situation match. The model of Fiedler proposes
the group look bad), they are informally that effective group performance depends on
communicating with, and controlling, the the match between the leader’s style of
member’s behaviour. interacting with subordinates and the degree to
(ii) Motivation: Communication fosters which the situation allows control.
motivation by clarifying to employees what 13. Organisations are never static. They are in
is to be done, how well they are doing, and continuous interaction with external forces.
what can be done to improve performance Changing customer attitudes, new legislations,
if it’s subpar. The formation of specific and technological breakthroughs all act on the
goals, feedback on progress toward the organisation to cause it to change. The degree
goals, and reinforcement of desired of change may vary from one organisation to
behaviour all stimulate motivation and other, but all face the need for adaptation to
require communication. external forces. Many for these changes are
(iii) Emotional expression: For many forced upon organisatons, whereas others are
employees, their work group is a primary generated internally. Because change is
source for social interaction. The occurring so rapidly, there is a need for new
communication that takes place within the ways to manage. Organisation Development
group is a fundamental mechanism by (OD) is a discipline applying behavioural
which members show their frustrations and sciences to help organisations adapt to these
feelings of satisfaction. Communication, changes. OD is aimed not only at improving
therefore, provides a release for the the organisation effectiveness but also at
emotional expression of feelings and for enhancing the development of organisational
fulfilment of social needs. members.
(iv) Information: The final function that OD is a prescription for process of planned
communication performs relates to its role change in an organisation in which the key
in facilitating decision-making. It provides prescriptive elements relate to:
the information that individuals and
1. the nature of the effort or programme
groups need to make decisions by
transmitting the data to identify and 2. the nature of the change activities
evaluate alternative choices. 3. the target of the change activities
11. The conflict process can be seen as comprising 4. the desired outcomes of the changed
five stages as discussed below: activities.
I. Potential opposition or incompatibility OD thus represents a unique strategy for system
change, a strategy largely based in the theory
II. Cognition & Personalization
and research of behavioural sciences and a
III. Intention\Conflict Management Strategies strategy having a substantial prescriptive
IV. Behaviour character.
V. Outcomes. 14. Replacement Charts: Replacement charts are
12. The contingency theory of Fiedler: Fiedler efficient forecasting tools to find out the
(1967) developed the first comprehensive employees readily available for promotion to
contingency theory of leadership. Fiedler’s predetermined positions. Basically, replacement
contingency theory suggests that leadership charts are records that contain details about the
 24

currently serving employees and the possible categories, more acceptable, acceptable,
replacements for the present job holders. They less than acceptable.
also contain information about the potentiality (iii) A summary report is prepared by the
of the existing employees for future promotion. members, and feed-back on a case to case
The replacement chart may classify the basis is administered to all the candidates
potentiality of the employees as: (i) fit for who ask for it.
immediate promotion; (ii) ready for promotion
but requires a little training; (iii) good enough 18. Red Hot Stove Rule: Disciplinary action
for the present job but not for promotion; and against an indiscipline employee a painful and
(iv) is found to be incompetent and needs to be generates resentment on the part of employees.
replaced. Replacement charts are usually Douglas McGregor suggested the Red Hot Stove
computerized by the organization to enhance Rule to guide managers in enforcing discipline.
their accessibility. These are periodically This rule is based on an analogy between
reviewed to make them up to date, and as and touching a red-hot stove and violating rules of
when replacements are required, these charts are discipline.
referred to for choosing the employees fit for The ‘red hot stove’ rule was originally advanced
promotion. The merit of this method is that it by D McGregor, who likened effective
clearly describes the mode of filling job discipline to the touching of a red hot stove:
vacancies through internal sources. 1. The burn is immediate – so there is no
Replacement charts are classified into two question of cause and effect.
categories: 2. There was a warning – the stove was red hot
1. Position replacement chart: It indicates the and you knew what would happen if you
possible replacement candidate for each touched it.
position in the organization. 3. It is consistent – everyone touching the
2. Personnel replacement chart: It indicates stove is burned.
the potential for promotion of the internal
4. It is impersonal – you get burned, not
candidates for different positions of the
because of who you are but because of what
company.
you have done.
17. Assessment Centre Method: Under this method,
25. The indifference point in EBIT-EPS analysis is
many evaluators join together to judge
the level of EBIT at which earnings per share
employee performance in several situations
are the same, regardless of which of two
with the use of a variety of criteria. Assessments
are made to determine employee potential for alternative capital structures is used. At EBIT
purpose of promotion. They are generally done levels greater than the indifference level, a more
with the help of a couple of employees and financially levered capital structure will produce
involve a paper and pencil test, psychological a higher level of earnings per share. At EBIT
tests, interviews and situational exercises. The levels lower than the indifference point, a less
steps under this method are: financially levered capital structure will produce
a higher level of earnings per share.
(i) The use of situational exercises (such as in-
basket exercies, business game, a role- 27. Defensive Tactics: A target company in practice
playing, incident and leadership group adopts a number of tactics to defend itself from
discussion. hostile takeover through a tender offer. These
(ii) They evaluate all employees, both tactics include a divestiture or spin-off, poison
individually and collectively and each pill, greenmail, white knight, crown jewels,
candidate is given one of the four golden parachutes, etc.
 25 UGC-Mang. J'15–4

• Divestiture: In a divestiture the target E = Earnings per share

company divests or spins off some of its r = Return in investment
businesses in the form of an independent, k = Cost of capital or market capitali-
subsidiary company. Thus, it reduces the zation rate
attractiveness of the existing business to the
In Walter’s model, the optimal dividend payout
acquirer.
ratio is determined by varying ‘D’ until one gets
• Crown jewels: When a target company uses the maximum market price per share. His views
the tactic of divestiture it is said to sell the on the optimal dividend payout ratio may be
crown jewels. In some countries such as the summed up in the following situations:
UK, such tactic is not allowed once the deal Here,
becomes known and is unavoidable.
r = 0.15
• Poison pill: An acquiring company itself
k = 0.10
could become a target when it is bidding for
another company. The tactics used by the EPS = ` 10
acquiring company to make itself Payout Ratio 0%
unattractive to a potential bidder is called DIV = Re 0
poison pills. For example, the acquiring P = 0 + (0.15/0.10)(10 – 0)/0.10
company may issue substantial amount of = ` 150
convertible debentures to its existing
Payout Ratio 40%
shareholders to be converted at a future date
when it faces a takeover threat. The task of DIV = ` 4
the bidder would become difficult since the P = [4 + (0.15/0.10)(10 – 4)]/0.10
number of shares to have voting control of = ` 130
the company will increase substantially. Payout Ratio 80%
28. Gross Profit Ratio: Gross Profit Ratio refers to DIV = ` 8
the ratio of gross margins made by a firm on its P = [8 + (0.15/0.10)(10 – 8)]/0.10
sales. Gross profit figures are a useful source of = ` 110
information, indicating the surplus left for other Payout Ratio 100%
expenses and profits after cost of production of
DIV = ` 10
the service has been paid for. Gross Profit Ratio
is measured by dividing gross profit by sales P = [10 + (0.15/0.10)(10 – 10)]/0.10
revenue, while gross profit is measured as the = ` 100
sales revenue minus the cost of goods sold. 30. Using Baumol’s Model
Gross Profit Ratio is an important number, as it
indicates the extent to which a firm can make 2tT
Optimum Cash Balance =
profits and thus serves as a means of deciphering k
the returns possible in an industry.
2  150  20000000
29. Formulae given by Walter is: =
0.15
D  (r/k )(E  D) = 200000
P=
k
31. Net Gain to the Importer
where, = 500000(64.25 – 64.00)
P = Market price per equity share = 500000 × .25
D = Dividend per share = 125000.
 26

34. Information search: Consumers, in order to setting objective, (2) determine demand,
satisfy the need recognized by them, search (3) estimate costs, (4) competition cost, price
the information from the various supply and offer analysis, (5) select a method to set
resources, e.g., personal source, comercial prices, and (6) final price setting.
sources, public sources and experimental 38. Product Classifications: Marketers have
sources. This forms the process of the buying traditionally classified products on the basis of
decision process, i.e., taking place before durability, tangibility, and use (Consumer or
purchase of the product.
Industrial). Each product type has an appropriate
The consumer can get this information related marketing-mix strategy.
to his search for product buying from any of
41. Direct Mailers: Firms send to the prospects
personal, public and commercial sources. The
letters, brochures and sometimes samples, and
sources from where he can draw information
ask them to purchase by mail or telephone.
are:
Some direct marketers even send audio tapes,
• Personal source: Family, friends, video cassettes and CDs to selected prospects.
neighbours, acquaintance, peers, social Direct mail is a popular medium because it
contacts, face book pages, Internet, direct permits high target market selectivity, can be
mailers, etc. personalized, is flexible, and allows early testing
• Commercial sources: Advertising, sales and response measurement. E-mail is a form of
people, dealers, packaging, displays, direct mailer which allows users to send a
websites, promotional emails, promotional message or file from one computer to another
electronic pages on the Internet. via internet. This is also a quick and cheapest
• Public sources: Mass media (e.g., ele- form of sending messages. The various
ctronic, print), consumer-rating organi- objectives of direct mail can be to generate sales,
zations, etc. produce prospect leaders for sales force,
• Experimental sources: Handling, strengthen relationships with the customers,
examining, using of the product by himself inform and educate customers to prepare them
at the point of purchase and other for later purchase.
promotional campaigns. 43. Assignable causes: Assignable causes (also
Consumers receive most of the information called non random or systematic) can be easily
about a product from commercial sources, identified. The assignable cause may occur at
which are provided and controlled by the any stage of the process. These causes can be
marketers and product manufacturing easily removed. Assignable causes of variation
companies. The most effective source, however, may be due to defective raw material,
always remains the personal source. Personal negligence of the operators, improper handling
sources become important in influencing the of machines, faulty equipment, etc.
purchase decisions too.
49. µ = Mean = x.P(x)
36. Predatory pricing refers to the practice of = 2  (0.25) + 0  (0.50) + 2  (0.25)
intentionally selling a product at a loss in order
= –0.5 + 0 + 0.5 = 0
to drive competitors out of business, thereby
establishing increased market power that allows Variance = (x – µ)2P(x)
the seller to raise prices above competitive = (–2 – 0)2  0.25 + (0 – 0)2  0.50
market levels and increase profits. + (2 – 0)2  0.25
37. By establishing a price policy, the company = 4  (0.25) + 4  (0.25)
should think six steps: (1) select the price- = 1 + 1 = 2.
 27

53. The Virtual Reality Modeling Language marketing expertise to the venture. By doing
(VRML) is a format for describing three- this as a joint venture rather than solo, Pan Amsat
dimensional interactive worlds and objects that expects to save more than $200 million. It is
can be used on the World Wide Web. The idea synergistic because it will allow Pan Amsat to
of a platform independent standard for 3D send up more satellites and thus compete
objects originated in 1994, when VRML 1.0 effectively in more markets and against smaller
was presented at a conference. In 1995, the regional providers that have only a few
VRML Architecture Group was formed which satellites. It also benefits Jsat with a lucrative
initiated development of the next version of opportunity. In this case, the alliance diversifies
VRML. VRML 2.0 was presented in 1996. Pan Amsat geographically and Jsat in product
54. Consumers can use a digital wallet to pay for markets. Thus, a synergistic strategic alliance
their e-commerce purchases. A digital wallet is different from a complementary business-level
(also called an electronic wallet or e-wallet) is alliance in that it diversifies both firms into a
an electronic device with software (or software new business, but in a synergistic way.
that runs on a computer or phone) that enables 56. The Five Competitive Forces That Determine
the user to make a purchase online. The digital Industry Profitability: The five competitive
wallet stores a user’s payment information such forces model is a framework for understanding
as bank account and credit card numbers, a the structure of an industry and was developed
digital certificate to identify the user, and by Harvard professor Michael Porter. The
information that the user provides such as framework is comprised of the forces that
shipping information to speed up Internet determine industry profitability. These forces—
transactions. The consumer’s information is the threat of substitutes, the entry of new
encrypted to protect against identify theft and competitors, rivalry among existing firms, the
other forms of online piracy. During checkout bargaining power of suppliers, and the
at an e-commerce site, the digital wallet can bargaining power of buyers—determine the
automatically enter the user’s information in the average rate of return for the firms in an industry.
online form after the user enters a password. Each of Porter’s five forces impacts the average
These online payment services provide rate of return for the firms in an industry by
consumers with a way to make online purchases applying pressure on industry profitability.
easily and securely. Well-managed companies try to position their
55. A synergistic strategic alliance is a corporate- firms in a way that avoids or diminishes these
level cooperative strategy in which firms share forces—in an attempt to beat the average rate
some of their resources and capabilities to create of return for the industry. For example, the rivalry
economies of scope. Similar to the business- among existing firms in the airline industry is
level horizontal complementary strategic high. JetBlue diminished the impact of this
alliance, synergistic strategic alliances create threat to its profitability by avoiding head-to-
synergy across multiple functions or multiple head competition with the major carriers in most
businesses between partner firms. markets. This is part of the reason that JetBlue
Pan Amsat developed a joint venture with Jsat outperforms the average profitability of the
Corporation to develop and send into orbit a airline industry.
small satellite ($ 140 million in expenses) to In his book Competitive Advantage, Porter
provide high-definition video programming points out that industry profitability is not a
and Internet services to the Eastern part of the function of a product’s features. Although it was
United States. Pan Amsat will move its current written in 1985 and the dynamics of the
customers off of its old satellite onto the new industries mentioned have changed, Porter’s
one and will also provide technical and essential point remains correct:
 28

Industry profitability is not a function of what 68. The Greening of Management: A number of
the product looks like or whether it embodies highly visible ecological problems and
high or low technology but of industry struc- environmental disasters brought about a new
ture. Some very mundane industries such as spirit of environmentalism. Recognizing the
postage meters and grain trading are extremely close link between an organization’s decisions
profitable, while some more glamorous, high- and activities and its impact on the natural
technology industries such as personal comput- environment is called the greening of manage-
ers and cable television are not profitable for ment.
many participants.
Values-Based Management: Values-based
59. Grand Strategy Matrix: In addition to SWOT management is an approach to managing in
matrix, SPACE matrix, BCG matrix and IE which managers are guided the organization’s
matrix, the Grand Strategy matrix has also
shared values in their management practices.
become a popular tool for formulating
alternative strategies. 69. The Gaia Hypothesis: It was propounded by
This matrix contains two dimensions: James Lovelock — Gaia being named after the
Greek Goddess of the earth — where he argues
• Competitive position
that the earth in its entirety, including rocks
• Market growth.
and atmosphere, is a single living organism, and
60. Entrepreneurial Mind Test: Timmons and that the living organisms on earth can control
Spinelli reported six dominant themes of their non-living environment to make it
desirable attitudes and behaviours for the comfortable for life. He emphasized the need
entrepreneurial mindset: for a holistic approach vis-à-vis a reductionist
1. Commitment and determination approach to tackle the problems relating to the
2. Leadership environment. He feels that if human beings
3. Opportunity obsession tamper with the planet earth, then they will be
4. Tolerance of risk, ambiguity, and eliminated by Gaia, replacing it with what James
uncertainty Lovelock calls more “amenable” species. He
5. Creativity, self-reliance, and adaptability
says, “It follows that if the world is made unfit
6. Motivation to excel
by what we do, there is the possibility of a
62. Gordon Method: Gordon method is a method change in regime to one that will be better for
for developing new ideas when the individuals life, but not necessarily ourselves.”
are unaware of the problem.
75. The 1994 Uruguay Round Agreement on
The Gordon method, unlike many other creative
Agriculture (AoA) was the result of intense
problem-solving techniques, begins with group
negotiations. The main provisions of the
members not knowing the exact nature of the
problem. This ensures that the solution is not agreement cover the key aspects that were seen
clouded by preconceived ideas and behavioural to be in need of liberalisation: market access,
patterns. The entrepreneur starts by mentioning domestic support, and export subsidies. The
a general concept associated with the problem. AoA called for the conversion of quantitative
The group responds by expressing a number of restrictions on agricultural products to tariffs as
ideas. Then a concept is developed, followed well as their reduction. It also called for cuts to
by related concepts, through guidance by the both domestic support subsidies and export
entrepreneur. The actual problem is then subsidies. Developing countries had a more
revealed, enabling the group to make relaxed schedule of reductions and the least
suggestions for implementation or refinement developed countries (LDCs) were exempt from
of the final solution. these cuts.