STUDY COMPANION

IN

BUSINESS STUDIES
CLASS-XII
[MODEL TEST PAPERS & PRACTICE PAPERS]
(Remembering / Understanding / Applications / HOTS / Evaluation Based Questions)
Strictly According to Latest Syllabus and Design of Question Paper
Issued by the CBSE - New Delhi

Dr. Prashant Vasudev

Principal
Modern Vidya Niketan
Greater Faridabad, Haryana

Hitendra Kumar Virani Neeru Sethi Mamta Narula

Lecturer Commerce G.D. Goenka Public School Delhi Public School
Directorate of Education Vasant Kunj, New Delhi Vasant Kunj, New Delhi
GNCT of Delhi

ARYA BOOK DEPOT

30 Naiwala, Karol Bagh
New Delhi-110 005
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MODEL PRACTICE PAPER-1 (With Hints)

BUSINESS STUDIES
Time allowed: 3 hours Maximum marks: 80

SECTION A
Q.1. Flamingo Publishing Ltd. wants to set up a book binding unit in Noida. The new unit
will require a paper folding and binding machine worth ` 20 lakh.
Identify and state the type financial decision taken by Flamingo Publishing Ltd. (1)
Q.2. Which organizational structure is suitable for a multi-product manufacturing company?
OR

I S TU I O N
Which organizational structure is suitable for a single-product manufacturing company?
(1)

E S
Q.3. “Through a significant process of designing and maintaining an environment in which
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individuals, working together in groups, efficiently accomplish selected aims.”

OT DI
PA
Identify the process highlighted here. (1)

R S
Q.4. The brand Ridhima Fashion has earned its brand value and clientele over two decades

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of its existence in New Delhi. The brand was established and nurtured over the years
by Arora’s. Following the footsteps of ancestral business and nurturing the past experience
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and expertise Aditya and Adarsh Arora have launched a beautiful wedding collection
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studio at Chandni Chowk. The designer duo is facing a problem of declining market
&
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share due to increased competition from new entrants in the market. Its competitors are
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successful in capturing significant market share as they are offering products as per the
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pocket of the customers. For price sensitive customers, low costing designer suits, party
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wear sarees, evening dress and gown and beautiful lehngas are marketed effectively by
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small retailers.
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B Y BU

Identify and state the suitable business plan for Ridhima Fashion. (1)
Q.5. In an organization manager recognizes that people perform best if they have set their
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own objectives. Manager needs to respect the other’s opinion and support subordinates
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to perform their duties in order to accomplish organizational objectives. Manager exercises

more control by using forces within the group.
Identify the type of Leadership style followed by the manager in the above situation.
(1)
Q.6. State the function of marketing which is concerned with creating time utility for the
product.
OR
State the function of marketing which is concerned with the classification of products
into different groups. (1)
Q.7. Gautam ordered a new model of touch screen phone at an online store, Phonewala.
com. He paid full amount through PNB debit cum credit card at the time of placing the
order. He was assured that the product would be delivered to him within three weeks.
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However, even after 25 days the product was not delivered. He wrote a number of
mails to the company and even called on their customer helpline number. No action
was taken by the company even after repeated complaints. Eventually, he approached
a consumer protection organization called Grahak Sangathan. The organization suggested
him to claim compensation of 3 lakh for non-fulfilment of the deal against the company.
Where should the complaint be filed and why? (1)
Q.8. Name the selection test which is a good indices of a person’s future success score.
OR
Name the selection test which measures the level of knowledge and proficiency in the
area of profession or technical training. (1)
SECTION B
Q.9. Premier India Limited is a well-established international camcorder company, a pioneer

I S TU I O N
in introducing non-digital camcorder. With the advancement of technology, the company

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officials planned to make huge investment in producing and marketing higher resolutions

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digital single lens range cameras. The CFO made a budget allocation of 1,000 crore for
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the new project. The company initiated the lengthy process of research and development
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in respect of higher resolutions digital single lens range cameras. In the due course of

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time, one if its competitors developed and launched format mirrorless camera system

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with a rangefinder-style body in the market.

Identify and state the limitations of planning by quoting the lines from the above case.
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(3)
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Q.10. Home Decor Furniture Ltd. is in the business of making wooden furniture since 1954.
&
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The major inventory of wood comes from a government-authorized suppliers in Madhya

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Pradesh. Due to outburst of forest fires in Madhya Pradesh raw-material supply of the
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company is severely hampered. The company is expecting high sales due to the
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forthcoming festive season. The company is in urgent need of short-term funds to

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ST

procure raw material inventory. Due to high interest rate charged by the banks, the
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finance manager is contemplating to procure inventory of wood on credit.

Identify and explain the instrument of money market to which the company can opt for.
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(3)
IN

Q.11. “Financial planning is an important part of overall planning of any business enterprise.
It aims at enabling the company to tackle the uncertainty in respect of the availability
and timing of the funds.”
In the light of the given statement, enlist any three importance of financial planning.
OR
“Financing decisions is concerned with how much fund to be raised from which source.
This decision determines the overall cost of capital and the financial risk of the enterprise.”
In the light of the given statement, State any three factors affecting financing decisions.
(3)
Q.12. State any three significant functions performed by the supervisor in an organization.

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OR
State any three barriers of communication related to organisation structure and authority
relationships. (3)
Q.13. “An organisation can never be completely centralised or decentralised.” Comment.
(3)
SECTION C
Q.14. Call-a-Cab Limited is a tour and travel company operating petrol taxis in Delhi. To
control pollution, a government ordinance was passed in the year 1988 to convert all
commercial vehicles into CNG. Soon after the ordinance, the company converted its
petrol taxis into CNG ones. In April 2016, the Supreme Court passed the verdict that
only CNG commercial vehicles could ply in Delhi. Call-a-Cab Limited with a well
maintained fleet of CNG taxies started earning huge profits while its competitors ran out

I S TU I O N
of business.

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(a) Identify and state the dimension of the business environment discussed in the

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above case.
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(b) State two reasons why Call-a-Cab Limited started earning huge profits. (4)
PA
Q.15. Glenmark management outlined its long term strategy and thoughts on medium term

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prospects. The company has equity share capital of ` 50 lakh. The face value of each

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share ` 100. In the year 2016, Glenmark expects faster approvals and better quality
launches to drive revenue growth, despite potentially higher business erosion due to
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increasing competition. The company raised ` 50 lakh from debt market due to bearish
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phase in the stock market at 9% interest. In the year 2017, the company earned profit
&
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of ` 10 lakh before interest and tax. The applicable tax rate is 40% for the year. In the
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year 2018, the company requires additional funds of ` 75 Lakhs for undertaking a new
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launch. It is expected that as a result of this new launch, the profit for the company in
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the next year will jump to ` 25 lakh. Debt funds are now available in the market at the
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ST

rate of 12%.
B Y BU

(a) Evaluate whether the earlier decision of raising debt fund 50 lakh was appropriate.
(b) Which source of finance should the company opt for now debt or equity considering
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EPS and ROI both? (4)

IN

Q.16. Mr. John is working as the Human Resource Consultant in Blue Horizon Pvt. Ltd. The
company manufactures squashes and soft drinks. The company is facing a problem of
high employee turnover due to which the production and supply situation of its product
has been on decline. The personnel manager of the company asks Mr. John to look into
the situation and offer a suitable solution for retaining the talented employees and solve
the problem of employee turnover. On analysing the situation Mr. John suggests that
the good employees of the organisation should be rewarded in a manner that creates
feeling of ownership among the employees and thus motivates them to contribute their
best towards the organisational goals.
(a) Identify and explain the incentive that has been suggested by Mr. John.
(b) Also, explain any two other incentives of the same category. (4)

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Q.17. Aryaman, a class XII student was in need of a ball-pen. He went to the nearest
stationery shop. The shopkeeper showed him a wide variety of ball-pens having different
prices. He selected a pen and paid ` 250, the maximum retail price, and took the cash
memo for the same. Aryaman felt dissatisfied on using the pen as its performance
doesn’t matched his expectation.
On the basis of the given information about Aryaman, answer the following questions:
(a) Identify the right exercised by Aryaman in above case.
(b) Identify the right that empowers a consumer to file a complaint and to be heard
in case of dissatisfaction with a good or a service.
(c) State any two points of the importance of consumer protection from the view point
of consumer. (4)
Q.18. Explain any two important activities that will have to be considered in for making the

I S TU I O N
goods available to the customers at the right place, right time and in the right quantity.

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OR

E
Explain briefly any four functions of designing a simple tag to be attached to the
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product. (4)
PA

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Q.19. State any four objective of the regulatory body to protect the interests of investors.

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OR

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Explain briefly any two functions performed by the financial markets. (4)
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SECTION D
C
S

Q.20. Sameer opened a fast food cafe in Kamla Nagar, Kanpur. His food cafe became popular
&
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and started attracting a lot of customers. During lunch hours, customers had a wait in
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long queue for their turn. As a result, many customers, were forced to return back.
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Sameer observed the same and decided to find out a solution to the problem. He
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observed that the time taken between placing an order and getting the food is around
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ST

20 minutes, even though, the standard time has been fixed at 10 minutes. He installed
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closed circuit cameras in the kitchen and observed that employees were engaged on
their smart phones and the gas burners remain idle due to wrong work practices.If
employees adhere to the standard time norm, it will result in an efficient use of resources
NE
IN

and more revenue for the firm. As a result, he banned use of smart phones during
working hours.
(a) Identify the function of management followed by Sameer.
(b) Explain the two steps undertaken by him in the process of that function. (5)
Q.21. A company was marketing ‘Juicers’ which were very popular due to their quality and
after sale services provided to the customers. The company was a leading company in
the market and earning huge profits. Because of huge profits the company ignored the
after sales services. As a result its relations with the customers got spoiled and the image
of the company in the public was damaged. Top management became concerned when
the profits for the current quarter fell steeply. On analysis, it was revealed that ignoring
the after sales services was its reason. Therefore the company took all possible measures
to protect and promote its favourable image. As a result the goodwill of the company
improved in the society.
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(a) Name and state the communication tool used by the marketer in the above case
to improve its image.
(b) Also explain role of the tool as identified in Part (a). (5)
Q.22. State any five functions performed by the manager working at the operational level of
management.
OR
State any five characterstics of the art of getting things done by the people in formally
organized groups. (5)
SECTION E
Q.23. Identify and explain the methods of training in following cases:
(a) The trainee learns under the guidance of a master worker.

I S TU I O N
(b) Trainees learn on the equipments they will be using, but training is conducted
away from the actual work floor.

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(c) Trainees work in some factory or office to acquire practical knowledge and skills

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along with regular studies.
N (6)

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PA
Q.24. Thomas is working as a manager of United Bearings Ltd. He has the authority to make

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purchases for the organisation and also to appoint employees. Thomas misuses his

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authority and grants an order of office stationery to his brother’s concern while the same

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products were available at a cheaper rate with other suppliers. While appointing two
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office executives he gives preference to Michael over Mamta because Michael is a

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Christian, like Thomas himself is and also because he prefers male employees over
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females. Thomas also has a habit of not letting the employees put forward any suggestions
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for improvement in work and productivity. He expects them to just follow his orders.
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Employees are also dissatisfied as they don’t get fair wages for the work they put in.
The production activities of United Bearings Ltd. lead to water pollution as the waste
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from the factory is disposed off in the nearby river.

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ST
B Y BU

Identify and explain various principles of management that are being violated in United
Bearings Ltd., by quoting the relevant lines from the case to support your answer.
(6)
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IN

Q.25. Explain any four points of the significance of the transfer of authority by a superior to
his subordinate.
OR
Explain any four points of the significance of systematic dispersal of authority to the
lowest level of the organisation. (6)

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HINTS AND ANSWER

MODEL PRACTICE PAPER-1

1. Capital Budgeting Decision pertains to allocation of the firm’s funds in different assets
so as to maximize the returns to the investors.
2. Divisional organisation structure.
OR
Functional organisation structure.
3. The process highlighted in the statement is management.
4. Strategy is a comprehensive plan for accomplishing an organizational objective these

I S TU I O N
are the future decisions defining the organization direction and scope in the long run.

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5. Democratic leadership style.

E
6. Warehousing.
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OR
PA

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Grading.

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7. The complaint can be filed at District Forum. The reason being the value of goods and
the compensation claimed is not more than 20 lakh.
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8. Aptitude Test.
C
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OR
&
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Trade Test.
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9. Limitations of Planning:
(i) Planning May not Work in Dynamic Environment.
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Lines: “In the due course of time, one if its competitors developed and launched
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B Y BU

format mirrorless camera system with a rangefinder-style body in the market.”

(ii) Planning is Time-Consuming
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Lines: “The company initiated the lengthy process of research and development
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in respect of higher resolutions digital single lens range cameras.”

(iii) Planning involves Huge cost
Lines: “The CFO made a budget allocation of 1,000 crore for the new project.”
10. A commercial bill is a bill of exchange used to finance the working capital requirements
of business firms. It is a short-term, negotiable, self-liquidating instrument which is used
to finance the credit sales of firms.
11. Importance of financial planning:
(i) It helps in avoiding business shocks and surprises and helps the company in
preparing for the future.
(ii) It helps in co-ordinating various business functions, e.g., sales and production
functions, by providing clear policies and procedures.

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(iii) Detailed plans of action prepared under financial planning reduce waste, duplication
of efforts, and gaps in planning.
OR
The financing decisions are affected by various factors. Important among them are as
follows:
(i) Cost: The cost of raising funds through different sources are different. A prudent
financial manager would normally opt for a source which is the cheapest.
(ii) Risk: The risk associated with each of the sources is different.
(iii) Floatation Costs: Higher the floatation cost, less attractive the source.
12. Role of supervisor:
(i) Supervisor ensures performance of work according to the targets set. He takes

I S TU I O N
responsibility for task achievement and motivates his workers effectively.
(ii) Supervisor provides good on- the-job training to the workers and employees. A

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skilled and knowledgeable supervisor can build efficient team of workers.

E
N
(iii) Supervisory leadership plays a key role in influencing the workers in the

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organisation. A supervisor with good leadership qualities can build up high morale
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among workers.

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OR

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The organizational barriers are:

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(i) Rules and regulations: Rigid rules and cumbersome procedures may be a hurdle
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to communication. Similarly, communications through prescribed channel may

&
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result in delays.
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TH

(ii) Status: Status of superior may create psychological distance between him and his
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subordinates. A status conscious manager also may not allow his subordinates to
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express their feelings freely.

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(iii) Complexity in organisation structure: In an organisation where there are number

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of managerial levels, communication gets delayed and distorted as number of

filtering points are more.
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13. An organisation can never be completely centralised or decentralised. As it grows in size

IN

and complexity, there is a tendency to move towards decentralised decision making.

This is because in large organisations those employees who are directly and closely
involved with certain operations tend to have more knowledge about them than the top
management which may only be indirectly associated with individual operations. Hence,
there is a need for a balance between these co-existing forces. Thus, it can be said that
every organization will be characterised by both centralisation and decentralisation.
14. (a) The dimension of business environment highlighted in the above case is legal
environment.
(b) The company started earning high profits due to the following reasons.
(i) Identifying opportunity and Getting First mover Advantage: Early idendification
of opportunity has given the company the first mover advantage against its
competitors.
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(ii) Identifying Threats and Early Warning Signals: The company has been able
to identify the threat of running out of business on time. They have identified
the government ordinance as an early warning singal.
15. Calculation of EPS under the previous situation and two new Alternatives:

Alternative I: If 75 Alternative II: If 75

Situation before
Particulars lakh are raised via lakh are raised via
new launch (`)
12% Debt Equity

Earning before
interest and Tax 10,00,000 25,00,000 25,00,000
(EBIT)

Less Interest on
4,50,000 13,50,000 4,50,000
Debentures

I S TU I O N
Earning after Tax
5,50,000 11,50,000 20,50,000

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(EAT)

E
Less: Tax @ 40% 2,20,000 460,000 8,20,000
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PA
Earning after tax
3,30,000 6,90,000 12,30,000

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(EAT)

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No. of Equity Shares

of Face Value of 50,000 50,000 1,25,000
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100 each
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EPS = (EAT/NO. of
&
6.60 13.80 9.84
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Equity Shares
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TH

ROI 10% 14.29% 14.29%

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SE

Interest Rate on Debt 9% 12% 9%

S I
ST

(a) Earlier decision of the company was appropriate due to two reasons:
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• ROI is greater than Interest Rate on Debt.

• Market is passing through a bearish phase; hence, it was difficult for the
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company to raise money through equity market.

IN

(b) The company should now opt for debt funding (Alternative I) as the EPS of equity
shareholders increases as compared to when more equity shares are issued.
16. (a) Co-partnership/Stock option is the type of incentive that has been suggested by Mr.
John.
(b) The two other financial incentives are listed below:
(i) Profit sharing: Under this method the employees given a share from the
profits of the company. This encourages to improve their performance and
contribute to their best of the ability because they understand that higher
profits for the company would also increase their personal gains.
(ii) Retirement benefits: An organisation may provide retirement benefits like
provident fund, pension and gratuity to its employees. These incentives provide

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financial security to the employees and acts as an incentive for them while
they are in service.
17. (a) Right to choose.
(b) Right to be heard.
(c) The following points highlight the importance of consumer protection from the
point of view of consumers:
(i) Ignorance of consumers: As consumers are generally ignorant about their
rights and various forms of relief available to them, it is important to make
them aware of their rights and responsibilities.
(ii) Exploitation of consumers: Consumers often face exploitation in the form of
unfair trade practices such as adulteration, black marketing and hoarding, and
it is necessary to protect them from such malpractices.

I S TU I O N
18. The activities/components of physical distribution are:

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(a) Order processing: A good physical distribution system should provide for an accurate

E
and speedy processing of orders, in the absence of which goods would reach the
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customers late or in wrong quantity or specifications.
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(b) Transportation: It is the means of carrying the goods and raw materials from the

R
point of production to the point of sale. It is important because unless the goods

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are physically made available, the sale cannot be completed.

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OR
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The main functions of labelling are:

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(i) Describe the product and specify its contents: The product, its usage, manufacturing
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and expiry dates, cautions in use are all specified on the label.
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(ii) Identification of the product or brand: The label helps the customers to identify
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the product or brand: For example: Cadbury chocolate.

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ST

(iii) Grading of products: With the help of label, products can be graded in different
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categories. For example, Brooke Bond Red Label, Green Label, etc.
(iv) Help in promotion of products: Labels play a very important role in sales promotions
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as they are termed as silent salesman.

IN

19. The objectives of SEBI are:

(i) To regulate stock exchanges and the securities industry to promote their orderly
functioning.
(ii) To protect the rights and interests of investors, particularly individual investors and
to guide and educate them.
(iii) To prevent trading malpractices and achieve a balance between self regulation by
the securities industry and its statutory regulation.
(iv) To regulate and develop a code of conduct and fair practices by intermediaries
like brokers, merchant bankers etc., with a view to making them competitive and
professional.

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OR
The two functions of financial markets are:
(i) Facilitates price discovery: In the financial market, the households are suppliers of
funds and business firms represent the demand. The interaction between them
helps to establish a price for the financial asset which is being traded in that
particular market.
(ii) Provide liquidity to financial assets: Financial markets facilitate easy purchase and
sale of financial assets. Financial markets provide liquidity to financial assets, so
that they can be easily converted into cash whenever required.
20. (a) Controlling.
(b) The two steps undertaken by Sameer in the controlling process are:
(i) Ascertaining deviation, and

I S TU I O N
(ii) Analysing and taking corrective action.

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21. (a) Public Relation: Public Relations refer to a variety of programmes to promote and

E
N
protect a company’s image or its products in the eyes of the public.

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(b) Role of Public Relation:
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(i) Press relations.

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(ii) Product publicity.

(iii) Corporate communication.
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(iv) Lobbying.
C
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&
22. (i) Operational managers will issue instructions to the workers and oversee their
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work.
Y
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(ii) Operational managers will guide and motivate the workers to achieve the targets.
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(iii) Operational managers will ensure that the work goes as per schedule.
S I
ST

(iv) Operational managers will maintain order and discipline in the organisation.
B Y BU

(v) Operational managers will ensure that the work is being carried out effectively and
efficiently.
NE

OR
IN

(i) Goal oriented process: Management is a goal oriented process, which is undertaken
to achieve already specified and desired objectives by proper utilisation of available
resources.
(ii) Pervasive: Management is universal in nature. It is used in all types of organisations
whether economic, social or political irrespective of its size, nature and location
and at every level.
(iii) Multidimensional: Management is multidimensional as it involves management of
work, people and operations.
(iv) Continuous: Management consists of a series of function and its functions are
being performed by all managers simultaneously. The process of management
continues till an organisation exists for attaining its objectives.

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(v) Group activity: Management is a group activity since it involves managing and
coordinating activities of different people as a team to attain the desired objectives.
23. (a) Apprenticeship training.
(b) Vestibule training.
(c) Internship training.
24. (i) Subordination of individual interest to general interest:
Lines: “Thomas misuses his authority and grants an order of office stationery to
his brother’s concern while the same products were available at a cheaper rate
with other suppliers.”
(ii) Equity
Lines: “While appointing two office executives he gives preference to Michael over

I S TU I O N
Mamta because Michael is a Christian, like Thomas himself is and also because
he prefers male employees over females.”

S
(iii) Initiative:

E
N
Lines: “Thomas also has a habit of not letting the employees put forward any

OT DI
suggestions for improvement in work and productivity. He expects them to just
PA

S
follow his orders.”

R
(iv) Remuneration of employees

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Lines: “Employees are also dissatisfied as they don’t get fair wages for the work
O

they put in.”

C
S

25. Importance of Delegation of Authority:

&
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(i) Effective management.

Y
E R NE

TH

(ii) Facilitation of growth.

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(iii) Employee development.

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(iv) Better coordination.

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B Y BU

OR
Importance of Decentralisation:
NE

(i) Reduces work load of top executives.

IN

(ii) Executive development.

(iii) Improves motivation.
(iv) Quick decision making.

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MODEL PRACTICE PAPER-2 (With Hints)

BUSINESS STUDIES
Time allowed: 3 hours Maximum marks: 80

SECTION A
Q.1. Define Budget as a type of single use plan.
OR
Define Policies as a type of standing plan. (1)
Q.2. Maybeline Fashions Ltd. is a large multinational company and operates in many countries
of the world. The company is in the business of organising health melas, trade fairs,

I S TU I O N
fashion shows, etc. around the globe. What is being marketed by the company? (1)

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Q.3. Alpha Enterprises is a company manufacturing water geysers. The company has a

E
functional structure with four main functions – Production, Marketing, Finance and
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Human Resource. As the demand for the product grew, the company decided to hire
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more employees.

R S
Identify the concept which will help the Human Resource Manager is deciding the actual

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number of persons required in each department. (1)

Q.4. An Indian information technology company presently employing 20000 worker’s decides
O

to expand its business to component manufacturing from just service provision to be

C
S
&
recognized as an international player.For achieving its objectives, the company has
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started shifting from centralized management system to decentralized one.

Y
E R NE

TH
UD

Identify the management function highlighted in the above case. (1)

SE

Q.5. American Tyres Ltd. is planning to launch a new line of paints in two year’s time.
S I

However, at present, due to market competition, the company has reduced the prices
ST
B Y BU

of its existing product line by 10% to retain its existing customers. Specify the two main
objectives the company is focusing at? (1)
NE

Q.6. Under three-tier machinery where can a legal heir or representative of a deceased
IN

consumer file a complaint where the compensation claim is ` 25 lakhs.

OR
‘The consumer has the right to acquire knowledge and to be a well informed consumer
throughout life.’State what type of knowledge is required by the consumer in the above
stated ‘Right’. (1)
Q.7. Welspin Fabrics Ltd., a reputed fabric manufacturing company needs ` 50 crore as
additional capital to expand its business. Ashok Satija, CEO of the company, wants to
raise funds through public issue of equity shares. On the other hand, CFO, Sanjeev
Dhingra feels that the public issue may prove expensive on account of various mandatory
and non-mandatory expenses. The company finally decides to allot securities to
institutional investors.
Name the method through which the company decides to raise additional capital. (1)
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Phone: 011-28751221, 28751223 ARYA BOOK DEPOT WhatsApp No: 8130400730

Q.8. Aishwarya Ltd., assured their employees that in spite of recession no worker will be
retrenched from the job.
Name the type of incentive offered to the employees.
OR
Springwell Matress Ltd. offers to its employees the equity shares of the company at a
price which is less than the market price.
Name the type of incentive offered to the employees. (1)
SECTION B
Q.9. The General Manager of Bookmark Ltd. has decided to start a new branch in Europe
as apart of its expansion programme. The company has recognised the amount of work
to be done in number of hours. The company has found out that it will take 40000

I S TU I O N
hours of man work and has subsequently divided the number of hours for different
operations. Finally, the responsibility of the predetermined quantum of work was given

S
to different individuals according to their capabilities.

E
N
On the basis of the given information about Bookmark Ltd., answer the following

OT DI
PA
question:

S
(a) Identify the main function of management highlighted in above case.

R
HE
M

(b) Identify the two steps of this function of management indicated above by quoting
the relevant lines. (3)
O

Q.10. Rajiv was very thrilled when he got his first salary. He gave the entire amount to his
C
S
&
father. His father advised him that the stock market is bullish in nature, and he should
S

think of investing his money there because there was a chance that his money will
Y
E R NE

TH

appreciate. He sought advice from his friend, Shubham who was working in the broking
UD

house explained to him that there are two markets through which he can purchase
SE
I

shares. Now Rajiv needs a demat account.

S
ST
B Y BU

State the first three steps involved in the working of the demat system. (3)
Q.11. ‘Planning is certainly important as it provides direction and reduces the risk of uncertainty
by preparing forecasts.’ This statement enumerates some of the points highlighting the
NE
IN

importance of planning.
State any three points of importance of planning not mentioned in the statement. (3)
Q.12. Explain any two reasons due to which a bluechip manufacturing company will be able
to pay dividends at a high rate in the coming years.
OR
Explain any two reasons because of which a bluechip service company will be able to
adopt a conservative dividend policy in the coming years. (3)
Q.13. State any three features of informal communication.
OR
State any three barriers to effective communication due to rules and regulations of
organization. (3)

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SECTION C
Q.14. State whether the working capital requirements of business manufacturing the following
items are big or small. Justify your statement.
(a) Biscuits (b) Sugar
(c) Water heaters (d) Furniture manufactured against orders (4)
Q.15. Star Ltd. has decided to become the market leader in selling water bottles. For achieving
this objective, the company decided to take care of all the departments of the organization.
The top management decided to set standards for all business activities right form the
purchase of raw materials for production and packaging of water bottles.
Explain the scientific technique of management that is followed by the top management.
(4)

I S TU I O N
Q.16. Mr. Peter working as senior sales executive at landmark appereals possesses good
marketing technique. He is quite effective in presentation of product features and formal

S
conversation with one or more prospective customers. He never indulge mal practices

E
N
like misleading the customers, false advertising claims, overpricing of the products etc.

OT DI
PA
On the basis of the given information about Mr. Peter, answer the following questions:

S
(a) Identify the element of marketing mix highlighted in above case.

R
HE
M

(b) Enlist the various features of the technique of the element identified in (a) above.
(4)
O

Q.17. Suresh Verma had been working as an assistant production manager in a team
C
S

manufacturing unit for the last twenty years. He was very popular amongst his
&
S

subordinates because of his commitment and dedication towards the work. When the
Y
E R NE

TH

manager senior to him retired, all his subordinates assumed that now Suresh Verma will
UD

be promoted. But they were surprised when the vacant post was filled by an outsider.
SE
I

Satish Sethi was a good leader, who would not only instruct his followers but would also
S
ST

build confidence among them and handle conflicts effectively. He noticed Suresh Verma
B Y BU

behavior and felt that his performance could be improved. He started involving Suresh
Verma in taking decisions related to production and made him a part of high-level joint
NE

Management Committee. Suresh Verma was now punctual in office and his performance
IN

started improving.
(a) Identify the function of management being performed by Suresh Verma.
(b) Name the element of the above function of management which helped Satish
Sethito improve Suresh Verma’s behavior.
(c) State any two features of the element identified in (b) above. (4)
Q.18. Explain treasury bills and commercial paper as instruments of money market
OR
Explain certificate of deposit and commercial bill as instruments of money market. (4)
Q.19. State any four benefits of branding as a product related decisions.
OR
State any four functions of labeling as a product related decisions.
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SECTION D
Q.20. After completing his degree course from Rajasthan University, Naresh has started a
consumer welafare organisation, for the welfare of the consumers.
Consumers who have been deprived of their rights can approach this organization
which files a complaint on their behalf in a consumer court and fights for their cause.
Naresh along with people from various backgrounds have launched a monthly magazine
to spread awareness about the rights, reliefs and responsibilities of the consumers. They
also organize training programmes in various parts of the country and share information
related to exploitation of consumers, consumer ignorance, and consumer rights and
reliefs available to them. The government has also recognized the dedication of his team
and has extended support to the organisation by offering them services of government
laboratories to test the purity and of products.

I S TU I O N
For the protection of the interests of consumers, identify the various function performed

S
by the organization initiated by Naresh. (5)

E
Q.21. Explain any three benefits of understanding business environment by an business
N
OT DI
enterprise
PA

S
OR

R
Explain briefly any three impacts of the changes in business environment on Indian

HE
M

business and industry. (5)

O

Q.22. Crystal Communications is an Indian company manufacturing mobile phones for the
C
S

domestic market as well as for exports. It enjoys a substantial market share and has a
&
S

loyal customer base. Nowadays, company is experiencing problems because its sales
Y
E R NE

targets are not being achieved. Also, the mobile market has grown tremendously and
TH
UD

many new companies have entered the market with latest technology and competitive
SE

pricing. The managing director of Crystal Communications is planning to change its

S I

control system and take necessary steps to overcome the problems.

ST
B Y BU

(a) Identify the benefits the company will derive from a good control system.
(b) How can the company relate its planning with control to ensure that its plans are
NE

actually implemented and targets achieved? (5)

IN

SECTION E
Q.23. Explain the first six steps in the process of staffing as a function of management.
OR
Explain the first six steps in the process of selection as a function of staffing. (6)
Q.24. Nilgiri Stores Ltd., a company having multiple stores in various parts of the country,
offers various types of daily use products under one roof. Each store is placed under
the charge of a store manager who is allowed to run their stores independently by
deciding about the products to be promoted, appointment of workers, customer complaints
etc. As these managers have a wide knowledge of the area acceptability, it enables them
to take these decisions effectively keeping in view of the prevailing circumstances and
consumers’ needs. This resulted in improvement of customer service and at the same

16
Phone: 011-28751221, 28751223 ARYA BOOK DEPOT WhatsApp No: 8130400730

time serves to boost morale and increase the job satisfaction of the store managers as
it empowers them to innovate and use their initiatives.
On the basis of the given information about Nilgiri Stores Ltd., answer the following
questions:
(a) Identify and explain the policy followed by ‘Nilgiri Stores Ltd.’ to run their stores
successfully.
(b) State any four points highlighting the importance of the approach followed as
identified in part (a) of the question. (6)
Q.25. Mr. Paul Fernandes is the Production Manager of High Lever Pvt. Ltd., he takes care
of assigning work to workers as per their abilities and skills. He is a firm believer that
work should be divided in such a manner that each worker gets to work on a specific
task again and again. He always involves them in decision making process, where it

I S TU I O N
affects them and encourages them to suggest ways to improve efficiency. He ensured

S
that workers get salary as per the work performed by them and they are able to

E
establish a reasonable standard of living. He did not discriminate between workers on
N
OT DI
the basis of caste, religion, sex etc. All this led to the workers being satisfied and giving
PA
priority to organisational objective over individual objectives.

R S
On the basis of the given information about Mr. Paul Fernandes, answer the following

HE
M

questions:
O

State the Principles of Management being followed by Mr. Paul Fernandes. (6)
C
S
&
S
Y
E R NE

TH
UD

SE
S I
ST
B Y BU

U
NE
IN

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HINTS AND ANSWER

MODEL PRACTICE PAPER-2

1. Budget: A budget as a plan is a statement of expected results expressed in numerical
terms like rupees, production units or man-hours.
OR
Policy: Policy is a general guideline to managerial thinking and action. Policy defines
boundaries within which decisions can be made.
2. Events are being marketed by Adlabs Ltd.
3. Workload Analysis.

I S TU I O N
4. Organising.

S
5. While launching a new product line, the company is focusing on objective of Growth

E
and by reducing price of its existing product, it is focusing on objective of Surival
N
OT DI
6. When the compensation claim is ` 25 lakh, then the legal heir or representative of a
PA
deceased consumer can file a complaint with the state commission concerned.

R S
OR

HE
M

In the above stated right, i.e., Right to Consumer Education, a consumer should
O

know about the rights and reliefs available to him in case a product or service falls short
of his expectations.
C
S
&
S

7. Private placement.
Y
E R NE

8. Job security.
TH
UD

OR
SE
I

Stock option plan.

S
ST

9. (a) The concept of management which is highlighted above is ‘Organising’.

B Y BU

(b) The two steps of Organising which are indicated in the above case are:
(i) Step 1 - Identification and division of work: “The company has recognised
NE

the amount of work to be done in number of hours. The company has found
IN

out that it will take 40000 hours of man work and has subsequently divided
the number of hours for different operations.”
(ii) Step 3 - Assignment of duties: “Finally the responsibility of the pre-
determined quantum of work was given to different individuals according to
their capabilities.”
10. The first three steps involved in the working of the demat system:
(i) Depository participant (DP) may be identified.
(ii) An account opening form and documentation (pan card details, photogragh, power
of attorney) may be completed.
(iii) The physical certificate is to be given to the DP along with a dematerialisation
request form

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11. The importance of planning are:

(i) Planning reduces overlapping and wasteful activities by coordinating the activities
of different divisions.
(ii) Planning promotes innovative ideas requiring application of mind and foresight.
(iii) Planning facilitates decision making by making a choice from among the alternative
courses of action.
12. (a) (i) High earning: It is the most important factor influencing the decision about
dividend because later is declared out of current as well as past earnings.
(ii) Cash flow position: Strong cash flow position is also an essential element
for declaring dividends because sufficiency of profit may not necessarily mean
sufficiency of cash too.
OR

I S TU I O N
(b) The company will follow a conservative dividend policy in current year because:

S
(i) Cash flow position: If cash flow position of company is weak so company

E
N
will declare less dividends.

OT DI
(ii) Growth opportunities: If growth opportunities are available to the company,
PA

S
the company retains a large share of their profits for financing the required

R
investment so, less amount is available for distribution as dividends.

HE
M

13. Features of Informal communication:

O

(i) It takes place without following the formal lines of communication.

C
S

(ii) It arises out of social needs of the employees.

&
S

(iii) It spreads rapidly.

Y
E R NE

TH

OR
UD

The organisational barriers to effective communication are:

SE
S I

(i) Organisational policy

ST
B Y BU

(ii) Rigid rules and regulations

(iii) Status.
NE

14. Requirements of working capital for the whose mentioned business will be:
IN

(a) Biscuits: Requirements of working capital will be less because it has quick cash
turnover.
(b) Sugar: Working capital required for manufacturers will be more as ratio of raw
material cost to total cost is more.
(c) Water heaters: Working capital required for manufacturers of water heaters will
be more because it is a seasonal product.
(d) Furniture: Requirements of working capital for a manufacturer of furniture
manufactured against specific order is less as it doesn’t requires large stock.
15. “Standardisation” is the technique of scientific management that helps in establishing
interchangeability of manufactured parts and products. “Standardisation”, implies setting
of bench marks for any work or activity. It provides the standards that have to be
followed during the production process.
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Phone: 011-28751221, 28751223 ARYA BOOK DEPOT WhatsApp No: 8130400730

16. (a) Promotion mix.

(b) Features of the Personal Selling:
(i) Personal contact is established under personal selling.
(ii) Oral conversation between salesman and prospective buyer.
(iii) Quick solution of queries.
(iv) Development of relationship with the prospective customers which may become
important in making sale.
17. (a) Directing
(b) Motivation
(c) Features of Motivaton:
(i) It is a psychological phenomenon

I S TU I O N
(ii) Motivation results in goal-directed behavior

S
(iii) Motivation is complex process

E
18. (i) Treasury Bill (T-bills): It is basically an instrument of short-term borrowing by
N
OT DI
the Government of India maturing in less than one year. They are also known as
PA
Zero coupon bonds.

R S
(ii) Commercial Paper: It is a short-term unsecured promissory notes, negotiable

HE
M

and transferable by endorsement and delivery with a fixed maturity period. It is

issued by large and creditworthy companies to raise short-term funds at lower
O

rates of interest than market rates. It has a maturity period of 15 days to one year.
C
S
&
OR
S
Y
E R NE

(i) Certificate of Deposit (CD): It is a unsecured, negotiable short-term instruments

TH
UD

in bearer form, issued by commercial banks and development financial institutions.

It can be issued to individuals, corporations and companies.
SE
S I

(ii) Commercial Bill (Trade Bill): It is a short-term, negotiable, self-liquidating

ST
B Y BU

instrument which is used to finance the credit sales of firms. The bill can be
discounted with a bank it the seller (drawer) needs funds before the bill maturity.
NE

19. Advantages of branding:

IN

(i) Product differentiation.

(ii) Advertising and display programmes.
(iii) Differential pricing.
(iv) Ease in introduction of new product.
OR
Functions of labelling:
(i) Description the product.
(ii) Identification of the brand.
(iii) Grading of products.
(iv) Promotion of products.

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20. The various functions performed by the NGO for the protection of consumers interests
are:
(i) It helps the consumers to file their complaints in the concerned consumer courts
(ii) It publishes a monthly magazine to spread awareness about the rights, reliefs and
responsibilities of the consumers.
(iii) Educates the general public about the issues related to consumer interest.
(iv) It carries out comparative tests of consumer products in government laboratories
to check their purity and authenticity.
(v) It organize protests against the exploitative and unfair practices.
21. The main benefits of understanding business enviornment are:
(i) Helps in assisting in planning and policy formulation

I S TU I O N
(ii) Helps in improving performance
(iii) Enables the firm to identify opportunities and getting first mover advantage

E S
OR
N
OT DI
Impact of the economic changes on Indian business and industry:
PA
(i) Increasing competition.

R S
(ii) More demanding customers.

HE
M

(iii) Rapidly changing technological environment.

O

22. (a) Importance of controlling:

C
S

(i) Helps in achieving organizational goals

&
S

(ii) Judging accuracy of standards

Y
E R NE

TH

(iii) Helps in better use of resources.

UD

(iv) Improving employee motivation

SE
I

(b) The company can relate its planning with control by using Critical point Control:
S
ST
B Y BU

The control system should focus on key result areas which are critical to the overall
U

performance of an organization.
23. Staffing Process:
NE
IN

(i) Estimating Manpower Requirement

(ii) Recruitment
(iii) Selection
(iv) Placement and Orientation
(v) Training and Development
(vi) Performance Appraisal
OR
Selection Process:
(i) Preliminary screening.
(ii) Selection tests.
(iii) Employment interview.
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Phone: 011-28751221, 28751223 ARYA BOOK DEPOT WhatsApp No: 8130400730

(iv) Medical examination.

(v) Reference checks.
(vi) Job offer.
24. (a) Decentralisation.
(b) The importance of decentralisation:
(i) Develops initiative among subordinates.
(ii) Develops managerial talent for the future.
(iii) Decision making.
(iv) Coordination
25. The following Principles of Management are being followed by Mr. Paul Fernardes:
(i) Development of each and every person to his or her greatest efficiency and

I S TU I O N
prosperity.

S
(ii) Division of Work.

E
(iii) Initiative.
N
OT DI
(iv) Remuneration of employees.
PA

S
(v) Equity.

R
HE
(vi) Subordination of individual interest to general interest.
O M
C
S
&
S
Y
E R NE

TH
UD

SE
S I
ST
B Y BU

U
NE
IN

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SAMPLE QUESTION PAPER-2018-19

BUSINESS STUDIES (054)
Time allowed: 3 hours Maximum marks: 80

General Instructions:
(i) Answer to questions carrying 1 mark may be from one word to one sentence.
(ii) Answer to questions carrying 3 marks may be from 50-75 words.
(iii) Answer to questions carrying 4-5 marks may be about 150 words.
(iv) Answer to questions carrying 6 marks may be about 200 words.
(v) Attempt all parts of a question together.

I S TU I O N
SECTION-A
Q.1. “Successful organizations do not achieve their goals by chance but by following

S
a deliberate process. Identify the process highlighted here. (1)

E
N
Ans. The process highlighted in the statement is ‘Management’.

OT DI
Q.2. Distinguish between Delegation and Decentralization on the basis of freedom
PA

S
of action. (1)

R
OR

HE
M

Distinguish between Authority and Responsibility on the basis of Origin.

O

Ans. Basis Delegation Decentralisation

C
S
&
Freedom of action More control by superiors hence less Less control over executives hence
S

freedom to take own decisions. greater freedom of action.

Y
E R NE

TH
UD

OR
SE
I

Basis Authority Responsibility

S
ST
B Y BU

Origin Arises from formal position. Arises from delegated authority.

Q.3. Name the process of stimulating and inspiring people at work to accomplish
NE

desired objectives. (1)

IN

OR
Name the ‘on-the-job’ method of training that is used to give training to
plumbers.
Ans. The process of stimulating and inspiring people at work to accomplish desired objectives
is known as Motivation.
OR
Apprenticeship programmes can be used to give training to the plumbers.
Q.4. Define Marketing Management. (1)
OR
Define ‘Grading’ as a function of marketing.
Ans. Marketing management refers to planning, organising, directing and controlling of the
activities which facilitate exchange of goods and services between producers and
consumers or users of products and services.
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Phone: 011-28751221, 28751223 ARYA BOOK DEPOT WhatsApp No: 8130400730

OR
Grading is the process of classification of products into different groups, on the basis of
some of its important characteristics such as quality, size, etc.
Q.5. Mohit purchased a smart phone for ` 30,000 from a mobile phone seller on his verbal
commitment that the smart phone will be replaced in case of any defect, within a span
of six months. The phone started creating technical issues in spite of proper maintenance
and upkeep of the phone. The seller denied taking any action on the complaint made
by Mohit.
Name the redressal agency under the Consumer protection Act where Mohit
can file his complaint. (1)
Ans. No, Mohit cannot file a complaint against the seller in the consumer court as he does
not have cash-memo. He had purchased mobile phone on the verbal commitment only.
Q.6. ‘The size of assets, the profitability and competitiveness are affected by one of the

I S TU I O N
financial decisions’.

S
State the decision involved with reference to the given statement. (1)

E
Ans. Capital budgeting decision involves allocation of funds to different projects or assets with
N
OT DI
long term implications.
PA
Q.7. In an organization, employees always feel that they are under enormous unnecessary

R S
stress, as the manager does not provide any information about future plans but simply

HE
M

instructs them what to do. He also does not listen to any of the suggestions given by
the subordinates.
O

Identify the type of leadership style followed by the manager in the above
C
S

situation. (1)
&
S

Ans. Autocratic style of leadership is being followed by the manager in the given situation.
Y
E R NE

Q.8. Mr. Mohan, Financial manager of ABC Ltd., has prepared the annual Statement of
TH
UD

proposed expenditure to be presented in the Annual General Meeting.

SE
I

Identify the type of plan formulated by the financial manager. (1)

S
ST

Ans. Budget is the type of plan formulated by the financial manager.

B Y BU

SECTION-B
Q.9. State any three points of importance of directing function of management.
NE

(3)
IN

OR
State any three measures to overcome the communication barriers.
Ans. The importance of directing: (Any three statements)
(i) Directing helps to initiate action in the organization towards attainment of desired
objectives.
(ii) Directing integrates employees’ efforts in the organization in such a way that
every individual effort contributes to the organisational performance.
(iii) Directing guides employees to fully realize their potential and capabilities by
motivating and effective leadership.
(iv) Directing facilitates introduction of needed changes in the organisation.
(v) Effective directing helps to bring stability in the organization.

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Phone: 011-28751221, 28751223 ARYA BOOK DEPOT WhatsApp No: 8130400730

OR
The measures to overcome communication barriers :
(i) Clarify the ideas before communication.
(ii) Communicate according to the needs of the receiver.
(iii) Consult others before communicating.
(iv) Be aware of the languages, tone and content of messages.
(v) Convey things of help and value to listeners.
(vi) Ensure proper feedback.
(vii) Communicate for present as well as future.
(viii) Follow up communications.
(ix) Be a good listener.

I S TU I O N
Q.10. Rahul decided to start a desert cooler manufacturing business. He sets the target of
earning 20% profit on sales in the first year. He was very much concerned about the

S
future prospects of the business, which were uncertain. For this, he gathered information

E
from the potential market and analyzed that the demand forwall mounted coolers is
N
OT DI
increasing day by day. He used this information as the base for future planning. On the
PA
basis of the gathered information, he called a meeting in the following week to find new

S
methods to achieve the objective.

R
HE
M

(a) Identify the function of management involved in the above case.

(b) Enumerate the next two steps, which have been followed by Rahul that
O

are related to the process of one of the functions of management. (3)

C
S

Ans. (a) Planning

&
S

(b) The next two steps of planning process, followed by Rahul are:
Y
E R NE

(i) Identifying alternative courses of action.

TH
UD

(ii) Evaluating alternative courses of action.

SE
I

Q.11. “The overall objective of SEBI is to protect the interest of investors and to
S
ST

promote the development of, and regulate the securities market.” In light of
B Y BU

the given statement, state any three objectives of SEBI. (3)

OR
NE

“Financial markets play an important role in the allocation of scarce resources

IN

in an economy by performing important functions.” In light of the given

statement, state any three functions performed by Financial Market.
Ans. The objectives of SEBI are: (any three)
(i) To regulate stock exchanges and the securities industry to promote their orderly
functioning.
(ii) To protect the rights and interests of investors, particularly individual investors and
to guide and educate them.
(iii) To prevent trading malpractices and achieve a balance between selfregulation by
the securities industry and its statutory regulation.
(iv) To regulate and develop a code of conduct and fair practices by intermediaries
like brokers, merchant bankers etc., with a view to making them competitive and
professional.

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Phone: 011-28751221, 28751223 ARYA BOOK DEPOT WhatsApp No: 8130400730

OR
The functions of Financial Market are: (Any three)
(i) Financial markets mobilise savings of households and channelize them into the
most productive uses.
(ii) It facilitates price discovery of a financial asset through interaction between supply
and demand of funds.
(iii) Financial markets provide liquidity to financial assets, so that they can be easily
converted into cash whenever required.
(iv) Financial markets provide valuable information about securities being traded in
the market and thereby, help to reduce cost of transaction in terms of time, effort
and money.
Q.12. ‘Delegation is not a process of abdication.’ Comment (3)

I S TU I O N
Ans. This statement is correct as delegation helps a manager to extend his area of operation
as without it his activities would be restricted to only what he himself can do. However,

S
delegation does not mean abdication; the manager shall still be accountable for the

E
assigned task. Moreover, the authority granted to a subordinate can be taken back and
N
OT DI
re delegated to another person. Thus, irrespective of the extent of delegated authority
PA
,the manager shall still be accountable to the same extent as before delegation.

R S
Q.13. Mr. Rohit is into transport business. His buses are hired by schools for transportation

HE
M

of students. He is willing to expand and diversify his business to inter-state transportation

purposes.
O

Enumerate any six factors that will affect his fixed capital requirements.
C
S

(3)
&
S

Ans. The factors affecting fixed capital requirements are: (any six)
Y
E R NE

(i) Scale of operations (ii) Financing alternatives

TH
UD

(iii) Growth prospects (iv) Nature of Business

SE
I

(v) Diversification (vi) Level of Collaboration

S
ST

(vii) Technology Upgradation (viii) Financing Alternatives

B Y BU

SECTION-C
Q.14. The Government of India has recently come up with an amendment to Section 6 of the
NE

Payment of Wages Act 1936, to allow employers of certain industries to make payment
IN

through various electronics modes of payments. The amendment will be applicable to

all the public sector undertakings for wages disbursement using epayment options. This
is another milestone in the direction to further push to cashless economy.
Identify and explain any two dimensions of business environment which
relate to the above mentioned case. (4)
Ans. The various dimensions of business environment which relate to the above mentioned
case are stated below:
(a) Political Environment: Political environment includes political conditions such as
general stability and peace in the country and specific attitudes that elected
government representatives hold towards business.
(b) Legal Environment: Legal environment includes various legislations passed by
the Government administrative orders issued by government authorities, court
judgments as well as the decisions rendered by various commissions and agencies
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at every level of the government centre, state or local. It is imperative for the
management of every enterprise to obey the law of the land.
(c) Technological Environment: Technological environment includes forces relating
to scientific improvements and innovations which provide new ways of producing
goods and services and new methods and techniques of operating a business.
Q.15. State any four differences between Primary market and Secondary Market.
(4)
OR
Differentiate between Capital Market and Money Market on the basis of:
(a) Liquidity (b) Duration
(c) Expected Return (d) Safety
Ans. Primary and secondary market – A comparison

I S TU I O N

E S
N
OT DI
PA

R S
HE
O M
C
S
&
S
Y
E R NE

TH
UD

SE
S I
ST
B Y BU

OR
NE

Basis Capital Market Money Market

IN

(a) Liquidity Capital market securities are Money market securities enjoy
considered liquid but less liquid but higher degree of liquidity.
less liquid than money market
securities.

(b) Duration Capital market deals with medium Money market deals with short term
and long term securities. securities.

(c) Expected Return The investment in capital markets The investment in money market
yield higher return due to longer yields less return due to short
duration. duration.

(d) Safety Capital market securities are riskier Money market securities are
than money market instruments. comparatively safer than capital
market securities.

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Q.16. Aarushi buys a packet of dry cake from a cake shop without asking for the bill. The pack
does not bear any information other than the name of shop. After reaching home she
finds the cake to be stale.
(a) Identify the consumer right that has been violated.
(b) State any three responsibilities that a consumer must keep in mind while
purchasing any good. (4)
Ans. (a) Right to be informed.
(b) The consumer responsibilities are: (Any two) :
(i) Be aware about various goods and services available in the market so that an
intelligent and wise choice can be made.
(ii) Buy only standardised goods as they provide quality assurance. Thus, look
for FPO mark on food products.

I S TU I O N
(iii) Read labels carefully so as to have information about prices, net weight,
manufacturing and expiry dates, etc.

S
(v) Assert yourself to ensure that you get a fair deal.

E
N
(vi) Be honest in your dealings. Choose only from legal goods and services and

OT DI
discourage unscrupulous practices like black-marketing, hoarding etc.
PA

S
(vii) Ask for a cash memo on purchase of goods or services. This would serve as

R
a proof of the purchase made.

HE
M

Q.17. State any four characteristics of good brand name. (4)

O

OR
State any four functions of Packaging.
C
S
&
S

Ans. The characteristics of a good brand name are: (Any four)

Y
E R NE

(i) The brand name should be short, easy to pronounce, spell, recognise and remember
TH
UD

e.g., Ponds, VIP, Rin, Vim, etc.

(ii) A brand should suggest the product’s benefits and qualities. It should be appropriate
SE
I

to the product’s function. e.g., Rasika, Genteel, Promise, My Fair Lady and Boost.
S
ST
B Y BU

(iii) A brand name should be distinctive e.g., Liril, Sprit, Safari, Zodiac.
U

(iv) The brand name should be adaptable to packing or labelling requirements, to

different advertising media and to different languages.
NE

(v) The brand name should be sufficiently versatile to accommodate new products,
IN

which are added to the product line. e.g. Maggie, Colgate.

(vi) It should be capable of being registered and protected legally.
(vii) Chosen name should have staying power i.e., it should not get out of date
OR
The functions of packaging are:
(i) Product Identification: Packaging greatly helps in identification of the products. For
example, Colgate in red colour, or Ponds cream jar can be easily identified by its
package.
(ii) Product Protection: Packaging protects the contents of a product from spoilage,
breakage, leakage, pilferage, damage, climatic effect, etc. This kind of protection
is required during storing, distribution and transportation of the product.

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(iii) Facilitating Use of the Product: The size and shape of the package should be such
that it should be convenient to open, handle and use for the consumers. Cosmetics,
medicines and tubes of toothpastes are good examples of this.
(iv) Product Promotion: Packaging is also used for promotion purposes. A startling
colour scheme, photograph or typeface may be used to attract attention of the
people at the point of purchase. Sometimes it may work even better than
advertising. In self-service stores, this role of packaging becomes all the more
important.
Q.18. Kavita recently joined as the human resource director of Arjun Vidyamandir School, a
senior secondary educational institute. She observed that the school had an experienced
medical team on its payroll. They regularly offered useful suggestions which were neither
appreciated nor rewarded by the school authorities. Instead the school outsourced the
task of maintenance of health records of the students and paid them a good compensation
for their services. Because of this, the existing medical team felt disheartened and

I S TU I O N
stopped giving useful suggestions.
(a) Identify the communication barrier discussed above.

E S
(b) State the category of this communication barrier.
N
OT DI
(c) Explain any other two communication barriers of the same category.
PA
(4)

S
Ans. (a) The communication barrier discussed in the above case is Lack of proper incentives.

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HE
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(b) It is a type of Personal barrier.

(c) Other communication barriers of the same category are:
O

(i) Fear of challenge to authority

C
S

(ii) Lack of confidence of superior on his subordinates

&
S

(iii) Unwillingness to communicate.

Y
E R NE

TH

Q.19. Sherya Ltd. is a large credit-worthy company manufacturing automobiles for the Indian
UD

market. It now wants to cater to the other market and decided to invest in new
SE
I

machines. For this, it requires long-term finance. It decides to raise funds by issuing
S
ST

equity shares. The issue of equity shares involves huge floatation cost. To meet the
B Y BU

expenses of floatation cost the company decides to tap the money market.
(a) Name and discuss the money market instrument the company can use
NE

for the above purpose.

IN

(b) What is the duration for which the company can get funds through this
instrument?
(c) State any other purpose for which this instrument can be used. 4
Ans. (a) Commercial paper is a short term unsecured promissory note, negotiable and
transferable by endorsement and delivery with a fixed maturity period.
(b) 15 days to one year.
(c) It is used to provide short term funds for seasonal and working capital needs of the
business.
SECTION-D
Q.20. Identify the technique of sales promotion used by the company in the following
cases:
(a) Purchase goods worth ` 90,000 and get a holiday package of ` 10,000
free.
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(b) A company offers 40% of extra glucose in a pack of 1 Kg.

(c) A mobile company offers a discount of ` 2,000 to clear off excess
inventory.
(d) A company offers a pack of 1 Kg of tea with a purchase of 5 kgs of sugar
(e) On return of the wrapper, a customer gets ` 5 off on purchase of the
same product. (5)
Ans. (a) Usable benefit
(b) Quantity Gifts
(c) Rebate
(d) Product combination
(e) Refund
Q.21. State any five functions performed by the manager who is working at the

I S TU I O N
middle level management. (5)

S
OR

E
State any five characteristics of Coordination.
N
OT DI
Ans. The functions performed by the middle level manager are:
PA
(i) To interpret the policies framed by the top management.

R S
(ii) To ensure that their department has the necessary personnel.

HE
M

(iii) To assign necessary duties and responsibilities to the employees of their respective
departments for implementation of the plan.
O

(iv) To motivate employees of their respective departments to achieve the desired

C
S

objectives.
&
S

(v) To cooperate with the departments for smooth functioning of the organisation.
Y
E R NE

OR
TH
UD

The characteristics of Coordination are:

SE
I

(i) Coordination unifies unrelated or diverse interests into purposeful work activity.
S
ST

(ii) The purpose of coordination is to secure unity of action in the realization of a

B Y BU

common purpose. It acts as the binding force between departments and ensures
that all action is aimed at achieving the goals of the organisation.
NE

(iii) Coordination is not a one-time function but a continuous process. It begins at the
IN

planning stage and continues till controlling.

(iv) Coordination is required at all levels of management due to the interdependent
nature of activities of various departments. It integrates the efforts of different
departments and different levels.
(v) Coordination is the responsibility of all managers at the top, middle and lower
level.
(vi) Coordination is the deliberate function of management.
Q.22. Rudrakshi Ltd. is engaged in manufacturing high end luxury pens. The target production
is 700 units daily. The company had been successfully attaining this target until three
months ago. Over the last few month, it has been observed that daily productions varies
between 600-650 units.
(a) Identify the function of management, which has been highlighted in the
above context.

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(b) Discuss the first four steps involved in the process of the function
identified above. (5)
Ans. (a) Controlling
(b) The first four steps involved in the controlling process are:
(i) Setting Performance Standards: The first step in the controlling process is
setting up of performance standards. Standards are the criteria against which
actual performance would be measured. Thus, standards serve as benchmarks
towards which an organisation strives to work. Standards can be set in both
quantitative as well as qualitative terms.
(ii) Measurement of Actual Performance: Once performance standards are set,
the next step is measurement of actual performance. Performance should be
measured in an objective and reliable manner. There are several techniques
for measurement of performance. These include personal observation, sample

I S TU I O N
checking, performance reports, etc. As far as possible, performance should be
measured in the same units in which standards are set as this would make

S
their comparison easier.

E
N
(iii) Comparing Actual Performance with Standards: This step involves comparison

OT DI
of actual performance with the standard. Such comparison will reveal the
PA
deviation between actual and desired results. Comparison becomes easier

R S
when standards are set in quantitative terms.

HE
M

(iv) Analysing Deviations: Some deviation in performance can be expected in all

activities. It is, therefore, important to determine the acceptable range of
O

deviations. Also, deviations in key areas of business need to be attended more

C
S

urgently as compared to deviations in certain insignificant areas.

&
S

SECTION-E
Y
E R NE

TH

Q.23. Differentiate between Functional structure and Divisional structure. (6)

UD

OR
SE
I

Distinguish between Formal organization and Informal organization.

S
ST
B Y BU

Ans.
NE
IN

OR
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Phone: 011-28751221, 28751223 ARYA BOOK DEPOT WhatsApp No: 8130400730

I S TU I O N

E S
N
OT DI
Q.24. A public transport corporation has hired 2000 buses for the different routes for the
PA
passengers of metropolitan city. In order to fill vacancies, it advertised in the newspaper

S
and number of applicants applied for the same. The company has to now undertake

R
HE
M

the process of selection to identify and select the best.

Explain the first six steps involved in the process. (6)
O

Ans. The steps involved in the selection process are:

C
S

(i) Preliminary Screening: Preliminary screening helps the manager eliminate

&
S

unqualified or unfit job seekers based on the information supplied in the application
Y
E R NE

forms. Preliminary interviews help reject misfits for reasons, which did not appear
TH
UD

in the application forms.

SE
I

(ii) Selection Tests: An employment test is a mechanism (either a paper and pencil
S

test or an exercise) that attempts to measure certain characteristics of individuals.

ST
B Y BU

These characteristics range from aptitudes, such as manual dexterity, to intelligence

to personality
(iii) Employment Interview: Interview is a formal, in-depth conversation conducted to
NE

evaluate the applicant’s suitability for the job. The role of the interviewer is to
IN

seek information and that of the interviewee is to provide the same. Though, in
present times, the interviewee also seeks information from interviewer.
(iv) Reference and Background Checks: Many employers request names, addresses,
and telephone numbers of references for the purpose of verifying information and,
gaining additional information on an applicant. Previous employers, known persons,
teachers and university professors can act as references.
(v) Selection Decision: The final decision has to be made from among the candidates
who pass the tests, interviews and reference checks. The views of the concerned
manager will be generally considered in the final selection because it is he/she
who is responsible for the performance of the new employee.
(vi) Medical Examination: After the selection decision and before the job offer is
made, the candidate is required to undergo a medical fitness test. The job offer
is given to the candidate being declared fit after the medical examination.

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Q.25. Flavours Ltd. was engaged in the business of making handmade chocolates. Lately, the
business was expanding due to good quality and reasonable prices. As the demand was
increasing, Flavours Ltd. decided to explore bakery products as well. In order to make
bakery products the company directed its workforce to work overtime but this resulted
in multiple problems.
Due to increased pressure the efficiency declined and the workers had to take orders
from more than one superior. Workers were overburdened and their health was also
affected. Gradually the quality of the products begins to decline and market share also
went down. The company realized that they had implemented changes without waiting
for the required infrastructure.
Identify and explain the principles/technique of Taylor/Fayol referred to in the
above para. (6)
Ans. (i) Unity of Command: According to Fayol there should be one and only one boss
for every individual employee. If an employee gets orders from two superiors at

I S TU I O N
the same time the principle of unity of command is violated. The principle of

S
unity of command states that each participant in a formal organisation should

E
receive orders from and be responsible to only one superior. Fayol felt that if this
N
principle is violated “authority is undermined, discipline is in jeopardy, order

OT DI
disturbed and stability threatened”.
PA

S
(ii) Fatigue Study: Fatigue study seeks to determine the amount and frequency of rest

R
intervals in completing a task. A person is bound to feel tired physically and

HE
M

mentally if he does not rest while working. The rest intervals will help one to
regain stamina and work again with the same capacity. This will result in increased
O

productivity.
C
S
&
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Y
E R NE

TH
UD

SE
S I
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IN

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