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Question Paper Solutions - Business Studies 2017 - 2018-CBSE 12th-Class 12 CBSE (Central Board of Secondary Education)

SubjectBusiness Studies
Year2017 - 2018 (March)

Alternate Sets


Marks: 80

What is meant by 'Decentralization'?

Chapter: [1.05] Organising
Concept: Concept of Decentralization

Give the meaning of Method as a type of plan

Chapter: [3.05] Functions of Management
Concept: Concept of Planning

Saurabh decided to start a chocolate manufacturing business. He set then a target of earning 10% profit on sales in the first year. As a good businessman, he was concerned about the future of the business, which was uncertain. He gathered information that the demand for chocolates is increasing day-by-day. He used this information as the base for future planning and shared it with his team. On the basis of the gathered information, he scheduled a meeting in the following week to find innovative ways to achieve the objectives.
List the first two steps, which have been followed by Saurabh that are related to the process of one of the functions of management.

Chapter: [1.01] Nature and Significance of Management
Concept: Management Functions

In the paint industry, various raw materials are mixed in different proportions with petroleum for manufacturing different kinds of paints. One specific raw material is not readily and regularly available to the paint manufacturing companies. Bonler Paints Company is also facing this problem and because of this, there is a time lag between placing the order and the actual receipt of the material. But once it receives the raw materials, it takes less time in converting it into finished goods.

Identify the factor affecting the working capital requirements of this industry.

Chapter: [2.01] Financial Management
Concept: Factors Affecting Fixed and Working Capital Requirements

An investor wanted to incest `20,000 in Treasury Bills for a period of 91days. When he approached the Reserve Bank of India for this purpose he came to know that it was not possible.

Identify the reason why the investor could not invest in the Treasury Bill.

Chapter: [5] Stock Exchange
Concept: Securities and Exchange Board of India (SEBI)

Why is the understanding of ‘Marketing Management Philosophies’ important?

Chapter: [2.03] Marketing Management
Concept: Concept of Marketing Management

Give the constitution of the District Consumer Disputes Redressal Forum under the Consumer Protection Act, 1986.

Chapter: [5] Consumer Protection
Concept: Consumer Protection Act 1986

‘Buy one get one free’ is printed on the label of the package of a mosquito repellant. State the labelling function being performed by this statement.

Chapter: [7] Marketing
Concept: Product - Labelling

Differentiate between formal and informal organisations on the basis of origin

Chapter: [1.05] Organising
Concept: Structure of Organisation

Differentiate between formal and informal organisations on the basis of  authority

Chapter: [1.05] Organising
Concept: Structure of Organisation

Differentiate between formal and informal organisations on the basis of the flow of communication.

Chapter: [1.05] Organising
Concept: Structure of Organisation

State the steps in the selection procedure, after the employment interview and before the job offer.

Chapter: [1.06] Staffing
Concept: Staffing - Recruitment Process

Sandhya is a successful manager at Mansions Enterprises. She has a team of twelve people working under her. She encourages them to set their own objectives and take decisions. She respects their opinions and supports them so that they can perform their duties and accomplish organisational objectives. To manage and exercise effective control she uses forces within the group.

As an intelligent manager, at times, she also makes use of positive aspects of informal communication. This way, she is able to unify diverse interests and ensure that targets are met.

a) There are many theories and styles of influencing people's behaviour. Identify the style used by Sandhya which is based on the use of authority.

b) State two positive aspects of the communication discussed above, which Sandhya is using as an intelligent manager.

Chapter: [1.07] Directing
Concept: Formal and Informal Communication

The Return on Investment (ROI) of a company ranges between 10-12% for the past three years. To finance its future fixed capital needs, it has the following options for borrowing debt:
Option ‘A’: Rate of interest 9%
Option ‘B’: Rate of interest 13%

Which source of debt, ‘Option A’ or ‘Option B’, is better? Give reasons in support of your answer. Also, state the concept being used in taking the decision.

Chapter: [2.01] Financial Management
Concept: Financial decisions - investment

Explain briefly any two points of importance of consumer protection from the point of view of the business.

Chapter: [2.04] Consumer Protection
Concept: Concept of Consumer Protection

Aradhana and Gandharv are heads of two different departments in 'Yumco Ltd.' 'They are efficient managers and are able to motivate the employee of their respective departments to improve performance. However, their drive to excel in their own sphere of activity instead of giving emphasis on objectives of the enterprise has hindered the interaction between the departments that Aradhana and Gandharv are heading. Often there are inter-departmental conflicts and they have become incompatible. This has proved to be harmful in the fulfilment of the organisational objectives. The situation has deteriorated to such an extent that the CEO of 'Yumco Ltd.' has hired a consultant, Rashmi, to resolve the problem. After studying the situation closely, Rashmi found that the problem has arisen due to inflexibility and a narrow perspective on the part of both Aradhana and Gandharv. She is of the view that this situation is a result of the type of organisational structure 'Yumco Ltd.’ has adopted.
From the above information, identify the organisational structure adopted by ‘Yumco Ltd.’ and state any three advantages of the structure so identified.

Chapter: [1.05] Organising
Concept: Structure of Organisation

In 2015, Naveen left his luxurious life in Mumbai, where he worked as a manager for Blue Birds Ltd. He shifted to Begampur, Chhattisgarh to fulfil his grandmother's dream of converting their 25-acre ancestral land into a fertile farm. For this, he set out specific goals along with the activities to be performed to achieve the goals.

Every activity was a challenge since he was clueless about farming. He learnt every activity from filling the land to sowing the seeds. To aid farmers he launched his own company 'Innovative Agriculture Solutions Pvt. Ltd.’

It was difficult initially as no one trusted an urban youth telling farmers about farming. But when everything was discussed in detail the farmers started taking an interest. He wanted to ensure that the future events meet effectively the best interests of the company. Through sales forecasting, he prepared an annual plan for production and sales.

He also found that the farmers grew the only paddy, which was an activity of 3 - 4 months and land remained idle for the rest 8-9 months of the year. He not only identified but evaluated various alternatives through which the farms could be utilised for the remaining months of the year. Through correct foresight and logical and systematic thinking based on analysis of all facts, all alternative were examined and evaluated. He promoted a plan to the farmers, where after harvesting paddy, vegetables could be grown.

The above case highlights the features of one of the functions of management. By quoting lines from the above identify and explain these features.

Chapter: [1.04] Planning
Concept: Planning Process

Explain any five points which highlight the importance of controlling function of management.

Chapter: [3.05] Functions of Management
Concept: Importance of Controlling

Ram Murthy, the CEO of ‘Goodcare Hospitals’, a leading chain of hospitals, decided to reward the good work of the doctors of his organisation. For this, he instituted two running trophies. A ‘Healthcare Achievers Trophy’ to acknowledge and appreciate the tireless efforts of the doctors who rendered selfless services to the patients and another ‘Beti Bachao Trophy’ to recognise the outstanding work done by the doctors in saving the girl child.
The CEO also wanted to improve the health services in rural areas all over the country. He decided that all doctors must work in rural areas for at least six months. He also decided that the paramedical staff should be employed locally.

1) Identify the incentive provided by ‘Goodcare Hospitals’ to its doctors through running trophies

2) Which need of the doctors will be satisfied through the incentive identified in part (a)? State.

3) State any two values that the CEO of ‘Goodcare Hospitals’ is trying to communicate to the society.

Chapter: [1.07] Directing
Concept: Motivation - Financial and Non Financial Incentives

State the protective functions of Securities and Exchange Board of India.

Chapter: [5] Stock Exchange
Concept: Securities and Exchange Board of India (SEBI)

Sumit purchased an ISI marked washing machine of a famous brand ‘MG’ from TG Electronics Ltd. The shopkeeper asked him to wait for two days for installation of the machine. His friend, Vivek, was very fond of experimenting with new electronic products. He told Sumit that there is no need to wait for the company’s representative to install the machine and that he could do it. So, both of them installed the machine without following the manufacturer’s instructions. Initially, the machine worked effectively and the wash was good. But after two days, the machine stared stopping in between the wash cycle. Sumit and Vivek tried their best to start the machine but failed in their efforts. Sumit, therefore, approached TG Electronics Ltd., which refused to provide any service on the plea that the installation of the machine was not done by the company.

1) State the responsibility which Sumit had to fulfil as an aware consumer to get the services of the company.

2) Explain briefly any two rights which Sumit could have exercised had he fulfilled his responsibility identified in part (a).

Chapter: [2.04] Consumer Protection
Concept: Consumer Awareness

What is meant by co-ordination?

Chapter: [1.01] Nature and Significance of Management
Concept: Management Functions

Explain any four features of co-ordination.

Chapter: [1.01] Nature and Significance of Management
Concept: Management Functions

Describe any four characteristics of 'co-ordination'.

Chapter: [1.01] Nature and Significance of Management
Concept: Management Functions

‘Konark Ltd.’ Is an electronic goods manufacturing enterprise situated in Shivpuri, Madhya Pradesh. It is earning a very low revenue in comparison to a competing electronic goods manufacturing enterprise, ‘Nova Ltd.’ situated in Mumbai. Both Konark’s and Nova’s operations are affected directly by the investors, customers, competitors and suppliers, which are unique to their respective locations. In addition to this, individual firms of this field are affected indirectly by the factors like the money supply in the economy, composition of the families, the technological changes etc.

1) Identify and state the feature of the concept discussed in the above paragraph.

2) Also, state any four points of importance of this concept.

Chapter: [1.01] Nature and Significance of Management
Concept: Management Functions

After acquiring the necessary knowledge and skills on starting an Aloe vera Farm. Ashok wanted to be the leading manufacturer of Aloe vera products worldwide. He observed that the products were expensive as the demand of the products was more than supply. He was also keen to promote methods and practices that were economically visible, environmentally sound and at the same time protecting public health.
Ashok's main consideration was about the amount of money paid by the consumers in consideration of the purchase of Aloe vera products. He also thought that competitors prices and their anticipated reactions must also be considered for this.
After gathering and analysing information and doing correct marketing planning, he came to know that the consumers compare the value of a product to the value of money which they are required to pay. The consumers will be ready to buy a product when they perceived that the value of the product is at least equal to the value of money which they would pay.
Since he was entering into a new market, he felt that he may not be able to cover all costs. He knew that in the long run, the business will not be able to survive unless all costs are covered in addition to a minimum profit.
He examined the quality and features of the products of the competitors and the anticipated reactions of the consumers. Considering the same he decided to add some unique features to the packaging and also decided to provide free home delivery of the products.
The above case relates to a concept which is considered to be an effective competitive marketing weapon. In conditions of perfect competition, most of the firms compete with each other on this concept in the marketing of goods and services.

1) Identify the concept.

2) Explain briefly any four factors discussed in the above case related to the concept so identified.

Chapter: [2.03] Marketing Management
Concept: Concept of Price (Marketing)

Karan Nath took over ‘D’ north Motor Company' from his ailing father three months ago. In the past, the company was not performing well. Karan was determined to improve the company's performance. He observed that the methods of production, as well as the selection of employees in the company, were not scientific.
He believed that there was only one best method to maximise efficiency. He also felt that once the method is developed, the workers of the company should be trained to learn that 'best method'.
He asked the Production Manager to develop the best method and carry out the necessary training. The Production Manager developed this method using several parameters right from deciding the sequence of operations, a place for men, machines and raw materials till the delivery of the product to the customers. This method was implemented throughout the organisation. It helped in increasing the output, improving the quality and reducing the cost and wastage.

Identify and explain the principles and the technique of scientific management followed by the Production Manager in the above case.

Chapter: [1.05] Organising
Concept: Structure of Organisation

‘Moga Industries Ltd,’ approached a well-established university in the city of Madurai to recruit qualified personnel for various technical and professional jobs. They selected Tanya, Ritu, Garima and Chetan for various Vacancies in the organisation.
After the selection and placement, 'Moga Industries Ltd,’ felt the need to increase the skills and abilities, and the development of a positive attitude of the employees to perform their specific jobs better. The company also realised that learning new skills would improve the job performance of the employees. Hence, the company decided to take action for the same.

1) Name the step of the staffing process regarding which the company decided to take action.

2) State the benefits of the action to ‘Moga Industries Ltd.'

Chapter: [1.06] Staffing
Concept: Staffing Process

Explain briefly any four factors affecting the fixed capital requirements of an organisation

Chapter: [2.01] Financial Management
Concept: Factors Affecting Fixed and Working Capital Requirements