ExamSpark CUET UG
Mock Test 07 Performance Solutions
Subject: Business Studies
Q1. "Aura Cosmetics," a multinational company, has different business heads for its Skincare, Haircare, and Fragrance divisions. Each head is responsible for the profit and loss of their respective division and has authority over its production, marketing, and finance functions. However, this has led to increased overall administrative costs and conflicts between divisional heads over resource allocation. Which feature of the organisational structure adopted by Aura Cosmetics is highlighted by the problem of 'conflicts'?
Correct Answer: Option A (Promotes product specialisation)
Explanation: Detailed explanation will be updated shortly.
Q2. A manager at "Zenith Logistics" noticed that the loading time for trucks was consistently exceeding the standard time by 15%. Instead of penalising the entire team, he analysed the process and found that two specific workers were using an outdated method. He arranged for their specific re-training. This approach by the manager is a classic application of:
Correct Answer: Option A (Critical Point Control)
Explanation: Detailed explanation will be updated shortly.
Q3. Read the following statements:
Assertion (A): In the long run, an organisation that fails to adapt to its environment is destined for obsolescence.
Reason (R): The business environment is a complex and dynamic phenomenon that presents both opportunities and threats.
In the context of the above statements, which of the following is correct?
Correct Answer: Option A (: In the long run, an organisation that fails to adapt to its environment is destined for obsolescence.
Reason (R): The business environment is a complex and dynamic phenomenon that presents both opportunities and threats.
In the context of the above statements, which of the following is correct?)
Explanation: Detailed explanation will be updated shortly.
Q4. "InnovateNext," a tech startup, needs to raise a significant amount of capital for a new AI research project with a high-risk, high-return profile. The project is not expected to generate profits for at least five years. The founders are keen on retaining full control of the company. Which source of finance would be LEAST suitable for them?
Correct Answer: Option A (Venture Capital)
Explanation: Detailed explanation will be updated shortly.
Q5. A marketing manager for a new brand of organic protein bars is deciding on the distribution strategy. The product requires specialised storage (temperature control) and detailed explanation to retailers. To maintain brand image and ensure proper handling, the manager decides to use a limited number of intermediaries in each geographic area. This is an example of:
Correct Answer: Option A (Intensive Distribution)
Explanation: Detailed explanation will be updated shortly.
Q6. A worker in a factory is instructed by the Production Manager to maximise output speed, while the Quality Control Inspector simultaneously instructs him to slow down to ensure zero defects. The worker is confused about whose instruction to prioritise. This situation is a direct violation of which of Fayol's principles of management?
Correct Answer: Option A (Unity of Direction)
Explanation: Detailed explanation will be updated shortly.
Q7. "Pinnacle Industries" has a policy that all purchase orders above ₹50,000 must be approved by the Department Head, while orders above ₹5,00,000 require the CFO's signature. This is a specific, chronological way of performing a task. This is best described as a:
Correct Answer: Option A (Policy)
Explanation: Detailed explanation will be updated shortly.
Q8. An FMCG company is launching a new dishwashing liquid. They set the initial price very low to capture a large market share quickly and create brand preference. This pricing strategy is known as:
Correct Answer: Option A (Price Skimming)
Explanation: Detailed explanation will be updated shortly.
Q9. A company's Earnings Before Interest and Tax (EBIT) is ₹10,00,000. It has 10% Debentures of ₹30,00,000 and the tax rate is 30%. The company is considering a new project that will increase the EBIT to ₹15,00,000. What will be the impact on the Earnings Per Share (EPS), assuming the number of shares remains constant?
Correct Answer: Option A (EPS will decrease due to higher tax liability.)
Explanation: Detailed explanation will be updated shortly.
Q10. A consumer, Mr. Sharma, bought a smartphone online. The website claimed it had a 48MP camera, but he discovered it was only 12MP. The company's customer service has not responded to his complaints for over a month. The company's failure to respond violates which of the consumer's rights?
Correct Answer: Option A (Right to Safety)
Explanation: Detailed explanation will be updated shortly.
Q11. A supervisor at a call centre, Priya, is known for her friendly and supportive nature. She often organizes team lunches and encourages open communication, which has resulted in high team morale and low employee turnover. Which element of directing is she demonstrating most effectively?
Correct Answer: Option A (Supervision)
Explanation: Detailed explanation will be updated shortly.
Q12. The process of staffing involves several sequential steps. Identify the correct sequence from the following options:
Correct Answer: Option A (Recruitment -> Selection -> Placement & Orientation -> Training & Development)
Explanation: Detailed explanation will be updated shortly.
Q13. A company director uses knowledge about an upcoming merger, which is not yet public, to buy a large number of his company's shares, expecting the price to rise after the announcement. This act is prohibited by SEBI under its:
Correct Answer: Option A (Regulatory Function)
Explanation: Detailed explanation will be updated shortly.
Q14. A manager delegates a task to a subordinate but constantly interferes, micromanages the process, and does not give the subordinate the necessary freedom to execute the task. Which principle of delegation is being violated here?
Correct Answer: Option A (Principle of Absoluteness of Accountability)
Explanation: Detailed explanation will be updated shortly.
Q15. Match the marketing philosophies in Column I with their primary focus in Column II.
| Column I (Philosophy) | Column II (Focus) |
| :--- | :--- |
| (i) Production Concept | (a) Existing product improvement |
| (ii) Product Concept | (b) Customer needs and satisfaction |
| (iii) Marketing Concept | (c) Availability and affordability |
Correct Answer: Option A ((i)-(c), (ii)-(a), (iii)-(b))
Explanation: Detailed explanation will be updated shortly.
Q16. The decision of a company to invest ₹500 crores in setting up a new manufacturing plant in a Tier-II city is a type of:
Correct Answer: Option A (Financing Decision)
Explanation: Detailed explanation will be updated shortly.
Q17. The widespread shift of consumers towards "fast fashion," driven by social media trends and the desire for new clothing styles at low prices, represents a change in which dimension of the business environment?
Correct Answer: Option A (Economic Environment)
Explanation: Detailed explanation will be updated shortly.
Q18. Which of the following is NOT a characteristic of management as a profession?
Correct Answer: Option A (Well-defined body of knowledge)
Explanation: Detailed explanation will be updated shortly.
Q19. A newly recruited finance executive is being trained by being placed under the guidance of a master worker for a prolonged period. The trainee learns by observing and performing tasks under the expert's supervision. This method of training is known as:
Correct Answer: Option A (Internship Training)
Explanation: Detailed explanation will be updated shortly.
Q20. In a communication process, the marketing team of a car company designs a brochure with technical specifications and complex jargon. Many potential customers find it difficult to understand the message. The complex jargon acts as which type of communication barrier?
Correct Answer: Option A (Semantic Barrier)
Explanation: Detailed explanation will be updated shortly.