CBSE Class 12th Business Studies Worksheet - W9a

Free Business Studies - Class 12th (CBSE) - Worksheet - W9a - Financial Management

Students of CBSE class 12th know that they can score better marks in Business Studies board exams when they practice case studies of Chapter 9: Financial Management.

If you are one of those bright students, we are here to assist you.

On this page, you can find several case studies (short and long) for practice and solve them. The first section is for short case studies, followed by long case studies.

Here are the quick details:

• Subject: Business Studies
• Class: 12th (CBSE)
• Chapter Name: Financial Management

Below is the content pattern:

• Short Case Studies
• Long Case Studies

CBSE Business Studies Case Studies for Chapter 9: Financial Management

Short Case Studies

Case Study 1​

Identify and state the type of decisions in the following cases.

1. Ravi wants to open a restaurant and is looking for a proper place to open it. He is also thinking of the amount of funds which will be required for some of the set-ups, like food making and storage machinery.
2. Ravindra is running a toy manufacturing company. He thinks of expanding his business. He meets his uncle and asks him for a sum of ₹2 crore. His uncle asks for a high interest rate.

He agrees to it and promises to pay the money back within 2 years.

Case Study 2

The demand for takeaway food businesses is increasing day by day. People working in multi-national companies have to work till night very often, and they are reluctant to cook food.

Taking advantage of this opportunity, Amit and Bijoy started ‘Langer’, a takeaway food business. The food became famous because of its good quality and the standards of hygiene followed by it. Over the years, the business became very profitable. 

They decided to expand the business by opening more branches in different cities. To ensure consistent food quality at all branches and to maintain hygiene and quality, they planned to import machines with advanced technology. 

The cost of each machine was ₹ 12 crores. They knew that this decision had to be taken very carefully, as it involves a huge cost, and that the decision, once taken, is irreversible.

1. Identify and state the financial decision discussed in the above paragraph.
2. Explain any two factors affecting the decision identified in (i) above.

Case Study 3

Hemant, the finance manager, and Arun Chopra, the managing director of Ghokla Ltd., were discussing the source of finance to be raised for the modernisation of their existing plant.

Noting that ‘Sensex’ has soared by 5078 points in the last three years, Hemant suggests that equity should be the preferred source. Arun Chopra wanted to consider the following factors:

1. Keeping in mind the high operating costs of the company, suggest another source of finance that can be used for the modernisation of the existing plant.
2. Also, explain the two factors highlighted above that should be kept in mind for taking this decision.

Case Study 4

Sunrises Ltd., dealing in readymade garments, is planning to expand its business operations in order to cater to the international market. 

For this purpose, the company needs additional ₹ 80,00,000 for replacing machines with modern machinery of higher production capacity.

The company wishes to raise the required funds by issuing debentures. The debt can be issued at an estimated cost of 10%. The EBIT for the previous year of the company was ₹ 8,00,000 and the total capital investment was ₹ 1,00,00,000.

Suggest whether the issue of debenture would be considered a rational decision by the company. Give a reason to justify your answer.

Case Study 5

Sunflower Ltd. is a trusted name in diagnostic services with seven branches across the city of Mumbai.

Over the past couple of years, the directors noticed that the rise in health consciousness in the city, coupled with the rise in disposable incomes, has led to increased health check-up packages available in the city itself. 

Considering this, they decided to open branches in Ahmedabad and Pune.

It was estimated that it would require 150 crore of additional funds. The directors have to make the decision about how much funding should be raised from equity capital and how much from debt.

It will affect the overall cost of capital and the financial risk of the company.

1. Identify and state the financial decision discussed in the above paragraph.
2. State any three factors that should be kept in mind by the board of directors of Sunflower Ltd. while making the decision identified in (i) above.

Case Study 6

Chetanshi Ltd. has been a company dealing in readymade garments for several years. Recently, the profit of the company has started increasing. 

The finance manager has decided to retain the profit instead of distributing it among the shareholders.

1. Identify and state the financial decision taken by the finance manager in the above case.
2. State any three factors affecting the decision identified in (i) above.

Case Study 7

Gupta International Ltd. earned a net profit of 50 crore. Mahesh, the finance manager of Gupta International Ltd., wants to decide how to appropriate these profits.

1. Identify and state the decision that Mahesh will have to make.
2. State any three factors that will help him in making this decision.

Case Study 8

Aval Ltd. is engaged in the business of exporting canvas goods and bags. In the past, the performance of the company had not been up to expectations. 

In line with the latest demand in the market, the company decided to modernise its plant, for which it required specialised machinery.

For this, the finance manager, Prabhu, prepared a financial blueprint of the organisation’s future operations to estimate the amount of funds required and the timings, with the objective to ensure that enough funds are available at the right time.

He also collected the relevant data about the profit expected for the coming years. By doing this, he wanted to be sure about the availability of funds necessary for the growth of the business. 

For funds from the internal source, the company could not find alternative mechanisms of financing. He is trying to find out alternative sources from outside the organisation.

1. Identify the financial concept discussed in the above paragraph. Also, state the objectives to be achieved by the use of the financial concept so identified.
2. “There is no restriction on payment of dividend by a company.” Comment.

Case Study 9

Gagla Engineering Ltd. is a leading manufacturer of rods used to manufacture trucks. It is important for a finance manager to ensure the availability of funds whenever required and their possible sources.

It is also important to ensure that the company does not raise funds unnecessarily. The fund requirement and the availability have to be matched.

1. Identify and give the meaning of the concept discussed in the case, which will help the finance manager to achieve his objectives.
2. Also, state any three points of importance of the concept identified in (i) above.

Case Study 10

Though Kan Apparels is making huge profits every year on a regular basis, it is not able to provide sufficient dividends to its shareholders. 

As a result, EPS remains low. Identify and explain the concept that can help to resolve the problem.

Case Study 11

The Return on Investment (RoI) of a company ranges between 10%-12%. For the past three years, to finance their fixed capital needs, they have had the following options for borrowing debt. 

• Option ‘A’: Rate of interest 9%. 
• Option ‘B’: Rate of interest 13%. 

Which source of debt, ‘Option A’ or ‘Option B’ should the company choose? 

Explain your answer. Also, state the concept being used in making the decision.

Case Study 12

Company ‘A’ has a debt-equity ratio of 3:1. Another Company, ‘B’, has a debt-equity ratio of 2.5:1. Both companies are part of an industry where the operating costs are high. 

Many of the companies in this industry are vulnerable to high business risks.

Which one of the two companies is going to have higher chances of financial risk?

Why do you think the financial risk in the above-mentioned industry is going to be dangerous for the companies?

Case Study 13

Kanav, after passing out of college with a specialisation in renewable energy, was determined to start a solar power plant. 

The venture required heavy investment in plant and machinery, as well as semi-skilled labour. 

Kanav needed to set up the solar panel manufacturing unit and purchase the latest solar panels, inverters, and rechargeable storage systems. 

Near the bank of the nearby river and other investments, Kanav’s business had good expansion possibilities.

Due to the government’s continuous move towards clean energy sources, there was a growing demand for electricity for houses and commercial installations in the area. 

But he did not anticipate the demand that would come in the future, and therefore, the anticipated demand exceeded quickly. 

These earnings have stabilized, and the sales were more than the expected amount. As the years passed, the solar power plant did very well and played a pivotal role in the city’s planned transition towards a greener and more sustainable future.

Identify and explain the two factors affecting the fixed capital requirements discussed in the above case.

Case Study 14

Pinnacle Ltd. deals in the sale of stationery and office furniture. They source the finished products from reputed brands that give them credit on the basis of four to six months' credit. 

Seeing the demand for electronics items, they are now also planning to market these items by opening outlets throughout India.

For this, they decided to join hands with a Japanese electronic goods manufacturer.

Identify and state any two factors that would affect the fixed capital requirement of Pinnacle Ltd. as discussed above.

Case Study 15

KJ Ltd. is manufacturing trucks at its manufacturing unit in Kolkata. The demand for its trucks is high as the economic growth is about 7% to 8%.

The company is planning to add a 20% increase in the demand for its trucks. It plans to set up a new truck manufacturing plant.

For this, the company will require approximately ₹2,000 crore as fixed capital and ₹500 crore as working capital. The company has already arranged for its fixed capital.

State any three factors that the finance manager of the company should keep in mind while arranging its working capital.

Case Study 16

Verma Ltd. has various warehousing arrangements. The services provided by the company help businesses to reduce their overheads, increase efficiency, and reduce distribution costs.

1. State whether the working capital requirements of Verma Ltd. will be high or low. Give a reason.
2. Explain any two factors affecting working capital requirement.

Long Case Studies

Case Study 17

S Ltd. is manufacturing steel at its plant in India. It is enjoying a buoyant demand for its products as economic growth is about 7-8% and the demand for steel is growing. 

It is planning to set up a new steel plant to cash in on the increased demand.

It is estimated that it will require about ₹5,000 crore to set up about ₹500 crore of working capital to start the new plant.

1. Describe the role and objectives of financial management for this company.
2. Explain the importance of making a financial plan for this company. Give an imaginary plan to support your answer.

Case Study 18

‘Neeraj Exports Ltd.’ is engaged in the export of electronic goods. 

The company has been expanding its operations for the last few years and is now planning to set up a new manufacturing unit. It is faced with the decision of how to finance this new project.

The company has a solid cash flow position and has been consistently generating profits. 

However, it already has significant fixed operating costs in the form of rent, salaries, and other expenses. 

The current shareholders are not in favour of issuing additional equity shares as they fear losing control of the company. 

Meanwhile, the stock market is experiencing a downturn, which makes raising funds through equity challenging. In light of these factors, the company is considering its financing options.

Quoting lines from the above discussion, identify and explain any four factors affecting the financing decision.

Case Study 19

Abhishek Ltd. manufactures cotton clothes. It has been consistently earning good profits for many years. This year, too, it has been able to generate profits. 

There is enough cash in the company and good prospects for growth in the future.

It is a well-managed organisation and believes in quality, equal employment opportunities, and good remuneration practices. It has many shareholders who prefer to receive a regular income for their investments.

It has taken a loan of ₹ 50 lakhs from ICICI Bank and is bound by certain restrictions on the payment of dividends according to the terms of the loan agreement.

The above discussion about the company leads to various factors that decide how much of the profits should be retained and how much should be distributed by the company.

Quoting the lines from the above discussion, identify and explain any four such factors.

Case Study 20

‘Sarah Ltd.’ is a company manufacturing cotton yarn. It has been consistently earning good profits for many years. This year too, it has been able to generate enough profits. 

There is enough cash in the company and good prospects for growth in the future. 

It is a well-managed organisation and believes in quality, equal employment opportunities, and good remuneration practices. 

It has many shareholders who prefer to receive a regular income from their investments.

It has taken a loan of ₹40 lakh from IDBI and is bound by certain restrictions on the payment of dividends according to the terms of the loan agreement. 

The above discussion about the company leads to various factors that decide how much of the profits should be retained and how much should be distributed by the company.

Quoting the lines from the above discussion, identify and explain any four such factors.

Case Study 21

Mr. Shah is the owner of Shah Marble Ltd. Within a short span of time, the company could generate cash flows from operations to meet its cash payment obligations, but also create a sufficient buffer. 

The company is on the growth path, and a new brand of marble is going to be brought in by the Italian marble sold by Shah Marble Ltd. 

To meet the increasing demand, Mr. Shah planned to expand his business by acquiring a mine. This required an investment of ₹ 120 crore. 

To seek advice on the matter, he called his financial advisor, Mr. Seth, who advised him to go for a judicious mix of equity (40%) and debt (60%).

Mr. Shah suggested that he take a loan from a financial institution, as the cost of raising funds from such a financial institution is cheap. 

He also opined that this will increase the financial risk but will also raise the return to equity shareholders. 

He also assured that the issue of debt will not dilute the control of existing shareholders.

He also apprised that interest on a loan is a tax-deductible expense and brings down the tax liability.

After due deliberations with Mr. Seth, Mr. Shah decided to raise funds through debt. Debenture financing is not very expensive.

1. Identify and explain the concept of financial management as advised by Mr. Seth in the above situation.
2. State any four factors affecting the concept as identified in part (i) above, which have been discussed between Mr. Shah and Mr. Seth.

Case Study 22

Mania Industries Ltd manufactures steel. Its plants are located in Gujarat. It produces around one million tonnes of steel every year. 

It has outgrown competition and is planning to expand the capacity of the existing steel plants. It will require ₹1,500 crore of Fixed Capital and an additional ₹500 crore as Working Capital to match the capacity of the capital. 

The company is considering the use of debentures for raising the debt by the debentures of 1,540 crore.

The capital structure at present comprises equity only. The finance manager of the company suggested that since the stock markets are undergoing a bearish phase, the company should issue debentures.

1. Is it justified to raise funds by issuing debentures? Give a reason.
2. Explain the impact of the issue of debentures on the risk faced by the company.
3. Explain the impact of the cost of debt and cost of equity on the capital structure of the company.

Case Study 23

ABC Tech Solutions is a growing software company that specialises in developing innovative technology solutions for various industries. 

The company recently decided to expand its operations by building new development centers in different cities. 

To set up this center, ABC Tech Infrastructure needs additional investment in fixed assets like computers, networking equipment, and office infrastructure.

While planning this expansion, the management faces the challenge of determining how much fixed capital would be required in the short term as well as beyond a long-term perspective. 

The CEO, Mr. Rajesh, emphasised the importance of efficient asset utilisation to ensure that available capital is not blocked and hampers future growth. 

Additionally, the finance team must carefully consider the allocation across these long-term investments to facilitate the organisation’s smooth functioning.

The management analyses the factors while setting up the new office, needs to quantify the costs of acquiring fixed assets and the company’s future expansion plans. 

They ensure they allocate sufficient capital. 

Mr. Rajesh ensures the importance of managing fixed capital to ensure that assets are used efficiently, financial charges are minimized, and the company can remain competitive in the market.

1. Give any four reasons why management of fixed capital is important.
2. State any two factors that affect the requirement of fixed capital.

Case Study 24

Vikram Automobiles Pvt. Ltd., a leading manufacturer of electric two-wheelers in India, has witnessed an extraordinary surge in demand over the past 12 months. 

“It’s been an exciting period for us, with sales hitting record levels,” says the CFO of Vikram Automobiles.

The company caters to the growing urban population eager to shift to eco-friendly modes of transport.

Interestingly, working capital management has been smooth, with a turnover of trade receivables averaging between 10 and 20 days.

One of the key reasons working capital remained in control was the pre-orders for their new range of electric scooters. 

Customers had placed advanced orders months in advance, with deposits paid, which helped boost the company’s cash flow.

The quick turnover of finished products and the company’s efficient inventory management kept storage costs low. 

“As soon as the scooters are manufactured, they are immediately shipped to dealers, keeping inventory at minimal levels,” said the CFO.

Moreover, favourable banking relationships further supported the company’s strong cash flow position, aiding in efficient working capital management.

1. Explain the concept of working capital.
2. Identify and explain any four factors that affect the requirement of working capital.

The End

CBSE Class 12th Business Studies Worksheet - W5a

Free Business Studies - Class 12th (CBSE) - Worksheet - W5a - Organising

Are you in CBSE Class 12th and want to practice more case studies regarding Chapter 5: Organising?

For that matter, we are here to assist you.

On this page, you can find several case studies (short and long) for practice and solve them. The first section is for short case studies, followed by long case studies.

Here are the quick details:

• Subject: Business Studies
• Class: 12th (CBSE)
• Chapter Name: Organising

Below is the content pattern:

• Short Case Studies
• Long Case Studies

CBSE Business Studies Case Studies for Chapter 5: Organising

Short Case Studies

Case Study 1​

A company named ‘Mahi Cycles’ has decided to start a new branch in the Middle East.​​ The company has recognised the amount of work to be done in a number of hours.​​
The company has found out that it will take 25,000 hours of manual work and has subsequently divided the number of hours for different operations.​​
Then very methodically, responsibility for the recognised amount of work was given to different individuals according to their c​​apabilities.

1. Which function of management is highlighted above? State its meaning.​
2. Identify and explain the two steps of this function indicated above.

Case Study 2​

Rakesh and Mamnaa Ltd. is manufacturing baby bottles and has separate departments of production, sales, and finance. Which type of structure would you suggest to them, and state some of its advantages?​

Case Study 3​

Reena Industries is a company that manufactures office furniture. The company chose to diversify its operations to improve its growth potential and increase market share. After evaluating the various alternatives, Sukhvinder, the Managing Director of the company, decided that they should add ‘Home Interiors and Furnishings’ as a new line of business activity.​

1. Name and explain the framework that the diversified organisation should choose. Give one reason in support of your answer.​
2. State any two limitations of this framework.

Case Study 4​

Neha runs a factory where she manufactures shoes. 

The business has been doing well, and she intends to expand by diversifying into leather bags as well as western formal wear, thereby making her company a complete provider of corporate wear. 

This will enable her to market her business unit as the one-stop for working women.​

Which type of structure would you recommend for her expanded organisation and why?

Case Study 5​

Some college friends together set up a multi-product company. Their company makes five different products. Three products of the company have been successfully launched in the market. But the company has not succeeded in launching the fourth and fifth products in the market.​

1. What sort of organisational structure, in your view, might have been adopted by the company?​
2. Explain any two advantages of the structure identified in (i).

Case Study 6​

DEF Ltd., a leading manufacturing company, has a strict hierarchy where every employee has a clear set of duties and responsibilities.​

The company follows a formal structure, where communication flows through established channels and every employee knows their role within the organisation.

This formal structure has led to a high degree of discipline and unity in operations, with well-defined rules and procedures being strictly adhered to.​

1. Identify the type of organisation being used by DEF Ltd.​
2. State three benefits of this organisation.

Case Study 7​

Mr. Atul is the owner of a garment manufacturing company. He finds the spreading of the message in his organisation a problem, as a lot of time is taken. 

On many occasions, he tried to bring different equipment and software systems to increase the speed of spreading the message. 

In the month of February this year, a new type of machine was installed in the production department.

He wanted to have a candid opinion about the utility of the machine from the employees, but no one had the courage to tell him about the flaws of the machine on his face. 

After three months, when there were shortcomings in the production of garments, he realised his limitations.​

With the passage of time, he found the motivation level of employees too low. 

Many of the employees and workers were new and found the place unfamiliar, and didn’t have friends, which resulted in a lowering of production.​

1. What would you suggest to Mr. Atul in this scenario?
2. Identify the three problems in the above case and give the outcomes of your solution given in point (i) above on these problems.

Case Study 8​

Manoj Ghai was the managing director of a restaurant in Lucknow called ‘Kitchen Hues’. 

The restaurant was doing well, and the volume of work started increasing slowly and steadily. Manoj Ghai was not able to manage all the work on his own. 

The increasing magnitude of work made it impractical for him to handle it all by himself. Moreover, his objective is to open more branches of this restaurant at different places. 

He appointed Nikhil Gupta as the general manager of ‘Kitchen Hues’ and gave him the authority to manage his subordinates and to take action within the scope of his position.​

For the smooth running of the restaurant, he also gave him the authority to hire and train the staff as per the requirements. 

Manoj Ghai was satisfied with the work of Nikhil Gupta and was able to open other branches of the restaurant at Agra and Kanpur, as well.​

1. Identify the concept followed by Manoj Ghai, which helped him to open the new branches of the restaurant.​
2. Also, explain briefly the two points of importance of this concept identified in (i).

Case Study 9​

The production head of Ahanya Limited, an organisation that manufactures generators, has been asked to achieve a target of 100 generators per day. 

He delegates the task to 12 production managers working under him. Seven of the production managers could not achieve their respective targets. Is the production head responsible? 

Explain in brief the relevant principle in support of your answer.

Case Study 10​

The directors of Alfa Ltd., an organisation manufacturing computers, have asked their production manager to achieve a production target of 150 computers per day. 

The production manager has asked his foreman to achieve this target, but he did not give him the authority for the requisition of tools and materials from the stores department. The foreman could not achieve the desired target.​

Can the directors blame the production manager, and can the production manager blame his foreman for not achieving the target? Discuss.

Case Study 11​

Team Leader: “I have so many tasks piling up, and it feels like there is no end to it.”​

Team Member: “Maybe I can assist you with some of the tasks. It might ease your burden.”​

Team Leader: “I appreciate the offer, but I prefer to handle everything myself. I’m not sure if anyone else can do it the way I need it done.”​

Team Member: “I understand, but I’m confident I can complete the tasks efficiently.”​

Team Leader: “I’m sorry, but I’d rather manage it all on my own. Thanks, though.”​

1. Which element is missing in the above conversation, as reflected by the team leader’s attitude?​
2. Do you think this element is important? Give any three reasons.

Case Study 12​

Rahul Gupta started a telecommunication company, ‘Essence Ltd.’, to manufacture economical mobile phones for the Indian rural market with 15 employees. 

The company did very well in its initial years. As the product was good and marketed well, the demand for its products went up. 

To increase production, the company decided to recruit additional employees. 

Rahul Gupta, who was earlier making all decisions for the company, had to selectively delegate the authority.​​

He believed that subordinates are competent, capable, and resourceful and can assume responsibility for the effective implementation of their decisions. 

This paid off, and the company was not only able to increase its production but also expand its product range.​​

1. Identify the concept used by Rahul Gupta through which he was able to steer his company to greater heights.​
2. Also, explain any three points of importance of this concept.

Case Study 13​

Arnav Electricals is a company that has, in recent years, adopted the decentralised method of running the organisation. 

The company has grown dynamically, and the decisions taken by the lower-level management are implemented, which saves time as people taking decisions are near the point of action. 

However, recently, the chairman of another manufacturing firm, who is also a good friend of Arnav, the chairman of Arnav Electricals, met him and asked him how he could evaluate the performance of employees in case he goes for a decentralised approach.​

A few hours later, Arnav’s secretary calls him and asks for the list of work to be done the next day. He narrates to him all the important tasks to be executed.​

1. Which importance of decentralisation has been highlighted in the above case?​
2. What advice do you think Arnav should give to have better control in a decentralised organisation?

Long Case Studies

Case Study 14​

Priya works as a project manager in an event planning company. She has been assigned the responsibility of overseeing a large-scale fashion show for one of the firm’s prestigious clients.​

To ensure the event’s success, Priya carefully analyses the different tasks involved and organises the work into specific task groups, such as the logistics team, design team, and hospitality team.​

To ensure smooth coordination both within and among the teams, she appoints a leader for each group.

Every team member is instructed to report to their respective leader, and all team leaders are expected to follow Priya’s overall directions.​

1. Identify the management function Priya is performing.​
2. Briefly describe the various steps involved in the performance of the management function identified in point (i) of the question.

Case Study 15​

Riya Kapoor was the Chief Operating Officer of ‘Fresh Organics’, a company specialising in organic food products. 

Fresh Organics offered a wide range of organic fruits, vegetables, and other food items. Riya Kapoor ensured that the company’s operations were efficient and organised by grouping work according to specific functions such as production, marketing, finance, and human resources. 

Each department had specialised tasks and was headed by an expert in that particular area.​​

This structure helped Fresh Organics streamline its operations, resulting in high productivity and efficiency. 

The marketing department, for example, was able to focus entirely on market research and promotional activities, leading to an increase in brand awareness. 

The production department, on the other hand, ensured that the quality of the products remained top-notch, as they could focus solely on manufacturing processes.​​

However, as Fresh Organics grew, the company faced new challenges. The departments started working in silos, and the marketing team often had conflicting priorities. 

The production and marketing teams had conflicting priorities, which resulted in delays in launching new products. 

Additionally, the rigid departmental boundaries made it difficult for the company to adapt quickly to market changes, such as the sudden demand for ready-to-eat organic meals.​​

1. On the basis of the above paragraph, identify the type of organisational structure adopted by Fresh Organics.​
2. Explain three benefits of this structure as discussed in the case.​
3. Explain two drawbacks of this structure as discussed in the case.

Case Study 16​

‘Health Relax Ltd.’ is one of India’s leading consumer healthcare brands in diagnostic services. It has an integrated nationwide network of diagnostic centres. 

The company was exploring new avenues for its expansion. The top-level managers analysed the business environment and found that since 2023 was the International Year of Millets, it was expected that the global demand for millets in the next two years would grow by around 5% annually. 

India, being one of the leading producers and exporters of millets, realised that there was a great business opportunity in the millet industry. 

The Board of Directors of the company had decided to move into the business of selling bread, noodles, and dosa mix made of millets.​​

The company had to restructure itself. It diversified into varied product categories and created a structure comprising separate business units. Each unit had a manager responsible for performance who had authority over the unit.​​

Manpower was grouped on the basis of the different products manufactured​​.

1. Identify the type of organisational structure of Health Relax Ltd. after restructuring and give its meaning.​
2. Briefly explain any two advantages and two disadvantages of the type of organisational structure identified in point (i) of the question.​

Case Study 17​

ABC Corporation, a multinational company operating in the technology sector, specialises in developing software solutions for various industries, including finance, healthcare, and retail.​

With a global presence, the company has grown rapidly over the past decade, expanding its operations into multiple countries.​

In response to its increasing complexity and the need for more efficient management of diverse product lines, ABC Corporation adopted a suitable organisational structure.​

This structure is characterised by the creation of separate divisions based on product lines and geographic regions.​

Each division operates as an independent entity with its own set of functions, including marketing, sales, R&D, and customer service.​

The company’s organisational chart shows several key divisions:​

• The North American Division is responsible for the company’s operations in the United States and Canada.​
  This division handles all aspects of product development, marketing, and sales specific to North American clients.​
• The European Division manages the company’s operations across European countries.​
  It tailors products and marketing strategies to meet the needs of the diverse European market.​
• The Asia-Pacific Division focuses on the Asia-Pacific region, which includes countries like China, Japan, and India.​
  This division oversees regional market demands and coordinates local operations.​
• Healthcare Solutions Division Specialises in software products tailored specifically for the healthcare industry.​
  This division is responsible for developing industry-specific solutions and managing relationships with healthcare clients globally.​
• Financial Services Division Dedicated to providing software solutions for the financial sector.​
  This division manages client relationships and product development for financial institutions worldwide.​

Each division has its own head who reports directly to the company’s CEO.​ 

This set-up allows each division to operate with a degree of autonomy, making decisions that best suit their specific market or product line.​

It facilitates a more focused approach to managing diverse product lines and regions, enabling quicker decision-making and more effective responses to market changes.​

However, this structure also presents challenges since each division operates somewhat independently, which can lead to duplication of efforts and a lack of standardisation across the company.​

Coordination between divisions can sometimes be complex, as each division prioritises its own goals and objectives.​

1. Identify the organisational structure of ABC Corporation.​
2. State the meaning of the organisational structure identified in (i).​
3. How does this structure differ from a functional structure?

Case Study 18​

A company manufacturing sewing machines, set up in 1945 by the British promoters, follows a formal organisational culture in totality.​

It is facing a lot of problems with delays in decision-making.​

As a result, it is not able to adapt to a changing business environment.​

The workforce is also not motivated, since they cannot address their grievances except through formal channels, which involve red tape.​ Employee turnover is high.​ Its market share is also declining due to changed circumstances and the business environment.

1. You are to advise the company with regard to changes it should bring about in its organisational structure to overcome the problems faced by it​.
2. Give reasons in terms of the benefits it will derive from the changes suggested by you.

Case Study 19​

Rewton Ltd. was a reputed computer software company providing unique software all over India.​ The turnover of the company was very high, resulting in good profits.​

The chief executive officer, Vihanan, was very strict and disciplined.​

He specified the boundaries of authority and responsibility for achieving organisational goals.​
There was systematic coordination among the various activities and specific relationships among various job positions.​

The company provided facilities like a canteen, a gym, a library, a music room, and a rest area for its employees, which they could use during rest intervals.​

Using these facilities, the employees developed friendships and discussed not only their personal, social, and emotional issues, but also the official ones.​

The general manager was of a different view.​

He told the chief executive officer that there was no use providing these facilities to the employees, as it is an extra financial burden on the organisation, on one hand, and on the other, it encourages groupism, and whenever any change is required in the organisation, they all resist.​

He suggested that they should do away with these facilities.​

But the chief executive officer, Vihanan, explained to the general manager that this type of social interaction is necessary and is in the best interest of the organisation.​

The interaction among people at work gives rise to a network of social relationships among employees and these networks.​

1. Identify and explain the type of organisation whose existence the chief executive officer felt was necessary.
2. State any two reasons due to which the general manager felt that there was no use of the type of organisation identified in  point (i) above.

Case Study 20​

Nisha and Arjun had always been passionate about eco-friendly fashion and wanted to create a business that promoted sustainable clothing. 

They founded ‘EcoThreads’, a company dedicated to selling clothing made from organic and recycled materials. Initially, they handled all the operations from their small office, making decisions about design, production, marketing, and sales.​

However, as their business grew, they realised that centralising all the decision-making was slowing down their operations. 

They needed to respond quickly to market demands, and it became clear that they couldn’t manage everything on their own. Recognising this, they decided to decentralise the decision-making process by empowering different departments within the company.​

They appointed a design team to independently create new clothing lines based on market trends, a production team to manage manufacturing, and a marketing team to handle customer engagement and sales strategies.​

This allowed each department to make quick decisions without waiting for approval from the founders.

As a result, ‘EcoThreads’ was able to release new collections faster, improve its supply chain efficiency, and tailor their marketing strategies to specific customer segments.​

In just a few months, their sales increased significantly, and they expanded their market reach to include international customers.​

Quoting lines from the above paragraph, identify and explain the concept discussed in the case.​

Also, state reasons why it is important to adopt this concept.

Case Study 21​

A company X Ltd. manufactures cosmetics, which have enjoyed a pre-eminent position in business, and has grown in size. Its business was very good till 1991.​

But after that, a new liberalised environment has seen the entry of many MNCs in the sector. As a result, the market share of X Ltd. has declined.​

The company had followed a very centralised business model with directors and divisional heads making even minor decisions.​

Before 1991, this business model had served the company very well, as consumers had no choice. But now, the company is under pressure to reform.

1. What organisation structure changes should the company bring about in order to retain its market share?​
2. How will the changes suggested by you help the firm? (Keep in mind that the sector in which the company is FMCG.)

The End

CBSE Class 11th Business Studies Test - t7b

Free Business Studies - Class 11th (CBSE) - Test - t7b - Sources of Business Finance

Dear class 11th students,

Prepare yourself for your examination by clearing your concepts regarding “Chapter 7: Sources of Finance”.

Therefore, our team has developed an exclusive test that students can solve and gain more knowledge about the topic.

Here are the quick details:

• Subject: Business Studies
• Class: 11th (CBSE)
• Chapter Name: Sources of Business Finance
• Marks: 40​
• Time: 1.5 hours

CBSE Class 11th Test

Q1. Debenture holders are called: (1 Mark)

1. Employees of the Company
2. Owners of the Company
3. Creditors of the Company
4. None of the above.

Q2. Who among the following are called owners of the company? (1 Mark)

1. Debenture holders
2. Employees
3. Directors
4. Equity shareholders

Q3. The most dependable source of funds is: (1 Mark)

1. Equity share
2. Preference share
3. Public deposits
4. Retained earnings

Q4. Ploughing back of profits is also referred to as __________ profits. (1 Mark)

Q5. Payment of dividends on shares is: (1 Mark)

1. Compulsory
2. Voluntary
3. Rarely
4. None of the above

Q6. Loans given by commercial banks are generally: (1 Mark)

1. Short-term
2. Medium-term
3. Long-term
4. None of the above

Q7. Which of the following businesses requires a higher amount of working capital? (1 Mark)

1. Figure A
2. Figure B
3. Both A and B
4. None of these

Q8. Vinita is the finance manager of Kipla Pharma Co. As the company wants to import a piece of new machinery from Japan for its expansion, the capital requirements for the same are estimated to be ₹ 5 crore. Vinita reported that the company is not in a position to bear the extra burden of paying interest to the company, so the company should use its own capital sources rather than borrowed capital. The board of directors is confident about the sales turnover and cash flow position of the company in the coming years and supports the borrowed capital source of raising capital. The company is also considering using retained earnings for the same.

Name the source of owned capital that is available free of cost. (1 Mark)

1. Equity shares
2. Preference shares
3. Retained earnings
4. Bonds

Q9. Read the following statements—Assertion (A) and Reason (R). (1 Mark)
Choose one of the correct alternatives given below. (1 Mark)

1. Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
2. Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
3. Assertion (A) is true, but Reason (R) is false.
4. Assertion (A) is false, but Reason (R) is true.

• Assertion (A): ICICI assists the creation, expansion, and modernisation of industrial enterprise in the private sector only. (1)
• Reason (R): ICICI is meant to assist industries in both the public and private sectors.

Q10. Match the statement given under Column I with the correct option given under Column II: (1 Mark)

Match the statement given under Column I with Column II

Column I	Column II
A. Equity shares	(i) Charge against assets of the company
B. Preference shares	(ii) Fixed rate of dividend
C. Debentures	(iii) Irredeemably

1. (A-i) (B-iii) (C-ii)
2. (A-ii) (B-i) (C-ii)
3. (A-iii) (B-ii) (C-i)
4. (A-i) (B-ii) (C-iii)

Q11. Identify and explain the source of finance highlighted in the following cases: (3 Marks)

1. It facilitates the purchase of goods and services without making immediate payment.
2. It refers to that part of profits which is kept as a reserve for use in the future.
3. This source has certain characteristics of both equity shares and debentures.
4. This source is arranged through brokers, and the rate of interest is higher than that of a bank.
5. It is also known as ploughing back profits.
6. This short-term source can be issued only by financially sound and highly creditworthy firms.
7. It is a permanent source of capital and is not redeemed during the lifetime of the company.

Q12. Ajay was not happy with his government job due to political interference and red tape in his department. He decided to take retirement under the Voluntary Retirement Scheme of the government.

On his retirement, he got some amount of money in the form of gratuity and provident fund, and plans to invest in securities where he can get regular returns with ownership rights.

You, being the financial market expert working for ‘Mitra Financial Advisors, OPC (Private Limited)’ are required to advise him on the following issues: (3 Marks)

1. Which type of security will you suggest to Ajay?
2. State two benefits of such securities for the issuing company.

Q13. How would you differentiate between Equity shares and Preference shares? (3 Marks)

Q14. Shiv Sales Pvt. Ltd. owns the agency of different food products, which sells goods of different brands to retailers after purchasing them from several companies. It purchases almost all goods for cash, while it sells on credit for one month. 

So the company keeps struggling with short-term finance. To overcome this problem, the company’s finance department held a meeting. 

The chairperson of the meeting asked the members to express their views on the solution of this problem. 

The first person said, ‘We should use a source of finance which does not involve any bureaucracy and legal problems, and the market of which remains stable’. 

The view of the second person was that the company should buy goods on credit. The third person’s opinion was that the company needs cash credit and overdraft. 

Therefore, the source of finance should be selected considering this fact. 

The chairperson of the meeting listened to the suggestions of all kinds and, to make the final decision, asked them to present at a meeting next week.

Identify and explain the sources of finance as suggested by different persons by quoting the lines. (4 Marks)

Q15. A public limited company decided to borrow additional funds. The management of the company is not interested in dilution of control. (5 Marks)

1. Suggest a suitable type of source of funds for raising the funds.
2. State any four merits.

Q16. Sanjoli and some of her friends jointly set up ‘Tirmurti Limited’. The business of their company was to manufacture blankets at a low rate. 

At the time of setting up the company, they issued 25,000 shares of the face value of ₹ 10 each. In this way, they started their business with a capital of ₹ 2,50,000. 

Before collecting the money from the public, they decided that they would issue such a security that would not allow the company to incur any fixed financial charges. 

Also, they wished to have the capital from such a source as should enable the company to keep the rate of return up all the time. 

To collect the capital, Sanjoli and her friends issued a prospectus. Through it, they told the public that in the coming years, the company expected to earn a big profit and that the price of its shares would be very high. 

As a result, the investors would be able to earn extra profit. 

In the prospectus, it was also said that the company would organise its meetings from time to time and that the investors would be invited to these meetings. 

They would have the right to cast their votes in these meetings. 

The company started earning more profit than what had been proposed to the investors. (5 Marks)

1. Identify the type of shares issued by ‘Trimurti Limited’.
2. Quoting the relevant lines, write about the four advantages to Trimurti Limited from the shares identified in para (i).

Q17. FSN Industries Limited manufactures heavy machines for small-scale enterprises in India. It enjoys excellent earnings with a sound capital structure position in the industry. 

Capital employed of the company consists of ₹ 50 crore as equity and ₹ 20 crore as long-term borrowings (debt). 

Inspired by the ‘Make in India’ campaign, which is directed to provide ease in doing business, it wishes to spread its business operations to overseas countries by raising ₹ 10 crore to install a new manufacturing unit in rural areas of Nagaland, where the rural women are to be trained under the ‘Skill India Mission’. (6 Marks)

1. As a financial advisor, you are asked to suggest which source of finance the company should choose to raise further funds. Explain the source.
2. State the reason for selecting the source of finance under part (i).
3. Differentiate between shares and debentures on the basis of:

• Nature
• Voting rights
• Redemption

The End

Do you want to practice more for class 11th's Chapter 7: Sources of Finance? Click here.

CBSE Class 11th Business Studies Test - t7a

Free Business Studies - Class 11th (CBSE) - Test - t7a - Sources of Business Finance

Dear class 11th students,

The time has come to make your concepts clear regarding “Chapter 7: Sources of Finance”.

Therefore, we have developed an exclusive test that students can solve and gain more knowledge about the topic.

Here are the quick details:

• Subject: Business Studies
• Class: 11th (CBSE)
• Chapter Name: Sources of Business Finance
• Marks: 40​

CBSE Class 11th Test

Q1. The unsecured source of borrowed fund which can be raised for a period of six months to three years is ______​ (1 Mark)

1. Public Deposits​
2. Preference Shares​
3. Debentures​
4. None of the above.​

Q2. Public Deposits are not suitable for new companies. (True/False)​ (1 Mark)

Q3. A company needs funds for funding Working capital requirement and Fixed Capital requirement. (True/False)​ (1 Mark)

Q4. Which of the following instruments is also known as hybrid security?​ (1 Mark)

1. Equity shares​
2. Debentures​
3. Public deposits​
4. Preference shares​

Q5. Preference shareholders get preference over equity shares for​ (1 Mark)

1. Payment of dividend​
2. Voting right​
3. Participation in management​
4. None of these​

Q6. Equity shareholders are also known as ______ owners.​ (1 Mark)

Q7. Name the kind of return on investment given to the investors shown in the given picture.​ (1 Mark)

1. Interest Paid on Bank Loan
2. Retained earnings​
3. Dividend​
4. Trade credit​

Q8. The capital of a company is divided into small units called ______.​ (1 Mark)

1. Shares​
2. Debentures​
3. Bonds
4. None of these​

Q9. Preference shareholders have ______ rights as to the redemption of capital at the time of winding up of the company.​ (1 Mark)

1. Normal​
2. Preferential​
3. No​
4. None of these​

Q10. Read the following statements carefully:​ (1 Mark)

In light of the given statements, choose the correct alternative from the following:​

1. Statement 1 is true and statement 2 is false.​
2. Statement 1 is false and statement 2 is true.​
3. Both statements 1 and 2 are true.​
4. Both statements 1 and 2 are false.​

• Statement 1: Public deposits are not issued against the security of assets of the company.​
• Statement 2: Public deposits are unsecured​

Q11. Libra Sales Private Limited owns the agency for different food products. This company sells the goods of different brands to retailers after buying them from several companies. The special characteristics of this company’s business are that it buys almost all its goods on a cash basis and sells on a credit basis. The retailers make payment to it about one month after. This is the very reason that the company often struggles with short-term finance. To overcome this problem, the company’s finance department held a meeting. The chairperson of the meeting asked the members to express their views on the solution of this problem. 

The first person said, “We should use such a source of finance that does not involve bureaucracy and legal hassles, and to obtain this, help from other companies can be obtained”. 

The second person’s opinion was  “When we sell goods on credit, why not make efforts to buy goods on credit too? Hence, to do so, pressure on the companies selling goods should be built up.”​

The chairperson of the meeting listened to the suggestions of all the people and, to make the final decision, asked them to be present in the meeting again after a week.​

Quoting the relevant lines, identify the source of finance indicated by the suggestions given by different people.​ (3 Marks)​

Q12. Differentiate between Owners’ funds and borrowed funds on the basis of​: (3 Marks)​

1. Investors
2. Control
3. Risk

Q13. What do you understand by ploughing back profits? (4 Marks)​

Q14. Akshit Ltd. is a manufacturing company.​ The company has issued equity and preference shares to meet its requirements.​

Other sources of finance have not been considered at all.​

This has resulted in payment of a larger amount of taxes to the government, as dividends on shares are not deducted from the income of the company for the purpose of tax calculation.​

1. State the source of finance that can give the benefit of tax savings.​
2. State any two merits. (4 Marks)​

Q15. Ratna Metals and Tubes Ltd. is a multi-location, multi-product company, manufacturing tubes and pipes in stainless steel/exotic material in wide size ranges, for a wide spectrum of applications.​It now wants to cater to the Asian market and has decided to invest in new hi-tech machines.​

Since the investment is large, the finance manager wants to raise borrowed funds through the cheapest long-term source of finance.​

On the basis of the given information about Ratna Metals & Tubes Ltd., answer the following questions: (5 Marks)

1. Identify and explain the source of finance to be used by the company to meet its funding requirements.​
2. State any three merits of the source of finance identified in part (i).

Q16. After completing her studies, Neetu decided to start her own business of handmade chocolates.​

After analysing all the pros and cons, she came to the conclusion that the total funds required are ₹12,00,000.​

She had ₹2,00,000 in her savings account.​ As these funds were insufficient to start the business, she approached Axis Bank for a loan of ₹10,00,000.​ The loan was approved within a month.​

On the basis of the given case, answer the following questions: (5 Marks)

1. Categorise the two types of funds on the basis of ownership.​
2. Out of the two sources of funds, which one is a permanent source of finance?​
3. Which source of funds requires a legal obligation to pay interest at a fixed rate at regular intervals? ​

Q17. ‘Balaji Traders Ltd.’ is a company that deals in the wholesale business of rice.​ Its Financial Manager, Mr. Charanjeet Chatterji, arranges unsecured short-term finance for the company through a commission agent.​

The rate of interest to be paid on this loan is more than the bank’s rate of interest.​

For Mr. Chatterji, one of the great advantages of this finance was that its source was far away from Bureaucratic and Legal Hassles.​

Identify this source of finance and write about any five of its characteristics. (6 Marks)

The End

Do you want to practice more for Chapter 7: Sources of Finance? Click here.

CBSE Class 12th Business Studies Worksheet - W7a

Free Business Studies - Class 12th (CBSE) - Worksheet - W7a - Directing

CBSE Class 12th is like a huddle race that every student wants to win.

However, only those pupils can win it who will practice it every day and with concentration.

For that matter, we are here to assist you.

So, are you feeling anxious about your CBSE class 12th board exams, or do you want to practice Business Studies case studies?

Well, you have visited the correct platform.

On this page, you can find several case studies (short and long) for practice and solve them. The first section is for short case studies, followed by long case studies.

Here are the quick details:

• Subject: Business Studies
• Class: 12th (CBSE)
• Chapter Name: Directing

Below is the content pattern:

• Short Case Studies
• Long Case Studies

CBSE Business Studies Case Studies for Chapter 7: Directing

Short Case Studies

Case Study 1

Classic Rocks is a pioneering advertisement-making company. Mr. Anuj is a dynamic manager who has recently joined the organisation. He receives complete support from top management. There is proper infrastructure, a planning mechanism, and subordinate support. He gives orders and ensures that the actual working of a new unit from the 1st of May. His schedule becomes very hectic.

The demanding work involves him almost throughout the day. He is busy giving meetings, talking to his subordinates or superiors, etc., throughout the day.

One day, he meets Mr. Vijay, who is working at the lower level management, though he himself is a part of the middle level management. He finds that even Vijay is involved in communicating and supervising his employees throughout the year, though he works at the lower-level management.

Similar is the case with his seniors working at the higher-level management. He feels relaxed after knowing this and continues his work with even more dedication.

1. Which function of management is highlighted in the above case?
2. Identify any two features of this function of management highlighted in the above case.

Case Study 2

Manav wanted to bring some changes to his company. One of those changes was the establishment of new software in the organisation. The software has the capability to judge the performance of all the employees. Thus, it makes them more accountable.

However, recently it has been observed that the employees disliked Manav’s decision. After a lot of thinking, one fine day, he decided to call a meeting to address their needs and resistance.

He told them that with the installation of the new software, their needs would be fulfilled, and the best-performing employee would be rewarded. Thus, he was able to bring down the resistance level of the employees.

1. Which concept of directing is applied by Manav in the above case?
2. Which one of the benefits of this concept has been highlighted in the above case?

Case Study 3

A company has a number of employees who don’t harbour good feelings for the organisation. They don’t care whether the organisation is progressing or not.

Some of them even have a negative attitude towards the management. When a local newspaper wanted to find out the reason for the declining productivity of the organisation, it was found that it was mainly due to the lack of any incentives in the organisation.

Employees were not awarded for increasing the output of the organisation.

1. What do you think needs to be done in such circumstances?
2. What could be the positive outcome of your step?

Case Study 4

Identify and state the Maslow’s needs applicable in the following cases of organisational set-up:

1. Virendra works in an organisation. He has been part of the organisation for the last 20 years. During all these years, in spite of his best performance in the organisation, he hasn’t yet reached the post of Vice-President.
2. Vandana works in a software firm. She goes to the office, which is situated at a distance of 20 km from her house. Her husband earns very well and is a pilot with a leading Airline. Though she belongs to a good-earning family yet she has decided to keep on going to her job, which she feels helps her gain acceptance in her social circle.

Case Study 5

Shyam Malik, the CEO of Care Hospitals, a leading chain of hospitals, decided to reward the good work of the doctors of this organisation. For this, he instituted two running trophies.

A Healthcare Achievers’ Trophy to acknowledge and appreciate the tireless efforts of the doctors who rendered selfless services to the patients, and another Beti Bachao Trophy to recognise the outstanding work done by the doctors in saving the girl child. He decided that all doctors must work in rural areas for atleast six months to improve health services.

1. Identify the incentive provided by Care Hospitals to its doctors through running trophies.
2. Which need of the doctors will be satisfied through the incentive identified in (i)? State.

Case Study 6

Mrs. Rani is working as the Human Resource Consultant in a firm that manufactures cosmetics. The company is facing a problem of high employee turnover.

The CEO of the company has invited suggestions from her for retaining the talented employees and reducing employee turnover.

Mrs. Rani recommends that the good employees be rewarded in a way that it creates a feeling of ownership among the employees and at the same time makes them contribute towards the growth of the organisation.

1. Identify the incentive and explain its type, which has been suggested by Mrs. Rani to the CEO of the company.
2. Also explain any two incentives of the same type.

Case Study 7

Manoj, a highly dedicated sales manager at Stellar Enterprises, consistently worked toward his sales targets with strategic planning and an enthusiastic approach. Recognised for his commitment and motivation, Manoj exceeded expectations by achieving his sales target one month before the deadline.

This impressive accomplishment not only highlighted his dedication but also inspired his team and motivated the organisation to achieve higher benchmarks. 

To honour his achievement, the company’s CEO decided to reward his diligence and hard work. Manoj’s success story was widely publicised as an example of dedication and hard work. 

Additionally, he was awarded with monetary incentives and recognition in the form of a ‘Best Performance’ certificate, which boosted his morale and reinforced the company’s culture of productivity and excellence.

1. Name the type of incentive provided to Manoj and identify the type of incentive.
2. List two other incentives of the type identified in (i).

Case Study 8

When Bhanupriya joined as the technical head of Logic Lotus computers, she was keen on increasing the productivity and profitability of the company. However, she observed that the employees were demotivated as no attention was paid to their work. Also, the workers were given little freedom to make decisions.

Bhanupriya decided to stimulate the employees by giving them T-shirts with their names on them. She also decided to include workers in work committees. This helped in improving the performance of the workers.

1. On the basis of the understanding of Maslow’s Need Hierarchy Theory of motivation, identify the human need that Bhanupriya has recognised in order to make the subordinates act towards the achievement of organisational goals.
2. Identify and explain two incentives that have been provided by Bhanupriya to improve the performance of the employees.

Case Study 9

Avni Enterprises organised a function for the employees. There were managers, supervisors, foremen, and others. Some of the employees were engaged in having conversations related to personal experiences, while others were discussing company experiences.

One of the supervisors wanted to give a suggestion to the manager of his department. But he could not do it because of official fear. In the function, the supervisor got an opportunity to give his opinion, which was appreciated by the manager. As a result, an appreciation letter was given to the supervisor. This motivated other employees as well.

1. Name the motivational method applied here.
2. List two more motivational methods of the same category.

Case Study 10

A reputed hostel, Gyan Pradan, provides medical aid and free education to the children of its employees. Which incentive is being highlighted here? State its category and name any two more incentives of the same category.

Case Study 11

In a renowned hospital with 100 beds, the CEO of the hospital congratulates the exceptionally performing employees by meeting in person. Sometimes the name of the employee of the month is displayed on the notice board at the main entrance along with his/her photograph.

Recently, the company went a step ahead and distributed T-shirts to the employees who have been among the top 3 performers.

On Employee Day every year, employees who contribute a lot are either rewarded or awarded.

1. In the above case, which type of incentive has been used by the company to improve employee performance?
2. Which type of incentive is this? Also, give the definition of this type of incentive.

Case Study 12

A popular magazine published an article on job cuts across the globe. It stated that due to reasons like cost-cutting, market conditions, and technological advancement, almost two lakh people in the IT sector have lost their jobs during the last year.

This was read and discussed by employees of iTechwire Ltd., a software development company in India. It created a lot of unrest among them, and their morale came down. The productivity of the employees started declining. The chief executive officer of the company observed the insecurity among the staff about their jobs.

Understanding his role as the leader, he wrote an email to all the employees assuring them about the stability of their future income and job.

This communication gave the employees psychological and emotional satisfaction and showed positive results in terms of their performance. The chief executive officer was able to make the subordinates act in a desired manner and achieve the organisational goals, without giving them any monetary rewards.

1. Identify and explain the incentive used by the chief executive officer to improve the performance of the employees.
2. State the need on the basis of Maslow’s Need Hierarchy of Needs Theory, which was satisfied in the above case.

Case Study 13

Ravi, the operations manager at Jindal Tea Company in Assam, is known for his firm, directive approach. He gives clear orders to his team without involving them in decision-making, expecting compliance to maintain efficiency and meet production targets.

Ravi believes that consulting with his subordinates may slow down operations and prefers to make decisions independently to ensure swift execution and productivity.

1. Identify and state the leadership style adopted by Ravi.
2. When can this style be useful for a manager? State.

Case Study 14

Pramod was a supervisor at the ‘Annapurna Atta’ factory. The factory was producing 200 quintals of atta every day. 

His main task was to ensure that the work went on smoothly and there was no interruption in the production process. 

For this, he would give orders only after consulting his subordinates and work out the policies with the consensus of the group. Identify and describe the leadership style being adopted by Pramod.

Case Study 15

In an organisation, one of the departmental managers is inflexible and once he makes a decision, he does not like to be contradicted. 

As a result, employees always feel they are under stress, and they take the least initiative and fear expressing their opinions and problems to the manager.

What is the problem with the way authority is being used by the manager?

Case Study 16

Balvinder is the production manager of ‘Pramod Tea Company’ in Guwahati. He gives orders to his subordinates and expects that they obey those orders. He does not consult them nor encourage them to participate in decision-making.

1. Identify and state the leadership style adopted by Balvinder.
2. When can this style be effectively used by a manager? State.

Case Study 17

Identify and state the type of leadership displayed in the following cases:

1. Mr. Umang Patel is the CEO of a leading software company. He is least concerned about the managerial development of his subordinates. The communication follows only from top to bottom in his organisation.
2. Ravish is the head of the marketing department of his company. Recently, he organised a series of meetings to get the suggestions of his team members on various issues. His subordinates appreciate his habit of consulting his team before he makes any major decision.

Case Study 18

Radhika started a business of supplying high-class facial kits to beauty parlours in various cities of the country. Initially, the business was doing well, and her products were popular because of their high quality. 

Radhika faced tough times when difficulties in operations started developing in Kagpur city, where her products failed to gain a strong market presence.

To understand the cause, she appointed a qualified marketing manager.

The marketing manager discovered that there was no proper exchange of facts, ideas, etc. between the branch office at Kagpur city and the employees at different locations of Kagpur. 

Vicky, who was in charge and responsible for overseeing all parlours in Kagpur, was unable to effectively foster a common understanding of the product among the employees. 

As a result, the employees did not grasp the key benefits and features of the high-class facial kits.

In turn, the employees were not able to convince potential clients about the product’s value.

1. Identify the concept discussed in the above case.
2. The concept identified in (i) above can be defined as a process having various elements. State the first five elements of this process.

Case Study 19

Rajesh and Suresh are working in the same company but in different departments. They often meet during coffee breaks to catch up on the latest news. One day, Rajesh tells Suresh that there is a rumor going around about the company planning to restructure, which might lead to some job cuts.

1. Which type of communication is this?
2. State any four features of the type of communication identified in (i).

Case Study 20

Neeraj, a Sales Representative of ‘Ornida Ltd.’ has changed about 80 jobs in the last year. He is a hard-working person, but is not able to attain targets. Many of the customers were due to his inadequate vocabulary and omission of needed words.

Sometimes, he uses the wrong words, because of which the intended meaning is not conveyed.
All this created a misunderstanding between him and his clients.

1. Identify the communication barrier discussed above and state the category of this communication barrier.
2. Explain any other communication barrier of the same category.

Case Study 21

Mr. Fernandes is the owner of Unibie Enterprises, carrying on the business of manufacturing electrical appliances.

There is a lot of discontentment in the organisation, and targets are not being met. He asked his son, Michel, who has recently completed his MBA, to find out the reason. 

Michel found that all decision-making of the enterprise was done by the father. Moreover, his father did not have confidence in the capacity of the employees. Thus, the employees were not able to contribute.

1. Identify any two communication barriers because of which ‘Unibie Enterprise’ was not able to achieve its target.
2. State one more barrier of each of the types identified in (i) above.

Case Study 22

Rajeev recently joined as the managing director of Tivori Ltd., an apparel designing company. He observed that the company had a number of experienced fashion designers on its payroll. They regularly offered useful suggestions that were neither appreciated nor rewarded by the company.

Recently, the company outsourced its services to some renowned fashion designers and paid them a good amount for their services. Because of this, the employees felt disheartened and stopped giving useful suggestions.

1. Identify the communication barrier discussed above and state the category of this communication barrier.
2. Explain any other communication barrier of the same category.

Case Study 23

Rajeev started working in an MNC. He was very devoted to his job. However, whenever he used to communicate with his subordinates, they were unable to understand him. 

The reason behind this problem was that he himself was unsure about the concept he used to explain to the subordinates. 

This problem was taking place on a daily basis. One day, he got an order from his senior to fly to Goa for a project meeting. 

There, he started explaining his concept to others, but there were many aspects that the team of Goa wanted to explain to him.

He was more concerned about speaking than listening. This resulted in the failure of the meeting, which was very important for the company.

In this hopelessness, he forgot to review the instructions he had given to his subordinates about a very important programme to be organised in his hometown.

What measures would you suggest to Rajeev so that he could improve his communication effectiveness?

Long Case Studies

Case Study 24

Sunrise Manufacturing Pvt. Ltd., a medium-sized company based in Pune, has been a leading player in the automobile parts industry for over two decades. 

Founded by Mr. Raghav Mehra, the company started with a modest production unit and a team of 50 employees. 

Over the years, through hard work and dedication, Sunrise Manufacturing expanded its operations, now employing over 500 workers and supplying automotive components to various car companies in India.

In 2022, Sunrise Manufacturing secured a large contract with one of the top automobile manufacturers in the country. 

This contract required the company to increase its production capacity significantly within a short period. To meet the growing demand, the management decided to install new machinery and hire additional workers. 

While the expansion was a positive development, it also brought challenges in managing the larger workforce and ensuring that new employees were integrated without compromising quality.

Mr. Mehra, the managing director, was aware that simply increasing the workforce and upgrading technology would not be sufficient to meet the new targets. 

He understood that the company needed strong leadership and effective communication to guide the employees effectively.

Mr. Mehra appointed Ms. Priya Kapoor, a seasoned manager with a strong track record in leadership, as the Head of Operations. 

Her primary responsibility was to oversee the expansion and ensure that the production targets were achieved on time.

Upon taking charge, Ms. Kapoor noticed that the rapid expansion had led to confusion among the workers.

The employees were unsure about their new roles, responsibilities and how the new machinery worked.

There was a lack of coordination among different departments, and the production process was becoming inefficient.

Recognising the urgency of the situation, Ms. Kapoor decided to take immediate action.

She started by organising a series of meetings with department heads to communicate the company’s goals and the importance of each department’s role in achieving these goals.

She then held training sessions for the workers to familiarise them with the new machinery and production process. During these sessions, Ms. Kapoor encouraged open communication, allowing workers to express their concerns and ask questions. 

This approach helped in building trust and ensuring that everyone was on the same page. To further enhance productivity, Ms. Kapoor introduced a system of regular feedback and performance reviews.

She set clear expectations for each team and provided guidance on how to meet these expectations.
Ms. Kapoor also recognised and rewarded employees who performed exceptionally well, motivating others to follow suit. 

Under her leadership, the workers began to feel more confident and engaged in their roles, leading to improved coordination and a significant increase in production efficiency.

As the company’s production ramped up, Ms. Kapoor continued to monitor the progress closely.

She maintained regular communication with the teams, addressing any issues that arose and providing the necessary support to keep operations running smoothly.

Her ability to direct the workforce effectively played a crucial role in Sunrise Manufacturing’s ability to meet the demands of the new contract without any major disruptions.

By the end of the year, Sunrise Manufacturing had successfully fulfilled the contract, exceeding the client’s expectations in terms of both quality and delivery time. 

The company’s success was largely attributed to Ms. Kapoor’s leadership and her ability to guide the employees toward achieving common goals. 

The experience also reinforced the importance of effective leadership and communication in managing a large workforce and achieving organisational objectives.

1. Identify the management function.
2. Identify the management function that Ms. Priya Kapoor primarily utilised to address the challenges at Sunrise Manufacturing.
3. Discuss the importance of the management function identified in the case.

Case Study 25

Riya Sharma was the Operations Manager at “FitGear Sportswear,” a company known for its high-quality athletic apparel. The company was recognised for its dynamic work culture, where employees felt motivated and aligned with the company’s goals.

Riya Sharma ensured that every employee clearly understood their role and responsibilities, creating a structured work environment.

To maintain high levels of productivity, Riya frequently communicated the company’s vision and objectives to her team, making sure that everyone stayed aligned. 

She was also known for providing one-on-one feedback to her members, praising their accomplishments and guiding them to improve when necessary.

Riya believed that encouraging her employees and recognising their achievements not only boosted their morale but also enhanced their commitment to the company’s objectives.

Moreover, Riya delegated tasks efficiently, ensuring that work was distributed based on individual strengths and capabilities. This allowed the team to work cohesively and achieve their targets effectively. 

As a result, FitGear Sportswear consistently delivered high-quality products and maintained a strong market position.

However, during a crucial project, one of the team leaders faced difficulties in executing the assigned tasks. Riya provided guidance and additional training to help the team leader overcome the challenges.

This support not only ensured the completion of the project but also strengthened the team leader’s confidence and competence.

By identifying from the above case, identify and explain the three elements of the directing function of management discussed in the case.

Case Study 26

Smita had been working as an assistant manager with ‘Johnson Enterprises’ for the last ten years. She was very popular amongst her colleagues because of her commitment and dedication to the work. 

When the manager senior to her retired, all her colleagues thought that now Smita would be promoted.

But to everyone’s surprise, the vacant post was filled by an outsider, Mrs. Rita. Smita felt demoralised, and her performance started declining. She would often be absent herself and could not meet her targets.

Mrs. Rita was a good leader who would not only instruct her subordinates but also guide and inspire them. Her subordinates would trust her and feel that their performance made her happy. 

Smita’s behaviour made it obvious that though she would raise the slogan of organisations and would speak in meetings, her behaviour was not in line with the thinking and behaviour of the high-level joint management committee.

Smita was now punctual in the office, and her performance started improving.

1. Identify and state the function of management being performed by Rita.
2. Name the element of the above function of management which helped Rita to improve Smita’s behaviour.
3. State any four features of the element identified in (ii) above.

Case Study 27

Inaya Ltd. is a multinational technology company focusing on artificial intelligence, online advertising, and search engine technology. 

The company is generating good profits and is aware of the well-being of its staff. The company offers benefits like allowances, medical aid, and insurance to employees. 

Regular exercise is promoted, and the manager/lead regularly conducts team-building sessions in this regard.

It frequently promotes employees to senior positions and makes various types of incentives available to them.

Under a special incentive scheme, the employees are offered shares of Inaya Ltd at a price that is lower than the market price. Each year, the company keeps aside funds to pay 10% of the basic salary as a bonus to its employees. 

No overtime wages would be provided for working at Inaya Ltd. to extend. Explain four incentives being provided by Inaya Ltd. to motivate their employees for better performance.

Case Study 28

Ramesh is a manager in a company engaged in the production of electrical appliances. He has been holding this position for a long time. 

He is liked by his subordinates as he encourages them and takes an interest in their tasks and important decisions. 

Being an experienced manager, he believes that money is not sufficient to motivate the employees.
Therefore, he uses the following non-financial incentives to motivate the employees.

• Ramesh has set up a suggestion box system in order to involve his subordinates in decision-making. This has boosted the confidence of employees to participate in issues related to the organisation.
• Ramesh gives freedom or more autonomy to the employees working under him, with an assurance of greater responsibility from them. Since workers have taken part in the process of decision-making, they feel that their job is important.
• Ramesh makes arrangements at the workplace for employees to make their work more meaningful. The outcome has been an increase in motivation for the workers at the place of work itself.
• Ramesh often makes arrangements for appropriate skill development programmes. He has chalked out a sound promotion policy to give more growth opportunities to employees.

1. Identify and explain the leadership style followed by Ramesh.
2. State the meaning of leadership.
3. Also identify and explain the various non-financial incentives used by Ramesh to motivate the employees.

Case Study 29

In an organisation, all the employees take things easy and are lazy in approaching anyone for minor queries and problems.

This has resulted in everyone talking to each other, thus resulting in inefficiency in the office. It has also resulted in the absence of secrecy and confidential information being leaked.

Which system do you think the manager should adopt to improve communication?

Case Study 30

Rajat Verma was the Marketing Head of a leading FMCG company, ‘FreshPure Products’. The company was known for its wide range of organic and healthy food items.

Rajat was a skilled communicator who ensured that his team was well-informed about the latest market trends and customer preferences. He conducted regular meetings with his team to discuss sales strategies and new product launches.

During one of the meetings, Rajat introduced a new product that required immediate attention and a strategic marketing plan. 

However, during the meeting, several team members were distracted by their phones and didn’t pay full attention to Rajat’s presentation. 

As a result, the team evaluated the strategy without fully understanding the details, which led to misunderstandings. 

When Rajat followed up on the actions discussed, he discovered that employees had different interpretations of the plan, resulting in a poorly coordinated marketing campaign.

Additionally, many subordinates did not actively participate in the discussion as they felt that their suggestions wouldn’t be valued or recognised, leading to a lack of initiative to communicate or offer suggestions. 

Employees may not take the initiative to communicate in the absence of proper incentives or motivation.

Meanwhile, a competitor, ‘NutriFoods’, launched a similar product with a highly effective marketing strategy and captured a significant market share. 

FreshPure Products struggled to communicate the product benefits properly, leading to a drop in sales and loss of market position.

Quoting lines from the above paragraph, identify and explain three barriers to communication and state the category.

The End