CBSE Class 12 Business Studies Question Paper 2024 (Set 2- 66/4/2) Available- Download Solution PDF with Answer Key

- Taking corrective action involves making necessary adjustments when significant deviations occur and cannot be corrected by other managerial actions.

- This step ensures that performance standards are achieved and prevents similar deviations in the future.
Quick Tip: Effective corrective action focuses on identifying root causes and implementing solutions to align performance with standards.

Top-level management refers to the highest tier of management in an organization. This includes roles such as the Chief Executive Officer (CEO), President, and other senior executives. The primary responsibility of top-level management is to set the overall strategic direction, goals, and vision for the organization. They make high-level decisions that affect the future of the company, including long-term planning and resource allocation.

While top-level management is responsible for the organization as a whole and must ensure that the company operates ethically and in a manner that considers its impact on society, they are not directly responsible for overseeing all the activities at lower management levels. First-line managers, who are part of operational management, oversee daily activities and direct the work of employees at the operational level. It is the responsibility of middle management to ensure that the appropriate personnel and resources are allocated within departments, and it is not the direct responsibility of top-level management to manage every operational aspect.

Thus, the statement that top-level management is responsible for all activities of the business, including first-line managers, is incorrect. Top-level management's responsibility is to guide the organization and establish policies, while delegating the responsibility for day-to-day activities and employee management to middle and first-line managers.

\section*{Correct Statements

(A) Operational level management is responsible for maintaining safety standards in the organization.

This is correct because operational management is directly involved in ensuring the safety of employees and the organization.

(B) At middle level management, managers ensure that their department has the necessary personnel.

This is correct because middle-level management is tasked with organizing and coordinating various resources, including human resources, within their respective departments.

(C) Chief Executive Officer at Top Level management is responsible for all activities of first-line managers.

This is incorrect because, as mentioned earlier, top-level management sets the strategic direction but does not directly manage first-line managers. First-line managers report to middle management, not the CEO.


Quick Tip: A quick and effective way to stay focused and boost productivity is by using the \textbf{Pomodoro Technique}. Here's how it works: Set a timer for \textbf{25 minutes} to focus solely on one task. After 25 minutes, take a \textbf{5-minute break}. Repeat this process for \textbf{four sessions}, then take a longer break of \textbf{15-30 minutes}. This technique helps you stay focused, reduces burnout, and increases your overall productivity.

- Establishing authority and reporting relationship is an essential step in the organizing process.

- It ensures that each employee knows their reporting authority and who they are accountable to.

- This step creates a structured hierarchy, ensuring clarity in decision-making and accountability.
Quick Tip: Clear authority and reporting relationships enhance efficiency by minimizing confusion and duplication of efforts.

- The organizational objective of growth focuses on increasing the scale of operations, including sales volume, product range, and capital investment.

- In this case, the company seeks to expand its business to ensure long-term sustainability and market leadership.
Quick Tip: Growth ensures that the organization capitalizes on opportunities and remains competitive in the long run.

- Primary packaging refers to the immediate container that holds the product, such as the perfume bottle itself.

- Secondary packaging is the outer box or wrapping that provides additional protection, helps in branding, and makes the product ready for display on retail shelves. The box shown in the image is an example of secondary packaging.

- Transportation packaging refers to bulk packaging used to transport goods securely. This is not relevant to the given question.
Quick Tip: Secondary packaging enhances product appeal and provides additional protection, while primary packaging directly contains the product.

- The business environment helps firms recognize potential threats and take corrective action to mitigate risks.

- Rajat identified the ban on single-use plastics as a threat and took proactive measures to shift to eco-friendly alternatives like bamboo and palm leaves.

- Early identification of threats enabled him to sustain and grow his business despite regulatory changes.
Quick Tip: Analyzing the business environment helps firms identify both opportunities and threats, enabling timely and strategic decisions.

- Complaints under the Consumer Protection Act are filed based on the value of goods and compensation claimed.

- Since the value of the phone is ₹40,500, Payal can approach the District Forum/Commission, which handles cases where the compensation value is up to ₹50,00,000.

- Higher-value complaints would require filing at the State or National Commission, depending on the amount.
Quick Tip: Choose the grievance redressal forum based on the value of the claim: District Forum (up to ₹50,00,000), State Commission (₹50,00,001 to ₹2 Crore), and National Commission (above ₹2 Crore).

- Demonetisation was aimed at reducing reliance on cash transactions and promoting digital payments, which strengthens the formal financial system.

- Option % Option
(D) contradicts this objective, as demonetisation encouraged savings to be directed towards the formal economy rather than away from it.

- It also aimed to improve tax compliance by reducing tax evasion and discouraging the circulation of black money.
Quick Tip: Demonetisation encourages digital transactions and formalizes the economy, leading to better tax compliance and transparency.

- Right to be informed: This right ensures that consumers are provided with complete and accurate information about the product they are purchasing.

- In this case, Lyka Ltd. adhered to the legal framework by providing details such as the manufacturer’s name and address, product weight, manufacturing and expiry dates, and maximum retail price. This helps consumers make an informed choice about the product.

- Providing such information fosters trust and transparency between the manufacturer and the consumer.
Quick Tip: Always check product labels for key details such as expiry date, price, and manufacturing information to make informed purchases.

- Financial intermediation refers to the process of transferring funds from savers to borrowers or investors.

- It ensures that the funds are directed toward the most productive investment opportunities in the economy.

- Examples include banks, mutual funds, and insurance companies, which facilitate the allocation of resources efficiently.
Quick Tip: Financial intermediation bridges the gap between surplus and deficit sectors, promoting economic growth and productivity.

- Informal organisations help employees form social relationships, which improve their sense of belongingness and job satisfaction.

- These networks complement the formal organisation by fostering communication and cooperation among employees.
Quick Tip: Informal organisations improve morale and communication but must be managed carefully to avoid disruptions.

- Co-ordination is the process of aligning the activities of various departments and individuals to ensure they work towards common objectives.

- It ensures that efforts across the organisation are integrated to avoid duplication and conflicts.
Quick Tip: Co-ordination is a key function of management that ensures harmony among different departments for effective performance.

- Statement-I: A brand name refers to the part of a brand that can be spoken, such as the name of a product or service. For example, "Nike" or "Apple" are brand names. This statement is true.

- Statement-II: A trademark is a part of the brand that is legally protected. It includes symbols, designs, or words that distinguish a product or service. For example, the Nike swoosh is a trademark. This statement is also true.
Quick Tip: A brand name is verbal and easy to identify, while a trademark provides legal protection to the brand's unique identity.

- Dematerialisation refers to converting physical securities into electronic form for easier storage and trading.

- This process reduces the risks associated with physical certificates, such as loss, theft, or forgery, and enhances the efficiency of securities transactions.
Quick Tip: Dematerialisation simplifies securities trading, making it secure and efficient by eliminating the need for physical certificates.

- The technological environment refers to the influence of advancements in technology on business operations.

- In this case, the availability of online booking systems for movie tickets demonstrates how technology has simplified the process for consumers.

- Businesses that adapt to technological advancements can improve customer convenience, enhance efficiency, and remain competitive.
Quick Tip: The technological environment constantly evolves, and businesses should leverage advancements like online platforms to enhance customer experience.

- Statement I: The business environment is dynamic due to the constantly changing political, economic, social, and technological factors. However, its characteristics remain consistent across countries, making this statement false.

- Statement II: The business environment is uncertain because external changes like economic shifts or political decisions are often unpredictable. This makes the statement true.
Quick Tip: The business environment is dynamic and uncertain, requiring businesses to be adaptive and proactive in their planning.

- Earnings are the primary source for paying dividends, as dividends are distributed from current or retained earnings.

- The amount of earnings available determines whether a company can pay dividends while retaining enough for future investments.
Quick Tip: Earnings play a crucial role in determining dividend policies, balancing shareholder returns and reinvestment needs.

- While directing ensures that employees perform their tasks, it does not explicitly focus on ensuring activities are performed as per plans. This is part of the controlling function.

- Directing involves guiding, supervising, and motivating employees to achieve organizational objectives.
Quick Tip: Directing focuses on motivating and guiding employees, while controlling ensures that activities align with organizational plans.

- Sales promotion includes short-term incentives like free samples, discounts, or offers to boost immediate sales.

- In this case, free samples distributed in schools aim to introduce the product and encourage customers to try it.
Quick Tip: Sales promotion is an effective tool for creating awareness and encouraging trial purchases in new product launches.

- A (iii): Training of intermediaries falls under the Development function as it aims to enhance the efficiency of market participants by providing them with the necessary skills.

- B (i): Regulation of takeover bids is a Regulatory function since SEBI ensures fair and transparent market practices to protect investors and maintain order.

- C (ii): Controlling insider trading and imposing penalties for such practices is a Protective function as it safeguards investors from fraudulent and unfair practices in the securities market.
Quick Tip: SEBI’s primary functions include regulation (to ensure market fairness), development (to enhance skills), and protection (to safeguard investors).

The concept discussed is Training, which helps employees improve their performance and prepare for future challenges.
Quick Tip: Training is key to enhancing employee skills and adapting to technological advancements, such as Artificial Intelligence.

The benefits of training to an organisation are:

1. Training provides systematic learning, reducing wastage of time, effort, and resources compared to trial-and-error methods.

2. It enhances employee productivity in terms of quality and quantity, leading to higher profits.

3. Training equips employees to handle future managerial roles effectively during emergencies.

4. It boosts employee morale, reducing absenteeism and turnover rates.

5. It helps the organisation adapt to technological and economic changes efficiently.
Quick Tip: Invest in training programs to boost productivity, improve employee retention, and future-proof your organisation.

The distinction between Capital Market and Money Market is as follows:

\begin{tabular{|c|p{6cm|p{6cm|
\hline
Basis & Capital Market & Money Market

\hline
Participants & The participants are financial institutions, banks, corporate entities, foreign investors, and ordinary retail investors from members of the public. & The participants are institutional participants such as the RBI, banks, financial institutions, and finance companies.

\hline
Investment Outlay & Securities do not necessarily require a huge financial outlay. & Transactions entail huge sums of money as the instruments are quite expensive.

\hline
Expected Return & Generally yields a higher return for investors than the money market. & Generally yields a lower return for investors than the capital market.

\hline
\end{tabular Quick Tip: The capital market is for long-term investments with higher returns, while the money market is for short-term liquidity with lower returns.

(i) Cash Flows of the Project

When a company makes an investment decision involving a significant amount, it expects to generate cash flows over a period of time.

These cash flows consist of a series of cash receipts and payments occurring over the life of the investment.


(ii) The Investment Criteria Involved

Investment decisions involve several calculations regarding the amount of investment, interest rate, expected cash flows, and rate of return.

Various techniques, known as capital budgeting techniques, are used to evaluate these investment proposals.
Quick Tip: Evaluate long-term investments by analysing expected cash flows and using capital budgeting techniques like NPV or IRR.

1. Critical Point Control:

Control should focus on key result areas (KRAs) that are critical to the success of an organisation. These KRAs are identified as critical points. If anything goes wrong at these critical points, the entire organisation may suffer. Focusing on KRAs ensures that the organisation's resources are directed toward achieving the most significant objectives.




2. Management by Exception:

Management by exception, also known as control by exception, is based on the belief that trying to control everything results in controlling nothing. Instead, only significant deviations that go beyond the permissible limits should be brought to the management's notice. This approach allows managers to focus on critical issues rather than routine matters, improving efficiency and decision-making.
Quick Tip: Both 'Critical Point Control' and 'Management by Exception' help organisations prioritize key areas and avoid wasting resources on minor or non-essential issues.

The nature of management discussed in the case is Management as an Art.
Management as an art involves the skillful and personalized application of knowledge to achieve desired results. In this case, Aman, Ashish, and Ashi used their creative methods to educate slum dwellers, showcasing the artistic aspect of management. Quick Tip: Management as an art is about personalizing acquired knowledge with creativity and skill to solve real-world problems effectively.

Feature 1: Personalised Application
“They used basic knowledge in their unique manner and were able to educate the slum dwellers.”
This shows that managers apply their knowledge and skills based on individual situations and requirements.

Feature 2: Based on Practice and Creativity
“They adopted three different slums of Mumbai and started educating the slum dwellers in their own creative manner.”
This highlights that management as an art requires creativity and practice to address specific challenges effectively. Quick Tip: When discussing features of management as an art, focus on creativity, personalized application, and practical execution in diverse situations.

The importance of the directing function of management includes:


1. Initiates Action: Directing helps to initiate action by people in the organisation towards the attainment of desired objectives.


2. Integrates Efforts: Directing integrates employees’ efforts in the organisation such that every individual effort contributes to organisational performance.


3. Guides Employees: Directing guides employees to fully realise their potential and capabilities through motivation and effective leadership.


4. Facilitates Change: Directing facilitates the introduction of necessary changes in the organisation through motivation, communication, and leadership.


5. Promotes Stability: Effective directing helps bring stability and balance to the organisation by fostering cooperation and commitment among employees.
Quick Tip: Directing ensures that employees are motivated, guided, and aligned with organisational goals, enhancing overall performance and stability.

(i) Badly Expressed Message:

Sometimes, the intended meaning may not be effectively conveyed by a manager to subordinates.

This can occur due to inadequate vocabulary, the usage of incorrect words, or the omission of necessary words, resulting in miscommunication.


(ii) Symbols with Different Meanings:

A single word can have multiple meanings, and the receiver has to interpret one of these meanings based on the communicator’s intent.

Misinterpretation or wrong perception of the symbols used can lead to communication problems.
Quick Tip: To avoid semantic barriers, ensure clarity in messages by using precise language and avoiding ambiguous symbols or words.

N/A

1. Replacement of the Product: The defective packet can be replaced with a new one that is free from defects.

2. Refund of the Price Paid: Nishi may be refunded the amount paid for the defective product.
Quick Tip: As a consumer, always check product details and act promptly by filing a complaint if goods are found defective or misleading.

1. Stock Market Conditions:

If the stock market is bullish, companies prefer raising equity capital as shares can be sold more easily, often at a higher price. This is why Kaysons Ltd. opted for a public issue of shares.


2. Control:

Issuing additional equity reduces the existing management's holding in the company, potentially diluting control over business decisions.


3. Floatation Costs:

Raising funds through equity involves significant costs such as underwriting fees, advertising, and compliance expenses, which influence the decision.


4. Regulatory Framework:

The company had to ensure compliance with SEBI guidelines while issuing shares, highlighting the importance of considering the regulatory framework when deciding the capital structure.
Quick Tip: Factors like stock market conditions, control, cost, and regulatory compliance are critical when deciding on a capital structure.

(a) Production Cycle:

The production cycle refers to the time span between the receipt of raw materials and their conversion into finished goods.

Companies with a longer processing cycle require a higher amount of working capital, whereas firms with a shorter processing cycle require less working capital.




(b) Seasonal Factors:

During the peak season, when there is a higher level of activity, a larger amount of working capital is required to manage increased operations.

Conversely, during the lean season, when the level of activity is lower, the working capital requirement decreases.
Quick Tip: Factors like production cycles and seasonal variations significantly influence a company's working capital needs. Longer cycles and peak seasons increase working capital requirements.

N/A

1. Safety/Security Needs: These include security and protection from physical and emotional harm, as provided by job stability.

2. Esteem Needs: These include self-respect, status, and recognition, which were fulfilled by the appreciation shown through the award given to Ekta.
Quick Tip: Job security meets employees’ safety needs, while recognition boosts their esteem, enhancing overall motivation and productivity.

(i) Selection Tests

Selection tests are mechanisms that attempt to measure certain characteristics of individuals.

These characteristics may include aptitudes, such as manual dexterity, intelligence, or personality traits, which are critical for determining job suitability.


(ii) Employment Interview

An employment interview is a formal, in-depth conversation conducted to evaluate the applicant’s suitability for the job.

The role of the interviewer is to seek relevant information, while the interviewee provides responses to demonstrate their capabilities and alignment with the job requirements.
Quick Tip: Selection tests help measure specific skills or traits, while interviews assess overall suitability, communication, and personality.

The importance of the 'Staffing' function of management includes:


1. Discovery and Recruitment of Competent Personnel: Staffing helps in discovering and obtaining qualified and competent individuals for various positions within the organisation.


2. Higher Performance: By placing the right person in the right job, staffing ensures higher efficiency and improved performance across the organisation.


3. Continuous Survival and Growth: Through effective succession planning for managerial roles, staffing ensures the organisation's continuous survival and growth in the long term.


4. Optimum Utilisation of Human Resources: Staffing helps avoid over-manning or shortages by ensuring the right balance of personnel, which leads to optimal utilisation of human resources.


5. Improved Job Satisfaction and Employee Morale: By providing fair assessment and rewards for employees' contributions, staffing enhances job satisfaction and morale.
Quick Tip: Staffing is critical for discovering talent, placing employees efficiently, and maintaining organisational growth and employee satisfaction.

(i) Strategy
A strategy is a comprehensive plan designed to accomplish an organisation's objectives.

Taking into account the business environment, it provides the broad contours of an organisation’s business and includes:

- Determining long-term objectives

- Adopting a particular course of action

- Allocating resources necessary to achieve the objectives


(ii) Method

Methods refer to the prescribed ways or manners in which tasks are to be performed to achieve objectives.

The methods may vary depending on the nature of the task, ensuring uniformity and efficiency in execution.


(iii) Budget

A budget is a statement of expected results expressed in numerical terms.

It quantifies future facts and figures, serving as a financial plan for efficient resource allocation.
Quick Tip: Types of plans like strategy, methods, and budgets ensure structured planning and resource optimisation in organisations.

(i) Planning may not work in a dynamic environment:

The business environment is dynamic, and organisations must constantly adapt to changes.

It becomes difficult to accurately assess future trends due to the unpredictable nature of the environment, making planning less effective in such situations.




(ii) Planning leads to rigidity:

In an organisation, a well-defined plan is drawn up with specific goals to be achieved.

This can lead to rigidity as managers may not have the flexibility to adapt to changing circumstances. Flexibility is essential for coping with unexpected situations.


(iii) Planning is a time-consuming process:

Planning requires significant time to gather information, analyse options, and make decisions.

As a result, there may be little time left for the actual implementation of the plans, especially in fast-changing environments.
Quick Tip: While planning is essential, organisations should incorporate flexibility and efficiency in the planning process to adapt to dynamic environments and reduce delays.

(a) Concept Identified: Delegation
Delegation is the process of granting authority to subordinates to carry out specific tasks within defined limits.



(b) Importance of Delegation:

1. Effective Management: Delegation allows managers to focus on higher-priority tasks by assigning routine work to subordinates.

2. Employee Development: It provides subordinates with opportunities to develop skills and gain experience.

3. Motivation of Employees: Delegation enhances employee morale and motivation by providing authority and responsibility.

4. Facilitation of Growth: It ensures efficient operations and enables the organisation to expand.

5. Better Coordination: Delegation ensures clarity in roles and responsibilities, improving coordination.
Quick Tip: Delegation empowers employees, enhances management efficiency, and facilitates organisational growth.

(i) Gathering and Analysing Market Information:

This function is essential to identify the needs and preferences of customers and make informed decisions for the successful marketing of products and services.

It helps analyse the opportunities and threats in the market and assess the organisation's strengths and weaknesses.



(ii) Standardisation and Grading:

Standardisation: It refers to producing goods of predetermined specifications, which ensures uniformity and consistency in the output.

Grading: It is the process of classifying products into different groups based on key characteristics such as quality, size, or other factors. Grading helps in improving the quality and marketability of products.



(iii) Consumer Support Services:

Consumer support services include activities such as after-sales services, handling customer complaints and adjustments, providing credit services, maintenance services, and technical support.

These services aim to provide maximum customer satisfaction, encourage repeat purchases, and build brand loyalty for the product.
Quick Tip: Functions like gathering market information, standardisation, and consumer support services ensure product quality, customer satisfaction, and market success.

The components of physical distribution are as follows:


(i) Order Processing:

This involves activities related to receiving, recording, and fulfilling customer orders. Efficient order processing ensures that products reach customers on time, which enhances customer satisfaction and builds loyalty.


(ii) Transportation:

Transportation is the process of moving goods from the place of production to the place of consumption. It ensures that products are delivered safely and efficiently to customers, contributing to market expansion and accessibility.


(iii) Warehousing:

Warehousing refers to storing goods until they are needed for sale. Proper storage ensures that goods are available in adequate quantities when required, reducing delays in supply.


(iv) Inventory Control:

Inventory control involves maintaining an optimum level of stock to meet customer demands without overstocking or understocking. It reduces wastage, lowers costs, and ensures timely availability of products.
Quick Tip: Effective physical distribution ensures that products are delivered to customers in the right quantity, at the right place, and at the right time, enhancing efficiency and customer satisfaction.

Principle of Scientific Management: Development of Each and Every Person to His or Her Greatest Efficiency and Prosperity

Taylor believed that each individual should be scientifically selected and assigned tasks suited to their physical, mental, and intellectual capabilities.

To enhance efficiency, employees should be given proper training, which would ensure their growth as well as the prosperity of the organisation.



Techniques of Scientific Management:

1. Method Study:

The objective of method study is to find the one best way of performing a task.

This helps minimise production costs while maximising quality and customer satisfaction. Techniques like process charts and operations research are used for this purpose.


2. Standardisation:

Standardisation involves setting benchmarks for business activities, such as processes, raw materials, machinery, or working conditions.

Adherence to these standards ensures uniformity and consistency in production.
Quick Tip: Scientific management focuses on maximising efficiency through principles like method study, standardisation, and employee development.