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CBSE Sample Papers for Class 12 Business Studies Paper 5 are part of CBSE Sample Papers for Class 12 Business Studies Here we have given CBSE Sample Papers for Class 12 Business Studies Paper 5.

CBSE Sample Papers for Class 12 Business Studies Paper 5

Students who are going to appear for CBSE Class 12 Examinations are advised to practice the CBSE sample papers given here which is designed as per the latest Syllabus and marking scheme as prescribed by the CBSE is given here. Paper 5 of Solved CBSE Sample Papers for Class 12 Business Studies is given below with free PDF download solutions.

Time: 3 Hours
Maximum Marks: 80

General Instructions

(i) Answer to questions carrying 1 mark may be from one word to one sentence.
(ii) Answer to questions carrying 3 marks may have about 50 to 75 words.
(iii) Answer to questions carrying 4 – 5 marks may have about 150 words.
(iv) Answer to questions carrying 6 marks may have about 200 words.
(v) Attempt all the parts of a question together.

Question 1:
The marketing manager of Illuminate Ltd, an organisation manufacturing generators has been asked to achieve a target sale of 100 generators per day. He delegates the task to 15 sales managers and 5 subordinates working under him. Identify the concept used in the above case.

Question 2:
Enumerate any two basis of departmentation in an organisation.

Question 3:
Write a limitation of demonetisation.

Question 4:
Economic environment is affected by many factors one of such factors is the general inflation rate preveiling in the country. How does the inflation rates affect the business firms?

Question 5:
“No smoking in the factory.” This statement is an example of which type of plan?

Question 6:
‘Global Diva’ is a company manufacturing high-end women accessories. The company received an order from Zing Chau Ltd, Korea. The order was in Korean language. The company got it translated and as per the translation, executed the order. However, Zing Chau Ltd refused to take delivery because the goods were not as per their specification stated in the order. Identify the barrier of communication from the above passage.

Question 7:
Identify the type of suitable organisation structure for a large scale organisation having diversified activities requiring high degree of specialisation in operations.

Question 8:
Which component of capital structure determines the overall financial risk in an organisation?

Question 9:
Mr Mukesh is a sales representative in a popular DTH company, he is required to personally assist and persuade the prospective buyers to buy the product.
Mr Mukesh is involved in which element of the promotion mix. Give any two features of that element as well.

Question 10:
Values are desirable for moral connections that are to be followed for ethical business practices. At the same time, techniques are the methods or procedures to achieve organisational goals. Then apart from values and techniques, why are the principles of management needed?

Question 11:
Explain how controlling helps in

1. accomplishing organisational goals.
2. judging accuracy of standards.

Question 12:
Dividends declared by the companies are taken as a positive note by the investors. Stock markets react positively to such decisions and share prices tend to show an upward trend. But, at the same time, it is restricted to certain extent by the Companies Act as well as the financial condition of the concern. Franco, the financial manager of Sunlight Ltd declared in the Annual General Meeting (AGM) that “It is costly to reinvest the retained earnings.” After considering his statement, what decision is taken by the board?

Question 13:
‘Decor Home’ is a furniture manufacturing company. The company has been able to earn substantial profit, yet they did not share their profits with the workers. This led to growing unrest among them leading to fall in productivity and also the quality of their work. Due to this, the company started facing the problem of falling revenues. Their HR manager Mr Dinesh advised the management to follow the principle of ‘Mental revolution’. Is the advice of HR manager appropriate? Elucidate.

Question 14:
ITC Ltd is a multi national company engaged in the business of FMCG goods, Mr Anil is currently working in it as the head of its cosmetic products segment. What kind of organisational structure is being followed in ITC Ltd? Mention any three advantages of such structure.

Question 15:
“Bending the customer according to the product” and “developing the product according to customer needs” are the two important concepts of marketing management. Identify these concepts and differentiate between the two.

Question 16:
“It can be said that management has some characteristics of profession, but it is still not a full fledged profession.” Comment whether this statement is true or false. Also give three reasons in support of your answer.

Question 17:
Mr Adarsh is a social activist. He was concerned with the pollution caused by the use of polythene bags. These bags are non-biodegradable and are a great threat for the water bodies and also adversely affect the quality of soil. To ban the use of these bags he filed a writ petition in the court. The court also identified the threats caused by these bags and passed an order banning the use of these bags on the following grounds:
(i) These bags are creating many environmental problems which affect the life of people in general.
(ii) Society in general is more concerned about quality of life.
(iii) The government decided to give subsidy to jute industry to promote this business.
(iv) Innovative techniques are being developed to manufacture jute bags at low rates.
Identify the different dimensions of business environment by quoting the lines from the above particulars.

Question 18:
Mr Daksh Mudgal, who is a vegetarian, went to a newly opened snacks corner. He asked the waiter for a menu but the waiter informed him that the menu cards are in printing. Then Mr Mudgal specifically asked for the options available for vegetarians. The waiter informed him about the available options and Mr Mudgal chose a particular sandwich. He again specifically asked the waiter if the sandwich, was veg, to which the waiter replied affirmatively. While eating, he found that the snack had non-vegetarian content. The packaging of the product did not display that the product had non-vegetarian content

1. What values are affected by this?
2. Will Mr Daksh Mudgal be able to claim compensation? Which right of the consumer is violated here?

Question 19:
“Marketing plays an important role not only in the growth of a firm but also in the development of an economy.” Discuss.

Question 20:
Define stock exchange and explain two features of stock exchange.

Question 21:
Blue Pharmacy is a company engaged in the production of life-saving drugs. The company has no internal system of performance appraisal and for the past two years, it has not declared any incentives or bonus to its employees, inspite of enormous profits. One of its employee, Mr Sangeet has discovered a new medication for ‘dengue’ during in-house research. The company has got patent on it in its own name and no reward or compensation was given to Sangeet. All these factors have de-motivated the employees and the company is started facing the problem of high employee turn over rate, increased absenteeism, falling levels of productivity, etc.
Due to a combined result of all these factors, Blue Pharmacy was not able to meet its organisational objectives.

1.  Design a control plan, suggesting measures to Blue Pharmacy to be able to achieve its objectives.
2. After controlling these factors, what values are being satisfied?

Question 22:
Staffing is one of the most complex and crucial step which ensures success of any business organisation. Staffing requires a lot of time and efforts. Briefly explain first five steps involved in the process of staffing.

Question 23:
The role of financial management cannot be under estimated, since it has a direct bearing on the financial health of a business. The importance of financial decisions can be judged by the fact, that almost all items of financial statements are affected by them. In the light of the above, explain the functions of financial management.

Question 24:
Ela is running a successful business of providing high-end beauty services to the upper section of society. Her parlour boasts of innovative beauty products. She has an in-house training programme for new employees. Also, she believes in high standards of performance and shares her profits with her employees. She also gives them yearly bonus and salary hikes. But still she feels that her employees are not as motivated as she wants them to be.

1. Are financial incentives the only way to motivate employees?
2. What are non-monetary incentives?
3. State any four non-monetary incentives which contribute to the performance of employees.

Question 25:
The first step in the process of planning is setting objectives. After that development of premises is done. Then various alternatives are identified. Explain the further process (steps) required to complete the process.

Answers

Answer 1:
Decentralisation of authority as manager delegates the authority throughout the levels of an organisation.

Answer 2:
The two basis of departmentation in an organisation are enumerated below:

1. Territories (North, South, East, West)
2. Products (appliances, clothes, cosmetics, etc)

Answer 3:
Demonetisation of the currency has caused huge inconvenience to the people. Cash crunch is a major problem due to the unavailability of small currency denominations.

Answer 4:
Increase in inflation rates directly affects the economic environment as it increases the cost of production, due to which profits of business firms are adversely affected.

Answer 5:
It is an example of rule.

Answer 6:
The barrier of communication identified in the above passage is faulty translation, which is a form of semantic barrier.

Answer 7:
Divisional structure is suitable for a large scale organisation having diversified activities requiring high degree of specialisation in operations.

Answer 8:
Debt determines the overall financial risk in an organisation’s capital structure.

Answer 9:
Mr Mukesh is involved in personal selling.
Following are the two features of personal selling:

1. Face-to-face Dialogue In personal selling, a direct face-to-face dialogue takes place that involves an interactive relationship between the seller and the buyer.
2. Development of Relationship Personal selling allows a salesperson to develop personal relationship with the prospective customers, which may facilitate in making sales.

Answer 10:
Management principles are essential for the successful running of business organisation. Its significance or need can be enumerated with the help of the points given below:

1. Optimum Utilisation of Resources Several principles of management, such as unity of direction, division of labour, etc help in optimum utilisation of resources.
2.  Scientific Decisions The knowledge of management principles enables managers to learn about the
   cause and effect relationship between variables operating in the organisation. This helps them to develop a scientific approach to solve problems.

Answer 11:
(i) Accomplishing Organisational Goals The controlling function measures the accomplishment against the standards and corrects deviations. This helps in ensuring that organisation is moving on the right , track to achieve organisational goals.
(ii) Judging Accuracy of Standards A sound controlling system helps the management to verify whether the standards set are accurate and relevant or not. It keeps a careful check on the changes, which are taking place in the organisation.

Answer 12:
Company’s net earnings are divided into two parts: retained earnings and dividend. If the company has profitable investment options then, it would like to retain the earnings and reinvest rather than distribute it as dividend. But in the given case, the condition is not favourable for reinvesting. Thus, the board may take the residual decision which means the.company will pay dividends as the reinvestment is not profitable.

Answer 13:
Yes, the advice of the HR manager is appropriate.
The basic idea behind the principles of scientific management is to change the mindset or outlook of the workers and the management towards each other. Taylor called it ‘mental revolution’.

Mental revolution insists on the following:

1. Change in mental attitude of workers and management towards each other.
2. Co-operation between workers and management.

Mental revolution can also be stated as ’bilateral mental revolution’. It requires that management should create suitable working conditions and provide an opportunity to workers to participate in the management and should be entitled to share surplus generated in the business.

Answer 14:
ITC Ltd is divided into various segments based on the products in which it deals, therefore it can be said that divisional structure of management is being followed in ITC Ltd. following are the main advantages of divisional structure:

1. It helps managers to develop varied skills related to a product and facilitates managerial development.
2. In divisional structure, fixation of accountability and responsibility is easy.
3. With more initiative and flexibility, decisions are taken much faster in divisional structure.

Answer 15:
(i) Bending the Customer According to the Product This statement is related with the selling concept.
(ii) Developing the Product According to Customer Needs This statement is related with the marketing concept.

Difference between selling concept and marketing concept are :

Answer 16:
On studying management as a profession, it can be said that management is not a full fledged profession but only a developing profession, therefore the said statement is true.
Following are the three main reasons in support of the said statement:

1. Like profession, management has a well defined body of knowledge which can be acquired through courses like MBA, BBA, etc.
2. Entry into the profession of management is not restricted through any examination or degree.
3. Unlike other professions, membership of any professional association is not mandatory for managers.

Answer 17:
(i) “The Court passed an order to ban polythene bags.” The quoted line is depicting the legal environment. Business has to function within the framework of laws and regulations of the country. Legal environment exercises significant influence on business activities.
(ii) “Polythene bags are creating many environmental problems which affect the life of people in general and society in general is more concerned about quality of life.” These quoted lines are depicting the social environment, which consists of all the social and cultural forces within which business firms operate.
(iii) “The Government decided to give subsidy to jute industry to promote this business.” The quoted line is depicting the political environment, which is concerned with the forces related with political stability and political conditions that have strong impact on business.
(iv) “Innovative techniques are being developed to manufacture jute bags at low rates.” The quoted line is
depicting the technological environment. It includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services.

Answer 18:
(i) Honesty and responsible behaviour are the two values that affected by this, as complete information about the product is not provided.
(ii) In the given case, there is a violation of the consumer right, ‘Right to Information’. According to the Amendment of the Regulations in Weight and Measurement Act, 2000, every product should bear a green dot for veg ingredients and brown for non-veg ingredients. This statutory provision was not fulfilled by the snack corner.
Hence, Mr Daksh Mudgal can claim compensation.

Answer 19:
The process of marketing plays an important role in a firm and in the economy, as explained below :

Role in a Firm Marketing emphasises customer satisfaction as the key to survival and growth of an organisation. It helps to focus the activities of the organisation on fulfilling the needs and wants of consumers, by designing the product according to them. This helps to develop brand loyalty and bring prosperity for the firm.

Role in the Economy Marketing acts as a catalyst in economic development of a country and helps in raising living standard of the people. Marketing inspires people to undertake various activities and to set-up enterprises for producing goods that are demanded in the market and ensure smooth flow of goods through efficient distribution system. It helps to establish linkages between the business, accelerating economic activity, leading to higher incomes, more consumption, increased savings and investment.

Answer 20:
According to Pyle, “Stock exchanges are market places where securities that have been listed there on, may be bought and sold for either investment or speculation.’’
Following are the two features of stock exchange:

1.  Organised Market Stock exchange is an organised market. Every stock exchange has a management committee which has all the rights related to management and control of exchange.
   All the transactions taking place in the stock exchange are done as per the prescribed procedure under the guidance of management committee.
2. Dealing in Securities Issued by Various Concerns Only those securities are traded in the stock
   exchange which are listed there. After fulfilling certain terms and conditions, a company can get its securities listed on stock exchange.

Answer 21:
(i) Under such circumstances, Blue Pharmacy should implement a control plan covering following points:

• Performance based appraisal system should be introduced.
• Employees like Mr Sangeet should be given due acknowledgment for their achievements.
• Proper communication of tasks should be made and feedback should be collected from time to time.

(ii) Following values are satisfied :

• Orderliness
• Discipline
• Flonesty
• Commitment and hardwork

Answer 22:
First five steps in the process of staffing are as follows:
(i) Estimating Manpower Requirements It refers to finding out the number of persons or employees and type of employees needed in the organisation in the near future. As both overstaffing and understaffing are undesirable, the manager tries to find out the manpower requirement by equating work load analysis to workforce analysis.
(ii) Recruitment It refers to the process of inducing people to apply for the job in the organisation. After assessing the number and type of required employees, the manager tries to get greater number of applicants for the job, so that the organisation can select better candidates.
(iii) Selection It refers to the choosing of most suitable candidate to fill the vacant job position. Selection is done through a process, which involves tests, interviews, etc.
(iv) Placement and Orientation In this step, employee occupies the position or is placed, for which he/she has been selected. After this a brief presentation about the company is given and employee is introduced to his superiors, subordinates and colleagues.
(v) Training and Development In this step, training is imparted to the selected candidate, by which he/she can enhance his/her skills, knowledge and through this, one can also explore the opportunities for future growth.

Answer 23:
The functions of financial management relate to three major decisions which every finance manager has to take.

The three essential functions of financial management are:

(i) Investment Decision This decision relates to careful selection of assets in which funds will be invested by the firms. A firm has many options to invest their funds but firm has to select the most appropriate investment which will bring maximum benefit for the firm and deciding or selecting most appropriate proposal is investment decision.

(ii) Financing Decision Finance manager has to take this decision by deciding the source of finance. A company can raise finance from various sources, i.e. by issue of shares, debentures or by taking loans and advances. Deciding how much to raise from which source is the concern of financing decision.
The main sources of finance can be divided into two categories which are given below :
(a) Owner’s fund
(b) Borrowed fund

(iii) Dividend Decision This decision is concerned with distribution of surplus funds. The profit of the firm is distributed among various parties, such as creditors, employees, debenture holders, shareholders, etc. The surplus profit is either distributed to equity shareholders in the form of dividend or kept aside in the form of retained earnings. Under dividend decision, the finance manager decides, how much to be distributed in the form of dividend and how much to keep aside as retained earnings.

Answer 24:
(i) No, financial incentives are not the only way to motivate employees. Employees can also be motivated with the help of non-monetary incentives.
(ii) Non-monetary Incentives These are not directly related with money. These incentives help in the satisfaction of top hierarchy needs like respect, self-actualisation, etc.
(iii) Following are the four important types of non-monetary incentives:

(a) Status It means the position or rank of a person in the organisation. It can be high or low. The rank of an employee is directly linked with his authority, responsibility and other facilities (e.g. A separate cabin, costly furniture, car, peon, PA, etc). Everybody has a wish for a higher status. Therefore, the employees can be motivated by raising their rank or position. The attainment of a higher status fulfils the psychological, social and esteem needs.
(b) Career Advancement Opportunity Every employee of the organisation wants to advance in his life. Promotion is an important example of advancement. When the avenues for promotion are available, the employees certainly get motivated.
(c) Employee Recognition Programmes Every employee wishes to be considered as an important part of the organisation. It means that he should have his own identity and he should appear to be distinctive. The manager should distribute work among the employees in such a manner which gives a feeling to every employee that his work is special and he alone is capable of doing it. By getting such kind of importance, they are motivated and work harder in a more responsible manner.
(d) Employee Participation Employees get encouraged if they are allowed to participate in managerial
works. Therefore, they offer their full cooperation in making successful the policies prepared with their help.

Answer 25:
The first step in the process of planning is setting objectives. After that development of premises is done.
Then various alternatives are identified. After this, the following steps are followed to complete the process of planning:

(i) Evaluating Alternative Courses After making the list of various alternates alongwith the assumptions supporting them, the manager starts evaluating each and every alternative and note down the positive and negative aspects of each alternative. After this, the manager starts eliminating the negative aspects and the one with maximum positive aspects is selected as the best alternative.
(ii) Selecting an Alternative This is the most crucial point of decision-making. The best plan has to be adopted and implemented. The ideal plan, of course, would be the most feasible, profitable and with least negative consequences.
(iii) Implementing the Plan This is the step where other managerial functions also come into the picture. This step is concerned with putting the plan into action, i.e. doing what is required, e.g. If there is a plan to increase production, then more labour and machinery will be required. This step executes the main plan.
(iv) Follow up Action To see whether plans are being implemented and activities are performed according to schedule, is also a part of the planning process. Monitoring the plans is equally important to ensure that objectives are achieved properly.

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CBSE Sample Papers for Class 12 Business Studies Paper 4 are part of CBSE Sample Papers for Class 12 Business Studies Here we have given CBSE Sample Papers for Class 12 Business Studies Paper 4.

CBSE Sample Papers for Class 12 Business Studies Paper 4

Students who are going to appear for CBSE Class 12 Examinations are advised to practice the CBSE sample papers given here which is designed as per the latest Syllabus and marking scheme as prescribed by the CBSE is given here. Paper 4 of Solved CBSE Sample Papers for Class 12 Business Studies is given below with free PDF download solutions.

Time: 3 Hours
Maximum Marks: 80

General Instructions

(i) Answer to questions carrying 1 mark may be from one word to one sentence.
(ii) Answer to questions carrying 3 marks may have about 50 to 75 words.
(iii) Answer to questions carrying 4 – 5 marks may have about 150 words.
(iv) Answer to questions carrying 6 marks may have about 200 words.
(v) Attempt all the parts of a question together.

Question 1:
A decision is taken to distribute certain part of the profit to shareholders after paying tax. What is this decision called?

Question 2:
“Management is an intangible force.” Explain.

Question 3:
What is the key feature of divisional structure?

Question 4:
Is directing necessary at planning stage? Give reason in support of your answer.

Question 5:
Which money market instrument is also known as zero coupon bond?

Question 6:
Mention any two parties who can file a complaint before the appropriate consumer forum.

Question 7:
Classify plans on the basis of duration of use.

Question 8:
Silver Tech Limited is a start-up company engaged in developing nano-technology for mobiles. The debt component is quite high in the capital structure of the company. Identify the risk which the company can face in future.

Question 9:
Give the various sources of recruitment and differentiate between the two internal sources.

Question 10:
Explain any three factors affecting capital budgeting decisions.

Question 11:
“Expenses on training is an investment and not a wastage.” Clarify. Also give any two advantages of training for the organisation.

Question 12:
Over the years, Brook Bond Taj Mahal tea has been a choice of millions of customers. The company uses the slogan ‘Waah Taj’ on its label. Their price range, quality and taste are different and unique from their competitors. What are the advantages of labelling a product shown in this case?

Question 13:
Management is the process of working with and through others to effectively achieve organisational objectives by efficiently using limited resources in the changing environment.” In the light of the above statement, explain any three features of management.

Question 14:
Give the positive and negative effects (any two) of the following principles of management:
(i) Equity
(ii) Stability of personnel

Question 15:
“Stock exchange works through its operators.” In the light of this statement, discuss any four types of operators working on a stock exchange.

Question 16:
Lately, many companies have planned for significant investments in organised retailing in India. Several factors have prompted their decision in this regard. Customers’ income is rising. People have developed a taste for better quality products even though they may have to pay more. The aspiration levels have increased. The government has also liberalised its economic policies in this regard and permitted even cent percent foreign direct investment in some sectors of retailing. In what ways, Indian managers have responded to change in the post liberalisation era?

Question 17:
Describe briefly multi-dimensional function of management.

Question 18:
How directing helps in efficient and effective functioning of the organisation? Explain by giving any four points.

Question 19:
A car manufacturing company sets a goal that in future they will expand their production by 15%. After measuring the performance, they noticed that the production has declined by 10% and the raw material is wasted by the production department.
(i) Can you find out, to which concept of controlling does it relate?
(ii) What values are being ignored in this case?

Question 20:
Name the decision, a financial manager takes keeping in view the overall objective of maximising shareholders’ wealth. Also, explain any four factors affecting the decision.

Question 21:
‘Millenium’ is a reputed B-school of Jaipur. It is offering lots of management degree programmes in the fields of finance, marketing, human resource, rural development, hospitality and information technology. The institute advertises that it has a 100% placement records, with many of its students being placed in top MNCs across the globe. The highest salary package to a student of the institute was
₹12.5 lakh per annum.
The advertisement also shows the campus to be well infrastructured. Influenced by this advertisement, hundred of students take admission in this institute. On taking admissions, the students learn that the campus shown in the advertisements was not the one that they were studying in and also that the institute is running only diploma and certificate courses, as it is not recognised by AICTE and therefore cannot issue degrees. The placement statistics were also misleading.
(i) As per your understanding, what are the values missing?
(ii) What steps should be taken by the student against these frauds?

Question 22:
”Some plans are formulated by companies to deal with situations that can occur again and again.” Identify the type of plan and explain any four of them.

Question 23:
Two managers are arguing that planning is looking ahead and controlling is looking back. As per your opinion, who is correct and why? Also explain how controlling helps in
(i) accomplishing organisational goals.
(ii) judging accuracy of standards.

Question 24:
My Car Ltd decided to set-up its new car manufacturing factory in the backward area of West Bengal where very less job opportunities were available. People of that area welcomed this effort of My Car Ltd. The company also decided to provide facilities like school, hospital, market, etc. in the factory premises so that people are attracted to join the factory as workers. My Car Ltd started earning huge profits. Another competing company asked its production manager Arvind to investigate the reasons of earning huge profits by My Car Ltd.

Arvind found that in both the companies there was systematic coordination among the various activities to achieve organisational goals. Every employee knew who was responsible and accountable to whom. The only difference was that in his organisation communication took place
only through the scalar chain, whereas My Car Ltd was allowing flow of communication in all the directions as well as quick . feedback.
(i) Identify the type of organisation which allows the flow of communication in all directions.
(ii) Also state the advantages of such type of organisation.

Question 25:
What do you mean by promotion mix? Explain its components.

Answers

Answer 1:
Dividend decision is taken to distribute certain part of the profit to shareholders after paying tax.

Answer 2:
Management is an unseen force whose presence can be felt when an organisation functions. Orderliness, discipline, cleanliness, etc all reflect the presence of good management. Hence, management is said to be an intangible force.

Answer 3:
The key feature of divisional structure is that it comprises of separate business units as divisions.

Answer 4:
No, directing is not necessary at planning stage, it is necessary at execution/operational stage.

Answer 5:
Treasury bill is also known as zero coupon bond.

Answer 6:
A complaint before the appropriate consumer forum can be made by the persons named here under:

1. Any consumer
2. A legal heir of a deceased consumer

Answer 7:
On the basis of duration of use, plans can be classified as follows:

1. Single use plans
2. Standing plans

Answer 8:
The company can face financial risk. It refers to a position, when a company is not able to meet its fixed financial charges namely interest, preference dividend, payment and repayment obligations. It arises due to higher use of debt.

Answer 9:
The sources of recruitment can be broadly classified as follows:
(i) Internal Sources These sources refer to recruitment within the organisation, from the existing staff and employees.
Two internal sources of recruitment are as follows:
(a) Transfers (b) Promotions
(ii) External Sources These sources refer to recruitment from outside the organisation.
Difference between Transfers and Promotions

The difference between transfers and promotions are:

Answer 10:
Following are the three factors affecting capital budgeting decision:

1. Cash Flows of the Project When a company takes an investment decision involving huge amount, it expects to generate some cash flows over a period. The amount of these cash flows should be carefully analysed before considering a capital budgeting decision.
2.  The Rate of Return It is the most important criteria to decide the investment proposal, as a higher rate of return would induce more m ‘estment and vice versa.
3. Investment Criteria The manager must compare and analyse the amount of investment, cash flows, interest rate, etc of various proposals and then take a decision.

Answer 11:
Expenses on training is an investment and not a wastage, as expenses incurred on training today will provide benefit to the organisation for a long-term in the form of increased efficiency of the employees.

The benefits of training and development to an organisation are as follows:

1. Training is a systematic learning, always better than hit and trial methods which leads to wastage of efforts and money.
2. It enhances employees’ productivity both in terms of quantity and quality, leading to higher profits

Answer 12:
Advantages of labelling which are shown in this case are as follows:
(i) It helps to assess the supermacy of a product over other competing products.
(ii) It raises the prestige of a product and guarantees the standard of the product.
(iii) It helps to establish brand loyalty of the customers towards the product.

Answer 13:
The above said statement is true. In the light of above statement, features of management are as follows:

1. Management is a Goal-oriented Process Objectives refer to the end result to be achieved through operations. They are set for the organisation as well as all departments. Management seeks to achieve these objectives through co-ordinated efforts.
2. Management is all Pervasive Management is necessary to conduct all types of activities whether it is a business or non-business activity. It is equally applicable in private and public enterprises, small and large enterprises, government and non-government enterprises. So, it is equally required in a petrol pump, a hospital, an office, whether in India, USA or Japan.
3. Management is a Continuous Process Management is an ongoing process of planning, organising, staffing, directing and controlling which brings the management cycle back to planning.
4. Group Activity An organisation is a collection of diverse activities and different individuals. Through
   coordination and teamwork, management unites the efforts of individuals to achieve organisational goals, alongwith the fulfilment of personal goals of the individuals.

Answer 14:
(i) Equity

Two positive effects of equity are given below:
(a) It ensures loyalty among the workers.
(b) It emerges cordial relation between workers and managers.

Two negative effects of equity, if violated are given below:
(a) Dissatisfaction among employees leading to greater employee turnover.
(b) It emerges poor relations between workers and managers.

(ii) Stability of Personnel

Two positive effects of stability of personnel are stated below:
(a) It encourages job security in the organisation.
(b) It increases motivation among employees.

Two negative effects of stability of personnel, if violated are stated below:
(a) It leads to increase in labour absenteeism.
(b) It Increases job insecurity thus, employees tend to leave jobs frequently leading to high turnover.

Answer 15:
There are four types of operators working on a stock exchange as given below:

1. Bull A bull is a speculator, who expects rise in price. He buys securities with a view to sell them in future at a higher price and making profit out of it. In Mumbai Stock Exchange, he is known as Tejiwala.
2. Bear A bear is a speculator, who expects fall in price. He sells securities which he does not want to possess. He is known as Mandiwala in Mumbai Stock Exchange.
3. Broker He is a member of stock exchange. He buys and sells securities on behalf of outsiders, who are not the members of the stock exchange. He charges brokerage or commission for his services. He buys and sells all types of securities as demanded by investors.
4. Jobber He is also a member of stock exchange. He buys and sells securities on his own behalf. He is specialised in one type of security and makes profit by selling the securities at a higher price. In Mumbai Stock Exchange, he is known as Tarawaniwala.

Answer 16:
Indian managers have responded to change in the post liberalisation era in the following ways:

1. By consolidation of MNCs.
2. By adopting varied strategies of markets.
3. By focussing more on the interests of the customers.
4. By adopting labour workforce management.
5. By increasing production capacity.
6. By high compensation levels.
7. By implementing strategy of mergers and acquisitions.
8. By adopting Capital structure reforms.

Answer 17:
Management is multi-dimensional i.e. management is a complex activity.

It has three dimensions which are discussed below:
(i) Management of Work All organisations exist for the performance of some work. It translates the work into goals, e.g. A product is produced in factory and then it is transported to the store where customers purchase it and their needs are satisfied.
(ii) Management of People Human resources are the greatest assets of an organisation. The task of management is to make people work towards achieving the organisational goals.
(iii) Management of Operations This refers to a production process, which entails the flow of input material and technology for transforming input into the desired output for consumption. It is interlinked with both management of work and management of people.

Answer 18:
The following four points highlight how directing helps in efficient and effective functioning of an organisation:
(i) Integrates Employees Directing integrates employees’ efforts in an organisation in such a way that every individual’s effort contributes to the welfare of the organisation. Thus, it ensures that employees work efficiently for the attainment of goals.
(ii) Improves Efficiency Directing guides employees to fully realise their potentials and capabilities. Through
this function, managers utilise the potential of employees and motivate them to work to the best of their ability and contribute their maximum effort towards the achievement of organisational objectives.
(iii) Facilitates Change Business environment is changing very frequently but people generally have a tendency to resist change. In this context, directing helps manager to persuade his subordinates to carry out changes from time to time and cope with changes in the environment.
(iv) Helps in Achieving Goals The work in the organisation starts with directing the employees towards the pre¬determined goals. Proper directing helps in unity of action and achieving organisational goals.

Answer 19:
(i) The concept of controlling which is being quoted is ‘comparing actual performance with standards’. After measuring the actual performance, it is being compared with the standards. In this case, the standard set is to increase production by 15% but actually it has declined by 10%. Infact the next step, i.e. ‘analysing deviations’ has also been undertaken and it is found out that raw materials have been wasted by the production department.
(ii) The values ignored here, are:
(a) Lack of commitment and hard work.
(b) Wastage of resources and lack of responsible behaviour towards achieving targets.

Answer 20:
The above said decision is financing decision. It is concerned with the decisions about how much funds are to
be raised from which long-term source, i.e. by means of shareholders funds or borrowed funds.
The factors affecting financing decisions are : (any four)

1. Cost The cost of raising funds from different sources are different. A wise finance manager opts for the cheapest source of finance.
2. Risk The risk associated with each of the source is different. The source which involves least risk should be preferred.
3. Cash Flow Position of the Company A stronger cash flow position may make debt financing more viable than funding through equity.
4. Control Considerations Issue of more equity may dilute shareholders’ control over the business. Therefore, a company afraid of a takeover bid may prefer debt to equity.
5. State of Capital Market If the stock market is rising, then it is easy to sell equity shares. But in a depressed capital market, the company has to opt for debt financing.

Answer 21:
(i) As per our opinion, the social and ethical values are missing. They are cheating the students, who are the pillars of nation. If they will be successful in their career, they can contribute a lot towards the development of our nation. But by providing misleading information, they are cheating students and spoiling their careers.
(ii) Following steps should be taken by the students:
(a) Students should boycott against this and provide all information of cheating and fraud to the local print media.
(b) Students should not blindly believe on the words of counsellors. They should collect all relevant information from different possible sources. –
(c) They should ask for redressal against unfair practices of the institute and can also ask for the
compensation.
”Some plans are formulated by companies to deal with situations that can occur again and again.” Identify the type of plan and explain any four of them.

Answer 22:
Standing plans are formulated by companies to deal with situations that can occur again and again.
The types of standing plan are as follows : (any four)

1. Objectives It can be said to be the desired future position that the management would like to reach.
2. Strategy A strategy is a comprehensive plan for accomplishing an organisation’s objectives.
3. Policy These are general statements that guide thinking or channelise energies towards a particular direction.
4. Procedure It describes the exact manner, in which a certain activity is to be performed.
5. Method It provides the prescribed ways or manner, in which a task has to be performed, considering the objectives.

Answer 23:
In my opinion, both are correct.
Planning is forward looking as plans are prepared for future and are based on forecasts about future conditions. On the other hand, controlling is looking back. It implies that it is like a postmortem of past activities to find out deviations from the standards.
However, it should also be noted that planning is backward looking also as it is guided by past experience and feedback report of controlling function and controlling is forward looking, as it does not end only by comparing the past performance with standards, it also helps in finding the reason for deviation and suggest the measures.
Thus, from the above description, we can conclude that planning and controlling are both forward as well as backward looking.
Controlling is essential as it helps in

1. Accomplishing Organisational Goals It measures the accomplishment of work against the standards and corrects deviations. This helps in ensuring that organisation is moving on right track to achieve the organisational goals.
2. Judging Accuracy of Standards A sound controlling system helps the management to verify whether
   the standards set are accurate and objective. It keeps a careful check on the changes, which are taking place in the organisation and in the environment, thereby helping to review and raise the standards in the light of such changes.

Answer 24:
(i) The type of organisation discussed here is informal organisation.
Interaction among people at work gives rise to a network of social relationships among employees. This is called informal organisation, e.g. meeting in a cafeteria, drama group in an organisation and cricket teams of organisational personnel, are all examples of informal organisations.
(ii) Advantages of informal organisation are as follows :

• Prescribed lines of communication are not followed. Thus, it facilitates quick feedback and spreads information faster.
• It provides a sense of belongingness and gives due respect to social and psychological needs.
• It provides the necessary environment for individual creativity and innovation.
•  It contributes to fulfilment of goals, promoting the feeling of cooperation among employees.

Answer 25:
Promotion Mix It refers to combination of promotional tools used by an organisation to achieve its
communication objectives. It consists of all the activities aimed at persuading customers to buy the product.
It includes communication activities undertaken to inform and convince customers.
Various components used by the marketers are given below:

• Advertising It is a non-personal visible communication which is paid for by an identified sponsor.
• Sales Promotion It refers to short-term activities or incentives which are aimed at encouraging purchase of products.
• Personal Selling It involves direct and face to face personal interactions between the sales person and potential customers.
• Public Relations This is the communication of a product, brand or business by placing information about it in the media without paying for the time or media space directly.

We hope the CBSE Sample Papers for Class 12 Business Studies Paper 4 help you. If you have any query regarding CBSE Sample Papers for Class 12 Business Studies Paper 4, drop a comment below and we will get back to you at the earliest.

CBSE Sample Papers for Class 12 Business Studies Paper 3 are part of CBSE Sample Papers for Class 12 Business Studies Here we have given CBSE Sample Papers for Class 12 Business Studies Paper 3.

CBSE Sample Papers for Class 12 Business Studies Paper 3

Students who are going to appear for CBSE Class 12 Examinations are advised to practice the CBSE sample papers given here which is designed as per the latest Syllabus and marking scheme as prescribed by the CBSE is given here. Paper 3 of Solved CBSE Sample Papers for Class 12 Business Studies is given below with free PDF download solutions.

Time: 3 Hours
Maximum Marks: 80

General Instructions

(i) Answer to questions carrying 1 mark may be from one word to one sentence.
(ii) Answer to questions carrying 3 marks may have about 50 to 75 words.
(iii) Answer to questions carrying 4 – 5 marks may have about 150 words.
(iv) Answer to questions carrying 6 marks may have about 200 words.
(v) Attempt all the parts of a question together.

Question 1:
In which type of plan, the sequence to perform a job is determined?

Question 2:
Rita wants to buy a packet of juice. As an aware customer, how can she be sure about the quality of juice she plans to buy?

Question 3:
There are several techniques for measurement of actual performance as a step of process of controlling. What does these techniques include?

Question 4:
Distinguish between functional structure and divisional structure on the basis of formation.

Question 5:
ABC Ltd, a reputed industrial machines manufacturer, need ₹20 crore as additional capital to expand their business. Mr Kunal, the Chief Executive Officer (CEO) of the company wants to raise funds through equity. The finance manager, Mr Amit, suggested that the share may be sold to investing public through intermediaries, as the same will be less expensive. The proposal was accepted.
Name the method through which the company decided to raise additional capital.

Question 6:
“Introducing a scheme of 50% + 40% less by Koutons,” is the example of which sales promotion technique?

Question 7:
A fashion design house has the following main jobs:
(a) Manufacturing
(b) Finance
(c) Marketing
(d) Personal
(e) Research and development
Which organisational structure will you prefer for this type of a company

Question 8:
The net income of XYZ Ltd is ₹10,20,000 and sales for the year are ₹70 lakh. The total investment in the business amounts are ₹90 lakh. Find out the return on investments for XYZ Ltd.

Question 9:
Identify the type of products in the following cases and give an example of each type.

1.  Purchase of goods in which buyers devote considerable time to compare quality.
2. Consumer products which are purchased frequently, immediately and with least time and efforts.

Question 10:
There are some barriers in communication which are concerned with organisational structure and regulations. Discuss briefly any three of its barriers.

Question 11:
Which institution is known as the watch dog of securities market in India?

Question 12:
Name the level of management, to which the following parts belong:

1. Mr A is a purchase manager in XYZ Ltd.
2. Mr A is a CEO in XYZ Ltd.
3. Mr A is a superintendent in XYZ Ltd.

Question 13:
Explain the following features of planning:

1.  Planning focuses on achieving objectives.
2. Planning establishes standards for controlling.

Question 14:
Rahul, a worker, is given a target of assembling two computers per day. Due to his habit of doing things differently, an idea struck him which would not only reduce the assembling time of computers, but would also reduce the cost of production of computers. Rahul’s supervisor instead of appreciating him, ordered him to complete the work as per the methods and techniques decided earlier, as nothing could be changed at that stage.

1. Identify the limitation of planning, as discussed in the above para.
2. In addition to the above limitation, discuss three more limitations of planning.

Question 15:
Mrs Hansaben Shah had bought a silk saree from Alka Saree Center for ₹7,000. She wore the saree on a couple of occasions but even before a wash it started tearing on its own. She complained to the dealer who said good once sold could not be taken back nor refund was possible.

1. What values of a customer are affected in this case?
2. What right can be exercised by the buyer in this case?

Question 16:
The directors of Kashyap Ltd, an organisation manufacturing computers, wants to double the sales and have given this responsibility to their sales manager. The sales manager has no authority either to increase the sales promotion expenses or appoint new salesmen. Hence, he could not achieve this target.

1. Is the sales manager responsible for not achieving the target?
2. Which principle of management is violated here?
3. State any two effects, if this principle is violated.

Question 17:
Discuss any four points highlighting the importance of delegation for an organisation.

Question 18:
What do you mean by working capital? Explain any three factors affecting the requirement of working capital.

Question 19:
On 8th November, 2016, Prime Minister Narendra Modi banned ₹ 500 and ₹ 1,000 currency notes by implementing demonetisation policy. In the context of this statement, explain any four features of demonetisation.

Question 20:
” An ideal control technique is the one that checks every bit of performance.” Comment.

Question 21:
National Optic Fibre Network (NOFN) Project, one of the most expensive and ambitious projects in India’s technology history, connects 2,50,000 Gram Panchayats in the country with a fibre optic network.

1.  As per the reader’s view, the above project is associated to which dimension of business environment?
2. How this project adds value to the society?

Question 22:
Blue Bell School believes in all round development of children, focusing both on academics and on sports and extra-curricular activities. Many students of this school have secured ranks at the state level in the board exams and also some of the students have excelled at the state and national games. One of the key reasons for such excellent performance of the students is that the school hires highly qualified teachers and pays them well. The school has presently vacancies for middle level classes. The internal sources have been exhausted. Explain any five sources of recruitment that the school can use for filling up these vacancies.

Question 23:
There are two companies B and D. Total contribution of capital is ₹40 lakh each. The ratio of equity to total capital in company B is ₹10 lakh and debt is ₹30 lakh while in company D, the total equity capital is ₹40 lakh, sourced through equity. EBIT is ₹8 lakh, the interest rate on debt is @ 10% and the tax rate is 30%. Which company enjoys favourable financial leverage?

Question 24:
Markfed Foods Pvt Ltd has appointed a new HR manager, who has completed his MBA from the most renowned institution in India. He was a gold medalist and has also been acknowledged as the best employee during his internship in a firm. Soon after his joining, the management noticed a drastic change in the attitude of workers towards their work.
They were willing to accept new challenges, take up more challenging jobs and were able to achieve targets efficiently and effectively. Soon, the company prospered and established its name in the market. On being enquired, he confessed that all this change is attributed to Maslow’s Theory of Motivation. Briefly explain Maslows Need Hierarchy Theory and also state the assumptions on which it is based.

Question 25:
What do you mean by channels of distribution? What functions do they play in the distribution of goods and services? Explain.

Answers

Answer 1:
Procedure is one of the types of standing plan which determine the sequence to perforn a job.

Answer 2:
Rita should look for FPO mark on the packet, which is a quality indicator for beverages.

Answer 3:
It includes sample checking, personal observation and preparing performance reports.

Answer 4:
Difference between functional structure and divisional structure is:

Answer 5:
Offer for sale is the method through which the company decided to raise additional capital.

Answer 6:
The name of sales promotion technique is discount.

Answer 7:
Functional organisational structure will be suitable for this type of organisation.

Answer 8:
Return on Investment = \(\frac { Net Income }{ Total Investment }\) x 100 = \(\frac { 10,20,000 }{ 90,00,000 }\) x 100 = 11.33%

Answer 9:
(i) Shopping Products They are the products that require considerable time and effort e.g. Colour TV, jewellery, etc.
(ii) Convenience Products These products require minimum time and effort and are purchased frequently by the customers e.g. Salt, soap, toothpaste, etc.

Answer 10:
The three organisational barriers are as follows:

1. Organisational Policy Communication is hampered, if the policy of an organisation does not support the freeflow of communication.
2. Status Status of a superior may create a psychological distance between him and are his subordinates. A status conscious manager does not easily communicate with his subordinates.
3. Rules and Regulations Rigid rules and cumbersome procedures act as a barrier to effective communication. Communication through the prescribed channels may result in delays.

Answer 11:
Securities Exchange Board of India (SEBI) is the watch dog of the securities market. It performs various functions to regulate and protect the interests of investors while dealing with securities.
The functions performed by SEBI to facilitate this role are as follows:

1. Registration of brokers and sub-brokers in the market.
2. Registration of collective investment schemes and mutual funds.
3. Controlling takeover bids and imposing penalties for such practices.
4. Prohibition of fraudulent and unfair trade practices.

Answer 12:
(i) Middle Level This level includes head of the departments such as purchase manager, finance manager, etc.
(ii) Top Level This level includes chief executives, managing directors, etc.
(iii) Operational Level This level includes foreman, inspectors, superintendent, etc.

Answer 13:
(i) Planning Focuses on Achieving Objectives Planning involves the determination of activities required to be undertaken to achieve objectives of organisation. Thus’, it can be said that it focuses on achieving objectives.
(ii) Planning Establishes Standards for Controlling Planning involves setting-up of objectives, which act as the standards against which actual performance is measured. This helps in finding deviations and taking corrective action in the controlling process.

Answer 14:

1. As per the above mentioned para, the limitation highlighted is‘planning reduces creativity’.
2. The other three limitations of planning are:
   • It involves huge costs i.e., it usually involves a lot of time, effort and cost of managers.
   • Success of planning rests on its implementation. Lack of proper implementation may lead to failure of planning. Thus, planning does not guarantee success.
   • A specific plan made in an organisation clearly indicates the objective to be achieved and ways of doing work. Since, a manager may not be able to change these plans, it leads to rigidity.

Answer 15:
(i) Emotional and economic values of a customer are affected in this case, as she purchased an expensive saree and wore it only on a couple of occasions.
(ii) Right to Seek Redressal As per the Consumer Protection Act, the consumer has a right to get relief in case the product falls short of his/her expectations. Several reliefs are available like removal of defect in the product, compensation paid for any loss, etc. So, she can exercise this right and can raise her voice against the dealer.

Answer 16:
(i) No, the sales manager is not responsible because he was not given authority to increase the sales promotion expenses.
(ii) The principle of authority and responsibility is being violated in the given case.
(iii) Two effects of violating this principle are stated below:
(a) Subordinates will not be able to complete the task effectively (in time).
(b) Violation of this principle may lead to delay in decision-making.

Answer 17:
Delegation of authority is important for an organisation because of the reasons discussed below:
(i) Motivation of Employees Delegation provides a feeling of status and recognition to subordinates, as it is not only a process of sharing workload, but also involves trust of the superior on his subordinate. Entrustment of responsibility builds up his esteem and encourages him to perform better.
(ii) Facilitation of Growth Delegation helps in the expansion of an organisation by providing a ready workforce to take up leading positions in new ventures. Trained and experienced employees are able to play significant role in launching new projects of the organisation.
(iii) Basis of Management Hierarchy Delegation of authority establishes superior-subordinate relationships, ’ which are the basis of hierarchy of management. This helps employees to know ‘who has to report to whom’.
Thus, duties and powers of each individual becomes clear.
(iv) Better Coordination The elements of delegation namely authority, responsibility and accountability helps to define the powers, duties and responsibilities related to various positions in an organisation. This helps to avoid overlapping and duplication of work and facilitates coordination, as it gives a clear picture of the work being done at various levels.

Answer 18:
Working Capital The capital invested in current assets such as stock of materials and finished goods, accounts receivable, bills receivable and bank balances for meeting day-to-day expenses is known as working capital.
Factors affecting the working capital requirements are:

1. Nature of Business A trading organisation and a service industry firm usually needs a smaller amount of working capital as compared to a manufacturing organisation.
2. Scale of Operations Organisations which operate on a large scale, their quantum of inventory and debtors required is generally high. Such organisations, therefore, require large amount of working capital as compared to the organisations which operate on a lower scale.
3. Credit Availed Just as a firm allows credit to its customers, it also may get credit from its suppliers. To the extent, it avails the credit on purchase, the working capital requirements is reduced.

Answer 19:
Features of demonetisation are as follows:

1. It is a radical monetary step in which a currency unit’s status as a legal tender is declared invalid.
2. It usually occurs when their is a change in currency by the government.
3. It is an attempt to make a cashless, corruption free and digital society.
4. It is a strict measure by the government against tax evasion.
5. It helps in channelising more savings into the formal financial system.

Answer 20:
This statement is not true. An ideal control system should concentrate on key aspects of performance. There are several activities to be controlled. In practice, it is not possible for management to control each and every activity due to limited time.

Moreover, minor deviations from plans and targets are insignificant for success. Therefore, an attempt to control everything is likely to be a futile exercise. Control system should focus attention on exceptional and key factors only. This will help to save time, efforts and money. Thus critical point control is an ideal technique where focus is on the key result areas.
On the other hand, controlling each and every activity results in delays, increased cost and neglect of key items. The control system should be designed in such a manner that only significant deviations from the standards are reported to the higher level managers. Thus, management by exception technique should be followed and deviations within an acceptable range should be ignored.

Answer 21:

1. (a) The National Optic Fibre Network (NOFN) Project of government is associated with political, social, technological and economic environment, as this project will satisfy the social needs of people, as well as, provide them opportunities of jobs, impressive wages, etc.
   (b) Secondly, it connects the villages with a fibre optic network, which depicts the best example of innovations or advancement of technologies.
   (c) The National Optic Fibre Network (NOFN) Project is being overseen by a new entity called Bharat Broadband Network Limited (BBNL) and is being executed by BSNL and Mahanagar Telephone Nigam Limited (MTNL).
   This project will prove to be beneficial not only for villagers but from this, persons involved in testing, civil work, logistics, local vendors, antenna- suppliers, technicians will also feel benefitted and will be able to satisfy their basic needs.
2. This project adds following values to the society:
   (a) Raising of standards of living and development of society.
   (b) Employment opportunities and economic development in rural areas.

Answer 22:
For filling up the vacant posts, following five external sources of recruitment can be used:
(i) Direct Recruitment Under direct recruitment, a notice is placed on the notice board of the enterprise specifying the details of the jobs available. Job seekers assemble outside the organisation on the specified date and selection is done on the spot. This source may be used for the office staff, teachers and primary teachers.
(ii) Advertisement Advertisement in newspaper is generally used when wider choice is required. The advantages of advertising vacancies is that more information about the organisation and job can be given in the advertisement. It gives the management a wider range of candidates from which to choose.
(iii) Employment Exchange Employment exchanges run by the government are regarded as a good source of recruitment. It helps to match personnel demand and supply by serving as a link between job seekers and
employers.
(iv) Recommendations of Employees Employees of an organisation recommend the names of their friends, relatives and neighbours, which prove to be a good external source of recruitment. It is a reliable source as the background of the suggested candidate is well known.
(v) Web Publishing Internet is becoming a common source of recruitment these days. There are many website?, like naukri.com, monster, com, etc designed to provide information to both job seekers and employers.

Answer 23:
As per the given details, company enjoying the favourable financial leverage can be identified as below:

Company B is in the position of favourable financial leverage as use of debt increases the EPS and thus, the situation is considered as favourable for trading on equity.

Answer 24:
Maslow’s Need Hierarchy Theory of Motivation was given by Abraham Maslow. It is based on human hierarchy of five needs which are depicted and explained below:

(i) Basic Physiological Needs These are the basic needs, which a person is required to satisfy in order to survive. Hunger, thirst, shelter and sleep are some of the examples of these needs. In an organisation, basic salary helps to satisfy these needs.
(ii) Safety/Security Needs These needs are concerned with physical, economic and social security, in the form of job security, stability of income, etc.
(iii) Affiliation/Belongingness/Social Needs These needs are concerned with affection, sense of belongingness acceptance and friendship. It is fulfilled when employees have cordial relations with colleagues.
(iv) Esteem Needs These needs include factors such as self-respect, status and recognition. When these needs are fulfilled through job title, it enhances self-confidence and prestige of employees.
(v) Self-actualisation Needs It is the highest level of need in the hierarchy. It arises after the satisfaction of all previously discussed needs. These needs include growth, self-fulfilment and achievement of goals.

Assumptions of Maslow’s Need Hierarchy Theory
The main assumptions of Maslow’s need hierarehy theory are :

1. People’s behaviour is based on their needs. Satisfaction of such needs influences their behaviour.
2. People’s needs are hierarchical in order. They start from basic physiological needs and reach to high level needs.
3. A satisfied need can no longer motivate a person, only next higher level need can motivate a person.
4. A person moves to the next higher level need, only when the lower level need is satisfied.

Answer 25:
Channels of Distribution Channels of distribution are set of individuals and firms that take title or assist in transferring title of particular goods and services as they move from producers to consumers, it refers to a team of merchants, agents and business institutions that combine physical movement and title movement of products.

Functions of Channels of Distribution Channels of distribution smoothen the flow of goods by creating possessions, place and time utilities. Some important functions performed by them are:

1. Sorting It refers to the process of sorting the product into homogeneous groups on the basis of size, quality, features and price.
2. Accumulation It refers to the process of accumulation of goods into larger homogeneous stocks. This helps to maintain a continuous flow of supply.
3. Allocation It involves breaking homogeneous stocks into smaller and marketable lots. This helps in making sales easily according to different requirements of different buyers.
4. Assorting It refers to the process of combining various goods of the same line of product, for sale to customers such as a cricket kit containing a bat, a ball, gloves, wickets, stumps, helmet and leg guards.

We hope the CBSE Sample Papers for Class 12 Business Studies Paper 3 help you. If you have any query regarding CBSE Sample Papers for Class 12 Business Studies Paper 3, drop a comment below and we will get back to you at the earliest.

CBSE Sample Papers for Class 12 Business Studies Paper 2 are part of CBSE Sample Papers for Class 12 Business Studies Here we have given CBSE Sample Papers for Class 12 Business Studies Paper 2.

CBSE Sample Papers for Class 12 Business Studies Paper 2

Students who are going to appear for CBSE Class 12 Examinations are advised to practice the CBSE sample papers given here which is designed as per the latest Syllabus and marking scheme as prescribed by the CBSE is given here. Paper 2 of Solved CBSE Sample Papers for Class 12 Business Studies is given below with free PDF download solutions.

Time: 3 Hours
Maximum Marks: 80

General Instructions

(i) Answer to questions carrying 1 mark may be from one word to one sentence.
(ii) Answer to questions carrying 3 marks may have about 50 to 75 words.
(iii) Answer to questions carrying 4 – 5 marks may have about 150 words.
(iv) Answer to questions carrying 6 marks may have about 200 words.
(v) Attempt all the parts of a question together.

Question 1:
Aircel started an earnest awareness campaign ‘Save our Tigers’. The campaign’s main agenda was to conserve tigers. This campaign highlights which objective of management?

Question 2:
Some products have certain unique features. They attract significant groups of buyers. Identify the kind of product.

Question 3:
Sunrise Ltd intends to achieve a return of 20% on investment. What type of plan is it?

Question 4:
The employees of Murfi Wear Ltd take part in hockey matches on Sunday. Name the type of organisation formed.

Question 5:
Priyanka wants to buy a gold ring. As an aware customer, how can she be sure about the quality of gold ring, which she is going to buy?

Question 6:
However qualified, experienced and learned a teacher may be, he/she is required to give a demo and teach a class before being selected. What kind of test is it?

Question 7:
XYZ Services was looking to hire 100 new employees in the month of February, 2018. The human resource department is asked to achieve this target with the help of operations department. By the end of February, 2018, the target could not be achieved. For this HR department is blaming operations department and vice-versa. Which concept is missing in the above paragraph?

Question 8:
Give the meaning of capital market.

Question 9:
Differentiate between management principles and values on the basis of mode of formation and nature.

Question 10:
Nature of money market can be well explained with the help of its features. State any three such features of money market.

Question 11:
In a manufacturing unit which is located in the remote town area, a labourer gets ₹ 400 after completing 100 units of product in a day. Another gets ₹ 500 after completing 80 units in a day.
(i) Which principle is violated in the given case?
(ii) State some of its adverse effects.

Question 12:
“Packaging has acquired great significance in the marketing of goods.” In the light of this statement, explain any three functions of packaging.

Question 13:
If planning involves working out details for the future, why does it not ensure success?

Question 14:
XYZ Co produces leather purses and they are using animal’s skin as a raw material.

1. Which values do you find disturbing in the above para?
2. Find out the component of business environment which is being overlooked?

Question 15:
(i) Name the organisation which has the benefit of easy to fix responsibility.
(ii) Name the type of organisation which does not have pre-determined objectives.
(iii) Differentiate between formal and informal organisation

Question 16:
“Management is skillful and personal application of existing knowledge to achieve desired results.” Explain.

Question 17:
Khushi purchased some household goods from a general store. After reaching home she found a face cream in her merchandise, for which she has not been billed. After checking the date of expiry and other details, she started using it. Her face burnt due to the use of cream.

1. Can Khushi file a complaint? Justify your answer.
2. Under Consumer Protection Act, 1986, who can file a complaint?

Question 18:
You are a management guru. In your opinion, is controlling the last function or the beginning of the process of management?

Question 19:
A company X Ltd is setting-up a new plant in India for manufacturing auto components. India has a highly competitive and cost effective production base in the sector. Many reputed car manufacturers source their auto components from here. X Ltd is planning to capture about 40% of the market share in India and also export to the tune of atleast $5 million in about 2 years of its planned operations. To achieve these targets, it requires a high trained and motivated work force. You have been asked by the company to advise it in this matter, which function of management helps in obtaining right people and putting them on the right place/jobs? Explain any three benefits of this function.

Question 20:
What do you mean by strategy? Explain its features.

Question 21:
KAY Ltd is a company manufacturing textiles. It has a share capital of ₹ 60 lakh. In the previous year its earning per share was ₹ 0.50. For diversification, the company requires additional capital of ₹ 40 lakh. The company raised funds by issuing 10% debentures for the same. During the year, the company earned profit of ₹8 lakh on capital employed. It paid tax @ 40%.

1. State whether the shareholders gained or lost, in respect of earning per share on diversification. Show your calculations clearly.
2. Also, state any three factors that favour the issue of debentures by the company as part of its capital structure.

Question 22:
Timely Ltd is a manufacturer of premium wall clocks. The company has been doing extremely well and has been able to carve a niche in the market. The company recently decided to go global. To achieve the above objective, the company decided to increase its production to 30,000 units per month. But, after two months, the management observed that only 45,000 units were manufactured. Company is * opting for a good control system in order to achieve the targets on time.

1.  In context to this, give some of the advantages of controlling.
2. State the values that will be served by an effective control system.

Question 23:
Motivation refers to the way in which urges, desires, aspirations, strivings or needs direct, control and explain the behaviour of human beings. It is something which moves the person to action and continues him in the course of action already initiated. With reference to this, explain the process of motivation.

Question 24:
Dev Ltd is a company engaged in the production and distribution of films. The company is an established name in Bollywood. Now the company wants to enter in the regional cinemas also and for this, they are now targeting the South Indian Film Industry. They have launched three films in South with leading actors and actresses and even managed to sign Rajnikanth. To fund its projects, the management takes a decision to raise money for long-term capital needs of business from certain sources.

1. State the different sources of long-term capital.
2. Decision to raise money for long-term capital needs is affected by several factors. Discuss any five such factors.

Question 25:
“Generally, consumers prefer to buy goods directly from the producers but it is not always possible.” Explain four different factors responsible for this.

Answers

Answer 1:
This campaign highlights social objective of management.

Answer 2:
These products are known as speciality products.

Answer 3:
It is an objective plan.

Answer 4:
Informal organisation is formed by the employees of Murfi Wear Ltd.

Answer 5:
She should check the BIS’s (Bureau of Indian Standards) ‘Hallmark’ on the ring.

Answer 6:
Trade test, which is used to evaluate candidate’s professional efficiency.

Answer 7:
In the given paragraph, coordination is missing between the HR department and the operations department. It affects the organisational value of cooperation among different departments.

Answer 8:
Capital market refers to facilities and institutional arrangements through which long-term funds, both debt and equity are raised and invested.

Answer 9:
Difference between management principles and values are:

Answer 10:
Features of money market are as follows :

1. It deals in short-term monetary assets, whose period of maturity is upto one year.
2. It is a market where low risk, unsecured and short-term debt instruments are issued and actively traded everyday.
3. Liquidity is provided by the Discount and Finance House of India, specially formed for this purpose.

Answer 11:

• Principle of equity is violated.
• Adverse effects are:
  • It creates dissatisfaction among the employees.
  • Skilled workers lose confidence in the organisation.
  •  It emerges poor relations between workers and managers

Answer 12:
Packaging refers to the act of designing and producing the container or wrapper of a product.
Three functions of packaging are as follows:

1. Product Identification Packaging helps a product to be identified by the customer, e.g. Maggi Noodles in yellow colour, Lays in blue, green and red colour can be identified easily.
2.  Product Protection Packaging protects the contents of a product from spoilage, breakage, leakage, damage, etc. e.g. Air tight containers and packets are used for biscuits, tea, etc.
3. Product Promotion Packaging promotes the sales of the product. Package is the buyer’s first encounter with the product and is capable of attracting or repulsing the buyer. The colourful attractive packing of the product may induce the customer to buy it. e.g. Ferrero Rocher Chocolates, Calcium Sandoz, etc

Answer 13:
The success of an enterprise is possible only when plans are properly made and then implemented. In order to achieve goals, plans need to be translated into action or else, they become meaningless. Managers usually rely on previously tried and tested successful plans and like to use them in every similar condition/situation. It is not necessary that just because the plan has worked before, it will work again. There are so many unknown factors to be considered. The kind of complacency and false sense of security that plans provide, may actually lead to failure instead of success.

Answer 14:
(i) The values overlooked by the company are :
(a) Conservation of wildlife and natural heritage of fauna.
(b) Religious sentiments of the people/society.

(ii) Social component of business environment is being overlooked in this case. Social environment of business includes the social forces like customs and traditions, values, social trends, society’s expectations from business, etc.

Answer 15:
(i) Formal organisation has the benefit of easy to fix responsibility.
(ii) Informal organisation does not have pre-determined objectives.
(iii) Difference between formal and informal organisation are:

Answer 16:
The above statement highlights the nature of management as an art, which is clarified by the following points:

1.  There is a lot of literature available in various areas of management like marketing, finance, etc which the manager needs to specialise in.
2. A manager applies scientific methods and body of knowledge to a given situation, issue or problem in his own unique manner.
3. A successful manager practices the art of management in the day-to-day activities of managing an enterprise based on studies, observation and experience.
   Thus, we can conclude that management is an art.

Answer 17:
(i) No, Khushi cannot file a complaint, as she is not a consumer under the Consumer Protection Act, 1986 because she has not paid any consideration for the face cream.

(ii) Under Consumer Protection Act, 1986, a complaint can be filed by:
(a) Any consumer.
(b) Any registered Consumer Association.
(c) Central or State Government.
(d) One or more consumers on behalf of numerous consumers.
(e) Legal heir or representative of deceased consumer.

Answer 18:
Controlling should not be misunderstood as the last function of management. It is a function that brings the management cycle back to the planning function.
In general, the process of management begins with planning and ends at controlling, but when a manager performs the function or steps of controlling, it is observed that the first step of controlling is setting standards. The controlling function finds out how far actual performance deviates from standards and analyses the corrective actions to be taken.
This process helps in formulation of future plans, thus becomes the premise of setting plans. Therefore, we can say it is the beginning of management process. Thus, it can be stated that, controlling function is both the beginning as well as the end of the management process.

Answer 19:
Staffing is that function of management which helps in obtaining right people and putting them on the right jobs.
Proper staffing ensures the following three benefits to the organisation:

1. Obtaining Competent Personnel It helps in discovering and obtaining competent personnel for various job positions in an organisation.
2. Higher Performance Staffing ensures high performance by putting right person on the right job.
3. Continuous Survival and Growth Proper staffing ensures continuous survival and growth of the enterprise through succession planning of managers.

Answer 20:
Strategies are general programmes of action towards the attainment of comprehensive objectives.
According to Allen, “Strategy is a unified, comprehensive and integrated plan designed to assure that the objectives are achieved.”

Features of strategy are as follows:

1. Strategy is flexible in nature. Changes can be incorporated, whenever required.
2. Strategy is formulated by top level management and its implementation is done by middle and lower management.
3. Strategy is formulated for allocation of resources necessary for achieving objectives.
4. Strategy is relative combination of actions. The combination is to meet a particular condition, to solve certain problems or to attain a desirable objective.

Answer 21:

Since, earning per share has fallen from 0.50 to 0.40, therefore the shareholders stand to lose on diversification.
Note In the absence of any information, shares are assumed to be of ₹ 10 each.

(ii) Three factors that favour issue of debentures by the company as part of its capital structure are :
(a) Debenture interest payable is a charge to the profits. Hence, a company stands to gain in terms of tax benefits.
(b) Issue of debentures help the shareholders of the company to gain through Trading on Equity’.
(c) Debenture is a cheaper source of finance as compared to equity.

Answer 22:
(i) Some advantages of good control system are as follows:

(a) Attainment of Organisational Objectives Budgeting as a system of control, focuses on specific and time bound targets. Thus, it helps in attainment of organisational objectives.
(b) Motivation to the Employees It is a source of motivation to the employees, who knows the standards against which their performance will be evaluated.
(c) Optimum Utilisation of Resources By allocating the resources according to the requirements of the different departments, it helps in optimum utilisation of resources.
(d) Budgeting Process It helps the management to learn from past experience. The management can
critically look at the success or failure of the past budgets and isolate errors, analyse their cause and establish steps to be taken to avoid repetition of such errors.

(ii) Values that can be served by good control system are as follows:
(a) Discipline (b) Orderliness (c) Efficiency/Increase in productivity

Answer 23:
Motivation process is based on unsatisfied human needs. It is as follows:
(i) An unsatisfied need of an individual creates tension which stimulates his or her drives.
(ii) These drives generate a search behaviour to satisfy such need.
(iii) When such need is satisfied, the individual is relieved from tension.
e.g. An employee has a need for promotion to a higher position. If this need is strong, it creates tension for the employee which stimulates his or her drives. Finally, he/she will fix it as his/her goal and search behaviour to reach the goal. If he/she succeeds in getting promotion (goal achievement), his/her need for promotion would be satisfied. This reduces his/her tension.

This process is explained with the help of a flow chart given below :

Answer 24:
(i) Sources of long-term capital are as follows:
(a) Equity shares
(b) Preference shares
(c) Debentures
(d) Long-term loans and advances
(e) Retained earnings

(ii) The following factors affect the financing decision :

• Cost The cost of all the sources of finance is different. The rate of interest on debt, fixed rate of dividend to be paid on preference share capital and the expectations of the shareholders on the equity share capital are in the form of costs. If the situations happen to be favourable, the benefit of cheap finance can be availed of by choosing debt capital.
•  Risk Debt capital is most risky and from the point of view of risk, it should not be used.
• Flotation Cost From the point of view of floating costs, retained profit is the most appropriate source. Therefore, its use should be made.
• Cash Flow Position If the cash flow position of the company is good, the payment of interest on the debt and the refund of capital can be easily made. Therefore, in order to take advantage of cheap finance, debt can be given priority.
• Level of Fixed Operating Costs
  In business, there are mainly two types of costs which are as follows:
  • Fixed Operating Cost e.g. Rent of the building, payment of salary, insurance premium, etc.
  • Fixed Financial Cost e.g. Interest on debt, etc.

If the level of fixed operating costs is in excess, it is better to keep the fixed financial costs at the minimum. Therefore, debt capital should not be used. On the contrary, if the level of fixed operating cost is low, the use of debt capital is more profitable.

Answer 25:
Generally, consumers prefer to buy directly from the producers but it is not always possible. Instead, consumers are supposed to take the help of channels of distribution, i.e. middlemen. In this channel, mainly agents, wholesalers and retailers are included.

Following four reasons are responsible for this are:
(i) Geographical Difference There are limited number of producers of any product while consumers are unlimited and scattered over a wide geographical areas. Hence, it is not possible to buy goods directly from the producers.
(ii) More Risk At the time of transportation of goods from one place to another, element of risk is always there. By using channel of distribution, such type of risk can be avoided.
(iii) Heavy Buying Costs It is a costly and difficult task to contact the producers directly.
(iv) Unavailability of Credit Facility Generally, it is not possible to have credit facility while purchasing directly from the producers.

We hope the CBSE Sample Papers for Class 12 Business Studies Paper 2 help you. If you have any query regarding CBSE Sample Papers for Class 12 Business Studies Paper 2, drop a comment below and we will get back to you at the earliest.

CBSE Sample Papers for Class 12 Business Studies Paper 1 are part of CBSE Sample Papers for Class 12 Business Studies Here we have given CBSE Sample Papers for Class 12 Business Studies Paper 1.

CBSE Sample Papers for Class 12 Business Studies Paper 1

Students who are going to appear for CBSE Class 12 Examinations are advised to practice the CBSE sample papers given here which is designed as per the latest Syllabus and marking scheme as prescribed by the CBSE is given here. Paper 1 of Solved CBSE Sample Papers for Class 12 Business Studies is given below with free PDF download solutions.

Time: 3 Hours
Maximum Marks: 80

General Instructions

(i) Answer to questions carrying 1 mark may be from one word to one sentence.
(ii) Answer to questions carrying 3 marks may have about 50 to 75 words.
(iii) Answer to questions carrying 4 – 5 marks may have about 150 words.
(iv) Answer to questions carrying 6 marks may have about 200 words.
(v) Attempt all the parts of a question together.

Question 1:
Which principle of management is violated if an employee is asked to receive orders from two superiors?

Question 2:
The top management of ‘Raheja Ltd’ focuses on maintaining an effective two way communication with their employees. They aim to keep everyone well informed and involve employees in company’s activities and provide opportunities for them to give their feedback. What will the company achieve by following such a network of communication? Give any two points.

Question 3:
Banking sector reforms have led to easier credit terms and better services. This is an example of a key component of the business environment. Name this component.

Question 4:
Demonetisation is the act of stripping or discontinuing a currency unit of its status as legal. Why does demonetisation policy implement in a country?

Question 5:
What is the primary objective of financial management?

Question 6:
In Mumbai, Salman found impurities in a bottle of soft drink which he had bought. He approached the redressal forum. Which right is exercised by him?

Question 7:
Name the market where companies issue new securities.

Question 8:
What do you understand by the term recruitment?

Question 9:
What do you mean by informal organisation? State any two features of it.

Question 10:
Explain any three components of physical distribution.

Question 11:
Mr Giriraj Ajmera is working as a sales department head in ABC Ltd. Name the level of management at which he is working. Explain any two functions performed by him.

Question 12:
‘Drink Up’ and ‘Sweet Drink’ are two competing companies manufacturing aerated drinks. During the past financial year, Drink Up was able to produce 1,00,000 bottles at the cost of ₹5,65,000 and Sweet Drink was able to produce bottles at a cost of ₹3,54,375. Which company is more efficient?

Question 13:
Name the method of recruitment in the following cases:

1. A company get applications on and off even without declaring any vacancy. However, as and when the vacancy arises, the company makes use of such applications.
2. Recruitment by which most of the senior positions of the industry as well as commerce are filled.
3. Casual vacancies of unskilled or semi-skilled jobs when there is a rush of order or when some permanent workers are absent.

Question 14:
‘Dreamz House’ is a company engaged in developing and promoting housing projects. The total capital of the company is ₹75,00,000, out of which ₹30,00,000 has been raised from loans. Compute the following:

1. The debt-equity ratio of the firm
2. The percentage of debt in the total capital of the firm.

Question 15:
What is National Stock Exchange of India (NSEI)? Explain its various segments.

Question 16:
Nimisha entered into Big Bazaar and purchased the products as per her needs. The sales person did not force her either directly or indirectly to buy the products. Secondly, the big retail chain provides the products after taking into consideration the following factors:
(a) Health of the consumers
(b) Fitness of the products
(c) Quality of the product
(d) Proper quantity at reasonable prices
(e) Customs and traditions of the consumers, etc.

1. What values are cherished by an individual in the above case?
2. Why should producers consider the above mentioned aspects?

Question 17:
You are a consumer. As per your viewpoints, what is consumer protection? Also, state its three importance.

Question 18:
In the rainy season, the level of impurities in the water bodies tend to rise, leading to an increase in the number of cases of jaundice and hepatitis. Keeping this in mind, the court passed an order that all schools must have water purifiers for the school children, keeping in view the below stated reasons:

1. Society in general is more concerned about the quality of life.
2. Innovative techniques are being developed to manufacture water purifier at competitive rates.
3.  Incomes are rising and children at home are also drinking purified water.
4. The government is also showing positive attitude towards the water purifier business.

Identify the different dimensions of business environment by quoting lines from the above para.

Question 19:
“Staffing is the part of human resource management.” Discuss.

Question 20:
A company Ltd manufacturing cosmetics, which enjoyed a pre-eminent position in business, has grown in size. Its business was very good till 1991. But after that, new liberalised environment has seen entry of many MNC’s in the sector.

With the result, the market share of X Ltd has declined. The company followed a very centralised business model with directors and divisional heads making even minor decisions. Before 1991, this business model had served the company very well as consumers has no choice. But now, the company is under pressure to reform and decentralise.

1.  What do you understand by decentralisation? Can an organisation in general, be fully centralised or fully decentralised?
2. Explain any three advantages of decentralisation.

Question 21:
A stock exchange is an institution which provides a platform for buying and selling of existing securities. SEBI, as a watch dog performs various functions which protects the investors.

1. Explain the regulatory and protective functions of SEBI.
2. Name the values which SEBI strives to fulfil through its functions.

Question 22:
Discuss the importance of controlling.

Question 23:
ABC Ltd is facing a problem of declining market share due to increased competition in the market. In order to retain its share in the market, what logical steps should be followed by a manager?

Question 24:
Identify the principles of management violated in the following cases and explain them.

1. Manav, a manager, speaks to people at all levels, including his as well as other departments.
2. Manav, a manager, expects his subordinates to work for personal satisfaction and contentment, without any monetary reward.
3. Manav, a manager, expects that his subordinate produces instant results, without giving him sufficient time to settle in the new environment.
4. Manav, a manager, is not strict with his employees regarding timings and targets of work.

Question 25:
There are some barriers in communication which are concerned with encoding and decoding of message. Explain such barriers.

Answers

Answer 1:
Principle of unity of command is violated if an employee is asked to receive orders from two superiors.

Answer 2:
The company will have following achievements:

1. Good communication helps in the smooth functioning of the enterprise.
2. It increases managerial efficiency.

Answer 3:
This is an example of legal environment.

Answer 4:
Demonetisation policy is an attempt to make a cashless corruption free society and create a digital country.

Answer 5:
The primary objective of financial management is to maximise the shareholder’s wealth.

Answer 6:
Right to be heard is exercised by him.

Answer 7:
Companies issue new securities in primary market.

Answer 8:
Recruitment is the process of searching for prospective employees and stimulating them to apply for jobs in the organisation.

Answer 9:
Informal organisation is the system of social relationship among the members of formal organisation. It emerges on its own in a natural manner within the formal organisation structure.

Following are the features of an informal organisation:

1.  It reflects human or social relationships among people.
2.  It is unplanned and emerges spontaneously.
3. Members develop independent channels of communication.

Answer 10:
The three main components of physical distribution are explained below:

1. Order Processing A good physical distribution system provides an accurate and speedy processing of orders, in the absence of which goods would reach to the customer late or in wrong quantity, resulting in customer dissatisfaction.
2. Transportation It is one of the major elements in the physical distribution of goods as it carries goods and raw materials from the point of production to the point of sale.
3. Warehousing It refers to the act of storing and assorting products in order to create time utility. The basic purpose of warehousing is to arrange placement of goods and facilitates storing until the goods are sold.

Answer 11:
He is working at a middle level of management.
Functions performed by him are as follows:

1. Interpretation of policies framed by top management to lower level.
2. Recruiting and selecting the employees for their department.
3. Cooperating with other departments for smooth functioning.

Answer 12:
Cost per bottle of Drink Up = \(\frac { 5,65,000 }{ 1,00,000 }\) = ₹ 5.65
Cost per bottle of Sweet Drink = \(\frac { 3,54,375 }{ 67,500 }\) = ₹ 5.25
Since, cost per unit of Sweet Drink is less, therefore it is more efficient.

Answer 13:

1. Casual Callers Method In this method, company makes use of database of unsolicited applicants which are kept in file. Company recalls them to fill the current vacancies.
2. Advertisement Method This method is used to fill the most of the senior positions of the industry as well as commerce.
3. Direct Recruitment Method Through direct recruitment, casual vacancies of unskilled or semi-skilled jobs are filled, when there is a rush of order or when some permanent workers are absent.

Answer 14:
Total Capital of the Firm= ₹ 75,00,000
Debt = ₹ 30,00,000
∴ Equity = ₹ 45,00,000 (75,00,000-30,00,000)

Answer 15:
National Stock Exchange of India (NSEI) It is the latest, most modern and technology driven exchange. It was incorporated in 1992 and was recognised as a stock exchange in April 1993. It started its operations in 1994 in trading on the wholesale debt market segment.

Market Segments of NSEI The exchange provides trading in the following three segments:
(i) Wholesale Debt Market Segment This segment provides a trading platform for a wide range of fixed
income securities that include central government securities, treasury bills, state development loans, bonds issued by public sector undertakings, floating rate bonds, zero coupon bonds, index bonds, commercial paper, certificate of deposit, corporate debentures and mutual funds.

(ii) Capital Market Segment It provides an efficient and transparent platform for trading in equity, preference, debentures, exchange traded funds as well as retail government securities.

(iii) Future and Options Segment NSEI has also introduced trading in future and options contracts. This section provides us with an insight into the derivative segment of NSEI. Real time quotes and information regarding derivative products, trading systems and processes, clearing and settlement, risk management, statistics, etc are available here.

Answer 16:

1.  The value of freedom is cherished by an individual as she is purchasing the product as per her needs and nobody is forcing her to buy a particular product.
2. Producers should consider health, fitness, quality, quantity, customs and traditions, etc because it is essential for a business unit to consider the social aspects of business environment as the business exists in the society and it is the duty of a producer to produce the goods as per the needs and wants of the society. In order to survive in the long-run, these aspects should be considered.

Answer 17:
Consumer protection is a very wide term. It includes rights, responsibilities and various remedies available to consumers. It is not only beneficial for consumer, but it is equally important for businessman also.

The importance of consumer protection from the point of view of consumers are explained below:
(i) Consumer Ignorance In some countries like India, consumers are ignorant about the rights and reliefs which are available to them. Thus, it becomes necessary to educate them about the same, so as to achieve consumer awareness.

(ii) Unorganised Consumers Consumers need to be organised in the form of consumer organisations, which would take care of their interests. In India, we have consumer organisations and NGO’s, which are working in the field of educating consumers about their rights and promoting their interests.

(iii) Widespread Exploitation of Consumers In order to capture large market share, some traders, manufacturers and service providers are engaged in exploitative and unfair trade practices. Some of these are supply of defective and unsafe products, adulteration, false and misleading advertisements, etc. Therefore, they need protection against such malpractices of the sellers.

Answer 18:
The quoted lines from the given para, which are indicative of different dimensions of business environment are as follows:

1. The court passed an order that all school must have water purifier.’ The quoted line is depicting legal environment. Business has to function within the framework of laws and regulations of the country. Legal environment exercises significant influence on business activities.
2. ‘Society in general is more concerned about the quality of life.’ The quoted line is depicting the social environment as this environment consists of all the social and cultural forces within which business firms operate.
3. ‘Innovative techniques are being developed to manufacture water purifier at competitive rates.’
   The quoted line is depicting the technological environment. It includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services.
4.  ‘Income are rising and children at home are also drinking purified water.’
   The quoted line is depicting the economic environment. It consists of the factors and forces concerning means of production and distribution of wealth. It includes all such forces of economic development which influence the product market scope of business.
5. The government is also showing positive attitude towards the water purifier business.’
   The quoted line is depicting the political environment. It is concerned with the forces related with political stability, conditions that have strong impact on business.

Answer 19:
Human resource management is a wider term as compared to staffing. It includes staffing, record keeping, personal policy formulation, conducting personal research, providing expert’s services, etc. Hence, staffing is a part of the human resource management and not all of it.

Staffing function deals with the human element of management. It is important because the performance of an organisation depends upon its human resource, its competence and motivation. But, as organisations grow and number of employees increase, a separate department called Human Resource Department (HRD) is formed. It consists of specialists for all areas related to HRM.

The areas of human resource management can be divided into the following categories:

1. Recruitment i.e. searching for eligible candidates.
2. Providing expert services.
3. Developing compensation and incentives plans.
4. Handling grievances and complaints.
5. Providing for social security and welfare of employees.
6. Defending the company in law suits.

Answer 20:
(i) Decentralisation refers to systematic delegation of authority at all levels of management and in all departments of organisation to take decision.
While complete centralisation implies concentration of authority in a few hands, complete decentralisation implies greater autonomy to the lower levels of management. Therefore, an organisation cannot be completely centralised or decentralised. As an organisation grows in size, there is a tendency to move towards decentralised organisation. At the same time, decisions need to be centralised in priority areas and Key Result Areas (KRAs).

(ii) Advantages of decentralisation are given below:
(a) Develops Initiative amongst Subordinate Decentralisation helps to promote self-reliance and confidence amongst the subordinates. This is because when lower level managers are given freedom to take their own decisions, they learn to depend on their own judgement.

(b) Quick Decision-making In a decentralised organisation, since the decision-making power is entrusted to all the managers who perform the activities, there is no delay in decision-making and they are taken quickly.

(c) Facilitates Growth Decentralisation provides greater autonomy to the lower levels of management as well as divisional or departmental heads. This increases the productivity levels and the organisation is able to generate more profits, which can be used for growth and expansion purposes.

Answer 21:
(i) (a) SEBI performs the following regulatory functions:

•  Registration of brokers, sub-brokers and other players in the market.
• Registration of collective investment schemes and mutual funds.
• Regulation of takeover bids by companies.
• Levying fee or other charges for carrying out the purposes of the Act.

(b) SEBI Perfoms the following protective functions:

• Prohibition of fraudulent and unfair trade practices.
• Controlling insider trading and imposing penalties for such practices.
• Undertaking steps for investor protection.
• Promotion of fair practices and code of conduct in securities market.

Because of the regulatory and protective functions performed by SEBI, it is a watch dog of security market.

(ii) The values which SEBI fulfils are:
(a) Safety
(b) Transparency
(c) Fairness

Answer 22:
A good control system helps an organisation in the following ways:
(i) Accomplishing Organisational Goals The controlling function measures progress towards the organisational goals and brings to light deviations, if any and indicates corrective action. Thus, it guides the organisation and keeps it on the right track so that organisational goals might be achieved.

(ii) Judging Accuracy of Standards A good control system enables management to verify whether the standards set are accurate and objective. An efficient control system keeps a careful check on the changes taking place in the organisation.

(iii) Making Efficient Use of Resources By exercising control, a manager seeks to reduce wastage and spoilage of resources. Each activity is performed in accordance with predetermined standards and norms. This ensures that resources are used in the most effective and efficient manner.

(iv) Improving Employee Motivation A good control system ensures that employees know well in advance what they are expected to do and what are the standards of performance on the basis of which they will be appraised. Thus, it motivates and helps them to give better performance.

(v) Ensuring Order and Discipline The controlling function helps to minimise undesirable behaviour of employees by keeping a close check on their activities. Thus, it facilitates order and discipline in the

Answer 23:
Steps to be followed by a manager are enumerated below:

1. Setting Objectives This is the first step in planning, objectives should be established for the entire enterprise and for each and every department.
2. Developing the Planning Premises A business premises is an assumption on which the plans are based. Management makes assumptions for everything it plans.
3. Search for Alternatives This involves collection of right type of data and its anaylsis.
4. Evaluation of Alternatives After developing alternative courses, the management will evaluate the merits and demerits of various alternatives in the light of the objectives of the business and planning premises.
5. Selection of Best Course of Action This is the stage of decision-making. Quantitative techniques may also be used to choose the best course of action.
6. Follow up Planning provides the future course of action. Future is uncertain. A system of continuous evaluation of the plan may be designed and implemented.

Answer 24:
(i) Scalar Chain According to Fayol, Scalar chain refers to the chain of authority and communication that runs from top to bottom and should be followed by managers and their subordinates.
The above figure illustrates the scalar chain. If D and G wants to communicate, the message should usually move up through C, B, A, E, F and then G whereas, the manager is communicating with all levels and all departments, without following the scalar chain.

(ii) Remuneration of Employees According to Fayol, the quantum and methods of remuneration payable to employees should be fair and reasonable. It should be satisfactory to both employers and employees, which gives them a reasonable standard of living and should be within the paying capacity of the company.

(iii) Stability of Personnel According to Fayol, employee turnover should be minimised to maintain organisational efficiency. Therefore, suppose an individual gets selected for a post, then he should be given appropriate time to prove his abilities.
We can say, that he should be kept at the post for a minimum fixed tenure. This ensures stability, so that he can get proper time to explore his skills.

(iv) Discipline It is the sincerity and obedience towards organisational rules and regulations, as these are necessary for the smooth functioning of an organisation.
According to Fayol, good superiors at all levels, fair agreements and judicious application of penalties are helpful in maintaining discipline. It means obedience on part of workers as well as managers.

Answer 25:
The barriers which are concerned with problems and obstructions in the process of encoding and decoding of message into words or impressions are called semantic barriers. Such barriers result in faulty translations, different interpretations, etc.

Types of semantic barriers are discussed below:
(i) Badly Expressed Message Sometimes due to inadequate vocabulary, usage of wrong words, omission of needed words, etc intended meaning may not be conveyed by a manager to his subordinates.

(ii) Symbols with Different Meanings A word may have several meanings. Receiver has to perceive the same meaning for the word used by the sender, e.g. the word ‘value’ has different meanings in the given examples: What is the value of this equipment? I value our relationship, You should value your time. Thus, the word should be perceived in the same sense as it is used by the sender otherwise, it leads to communication problems.

(iii) Technical Jargon It is a common situation, faced by many in an organisation. The specialists use technical language or words, while explaining the process to persons who are not aware about these terms and may not understand their actual meaning.

(iv) Faulty Translations Sometimes the communication is drafted in one language and translated in another language, e.g. a manager drafts an information in english and while translating, uses hindi. If he is not proficient in both languages, mistakes may creep in and lead to faulty translation in the process.

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