{"id":18735,"date":"2021-02-15T15:29:45","date_gmt":"2021-02-15T09:59:45","guid":{"rendered":"https:\/\/ncertsolutions.guru\/?p=18735"},"modified":"2021-03-04T10:12:28","modified_gmt":"2021-03-04T04:42:28","slug":"ncert-solutions-for-class-11-business-studies-chapter-1","status":"publish","type":"post","link":"https:\/\/ncertsolutions.guru\/ncert-solutions-for-class-11-business-studies-chapter-1\/","title":{"rendered":"NCERT Solutions for Class 11 Business Studies Chapter 1 Nature and Significance of Management"},"content":{"rendered":"

Detailed, Step-by-Step NCERT Solutions for 11 Business Studies<\/a> Chapter 1\u00a0Nature and Significance of Management Questions and Answers were solved by Expert Teachers as per NCERT (CBSE) Book guidelines covering each topic in chapter to ensure complete preparation.<\/p>\n

Nature and Significance of Management NCERT Solutions for Class 11 Business Studies Chapter 1<\/h2>\n

Nature and Significance of Management Questions and Answers <\/span>Class 11 Business Studies Chapter 1<\/h3>\n

Question 1.
\nWhich of the following does not characterise business activity?
\n(a) Production of goods & Services.
\n(b) Presence of risk
\n(c) Sale or exchange of goods & Services
\n(d) Salary or wages.
\nAnswer:
\n(d) Salary or wages.<\/p>\n

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Question 2.
\nWhich of the broad categories of industries cover oil refinery and sugar miles?
\n(a) Primary
\n(b) Secondary
\n(c) Territory
\n(d) None of them.
\nAnswer:
\n(b) Secondary<\/p>\n

Question 3.
\nWhich of the following cannot be classified as an auxiliary to trade?
\n(a) Mining
\n(b) Insurance
\n(c) Warehousing
\n(d) Transport.
\nAnswer:
\n(a) Mining<\/p>\n

Question 4.
\nThe occupation in which people work for others and get remunerated in return is known as –
\n(a) Business
\n(b) Employment
\n(c) Profession
\n(d) None of them.
\nAnswer:
\n(b) Employment<\/p>\n

Question 5.
\nThe industries which provide support services to other industries are known as –
\n(a) Primary industries
\n(b) Secondary Industries
\n(c) Commercial industries
\n(d) Territory industries.
\nAnswer:
\n(d) Territory industries.<\/p>\n

Question 6.
\nWhich of the following cannot be classified as an objective of business?
\n(a) Investment
\n(b) Secondary Productivity
\n(c) Innovation
\n(d) Profit earning.
\nAnswer:
\n(a) Investment<\/p>\n

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Question 7.
\nBusiness risk is not likely to arise due to –
\n(a) Changes in government policy
\n(b) Good management
\n(c) Employee dishonesty
\n(d) Power-failure.
\nAnswer:
\n(b) Good management<\/p>\n

Short Answer Type Questions<\/span><\/p>\n

Question 1.
\nState the different types of economic activities.
\nAnswer:
\nEconomic activities are those by which we can earn our livelihood. Economic activities may be further divided into three categories, namely business, profession, and employment, e.g., a person running a garment business, a doctor operating in his clinic, and a teacher teaching in a school – all three are doing so to earn their livelihood and are, therefore, engaged in economic activity.
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Question 2.
\nWhy is business considered an economic activity?
\nAnswer:
\nBusiness is essentially an economic activity because it involves the production and distribution of goods and services for earning profits.<\/p>\n

Business As An Economic Activity<\/p>\n

(1) Efficient use of Resources: A business enterprise makes efficient use of scarce resources like men, money, material and machine. Business involves the efficient utilisation of various resources for the production of goods and services. Labour, materials, capital, and machinery are important inputs of the business. The businessman organizes these resources to utilise them for producing and supplying the goods desired by society.<\/p>\n

(2) Creation of Utilities: Business makes goods more useful by creating utility, such as form utility, place utility, and time utility. When raw materials are converted into finished goods, form utility is created. Goods are transported from the producer to the consumer and thus place utility is created. Moreover, business firms carry on production throughout the year and store goods in warehouses to make them available when demanded by the consumers. This is how time utility is created.<\/p>\n

(3) Satisfaction of Human needs: Business activities are intended to serve the general public. They do so by making available those goods and services which can satisfy the needs of society. Moreover, the business also satisfies the needs of businessmen through economic gains or profits. The satisfaction of customers is an important economic activity of a business.<\/p>\n

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(4) Regular dealings: A single transaction cannot a business firm is continuously engaged in production and exchange goods and services for its customers.<\/p>\n

(5) Profit motive: People pursue business as an occupation o means of livelihood. The main purpose of every business activity is to earn profits. In other words, business is a source of income for t businessman. It keeps him busy in an economic occupation. A business that does no earn profits cannot survive for long. Profits are essential for growth and expansion.<\/p>\n

(6) Risk element: As an economic activity, business involves an element of risk of economic loss. Such loss might occur because of theft, fire, earthquake, flood, etc. Various other risk factors are chan in consumers tastes, fashion and demands changes in technology increase in competition, shortage of raw-material, etc. affect the business.<\/p>\n

Question 3.
\nExplain the concept of business.
\nAnswer:
\nThe term \u2018business\u2019 is derived from the word \u2018busy\u2019. Thus, business means being busy. However, in a specific sense, business refers to any occupation in which people regularly engage in an activity with an objective of earning profit: The activity may consist of production or purchase of goods for sale or exchange of goods or supply of services to satisfy the needs of other people in the society.<\/p>\n

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Question 4.
\nHow would you classify business activities?
\nAnswer:
\nBusiness Activities – Classification<\/p>\n

All business activities may be classified mainly into two groups
\n(i) Industry
\n(ii) Commerce.<\/p>\n

The industry covers production, manufacturing, or processing of goods and services, while commerce is concerned will d distribution of goods and services to ultimate users or consumers. Industry 3 and commerce may further sub-divided into the followings:
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Question 5.
\nWhat are various types of industries?
\nAnswer:
\nThe industry refers to economic activities, which are connected with the conversion of resources into useful goods. Industries may be divided into three broad categories namely primary, secondary and tertiary. Primary Industries include all those activities, which are connected with the extraction and production of natural resources and reproduction and development of living organisms, plants, etc.
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Question 6.
\nExplain any two business activities which are auxiliaries to trade. .
\nAnswer:
\nAuxiliaries to trade
\nThese are services facilitating trade. In other words, these services remove the hindrances before the business and are known as transportation, communication, banking, insurance, warehousing and marketing, etc.<\/p>\n

(1) Transportation – It creates a place of utility in goods by overcoming the business of distance. From each other. The hindrance of this distance is removed by transportation facilities. Goods produced at one place may be transported to different comers of the world. The means of transport available to us are as under:
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\nTransport widens the market and helps to equalise prices at different places.<\/p>\n

(2) Communication – The successful operation of the business requires that there must be contact between buyers and sellers of the commodity. Communication between diem is required for placing order, making complaints, making payments, deciding the terms of transactions and other related information. The various means of communication are correspondence, telegram and telephone services. The modem means of communication are fax, STD services, pagers and cellular phones etc. Communication facilities like postal services, telephone and others are necessary’, so that producers, traders and consumers, interact with each other.<\/p>\n

(3) Insurance – There is risk in every walk of business. There is risk from fire, damage, accident and storms etc. Loss of goods due to misshaping damages the prospects of the business. It is, therefore, necessary that there must be certain agencies to undertake these risks. Insurance is based on the pooling of risks. There are insurance companies, which issue fire, marine, accident and other policies and undertake the responsibility to compensate for the loss upon payment of certain premiums.<\/p>\n

(4) Warehousing – There is time gap between the production and consumption of goods, so it is necessary that goods must be kept safe, secured and intact for this period. This hindrance of the business is removed by storing the goods in various private and public godowns. Certain goods are stored in cold storage for their off-season use. Warehousing these days has become an important element of the business. Warehousing helps to stablise prices through the continuous supply of goods.<\/p>\n

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(5) Marketing – Marketing in modern business has assumed a very’ important place. In order to accelerate the pace of growth of the business, it is necessary that sales should go on multiplying. Competition being in the market it is very difficult to push sales. It has now been necessary for the business to adopt sales promotion and advertising measures together with attractive packaging and standard quality of goods. Advertising and publicity are the tools helpful in marketing the products and to create the demand of the product in the consumer\u2019s minds.<\/p>\n

Question 7.
\nWhat is the role of profit in business?
\nAnswer:
\nAn objective is the starting point of business. Every business is directed to the achievement of certain objectives. Objectives refer to all the business people want to get in return for what they do. It is generally believed that business activity is carried on only for profit.<\/p>\n

Businesspersons themselves proclaim that their primary objective is to produce or distribute goods or services for a profit. Every business is said to be an attempt on the part of business people to get more than what has been spent or invested or, in other words, to earn profit which is the excess of revenue over cost.<\/p>\n

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However, it is being increasingly realized nowadays that business enterprises are part of society and need to have several objectives, including social responsibility to survive and prosper in the long run. Profit is found to be a leading objective but not the only one.<\/p>\n

Although earning a profit cannot be the only objective of a business its importance cannot be ignored. Every business is an attempt to reap more than what has been invested, and profit is the excess of revenue over cost.<\/p>\n

Profit may be regarded as an essential objective of business for various reasons:<\/p>\n

    \n
  1. It is a source of income for business persons<\/li>\n
  2. It can be a source of finance for meeting the expansion requirements of the business<\/li>\n
  3. It indicates the efficient working of the business<\/li>\n
  4. It can be taken as society\u2019s approval of the utility of business and<\/li>\n
  5. It builds up the reputation of a business enterprise.<\/li>\n<\/ol>\n

    But, earning a profit cannot be the sole objective of a truly successful business. In the words of Urwick, \u201cEarning of profit cannot be the objective of business more than eating is the objective of living. In fact, service to the community is the real objective of the business.<\/p>\n

    Therefore, modem business houses aim at making a profit through service. As Ford had observed mere money chasing is not business\u2019. This may result in the neglect of social objectives. However, too much emphasis on profit to the exclusion of other objectives can be dangerous for good business.<\/p>\n

    Obsessed with profit, Business managers may neglect all other responsibilities towards customers, employees, investors, and society at large. They may even be inclined to exploit various sections of society to earn an immediate profit.<\/p>\n

    This may result in the non-cooperation or even opposition from the affected people against the malpractices of business enterprises. The enterprises might lose business and may be unable to earn a profit. That is the reason why there is hardly any sizable business enterprise whose only objective is the maximization of profit.<\/p>\n

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    Question 8.
    \nWhat is business risk? What is its nature?
    \nAnswer:
    \nBusiness Risks – Meaning & Nature
    \nBusiness risk arises due to uncertainly about the future course of action. It has already been observed that one of the basic features of the business is \u2018risk\u2019, i.e.. possibility of some loss or adverse happening. There is always a possibility- of loss in business because of uncertainties in the natural, political, economic, social, and technological environment.<\/p>\n

    For instance, who could foresee the terrorist attack on the World Trade Centre (WTC) in New York on 11th September 2001,? This single happening had adverse effects on investors, stockbrokers, airlines, hotels, importers, exporters, and other business firms throughout the world. There are uncertainties regarding prieefall, technological changes, competition, and change in government policies, etc.<\/p>\n

    Meaning and Types of Business Risk – According to B O. Wheeler, \u201dBusiness risk means the possibility of some occurrence which might lead to some loss for the business”. In other words, business risk refers to the possibility of loss or inadequate profits due to some unexpected events which are beyond the control of the businessman. For example, the demand for a firm\u2019s product may go down due to changes in fashion or the availability of better substitutes. This might lead to a loss for the firm.<\/p>\n

    In the words of C.O. Hardy \u201cBusiness risk refers to uncertainty as regards cost, loss or damage.\u201d In fact, the risk is an inherent feature of any business. Business risks are common to all businessmen from a small vendor to a big industrialist. There may, however, be differences in degrees of different types of risks. The possibility of loss for the business does exist though it is not measurable.<\/p>\n

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    The most common types of business risks include :<\/p>\n