Subhash Dey’s

Subhash Dey’s Sample Papers for CBSE 2023 Examinations

     
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 CBSE Sample Question Paper and BUSINESS STUDIES XII EXAM HANDBOOK
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20 Practice Papers

Sample Paper-3 OR
(b) The economic objectives of a business are survival,
1. (b) Management as an art profit and growth.
2. (a) Top level of management (i) Survival: The basic objectives of any business
3. (a) Ismail-Abhishek-Rajat-Sara-Shalleen-Lata-Rupa- is survival. Management must strive to ensure
Geet-Hussain the survival of the organisation. In order to
4. (c) ` 1315 survive, an organisation must earn enough
5. (c) Technological environment revenues to cover costs.
6. (a) Follow-up action (ii) Profit: Mere survival is not enough for
business. Management has to ensure that the
7. (c) Time based pay plus incentives
organisation makes a profit. Profit provides
8. (c) Vestibule training a vital incentive for the continued successful
9. (b) Initiates action operation of the enterprise. Profit is essential
10. (b) Autocratic for covering costs and risks of the business.
11. (d) Employee recognition (iii) Growth: A business needs to add to its
12. (a) When deviations go beyond the acceptable range, prospects in the long run, for this it is
especially in the key result areas. important for the business to grow. To remain
13. (a) `14 in the industry, management must exploit
fully the growth potential of the organisation.
14. (c) Alternative III
Growth of a business can be measured in
15. (d) No, Earning Per Share (EPS) does not always rise terms of:
with increase in debt. When cost of debt is greater than • increase in sales volume,
ROI, use of more debt decreases the EPS.
• increase in the number of employees,
16. (c) Both (i) and (ii) • increase in the number of products,
17. (b) Depository is like a bank which keeps securities in • the increase in capital investment, etc.
electronic form on behalf of investor. 22. (a) Limitations of planning highlighted are:
18. (b) Statement II is correct and Statement I is not (i) Planning involves huge cost.
correct.
"With the advancement of technology, the
19. (d) Both the Statements I and II are not correct. planned to make huge investment in developing
20. (b) Right to be Assured and selling even higher resolution digital
21. (a) Management is multi-dimensional. cameras. The made a budget allocation of
Management is a complex activity that has three `1,000 crore in developing it."
main dimensions. These are: (ii) Planning is time-consuming.
(i) Management of work: All organisations "It is a lengthy process of research and
exist for the performance of some work. development. It may take 2 to 3 years to actually
Management translates this work in terms of start production."
goals to be achieved and assigns the means to (iii) Planning may not work in a dynamic
achieve it. environment.
(ii) Management of people: Managing people has "In the mean time one of its competitors moved
two dimensions: a step forward and developed and marketed
• dealing with employees as individuals mirror-less cameras in the market. It resulted in
with diverse needs and behaviour; and heavy losses to Prem India Limited."
• dealing with employees as a group of OR
people. (b) Two types of plans discussed are:
The task of a manager is to make people work (i) Objectives: Objectives are the end points
towards the achievement of the organisational which are numerically expressed, that the
goals by making their strengths effective and management seeks to achieve within a given
their weaknesses irrelevant. time period, e.g. increasing sales by 10% in
(iii) Management of operations: Every the next quarter. Objectives are usually set by
organisation has some basic product or service top management and focus on broad general
to provide in order to survive. This requires issues. Objectives serve as a guide for overall
a production process of transforming input planning.
material and the technology into the desired (ii) Strategy: A strategy provides broad contours
output for consumption. of an organsiation’s business and refers to
 BUSINESS STUDIES XII EXAM HANDBOOK Shree Radhey Publications (Subhash Dey)
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future decisions defining the organisation’s be encouraged to develop and carry out their
direction and scope in the long run. A strategy plans for improvement in the organisation.
is a comprehensive plan for accomplishing an A good company should have an employee
organisation’s objectives taking competition suggestion system whereby initiative/
and business environment into consideration. suggestions which result in substantial cost/
It includes three dimensions: time reduction should be rewarded.
• Determining long-term objectives, OR
• Adopting a particular course of action, (b) (i) Functional Foremanship – a technique of
and scientific management
• Allocating resources necessary to achieve Functional foremanship is an extension
the objectives. of the principle of division of work and
23. Transfer is used as a good source of filling the vacancies specialisation. It is a technique which aims
internally because: to improve the quality of supervision at
(i) Transfer is a tool of training the employees to shop floor by putting a worker under eight
prepare them for higher jobs. Also people recruited specialist foremen.
from within the organisation do not need induction In this technique, planning is separated from
training. execution. Taylor suggested four foremen for
(ii) Transfer has the benefit of shifting workforce from planning and four foremen for execution.
the surplus departments to those where there is The four foremen for planning and their role:
shortage of staff. • Instruction card clerk – To draft
(iii) Filling of jobs internally through transfers is instructions for the workers.
cheaper as compared to getting candidates from • Route clerk – To specify the route of
external sources. production
24. The steps Hemant has to take to complete the process of • Time and cost clerk – To prepare time
appointment of nurses: and cost sheet.
(i) Medical Examination: Medical Examination • Disciplinarian – To ensure discipline.
includes a medical fitness test which the candidate The four foremen for execution and their
is required to undergo. The job offer is given to the role:
candidate after being declared fit in the medical • Speed boss – To be responsible for timely
examination. and accurate completion of the job.
(ii) Job Offer: Job offer is made through a letter of • Gang boss – To keep machines and tools
appointment, which contains the date by which ready for operation by the workers.
the appointed candidate must report on duty. • Repair boss – To ensure proper working
(iii) Contract of Employment: After the job offer conditions of machines and tools.
has been made and candidate accepts the offer, • Inspector – To check the quality of work.
certain documents need to be executed by the (ii) Concept of Mental Revolution
employer and the candidate–the attestation form Mental revolution involves a change in the
and a contract of employment regarding terms and attitude of workers and management towards
conditions of employment, pay, hours of work, one another from competition to cooperation.
leave rules, etc. Both should realise that they require one
25. (a) (i) Centralisation and Decentralisation: The another. Both should aim to increase the
concentration of decision-making authority size of surplus. This would eliminate the
by the top management is called centralisation need for any agitation. Management should
whereas its dispersal among more than share a part of surplus with workers. Workers
one person is known as decentralisation. should also contribute their might so that the
In general, large organisations have more company makes profits. This attitude will
decentralisation than small organisations. be good for both of them and also for the
According to Fayol, “There is a need to company. In the long run only worker’s well-
balance subordinate involvement through being will ensure prosperity of the business.
decentralisation with managers’ retention of 26. Following are the points of importance of understanding
final authority through centralisation.” Business Environment discussed:
(ii) Initiative: Initiative means thinking out and (i) “Improve existing card facility” – It helps the firm in
executing the plan within the prescribed limits identifying threat and early warning signal.
of authority. It states that the workers should
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'Threats' refer to the external environment trends 28. Directing
and changes that will hinder a firm’s performance. Features of directing: (any three)
Environmental awareness can help managers to (i) While other functions prepare a setting for action,
identify various threats on time and serve as an directing initiates action in the organisation. Thus,
early warning signal. directing is an executive function.
(ii) “Exploit opportunity arising” – It helps to identify (ii) Directing takes place at every level of management.
opportunities and get first mover advantage. Every manager, from top executive to supervisor
'Opportunities' refer to the positive external trends performs the function of directing. The directing
or changes that will help a firm to improve its takes place wherever superior-subordinate relations
performance. exist.
Early identification of opportunities helps an (iii) Directing is a continuous process. It takes place
enterprise to be the first to exploit them instead of throughout the life of the organisation irrespective
losing them to competitors. of people occupying managerial positions.
(iii) Improve their performance” – It helps in improving (iv) Directing flows from top to bottom. Directing is
performance. first initiated at top level and flows to the bottom
The enterprises that continuously monitor their through organisational hierarchy. It means that
environment and adopt suitable business practices every manager can direct his immediate subordinate
can not only improve their present performance and take instructions from his immediate boss.
but also continue to succeed in the market for a 29. (a) Controlling
longer period. Importance of controlling: (any three)
(iv) “Planned to hire more guidelines to train sales force” (i) Accomplishing organisational goals: The
– It helps in assisting in planning and policy controlling function measures progress
formulation. towards the organisational goals and brings
Since environment is a source of both to light the deviations, if any, and indicates
opportunities and threats for a business enterprise, corrective action. It, thus, guides the
its understanding and analysis can be the basis for organisation and keeps it on the right track so
deciding the future course of action (planning) or that organisational goals might be achieved.
training guidelines for decision making (policy). (ii) Making efficient use of resources: By
27. (i) Assignment of duties: Defining the work of exercising control, a manager seeks to reduce
different job positions and allotting the work wastage and spoilage of resources. Each
according to the skills of the employees. activity is performed in accordance with
(ii) Kanaputti responded to the complaint of Ramdas predetermined standards and norms. This
by: ensures that resources are used in the most
(a) Assigning the duties: Jobs are allocated to effective and efficient manner.
the members of each department according (iii) Ensuring order and discipline: Controlling
to their skills and competencies for effective creates an atmosphere of order and discipline
performance. in the organisation. It helps to minimise
(b) Establishing reporting relationship: Authority dishonest behaviour on the part of the
responsibility relationships are clearly employees by keeping a close check on their
established so that each individual knows activities.
who he has to take orders from and to whom (iv) Improving employee motivation: A good
he is accountable. This helps in coordination control system ensures that employees know
amongst various departments. well in advance what they are expected to do
(iii) Importance of organising reflected are: (any two) and what are the standards of performance on
(a) Clarity in working relationship: It leads to the basis of which they will be appraised. It,
clarity in working relationships by specifying thus, motivates them and helps them to give
who is to report to whom. better performance.
(b) Benefits of specialisation: It leads to (v) Facilitating coordination in action:
specialisation by a systematic allocation Controlling provides direction to all activities
of jobs resulting in reduced workload and and efforts for achieving organisational goals.
enhanced productivity. Each department and employee is governed
(c) Effective administration: It helps in by predetermined standards which are well
effective administration by providing a clear coordinated with one another. This ensures
description of jobs and working relationships. that overall organisational objectives are
accomplished.
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(vi) Judging accuracy of standards: An efficient

control system keeps a careful check on the
changes taking place in the organisation and
in the environment and helps to review and
revise the standards in light of such changes.
A good control system enables management
to verify whether the standards set are
accurate and objective. Disadvantages:
(i) Conflict may arise among different divisions with
OR
reference to allocation of funds and further a
(b) Controlling
particular division may seek to maximise its profits
Controlling is both a backward looking as well as at the cost of other divisions.
forward looking function.
(ii) It may lead to increase in costs since there may be a
• Controlling is like a post-mortem of past duplication of activities across products. Providing
activities to find out deviations from the each division with separate set of similar functions
standards. In that sense, controlling is a increases expenditure.
backward-looking function.
(iii) It provides managers with the authority to supervise
• Controlling is also a forward-looking function all activities related to a particular division. In
because the corrective action initiated by course of time, such a manager may gain power
control function aims to improve future and in a bid to assert his independence may ignore
performance. organisational interests.
30. The next four steps of the trading procedure: OR
(i) Placing an order: The investor then places an
(b) Formal organisation
order with the broker to buy or sell shares. Clear
instructions have to be given about the number of Advantages:
shares and the price at which the shares should be (i) It is easier to fix responsibility since mutual
bought or sold. The broker will then go ahead with relationships are clearly defined.
the deal and issue an order confirmation slip to the (ii) It avoids duplication of effort since there is
investor. no ambiguity in the role that each member
(ii) Match the order: The broker then will go on-line has to play.
and connect to the main stock exchange and match (iii) It maintains unity of command through an
the share and best price available. established chain of command.
(iii) Executing order: When the shares can be bought or (iv) It leads to accomplishment of goals by
sold at the price mentioned, it will be communicated providing a framework for the operations to
to the broker’s terminal and the order will be be performed.
executed electronically. The broker will issue a trade (v) It provides stability to the organisation
confirmation slip to the investor. because there are specific rules to guide
(iv) Issue of contract note:After the trade has been behaviour of employees.
executed, within 24 hours the broker issues a 32. (a) Long Term Investment Decision/Capital Budgeting
Contract Note. A Unique Order Code number is (b) Capital budgeting decisions are important for the
assigned to each transaction by the stock exchange following reasons: (any two)
and is printed on the contract note. It contains (i) Long-term growth: These decisions have
details of the number of shares bought or sold, the bearing on the long-term growth. The funds
price, the date and time of deal, and the brokerage invested in long-term assets are likely to yield
charges. This is an important document as it is returns in the future. These will affect the
legally enforceable and helps to settle disputes/ future prospects of the business.
claims between the investor and the broker. (ii) Large amount of funds involved: These
31. (a) Divisional structure decisions normally involve huge amounts of
A divisional structure is suitable for those business funds being blocked in long-term projects.
enterprises where a large variety of products are (iii) Risk involved: Fixed capital involves
manufactured using different productive resources. investment of huge amounts. It affects the
returns of the firm as a whole in the long-
term. Therefore, investment decisions
involving fixed capital influence the overall
business risk complexion of the firm.
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(iv) Irreversible decisions: These decisions once Suitability Advertising is more useful Personal selling is more
taken, are not reversible without incurring in marketing to the helpful in selling products
heavy losses. Abandoning a project after ultimate consumers who to the industrial buyers
heavy investment is made is quite costly in are large in numbers. or to intermediaries such
terms of waste of funds. as dealers and retailers
who are relatively few in
Factors affecting Capital Budgeting Decision : numbers.
(i) The amount of cash flows of the project should be
carefully analyzed before considering the decision. OR
(ii) The rate of return of the project based on expected (b) Factors affecting determination of the price of a
return and assessment of the risk involved from product or service:
each proposal should be analyzed. (i) Pricing objectives: If the objective of a firm
(iii) Investment criteria – The decision to invest in a is profit maximisation in the short run, it
particular project involves a number of calculations will charge maximum price for its products
regarding the amount of investment, interest rate, but for long run profit maximisation, it will
cash flows and rate of return. charge lower per unit price so that it can
33. (a) Difference between Advertising and Personal capture large market share.
Selling (any six) Apart from profit maximization other
objectives are:
Basis Advertising Personal Selling
• Obtaining market share leadership-If firm
Form/ Advertising is an Personal selling is
wants to capture big share of market it
Nature impersonal form of a personal form of
communication. communication. has to keep its price low.
• Surviving in competitive market- To
Method Advertising involves In personal selling, the
transmission of sales talk is adjusted survive in a competitive market the firm
standardised messages, keeping in view the has to offer discounts.
i.e. same message is sent customer’s background • Attaining product quality leadership-
to all the customers in a and needs. Generally high prices are charged to cover
market segment. cost of R&D.
Reach It reaches masses, i.e. a Only a limited number of (ii) Product cost: Cost includes cost of producing,
large number of people people can be contacted
distributing and selling the product. The cost
can be approached. because of time and cost
considerations. sets the minimum level or the floor price at
which the product can be sold. Price should
Cost In advertising, the cost The cost per person is
per person reached is very quite high in the case of recover total costs (fixed costs as well as
low. personal selling. variable costs) plus a profit margin.
Media Advertising makes use Personal selling makes (iii) Extent of Competition in the market: When
used of mass media such use of sales staff, which firm does not face any competition it has
as television, radio, has limited reach. complete freedom in fixing up the price.
newspapers and magazines. But when competition is more the price
Feedback Advertising lacks direct Personal selling provides of the product is fixed keeping in mind the
feedback. Marketing direct and immediate competitor’s price.
research efforts are needed feedback. Salespersons (iv) Utility and demand: The utility provided by
to judge the customers’ come to know about
reactions to advertising. the customers’ reactions
the product and the intensity of demand of
immediately. the buyer sets the upper limit of price, which
Flexibility Advertising is inflexible, Personal selling is highly
a buyer would be prepared to pay. When the
as the message cannot be flexible, as the message demand of the product is inelastic, a firm can
adjusted to the needs of can be adjusted. fix higher price. However, when the demand
the buyer. is elastic, lower price should be fixed.
Time/ Advertising can cover the Personal selling efforts (v) Government regulations: In order to protect
Coverage market in a short time. take a lot of time to the interests of the consumers government
cover the entire market. has all rights to control prices of important
Role Advertising is more useful Personal selling plays commodities & services, e.g. medicines. The
in creating and building an important role at Government does not allow the firms to
interest of the consumers the awareness stage of
charge a higher price of the medicine.
in the firm's products. decision-making.
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(vi) Marketing methods used: The price of

product is also affected by the methods &
techniques used to promote the product,
e.g. distribution system, quality of salesmen
employed, quality of advertising, the type of
packaging, etc.
34. (i) Ginika– Societal Marketing concept
• The marketing efforts start from the
identification of needs of the target market
and the society.
• Focus is on Customer needs and society’s well-
being. It takes care of long term well being of
the consumers as well as the society.
• It uses integrated marketing as a means to
achieve the objective.
• Its objective is to earn profits through
customer satisfaction and social welfare.
(ii) Tanish– Selling concept
Selling concept is based on the belief that profits
could be maximised by increasing sales volume
by undertaking aggressive selling and promotional
efforts.
• The marketing efforts start after the product
is produced in the factory.
• It involves pushing the sale of existing
products.
• It uses aggressive selling and promotional
techniques like advertising, personal selling
and sales promotion to achieve the objective.
• Its objective is to earn profits through
increased volume of sales.
(iii) Rohit–Marketing concept
• The marketing efforts start from the
identification of needs of the target market.
• Its focus is on satisfaction of customers’
needs.
• It uses integrated marketing (in respect of
product, price, promotion and physical
distribution) as a means to achieve the
objective.
• Its objective is to earn profits by satisfying
needs of the target market better than the
competitors.