CBSE Class 12 Business Studies Question Paper 2024 (Set 1- 66/2/1) Available- Download Solutions with Answer Key

Solution: This is a rule because it is a clear and direct instruction that needs to be followed. A rule is a regulation that must be obeyed, and in this case, it ensures safety at the construction site.

Solution: Akash Mehra follows an authoritative leadership style, where the leader gives clear instructions and expects compliance from subordinates with little input from them. The communication is one-way, with the manager issuing commands.

Solution: Directing involves guiding and supervising employees to ensure that they are working towards organizational goals. However, estimating manpower requirements is part of the planning function, not directing.

Solution:Recruitment is the process of attracting potential employees to apply for job openings. It involves advertising vacancies, sourcing candidates, and encouraging qualified individuals to apply.

Solution: Dematerialization refers to the process of converting physical securities into electronic form. This enables faster and more secure transactions.

Solution: The case demonstrates how planning encouraged Sudha and Shweta to transform their innovative idea into a successful business. Planning promotes new ideas and helps convert them into concrete actions.

Solution: The correct matching of marketing philosophies to their main focus is as follows:
1. Production concept: iv) Quantity of product
2. Product concept: ii) Quality, performance and features of product.
3. Marketing concept: i) Customers' needs
4. Societal Marketing concept: iii) Customers' needs and societal well-being.

Solution: Decentralization is an optional decision made at the discretion of the top management. Top management has the authority to decide whether decentralization should be implemented in the organization based on factors like its size, complexity, and goals. Assertion (A) is correct, and Reason (R) explains this concept by stating that decentralization is a decision taken by top management. Hence, both are true, and Reason (R) explains Assertion (A).

Solution: Sushant demonstrated delegation by assigning specific tasks to his subordinates while retaining the responsibility for the overall project. Delegation involves transferring authority and responsibility for specific tasks to others while the manager maintains accountability. This allowed Sushant to effectively manage his workload and complete the project on time with the help of his subordinates.

Solution: The communication barrier described here is a personal barrier, which arises due to individual attitudes, emotions, or biases. In this case, the superior's lack of confidence in their subordinates is a personal perception that hampers effective communication. Personal barriers can lead to miscommunication, misunderstanding, and inefficiency in the workplace.

Solution: The factor affecting capital structure in this case is control. Issuing equity to the public can dilute the ownership of management, making it vulnerable to a takeover. Companies prefer to maintain control, especially when their current stake in the company is low. Hence, control is an important factor in determining the choice between debt and equity financing.

Solution: Statement I is true because controlling is the function of ensuring that activities are aligned with the plans and objectives set by the organization. Statement II is also true as controlling is a pervasive function, meaning it is required at all levels of management, from top to operational levels. Therefore, both statements are correct.

Solution: The company, 'Lens-o,' uses a zero level channel of distribution. This type of distribution channel is direct, where the company sells its products directly to customers without intermediaries. Initially, 'Lens-o' operated online, and with the introduction of an offline store, the company continues to use a direct distribution model.

Solution: Sunita has used a functional structure for her travel agency. In this structure, the organization is divided into different departments based on specialized functions like reservations, hotel bookings, and payment handling. Each department focuses on a specific function, which enhances efficiency and specialization.

Solution: The tool of promotion used by 'JKSD India Ltd.' is Personal Selling. In this case, salespersons are directly interacting with potential customers in malls to promote the products and persuade them to buy. Personal selling involves face-to-face communication where a sales representative helps in persuading the customer to purchase a product.

Solution: The tests used to measure an individual's potential for learning new skills are Aptitude Tests. These tests assess the ability of an individual to learn or develop new skills and are commonly used in the selection process for jobs that require specific competencies.

Solution: The correct answer is Allocative. In financial markets, funds are allocated or directed to the most productive investment opportunities. This allocation function ensures that capital is distributed efficiently to support economic growth and investment in productive ventures.

Solution: The correct answer is Brand. A brand is a unique name, term, symbol, or design that identifies and differentiates a company's products or services from others in the market. It is used to create a unique identity and recognition in the marketplace.

Solution: The correct answer is Trading on equity. Trading on equity occurs when a company uses fixed financial charges, such as interest on debt, to increase the return for its equity shareholders. The presence of debt can amplify the profits for equity shareholders due to the leverage effect.

Solution: The correct answer is Storage and warehousing. While storage and warehousing are important aspects of logistics and supply chain management, they are not core features of marketing. Marketing primarily focuses on understanding and meeting customer needs and wants, creating value, and offering products and services that appeal to the target market.

Solution:(i) The function of management discussed in this case is Controlling.

Controlling is a key function of management that involves monitoring and evaluating the progress of activities to ensure that the organization is on track to meet its objectives. It includes the processes of setting performance standards, measuring actual performance, identifying deviations from the standards, and taking corrective actions.

In this case, Piyush, the Production Manager, noticed that the production cost for one pair of shoes exceeded the estimated cost. Upon investigation by Abhay, it was found that there was overmanning in the production process, meaning that more workers were involved than necessary to complete the task. The result was higher labor costs and inefficiency in resource utilization.

The controlling function is crucial in identifying such discrepancies and providing a foundation for corrective actions. By using controlling techniques, Abhay was able to identify the problem, allowing the organization to adjust its labor usage, thereby reducing costs and improving efficiency in future projects.

The key steps in controlling include:
1. Setting performance standards: In this case, the initial cost estimation and labor requirements would have been set as the performance standard.
2. Measuring actual performance: The actual labor used and the cost of production were monitored, revealing discrepancies between the expected and actual performance.
3. Identifying deviations: It was identified that the production process was using more workers than necessary, leading to higher labor costs.
4. Taking corrective action: After the issue was identified, the corrective action would involve optimizing the number of workers required and making the necessary adjustments to ensure that future production is more efficient.

Controlling is a fundamental part of the management process because it ensures that resources are used efficiently, performance is aligned with objectives, and the organization can quickly address any inefficiencies or issues that arise.

Solution: (ii) Importance of Controlling:
(1) It helps in accomplishing organisational goals by bringing to light the deviations, if any, and indicating corrective action.
(2) It helps in judging accuracy of standards in the light of changes taking place in the organization and environment.
(3) It helps in making efficient use of resources by ensuring that each activity is performed in accordance with predetermined standards.
(4) It improves employee motivation as the employees know well in advance the standards of performance on the basis of which they will be appraised.
(5) It ensures order and discipline among employees by keeping a close check on their activities.
(6) It facilitates coordination in action as each department is governed by pre-determined standards which are well coordinated with one another.

Solution:
The importance of controlling in management includes:
(i) Accomplishing organisational goals: Controlling ensures that activities are aligned with the set objectives of the organization, helping in achieving the overall goals.
(ii) Making efficient use of resources: It helps in monitoring the utilization of resources effectively and optimally.
(iii) Ensuring order and discipline: By keeping a check on performance, controlling ensures that the employees work in an organized and disciplined manner, maintaining a smooth workflow.

Solution:
Planning and controlling are inseparable twins of management. They are interdependent and work together to ensure the achievement of organizational goals.

1. Planning is a prerequisite for controlling: Planning sets the goals, and controlling helps to ensure that those goals are achieved. Without a plan, there is no standard to measure against.

2. Planning is prescriptive, controlling is evaluative: Planning involves deciding on a course of action for the future, while controlling assesses whether the actions taken are in line with the plan.

3. Planning is forward-looking, controlling is backward-looking: Planning sets future goals, whereas controlling evaluates past activities to correct any deviations and ensure goals are achieved.

Solution: 1. Registration of brokers and sub-brokers and other players in the market.
2. Registration of collective investment schemes and Mutual Funds.
3. Regulation of stock brokers, portfolio exchanges, underwriters, and merchant bankers and the business in stock exchanges and any other securities market.
4. Regulation of takeover bids by companies.
5. Calling for information by undertaking inspection, conducting enquiries, and audits of stock exchanges and intermediaries.

Solution: Objectives of SEBI:
(i) Regulation of Stock Exchanges:
SEBI aims to regulate stock exchanges and the securities market to ensure their smooth and orderly functioning.
(ii) Investor Protection and Awareness:
SEBI works to protect the rights and interests of investors, particularly individual investors, by guiding and educating them about securities trading.
(iii) Prevention of Trading Malpractices:
SEBI ensures that unethical and fraudulent activities such as insider trading, price manipulation, and unfair trade practices are prevented.
(iv) Regulation of Intermediaries:
SEBI formulates a code of conduct and fair practices for intermediaries like brokers, merchant bankers, and investment advisors, ensuring professionalism and competitiveness.

Solution:
Two types of plans discussed in the case:
(i) Objective:
"He set a target of earning a modest 10An objective is a specific goal set by the organization to be achieved within a set time period. In this case, the target return on investment is a clear objective.

(ii) Strategy:
"He now wanted to develop a plan to define the direction and scope of 'Cakes and Bakes' for the long run."
A strategy outlines a broad course of action that is designed to achieve long-term goals and objectives, such as improving ROI and advertising products effectively.

Solution:
The incentives provided by 'Inaya Ltd.' include:
(i) Perquisites:
Perquisites such as car allowance, housing, and medical aid provide motivation to employees over and above their salary.

(ii) Retirement benefits:
Retirement benefits like provident fund and gratuity provide financial security to employees after retirement, motivating them to stay in the organization.

(iii) Stock option/Co-partnership:
Employees are offered company shares at a set price lower than the market price, creating a sense of ownership and encouraging them to contribute to the growth of the company.

(iv) Bonus:
Bonuses are provided over and above salaries as a reward for good performance, motivating employees to achieve higher results.

Solution:
Vestibule Training:
Employees learn their jobs on the equipment they will be using, but the training is conducted away from the actual work floor.
Actual work environments are created in a classroom, and this is usually done when employees are required to handle sophisticated machines and equipment.

Apprenticeship Programme:
Apprenticeship programmes put the trainee under the guidance of a master worker. These are designed to acquire a higher level of skill.
A uniform period of training is offered to trainees, in which both fast and slow learners are placed together. Slow learners may require additional training.

Solution:
The advantages of internal sources of recruitment are:
(i) Employees are motivated to improve their performance as a promotion at a higher level may lead to a chain of promotion at lower levels in the organisation.
(ii) Internal recruitment also simplifies the process of selection and placement as the candidates are already known to the organisation.
(iii) People recruited from within the organisation do not need induction training.
(iv) Transfer has the benefit of shifting the workforce from the surplus departments to those where there is a shortage of staff.

Solution:
(i) Scale of operations:
A larger organisation operating at a higher scale needs bigger plants, more space, etc., and therefore requires higher investment in fixed assets when compared with a small organisation.

(ii) Financing alternatives:
The availability of leasing facilities may reduce the funds required to be invested in fixed assets, thereby reducing the fixed capital requirements. When an asset is taken on lease, the firm pays lease rentals and uses it, avoiding the huge sum required for purchasing it.

Solution:
(i) Cash flow position:
The payment of dividend involves an outflow of cash. A company may be earning profit but may be short on cash. Availability of enough cash in the company is necessary for the declaration of dividend.

(ii) Growth opportunities:
Companies having good growth opportunities retain more money out of their earnings to finance the required investment. The dividend in growth companies is, therefore, smaller than that in non-growth companies.

Solution:
Primary Market:
(i) It involves the sale of securities by new companies or new issues of securities by existing companies to investors.
(ii) Securities are sold by the company to the investors directly.
(iii) It directly promotes capital formation.
(iv) Only buying of securities takes place.

Secondary Market:
(i) There is trading of existing shares only.
(ii) Ownership of securities is exchanged between investors.
(iii) It indirectly promotes capital formation.
(iv) Both buying and selling of securities takes place.

Solution:
The two factors affecting price determination are:
(i) Product cost:
The cost sets the minimum level or the floor price at which the product may be sold. Generally, all marketing firms strive to cover all their costs, at least in the long run, and aim to earn a profit margin over the costs.

(ii) Extent of competition in the market:
The price will tend to reach the upper limit when there is lesser competition. However, under conditions of free competition, the price will be set at the lowest level. Competitors' prices, their anticipated reactions, quality, and features of the competitive products must be considered before fixing the price of a product.

Solution:
Dimension of Business Environment:
Social Environment:
The social environment of business includes social forces like customs, traditions, values, social trends, and society's expectations from business.

Importance of Understanding the Business Environment:
It helps to improve performance:
Enterprises that continuously monitor their environment and adopt suitable business practices not only improve their current performance but also continue to succeed in the market for a longer period.

Solution: The features of coordination highlighted in the above case are:
(i) Coordination is a deliberate function:
‘She coordinates the efforts of her staff in a conscious and deliberate manner and plans for the wedding season demand in the month of June itself.'
A manager has to coordinate the efforts of different people in a conscious and deliberate manner.

(ii) Coordination is a continuous process:
'Thus, her coordination with all departments of the organization begins at the planning stage and continues till controlling.'
Coordination is not a one-time function but a continuous process that begins at the planning stage and continues till controlling.

(iii) Coordination ensures unity of action:
‘This acts as a binding force between the departments and ensures that all action is aimed at achieving organizational goals.' The purpose of coordination is to secure unity of action in the realization of a common purpose.

(iv) Coordination integrates group efforts:
‘Nalini is able to give a common focus to group effort to ensure that the business is performing as planned, year after year.' Coordination unifies unrelated or diverse interests into purposeful work activity.

Solution:
(i) Science, Not Rule of Thumb:
It states that there is only one best method to maximize efficiency. This method can be developed through scientific study and analysis of each element of a job and should substitute the 'Rule of Thumb'. The standard method should be followed throughout the organization.

(ii) Harmony, Not Discord:
This principle emphasizes that there should be complete harmony between management and workers. This requires ‘Mental revolution' on the part of both management and workers. Both management and workers should transform their thinking. Management should share the gains of the company with the workers, and workers should work hard and be willing to embrace change for the good of the company.

(iii) Development of Each and Every Person to His or Her Greatest Efficiency and Prosperity:
This principle is concerned with the efficiency of employees, which could be built right from the process of employee selection. The work assigned to employees should suit their capabilities. They should be given the required training to increase their efficiency. Efficient employees would produce more and earn more, which ensures their greatest efficiency and prosperity for both the company and the workers.

Solution:
(i) Providing Managers with Useful Insights into Reality:
Principles of management provide valuable insights by helping managers learn from past mistakes and solve recurring problems quickly. Adherence to these principles enhances managerial knowledge, ability, and understanding of complex business situations. This leads to better decision-making and efficient problem-solving in organizations.

(ii) Scientific Decisions:
Management principles ensure that decisions are made scientifically rather than arbitrarily. Decisions based on these principles are free from bias and rely on objective assessment of business situations. This enhances accuracy, consistency, and effectiveness in managerial decision-making.

(iii) Fulfilling Social Responsibility:
Modern businesses operate in an environment where public awareness and expectations regarding corporate social responsibility are high. Principles of management emphasize ethical practices and social responsibility, ensuring businesses contribute to societal well-being. Management theories continue to evolve in response to social and environmental demands.

Solution: The differences between Formal Organization and Informal Organization are:
Formal Organization:
(i) Meaning: It is a structure of authority relationships created by management.
(ii) Origin: It arises as a result of company rules and policies.
(iii) Authority: It arises out of position in management.
(iv) Behavior: It is directed by rules.
(v) Nature: It is rigid in nature.
(vi) Leadership: Managers are leaders.
(vii) Flow of Communication: Communication takes place through the scalar chain.

Informal Organization:
(i) Meaning: It is a network of social relationships arising out of interaction among employees.
(ii) Origin: It arises as a result of social interaction.
(iii) Authority: It arises out of personal qualities.
(iv) Behavior: There is no set behavior pattern.
(v) Nature: It is flexible in nature.
(vi) Leadership: Leaders may or may not be managers. They are selected by the group.
(vii) Flow of Communication: Flow of communication is not through a planned route. It can take place in any direction.

Solution: The importance of the Planning function of management are:
(i) Planning provides direction: Planning gives a clear direction to the activities of the organization and helps to avoid unnecessary efforts.
(ii) Planning reduces the risk of uncertainty: Through forecasting and preparing for future contingencies, planning helps minimize risks associated with uncertainty.
(iii) Planning reduces overlapping and wasteful activities: By clearly defining objectives and procedures, planning ensures resources are utilized effectively, preventing duplication of work.
(iv) Planning promotes innovative ideas: Planning encourages creativity and innovation, as it often involves assessing new possibilities and alternative courses of action.
(v) Planning facilitates decision making: By setting objectives and strategies, planning helps managers make informed and well-guided decisions.
(vi) Planning establishes standards for controlling: It provides benchmarks for performance evaluation, ensuring that organizational activities are in line with set goals.

Solution:
Right to choose/Right to be assured: The consumer has the freedom to access a variety of products at competitive prices. This implies that the marketers should offer a wide variety of products in terms of quality, brand, prices, size, etc., and allow the consumer to make a choice from among these.

Right to be heard: The consumer has a right to file a complaint and to be heard in case of dissatisfaction with a good or a service. It is because of this reason that many enlightened business firms have set up their own consumer service and grievance cells.

Right to safety: The consumer has a right to be protected against goods and services that are hazardous to life, health, and property. Thus, consumers are educated that they should use electrical appliances that are ISI marked, as this would be an assurance of such products meeting quality specifications.

Solution:
Buy only standardised goods: Ashish did not ensure that the product was standardised and lacked quality assurance, which is essential to guarantee its safety and reliability.

Ask for a cash memo on purchase of goods or services: Ashish did not ask for a proper cash memo, which is a basic consumer responsibility when purchasing goods to ensure that transactions are documented and transparent.

Be honest in your dealings: Ashish did not confirm whether the TV was as per the standard specifications, which could have helped him in avoiding faulty purchases or misleading deals.