ISC Commerce 2016 Class-12 Previous Year Question Papers

(b) Difference between Centralization and Decentralization

Point of difference Centralization Decentralization
(i) Meaning It refers to concentration of power or authority’ at higher level only. It refers to every distribution of powers and authority at every level of management.
(ii) Authority at different levels Top management retains maximum authority. The authority with middle and lower management is very low. The authority is systematically divided at every level.
(iii) Suitable It is suitable for small scale and small size organisations. It is suitable for large scale organisations.
(ii) Freedom of Actions Managers have less freedom of actions Managers have more freedom of actions.

(c) Principles of Management as laid down by F.W. Taylor are:
Division of Work : Division of work refers to dividing the work into compact jobs and allocating these compact jobs to different individuals.

Authority and Responsibility : According to this principle, there should be a proper balance between authority and responsibility.


  • Authority is the right to give orders to subordinates and responsibility is the duty, which a subordinate is expected to perform by virtue of his position in organisation. Authority and responsibility go hand in hand.

Discipline : Discipline refers to obedience to rules and regulations of the organisation, which is necessary for systematic working of the organisation.

Unity of Command : According to this principle, each subordinate should receive orders and be accountable to one and only one superior.

Unity of Direction : Unity of Direction implies that there should be one head and one plan for group of activities having same objectives.

Subordination of Individual Interest to General Interest: According to this principle, interest of the organisation as a w hole must prevail over the interest of the individuals or employees.

Remuneration of Employees : According to this principle, overall pay and compensation should be fair to both employees and organisation.

  • The remuneration should be just and fair to everybody.
  • It should provide satisfaction to both employees and organisation.

Centralization and Decentralization : According to this principle, there should be proper balance between centralization and decentralization in the organisation. Centralization refers to concentration of authority at the top level, whereas decentralization refers to evenly distribution of authority at all levels of management.

Scalar Chain: Scalar chain is the chain of superiors ranging from the highest authority to the lowest level in the organisation.

Order: According to this principle, there should be a place for everything and every one.

  • If there is a fixed place for everything and it is present there, then there w ill be no obstruction in work.
  • It will lead to increased productivity and efficiency.


Equity : According to this principle, there should not be any discrimination among the employees on the basis of religion, language, caste, sex, belief or nationality

Stability of Personnel: According to this principle, there should be proper efforts to achieve stability and continuity’ of tenure of personnel.

Initiative : According to this principle, workers should be encouraged and given an opportunity to take some “initiative in making and executing the plans.

EspiritvDe Corps : According to this principle, management should take reasonable steps to develop a sense of belongingness and feeling of team spirit among employees.

Question 6.     (ISC Commerce 2016 Class-12 )
(a) Explain any three objectives of management. [3] (b) Explain the terms : [4]
(i) Labelling
(ii) Packaging
(c) Discuss the first five steps involved in the process of staffing. [5] Answer 6:
(a) The three objectives of management are :
Organisational objectives : Management is responsible for setting and achieving the objectives of an organisation. These objectives include :

  • Optimum utilization of resources.
  • Innovation and development of new product or a new method of production.
  • Securing maximum results with minimum efforts.
  • Integration of organisational and individual interest.

Social objectives: Social objectives deal with the commitment of an organisation towards society-. These objectives include :

  • Consumer satisfaction
  • Providing financial support to community
  • Preservation and protection of environment

Individual Objectives: It refers to ascertainment of the objectives in reference to the employees, while ascertaining personal objectives. It must be taken into consideration that in no way there is a clash between organisational and personal objectives.
These objectives include :

  • Providing good working conditions
  • Peer recognition
  • Good human relations amongst the workers
  • Integration of personnel objectives with corporate objectives.

(b) Labelling: Label is a slip which is found on the product itself or on the package providing all the information regarding the product and its producer. This can either be in the form of a cover or a seal. For example, the name of the medicine on its bottle along with the manufacturer’s name, the formula used for making the medicine, date of manufacturing, expair date, batch no., price etc., are printed on the slip thereby giving all the information regarding the medicine to the consumer. The slip carrying all these in details called Label and the process of preparing it as Labelling.

Packaging: Packaging aims at avoiding breakage, damage, destruction, etc., of the goods during transit and storage. Packaging facilitates handling, lifting, conveying of the goods Many a time, customers demand goods in different quantities. It necessitates special packaging. Packing material includes bottles, canister, plastic bags, tin or wooden boxes, jute bags etc.

(c) Staffing process includes the following steps :
Estimating the Manpower Requirements: At first step of staffing the need for required number of employees is estimated. Under this, it is ensured that capable employees are available in the adequate number. At the time of determining the number of persons required. The possibilities regarding promotions, retirements, resignation, etc. should be taken into consideration.

Recruitment: Recruitment is the process of searching for prospective employees and stimulating them to apply for jobs in the organisation. The main objective of recruitment is to create a pool of the prospective job candidates. Higher the number of people w ho apply for a job, higher will be the possibility of getting a suitable employee.

Selection : Under the process of selection, competent applicants are selected out of a large number of them. It is important to keep in mind that the ability of the applicant and the nature of work must match. The closest matching w ill bring the best results. To complete the selection process mam tests are conducted. Finally, an applicant is selected if he/she is declared pass in the interview .


Placement and Orientation : Placement means putting the selected candidate at the right job after considering his ability and capability . Orientation means introduction of new employees with the existing employees and rules and regulations of the organisation.

Training and Development : Training is to impart training and development to employees to increase their efficiency and effectiveness. Training reduces the cost of production and helps in the maintenance of machines and tools and reduces the number of accidents.

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