Class XII – Business Studies Sample Paper – 2

Ans. d) Management is goal-oriented.

Ans. a) Training of intermediaries of the securities market

Ans. d) Both the Statements are true.

Ans. c) Providing Suitable incentives

Ans. d) Allocative

Ans. b) Unity of command

Ans. a) Both A and R are true and R is the correct explanation of A.

Ans. a) Reference and background check

Ans. a) Existing physical shares cannot be converted into electronic form

Ans. c) option (d)

Ans. b) Decrease the requirement for fixed capital

Ans. a) (a) – (iii), (b) – (ii), (c) – (i)

Ans. b) Statement II is correct and Statement I is not correct.

Ans. a) Planning

Ans. d) Both the Statements I and II are correct.

Ans. c) Stability of dividends

Ans. d) All of these

Ans. c) Planning

Ans. b) Both the Statements I and II are correct.

Ans. Management is a complex activity that has three main dimensions. The dimensions are:

i. Management of work

ii. Management of people

iii. Management of operations

Ans. Following are the functions performed by the middle level manager:-

i. Middle management is responsible for implementing and controlling plans and strategies developed by top management.

ii. They are responsible for all the activities of first line managers.

iii. Their main task is to carry out the plans formulated by the top managers.

Ans. By offering its employees the issue of shares at a price less than the market price Zeto Ltd. offered ‘co-partnership’ which is a financial incentive. The company did so in order to motivate its employees to work with great zeal. Financial incentives: It refers to those incentives which are measurable and paid in monetary form.

Ans. (i) The bonus is an incentive offered over and above wages/salaries to the employees.

(ii) sharing in profit for effective work.

Ans. The three measures to overcome the communication barriers are:

i. Clarify the Ideas before Communication: Any issue to be communicated to a subordinate should be clearly and completely studied and analyzed by the superior. Moreover, it should be stated in such a manner that subordinate can easily understand it in the same sense in which the supervisor wants him to receive it.

ii. Be aware of languages, tone and content of message: Language, tone and content of the message should be so adjusted according to the situation that it is easily understood by the receiver and stimulates them.

iii. Convey things of help and value to listeners: To get a good response from the subordinates, it should be ensured that the message relates to their interests.

Ans. i. Cost of debt: A firm’s ability to borrow at a lower rate of interest increases its capacity to employ higher debt Thus, more debt can be used if debt can be raised at lower rate. In case the cost of debt, i.e. interest rate which is a fixed cost is higher, then the company prefers more of equity in the capital structure.

ii. Cost of equity: The higher cost of equity makes the overall Weighted Average cost of capital higher which forces the company to include less equity in the capital structure and vice -versa.

Ans. Anita can file a complaint against the seller of the book at ‘District commission’. If the complaint alleges defect in goods which cannot be determined without checking.

Under the Consumer Protection Act 2019, a consumer is a person who buys any goods or avails services for a consideration, which has been paid or promised, or partly paid and partly promised, or under any scheme of deferred payment.

Ans. Features of management:

i. Management is goal oriented “

… united the efforts of different people to achieve this goal.” Every organisation has a set of basic goals which are the basic reason for its existence and unites the efforts of different individuals in the organisation towards achieving these goals. setting goal is first work in management activity.

ii. Management is a dynamic function “

…The company adapted to keep pace with the changing environment.” Management is a dynamic function and has to adapt itself to the changing environment. In order to be successful, an organisation must change itself and its goals according to the needs of the environment. due to rapid changes organisation needs to adapt these changes because its effecting the future of the organisation.

iii. Management is an intangible force

“All the employees of the organisation were happy and satisfied and the effect of management was noticeable in the organisation.”

Management is an intangible force that cannot be seen but its presence can be felt in the way the organisation functions. The effect of management is noticeable when targets are met and employees are happy and satisfied.

Ans. i. Controlling helps inefficient use of resources- Controlling help inefficient use of resources. An effective controlling system seeks to reduce wastage and spoilage of resources because activities are performed in accordance with predetermined standards.

ii. Controlling facilitates decision-making- Controlling and decision-making are considered to be twins. The process of controlling is complete only when corrective measures are taken. This requires taking the right decision as to what type of follow up action is to be taken. Controlling helps in quick decision-making by bringing together all the units in action.

Ans. i. Controlling helps in judging accuracy of standards- A good controlling system enables management to verify whether standards set are accurate and objective. An efficient controlling system keeps a careful check on the changes taking place in the organisation and in the environment and helps to review and revise standards, if necessary.

ii. Controlling helps in ensuring order and discipline- Controlling creates an atmosphere of order and discipline in the organisation. Controlling helps to minimise dishonest behaviour on the part of the employees by keeping a close check on their activities

Ans. Time Study:- One of the techniques helps to determine the number of workers to be employed; frame suitable incentive schemes and labour costs. It circumscribes the conventional time taken to complete a well-defined job.

Differential Piece Wage System:- Another technique recognises those workers who are able to accomplish/exceed the fair days work and is based on the premise that efficiency is the result of the joint efforts of the managers and the workers.

Ans. Job Enrichment – t refers to the designing of jobs in such a way that it involves a higher level of knowledge and skill, a variety of work content, more autonomy and responsibility of employees, meaningful work experience and more opportunities of growth. When the job is interesting, it itself serves as a source of motivation.

Employee Participation – Employee participation is the process whereby employees are involved in decision-making processes, rather than simply acting on orders. Employee participation is part of a process of empowerment in the workplace. Involving the employees in decision making regarding the issues related to them such as canteen committees, work committees, etc. also helps in motivating them and inducing a sense of belongingness in them.

Ans. The step of trading procedure in a stock exchange which has not been followed by “Unicon Securities Pvt. Ltd” is settlement i.e. the delivery of shares through the D’mat Account of the broker to D’mat account of the investors.

Ans. The Securities and Exchange Board of India (SEBI) is the Apex statutory body of capital market to whom customer can complain to redress their grievances.

Ans. Money market js a market for short term funds meant for dealing in monetary assets whose period of maturity is less than one year. Features of money market are

i. Market for short term

ii. No fixed geographical location

iii. Major institutions involved in money market are RBI Commercial Banks, LIC, GIC etc.

iv. Common instruments of money market are call money, treasury bill, CP, CD, commercial bill etc.

Ans. Meaning of Consumer Protection: Consumer protection means the act of providing adequate protection to consumers against the unscrupulous, exploitative and unfair trade practices of manufacturers and service providers which may have a negative effect to them:

Importance of consumer protection for business:

i. Long-term interest of business.

ii. Business uses society’s resources.

iii. Social responsibility

iv. Moral Justification

v. Government intervention.

Ans. The next three steps to be followed by Prashant in the staffing process after advertising for the above vacancies are as follows:

i. Selection: Selection is the process of choosing the best candidate from a pool of applicants.

ii. Placement and Orientation: Placement refers to the process of giving the charge of the job for which they have been appointed. Orientation may involve a series of activities related to introducing the new employee to other employees and familiarising him with the rules and policies of the organization. Moreover, he is taken around the workplace and made aware of the fire safety policy, canteen, conference room, etc.

iii. Training and Development: Organisations either have in-house training centers or make alliances with training and educational institutes. This is done to ensure the continuous learning of their employees in order to strengthen their competencies for both present and future jobs. This helps to motivate them and enables them to perform better and contribute more towards the realization of the organizational effectiveness and efficiency.

Ans. The two values that Prashant wants to communicate by setting up this manufacturing unit are:

i. Optimum utilization of resources

ii. Rural development

Ans. Features of Business Environment: (Any five)

a. It is the totality of all external forces affecting a business.

b. It includes both general and specific forces.

c. Its elements are closely inter-related.

d. It is dynamic as it keeps on changing.

e. It is uncertain as it is difficult to predict future happenings.

f. It is complex and difficult to comprehend as it consists of numerous inter-related and dynamic forces.

Ans. i. Increase in Competition: Owing Privatisation of the Business Units of the Public Sector, there has taken place an increase in competition. For example, the privatization in telecommunication has resulted in a lot of increase in competition. Consequently, telecommunication services have become cheaper and of better quality.

ii. Reduction in Political Interference: Privatisation results in freedom from political interference. Consequently, there is no unnecessary delay in taking decisions and the work is done at a fast speed.

iii. Increase in Responsibility: Privatisation has led to the development of a sense of responsibility in the employees.

iv. Increase in Efficiency: The privatization of industries in the Public Sector has resulted in an increase in their efficiency.

v. Increase in Rate of Industrial Growth: Prior to Privatisation, several industries lay inactive in the Public Sector, because of which the rate of Industrial Development/Growth of the country was slow. But after Privatisation, there has taken place an increase in the rate of growth of these industries. Consequently, the rate of the Industrial Growth of the country has increased.

vi. Freedom in Management: Prior to Privatisation, the industrial units, which were victims of bureaucracy and red-tapism, have now begun to be managed by professional managers. Now the managers can take decisions freely, without any political pressure. Consequently, now there has taken place an increase in the rate of performance and quality of work.

Ans. The concept of organizing discussed in the above case involves structuring tasks and resources to achieve efficiency. By appointing Bhavana to handle tasks, Kartik engages in organizing.

The two essential elements of organizing in this case are:

i. Division of labour: Kartik divides the workload by assigning specific tasks to Bhavana, such as baking, inventory management, or customer service. This division allows each person to focus on their assigned responsibilities, maximizing productivity and efficiency.

ii. Delegation of authority: Kartik delegates authority to Bhavana, granting her the power to make decisions and take actions independently. This empowers Bhavana to handle tasks on Kartik’s behalf, reducing his workload and allowing him to allocate his time to high-priority activities, such as strategic planning and business development.

Ans. Personal selling refers to the oral presentation of the message in the form of conversation with one or more prospective customers for the purpose of making sales. Companies appoint salespersons to contact prospective buyers and create awareness about the product and develop product preferences with the aim of making a sale. It is a convincing tool for sales promotion. Personal selling is an effective tool for the promotion mix. Its importance to business is judged by the following factors:

i. Flexible tool: The Sales pitch can be adjusted on the basis of the requirement of the prospective customer.

ii. Link with customers: There is direct contact between the salesman and the prospects that make the prospective customer feel more privileged and important.

iii. Feedback: It enables the businesses to obtain feedback from the customers and accordingly prepares the strategies for the future. In other words, the salesman can clarify the doubts and myths which may be there in the mind of the customer.

iv. Role in the introduction stage: It is an effective tool to launch products m the introductory stage of a product life cycle.

Ans. Packaging refers to the act of designing and producing the container or wrapper of a product. It is concerned with the determination of convenient size lots in which the product is to be put in the market and the creation of proper packages for a different lot of sizes, in order to avoid spoilage, leakage, breakage and pilferage of the product. In the present age of consumer-oriented marketing approach (i.e. buyers market), packaging has gamed unique importance and provides several benefits m the marketing of goods Importance of packaging is stated in the points below:

i. Protection: The main role of the Packaging element of a product is to protect it from any type of damage and destruction.

ii. Product identification: The package of a product is what makes it appear different from other products.

iii. Silent salesman: The package of the product speaks about itself as it contains all the necessary information related to the product in the form of labelling.

iv. Reduces cost: Through packaging, the cost of transportation also reduces to an extent.

v. Sales promotion: An attractive package induces the customer to buy the product and thus it is an important tool of sales promotion.