UGC NET Paper 2: Management July 2018 (Previous Year Paper)

The correct answer is (a) - (iii), (b) - (i), (c) - (iv), (d) - (ii). 

Key PointsInventory Control:

• Inventory control refers to the activity of checking stock at a shop.
• It requires maintaining the desired levels of inventories in the best economic interest of an entity. The objective is to keep the cost low while meeting consumer demand to maximize profits.
• In simpler words, inventory control involves monitoring stock usage, movement, and storage in a business.

Important Points

Hence, the correct answer is (a) - (iii), (b) - (i), (c) - (iv), (d) - (ii).

The correct answer is Statement (I) is correct but (II) and (III) are not correct.

Critical Path Method (CPM):

• The Critical Path Method (CPM) is a network analysis approach.
• It finds out which sequence of activities has the least measure of scheduling resilience by which it predicts the duration of the project.
• It is based on the estimation of the standard time needed for the execution of an activity.

Key Points

• The critical path is the longest path time-wise which can be determined from the forward path method only.
• The critical path is the longest path through the network and time along this path gives the project duration.
• The critical path joins those activities which are critical.
• Thus Statement I is correct.
• The critical path (or paths) is the longest path (in time) from Start to Finish; it indicates the minimum time necessary to complete the entire project.
• The duration of a project is the same as the duration of its critical path.
• Thus Statement II is not correct.
• The early start time refers to the time at which all activities start as early as possible.
• The early finish time refers to the time at which all activities finish as early as possible.
• The Earliest start and finish times of activity are based on the condition that every activity will be started and finished as early as possible.
• Thus Statement III is not correct.

Hence, the correct answer is Statement (I) is correct but (II) and (III) are not correct.

The correct answer is Both Statements (I) and (II) are not correct.

Quality Costs:

• Cost of quality (COQ) is defined as a methodology that allows an organization to determine the extent to which its resources are used for activities that prevent poor quality, that appraise the quality of the organization’s products or services, and that result from internal and external failures.
• Having such information allows an organization to determine the potential savings to be gained by implementing process improvements.

Key Points Internal failure costs: 

Internal failure costs are incurred to remedy defects discovered before the product or service is delivered to the customer. These costs occur when the results of work fail to reach design quality standards and are detected before they are transferred to the customer. They could include:

• Waste: Performance of unnecessary work or holding of stock as a result of errors, poor organization, or communication
• Scrap: Defective product or material that cannot be repaired, used, or sold
• Rework or rectification: Correction of defective material or errors
• Failure analysis: Activity required to establish the causes of internal product or service failure

External failure costs:

External failure costs are incurred to remedy defects discovered by customers. These costs occur when products or services that fail to reach design quality standards are not detected until after transfer to the customer. They could include:

• Repairs and servicing: Of both returned products and those in the field
• Warranty claims: Failed products that are replaced or services that are re-performed under a guarantee
• Complaints: All work and costs associated with handling and servicing customers’ complaints
• Returns: Handling and investigation of rejected or recalled products, including transport costs

Important Points

• Internal failure costs are incurred before the delivery of products while external failure costs are generated after the dispatch of products to customers.

Hence, the correct answer is Both Statements (I) and (II) are not correct.

The correct answer is Statement (I) and (III) are not correct but Statement (II) is correct.

Key Points

Method Analysis:

• Methods analysis is the study of tasks and how they are performed.
• Methods analysis can be used where job design represents the structure of the job.
• It is model which guides the performance of operational activities.
• It involves the detailed process of doing a particular job.
• Methods analysis is used by a company while developing new products and services and also for improving the efficiency and effectiveness of the methods which are currently in use.
• Method analysis studies a job as part of different processes.
• Thus Statement I is not correct.

Principles of motion economy: 

• The principles of motion economy form a set of rules and suggestions to improve manual work in manufacturing and reduce fatigue and unnecessary movements by the worker, which can lead to a reduction in work-related trauma.
• The principles of motion economy are grouped under three headings: Use of the human body, Arrangements of the workplace, and Design of tools and equipment.
• It is necessary for a productivity analyst to know the laws of motion economy that are useful in both workshops and offices since they cannot develop an effective new method without such knowledge.
• Thus Statement II is correct.

Work Sampling:

• Work sampling is a method in which a large number of instantaneous observations are made at random time intervals over a period of time or a group of machines, workers, or processes/operations.
• Each observation records what is happening at that instant and the percentage of observations recorded for a particular activity or delay/idleness is a measure of the percentage of time during which that activity or delay/idleness occurs.
• Thus statement III is also not correct.

Hence, Statement (I) and (III) are not correct but Statement (II) is correct.

The correct answer is Toyota Manufacturing system. 

Key Points 

 Just in Time:

• `Just-in-time' is a management philosophy and not a technique.
• It originally referred to the production of goods to meet customer demand exactly, in time, quality, and quantity, whether the `customer' is the final purchaser of the product or another process further along the production line.
• It has now come to mean producing with minimum waste.
• "Waste" is taken in its most general sense and includes time and resources as well as materials.
• JIT originated in Japan.
• Its introduction as a recognized technique/philosophy/way of working is generally associated with the Toyota motor company, JIT being initially known as the "Toyota Production System" or "Toyota Manufacturing system".

Additional Information Elements of JIT include:

• Continuous improvement.
• Eliminating waste.
• Good housekeeping - workplace cleanliness and organization.
• Set-up time reduction - increases flexibility and allows smaller batches. The ideal batch size is 1 item. Multi-process handling - a multi-skilled workforce has greater productivity, flexibility, and job satisfaction.
• Leveled / mixed production - to smooth the flow of products through the factory.
• Kanban - simple tools to `pull' products and components through the process.
• Jidoka (Autonomation) - providing machines with the autonomous capability to use judgment, so workers can do more useful things than standing watching them work.
• Andon (trouble lights) - to signal problems to initiate corrective action.

Hence, ‘Just In Time’ was originally developed in the 1970s by a Japanese company and was initially known as the Toyota Manufacturing system.

The correct answer is (a) - (iii), (b) - (i), (c) - (iv), (d) - (ii). 

Important Points 

Hence, the correct answer is (a) - (iii), (b) - (i), (c) - (iv), (d) - (ii).

The correct answer is Statement (I) is correct but (II) is not correct.

Divisional organizational structure:

• A divisional organizational structure is a system in which a company segments its employees based on products or markets, as opposed to their job roles.
• This is most useful for larger companies that benefit from organizing their workforce into relatively independent groups.

Key Points Businesses using a divisional structure may have one or more of the following characteristics:

• Selling a wide range of customer-facing product lines
• Offering both businesses-to-customer and business-to-business services
• Advertising to a wide variety of demographics
• Marketing their brand in different geographic locations
• Serving major clients who need individualized attention

Important Points

• White goods refer to heavy consumer durables or large home appliances, which were traditionally available only in white.
• A company manufacturing Televisions, Refrigerators, Air-conditioners, Washing machines, etc. uses different productive resources and is at the threshold of growth, requiring more employees.
• These companies use a divisional structure of the organization.
• Thus Statement I is correct.
• Pepsi and Coke have bottling plants scattered all over the country which caters to different regions mainly for reducing overall transportation costs and the lead time for supplying goods in the markets.
• Thus Statement II is not correct.

Hence, the correct answer is Statement (I) is correct but (II) is not correct.

The correct answer is (a) and (d) only. 

• Oligopoly Market is a system of Markets where there is more than one Vendor (or a firm) for the trading of a particular good but there are very few Vendors.
• This is imperfect competition as the decision of one Vendor affects the decision of others in the Market, although the competition is very limited.
• The main characteristic of this type of Market is the interdependence of the Vendors that urge them to collaborate and compete with each other to control the Market, affecting the demand and supply based on the prices.

Key Points

• Collusion model: In order to avoid uncertainty arising out of interdependence and to avoid price wars and cutthroat competition, firms working under oligopolistic conditions often enter into agreement regard­ing a uniform price-output policy to be pursued by them. This is known as the collusion model.
• Price Leadership model: Under price leadership, one firm sets the price and others follow it. The one who sets the price is a price leader and the others who follow it are its followers. Price cannot vary from firm to firm under this model.

Additional Information

• Cournot's Model: In a Cournot equilibrium, the price-cost margin of each firm is that firm's market share divided by the elasticity of demand. Here the price of each firm depends on its market share and varies from firm to firm.
• Kinked Demand Model: In an oligopolistic market, the kinked demand curve hypothesis states that the firm faces a demand curve with a kink at the prevailing price level. This means that the response to a price increase is less than the response to a price decrease.

Thus Under Collusion model and Price leadership model the oligopolists will not vary the prices of their products despite differences in cost of production.

The correct answer is (A) and (R) both are correct but (R) is not the right explanation of (A).

• Pricing is a process of fixing the value that a manufacturer will receive in the exchange of services and goods.
• The pricing method is exercised to adjust the cost of the producer’s offerings suitable to both the manufacturer and the customer.

Key Points

• The penetration pricing strategy involves offering a new product or service at a low initial price to gain customers' attention.
• The goal is to aggressively get customers in the door with low prices and gain market share.
• Low initial price/penetration pricing is regarded as the principal means for entering into the mass market for some new products.
• Thus Assertion A is correct.
• Excess capacity is a condition that occurs when demand for a product is less than the amount of product that a business could potentially supply to the market.
• When a firm is producing at a lower scale of output than it has been designed for, it creates excess capacity.
• Firms generally enter into the production of new products with excess capacity of the plant initially.
• Thus Reason R is also correct.
• However, R is not the correct explanation of A since excess capacity does not necessarily result in low pricing.

Hence, the correct answer is (A) and (R) both are correct but (R) is not the right explanation of (A).

The correct answer is Competitive parity approach. 

An advertising strategy is the sum total of a company's outreach efforts to build brand awareness and drive sales; these goals can include introducing new products, priming sales conversion rates, gaining social media subscribers, accessing a target market, and engaging existing customers.

Key Points

• Competitive parity is a budgeting method in which a company spends the same amount of money on advertising and marketing as its competitors.
• As a business strategy, the competitive parity is designed to defend a competitive position by not overspending on promotion and marketing budgets.
• A defensive strategy is defined as a marketing tool that helps companies to retain valuable customers that can be taken away by competitors.
• When this rivalry exists, each company must protect its brand, growth expectations, and profitability to maintain a competitive advantage and adequate reputation among other brands.

Additional Information

• The percentage of sales method is a forecasting tool that makes financial predictions based on previous and current sales data. This data encompasses sales and all business expenses related to sales, including inventory and cost of goods.
• Return on investment (ROI) is a performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of a number of different investments. ROI tries to directly measure the amount of return on a particular investment, relative to the investment’s cost.
• The objective task method is a system in which a company allocates a certain amount of money to its marketing budget based on specific objectives, rather than choosing an arbitrary amount or basing its marketing budget on sales revenues or projections alone.

Hence, the firm may go for defensive advertising as per the Competitive parity approach.

The correct option is (A) and (R) both are correct and (R) is the correct explanation of (A).

 Key Points

• The asertion stating that a person who are in a stressful situation and he not able to listen the message correctly because during stressful situation people are not able to listen and understand the message correctly
• in such time the psychological frame of mind changes and the message gets distorted due to the  beliefs ,experiences ,goals and values held by the receiver of the message.
• these happens because the person who loss thier concentration and focus and the end result who loss the eseence of meessege.
• The both assertion and reason are logically correct and the reason mentioned here its explain assertion in clear way

Additional Information

• In order to avoid the consequences of stressful situation there are stress mitigation are available and also we can ensure the mental capacity by become more focus and more open minded there by stress relive id possible  at certain end.

Hence the correct answer is  (A) and (R) both are correct and (R) is the correct explanation of (A).

 Key Points

• The reason for the resistance to change by employees because of fear and anxiety, in many cases resistance is came from persons rather than technical problems.
• People resistance to change because of many reasons one of the main reasons is they think it will lead to discomfort if the current situation changes.
• In order to overcome this issue, many organizations implement change management teams and they are ensuring proper orientation and awareness are provided and thereby changes are implemented without any difficulties.

Important Points (a) Perceived peripherality of change - Coping mechanism (iii) - Participation in diagnosis: When individuals perceive the change as peripheral or not directly affecting them, involving them in the diagnosis of the change and its impact can help overcome resistance.

(b) Fear of loss of power - Coping mechanism (i) - Role redefinition and re-orientation: Addressing the fear of losing power involves redefining and reorienting the roles and responsibilities of individuals to ensure their continued importance and influence.

(c) Fear of obsolescence - Coping mechanism (iv) - Development of skills: Overcoming the fear of obsolescence involves providing opportunities for individuals to develop new skills and acquire the knowledge needed to adapt to the change.

(d) Fear of imposition - Coping mechanism (ii) - Participation and involvement: To address the fear of imposition, involving individuals in the change process and decision-making can help alleviate resistance and increase acceptance.

Therefore, the correct matching is (a) - (iii), (b) - (i), (c) - (iv), and (d) - (ii).

Hence the correct answer is (a) - (iii), (b) - (i), (c) - (iv), (d) - (ii)

Key Points

 Important PointsThere are mainly four behaviour models available which is

Autocratic model

• In this model, the power is rest with management and the employees in this model are oriented towards obedience and discipline.

Custodial model

• In this model, the employees are oriented to the security and benefits provided to them and they are dependent on the organization.

Collegial Model

• In this model, employees are more responsible, and they are self-disciplined.

Supportive model

• In this model, the employees are oriented towards their job performance and their involvement.
• The management orientation of support is more.

Hence the correct answer is (a) - (iv), (b) - (ii), (c) - (iii), (d) - (i)

The correct option is Wild cat strike

Key Points

• The Wild cat strike is happening without any prior permission from the union and it is led by unionized employees only.
• The main characteristics of these strikes are unpredictability and uncontrollable.
• This kind of strike resulted in a work stoppage and which have no formal approval from the the official union.

Hence the correct answer is Wild cat strike

The correct option is Employee becomes comfortable with organisation and internalises its norms.

 Key Points

• Employee socialisations ensure that new employees are acquired the necessary behavior and attitudes and skills to become a productive organizational members.
• There are mainly three stages included in this employee socialization process that are

 Important PointsAnticipatory socialization stage

• occurs before the new joiner joined the organization by interacting with company representatives and thereby, they are framing a picture in their mind about the company.

Organization entry and assimilation stage

• The new joiner seeks information about the organization that is prior to joining the organization.

Organization disengagement and exit 

• stage where the employee is not able to manage their concepts with the organization's outcome and the ultimate result they exist the organization.

Hence the correct answer is  Employee becomes comfortable with organisation and internalises its norms.

The correct answer is Equal to zero (=0). 

• The profitability index shows the relationship between a company project's future cash flows and initial investment by calculating the ratio and analyzing the project viability.
• The formula for the profitability index is as follows:

Present value of future cash flows ÷ Initial investment = Profitability Index

Key Points Decision criteria under the profitability index: 

• A profitability index of 1 indicates that the project will break even.
• If it is less than 1, the costs outweigh the benefits and are rejected.
• If it is above 1, the venture should be profitable and accepted.

Net Present Value: 

• Net present value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows over a period of time.
• NPV is used in capital budgeting and investment planning to analyze the profitability of a projected investment or project.
• In general, projects with a positive NPV are worth undertaking while those with a negative NPV are not.

Important Points Relationship between Profitability Index and Net Present Value: 

• Both NPV and PI measures consider an investment property’s future cash flow.
• However, the net present value gives the difference in monetary terms, while the profitability index is a ratio.
• The Profitability Index becomes greater than 1.0 when the net present value appears positive.
• The Profitability Index becomes lesser than 1.0 when the net present value appears negative.
• When the Net present value is equal to zero, the profitability index is equal to 1.

Hence, in case the profitability index of an investment is equal to one(=1), the net present value of the investment will be equal to zero (=0).

The correct answer is (A) and (R) both are correct and (R) is the right explanation of (A).

Key Points

• Capital investment analysis is a budgeting tool that companies and governments use to forecast the return on a long-term investment.
• Capital investment analysis assesses long-term investments, including fixed assets such as equipment, machinery, or real estate.
• Capital investment analysis is used to identify the option that can yield the highest return on invested capital.

Additional Information 

• Capital investments are risky because they involve significant, up-front expenditures on assets intended for many years of service, and they will take a long time to pay for themselves.
• Risk analysis of capital investment is the most complex and controversial area in finance.
• Thus, Assertion(A) is correct.
• Future cash flow estimates are important determinants of capital investment decisions.
• Thus, Reason(R) is also correct.
• Adjustment of risk is necessary to help make the decision as to whether the returns out of the project are proportionate with the risks borne and whether it is worth investing in the project over the other investment options available.
• Risk adjustment is required to know the real value of the Cash inflows.
• Thus, R is the correct explanation of A.

Hence, the correct answer is (A) and (R) both are correct and (R) is the right explanation of (A).

The correct answer is (c) and (d) only.

• Business acquisition occurs when one company (the acquirer) buys most or all shares in another company (the target) to assume control of its assets and operations.
• Acquisitions are often amicable, meaning both companies are on-board with and negotiate the terms of the transaction.

Key Points

• Acquisitions either can be mutually agreed upon by the acquired and acquiring firm or completed through a hostile takeover.
• An acquisition can be interchangeably used with the terms takeover and absorption.
• In absorption, the absorbing company absorbs the other company and continues its existence. Acquired companies cease to exist and become part of acquiring companies.
• A takeover occurs when one company makes a successful bid to assume control of or acquire another. Takeovers can be done by purchasing a majority stake in the target firm.

Additional Information

• A merger refers to consolidating two or more business entities to create a single joint entity with a new management structure and new business owners. It is where both entities team up and merge as one unit with a new name to gain a competitive advantage and synergies in operations.
• Amalgamation is the consolidation or combination of two or more companies known as amalgamating companies. Usually, the companies operate in the same or similar line of business to form a completely new company.

Hence, the acquisition of firms is the same as a takeover or an absorption.

The correct answer is (a), (b), and (c) only.

• The capital structure of a company is the way a company finances its assets.
• A company can finance its operations with either equity or different combinations of debt and equity.
• The capital structure of a company can have a majority of the debt component or a majority of equity or an even mix of both debt and equity.

Key Points

• The Modigliani and Miller approach to capital theory, devised in the 1950s, advocates the capital structure irrelevancy theory.
• This suggests that the valuation of a firm is irrelevant to the capital structure of a company.
• Whether a firm is highly leveraged or has a lower debt component has no bearing on its market value.
• Rather, the market value of a firm is solely dependent on the operating profits of the company.

Important Points

ASSUMPTIONS OF MODIGLIANI AND MILLER'S APPROACH:

• Perfect Capital Markets: The perfect market condition applies to the securities that are traded in a share market. It makes sure that the investors of the market can buy or sell securities without any restrictions.
• Homogenous Risk Classes: There are companies in the market that fall within certain homogenous classes. These companies are believed to have similar operating risks and they fall within the same groups considering the risks they are subjected to.
• No Taxes: The theorem considers that there is no tax payable by the firms. This means that there is no tax saving from the interest payable to debts.
• 100% Dividend Payout: The theorem states that the companies must pay all net earnings to the shareholders. In other words, the company should distribute 100% of its net earnings as dividends.

Hence, the correct answer is (a), (b) and (c) only.

The correct answer is James E Walter.

• A dividend is the distribution of a company's earnings to its shareholders and is determined by the company's board of directors.
• A company's dividend policy dictates the amount of dividend paid out by the company to its shareholders and the frequency with which the dividends are paid out.

Key Points Walter's Dividend Model: 

• Walter’s Model, as the name suggests, was introduced by Prof. James E. Walter.
• The model is based on share valuation and postulates that both prices of shares and dividends are interdependent.
• Walter’s model is a dividend theory that considers the internal rate of return (IRR) and cost of capital to derive the valuation of a firm.

Application of Walter's Model: 

• For Growth firms – Internal Rate of Return is greater than the cost of capital (r>k) - Zero payout ratio
• For normal firms – Internal rate of return is equal to the cost of capital (r=k) - Any payout ratio is optimal
• Declining Firms – Internal rate of return is less than the opportunity cost of capital (r<k) - 100% payout ratio

Important Points

Formulae: 

The formula that is used to determine the market price per share with Walter's model is,

$P_0=\frac{D}{K}+\frac{\frac{R}{K}(E-D)}{K}$ 

Where,

• P = Market Price of share
• D = Dividend per share
• E = Earnings per share
• R = Internal rate of return
• K = cost of capital

Hence, the correct answer is James E Walter.

The correct answer is Both (A) and (R) are incorrect.

• A capital market is a place where buyers and sellers indulge in trade (buying/selling) of financial securities like bonds, stocks, etc.
• The trading is undertaken by participants such as individuals and institutions.
• The capital market trades mostly in long-term securities.

Key Points

• Risk-averse investors will select portfolios close to the risk-free asset, preferring low variance to higher returns. These investors have a higher inclination for investment in debentures.
• Less risk-averse investors will prefer portfolios higher up on the CML, with a higher expected return, but more variance. These investors have a higher inclination for investment in equity shares.
• Thus the preference of investors will differ based on their risk-bearing capacity and investors in the capital market are not always inclined to debentures.
• Hence, Assertion (A) is incorrect.
• A secondary market is a platform wherein the shares of companies are traded among investors.
• It means that investors can freely buy and sell shares without the intervention of the issuing company.
• Currently, shares have a well-established secondary market in India while debentures still do not have an active secondary market.
• Thus, Reason(R) is also incorrect.

Hence, the correct answer is Both (A) and (R) are incorrect.

The correct answer is Selective Distortion.

• Perception is the process by which an individual selects, organizes, and interprets information inputs to create a meaningful picture of the world.
• Perception depends not only on the physical stimuli but also on the stimuli' relation to the surrounding field and on conditions within the individual.
• People can emerge with different perceptions of the same object because of three perceptual processes: selective attention, selective distortion, selective retention, and subliminal perception.

Key Points

• Selective distortion is defined as the tendency for people to interpret information in a way that supports previously established beliefs or perceptions.
• For example, if you’re a dog lover and see a trailer for a movie about a dog, you may experience that trailer differently than someone who prefers cats.
• For marketers and advertisers, knowing how selective distortion can change the interpretation of advertisements, it is important for them to understand their audiences and craft messaging that is meaningful and relevant.
• This is why a customer-centric approach to marketing and advertising can be a key part of a brand’s strategy.

Additional Information

• Selective attention is defined as “the capacity for or process of reacting to certain stimuli selectively when several occur simultaneously.”
• Selective retention is the inclination for people to be more likely to remember information that closely aligns with their needs, beliefs, interests, and values.
• Subliminal perceptions, also known as subliminal messages, are messages, either visual or auditory, that are presented just beyond the threshold of human perception.

Hence, Selective distortion expresses the tendency of consumers to interpret information in a way that fits one’s preconceptions in consumer buying behavior.

The correct answer is Stability Strategy

Key Points

• Strategy refers to the tactical course of action which is specifically designed to achieve the pre- determined long term goals of the organization. There are mainly three types of strategies according to their levels, namely: 
• Corporate Level Strategy
• Business Level Strategy
• Functional Level Strategy
• Corporate Level Strategy : Under this level of strategy, an action is taken to get competitive advantage in the market and strategic decisions related with wider policies of an organization is taken place at this level. According to Michael Porter, there are basically four strategic alternatives available with corporate level strategy, namely: 
• Stability Strategy
• Expansion Strategy
• Retrenchment Strategy
• Combination Strategy
• Stability Strategy: In this type of strategy, a company concentrates on maintaining its current market share as well as adopts an progressive approach which helps to keep them on safer side and also generates better revenue. 
• For Example: Slightly update on product, Same product with special service etc.
• Stability strategy can be further divided into three parts, such as: No change strategy, Profit strategy and Caution strategy.
• Under No change strategy, a firm don't make any major changes in the process/ planning.
• Profit strategy is suitable for achieving short term gains. It may include increase in the price of product, Cost cutting technique etc.
• Caution Strategy is suitable when a firm want to proceed cautiously with regard to any strategy.

So, When a company in packaged tea business provides special service to its institutional customers through market intermediaries in order to encourage bulk buying and improving its marketing efficiency, then clearly it is an example of Stability Strategy.

The correct answer is Strategic Myopia

Key Points

Organizational Myopia refers to that situation in which an organization is not able to analyze the specified / particular facts as per their current situation.

• Strategic Myopia refers to that situation in which the business management have only fuzzy/ rough idea about their future in the long term.
• Under Strategic Myopia, there is cognitive distortions on the part of management.
• Under Strategic Myopia, business management don't see the opportunities beyond their own knowledge. They usually reject that part of information/ knowledge which is not familiar to them.
• Under Strategic Myopia, negative part of information is also rejected by the corporation.

So, We can say that "The willingness to reject unfamiliar as well as negative information is called Strategic Myopia".

Additional Information

• Marketing Myopia refers to short sightedness in which a company has narrow minded approach , as it focuses only on the current needs of the organization rather than customer needs. (More Focus on Sale than Marketing).

The correct answer is (a)- (iv), (b)- (i), (c)- (iii), (d)- (ii)

Explanation: Strategy acts like a blueprint with the help of which a company can achieve its long term goals. There are different components of strategy:

• Vision
• Strategic Intent
• Mission
• Objectives
• Goals
• Programs

Key Points

• Strategic Intent: It gives an idea with regard to the desires of an organization which needs to be attain future. The basic purpose of strategic intent is to give the answer to the question, what is the purpose of existence of the organization in the market.
• Vision: Vision is an abstract idea which talks about the aspirations of an organization. It motivates the employees of an organization to see the value in their efforts. It is a forward thinking process and if once it is formulated then it remains forever.
• Mission: It gives brief description of organization with regard to who we are? what we do? etc. It is the unique purpose that sets it apart from other similar firms.
• Objective: These are specific milestones/ goals that needs to be achieve in a small period of time. Objectives can only be achieved when attempts are made in a specific direction.
• For Example: An organization wants to increase its sale by 20% in the upcoming one year.
• Program: These are the activities that provides framework to accomplish the plan.

So, Mission states the Reason for existence, Vision describe the aspiration -expresses as strategic intent, Objectives are concerned with Accomplishing results at certain time and Programs states the Activities needed to accomplish plan.

Confusion Points

• Goals are the long term purpose of an organization whereas Objectives are generally for short term to medium term.
• Goals are the end result to be achieved whereas Objectives are the means to an end.
• For Example: "To be become a most profitable agency is an example of Goal".
• For Example: "To increase the sale by 10% in upcoming three months", is an example of Objective.

The correct answer is Statement (II) is correct but (I) is incorrect.

Key Points

 Statement (I): According to Plato, a capitalist system is unjust because of many reasons including distributive injustice.

• Capitalism: In a capitalist economy, private people or companies own the capital assets.
• Workers employed by capitalists are paid simply wages; they do not own the means of production; rather, they merely use them on account of the capital owners.
• There are four popular ideas of justice identified by PLATO are as follows; which shows that capitalist system is just and fair:
• Radicalism
• Traditionalism
• Rationalism
• Pragmatism

So, the first statement is wrong.

Statement (II): Capitalism leads to alienation of workers.

• Workers are cut off from the outcomes of their effort.
• Having ownership over the tools of production allows capitalists to enrich themselves without having to perform any labour themselves.
• The action usually is not under the control of workers and it doesn't represent their own objectives.

So, the second statement is correct.

Hence, the correct answer is Statement (II) is correct but (I) is incorrect.

The correct answer is 1992 Rio Declaration

Key Points

• During the Conference on Environment and Development held in Rio de Janeiro in June 1992, the United Nations endorsed the Rio Declaration on environment and development.
• According to the Rio Declaration, linking economic growth with environmental protection is the only way to ensure long-term success.
• It gives 27 principles for the sustainable development.
• According to principle 16, national authorities should work to encourage the internalization of environmental costs and the use of economic mechanisms, keeping in mind that the polluter is responsible for the cost of pollution.

Hence, the correct answer is 1992 Rio Declaration.

Confusion Points 

• Kyoto Protocol:  In order to "stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system," the Kyoto Protocol is an amendment to the United Nations Framework Convention on Climate Change.

The correct answer is Both the Statements (I) and (II) are incorrect.

Key Points

 **Statement (I): For the improvement in the corporate governance, the Department of Company Affairs (DCA) proposed a code of behavior for the public sector companies in the year 1998.**​

• As of March 31, 2003, these corporate governance norms were being gradually implemented for all listed businesses having paid-up capital of at least Rs. 3 crore or net worth of at least Rs. 25 crore at any point during the existence of company.
• The CII (Confederation of Indian Industry Code) launched the first such initiative for the evolution of current governance practises and proposals for improvement and change about the same.
• Rahul Bajaj was the committee's chairman when it was established in 1996 and they had delivered the code back in 1998.

Statement (II): The Clause 49 of SEBI was amended on August 2001, which had made it mandatory for every public company listed on Indian stock exchanges to sign it.

• Corporate governance best practises were outlined by SEBI in a circular dated February 21, 2000, and a new item 49 was introduced to the Stock Exchanges' Listing Agreement.
• The SEBI established two committees to address corporate governance-related issues.
• The first committee, led by Kumar Manglam Birla, turned in its report in early 2000; the second, led by Narayan Murthy, turned in its report three years later. Via the creation of clause 49, the recommendations of these two committees serve as crucial tools for bringing about meaningful changes in corporate governance in India.

Hence, the correct answer is Both the Statements (I) and (II) are incorrect.

The correct answer is Walker.

Key Points 

• Corporate Social Responsibility (CSR) is a self-policing corporate model that enables companies to be accountable to its stakeholders and the general public while also being socially responsible.
• Over the years, a number of CSR models have been developed.

Important Points

• James E. Walker proposed a theory on the dividend policy of a company. It states that a company’s dividend policy depends on the internal rate of return [r] and capital (k) cost.

Additional Information

• Friedman argued in favour of a straightforward version of capitalism and opposed any actions that might stifle economic freedom.
• Model of Carroll's cpyramid is One of the top CSR models is this one. It is officially referred to as the Carroll's four-part pyramid model. the model
• The Ackerman Model is a good alternative to traditional, old-school negotiating schools of thought. It’s an offer-counteroffer system, but it crucially avoids the counterproductive “split the difference” approach that dissatisfies both parties.

Hence, the correct answer is Walker.

The correct answer is Statement (I) is right, (II) is wrong.

 Key Points

• A "Badli workman" is a worker who replaces another worker whose name appears on the industrial establishment's muster records,
• but who ceases to be recognised as such for the purposes of this section once he has worked there for a continuous period of one year.

Additional Information

• Indeed, a badli workman has no right to claim employment in place of an absentee employee.
• In any particular case, if there be some jobs to be performed and the...employee concerned is absent, the company may take in a badli workman for the purpose.
• Badli workmen are really casual employees without any right to be employed.

Hence, with the help of above explanation we can say that Statement (I) is right, (II) is wrong.

The correct answer is Industrial democracy

 Key Points

• A form of corporate governance known as codetermination allows members of a company's staff to elect their peers to the board of directors.
• The system of codetermination can help lessen workplace friction between employers and employees by allowing employees to be represented on the board of directors alongside shareholders because the latter are able to participate in operating the company.

Additional Information

• Collective bargaining refers to the procedures through which the terms of payment within the workforce are negotiated.
• Union leadership is forming a Union.
• action taken by employees of a company as a protest, especially striking or working to rule.

Hence, the correct answer is Industrial democracy.

The correct answer is - Rs. 166.67

Key Points

• Walter’s Model Formula
• Market Price (P) = D + (r / ke)(E − D) / ke
• D = Dividend per share = 50% of Rs. 15 = Rs. 7.5
• E = Earnings per share = Rs. 15
• r = Return on investment = 20% or 0.20
• ke = Cost of equity = 12% or 0.12
• Calculation Steps
• Step 1: Find retained earnings = E − D = 15 − 7.5 = Rs. 7.5
• Step 2: Multiply retained earnings with (r / ke) → (0.20 / 0.12) × 7.5 = 1.6667 × 7.5 = 12.5
• Step 3: Add dividend → 7.5 + 12.5 = Rs. 20
• Step 4: Divide by ke → 20 / 0.12 = Rs. 166.67
• The correct market price per share using Walter’s Model is therefore Rs. 166.67.

Additional Information

• Assumptions of Walter’s Model
• The firm finances all investments through retained earnings only; no external financing is used.
• The internal rate of return (r) and cost of equity capital (ke) remain constant.
• The firm has an infinite life.
• All earnings are either reinvested internally or paid out as dividends immediately.
• Interpretation of Walter’s Model
• If r > ke, the firm should retain earnings (growth firm).
• If r < ke, the firm should distribute earnings (declining firm).
• If r = ke, dividend policy is irrelevant and does not affect market value.
• Exam Tip: Always apply Walter’s formula directly for numerical questions where all variables are provided. Avoid conceptual shortcuts unless asked theoretically.

The correct answer is Statement (I) is true and Statement (II) is false. 

Key Points

• Debt - equity ratio indicates the relative proportion of shareholder's equity and debt used to finance a company's assets.
• Debt equity ratio of 2:1 indicates for every 1 unit of equity the company has raised 2 units as debt.
• Cost of floating an equity share is higher than cost of floating a debt because dividend to equity holder are not tax deductible.

Hence, Statement (I) is true and Statement (II) is false.

The correct answer is Number of times surplus covers interest and instalments of Term Loans.

Key Points

• Debt Service Coverage Ratio is a financial metric used to measure a company's ability to pay its debts.
• It is a ratio of a company's net operating income (NOI) to its debt service payments, which includes both principal and interest payments.

Additional Information 

• In corporate finance, the term “DSCR” refers to the amount of cash flow that may be used to cover yearly interest and capital payments on debt, including floating fund payments.
• Bank loan officers utilize a ratio called the DSCR to assess a borrower’s capacity for debt payment.
• The debt service coverage ratio (DSCR) is a key indicator used to assess whether a property has enough cash flow to repay its debts. In the late 1990s and early 2000s, banks normally demanded a DSCR of at least 1.2, although more aggressive institutions would accept lower ratios.

Hence, the correct answer is Number of times surplus covers interest and instalments of Term Loans.

The correct answer is Rs. (-)50,000

Key PointsTangible net worth is most commonly a calculation of the value of a company that excludes any value derived from intangible assets such as copyrights, patents, and intellectual property

TNW=Total Assets−Liabilities−Intangible Asset 

Authorised capital = Rs. 5 Lakhs

Paid up capital = Rs. 5,00,000 * 40% = Rs. 2,00,000

Total Loss = Rs 2,00,000 + Rs. 50,000 = Rs. 2,50,000

Tangible Net Worth = Rs. Paid up capital - Loss 

=Rs. 2,00,000 - Rs. 2,50,000

=Rs. (-) 50,000

Hence the correct answer is Rs. (-) 50,000

The correct answer is to analyse variance between standard costs and actual costs.

Key Points

• A financial manager is a professional who is responsible for overseeing the financial health of an organization.
• They are responsible for creating financial reports, developing and implementing financial strategies, and managing investments.

And, Control refers to the comparison of actual cost with the standard cost and working for removing the deviations, if any.

Additional Information 

Variance analysis is the procedure of computing the differences between standard costs and actual costs and recognizing the causes of those differences.

• With the help of above explanation control function of financial manager include variance between standard costs and actual cost.
• Hence the correct answer is to analyse variance between standard costs and actual costs.

The correct answer is (2) 5.71%

The return that an investor anticipates from a business investment is known as the Cost of Equity.

Its price reflects the sum that the market considers fair compensation for taking on ownership risk by purchasing company shares.

Additional Information 

The dividend is the cost of equity.

The formula is:

(Dividends per share for next year ÷ Current market value of the stock)

Ke (In %) =  (10/175)x 100

               0.0571*100      

                = Rs. 5.71%

The correct answer is (1) ₹8.90 lacs

Important Points

• Net present value (NPV) refers to the difference between the value of cash now and the value of cash at a future date.
• To evaluate the profitability of a proposed investment or project, NPV is used in capital budgeting and investment planning.

Depreciation :(300/5) = 60 for every year.

Net Present value = P.V. of cash flow - Cash outflow

Net Present value = 308.9 lacs – 300 lacs = 8.90 lacs

The correct answer is (3) (a) - (iv), (b) - (ii), (c) - (i), (d) - (iii)

Additional Information 

1. CRISIL

• An acronym for Credit Rating Information Services of India Limited, is the first Credit Rating Agency established in India in 1987.
• It is a multinational analytical company whose major goal is to improve the efficiency of the financial markets.
• Many businesses and financial institutions use its ratings, research, risk, and advice services.

2. Moody’s Investors Service

• Risk assessment, research, and credit ratings are all offered by Moody's Investors Services. which was established in 1909.
• The company provides services for enterprise risk management, valuation, training and certification, economic and consumer credit analytics, risk measurement, and risk management.

3. Standard and Poor Credit rating agency

• It is one of the top index providers and sources of independent credit ratings data founded in 1860.
• It is one of the biggest credit rating organizations, Standard & Poor's, assigns letter grades to businesses, nations, and the debt they issue on a scale from AAA to D, reflecting the level of investment risk.

4.  Fitch Ratings

• Fitch ratings is a credit rating agency established in 1914 that assign ratings to investments based on how likely it is that they would default.
• Fitch rates companies use a letter system; for instance, a firm rated AAA is very high quality and has consistent cash flows, whereas a company rated D has already experienced a default.

Hence, the correct answer is (3) (a) - (iv), (b) - (ii), (c) - (i), (d) - (iii)

The correct answer is : (2) (b) and (c)

Important Points

Highlights on World Trade Organization (WTO)

• WTO deals with trade in goods and other areas such as services, intellectual property, etc.
• GATT had contracting parties, whereas WTO has member nations.
• Unlike the GATT system, which was subject to delays, the WTO's dispute settlement procedure is far more successful, fast, and transparent.

Hence, (b) and (c) are true and (a) is false

The correct answer is (a) - (iv), (b) - (iii), (c) - (ii), (d) - (i). 

• The production function of an organization or enterprise is an association between inputs used and the utmost amount of outputs that can be manufactured.
• In other words, the production function is the relationship that shows the relationship between inputs and outputs for any given amount of inputs invested and the maximum amount of outputs obtained in the production process.

Key Points 

Hence, the correct answer is (a) - (iv), (b) - (iii), (c) - (ii), (d) - (i).

The Correct option is Team consideration

 Key Points

• The Bass transformational leadership founded by Bernard M Bass in the year 1985
• as per this theory, leaders can influence their subordinates by making them aware of their goals and aligning that with the organizational goal.
• Transformational leadership raises the leadership to the next level

Important Points There mainly four components

1)Inspirational motivation

• Transformational leaders are trying in such a way to motivate and inspire the people around them by providing meaningful challenges and by they creating good spirits among them.

2)Intellectual stimulation

• Transformational leaders try to encourage creativity by providing opportunities to Reframe the older problem and approaches in new ways and the ultimate result of creativity is increased.

3)Individualized influence 

• Transformational leaders are active in such a way that they will consider role models for their followers and are admired and respected basis on their capabilities.

4)Individual consideration

• Each individual gets better consideration and attention in detail because the leaders act like coaches and they and they help them to be improved themselves.

Additional Information

• The transformational leadership theory aims to develop the subordinates as future leaders by developing leadership abilities and skills.

Hence the correct answer is Team consideration

The correct option Sweetheart contract

 Key Points

• A sweetheart contract is a contract made through collusion between management and labour representatives
• which contains terms beneficial to management and unfavourable to union workers.

Important Points

• The management and labour representatives are the beneficiaries of such contracts and ultimately workers are not getting any benefit and it’s not in workers' best interest.

Hence the correct answer is the Sweathert contract.

The correct answer is (a) - (iii), (b) - (i), (c) - (iv), (d) - (ii). 

Key PointsHolistic marketing: 

• The holistic marketing concept considers all the different parts of a business as one single entity.
• It is based on the premise that the whole is greater than the sum of its parts.
• As such, there is a shared aim and purpose for all the activities related to a business.
• This ensures that each person in every department, from sales to operations to HR to marketing and others, works towards one common goal.

Important Points 

Hence, the correct answer is (a) - (iii), (b) - (i), (c) - (iv), (d) - (ii).

The correct answer is Statement (I) is incorrect while Statement (II) is correct.

Key Points 

Incremental Innovation: 

• Incremental innovation is the concept of growing or improving a company by making a series of minor improvements to existing products, services, processes, and tools.
• These small changes focus on improving the productivity and performance of the company, as well as the efficiency and user experience of the products and services.

Important Points

• Companies can use incremental innovation to save costs and differentiate from competitors.
• Over time, businesses can use incremental innovation to improve their market position and build a bigger audience that gravitates to new and improved product features.
• Most established companies focus on incremental innovation for new product development.
• Thus Statement I is incorrect.
• Most established companies focus on incremental innovation when they aim to enter new markets by tweaking existing products, or they want to stay one step ahead in the market by using variations on a core product.
• Thus Statement II is correct.

Hence, the correct answer is Statement (I) is incorrect while Statement (II) is correct.

The correct answer is Stratified sampling. 

Sampling techniques: 

• The sampling method or sampling technique is the process of studying the population by gathering information and analyzing that data.
• It is the basis of the data where the sample space is enormous.
• There are several different sampling techniques available, and they can be subdivided into two groups.
• Probability sampling involves random selection, allowing you to make strong statistical inferences about the whole group.
• Non-probability sampling involves non-random selection based on convenience or other criteria, allowing you to easily collect data.

Key PointsTypes of Probability sampling: 

• Simple random sampling
• Cluster sampling
• Systematic sampling
• Stratified random sampling

Types of Non-Probability sampling: 

• Convenience sampling
• Judgmental or purposive sampling
• Snowball sampling
• Quota sampling

Important Points

Stratified random sampling: 

• Stratified random sampling is a widely used statistical technique in which a population is divided into different subgroups, or strata, based on some shared characteristics.
• The purpose of stratification is to ensure that each stratum in the sample and to make inferences about specific population subgroups.
• This technique is beneficial in cases where the population is heterogeneous, and a simple random sample may not provide accurate results.
• By dividing the population into strata, researchers can ensure that their sample is representative of the population and avoid sampling biases.

Additional Information

• Judgmental or purposive sampling: Judgmental or purposive samples are formed at the researcher’s discretion. Researchers purely consider the purpose of the study, along with the understanding of the target audience.
• Snowball sampling: Snowball sampling is a sampling method that researchers apply when the subjects are difficult to trace. For example, surveying shelterless people or illegal immigrants will be extremely challenging. In such cases, using the snowball theory, researchers can track a few categories to interview and derive results.
• Quota sampling:  In Quota sampling, members in this sampling technique selection happens based on a pre-set standard. In this case, as a sample is formed based on specific attributes, the created sample will have the same qualities found in the total population.

Hence, of the above options Stratified sampling relates to the probability-based sampling technique. 

​

The correct answer is Protection of details of electronic transaction.

Key Points Block Chain Technology:

• A blockchain is a decentralized, distributed, and often public, digital ledger consisting of records called blocks that are used to record transactions across many computers so that any involved block cannot be altered retroactively, without the alteration of all subsequent blocks.
• This allows the participants to verify and audit transactions independently and relatively inexpensively.
• A blockchain database is managed autonomously using a peer-to-peer network and a distributed timestamping server.
• They are authenticated by mass collaboration powered by collective self-interests.
• Blockchain security is a complete risk management system for blockchain networks, incorporating assurance services, cybersecurity frameworks, and best practices to mitigate the risks of fraud and cyber-attacks.
• Blockchain technology's data structures have inherent security qualities because they are based on consensus, cryptography, and decentralization principles.
• Each new block of information connects to all the previous blocks in a way that it's nearly impossible to tamper with.

Additional Information Information Technology : 

• Information Technology is a field that manages and processes information for large-scale organizations or companies.
• Information technology is now synonymous with any form of digital communications and technologies.
• Everything falls under the grasp of Information Technology, from checking emails to running software on laptops to making a zoom call with colleagues.

Hence, "Block Chain” in the field of information technology means Protection of details of electronic transactions.

The correct answer is Overall cost leadership. 

Key Points Michael Porter's Generic Strategies: 

• A firm's relative position within its industry determines whether its profitability is above or below the industry average.
• The fundamental basis of above-average profitability in the long run is a sustainable competitive advantage.
• A firm can possess two basic types of competitive advantage: low cost or differentiation.
• The two basic types of competitive advantage combined with the scope of activities a firm seeks to achieve them, lead to three generic strategies for achieving above-average performance in an industry: cost leadership, differentiation, and focus.

Important PointsCost Leadership Strategy: 

• In cost leadership, a firm sets out to become the low-cost producer in its industry.
• The sources of cost advantage are varied and depend on the structure of the industry.
• They may include the pursuit of economies of scale, proprietary technology, preferential access to raw materials, and other factors.
• A low-cost producer must find and exploit all sources of cost advantage.

Additional Information

Differentiation Strategy 

• In a differentiation strategy, a firm seeks to be unique in its industry along some dimensions that are widely valued by buyers.
• It selects one or more attributes that many buyers in an industry perceive as important and uniquely positions itself to meet those needs.
• It is rewarded for its uniqueness with a premium price.

Focus strategy 

• The generic strategy of focus rests on the choice of a narrow competitive scope within an industry.
• The focuser selects a segment or group of segments in the industry and tailors its strategy to serve them to the exclusion of others.
• The focus strategy has two variants.

(a) In cost focus, a firm seeks a cost advantage in its target segment, 

(b) In differentiation focus, a firm seeks differentiation in its target segment. 

Hence, when the organizational requirements advocate tight cost control; frequent, detailed control reports; structured organization and responsibilities, and incentives based on meeting strict quantitative targets then it is called cost leadership strategy.

The correct answer is- Statements (II) is correct but statement (I) and (III) are not correct.

Explanation:

  Strategy refers to a tactical course of action that is specifically designed to achieve the pre-determined long term goals of an organization. There are three different levels, on the basis of which strategy can be formulated:

1. Corporate Level Strategy
2. Business unit Level Strategy
3. Functional Level Strategy

​ 

Key Points:

Corporate level strategy is considered as the highest level of strategic plan that defines the corporate goals and ways of the achieving these goals.

• There are mainly four different Strategic alternatives which falls under which the category of Corporate Level Strategy, namely: 
• Stability Strategy
• Expansion Strategy
• Retrenchment Strategy
• Combination Strategy
• ​Retrenchment Strategy follows when an organization aims at restructuring/ divestment/ contraction of its business activities.
• There are three sub parts of Retrenchment Strategy, namely: 
• ​Turnaround
• Divestment
• Liquidation
• Turnaround Strategy is basically a restructuring strategy and the main purpose of this strategy is to transform a loss-making company into a profit-making company. This type of strategy is followed by the company when if feels that the earlier decision is wrong and needs to alter.
• Divestment is followed when the turnaround strategy becomes ineffective. It is also known as divestiture/ retrenchment strategy and it includes downsizing the operations of the business to prevent the losses that a company has to face.
• Liquidation refers to that stage when a company sells off its specific business units or shuts down those units.
• Combination Strategies are followed when a company adopts different combinations of stability, expansion, and retrenchment either at the same time or at different times in the same business with the aim of improving its competitive position.

So, we can say that Strategic turnaround is a very serious form of internal retrenchment and lead to divestment. Whereas Divestment is part of the restructuring plan and it is adopted when turnaround has been attempted but has proven to be unsuccessful.

Additional Information

• Stability Strategies are of three types, namely: No change strategy, Profit Strategy, and Caution Strategy. This type of strategy is used by small businesses in order to avoid risky situations.
• Expansion Strategy is also known as Growth Strategy and there are five subtypes of Expansion strategy, namely: Concentration, Diversification, Cooperation, Integration, and Internationalization.

The correct answer is Corporate Parenting Analysis

Key Points

• A Diversified Corporation refers to that company which deals in diversified/ unrelated business segments.
• There are different types of diversification in business, such as: Product diversification, Service diversification, Joint Venture, Market diversification etc.
• Corporate Parenting Analysis helps to analyze the different factors which determines the policies/ values, such as: Budget process, Organizational Structure etc.
• Corporate Parenting Analysis helps to improve the effectiveness and performance of the business.
• There are mainly three styles of Corporate Parenting Analysis, namely: Strategic Planning, Strategic Control and Financial Control.
• Strategic Planning enhances synergies and facilitating cooperation across the business units.
• Under strategic Control, the business parent makes the use of its capabilities to capture the growth opportunities.
• Under Financial Control category, corporate parent evaluates and monitor the financial performance of business units.

So, Corporate Parenting Analysis advocates that , what businesses should be diversified corporation own and why and what organizational structure, management processes and philosophy will foster superior performance from the corporation's individual business units.

The correct answer is Handholding stage

Key Points

• A sick industrial unit is one which has accumulated losses  more than its entire net worth at the end of financial year.
• There are two types of Sickness:
• Actual Sickness : When there is erosion of 50% or more units during last six months or more and there is default in the loan installment payment, then it is called Actual Sickness.
• Potential Sickness: When the capacity utilization of a firm is less than 50% during last five years, then it is called as Potential Sickness.
• There are some Internal causes of Industrial Sickness:
• Poor Production Policies
• Ineffective Corporate Management
• Inadequacy of Finance
• There are some External causes of Industrial Sickness:
• Marketing Constraints
• Production Constraints
• Personnel Constraints etc.
• Rehabilitation refers to the process which enables a business unit to function at profitable level and make arrangements for recovery of due debts.
• MSE (Micro and Small Scale Enterprise) is said to sick, when due to accumulated losses there is erosion in the net worth upto the extent of 50% or the borrowal account of company remains NPA (Non Performing Assets) for the period of three or more months.
• Different Stages of MSE includes: Handholding Stage, Recovery Stage, Supporting Stage and Sustaining Stage.
• Handholding Stage: This stage of MSE starts when banks detect the symptoms of sickness at the initial stage and starts intervention with the purpose of addressing the sickness at early stage.
• For Example: When there is delay in commercial production for six or more months due to the reason beyond the control of the promoters.

                                                 OR

                     A company incurs losses from past two years or the capacity utilization of company is less than 50% of its value.

So, Timely assistance to MSEs and  rehabilitation effort should begin on a proactive basis when early sign of sickness is detected, that stage is called Handholding Stage.

Additional Information 

• Recovery Stage basically deals with the recovery of fully loosed Micro and Small Scale Enterprises.
• Supporting Stage deals with providing financial and technical assistance to MSEs.
• Sustaining Stage deals with sustaining support to MSEs.

The correct answer is - Pure Entrepreneurs

Key Points

• Entrepreneur refers to an individual who has power of sensing opportunities and exploit these opportunities by taking risk for an organization.
• Entrepreneur is also called as innovator and wealth generator.
• There are various types of entrepreneurs:
• Pure Entrepreneurs
• Induced Entrepreneurs
• Drone Entrepreneurs
• Fabian Entrepreneurs
• Imitating Entrepreneurs
• Trading Entrepreneurs etc.
• Pure Entrepreneurs are known as the founder of business and they are highly motivated by psychological (mental satisfaction) and economic rewards (monetary). They conceptualize the business plan and make it successful by putting efforts into it. 
• For Example: Dhirubai Ambai
• Induced Entrepreneurs are those individuals who are induced/ inspired to take up entrepreneurial activities due to some external factors. Such as: Government Grant/ Concessions etc**.**
• Drone Entrepreneurs are those individuals who are not open to any change. They are happy with their existing mode of business activities even at the cost of loss.
• Fabian Entrepreneurs are called second generation entrepreneurs. They don't show any initiative in the  implementation of new ideas until there is imminent threat to their existence.
• Imitating Entrepreneurs are those individuals who imitate/ copy the successful innovation. They usually copy the concept of already existing entrepreneurs for setting up their own business.
• Trading Entrepreneurs are those individuals who are concerned with trading activities, i.e. buying and selling activities.

So, We can say that Individuals who are the founders of the business and conceptualize the business plan by putting his/ her efforts to make a successful plan are known as Pure Entrepreneurs.

The correct answer is 1965

Key Points

• For the entrepreneurial sector to flourish, government backing is required. The Indian government acted quickly to secure the expansion of this sector's economy.
• Various policies and programmes are made by the government for the promotion of Small Scale Industries. It includes:
• Industrial Policy Resolution 1948
• • Industrial Policy Resolution 1956
• Industrial Policy Resolution 1977
• Industrial Policy Resolution 1980
• Industrial Policy Resolution 1990
• Industrial Policy Resolution 1991
• Industrial Policy Resolution 1948: IPR 1948 was introduced by the government in post independence period. The main objective of this policy was to liberalize the industrial sector in order to boost its competitiveness and industrial productivity.
• Industrial Policy Resolution 1956: IPR 1956 was created as result of changes that came about as a result of economic and political events in several fields that demanded modifications in industrial policy within a short period of 1948 industrial strategy's implementation. IPR 1956 can be divided into three categories namely; 
• Schedule A ( with 17 Industries)
• Schedule B (with 12 industries)
• Schedule C (with Remaining industries)
• Industrial Policy Resolution, 1977: This policy acts as an extension of IPR 1956 with main focus on decentralization. It divides small scale sector into: Cottage and Household Sector, Small Scale industries and Tiny sectors. The fundamental goal of this policy was to effectively promote small, widely distributed industries in rural/ small town areas.

So, it is clear from the above discussion that IPR 1948, IPR 1956 and IPR 1977 all comes under the category of government policies except IPR 1965.

Additional Information

• Industrial Policy Resolution 1980 focuses on the effective utilization of installed capacity.
• Industrial Policy Resolution 1990 was formed with a view to enhancing the competitiveness of the products manufactured in the small scale sector.
• Industrial Policy Resolution 1991 mainly focuses on providing facilities to the market forces  as well as increase its effeciency.

The correct answer is govern the actions of an individual

Key Points 

• Morality and ethics have a lot of similarities. Whereas it once would have been more accurate to speak of moral principles, it is now usual to refer to ethical principles.
• The foundation of ethics is a set of well-founded moral principles that outline what is appropriate human behaviour, typically in terms of rights, obligations, fairness etc.
• Actions of an individual is governed by ethics.
• The term "ethics" refers to a set of moral guidelines, a sense of right and wrong, goodness and evil in our deeds and their effects.
• People follow moral principles as guidance to ensure they are acting morally.
• Moral principles include: fairness, honesty etc.

Hence, the correct answer is govern the actions of an individual.

Additional Information

• Moral principles can be of two types:
• Absolute
• Relative
• Absolute Moral principles: Universal truths regarding human nature serve as the foundation for all absolute moral rules.
• For Example: Speaking the truth
• Relative Moral principles: Relative morality is based on circumstances and attitudes that can change over time, from individual to individual, or in different contexts.

The correct answer is Legitimate son who has attained the age of twenty five, he is not “dependent” under the Employees’ State Insurance Act, 1948.

Key Points 

• As per section 2(6A) dependent includes His widow, a son under the age of 25, an unmarried daughter, and his widowed mother are among his dependents.
• A son or daughter who is more than 25 years old and fully dependent on the worker may also qualify as a dependent.
• In some circumstances, dependents can also include a minor sister, minor child, parent other than a widowed mother, etc.

Additional Information

• Traditionally, the term legitimate child is defined as a child conceived or born during a marriage or to parents who are legally married to each other, and has complete filial rights and obligations by birth.
• This means that the child was lawfully begotten.
• The reason behind the expression ‘lawfully begotten’ was because marriage was considered a sacred and lawful union.

Therefore, as per the explanation stated above the correct answer is Legitimate son who has attained the age of twenty-five.

The correct answer is Personal Approach.

Important Points

• Hot Stove Rule: A management term to explain the similarity between breaking company discipline and touching a hot stove.
• According to Mc Gregor, The principle of the "Hot stove rule" can guide an employee to be in discipline with the prior given principles.

                             Let's say, you touch a red hot stove anyway, which will burn and hurt you, you may get angry on the stove but you know at the same time, it's your fault, the stove not trying to burn you intentionally. The same can happen if you'll repeat your mistake. The same goes for disciplinary action against an employee, with no exceptions.

 Additional Information     

When you touch a hot stove (breach the principles, your discipline is :

1. Immediate (instant consequence)
2. Prior warning (prior intimation)
3. Consistent action (punishment)
4. Impersonal (unbiased disciplinary action against the act, not against the person).

      All of the above are the principles of **the "**Hot stove rule" but not the Personal approach.

Hence, The correct answer is Personal Approach.

The correct answer is Brand imagery.

Important Points 

• Extrinsic properties of the product or services refer to those properties that are related to the product or services but not a physical part of it like the brand image for brand loyalty.
• Brand advertisement sales promotion etc. may increase the consumers' desire to buy the product and fulfill their psychological needs.

 Additional InformationBrand image shows the product is valuable and different from other brands due to which customers rely on and repurchase a product and become reliable and committed customers.

Brand judgments: Based on past experiences and with the brand itself allow us to generate opinions about a brand in the world of marketing this refers to brand judgment like Coca-Cola.

Brand resonance: When a brand creates an emotional connection with customers via its name image consistency refers to brand resonance. The more effective the emotional bond, the

higher the likelihood of purchase and hence create more loyal customers.

Brand performance: The measurement of a brand’s results against the target explains brand performance customers' growth customer interaction brand knowledge and brand awareness are some metrics to measure brand performance.

The correct answer is Supermarket 

• Supermarket: A supermarket is a sizable retail store that specialises on selling food and other household items and is generally run on a self-service system.
• This type of store is bigger and has a wider variety than older grocery stores, but it is smaller and offers a lower selection of goods than a hypermarket.
• Due to their size and purchasing power, supermarkets are able to negotiate lower pricing from producers, allowing them to provide products at comparatively inexpensive costs.
• A supermarket is a particular type of retail establishment with large, inexpensive, low-margin, high-volume, self-service shop features that are intended to cover all demands for food and household goods.
• For Example: Big Bazar

Hence, the correct answer is Supermarket.

Confusion Points 

• Superstore: Superstores are bigger than supermarkets, sell items at steep discounts, and also carry items for the house and apparel that are not really frequently seen in supermarkets.

​

• Discount Store: Discount stores are a subset of department stores that sell a variety of goods, however others focus on particular products.
• Discount retailers use a high-volume, low-profit-margin strategy to offer goods at a lower price than other stores in the area.
• Convenience Store: A convenience store is a small, nearby, easily accessible store that sells packaged items and everyday essentials like milk, bread etc.

The correct answer is (a) - (i), (b) - (ii), (c) - (iv), (d) - (iii)

Key Points

Hence, the correct answer is  (a) - (i), (b) - (ii), (c) - (iv), (d) - (iii)

The correct answer is : (1) ASEAN

Additional Information 

Official languages of Association of South East Asian Nations (ASEAN) are:  English, Burmese, Filipino, Tamil, Indonesian,  Lao, Malay, Mandarin, Khmer, Thai and Vietnamese.

Important Points 

• The official language of SAARC is English.
• The official languages of BRICS are - Portuguese, Mandarin, Russian, English, and Hindi.

Hence, the correct answer is (1) ASEAN.

The correct answer is both (A) and (R) are correct, and (R) is the right explanation of (A).

Important Points 

• The integration of the domestic economy through twin channels of trade and capital flows has accelerated in the past two decades which in turn led the Indian economy to grow from 32 trillion rupees to 153 trillion rupees.
• As per Suresh Prabhu, Minister of commerce and industry, the govt of India is keen to grow exports and provide more jobs to the young talented, semi-skilled, and unskilled workforce of India

.Hence the correct answer is both (A) and (R) are correct, and (R) is the right explanation of (A).

The correct answer is (b) Its shipping lines offer slower shipping services and (d) Its document of transport contract is called ‘Charter Party’.

Important Points

 liner shipping:

• liner shipping is the service of transporting goods by means of high‐capacity ocean‐going ships that transit regular routes on fixed schedules.
• Nowadays, the majority of liner fleets use strong, contemporary ships that can keep up with the demand for speed and punctuality. As a result, these liner services' prices are likewise often consistent.

charter party:

• A charter party, or charter-party, is a nautical agreement between a shipowner and a "charterer" for the hiring of a ship to transport people or goods or a yacht for pleasure.

 Hence the correct answer is  (b) Its shipping lines offer slower shipping services and (d) Its document of transport contract is called ‘Charter Party’.

The correct answer is (a), (b), and (c) only.

• Price elasticity measures the responsiveness of the quantity demanded or supplied of a good to a change in its price.
• It is computed as the percentage change in quantity demanded—or supplied—divided by the percentage change in price.
• The price elasticity of demand is the percentage change in the quantity demanded of a good or service divided by the percentage change in the price.

Key Points

• Range of substitutes of the commodity: The greater the possi­bility of substitution, the greater the price elasticity of demand for it. If commodity substitutes are not available, people will have to buy it even when its price rises, and therefore its demand would tend to be inelastic.
• The extent of the different uses of the commodity: The greater the number of uses to which a commodity can be put, the greater will be its price elasticity of demand. If the price of a commodity having several uses is very high, its demand will be small and it will be put to the most important uses and if the price of such a commodity falls it will be put to less important uses also and consequently, its quantity demanded will rise significantly.
• A portion of the income of the buyer spent on the commodity: The greater the proportion of income spent on a commodity, the greater will be generally its elasticity of demand, and vice versa. The demand for common salt, soap, matches, and other goods tends to be highly inelastic because the households spend only a fraction of their income on each of them.

Additional Information

• Income group of buyers purchasing the commodity: The income group of the buyer does not have a positive relationship with the price elasticity of demand.

Hence, the correct answer is (a), (b), and (c) only.

The correct answer is Fritz Heider. 

Key Points

• Balance theory was developed by social psychologist Fritz Heider in 1946.
• The theory was originally developed to explain patterns of interpersonal relations, but it has also been applied to study attitudes and opinions about many items such as physical objects, ideas, or events.
• Heider explained that a balance must exist between interpersonal relationships, or for something specific between two or more individuals so that psychological harmony can be achieved.
• If two or more people share similar ideas about something, there is not likely to be any tension or complication surrounding this idea in the relationship.

Additional Information

Balance Theory:

• The key notion of balance theory is that certain structures are balanced, whereas others are imbalanced. Balanced structures are usually preferred over imbalanced ones.
• Imbalanced structures are associated with uncomfortable feelings, and this is what leads people to seek to achieve balance.
• Heider suggested that ‘likes’ and ‘dislikes’ are related to balance and imbalance.
• Humans search for consistency between their attitudes and relations with others to make the balance neutral.
• However, if there is an inconsistency between relations and a perceived imbalance, humans tend to seek modifications to reach consistency and thus cognitive harmony of the situation again.
• In this way, balance theory describes how humans are motivated to change their attitudes.

Hence, Fritz Heider proposed the Balance Theory of attitude formation

The correct option is 2)A-B-D

• Organisation’s efforts to manage relationships between employer and employees.
• (b) The programs to prevent and resolve problems arising from work situations.
• (d) Organisation’s structure of managing rapport between boss and staff.

 Key Points

• The main moto employee relation is to maintain a good relationship with its employees the result of this act will make employees more loyal to the organization.
• in every organization, there are responsible people who are maintaining this relationship by proactively interacting with workers and management and thereby they ensure that there zero issues and workers are on the right path.
• The purpose of employee relations is to determine the rules that will govern employment relations.
• If there is proper maintenance of employee relations that will Leeds to mutual benefit for both the workers as well as employers.

Hence the correct answer is option A-B-D

• Organisation’s efforts to manage relationships between employer and employees.
• (b) The programs to prevent and resolve problems arising from work situations.
• (d) Organisation’s structure of managing rapport between boss and staff.

The correct answer is Employee Engagement. 

Organizational Citizenship Behaviour:

• Organizational citizenship behavior (OCB) is a term used to describe employees who go above and beyond their formal job requirements to help their organization.
• OCB goes beyond the scope of what is expected of an employee, such as volunteering for extra tasks, helping co-workers, being helpful to customers, and offering solutions to organizational problems.

Key PointsEmployee Engagement:

• Employee engagement is the extent to which employees feel passionate about their jobs, are committed to the organization, and put discretionary effort into their work.
• Employee engagement describes the level of enthusiasm and dedication a worker feels toward their job.
• Employee engagement can be critical to a company's success, given its links to job satisfaction and employee morale.
• An engaged employee is in it for more than a paycheck and may consider their well-being linked to their performance, and thus instrumental to their company's success.

Additional Information

• Employee empowerment refers to the manner in which companies provide their employees with anything and everything they need to succeed.
• Employee enhancement is when an  employ with the resources needed to do their job is better equipped to do the job and, thereby, better able to perform it job .
• Employee encouragement or employee motivation is the level of energy, commitment, and creativity that a company's workers bring to their jobs.

Hence, when an employee is willing to go above and beyond what is typically expected in his or her role, it is known as Employee engagement.

The correct answer is (a), (b), and (d) only. 

Financing Decisions:

• The decisions that have to be taken with respect to the capital structure are known as Financing Decisions.
• Decision-making helps to utilize the available resources for achieving the objectives of the organization, unless minimum financial performance levels are achieved, it is impossible for a business enterprise to survive over time.

Key Points

There are three financial decisions that financial managers have to take:

1. Investment Decision
2. Financing Decision and
3. Dividend /Profit distribution Decision

• Investment decision. is concerned with how the firm’s funds are invested in different assets. An investment decision can be long-term or short-term.
• Financing decision is concerned with the amount of finance to be raised from various long-term sources of funds like equity shares, preference shares, debentures, bank loans, etc. In other words, it is a decision on the ‘capital structure’ of the company.
• Dividend decisions or Profit distribution decision is concerned with deciding how much of the profit earned by the company should be distributed among shareholders (dividend) and how much should be retained for future contingencies (retained earnings).

Additional Information

• Pricing decisions are the choices businesses make when setting prices for their products or services.
• Pricing is considered part of a company’s marketing strategy because it influences its relationship with customers: When prices are fair and competitive, customers  come back, increasing the profitability of the business .
• Thus pricing decisions are irrelevant to financial decision-making but are concerned with marketing decision-making.

Hence the correct answer is (a), (b), and (d) only.

The correct answer is The set of consumers who are buying the company’s product.

Market:

• A market is a place where parties can gather to facilitate the exchange of goods and services.
• The parties involved are usually buyers and sellers.
• The market may be physical like a retail outlet, where people meet face-to-face, or virtual like an online market, where there is no direct physical contact between buyers and sellers.

Key Points

Penetrated Market: 

• Penetrated market refers to the set of customers who are already buying or using a particular product or service.
• In a penetrated market, users are aware of the product already and most of them are active users.
• Markets that are not penetrated are called target markets, potential markets, or available markets.
• If the penetrated market for a particular product is high, it means that the brand or the category is popular in that market.
• The size of the penetrated market for a product gives an estimate of the amount of scope of increasing sales in the un-penetrated market and the size of the target market.
• If the size of your penetrated market is small, it means that more investment should go into the strategy of marketing that particular product.

Additional Information

• Potential Market: It is the total population in the market that is interested to buy a product and service
• Available market: Within the potential market all those people with enough money to buy products and services.
• Qualified Available Market: People in the available market who are permitted to buy the available products and services.
• Target Market: It is the segment of the available market that a company is ready to serve it.

Hence, the set of consumers who are buying the company’s product represents Penetrated Market.

The correct answer is (a) - (ii), (b) - (iii), (c) - (i). 

Key Points

• Our standard product life cycle goes through the stages of introduction, growth, maturity, and decline.
• However not all products follow the standard product life cycle and will have a very short life or stay in the maturity stage and not progress to the decline stage.
• One group of products was divided into three categories by Philip Kotler: fashions, fads, and styles.

Important Points 

Hence, the correct answer is (a) - (ii), (b) - (iii), (c) - (i).

The correct answer is Poisson Distribution. 

Probability distribution : 

• Probability distribution yields the possible outcomes for any random event.
• It is also defined based on the underlying sample space as a set of possible outcomes of any random experiment.
• These settings could be a set of real numbers or a set of vectors or a set of any entities.

Key Points

Poisson distribution : 

• The Poisson distribution is a discrete probability function that means the variable can only take specific values in a given list of numbers, probably infinite.
• A Poisson distribution measures how many times an event is likely to occur within an “x” period of time.
• In other words, we can define it as the probability distribution that results from the Poisson experiment.
• A Poisson experiment is a statistical experiment that classifies the experiment into two categories, such as success or failure.
• Poisson distribution is a limiting process of binomial distribution.

Important Points The formula for the Poisson distribution function is given by:

f(x) =(e^{– λ} λ^x)/x!

Where,

• e is the base of the logarithm
• x is a Poisson random variable
• λ is an average rate of value

Thus, in Poisson distribution, the mean value of the distribution (λ) is the sole parameter of the distribution. 

Additional Information Binomial distribution: 

• The binomial distribution is a probability distribution in statistics that summarizes the likelihood that a value will take one of two independent values under a given set of parameters or assumptions.
• The underlying assumptions of the binomial distribution are that there is only one outcome for each trial, that each trial has the same probability of success, and that each trial is mutually exclusive or independent of one other.

Normal Distribution: 

• Normal distribution, also known as the Gaussian distribution, is a probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.
• In graphical form, the normal distribution appears as a "bell curve".

Exponential distribution:

• The exponential distribution is a continuous probability distribution that often concerns the amount of time until some specific event happens.
• It is a process in which events happen continuously and independently at a constant average rate.

 Hence,  in Poisson distribution, the mean value of the distribution (λ) is the sole parameter of the distribution.

The correct answer is- Medium Growth

Key Points

• When the division/ department of a big organization is managed by its own  (independently) with its own framed vision and objectives, then it called as Strategic Business Unit.
• There is possibility of autonomous Planning and Functioning due to separation of business units.
• There are some advantages of Strategic business unit, i.e. Quick Decision Making, Increase in Profits etc.
• SBU's can be created in any circumstances with having unique target market .
• Although SBU's operate independently, but it has to report to the headquarter of an organization directly and inform them about the current status of its working/ operation.
• For Example: LG (LG company deals in Washing machines, Purifier ,A.c. and other home appliances). All these units formed different SBU's so that its profit as well expenses can be tracked easily.
• Boston Consultancy Group Matrix studied all the SBU's of the company, as there are four cells which represent the size of strategic business unit, namely: Stars, Cash Cows, Question Mark, Dog.
• There are mainly three categories of SBU: High Growth, Medium Growth and Low Growth. When the weight of:
• Return on Assets is 25%
• Cash Flow is 25%
• Strategic Fund Program is 25%
• Market Share Increase is 25%

Then it lies under the category of Medium Growth. Similarly, there are different weights assigned to High Growth and Low Growth SBU's.

So, as per Weighted factor Approach to strategic incentive management, if for any SBU , Return on assets is 25%, Cash flow is 25%, Strategic fund program is 25% and Market Share increase is also 25%, then this will fall under the Medium Growth category.

Additional Information

• High Growth Category represents, Return on Asset with 10%, Cash flow 0%, Strategic fund program 45% and Market Share increase 45%.
• Low Growth Category represents, Return on Asset with 50%, Cash flow 50%, Strategic fund program 0% and Market Share increase 0%.

The correct answer is (a)- (iii), (b)- (i), (c)- (ii)

Key Points

• According to Joseph Schumpeter, an entrepreneur is an individual who introduces something new to the market/ economy. According to him, Entrepreneurship is essentially a creative activity.
• Creative activity means, when an entrepreneur creates a link between raw material and production of products according to the need of society.
• According to Fransis A. Walker, an entrepreneur refers to that individual who is engaged in organizing and coordinating the  activities and becomes pioneer of the industry. In other words, an individual who has above average abilities in the task of arranging/ coordinating the various aspects of production is referred to as an entrepreneur.
• According to Peter F. Drucker, an entrepreneur refers to an individual who looks for change, reacts to it and seizes the opportunity it presents. Because of the reason that there are no resources until someone discovers a use for something and gives its economic value, entrepreneurs innovate and generate resources.

So, here we can say that column I which states that Entrepreneurship is essentially a creative activity is given by Joseph Schumpter. An Entrepreneur is an Organizer and coordinator of various factor of production is given by Fransis A. Walker. An entrepreneur is one who always searches for change respond to it and exploits it as an opportunity, this statement is given by Peter F. Drucker.

The correct answer is Intrapreneur

Key Points

• Intrapreneur: An employee who is entrusted with creating an innovative idea with an organization is known as intrapreneur.
• One of the main objective of intrapreneur is to strengthen the company's sustainability.
• The tools and technical assistance provided to intrapreneur by the organization, are up to them to employ as they see fit. (without any restriction).
• An insider entrepreneur serves as a link between creators/ inventors and managers.
• An intrapreneur will continue to receive payment in the form of salary, even if the product does not reach to the production level, unlike entrepreneur who takes personal risk when a product does not generate revenue.

So, we can say that an intrapreneur refers to that individual who bridges the gap between inventors and managers.

Confusion Points 

• Investor refers to that individual who puts/ invest 
  

his money into the business in order to get financial return.

• An entrepreneur refers to that individual who establishes a firm with the intention of inventing particular goods/ services while being willing to take all sort of risks attached with it. Whereas investor is a person who provides capital to business for the anticipation of future gains.
• An entrepreneur is a person who establishes his business with some new ideas. Whereas an employee of the organization who is in charge of implementing product and service innovations is known to be an intrapreneur.
  

The correct answer is- Accountability and transparency is not visible in less developed countries.

Key Points

• Corporate Governance refers to the collection of rules, procedures, legislation etc. that influences how a corporation is governed.
• Corporate Governance contributes to creating a kind of climate which encourages the long term investment and gives financial stability.
• There are some factors that influence the Corporate Governance, such as: Ownership Structure (specifies the management and control of the organization), Company Board Structure (accountability on the part of BOD with regard to corporate objectives and policies), Financial Structure (tells about the proportion between debt and equity)
• Accountability and transparency are equally important for both developed as well as developing countries.
• Good Corporate Governance always ensures the transparency and provides accurate information to all stakeholders of the company, i.e. public, shareholders, government etc.
• Good Corporate Governance helps to reduce the financial turmoil and corporate frauds due to its transparency function. So, it becomes a sort of pride for the nation.
• Good Corporate Governance also encourages the effective decision making through its policies.