CBSE Class 12 Business Studies Question Paper 2024 (Set 3- 66/2/3) Available- Download Solution PDF with Answer Key

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

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:
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:
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 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:
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:
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:
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:
Importance of Controlling: (Any three)
(i) Accomplishing Organisational Goals:
- Controlling helps in aligning actual performance with planned objectives, ensuring that organizational goals are achieved efficiently.

(ii) Making Efficient Use of Resources:
- Through effective control measures, wastage of resources is minimized, ensuring their optimal utilization for higher productivity.

(iii) Ensuring Order and Discipline:
- A strong control system establishes rules and procedures, preventing misconduct and fostering discipline within the organization.

(iv) Improving Employee Motivation:
- Controlling provides performance feedback, recognizing employees' efforts and motivating them towards higher efficiency.

(v) Judging Accuracy of Standards:
- By continuously comparing actual results with set standards, controlling helps in evaluating the feasibility and relevance of objectives.

(vi) Facilitating Coordination in Action:
- Control ensures coordination among different departments by aligning their activities with the organizational objectives.

Solution:
Relationship between Planning and Controlling: (Any three)
(i) Planning Without Controlling is Meaningless, and Controlling is Blind Without Planning:
- Once a plan is implemented, controlling is necessary to monitor progress, measure performance, detect deviations, and take corrective actions.
- Without planning, controlling has no benchmarks to measure performance, making it ineffective.

(ii) Planning is a Prerequisite for Controlling, While Controlling Ensures Execution of Plans:
- Planning sets predetermined performance expectations, while controlling ensures that actual performance aligns with these plans.
- Controlling helps in identifying deviations and making necessary corrections to stay on track with the planned objectives.

(iii) Planning is Prescriptive, While Controlling is Evaluative:
- Planning involves defining the course of action for future activities, while controlling evaluates whether the plan is being followed effectively.
- Planning prescribes actions, whereas controlling measures and corrects deviations to ensure success.

(iv) Planning is Forward-Looking, While Controlling is Looking Back:
- Planning involves anticipating future needs and conditions, making it a forward-looking function.
- Controlling, on the other hand, analyzes past performance to identify shortcomings and improve future outcomes.

(v) Controlling is Forward-Looking, While Planning is Looking Back:
- Controlling not only corrects past mistakes but also prepares for future improvements.
- Planning is often guided by past experiences, helping managers learn from previous outcomes to design better strategies.

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.

(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 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:
Internal Sources of Recruitment:

(i) Promotions:
- Promotion refers to the vertical movement of an employee to a higher position with greater responsibility, status, pay, and benefits.
- It serves as a motivational tool, enhancing employees' loyalty, job satisfaction, and commitment towards the organization.

(ii) Transfers:
- Transfer involves the horizontal movement of an employee from one job to another or from one department to another without a significant change in status, pay, or responsibilities.
- It helps in balancing workforce requirements by moving employees from overstaffed to understaffed departments, avoiding termination, and resolving employee grievances.

Solution:
Limitations of Internal Sources of Recruitment:

(i) Reduced Scope for Fresh Talent:
- Excessive dependence on internal recruitment limits new talent acquisition, leading to inbreeding and reducing innovation and diversity.

(ii) Employee Complacency:
- Employees may become lethargic and less competitive if they are assured of time-bound promotions without strong performance incentives.

(iii) Unsuitable for New Enterprises:
- Startups and new enterprises cannot rely on internal recruitment as they lack an existing workforce for internal promotions or transfers.

(iv) Hampered Competitive Spirit:
- Over-reliance on internal hiring may reduce the spirit of competition among employees, as external candidates with diverse skills and experiences are not considered.

(v) Frequent Transfers May Lower Productivity:
- Continuous transfers may disrupt workflow and employee efficiency, affecting overall productivity and job performance.

Solution:
(i) Growth Prospects:
- Organizations with higher growth potential generally require greater investment in fixed assets.
- If a company expects increased future demand, it must expand its infrastructure and production capacity, leading to higher fixed capital requirements.

(ii) Diversification:
- A firm may choose to diversify its operations to enter new markets or expand product offerings.
- With diversification, fixed capital requirements rise as new business operations require additional investment in fixed assets, such as land, machinery, and infrastructure.

Solution:
(i) Stock Market Reaction
- Investors generally view an increase in dividends as a positive sign, which boosts their confidence in the company.
- A rise in dividends often leads to an increase in stock prices, influencing the company's market valuation.
- Since dividends affect share price movements, management carefully considers the impact of dividend policy before making a decision.

(ii) Access to Capital Market
- Large, well-established companies have easier access to the capital market, enabling them to raise funds externally.
- Such companies depend less on retained earnings and can afford to pay higher dividends.
- In contrast, smaller companies with limited capital market access may retain more earnings to finance their growth.

Solution:
Functions of Stock Exchange:

(i) Providing Liquidity and Marketability to Existing Securities:
- The stock exchange provides a ready market where investors can buy and sell securities at any time.
- It ensures continuous trading, giving liquidity to investments and allowing investors to convert securities into cash easily.

(ii) Pricing of Securities:
- The stock exchange determines the market price of securities based on supply and demand forces.
- This price discovery mechanism helps investors make informed decisions.

(iii) Safety of Transaction:
- Stock exchanges operate under strict government regulations and monitoring, ensuring transparency and security.
- Investors can trade with confidence, knowing that fraudulent practices are minimized.

(iv) Contribution to Economic Growth:
- Stock exchanges facilitate capital formation by channelizing savings into productive investments.
- They help companies raise funds for expansion, leading to industrial development and economic growth.

(v) Spreading of Equity Cult:
- The stock exchange promotes investment awareness among individuals, encouraging them to invest in equities.
- It fosters a culture of investment and wealth creation in the economy.

(vi) Providing Scope for Speculation:
- Stock exchanges allow speculative activities, which help maintain liquidity and stabilize prices.
- However, speculation is regulated to prevent excessive risks and market manipulation.

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 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:
(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) Fatigue Study
- Fatigue Study determines the amount and frequency of rest intervals required while completing a task.
- Proper rest intervals help workers regain stamina, leading to higher productivity and efficiency.
- It ensures that workers do not experience physical or mental exhaustion, maintaining steady performance levels.

(ii) Differential Piece Wage System
- This system differentiates between efficient and less efficient workers by offering higher wages to productive workers.
- It encourages higher efficiency and motivation among workers by providing an incentive to improve performance.
- There are two piece rates: - Higher wage rate for those who meet or exceed the standard output. - Lower wage rate for those who fail to meet the standard output.

(iii) Standardisation and Simplification of Work
- Standardisation involves setting uniform standards for processes, raw materials, time, machinery, and working conditions.
- Simplification eliminates unnecessary variations in product designs, sizes, and dimensions, ensuring efficiency and cost reduction.
- Together, these techniques improve consistency, reduce wastage, and enhance productivity.

Solution:
(i) General Guidelines
- Principles of management provide broad guidelines but do not offer ready-made solutions to every problem.
- This is because real business scenarios are dynamic and complex, influenced by multiple factors.
- Managers use these guidelines to adapt to different situations and make strategic decisions.

(ii) Cause and Effect Relationship
- Management principles help establish a cause-and-effect relationship between different business activities.
- They enable managers to predict outcomes when a particular principle is applied in a given situation.
- However, since business environments vary, the effect of applying a principle may not always be identical in all cases.

(iii) Universal Applicability
- Management principles are applicable across all types of organizations, including business and non-business sectors.
- They are relevant to organizations of all sizes, whether small or large, public or private, manufacturing or service-based.
- However, their application varies depending on the nature of the organization, industry, and operational scale.

Solution:
Steps in the Process of Organising:
(i) Identification and Division of Work:
- The total workload of an organisation is divided into smaller tasks for efficiency.
- Specialisation is encouraged by assigning specific tasks to individuals based on their expertise.

(ii) Departmentalisation:
- Similar activities are grouped together into departments such as finance, marketing, production, etc.
- This ensures better coordination and a clear distinction between responsibilities.

(iii) Assignment of Duties:
- After departments are formed, specific tasks are assigned to individuals.
- The assignment considers skills, qualifications, and job roles, ensuring effective performance.

(iv) Establishing Authority and Reporting Relationships:
- A clear hierarchy is established, defining who reports to whom.
- This step ensures smooth communication, accountability, and coordination within the organisation.

Solution:
Features of Planning:
(i) Planning Focuses on Achieving Objectives:
- Planning provides a roadmap for achieving organisational goals.
- It ensures that all efforts are directed towards the defined objectives.

(ii) Planning is a Primary Function of Management:
- Planning is the first and foremost function of management, as it lays the foundation for all other functions.
- It defines what is to be done, when, how, and by whom.

(iii) Planning is Pervasive:
- It is required at all levels of management, from top-level to lower-level executives.
- Every department, whether finance, marketing, or HR, needs planning to operate efficiently.

(iv) Planning is Continuous:
- Planning is an ongoing process as business environments keep changing.
- Modifications and adjustments are necessary based on evolving conditions.

(v) Planning is Futuristic:
- It involves forecasting future events and trends to prepare accordingly.
- Effective planning helps in minimising uncertainties and handling risks proactively.

(vi) Planning Involves Decision-Making:
- Planning requires managers to evaluate multiple alternatives before selecting the best course of action.
- Rational decision-making ensures optimal resource utilisation.

(vii) Planning is a Mental Exercise:
- Planning is an intellectual activity that requires logical thinking, foresight, and analytical skills.
- It is based on facts, experience, and market analysis, rather than mere guesswork.

Solution:
(i) Identify and explain two consumer rights discussed in the above case
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.

(ii) State two consumer responsibilities that Ashish did not fulfil while buying the LCD TV.
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.