Business StudiesCBSE Class 12 · Board exam 2026 (session 2025-26)

CBSE Class 12 Business Studies: 2026 board paper, set 66/5/1

The question paper set in the CBSE Class 12 board exam of 2026, 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 question paper from cbse.gov.in: https://www.cbse.gov.in/cbsenew/question-paper/2026/XII/Business_Studies.zip (a zip; this paper is the file 66-5-1.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	MCQ including assertion-reason and statement-based
B	21-34	3, 4 and 6 mark questions

Instructions in brief: All 34 questions compulsory; internal choice in some questions; answers to 3-mark questions 50-75 words, 4-mark about 150 words, 6-mark about 200 words.

Section A

MCQ including assertion-reason and statement-based

Q1 · 1 mark · MCQCompetency-basedBusiness Environment
The top management of a smartphone manufacturing company recently observed that the government has ordered new safety standards for batteries used in smartphones to prevent overheating. It also noticed that the government announced a reduction in import duties on components used in mobile phones.
The dimensions of business environment highlighted in the above case are :
1. (A)Technological and legal environments
2. (B)Political and technological environments
3. (C)Legal and social environments
4. (D)Political and legal environments
Try it first, then show our solutionSolution
1. New safety standards for batteries ordered by the government are rules the firm must legally follow: the legal environment.
2. A cut in import duties is a government policy decision: the political environment. Option (D).
  1 mark
Answer: (D) Political and legal environments
Where the marks are
- Government orders and duty cuts (1 mark)
Open Q1 on its own page
Q2 · 1 mark · MCQCompetency-basedFinancial Management
‘Tangy Beverages Ltd.’ was known for its popular tangy fruit drinks. It had recently introduced a new range of fruit drinks that became an instant hit among consumers and led to a significant increase in the company’s profits. As a result, the Board of Directors wanted to declare a higher dividend for the year. The Chief Finance Officer suggested that they should evaluate the impact of dividend on the share price of previous years before taking a decision. An analysis was done, which showed how the company’s share price had risen in previous years whenever the dividend was increased. On the other hand, even a small decrease in dividend had led to a noticeable dip in the share price.
Which of the following factors affecting dividend decision was suggested by the Chief Finance Officer to the Board of Directors in the above case ?
1. (A)Access to capital market
2. (B)Stock market reaction
3. (C)Shareholders preference
4. (D)Cash flow position
Try it first, then show our solutionSolution
1. The CFO asked the board to study how the share price reacted to past increases and decreases in dividend.
2. The effect of dividend changes on the share price is the factor stock market reaction. Option (B).
  1 mark
Answer: (B) Stock market reaction
Where the marks are
- Share price response to dividend changes (1 mark)
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Q3 · 1 mark · Assertion-reasonCompetency-basedBusiness Environment
Read the following statements : Assertion (A) and Reason (R).
Assertion (A) : General forces such as social, political, legal and technological conditions affect an individual firm only indirectly.
Reason (R) : General forces have an impact on all business enterprises, in contrast to, specific forces that affect individual firms directly and immediately in their day-to-day working.
Choose the correct alternative from the following :
1. (A)Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
2. (B)Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).
3. (C)Both Assertion (A) and Reason (R) are incorrect.
4. (D)Assertion (A) is correct, but Reason (R) is incorrect.
Try it first, then show our solutionSolution
1. Assertion: Correct. General forces (social, political, legal, technological) affect an individual firm only indirectly.
  Reason: Correct. General forces affect all businesses, whereas specific forces (customers, competitors, suppliers) affect individual firms directly and immediately.
2. Because general forces act on all firms at once, they reach any one firm only indirectly, so R explains A. Option (A).
  1 mark
Answer: (A) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
Where the marks are
- Truth of A and R and the link between them (1 mark)
Open Q3 on its own page
Q4 · 1 mark · MCQMarketing
One of the factors affecting price determination of a product is ‘Pricing Objectives’. Which of the following pricing objectives will result in a higher price being fixed for the product ?
1. (A)Obtaining market share leadership
2. (B)Surviving in a competitive market
3. (C)Attaining product quality leadership
4. (D)Profit maximisation in the long run
Try it first, then show our solutionSolution
1. Market-share leadership and survival call for lower prices; long-run profit maximisation does not by itself demand a premium.
2. Attaining product quality leadership needs higher-quality inputs and research, so a higher price is fixed to cover these costs. Option (C).
  1 mark
Answer: (C) Attaining product quality leadership
Where the marks are
- Quality leadership means a premium price (1 mark)
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Q5 · 1 mark · MCQPrinciples of Management
“The application of principles of management is dependent upon the prevailing situation at a particular point of time.” This statement highlights which of the following features of principles of management ?
1. (A)General guidelines
2. (B)Flexible
3. (C)Mainly behavioural
4. (D)Contingent
Try it first, then show our solutionSolution
1. The statement says the application of principles depends on the situation at a given time.
2. This is the feature that principles are contingent. Option (D).
  1 mark
Answer: (D) Contingent
Where the marks are
- Application depends on the situation (1 mark)
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Q6 · 1 mark · MCQCompetency-basedPlanning
‘Renew Ltd.’ was the pioneer in the Electric Vehicles segment and presently has 70% market share. Keeping in mind the rapidly increasing demand for Electric Vehicles due to the rising environment consciousness among people and lower operating costs, the company set a target to increase its market share to 80% in the current year. However, the incentives provided by the government to encourage manufacturing of Electric Vehicles attracted many new players in the market. As this change in the business environment happened suddenly, the company was not able to accurately assess future trends. As a result, the market share of ‘Renew Ltd.’ fell from 70% to 55% in the current year.
Which limitation of planning has been discussed in the above case ?
1. (A)Planning may not work in a dynamic environment
2. (B)Planning leads to rigidity
3. (C)Planning does not guarantee success
4. (D)Planning involves huge costs
Try it first, then show our solutionSolution
1. A sudden change in the environment (new entrants attracted by government incentives) could not be assessed in advance.
2. Plans failed because the environment changed: planning may not work in a dynamic environment. Option (A).
  1 mark
Answer: (A) Planning may not work in a dynamic environment
Where the marks are
- Sudden environmental change defeated the plan (1 mark)
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Q7 · 1 mark · MCQDirecting
Which of the following statements is incorrect with reference to Maslow’s Need Hierarchy Theory of motivation ?
1. (A)People’s behaviour is based on their needs.
2. (B)People’s needs are in hierarchical order, starting from basic needs to other higher level needs.
3. (C)Only a satisfied need can motivate a person.
4. (D)A person moves to the next higher level of the hierarchy only when the lower need is satisfied.
Try it first, then show our solutionSolution
1. Maslow held that behaviour is driven by needs arranged in a hierarchy, and a person moves up only when the lower need is satisfied.
2. A satisfied need no longer motivates; only an unsatisfied need motivates. So (C) is incorrect. Option (C).
  1 mark
Answer: (C) Only a satisfied need can motivate a person.
Where the marks are
- Only unsatisfied needs motivate (1 mark)
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Q8 · 1 mark · MCQFinancial Management
Which of the following is not a factor affecting capital structure of a company ?
1. (A)Cash flow position
2. (B)Return on investment
3. (C)Financing alternatives
4. (D)Stock market conditions
Try it first, then show our solutionSolution
1. Cash flow position, return on investment and stock market conditions all affect the choice of debt and equity.
2. Financing alternatives (e.g. leasing) affect the requirement of fixed capital, not capital structure. Option (C).
  1 mark
Answer: (C) Financing alternatives
Where the marks are
- Financing alternatives belong to fixed capital (1 mark)
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Q9(a) · 1 mark · MCQCompetency-basedMarketing
Identify the shift in the marketing management philosophy from Picture I to Picture II.
Picture I: Mass Production of Televisions
Picture II: Use of Television as a Computer Monitor
1. (A)From Production concept to Product concept
2. (B)From Production concept to Societal marketing concept
3. (C)From Societal marketing concept to Production concept
4. (D)From Product concept to Production concept
Figure in the paper: Two photographs. Picture I: shelves stacked with many television sets (mass production of televisions). Picture II: a person looking at a large television screen used as a computer monitor. See it in the official paper.
Try it first, then show our solutionSolution
1. Picture I, mass production of televisions, reflects the production concept (availability and low cost through mass production).
2. Picture II, a TV improved to work as a computer monitor, reflects the product concept (improving quality, performance and features). Option (A).
  1 mark
Answer: (A) From Production concept to Product concept
Where the marks are
- Mass production, then product improvement (1 mark)
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Q10 · 1 mark · MCQCompetency-basedOrganising
‘Deccan Motors Ltd.’ is a renowned name in the automobile sector in India. It deals in both commercial vehicles like bus, truck and lorries, as well as passenger vehicles like cars, scooters, etc. It presently has a functional organisational structure. The Board of Directors have now decided to shift to divisional structure, with separate divisions for commercial vehicles and passenger vehicles.
Identify the benefit the company will get as a result of shifting to divisional structure :
1. (A)It will promote flexibility and initiative because each division will function as an autonomous unit.
2. (B)It will lead to minimal duplication of effort, which will result in economies of scale.
3. (C)It will make training of employees easier as the focus will be on limited range of skills.
4. (D)It will lead to occupational specialisation since emphasis will be placed on specific functions.
Try it first, then show our solutionSolution
1. Each division will run as an autonomous unit with its own functions.
2. Autonomy allows faster decisions: it promotes flexibility and initiative. Options (B), (C) and (D) are advantages of a functional structure. Option (A).
  1 mark
Answer: (A) It will promote flexibility and initiative because each division will function as an autonomous unit.
Where the marks are
- Autonomy of divisions (1 mark)
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Q11 · 1 mark · MCQOrganising
Obligation of a subordinate to properly perform the assigned duty is known as ___________.
1. (A)Delegation
2. (B)Accountability
3. (C)Responsibility
4. (D)Authority
Try it first, then show our solutionSolution
1. Authority is the right to command; accountability is answerability for the outcome.
2. The obligation of a subordinate to properly perform the assigned duty is responsibility. Option (C).
  1 mark
Answer: (C) Responsibility
Where the marks are
- Obligation to perform the assigned duty (1 mark)
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Q12 · 1 mark · MCQCompetency-basedStaffing
A software company wants to expand its business. For this, it requires a large number of fresh graduates with innovative ideas in the field of Artificial Intelligence and Data Analytics. The existing staff members do not possess these specialized skills, so a notice was put up at the reception of the office asking the present employees to introduce any friend or relative who could possibly be possessing the required skills for the jobs.
The source of recruitment that has been used by the software company is :
1. (A)Direct Recruitment
2. (B)Recommendation of employees
3. (C)Transfer
4. (D)Promotion
Try it first, then show our solutionSolution
1. Existing employees were asked to introduce friends or relatives with the required skills.
2. This external source is recommendation of employees. Option (B).
  1 mark
Answer: (B) Recommendation of employees
Where the marks are
- Employees introduce candidates (1 mark)
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Q13 · 1 mark · MCQNature and Significance of Management
Read the following statements carefully :
Statement I : The entry to a profession is not restricted either through an examination or through acquiring an educational degree.
Statement II : There is no restriction on anyone being designated or appointed as a manager in any business enterprise irrespective of the educational qualifications possessed.
In the light of the given statements, choose the correct alternative from the following :
1. (A)Statement I is true and Statement II is false.
2. (B)Statement I is false and Statement II is true.
3. (C)Both Statement I and Statement II are true.
4. (D)Both Statement I and Statement II are false.
Try it first, then show our solutionSolution
1. Statement I is false: entry to a profession is restricted through an examination or a degree.
2. Statement II is true: anyone can be appointed a manager regardless of qualification, which is why management is not a full-fledged profession. Option (B).
  1 mark
Answer: (B) Statement I is false and Statement II is true.
Where the marks are
- Management as a profession: restricted entry is missing (1 mark)
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Q14 · 1 mark · MCQCompetency-basedDirecting
A leading newspaper company noticed that many of its talented editors were resigning despite being paid competitive salaries. On conducting an internal survey, it was revealed that employees were dissatisfied as they were not being offered benefits over and above the salary, like the employees of other competitive firms. Realising that such additional benefits play an important role in motivating employees, the management decided to provide car allowance, housing facilities, medical benefits, etc. to retain employees in the organisation and improve their satisfaction.
Identify the incentive that the newspaper company decided to provide to their employees :
1. (A)Bonus
2. (B)Retirement benefits
3. (C)Perquisites
4. (D)Profit sharing
Try it first, then show our solutionSolution
1. Car allowance, housing and medical benefits are benefits over and above salary.
2. Such fringe benefits are perquisites, a financial incentive. Option (C).
  1 mark
Answer: (C) Perquisites
Where the marks are
- Benefits over and above salary (1 mark)
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Q15 · 1 mark · MCQPlanning

Match the type of plan given in Column-I with its meaning in Column-II :

Column-I	Column-II
a. Policy	(i) Prescribed way or manner in which a task has to be performed considering the objective.
b. Programme	(ii) Detailed statement about a project which outline the objectives, policies, procedures, rules, tasks, human and physical resources required and the budget to implement any course of action.
c. Method	(iii) A comprehensive plan for accomplishing an organisation’s objectives, taking business environment into consideration.
d. Strategy	(iv) A general statement that guides thinking or channelises energies towards a particular direction.

Choose the correct alternative from the following :

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

Try it first, then show our solutionSolution

A policy is a general statement that guides thinking (iv); a programme is a detailed statement of a project with its objectives, resources and budget (ii).
A method is the prescribed way of performing a task (i); a strategy is a comprehensive plan that considers the business environment (iii). Option (B).
1 mark

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

Where the marks are

Matching types of plans (1 mark)

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Q16 · 1 mark · MCQFinancial Markets
The purpose of opening a Demat Account with a Depository Participant (DP) is :
1. (A)For holding and transferring securities in the Demat form
2. (B)For entering into an agreement with broker
3. (C)For making payment to stock exchange for any purchase of securities
4. (D)For enabling cash transactions in the securities market
Try it first, then show our solutionSolution
1. A demat account holds securities in electronic (dematerialised) form.
2. It is opened with a Depository Participant for holding and transferring securities in demat form. Option (A).
  1 mark
Answer: (A) For holding and transferring securities in the Demat form
Where the marks are
- Demat account holds securities electronically (1 mark)
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Q17 · 1 mark · MCQStaffing
The step of the staffing process in which an employee’s current and/or past performance is evaluated against certain pre-determined standards is :
1. (A)Placement and orientation
2. (B)Performance appraisal
3. (C)Promotion and career planning
4. (D)Recruitment
Try it first, then show our solutionSolution
1. Performance is compared with pre-determined standards.
2. Evaluating an employee's current or past performance against standards is performance appraisal. Option (B).
  1 mark
Answer: (B) Performance appraisal
Where the marks are
- Evaluation against standards (1 mark)
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Q18 · 1 mark · MCQFinancial Management
Which of the following will require higher working capital ?
1. (A)Trading organisations
2. (B)Short processing cycles
3. (C)High level of competition
4. (D)Strict credit policy towards debtors
Try it first, then show our solutionSolution
1. Trading firms, short processing cycles and a strict credit policy all reduce working capital needs.
2. A high level of competition forces liberal credit and larger stocks, so more working capital is needed. Option (C).
  1 mark
Answer: (C) High level of competition
Where the marks are
- Competition raises credit and inventory (1 mark)
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Q19 · 1 mark · MCQDirecting
Read the following statements carefully :
Statement I : In democratic leadership style, the followers are given a high degree of independence to formulate their own objectives and ways to achieve them.
Statement II : In autocratic leadership style, communication is only one-way, with the subordinates only acting according to the command given by their managers.
In the light of the given statements, choose the correct alternative from the following :
1. (A)Statement I is true and Statement II is false.
2. (B)Statement I is false and Statement II is true.
3. (C)Both Statement I and Statement II are true.
4. (D)Both Statement I and Statement II are false.
Try it first, then show our solutionSolution
1. Statement I is false: giving followers a high degree of independence to set their own objectives describes laissez faire (free-rein) leadership, not democratic.
2. Statement II is true: in autocratic style, communication is one-way and subordinates act on commands. Option (B).
  1 mark
Answer: (B) Statement I is false and Statement II is true.
Where the marks are
- Free-rein vs democratic; autocratic is one-way (1 mark)
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Q20 · 1 mark · Assertion-reasonCompetency-basedFinancial Markets
Read the following statements : Assertion (A) and Reason (R).
Assertion (A) : The investing public gets a safe and fair deal on the stock market.
Reason (R) : The membership of stock exchange is well regulated and its dealings are well defined according to the existing legal framework.
Choose the correct alternative from the following :
1. (A)Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
2. (B)Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).
3. (C)Both Assertion (A) and Reason (R) are incorrect.
4. (D)Assertion (A) is correct, but Reason (R) is incorrect.
Try it first, then show our solutionSolution
1. Assertion: Correct. The investing public gets a safe and fair deal on the stock market.
  Reason: Correct. Membership is well regulated and dealings follow the legal framework.
2. It is because of the regulated membership and legal framework that investors get a safe and fair deal, so R explains A. Option (A).
  1 mark
Answer: (A) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
Where the marks are
- Truth of A and R and the link between them (1 mark)
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Section B

3, 4 and 6 mark questions

Q21 · 3 marks · Short answerCompetency-basedMarketing
‘Premier Ltd.’ is a clothing company known for its high quality apparel and strong commitment to environment sustainability. The company designs its clothing after carefully understanding the needs of its present and prospective buyers and satisfying them in an effective manner. It assumes that profit can be maximised only when all decisions are taken from the point of view of customer satisfaction. Along with meeting customer needs, ‘Premier Ltd.’ also shows a deep concern for the long-term well-being of the society. To reduce environmental pollution, the company is using organic cotton and recycled polyester. For reducing waste, they run a programme where customers can return old clothes for recycling and get a discount on new clothes. Not only this, they keep aside a portion of its profits for environmental education programmes in local schools.
Identify and explain two marketing management philosophies followed by ‘Premier Ltd.’.
Try it first, then show our solutionSolution
1. Marketing concept: Identified from designing clothing after understanding buyers' needs and maximising profit through customer satisfaction.
  ½ mark
2. The marketing concept holds that an organisation maximises profit in the long run by identifying the needs of present and prospective buyers and satisfying them effectively.
  1 mark
3. Societal marketing concept: Identified from the concern for society: organic cotton, recycling of old clothes and funding environmental education.
  ½ mark
4. The societal marketing concept holds that the firm should satisfy the target market's needs effectively and efficiently while taking care of the long-term well-being of consumers and society.
  1 mark
Answer: Marketing concept and societal marketing concept.
Where the marks are
- Each philosophy: ½ identification + 1 explanation
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Answer one of these 2 alternatives.
Q22(a) · 3 marks · Short answerFinancial Management
State any three points of importance of Financial Planning.
Try it first, then show our solutionSolution
1. Forecasting: It forecasts what may happen under different situations so the firm can face them better.
  1 mark
2. Avoids business shocks and surprises: It prepares the company for the future.
  1 mark
3. Coordination: It coordinates business functions such as sales and production through clear policies and procedures. (Also: reduces waste and duplication, links present with future, links investment and financing decisions, eases evaluation of performance.)
  1 mark
Answer: Any three: forecasting, avoiding shocks and surprises, coordinating functions, reducing waste, linking present and future, linking investment and financing, easing evaluation.
Where the marks are
- Any three points, 1 each (½ each if only listed)
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OR
Q22(b) · 3 marks · Short answerFinancial Management
State any three factors that determine the requirement of fixed capital of a company.
Try it first, then show our solutionSolution
1. Nature of business: A manufacturing concern needs more fixed assets than a trading concern.
  1 mark
2. Scale of operations: A larger scale needs bigger plant and more space.
  1 mark
3. Choice of technique: A capital-intensive firm needs more plant and machinery than a labour-intensive one. (Also: technology upgradation, growth prospects, diversification, financing alternatives, level of collaboration.)
  1 mark
Answer: Any three: nature of business, scale of operations, choice of technique, technology upgradation, growth prospects, diversification, financing alternatives, collaboration.
Where the marks are
- Any three factors, 1 each (½ each if only listed)
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Q23 · 3 marks · Short answerCompetency-basedControlling
‘DF Telecom Ltd.’, which produces a range of mobile phones for the Indian market, set a target to produce 30,000 units of mobile phones in the month of December 2025. This was the benchmark against which actual performance would be measured. At the end of the month, it was found that only 27,000 units were produced.
Concerned with the shortfall, the General Manager asked the Production Manager to find out and resolve the problem.
State the steps related to the process of one of the functions of management which the Production Manager has to take to find out and resolve the problem.
Try it first, then show our solutionSolution
1. The function is controlling. Standards (30,000 units) are set and performance (27,000 units) has been measured and compared, so the remaining steps are:
2. Analysing deviations: Find the acceptable range of deviation (management by exception), attend urgently to key areas (critical point control), and analyse the causes of the 3,000-unit shortfall.
  1½ marks
3. Taking corrective action: If the deviation is beyond the acceptable range in an important area, take action to remove its causes so it does not recur and the standard is met.
  1½ marks
Answer: Controlling: analysing deviations and taking corrective action.
Where the marks are
- Each step: 1½ marks (½ each if only listed)
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Answer one of these 2 alternatives.
Q24(a) · 3 marks · Short answerFinancial Markets
Differentiate between ‘Capital Market’ and ‘Money Market’ on the basis of the following :
(i) Investment outlay
(ii) Liquidity
(iii) Safety
Try it first, then show our solutionSolution
1. (i) Investment outlay: Capital market: units of securities are of low value, so a huge outlay is not needed. Money market: instruments are expensive and need huge sums.
  1 mark
2. (ii) Liquidity: Capital market securities are less liquid; money market instruments are highly liquid as there is a formal arrangement for it.
  1 mark
3. (iii) Safety: Capital market instruments are riskier in returns and principal; money market instruments are much safer with minimum risk of default.
  1 mark
Answer: Capital market: low outlay, less liquid, riskier. Money market: huge outlay, more liquid, safer.
Where the marks are
- Each basis, 1 mark
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OR
Q24(b) · 3 marks · Short answerFinancial Markets
State any three development functions of Securities and Exchange Board of India.
Try it first, then show our solutionSolution
1. Training of intermediaries: SEBI trains intermediaries of the securities market.
  1 mark
2. Research and publishing information: It conducts research and publishes information useful to all market participants.
  1 mark
3. Developing the capital market: It undertakes measures to develop the capital market by adopting a flexible approach.
  1 mark
Answer: Training intermediaries, conducting research and publishing information, and developing the capital market with a flexible approach.
Where the marks are
- Any three development functions, 1 each
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Answer one of these 2 alternatives.
Q25(a) · 4 marks · Long answerBusiness Environment
Explain the following points of importance of business environment :
(i) Helps in tapping useful resources
(ii) Helps in coping with rapid changes
Try it first, then show our solutionSolution
1. (i) Helps in tapping useful resources: The environment is the source of inputs and the outlet for outputs; understanding what it offers lets the firm design policies to obtain the resources it needs and convert them into outputs the environment wants.
  2 marks
2. (ii) Helps in coping with rapid changes: Firms of all sizes face an increasingly dynamic environment; managers who understand and examine it can develop suitable courses of action to cope with change.
  2 marks
Answer: Understanding the environment helps obtain resources and cope with rapid changes.
Where the marks are
- Each point explained, 2 marks
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OR
Q25(b) · 4 marks · Long answerPrinciples of Management
Explain the following techniques of Scientific Management :
(i) Method study
(ii) Standardisation and simplification of work
Try it first, then show our solutionSolution
1. (i) Method study: Finding the one best way of doing a job, covering every activity from procurement of raw materials to delivery of the final product; it minimises cost and maximises quality and customer satisfaction.
  2 marks
2. (ii) Standardisation and simplification of work: Standardisation sets standards for every activity (process, material, time, product, machinery, methods, working conditions); simplification removes unnecessary diversity of products, saving labour, machine and tool costs.
  2 marks
Answer: Method study finds the one best way; standardisation sets standards and simplification removes unnecessary variety.
Where the marks are
- Each technique explained, 2 marks
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Answer one of these 2 alternatives.
Q26(a) · 4 marks · Long answerNature and Significance of Management
State any four features of coordination.
Try it first, then show our solutionSolution
1. Integrates group efforts: It unifies diverse interests into purposeful work activity.
  1 mark
2. Ensures unity of action: It binds departments so that all action aims at organisational goals.
  1 mark
3. Continuous process: It starts at planning and continues till controlling.
  1 mark
4. All-pervasive function: It is needed at all levels and in all departments. (Also: responsibility of all managers; deliberate function.)
  1 mark
Answer: Any four: integrates group efforts, ensures unity of action, continuous, all-pervasive, responsibility of all managers, deliberate.
Where the marks are
- Any four features, 1 each (½ each if only listed)
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OR
Q26(b) · 4 marks · Long answerNature and Significance of Management
State any four points of importance of management.
Try it first, then show our solutionSolution
1. Achieves group goals: It gives a common direction to individual efforts towards the overall goal.
  1 mark
2. Increases efficiency: It reduces costs and increases productivity through better planning, organising, staffing, directing and controlling.
  1 mark
3. Creates a dynamic organisation: It helps people adapt to change so the organisation keeps its competitive edge.
  1 mark
4. Achieves personal objectives: Through motivation and leadership, members meet personal goals while contributing to the organisation. (Also: development of society.)
  1 mark
Answer: Any four: group goals, efficiency, dynamic organisation, personal objectives, development of society.
Where the marks are
- Any four points, 1 each (½ each if only listed)
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Q27 · 4 marks · Long answerCompetency-basedFinancial Management
‘Ratan Ltd.’ and ‘Lara Ltd.’ are two companies with each having a capital employed of ₹ 20,00,000. ‘Ratan Ltd.’ had raised funds by issuing shares whereas ‘Lara Ltd.’s’ capital has 60% equity (in shares of ₹ 100 each) and 40% debt (comprising of 8% debentures). Both the companies have a Return on Investment of 10% and the tax rate is 40%.
State with reason which company will be able to give a better return to the shareholders. Show your calculations clearly.
Try it first, then show our solutionSolution
1. Capital: Ratan Ltd: equity ₹20,00,000 (20,000 shares of ₹100). Lara Ltd: equity 60% = ₹12,00,000 (12,000 shares of ₹100) and 8% debentures 40% = ₹8,00,000.
  ½ mark
2. EBIT = 10% of ₹20,00,000 = ₹2,00,000 for each. Interest: Ratan nil; Lara 8% × 8,00,000 = ₹64,000. EBT: Ratan ₹2,00,000; Lara ₹1,36,000.
  1 mark
3. Tax @ 40%: Ratan ₹80,000, EAT ₹1,20,000; Lara ₹54,400, EAT ₹81,600.
  ½ mark
4. EPS = EAT ÷ number of shares: Ratan = 1,20,000 ÷ 20,000 = ₹6; Lara = 81,600 ÷ 12,000 = ₹6.80.
  1 mark
5. Lara Ltd. will give a better return to its shareholders.
  ½ mark
6. Reason: Lara has debt in its capital structure and its ROI (10%) is higher than the cost of debt (8%), so trading on equity raises EPS.
  ½ mark
Answer: Lara Ltd: EPS ₹6.80 against ₹6 for Ratan Ltd, because ROI (10%) exceeds the cost of debt (8%).
Where the marks are
- Calculations of EAT and EPS (3)
- Conclusion (½) + reason (½)
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Q28 · 4 marks · Long answerCompetency-basedConsumer Protection
Rishabh purchased a car for ₹ 8,00,000. He insured the car on the same day from Alex Insurance Company. Rishabh’s car was stolen in Kedwan while he was on vacation with his family. He promptly filed a First Information Report (FIR), informed the insurer and submitted all the required documents.
To Rishabh’s shock, the insurance company rejected his claim, alleging he had failed to take due care and had parked the car in an unsafe manner. Determined to challenge this, Rishabh wrote multiple letters to the insurance company, but the insurance company refused to pay the compensation.
Rishabh filed a case with District Commission. The District Commission was satisfied with the genuineness of the complaint and ordered the insurance company to pay a reasonable amount.
Identify and explain two consumer rights which have been exercised by Rishabh.
Try it first, then show our solutionSolution
1. Right to be heard: Rishabh complained to the insurer by writing multiple letters.
  1 mark
2. When dissatisfied with a good or service, the consumer has the right to file a complaint and to be heard; that is why many firms set up consumer service and grievance cells.
  1 mark
3. Right to seek redressal: he filed a case with the District Commission, which ordered the insurer to pay.
  1 mark
4. When a product or service falls short of expectations, the consumer has the right to relief such as replacement, removal of defect or compensation for loss suffered.
  1 mark
Answer: Right to be heard and right to seek redressal.
Where the marks are
- Each right: 1 identification + 1 explanation
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Q29 · 4 marks · Long answerCompetency-basedPrinciples of Management
Hitesh started a garment manufacturing company recently. However, he soon began facing several problems like targets not met, conflicts among managers, high labour turnover, etc. He hired a management consultant to find out what was going wrong. The consultant conducted investigations and gave the following observations :
(i) In Production Department, workers were receiving instructions from both, the Production Manager and the Marketing Manager. As a result, there was a lot of confusion regarding tasks to be done.
(ii) Promotions were given only to women employees. Other employees did not get equal opportunities in the company to rise.
Identify and explain the two principles of management given by Fayol which are not being followed in Hitesh’s company.
Try it first, then show our solutionSolution
1. (i) Unity of command: Identified from workers receiving orders from both the production and marketing managers.
  ½ mark
2. Each employee should receive orders from, and be responsible to, only one superior; this prevents confusion about tasks.
  1½ marks
3. (ii) Equity: Identified from promotions given only to women employees.
  ½ mark
4. There should be no discrimination on grounds of sex, religion, language, caste, belief or nationality; managers should treat workers with kindliness and justice to win loyalty.
  1½ marks
Answer: Unity of command and equity are not being followed.
Where the marks are
- Each principle: ½ identification + 1½ explanation
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Q30 · 4 marks · Case-basedCompetency-basedOrganising
The students of class 11 of ‘AL Public School’ decided to host a farewell party to students of class 12. A core team was formed that brainstormed and identified various activities that needed to be performed for the same. It was decided that the arrangements for refreshments, sound and music, tentage, gifts, invitations and cultoural programme are required to be made. The students then divided the work into manageable activities so that duplication is avoided and burden of work is shared.
The students were excited that they were managing the whole event themselves.
1. (i)
  The students of class 11 have performed one of the steps in the process of organising. Identify the step.
  1 mark
2. (ii)
  State the next three steps that the students need to perform to complete the process of organising successfully.
  3 marks
Try it first, then show our solutionSolution
1. (i) The step performed is Identification and Division of Work.
  1 mark
2. (ii) Departmentalisation: Grouping similar activities (refreshments, sound, gifts, etc.) into departments to facilitate specialisation.
  1 mark
3. Assignment of duties: Allocating jobs to members of each department according to their skills and competencies.
  1 mark
4. Establishing authority-responsibility (reporting) relationships: Each person knows from whom to take orders and to whom they are accountable.
  1 mark
Answer: (i) Identification and division of work. (ii) Departmentalisation, assignment of duties, establishing reporting relationships.
Where the marks are
- (i) Identification (1)
- (ii) Three steps, 1 each (½ each if only listed)
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Q31 · 6 marks · Long answerCompetency-basedMarketing
‘Novel Stores’ is a chain of grocery stores that has built its reputation on customer satisfaction. It is known for its high-quality products, including a wide variety of bakery, dairy products and ready-to-cook meal kits, etc. catering to diverse customer needs. The store regularly takes feedback from the customers and stocks items accordingly.
The store is popular among the customers for its attractive schemes such as ‘buy one get one free’ offers and weekly discounts, etc. which are advertised on its website.
Once the goods are manufactured, packaged, branded and promoted, ‘Novel Stores’ ensures that they are made available to customers at the right place, in the right quantity and at the right time. Customers can place orders online and choose to get them delivered at their home or pick them up from the store at a selected time. As a result, the revenues of ‘Novel Stores’ are growing every year and profits are increasing.
Identify and explain the elements of marketing mix highlighted in the above case.
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1. Product: High-quality bakery, dairy and meal-kit products stocked to customer feedback. Product means anything of value offered for sale, including the extended product; decisions cover features, quality, packaging, labelling and branding.
  2 marks
2. Promotion: "Buy one get one free" offers and weekly discounts advertised on the website. Promotion is communicating information about the product and persuading customers to buy, using advertising, personal selling, public relations and sales promotion.
  2 marks
3. Place (physical distribution): Goods made available at the right place, quantity and time, with home delivery or store pick-up. Place covers making products available to target customers: choosing intermediaries, inventory, warehousing and transportation.
  2 marks
Answer: Product, promotion and place (physical distribution).
Where the marks are
- Each element: ½ identification + 1½ explanation
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Answer one of these 2 alternatives.
Q32(a) · 6 marks · Long answerDirecting
Explain any four points of importance of directing function of management.
Try it first, then show our solutionSolution
1. Initiates action: Directing starts action by people towards objectives; superiors guide subordinates and clarify their doubts.
  1½ marks
2. Integrates employees' efforts: Every individual effort is made to contribute to organisational performance.
  1½ marks
3. Guides employees to realise their potential: Motivation and leadership help employees work up to their full capabilities.
  1½ marks
4. Facilitates introduction of needed changes: Motivation, communication and leadership reduce resistance to change. (Also: brings stability and balance.)
  1½ marks
Answer: Any four: initiates action, integrates efforts, guides employees to realise potential, facilitates change, brings stability and balance.
Where the marks are
- Any four points: ½ naming + 1 explanation
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OR
Q32(b) · 6 marks · Long answerDirecting
Explain any four psychological barriers of communication.
Try it first, then show our solutionSolution
1. Premature evaluation: The receiver judges the message before the sender completes it, due to pre-conceived notions or prejudice.
  1½ marks
2. Lack of attention: A preoccupied receiver does not listen to the message.
  1½ marks
3. Loss by transmission and poor retention: Messages lose accuracy as they pass through levels, and inattentive people cannot retain information for long.
  1½ marks
4. Distrust: If sender and receiver do not trust each other, they cannot understand the message in its original sense.
  1½ marks
Answer: Premature evaluation, lack of attention, loss by transmission and poor retention, distrust.
Where the marks are
- Each barrier: ½ naming + 1 explanation
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Q33 · 6 marks · Long answerCompetency-basedStaffing
‘Yummi Foods’, a fast-growing snacks chain has been in business for the last 13 years. Realising that there is a growing demand for nutritious food, the company planned to enter the healthy snacks segment. They decided to hire a Marketing Manager with an experience in this segment. For this, they gave an advertisement in a leading newspaper and received more than 200 applications.
The Human Resource Manager carefully went through all the application forms and removed the application forms of those applicants who did not meet the basic qualifications. Short introductory interactions were also held to filter out candidates who did not match the job requirements. The shortlisted candidates were then asked to take a test designed to measure their intelligence, personality traits, etc. Candidates who performed well in the test were invited for a formal in-depth conversation to be evaluated on their suitability for the job. A job offer was made to a candidate for the role of a Marketing Manager through an appointment letter mentioning the joining date.
But before the job offer was made, ‘Yummi Foods’ had performed three steps in the process of selection which are not mentioned above.
Identify and explain the steps.
Try it first, then show our solutionSolution
1. The case shows preliminary screening, selection tests, employment interview and job offer. The steps not mentioned are:
2. Reference and background checks: Employers verify information and gain more about the applicant from references such as previous employers, teachers and known persons.
  2 marks
3. Selection decision: The final choice among candidates who passed tests, interviews and reference checks, generally considering the views of the manager concerned.
  2 marks
4. Medical examination: After the selection decision and before the job offer, the candidate undergoes a medical fitness test; the offer is made only if declared fit.
  2 marks
Answer: Reference and background checks, selection decision and medical examination.
Where the marks are
- Each step: ½ identification + 1½ explanation
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Answer one of these 2 alternatives.
Q34(a) · 6 marks · Long answerOrganising
Explain the following points of importance of delegation :
(i) Employee development
(ii) Motivation of employees
(iii) Effective management
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1. (i) Employee development: Delegation gives employees chances to use their talent and bring out latent abilities, making them better decision makers and future managers.
  2 marks
2. (ii) Motivation of employees: Entrusting a task shows the superior's trust and builds the subordinate's commitment and self-esteem, improving performance.
  2 marks
3. (iii) Effective management: Freed from routine work, managers get more time to concentrate on important matters and excel in new areas.
  2 marks
Answer: Delegation develops employees, motivates them and makes management more effective.
Where the marks are
- Each point explained, 2 marks
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OR
Q34(b) · 6 marks · Long answerPlanning
Explain the following points of importance of planning :
(i) Planning provides directions
(ii) Planning reduces overlapping and wasteful activities
(iii) Planning establishes standards for controlling
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1. (i) Provides directions: Planning states in advance how work is to be done and states goals clearly, guiding what action to take and in which direction.
  2 marks
2. (ii) Reduces overlapping and wasteful activities: Planning is the basis for coordinating departments and individuals, avoiding confusion and eliminating useless, redundant activities.
  2 marks
3. (iii) Establishes standards for controlling: Planning provides the goals against which performance is measured; without them deviations could not be found, so it is a prerequisite for controlling.
  2 marks
Answer: Planning gives direction, removes overlapping and waste, and provides the standards for control.
Where the marks are
- Each point explained, 2 marks
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Source: official question paper, cbse.gov.in. Chapter tags and solutions are ours. Spotted a transcription error? Write tosupport@questionbuddy.in.