Business StudiesCBSE Class 12 · Sample paper, session 2024-25

CBSE Class 12 Business Studies: sample paper 2024-25

The sample question paper CBSE published for the 2024-25 session, as printed: 34 questions for 80 marks, in sections, with each OR choice shown as an alternative. Try each question first, then open our solution.

Every question here has our step-by-step solution, split into the steps that earn marks. Each one was checked by an independent re-solve from the question paper.

Source: official sample question paper from cbseacademic.nic.in: https://cbseacademic.nic.in/web_material/SQP/ClassXII_2024_25/BusinessStudies-SQP.pdf. Questions are transcribed from that PDF; figures are described in words, so check the official paper for them. Questions printed only for visually impaired candidates are left out (1).

Practise a paper like this, timedMy board paper sets a full paper in this exact format from real board questions, with a timer.Get your written answers markedThe Answer Coach marks a photo of your handwritten answer step by step, like the examiner.

How the paper is set

Section	Questions	What it has
A	1-20	section letters not printed on the paper; labelled by the CBSE Business Studies pattern
B	21-24	section letters not printed on the paper; labelled by the CBSE Business Studies pattern
C	25-30	section letters not printed on the paper; labelled by the CBSE Business Studies pattern
D	31-34	section letters not printed on the paper; labelled by the CBSE Business Studies pattern

Instructions in brief: 34 questions; answers to 3-mark questions 50-75 words, 4-mark about 150 words, 6-mark about 200 words; internal choices in 21, 22, 26, 28, 32, 34.

Section A

section letters not printed on the paper; labelled by the CBSE Business Studies pattern

Q1 · 1 mark · MCQCompetency-basedNature and Significance of Management
The newly appointed Production Manager of Saheb Ltd., a firm manufacturing toys, Mr Ahrawat noticed that the workers in the factory were not giving their best as the physical conditions in the factory were not good. He conducted an experiment to see the effect of improvement in the physical conditions in the factory on the performance of the workers, by providing adequate ventilation and water facilities. He observed that the fatigue level of the workers reduced. The nature of management being highlighted in the above case is:
1. (A)Management as science
2. (B)Management as profession
3. (C)Management as art
4. (D)Both A. and C.
Try it first, then show our solutionSolution
1. Mr Ahrawat changed one condition (ventilation and water), observed its effect on workers (lower fatigue) and drew a cause-and-effect conclusion.
2. Systematic experimentation and observation to establish cause and effect is the scientific nature of management. Option (A).
  1 mark
Answer: (A) Management as science
Where the marks are
- Experiment and observed cause-effect (1 mark)
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Q2 · 1 mark · MCQCompetency-basedOrganising
Jasmine Ahluwalia is the manager of an artefacts museum's marketing team, responsible for promoting exhibitions and events. In the previous season, she defined the total work of managing the events into graphic designing, registration inquiries, bill payments, etc, in order to facilitate specialisation. However, instead of allocating work, she had assigned each team member the full responsibility of managing the promotion of an entire event. Inspite of holding regular team meetings to take feedback, Jasmine found problems throughout the events season in the quality of graphic design, registration inquiry, bill payments, etc,.
For the upcoming events season, Jasmine has decided to divide these responsibilities on the basis of her observation of the areas in which the individual team members have excelled in the previous season and allocate the roles based on their skills and competencies.
Identify the step in the organising process which was not properly performed in the previous season but has been duly performed for the upcoming season.
1. (A)Identification and division of work
2. (B)Establishing reporting relationships
3. (C)Departmentalisation
4. (D)Assignment of duties
Try it first, then show our solutionSolution
1. Last season the work was divided, but each member was given an entire event instead of the activities matching his or her skills, so quality suffered.
2. This season roles are allotted according to each member's skills and competencies: assignment of duties is now done properly. Option (D).
  1 mark
Answer: (D) Assignment of duties
Where the marks are
- Matching jobs to skills (1 mark)
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Q3 · 1 mark · Assertion-reasonCompetency-basedFinancial Management
Read the following statements: Assertion (A) and Reason (R). Choose the correct alternative from those given below:
Assertion(A): Financial Planning aims at enabling the company to tackle the uncertainty in respect of the availability and timing of the funds.
Reason(R): Capital structure refers to the mix between owners' and borrowed funds
1. (A)Both Assertion (A) is false and Reason (R) are true.
2. (B)Both Assertion (A) and Reason (R) are false.
3. (C)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion.
4. (D)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion.
Try it first, then show our solutionSolution
1. A is true: financial planning ensures funds are available at the right time and in the right amount. R is true: capital structure is the mix of owners' and borrowed funds.
2. R defines capital structure, which does not explain the purpose of financial planning. Option (C).
  1 mark
Answer: (C) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion.
Where the marks are
- Both true, unrelated (1 mark)
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Q4 · 1 mark · MCQFinancial Markets
Read the following statements carefully:
Statement I: Secondary Market directly promotes capital formation.
Statement II: Capital market deals in medium and long term securities such as equity shares and debentures.
In the light of given statements, choose the correct alternative from the following:
1. (A)Both the statements are true.
2. (B)Both the statements are false.
3. (C)Statement I is true, Statement II is false.
4. (D)Statement II is true, Statement I is false.
Try it first, then show our solutionSolution
1. Statement I is false: the secondary market deals in existing securities and only indirectly helps capital formation; the primary market directly promotes it.
2. Statement II is true: the capital market deals in medium- and long-term securities such as shares and debentures. Option (D).
  1 mark
Answer: (D) Statement II is true, Statement I is false.
Where the marks are
- Primary market creates capital directly (1 mark)
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Q5 · 1 mark · MCQStaffing
Choose the statement that correctly highlights the benefit of using external sources of recruitment.
1. (A)Competitive spirit among the existing staff
2. (B)Reduction in employees turnover
3. (C)Helps in increasing employees satisfaction
4. (D)Develops a sense of security amongst employees
Try it first, then show our solutionSolution
1. B, C and D are benefits of internal sources (lower turnover, satisfaction and security of existing employees through promotion).
2. When outsiders can be brought in, existing staff must compete with them and work harder: competitive spirit is a benefit of external sources. Option (A).
  1 mark
Answer: (A) Competitive spirit among the existing staff
Where the marks are
- Outsiders create competition (1 mark)
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Q6 · 1 mark · MCQCompetency-basedBusiness Environment
Goodwill Enterprises is a large-scale automobile manufacturer, who fulfills the needs of both industrial users and consumers. The company is providing easy finance facilities at a low rate of interest, which has considerably increased the demand for the product. The company has installed a new branch management software to efficiently manage and coordinate activities across their multiple branches and locations.
Identify the components of the business environment from the above case study.
1. (A)Political and economic environment
2. (B)Economic and social environment
3. (C)Technological and legal environment
4. (D)Economic and technological environment
Try it first, then show our solutionSolution
1. Easy finance at low interest rates relates to credit and interest rates, part of the economic environment.
2. New branch management software is a technological change. So the components are economic and technological. Option (D).
  1 mark
Answer: (D) Economic and technological environment
Where the marks are
- Interest rates and software (1 mark)
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Q7 · 1 mark · MCQCompetency-basedConsumer Protection
Identify the responsibility that a consumer fulfills when he looks for the quality marks given above:
1. (A)Assert yourself to ensure that you get a fair deal
2. (B)Getting a proper receipt
3. (C)Buy only standardised products
4. (D)Be honest in your dealings
Figure in the paper: Two quality marks shown: a circular Agmark seal reading 'Government of India' (भारत सरकार) with 'CANO AD 14599' and AGMARK in a diamond at centre; and a second logo resembling the FPO mark (stylised rounded shape with a coconut/fruit-like curve inside). See it in the official paper.
Try it first, then show our solutionSolution
1. The marks shown are quality certification marks (such as ISI, Agmark, Hallmark) that certify a product meets standards.
2. Looking for these marks means buying only standardised products. Option (C).
  1 mark
Answer: (C) Buy only standardised products
Where the marks are
- Quality marks = standardised products (1 mark)
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Q8 · 1 mark · Assertion-reasonCompetency-basedControlling
Read the following statements: Assertion (A) and Reason (R). Choose the correct alternative from those given below:
ASSERTION (A): Controlling can prevent deviations.
REASON (R): Controlling helps in minimising deviations by taking actions and decisions that reduce their recurrence.
1. (A)Both Assertion (A) and Reason (R) are true and Reason is the correct explanation of Assertion.
2. (B)Both Assertion(A) and Reason (R) are true and Reason is not the correct explanation of Assertion.
3. (C)Assertion (A) is true, Reason (R) is false.
4. (D)Assertion(A) is false, Reason(R) is true.
Try it first, then show our solutionSolution
1. The Assertion is false: controlling cannot prevent deviations altogether. The Reason is true: it minimises deviations by actions that reduce their recurrence.
2. So A is false and R is true. Option (D).
  1 mark
Answer: (D) Assertion (A) is false, Reason (R) is true.
Where the marks are
- Control minimises, does not prevent, deviations (1 mark)
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Q9 · 1 mark · MCQStaffing
'Joining a job marks the beginning of socialisation of employees at the workplace. The employee should be given a post for which he has been selected.'
Place the subsequent steps of staffing in a small organisation in the correct order:
1. (A)Training and development, promotion and career planning, performance appraisal, compensation
2. (B)Performance appraisal, training and development, promotion and career planning, compensation
3. (C)Training and development, performance appraisal, promotion and career planning, compensation
4. (D)Training and development, performance appraisal, compensation, promotion and career planning
Try it first, then show our solutionSolution
1. The quoted lines describe placement and orientation. The steps after it are training and development, then appraisal of performance, then promotion and career planning, and finally compensation.
2. That order is option C. Option (C).
  1 mark
Answer: (C) Training and development, performance appraisal, promotion and career planning, compensation
Where the marks are
- Order of staffing steps after placement (1 mark)
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Q10 · 1 mark · MCQCompetency-basedControlling
Spiceworks, a company providing financial services to its clients is keeping a close check on the employee's activities by using biometric and retina scanning as modes of accessing the office premises, in order to ensure greater security of information in the organisation.
Choose the correct point of significance of controlling highlighted above:
1. (A)controlling helps in achievement of organisational goals
2. (B)controlling helps in ensuring order and discipline
3. (C)controlling helps in improving employees motivation
4. (D)controlling enables optimum utilisation of resources
Try it first, then show our solutionSolution
1. Biometric and retina scanning keep a close check on employees and restrict access to protect information.
2. This reduces dishonest behaviour and creates order and discipline. Option (B).
  1 mark
Answer: (B) controlling helps in ensuring order and discipline
Where the marks are
- Close check on employees (1 mark)
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Q11 · 1 mark · MCQFinancial Management
Identify the incorrect statement with respect to 'Investment decision':
1. (A)Net working capital refers to excess of current assets over current liabilities
2. (B)Current assets are those assets which get converted into cash within one year
3. (C)Capital budgeting decisions are irreversible.
4. (D)Size of the assets, Profitability and competitiveness are not affected by capital budgeting decisions.
Try it first, then show our solutionSolution
1. A, B and C are correct: net working capital is current assets minus current liabilities; current assets turn into cash within a year; capital budgeting decisions are irreversible except at a huge cost.
2. D is incorrect: capital budgeting decisions affect the size of assets, profitability and competitiveness. Option (D).
  1 mark
Answer: (D) Size of the assets, Profitability and competitiveness are not affected by capital budgeting decisions.
Where the marks are
- Capital budgeting affects size, profit and competitiveness (1 mark)
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Q12 · 1 mark · MCQConsumer Protection
State Commission has the jurisdiction to entertain complaints where value of goods and services paid as consideration is ________
1. (A)More than ₹1 crore and not more than ₹ 5 crore
2. (B)More than ₹10 crore
3. (C)Less than ₹1 crore
4. (D)More than ₹1 crore and not more than ₹10 crore
Try it first, then show our solutionSolution
1. Under the Consumer Protection Act, 2019 (pecuniary limits revised in 2021): District Commission up to ₹1 crore, State Commission above ₹1 crore up to ₹10 crore, National Commission above ₹10 crore.
2. So the State Commission hears complaints of more than ₹1 crore and not more than ₹10 crore. Option (D).
  1 mark
Answer: (D) More than ₹1 crore and not more than ₹10 crore
Where the marks are
- State Commission jurisdiction (1 mark)
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Q13 · 1 mark · MCQCompetency-basedBusiness Environment

Match the statements given in column I with the characteristic of business environment given in column II

	COLUMN I		COLUMN II
(a)	Increased demand of Khakhra and Thepla in the region of Gujarat as compared to Delhi region	i.	Uncertainty
(b)	Digital academic certificates are issued to students accessible in a secured manner to eliminate undesirable practices like corruption and manipulation of records under Digital India Initiative. Such technological improvements are happening at a very fast pace.	ii.	Dynamic
(c)	Fashion market is facing both opportunities and challenges. Therefore it is difficult to predict the future of the fashion market.	iii.	Relativity
(d)	A new government will result in changing government rules, fiscal policies, market conditions etc	iv.	Interrelatedness

Choose the correct option from the following:

(A)(a)-(iii), (b)-(ii), (c)-(i), (d)-(iv)
(B)(a)-(ii), (b)-(i), (c)-(iii), (d)-(iv)
(C)(a)-(iv), (b)-(ii), (c)-(i), (d)-(iii)
(D)(a)-(iii), (b)-(i), (c)-(ii), (d)-(iv)

Try it first, then show our solutionSolution

(a) Demand varies by region: relativity (iii). (b) Fast technological change: dynamic (ii).
(c) Future hard to predict: uncertainty (i). (d) Political change affects rules, fiscal policy and markets: interrelatedness (iv). Option (A).
1 mark

Answer: (A) (a)-(iii), (b)-(ii), (c)-(i), (d)-(iv)

Where the marks are

Features of business environment (1 mark)

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Q14 · 1 mark · MCQMarketing
The process of classification of products into different groups, on the basis of some of the important characteristics such as quality, size, etc. is known as:
1. (A)Branding
2. (B)Standardisation
3. (C)Grading
4. (D)Marketing planning
Try it first, then show our solutionSolution
1. Branding gives a name; standardisation sets standards for a product.
2. Classifying products into groups by quality, size and similar characteristics is grading. Option (C).
  1 mark
Answer: (C) Grading
Where the marks are
- Classification by characteristics (1 mark)
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Q15 · 1 mark · MCQCompetency-basedStaffing
Shiwakumar runs a legal consultancy firm in Chhattisgarh. Whenever the firm hires new employees, on the first day of joining, they are welcomed to the organisation and are given details about the dress code, lunch timings, introduction to daily operations and fellow colleagues. They are also familiarised with the organisational policies and procedures, emergency exits, evacuation procedure, etc.
Name the type of training which is provided by Shiwakumar in his firm.
1. (A)Apprenticeship training
2. (B)Vestibule training
3. (C)Induction training
4. (D)Internship training
Try it first, then show our solutionSolution
1. New employees are welcomed on the first day and told about dress code, timings, colleagues, policies and safety procedures.
2. Helping a new employee settle into the organisation is induction training. Option (C).
  1 mark
Answer: (C) Induction training
Where the marks are
- First-day familiarisation (1 mark)
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Q16 · 1 mark · MCQConsumer Protection
Identify the incorrect statement with respect to Consumer Protection in India.
1. (A)It not only includes educating consumers about their rights and responsibilities but also helps in getting their grievances redressed
2. (B)It not only requires a judicial machinery for protecting the interest of consumers but also requires the consumers to get together and form themselves into Consumer associations for protection and promotion of their interests.
3. (C)It is the moral duty of any business to take care of consumers' interest and avoid any form of exploitation.
4. (D)The provisions of Consumer Protection Act came into force from 1981.
Try it first, then show our solutionSolution
1. A, B and C are correct statements about consumer protection: education plus redressal, judicial machinery plus consumer associations, and the moral duty of business.
2. D is incorrect: the original Consumer Protection Act was passed in 1986 (now replaced by the 2019 Act), not 1981. Option (D).
  1 mark
Answer: (D) The provisions of Consumer Protection Act came into force from 1981.
Where the marks are
- Year of the Act (1 mark)
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Q17 · 1 mark · MCQFinancial Management
Identify the decision which is not taken under financial management.
1. (A)Dividend Decision
2. (B)Capital Budgeting Decision
3. (C)Pricing Decision
4. (D)Both B. and C.
Try it first, then show our solutionSolution
1. Financial management takes investment (capital budgeting), financing and dividend decisions.
2. Pricing a product is a marketing decision, not a financial management decision. Option (C).
  1 mark
Answer: (C) Pricing Decision
Where the marks are
- Three financial decisions (1 mark)
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Q18 · 1 mark · MCQFinancial Management
What are the factors that affect financing decisions?
(a) Cash flow position of the company
(b) Stability of earnings
(c) Degree of financial risk
(d) Contractual constraints
(e) State of capital market
(f) Level of competition
Choose the correct alternative from the following:
1. (A)(b), (c) and (f)
2. (B)(d), (e) and (f)
3. (C)(a), (c) and (d)
4. (D)(a), (c) and (e)
Try it first, then show our solutionSolution
1. Stability of earnings and contractual constraints affect the dividend decision; level of competition affects working capital, not financing.
2. Cash flow position, degree of financial risk and state of the capital market affect the financing decision. Option (D).
  1 mark
Answer: (D) (a), (c) and (e)
Where the marks are
- Factors of financing decision (1 mark)
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Q19 · 1 mark · MCQCompetency-basedConsumer Protection
Consumers can ask anything regarding the date of manufacturing, MRP, etc, about the product that he intend to buy.
Identify the consumer right highlighted in the above lines.
1. (A)Right to be informed
2. (B)Right to be assured
3. (C)Right to be heard
4. (D)Right to safety
Try it first, then show our solutionSolution
1. Asking about date of manufacture and MRP is asking for information about the product.
2. This is the right to be informed. Option (A).
  1 mark
Answer: (A) Right to be informed
Where the marks are
- Information about the product (1 mark)
Q20 · 1 mark · MCQFinancial Management
Read the following statements carefully:
Statement I: Cost of debt is lower than cost of equity for a company.
Statement II: The objective of financial management is to increase shareholder's wealth.
In the light of given statements, choose the correct alternative from the following:
1. (A)Both the statements are true.
2. (B)Both the statements are false.
3. (C)Statement I is true, Statement II is false.
4. (D)Statement II is true, Statement I is false.
Try it first, then show our solutionSolution
1. Statement I is true: interest on debt is a tax-deductible expense and debt carries less risk for lenders, so it is cheaper than equity.
2. Statement II is true: the primary objective of financial management is to maximise shareholders' wealth. Option (A).
  1 mark
Answer: (A) Both the statements are true.
Where the marks are
- Debt cheaper; wealth maximisation (1 mark)
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Section B

section letters not printed on the paper; labelled by the CBSE Business Studies pattern

Answer one of these 2 alternatives.
Q21(A) · 3 marks · Short answerPlanning
State the meaning of single use plans and standing plans
Try it first, then show our solutionSolution
1. Single use plans: Developed for a one-time event or project that is not likely to be repeated (non-recurring); their duration depends on the project and may be a day, a week or a month. Budgets and programmes are examples.
  1½ marks
2. Standing plans: Used for activities that occur regularly; developed once and modified from time to time, they keep internal operations running smoothly and make routine decisions efficient. Policies, procedures, methods and rules are examples.
  1½ marks
Answer: Single use plans are for one-time, non-recurring situations; standing plans are for repetitive activities and are used again and again.
Where the marks are
- Each type: 1½ marks
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OR
Q21(B) · 3 marks · Short answerPlanning
State how planning
(I) reduces creativity
(II) leads to rigidity.
1. (I)
  reduces creativity
  1½ marks
2. (II)
  leads to rigidity.
  1½ marks
Try it first, then show our solutionSolution
1. (I) Reduces creativity: Planning is done mainly by top management; others only implement plans and may neither deviate from them nor act on their own, so people think along the same lines and new ideas are discouraged.
  1½ marks
2. (II) Leads to rigidity: A well-defined plan with specific goals and time frames fixes the future course of action; managers may be unable to change it, and following it after circumstances change may hurt the organisation.
  1½ marks
Answer: Planning reduces creativity because others only implement top management's plans, and leads to rigidity because managers cannot change a fixed plan when circumstances change.
Where the marks are
- Each limitation: 1½ marks
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Answer one of these 2 alternatives.
Q22(A) · 3 marks · Short answerDirecting
Explain the concept of leadership. Give two situations in which autocratic leadership style is most effective.
Try it first, then show our solutionSolution
1. Leadership is the process of influencing the behaviour of people so that they strive voluntarily towards organisational goals.
  1 mark
2. Production on time: In a factory where the supervisor must get output on time, autocratic leadership secures labour productivity.
  1 mark
3. Quick decisions: When decisions must be taken quickly, the leader decides alone without consultation.
  1 mark
Answer: Leadership is influencing people to work willingly for organisational goals; the autocratic style works best where production deadlines must be met and where quick decisions are needed.
Where the marks are
- Concept (1)
- Two situations: 1 mark each
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OR
Q22(B) · 3 marks · Short answerDirecting
Explain the concept of communication. Give the meaning of formal and informal communication.
Try it first, then show our solutionSolution
1. Communication is the process of exchanging information between two or more persons to reach a common understanding.
  1 mark
2. Formal communication: Flows through the official channels designed in the organisation chart.
  1 mark
3. Informal communication: Takes place without following the formal lines of communication (the grapevine).
  1 mark
Answer: Communication is exchange of information for common understanding; formal communication follows official channels, informal communication does not.
Where the marks are
- Concept, formal and informal: 1 mark each
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Q23 · 3 marks · Short answerCompetency-basedFinancial Management
From the following information regarding Aditya Ltd. which is in the business of manufacturing green tea, calculate the Return on Investment and Interest Coverage Ratio of the company: (Show working)
Earning before interest and tax ₹ 15,00,000
10% debentures ₹ 12,00,000
Equity Share Capital (₹10 each) ₹ 18,00,000
Tax Rate 40%
Try it first, then show our solutionSolution
1. Total investment = 10% debentures + equity share capital = ₹12,00,000 + ₹18,00,000 = ₹30,00,000.
2. ROI = EBIT ÷ Total investment × 100
  ½ mark
3. = 15,00,000 ÷ 30,00,000 × 100
  ½ mark
4. = 50%
  ½ mark
5. Interest = 10% of ₹12,00,000 = ₹1,20,000. Interest coverage ratio = EBIT ÷ Interest
  ½ mark
6. = 15,00,000 ÷ 1,20,000
  ½ mark
7. = 12.5 times. (The tax rate is not needed for either ratio.)
  ½ mark
Answer: ROI = 50%; Interest coverage ratio = 12.5 times.
Where the marks are
- ROI: formula, substitution, answer (½ each)
- ICR: formula, substitution, answer (½ each)
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Q24 · 3 marks · Case-basedCompetency-basedBusiness Environment
Mr Vivek Vaswani, a foodpreneur combined his passion for food with his entrepreneurial skills and started his innovative fast food outlet OH CHILLI! in 2021. He had started his career as a food blogger and had noticed that numerous Indian consumers were looking for reasonable and pure vegetarian fast food options for dining out. The high end restaurants were not opted by many as they were exorbitantly priced. Though many global fast food chains were running across the country, yet not many outlets offered reasonable and healthy pure vegetarian fast food options to consumers. OH CHILLI! became a pioneer in offering a healthy and delicious variety of food.
What came as a surprise for consumers was that even without using onion or garlic in the pasta sauce, marinade and ketchup ,the food could actually taste great. The company witnessed an increase in net profit of 26% in its second financial year and became a market leader.
1. (I)
  State the concept of business environment.
  1 mark
2. (II)
  Identify and explain in what way, a good understanding of business environment enabled Mr. Vivek Vaswani to improve the performance of the enterprise.
  2 marks
Try it first, then show our solutionSolution
1. (I) Business environment is the sum total of all individuals, institutions and other forces outside the control of a business enterprise that may affect its performance.
  1 mark
2. (II) Identification of opportunities and first mover advantage.
  ½ mark
3. Vivek noticed an unmet demand for reasonably priced, pure vegetarian fast food. Spotting this positive external trend early let OH CHILLI! exploit it before competitors, become a pioneer and market leader, and raise net profit by 26%.
  1½ marks
Answer: (I) The sum total of external forces that affect a business. (II) It helped him identify opportunities and gain first mover advantage.
Where the marks are
- (I) Concept (1)
- (II) Identification (½) + explanation (1½)
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Earning before interest and tax	₹ 15,00,000
10% debentures	₹ 12,00,000
Equity Share Capital (₹10 each)	₹ 18,00,000
Tax Rate	40%

Section C

section letters not printed on the paper; labelled by the CBSE Business Studies pattern

Q25 · 4 marks · Case-basedCompetency-basedNature and Significance of Management
The General manager of a reputed organisation, Mr. Agastaya Lokhande, made the following announcement at the Annual General Meeting of the company- "When we think of a brand, we think of reputation, but the reputation is made or broken by the quality of products and customer representation. If people are miserable, they can't give their best work and the brand suffers. On the contrary, positive results can be observed if there is job satisfaction, effective and efficient functioning."
1. (I)
  Identify and explain the feature of management discussed by Mr Agastaya in his announcement.
  1 mark
2. (II)
  Explain any three reasons that make management important to any organisation.
  3 marks
Try it first, then show our solutionSolution
1. (I) Management is an intangible force. It cannot be seen, but its presence is felt in how the organisation functions: targets met, employees satisfied and order instead of chaos, as the GM says about job satisfaction and effective functioning.
  1 mark
2. (II) Achieving group goals: Management gives a common direction to individual efforts towards the organisation's goals.
  1 mark
3. Increases efficiency: Better planning, organising, staffing, directing and controlling reduce costs and raise productivity.
  1 mark
4. Creates a dynamic organisation: It helps people adapt to change so the organisation keeps its competitive edge. (Also: achieving personal objectives, development of society.)
  1 mark
Answer: (I) Management is an intangible force. (II) It achieves group goals, increases efficiency and creates a dynamic organisation (also personal objectives, development of society).
Where the marks are
- (I) Identification ½ + explanation ½
- (II) Any three reasons: 1 mark each
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Answer one of these 2 alternatives.
Q26(A) · 4 marks · Long answerStaffing
In order to streamline the selection procedure, so as to minimise the margin of errors, certain tests are carried out that attempt to measure the characteristics of individuals. Explain any four such tests.
Try it first, then show our solutionSolution
1. Intelligence tests: Measure a person's intelligence quotient, an indicator of learning ability and the ability to make decisions and judgements.
  1 mark
2. Aptitude tests: Measure a person's potential for learning new skills, i.e. capacity to develop.
  1 mark
3. Personality tests: Probe emotions, reactions, maturity and value system; they are difficult to design and implement.
  1 mark
4. Trade tests: Measure the existing skills, knowledge and proficiency in a profession or technical area. (Also: interest tests.)
  1 mark
Answer: Intelligence, aptitude, personality and trade tests (also interest tests).
Where the marks are
- Any four tests: 1 mark each
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OR
Q26(B) · 4 marks · Long answerStaffing
Since jobs have become more complex, the importance of employee training has increased. Training programmes provide numerous benefits to workers. Explain any four points that support this statement.
Try it first, then show our solutionSolution
1. Better career: Improved skills and knowledge lead to better careers for the individual.
  1 mark
2. Higher earnings: Better performance helps the worker earn more.
  1 mark
3. Fewer accidents: Trained workers handle machines more efficiently and are less prone to accidents.
  1 mark
4. Higher satisfaction and morale: Training increases the satisfaction and morale of employees.
  1 mark
Answer: Training gives workers better careers, higher earnings, fewer accidents and higher satisfaction and morale.
Where the marks are
- Four benefits to workers: 1 mark each
Open Q26(B) on its own page
Q27 · 4 marks · Case-basedCompetency-basedDirecting
When Bhaanupriya joined as technical head of Logic Lotus Innovators, she was keen on increasing the productivity and profitability of the company. However, she observed that the employees were demotivated as no attention was given to their work. Also, the workers were given little freedom to make decisions.
Bhaanupriya decided to stimulate the employees by giving each worker T-shirts with their name on it. She also decided to include workers in work committees. This helped in improving the performance of the workers.
1. (I)
  On the basis of the understanding of Maslow's Need Hierarchy Theory of motivation, identify the human need that Bhaanupriya has recognised in order to make the subordinates act towards achievement of organisational goals.
  1 mark
2. (II)
  Identify and explain two incentives that have been provided by Bhanupriya to improve the performance of the employees.
  3 marks
Try it first, then show our solutionSolution
1. (I) Esteem needs (self-respect, recognition, status and autonomy): the employees felt ignored and had little freedom to decide.
  1 mark
2. (II) Employee recognition programme: Recognition is acknowledgement with a show of appreciation; T-shirts with each worker's name recognise them, motivating them to perform better.
  1½ marks
3. Employee participation: Involving workers in decisions on issues related to them, e.g. through work committees, joint management committees and canteen committees.
  1½ marks
Answer: (I) Esteem needs. (II) Employee recognition programmes and employee participation (non-financial incentives).
Where the marks are
- (I) Identification (1)
- (II) Each incentive: ½ identification + 1 explanation
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Answer one of these 2 alternatives.
Q28(A) · 4 marks · Long answerControlling
Explain how Planning and controlling are both backward looking, as well as forward looking functions.
Try it first, then show our solutionSolution
1. Planning is forward looking: plans are prepared for the future on the basis of forecasts.
  1 mark
2. Controlling is backward looking: it is like a post-mortem of past activities to find deviations from standards.
  1 mark
3. But planning also looks back: it is guided by past experience.
  1 mark
4. And controlling also looks forward: corrective action aims to improve future performance. So both are backward-looking as well as forward-looking.
  1 mark
Answer: Planning looks ahead but draws on past experience; controlling reviews the past but its corrective action improves the future, so both look backward and forward.
Where the marks are
- Explanation of the two-way relationship (4)
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OR
Q28(B) · 4 marks · Long answerControlling
The first step in the controlling process is setting up performance standards. Explain the subsequent two steps in the process of controlling.
Try it first, then show our solutionSolution
1. Measurement of actual performance: Performance is measured objectively and reliably, e.g. by personal observation, sample checking or performance reports.
  2 marks
2. Comparing actual performance with standards: Comparison reveals the deviation between actual and desired results; it is easier when standards are quantitative.
  2 marks
Answer: The next two steps are measurement of actual performance and comparing it with standards.
Where the marks are
- Each step: ½ heading + 1½ explanation
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Q29 · 4 marks · Long answerCompetency-basedPlanning
When Chandrashekhar Shukla returned to India after completing a Certificate course in Food Quality Assurance and Quality Control from the Netherlands, he was convinced that he would fulfil his grandfather's dream of converting their 58 acre land into a fertile farm. He started by setting out specific goals and laid down related activities to be performed to achieve the goals. Soon he launched his own company 'Food and Agribusiness Solutions Private Limited'.
He sought to ensure that the future events effectively meet the best interest of the company. He prepared an annual statement for production and sales, based on sales forecasting. He noticed that the farmers grew only paddy due to which land remained idle for the subsequent 8 to 9 months of the year. He identified and assessed various alternatives through which farms could be utilised for the remaining months of the year.
Through his accurate vision, judgement and systematic thinking based on analysis of the facts, he presented a scheme to the farmers where both paddy and vegetables could be grown.
Identify and explain the features of one of the functions of Management highlighted above.
Try it first, then show our solutionSolution
1. Planning focuses on achieving objectives: Chandrashekhar set specific goals and laid down activities to achieve them; planning is purposeful.
  1 mark
2. Planning is futuristic: He sought to meet future events to the company's best interest and prepared an annual production and sales statement based on forecasting.
  1 mark
3. Planning involves decision making: He identified and assessed alternatives for using the idle land and chose a scheme for paddy and vegetables.
  1 mark
4. Planning is a mental exercise: His vision, judgement and systematic thinking based on facts show planning is an intellectual activity, not guesswork.
  1 mark
Answer: Planning: focuses on objectives, is futuristic, involves decision making and is a mental exercise.
Where the marks are
- Four features: 1 mark each
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Q30 · 4 marks · Long answerMarketing
Give any four points of difference between advertising and personal selling.
Try it first, then show our solutionSolution
1. Form: Advertising is an impersonal form of communication; personal selling is personal, face-to-face.
  1 mark
2. Flexibility: Advertising sends a standardised, inflexible message; personal selling adjusts the talk to each customer.
  1 mark
3. Reach: Advertising reaches masses quickly; personal selling reaches only a few people because of time and cost.
  1 mark
4. Feedback: Advertising lacks direct feedback; personal selling gives direct and immediate feedback. (Also: cost per person, time to cover the market, media used, stage of buying, type of buyer.)
  1 mark
Answer: Advertising is impersonal, standardised and mass-reaching with no direct feedback; personal selling is personal, flexible, limited in reach and gives immediate feedback.
Where the marks are
- Any four differences: 1 mark each
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Section D

section letters not printed on the paper; labelled by the CBSE Business Studies pattern

Q31 · 6 marks · Case-basedCompetency-basedFinancial Markets
It was established by the Government of India on 12 April 1988 as an interim administrative body to promote orderly and healthy growth of the securities market and for investor protection. It was given statutory status in 1992 through an Act of Parliament.
1. (I)
  Identify the regulatory body which has been highlighted above.
  1 mark
2. (II)
  State the three objectives of the regulatory body identified in part (I).
  3 marks
3. (III)
  State any two functions that are performed for the development of the securities market by the regulatory body identified in part (I).
  2 marks
Try it first, then show our solutionSolution
1. (I) Securities and Exchange Board of India (SEBI), set up in 1988 and given statutory status in 1992.
  1 mark
2. (II) Regulate stock exchanges and the securities industry: To promote their orderly functioning.
  1 mark
3. Protect investors: To protect the rights and interests of investors, particularly individual investors, and to guide and educate them.
  1 mark
4. Prevent trading malpractices: To prevent malpractices and balance self-regulation by the industry with statutory regulation. (Also: a code of conduct and fair practices for intermediaries.)
  1 mark
5. (III) Training of intermediaries: Training intermediaries of the securities market.
  1 mark
6. Research and publishing: Conducting research and publishing information useful to all market participants. (Also: measures to develop capital markets with a flexible approach.)
  1 mark
Answer: (I) SEBI. (II) Regulate stock exchanges, protect investors, prevent malpractices. (III) Training intermediaries and research and publication.
Where the marks are
- (I) Identification (1)
- (II) Three objectives: 1 mark each
- (III) Two developmental functions: 1 mark each
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Answer one of these 2 alternatives.
Q32(A) · 6 marks · Long answerOrganising
Differentiate between functional structure and divisional structure on the basis of:
(I) Formation
(II) Specialisation
(III) Responsibility
(IV) Managerial development
(V) Cost
(VI) Coordination
Try it first, then show our solutionSolution
1. (I) Formation: Functional: based on functions. Divisional: based on product lines, supported by functions.
  1 mark
2. (II) Specialisation: Functional: functional specialisation. Divisional: product specialisation.
  1 mark
3. (III) Responsibility: Functional: difficult to fix on a department. Divisional: easy to fix for performance.
  1 mark
4. (IV) Managerial development: Functional: difficult, since each functional manager reports to top management. Divisional: easier, through autonomy and multiple functions.
  1 mark
5. (V) Cost: Functional: no duplication of functions, so economical. Divisional: duplication of resources, so costly.
  1 mark
6. (VI) Coordination: Functional: difficult for a multi-product company. Divisional: easy, as all functions of a product are in one division.
  1 mark
Answer: Functional vs divisional: functions vs products, functional vs product specialisation, responsibility hard vs easy to fix, development hard vs easy, economical vs costly, coordination hard vs easy.
Where the marks are
- Six bases: 1 mark each
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OR
Q32(B) · 6 marks · Long answerOrganising
'Delegation helps a manager to extend his area of operations as without it, his activities would be restricted to only what he himself can do.'
In light of the above statement, explain how effective delegation helps the organisation in achieving objectives.
Try it first, then show our solutionSolution
1. Effective management: Managers freed from routine work concentrate on important matters.
  1 mark
2. Employee development: Employees use their talents and grow into better leaders and decision makers.
  1 mark
3. Motivation of employees: Responsibility builds self-esteem and confidence.
  1 mark
4. Facilitation of growth: A ready workforce is available to lead new ventures and expansion.
  1 mark
5. Basis of management hierarchy: Delegation sets up superior-subordinate relationships that form the hierarchy.
  1 mark
6. Better coordination: Clearly defined powers, duties and answerability avoid overlapping and duplication of work.
  1 mark
Answer: Effective delegation leads to effective management, employee development, motivation, growth, a management hierarchy and better coordination.
Where the marks are
- Six points: 1 mark each
Open Q32(B) on its own page
Q33 · 6 marks · Long answerCompetency-basedPrinciples of Management
Leena has been appointed as the Operations Manager in a small trading company dealing in garments, with growing online sales. The company has recently rented space in a warehouse to store garments and mail out orders. In order to take over the responsibilities of order fulfilment, Leena promotes an associate, Kushagra to the post of Inventory and Order fulfilment Supervisor. Kushagra has been given the task to assess whether it is best to process orders as they come in or let them accumulate and then to process them in batches. He concludes that accumulating and then processing them in batches is the best way of fulfilling orders, in order to minimise cost and maximise customer satisfaction.
Through several readings Leena finds that the standard time taken from the placement of order to the delivery of garments for a batch of 100 pieces is 72 hours. This helped her to determine the labour cost.
On the basis of the understanding of concepts of scientific management, identify and explain the techniques used by Leena and Kushagra to improve the performance of the employees.
Try it first, then show our solutionSolution
1. Method study (used by Kushagra):
  ½ mark
2. It aims to find the one best way of doing a job, covering every activity from procurement to delivery, so as to minimise cost and maximise quality and customer satisfaction. Kushagra compared processing orders as they come with processing them in batches and chose batches as the best way.
  2½ marks
3. Time study (used by Leena):
  ½ mark
4. It fixes the standard time for a well-defined job by taking several readings; it is used to decide the number of workers, frame incentive schemes and determine labour cost. Leena fixed 72 hours per batch of 100 pieces and used it to determine labour cost.
  2½ marks
Answer: Kushagra used method study and Leena used time study.
Where the marks are
- Each technique: ½ identification + 2½ explanation
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Answer one of these 2 alternatives.
Q34(A) · 6 marks · Long answerMarketing
Explain the four elements of marketing mix.
Try it first, then show our solutionSolution
1. Product: Goods, services or anything of value offered for sale, including the extended product (after-sales service, spares); decisions cover features, quality, packaging, labelling and branding.
  1½ marks
2. Price: The money customers pay to obtain the product; marketers set pricing objectives, analyse factors, fix the price and decide discounts and credit terms.
  1½ marks
3. Place: Physical distribution: activities that make the product available to target customers, such as choosing intermediaries, inventory, warehousing and transportation.
  1½ marks
4. Promotion: Activities that inform customers about the product and persuade them to buy it, through advertising, personal selling and sales promotion.
  1½ marks
Answer: The four Ps: product, price, place and promotion.
Where the marks are
- Each element: ½ heading + 1 explanation
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OR
Q34(B) · 6 marks · Long answerMarketing
Explain any four factors affecting determination of the price of a product or service.
Try it first, then show our solutionSolution
1. Product cost: The cost of producing, distributing and selling sets the floor price; in the long run all costs must be covered.
  1½ marks
2. Utility and demand: Utility and intensity of demand set the upper limit that buyers will pay.
  1½ marks
3. Extent of competition: Less competition lets the price reach the upper limit; free competition pushes it to the lowest level.
  1½ marks
4. Government and legal regulations: Government may declare a product essential and regulate its price to protect the public. (Also: pricing objectives, marketing methods used.)
  1½ marks
Answer: Product cost, utility and demand, extent of competition and government regulation (also pricing objectives and marketing methods).
Where the marks are
- Any four factors: ½ heading + 1 explanation each
Open Q34(B) on its own page

Source: official sample paper, cbseacademic.nic.in. Chapter tags and solutions are ours. Spotted a transcription error? Write tosupport@questionbuddy.in.