Assignment Code: BCOC-132/TMA/2022-23

Course Code: BCOC-132

Assignment Name: Business Organisation and Management

Year: 2022-2023

Verification Status: Verified by Professor

Maximum Marks: 100

Note: Attempt all the questions.

Section-A

(This section contains long answer questions of 10 marks each)

Q.1) What is lease financing? What are two types of lease financing? (10)

Ans) In a lease, the owner of the asset offers the other party the right to use the item in exchange for regular payments from the first party. In a lease finance arrangement, the asset is rented for a predetermined time. The Lessor is the legal name for the owner of the assets. The Lessee is the party to whom the asset is transferred. For the use of the asset, known as lease rental, Lessee pays the predetermined sum to the Lessor.

The lease contract, which outlines the terms and circumstances for controlling the lease arrangements, is signed. After the lease period has ended, the asset is returned. The organization's modernization and diversification may be supported by this funding. Lease finance might be appropriate for a company that deals with rapidly advancing technology breakthroughs. Before agreeing to lease finance, the lessee must examine the costs of purchasing and leasing an asset.

Types of Lease Financing

Finance Lease:

In exchange for lease rentals, the lessor essentially passes all the rewards and hazards of asset ownership to the lessee. The Lessee is delivered in the same state that he or she would have been in if they had bought the asset. The financial lease process involves two stages. The first phase is the initial stage. The initial phase is a permanent time. Through the lease's rent, the lessor is able to recoup his initial investment. The initial period may continue for an endless amount of time. The secondary period's lease rental is less than the primary period's.

Features of Finance Lease

1. The lessee receives a right to utilise an asset under the lease financing.

2. During the initial term of the lease, the lessor is required to pay lease rent. The amount of lease rent might pay for the initial investment.

3. For the secondary phase, the lease rent is cheaper.

4. The Lessee is responsible for asset upkeep.

5. The asset-related risk and profit are not assumed by the lessor.

6. Because the lease is irrevocable, Lessor's investment is protected.

Operating Lease

Operating lease refers to a lease that is not a financing lease. The risks and benefits associated with asset ownership are not passed by the lessor to the lessee in the event of an operating lease. Such leases have terms that are significantly shorter than the asset's economic life. During the initial term of the lease, the lessee may not be able to recoup the full investment through lease rental. For repairs, upkeep, and technical knowledge of the leased asset, the lessor typically gives the lessee assistance. The operating lease is therefore also known as the service lease.

Features of Operating Lease

1. Less than the asset's economic life is the lease period.

2. The lease is terminable with little notice by the lessee. Termination is not subject to a penalty.

3. The Lessor is in charge of providing the technical know-how.

4. Both the risks and profits belong to the lessor.

5. A distinct Lessee is given a lease on an asset by the Lessor. Leasing makes it easier to get your money back.

Q.2) Briefly discuss the process of innovation. Mention various types of innovation. (10)

Ans) The process of innovation has five basic steps. These steps are follows:

Idea Generation and Mobilisation: The first phase in the innovation process is coming up with an idea and then putting it out there. A fresh concept might be original or developed to strengthen an earlier concept. Apple is a well-known illustration of this. After MP3 devices were introduced, Apple Inc. delayed three years before releasing the iPod.

Advocacy and Screening: Ideas are screened in the second step. The concept with the greatest potential and a forward-looking view is chosen. Prior to the screening, advocacy is conducted.

Experimentation: In this phase, the chosen concepts are tested in the intended market. The testing might be done continuously or in stages so that the screeners and proponents can re-evaluate the concept. The most crucial element in this situation is time.

Commercialisation: This step's primary goal is to give the concept a market value and concentrate on its possible effects. Only after a new product satisfies consumer wants can it be introduced to the target market.

Diffusion and Implementation: This step consists of the diffusion stage and the implementation stage. Implementation is the phase in which the idea is created or generated, whereas diffusion is the stage in which an organisation embraces the innovation.

Types of Innovation

Incremental Innovation: The most common innovation is one that makes use of current technology to give the client more value. All types of organisations typically participate in incremental innovation at some point. Consider Facebook. Since its founding in 2004, this social network company has employed incremental innovation in a variety of ways.

Disruptive Innovation: Stealth (or covert) innovation is another name for this kind of invention. This adapts brand-new technological procedures to the business's current marketplace. Because it tends to be more expensive and less effective than the technology already available on the market, it is clandestine by nature. The new technology initially takes some getting used to before it outperforms the old technology and upends all established businesses. In this situation, a company that adopts new technology gains a competitive edge. The iPhone is a prime example of a disruptive innovation that altered the mobile phone industry.

Architectural Innovation: This kind of innovation applies the knowledge, abilities, and overall technology to various markets. Companies in the computer industry, such as IBM, Dell, etc., have been adopting sustaining technology with minimal design adaptation. Innovation of this kind involves fewer risks.

Radical Innovation: This type of innovation typically results in the development of new ideas while consuming the existing ones to produce a revolutionary technology. The financing method employed by entrepreneurs, crowd funding, is a good illustration of the same.

Q.3) What are the steps involved in the communication process? Briefly explain the major elements in the communication process. (10)

Ans) The steps involved in the communication process are as follows:

Clear Perception of the Idea or Problem: No message can be communicated effectively until the communicator formulates the idea or issue with clarity of thinking and vision. The communicator may only choose the method to be used to deliver the message on the basis of clear thought.

Participation of Others Involved: The next stage is to ensure that other people are involved in the choice to communicate a message. Through interaction with others, the ideas may be clarified, fresh ideas and suggestions may be gathered, and a motivating environment may be created to ensure a good response to the message.

Transmission of the Message: Before the communication is actually sent, it is assumed that the decision-makers will have decided what to transmit, to whom, when, and how. The process of "encoding" a message entails preparing it for transmission and choosing the appropriate medium for communication (oral or written) based on the type of audience to which it is to be addressed.

Motivating the Receiver of the Message: The communicator cannot rely solely on the message to elicit the desired response from the recipient. He must make sure the recipient of the message can correctly understand it and is ready to respond in accordance with it. Therefore, in addition to the message's clarity, it must motivate the recipient to act or behave in the way that the message's author desires.

Evaluation of the Effectiveness of Communication: It is up to the communicator to determine and assess the communication's nature and impact after it has been sent and received by the intended recipient. This establishes whether and how much the message has been received favourably by the recipient.

Elements in the Communication Process

1. Communicator: As the sender of the message, the communicator is crucial to the communication process. Managers, employees, clients, customers, and third parties can all communicate.

2. Encoding: The second component is to encode the information to be delivered. It means getting the conversation topic ready in an appropriate language.

3. Message: The right channels must be used to convey the encoded message. Depending on the intended outcome, it might be spoken or written.

4. Medium: The message is transmitted from the communicator to the recipient through the communication channel. There are several options for communication medium, including face-to-face verbal interaction, telephone use, intercom capabilities, the distribution of memos, notices, circulars, and statements, as well as telegraph and telex.

5. Decoding: Decoding is the process through which the communication is transformed by the recipient into comprehensible words. The receiver's response, which also depends on his comprehension of the message's aim and content, is another crucial component of communication.

6. Receiver: The message's recipient is just as important to the communication process as the communicator. Receiver-oriented communication is necessary for efficient communication. A positive response from the receiver is influenced by their capacity to decode and comprehend the information.

7. Feedback: This plays a crucial role in the communication process. It lessens the probability of a discrepancy between the communicator's goal and the recipient's interpretation of the message.

Q.4) “Non-financial incentives are as strong motivators as the financial ones” Critically examine this statement in the light of need-priority model and two-factor theory of motivation. (10)

Ans) Money stops being a motivational element after the physiological and security demands are met with it; for this reason, it is viewed as a maintenance component. Employees do, in fact, have other requirements as well. They desire to fulfil their ego demands, gain status and acceptance in society, and make progress in their life.

The following non-financial incentives may be used by management to encourage employees who have these needs:

Competition: Employees will accomplish their individual or group goals if there is healthy competition among individuals or groups of employees. Thus, competition serves as a non-financial motivator.

Praise or Appreciation of Work Done: Since it meets ego demands, acknowledging good performance serves as a non-financial reward. A compliment for a job well done might occasionally be more motivating than any other reward. This incentive should only be utilised sparingly, though, as rewarding an ineffective worker breeds animosity among capable workers.

Knowledge of the Results: Employee satisfaction is a result of knowing the outcomes of the job that has been done. When a worker receives feedback on his performance, he is pleased. When his boss recognises the work he has done, he feels satisfied. In contemporary industry, the production staff rarely interacts with customers, making it impossible for them to gauge their reactions. If they are informed of their performance's evaluation, they may be more motivated.

Workers’ Participation in Management: Employee motivation is greatly increased by participation in management. The psychological gratification of having their voice heard. Taking part in management fosters two-way communication and a sense of significance.

Suggestion System: The suggestion system is an incentive that meets many of the needs of the staff. Cash rewards are frequently given out by organisations that use the suggestion system for good proposals. The employee's name and picture may occasionally appear in the company magazine. This encourages the staff to look for things that might be more beneficial to the company.

Opportunity for Growth: Growth potential is another type of incentive. Employees feel more satisfied and are more dedicated to the objectives of the company if they are given opportunities for personal development, growth, and promotion.

Q.5) Explain various marketing concepts under which business enterprises conduct their marketing activity. (10)

Ans) The marketing concepts under which business enterprises conduct their marketing activity are:

Production Concept

The oldest concept is presumably this one. Some businesspeople think that consumers only want products that are inexpensive, accessible, and widely available. They don't place much value on the product's finer qualities. The producers therefore think that they should solely focus on efficient and extensive production. A business that adopts this philosophy focuses on achieving great production efficiency and extensive distribution coverage.

Organisations may adopt this concept in two types of situations:

1. When there is a gap between supply and demand for a product, increasing output will increase sales. Here, the management's top priority is to develop ways to boost production in order to close the gap between supply and demand.

2. When a product has a high cost and production is increased, economies of scale will cause the cost to decrease.

Product Concept

According to the product concept, people prefer the goods with the best quality, functionality, and features. Additionally, they think that customers value high-quality features and will be willing to pay a "higher" price for the "additional" quality of the offered good or service. Therefore, businesses that adhere to this idea focus on the product and ways to improve it. However, when making product improvements, they seldom ever take the demands and satisfaction of the customer into account. Even when developing new items, the producer is more focused on the intended purpose of the product than on the wants or needs of the consumer.

Selling Concept

A superior product might not guarantee market success. Selling hence becomes more significant. Therefore, some manufacturers think that forceful persuading and selling are essential to their company's success and that they cannot make sales or live without them. Therefore, efforts are made to identify strategies for selling.

Marketing Concept

The marketing philosophy is thought to have broader ramifications than other business philosophies. According to the marketing philosophy, the organisation views the requirements and wants of customers as its guiding principle and strives to produce products and services that do so more effectively and efficiently than its rivals. Additionally, it is claimed that the marketing concept is consumer-focused with the aim of generating long-term profitability.

Societal Concept

In a way, marketing is not just a corporate activity; it also needs to consider societal issues. Overuse of resources, environmental degradation, and customer movements in particular have made it necessary to acknowledge the importance of marketing to society. Therefore, marketing must be a morally upright or accountable activity. According to the societal notion, the business organisation must take into account both the demands and desires of the consumer's satisfaction and the welfare of society. The societal notion broadens the consumer-focused marketing approach to include society as well.

Section-B

(This section contains medium answer questions of 6 marks each)

Q.6) What do you mean by leadership style? Briefly explain the basic styles of leadership. (6)

Ans) The dominant behaviour pattern of a leader-manager in relation to his subordinates is known as leadership style. There are three basic styles of leadership as follows:

Autocratic or Authoritative Style

A leader who practises autocracy concentrates authority and control in himself and has total authority over his followers. Under the threat of punishment, followers of the leader are coerced into doing as they are told. They are not given the chance to define goals, take the initiative, or offer suggestions. Since they are closely watched, they have a propensity to shirk duty. The disgruntled and disenchanted employees of the dictatorial management are not given much thought. They attempt to work as little as possible since they do not feel a sense of belonging to the organisation.

Democratic or Participative Style

Participative style is another name for the democratic style. In this leadership style, choices are made by the leader after consulting with the team members and involving them in the decision-making process. The participative leader empowers followers to provide ideas, take initiative, and create goals and carry them out. This helps subordinates to meet their ego and social requirements, which in turn motivates them to support the objectives of the company and increases productivity. Building trust and confidence between managers and their staff members requires regular communication.

Laissez Faire Leadership Style

An authoritarian leadership style is exactly the reverse of laissez faire. When a management chooses this technique, he or she entirely relinquishes the reins of authority. The decision-making authority rests with the subordinate group, and group members are free to act whatever they see fit. Any leadership position is not present. The group members are completely free to define goals and carry them out. As a result, there is confusion and poor management of group objectives. However, it has been discovered that laissez-faire leadership is extremely appropriate when the subordinates are competent and well-trained, and the leader-manager is able to fully assign the subordinates' decision-making and execution authority.

Q.7) Write a short note on National Skill Development Corporation (NSDC). (6)

Ans) As a public-private partnership organisation, the National Skill Development Corporation (NSDC) was established as a component of the National Skill Development Mission of MSDE. The NSDC's mission is to improve India's skills landscape. Three pillars form the foundation of the NSDC philosophy. Which are:

1. Create: To facilitate in establishing quality vocational training institutions.

2. Fund: To provide funds in form of grants and equality.

3. Enable: To ensure the sustainability of the necessary support structures for skill development, which include sector skill councils run by industry (SSCS).

The vision and mission of NSDC is as follows:

1. Vision of NSDC: To close the existing gap between the demand and supply of skills in order to meet India's growing need for skilled labour.

2. Mission: The mission of NSDC is as follows:

i) Through strong industry engagement, skills can be raised to worldwide norms, and the appropriate structures for standards, curriculum, and quality assurance can be created.

ii) Through suitable Public-Private Partnership (PPP) models, strengthen, support, and coordinate private sector initiatives for skill development, work toward considerable operational and financial engagement from the private sector.

iii) Take on the role of a "Market-maker" by providing money, especially in industries without or with inadequate market mechanisms.

iv) Prioritize initiatives that can multiply or function as a catalyst rather than those that will only have a one-time impact.

Keeping in view the vision and mission of its main objective is NSDC:

To significantly contribute to India's overarching goal of improving people's skill levels, mostly by supporting and funding private sector programme efforts.

The objective of NSDC includes all three pillars on the basis of which it was formed:

As part of the larger Skill Indian Mission project, MSDE has launched a number of initiatives through NSDC to work with industry. The NSDC features a straightforward facilitation system that provides a platform for businesses to collaborate on various projects including corporate social responsibility. It collaborates with a wide range of stakeholders, including businesses, NGOs, governmental agencies, and others to design skill development initiatives with a significant social impact.

Since its start, NSDC has worked with organisations including NALCO, SBI Card, GE Power, NTPC, and others to fulfil CSR obligations mandated by the Companies Rules, 2013. Through the National Skills Qualification Framework, NSDC also offers accreditation for skill development programmes. All of this is done to bring the nation's skill development programmes into alignment. After reviewing the NSDC's vision, mission, and objective, it can be concluded that NSDC has been assisting the PPP model's requirement for skill development.

Q.8) Explain McGregor’s Participation Theory of motivation. (6)

Ans) Based on the input of the workers, Douglas McGregor developed two sets of presumptions about people. Theory X contains the first set of assumptions, while Theory Y has the second set of assumptions. According to McGregor's Theory X, the average person has a natural aversion to labour and will avoid it at all costs. According to the managers of these workers, "the majority of individuals must be contributed, directed, and threatened with penalty in order to get them to put out acceptable efforts toward the fulfilment of organisational objectives."

Theory X presumes that people by nature:

1. Lack integrity.

2. Are fundamentally lazy and desire to work as little as possible.

3. Avoid responsibility.

4. Are not interested in achievement.

5. Are incapable of directing their own behaviour.

6. Are indifferent to organisational needs.

7. Prefer to be directed by others.

8. Avoid making decision whenever possible.

9. Are not very bright.

Notion X, according to McGregor, is the conventional theory of how to manage employees and what management must do. Employees need to be motivated and persuaded to perform. Only via dictatorial leadership can workers be forced to work. McGregor described Theory X before asking whether this interpretation of human behaviour is accurate. He advanced theory Y, which, in his opinion, more accurately describes how people behave.

Under theory Y, it is assumed that people by nature:

1. Have integrity.

2. Work hard towards objectives to which they are committed.

3. Assume responsibility within their commitments.

4. Desire to achieve.

5. Are capable of directing their own behaviour.

6. Want their organisation to succeed.

7. Are not passive and submissive.

8. Will make decisions within their commitments.

The presumptions of McGregor's theory Y point to a novel management strategy. It places more focus on employee and management collaboration. The managers that adhere to this approach strive for the highest productivity with the least amount of control. Typically, there is no apparent conflict between an organization's aims and its employees' objectives. Therefore, employee efforts that are in the organization's best interests are also in the best interests of the employees.

Q.9) Discuss the marketing concepts under which business enterprises conduct their marketing activity. (6)

Ans) The marketing concepts under which business enterprises conduct their marketing activity are:

Production Concept

The oldest concept is presumably this one. Some businesspeople think that consumers only want products that are inexpensive, accessible, and widely available. They don't place much value on the product's finer qualities. The producers therefore think that they should solely focus on efficient and extensive production. A business that adopts this philosophy focuses on achieving great production efficiency and extensive distribution coverage.

Product Concept

According to the product concept, people prefer the goods with the best quality, functionality, and features. Additionally, they think that customers value high-quality features and will be willing to pay a "higher" price for the "additional" quality of the offered good or service. Therefore, businesses that adhere to this idea focus on the product and ways to improve it.

Selling Concept

A superior product might not guarantee market success. Selling hence becomes more significant. Therefore, some manufacturers think that forceful persuading and selling are essential to their company's success and that they cannot make sales or live without them.

Marketing Concept

According to the marketing philosophy, the organisation views the requirements and wants of customers as its guiding principle and strives to produce products and services that do so more effectively and efficiently than its rivals. Additionally, it is claimed that the marketing concept is consumer-focused with the aim of generating long-term profitability.

Societal Concept

Therefore, marketing must be a morally upright or accountable activity. According to the societal notion, the business organisation must take into account both the demands and desires of the consumer's satisfaction and the welfare of society. The societal notion broadens the consumer-focused marketing approach to include society as well.

Q.10) Explain the Role and Functions of SEBI. (6)

Ans) The role of SEBI is as follows:

In order to prevent fraud and safeguard investors' interests, SEBI was established. It was concerned with safeguarding the interests of investors, issuers, and intermediaries.

1. Issuers: SEBI provides safe marketplace to Issuers for raising the finance fairly and easily.

2. Investors: SEBI aimed at protecting the investors and supplying them accurate information.

3. Intermediaries: Professionally competitive market is provided by SEBI for the Intermediaries.

The functions of SEBI are as follows:

Protective Functions: The goal of SEBI is to safeguard investors' interests. It offers investment safety. Malpractices, fraud, and unethical business practises are reduced. It establishes a rule of conduct for fair operations and encourages ethical behaviour.

Developmental Functions: SEBI encourages securities market intermediaries to complete training. Stock exchanges are urged to use an adaptable and flexible strategy.

Regulatory Functions: The Stock Exchange's business is governed by SEBI. To control how the intermediaries conduct their business, regulations, rules, and a code of conduct have been created. It controls how stockbrokers, mutual funds, takeovers of businesses, etc. operate. Additionally, it audits the stock exchange.

Section-C

(This section contains short answer questions of 4 marks each)

Q.11) Explain the concept of One Person Company. (4)

Ans) One Person Company is defined as a company with just one member in Section 2(62) of the 2013 Companies Act. According to Section 3(1)(c), a company may be founded by one person for any legitimate purpose if it is to be a One Person Company, which is to say, a private company, by contributing his name to a memorandum and adhering to the Act's registration criteria.

However, the memorandum of the One Person Company shall specify the name of the other person who, in the event of the Subscriber's death or his inability to contract, shall become the Member of the Company, with his prior written consent in the prescribed form (Form No. INC.3), and the written consent of such person shall also be filed with the Registrar at the time of the One Person Company's incorporation along with its memorandum and articles.

Q.12) Differentiate between PERT and CPM. (4)

Ans) The differences between PERT and CPM are as follows:

Using a process called network analysis, the project's overall completion time and project expenses are reduced to the absolute minimum. The network analysis is particularly well suited to undertakings that are not normal or repeated and may only be carried out once or twice, such as building or dam construction, research and development, marketing new products, building ships or factories, manufacturing missiles, etc. The two most widely utilised methods of network analysis in modem management are PERT and CPM. PERT is a project management methodology that is mostly effective for the following managerial tasks: planning, scheduling, controlling, etc.

The engineers at the Du Pont Company created CPM in the 1950s for use in all scheduling tasks, building projects, R&D initiatives, and several other scenarios requiring time and performance estimations. It requires breaking down a programme or project into its constituent pieces in chronological order. The CPM technique assists in identifying the more strategic components of a plan in order to improve project design, planning, coordination, and control. A project is broken down into interconnected pieces.

Q.13) How is Primary market different from Secondary market? (4)

Ans) The differences between primary market and secondary market are as follows:

New securities are released on the primary market. New Issue Market is another name for it. Governments, corporations, and issuers all sell securities in the primary market. It assists in resource raising and satisfies the need for investment. Either face value or a discount/premium value may be applied when issuing the securities. The securities could take the shape of debt, equity, etc. Securities may be issued by market players on both domestic and foreign markets. Public issues or private placements are used to conduct the offering on the primary market.

The term "secondary market" refers to a market where securities are exchanged that were previously offered to the public in the main market and/or listed on the Stock Exchange. Trading is primarily done on the secondary market. Equity markets and debt markets make up the secondary market. The already owned securities are traded by investors or participants. This is done while taking risk and reward into account. The secondary market allows for the possibility of forward trading, or trading for a future date. Securities are traded in this market in exchange for future delivery and payment.

Q.14) Explain the barriers of effective communication. (4)

Ans) The barriers of effective communication are:

1. Language Barrier: Due to the sender's use of jargon, people with diverse intellectual abilities, educational backgrounds, and cultural perspectives may find it challenging to interpret the message.

2. Status Barrier: Effective communication may be seriously hampered by status connections in an organisation. Due to their relative places in the hierarchy, those in superior and subordinate roles have different statuses. Due to the status gap, subordinates frequently repress or withhold information that might not be well received by their superiors or spread false information to appease them.

3. Physical Distance as a Barrier: This is due to the fact that if the recipient's job is far from the sender's, it might be challenging to determine whether he or she has understood, accepted, and applied the message.

4. Emotional and Psychological Barriers: When people have strong attitudes and feelings, statements that contradict those attitudes emotionally harm them. If the sender has strong feelings about something or is experiencing emotional stress at the time, he or she may also falsify a message. Psychological obstacles frequently result from a lack of mutual confidence and trust. Similar to this, subordinates are psychologically more likely to accept and positively respond to their superior's communications when they have a favourable impression of him.

Q.15) What is outsourcing? How is it distinguished from off-shoring? (4)

Ans) Contracting a third-party business to do a few of your company's tasks is known as outsourcing. Because outsourcing is more affordable than hiring an in-house team, it can be done to cut operational costs.

The differences between outsourcing and off-shoring are as follows: