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MS Business Studies Set 66 5 1,2,3 2019
MS Business Studies Set 66 5 1,2,3 2019
1. You are aware that evaluation is the most important process in the actual and correct
assessment of the candidates. Small mistakes in evaluation may lead to serious problems
which may affect the future of the candidates, education system and teaching profession. To
avoid mistakes, it is requested that before starting evaluation, you must read and understand
the spot evaluation guidelines carefully. Evaluation is a 10-12 days mission for all of us.
Hence, it is desired from you too give your best in this process.
2. Evaluation is to be done as per instructions provided in the marking scheme. It should not
be done according to one’s own interpretation or any other consideration. Marking scheme
should be strictly adhered to and religiously followed. However, while evaluating answers
which are based on latest information or knowledge and innovative may be assessed and
marks be awarded to them.
3. The head examiner has to go through the first five answer scripts evaluated by each
evaluator to ensure that evaluation has been carried out as per instructions given in the
marking scheme. The remaining answer scripts meant for evaluation shall be given only
after ensuring that there is no significant variation in the marking and encircled.
4. If a question has parts, please award marks on the right hand side for each part. Marks
awarded for different parts of the question should then be totalled up and encircled in the left
hand margin.
5. If a question does not have any parts marks must be awarded in the left hand margin and
encircled.
6. If a student has attempted an extra question ,answer of the question deserving more marks
should be retained and other answer scored out
7. In a question, if two features/ characteristics/ points are asked but an examinee writes
more than two features/ characteristics/ points, say, five, of which first is correct, second is
incorrect, the first two should be assessed and the remaining should be ignored.
8. The examiners should acquaint themselves with the instructions given in the Guidelines
for Spot Evaluation before starting the actual evaluation.
9. Every examiner should stay full working hours i.e. 8 hours every day and evaluate 25
answer books.
10. It is expected that the marking scheme should be followed objectively to ensure quality
evaluation. For instance, if an examinee scores 24 marks, then the marks should not be
1
inflated to 27 simply to pass him/ her.
11. Avoid the following common type of errors committed by the examiners in the pat-
Ø Leaving answers or parts thereof unassessed in the answer script.
Ø Giving more marks for an answer than assigned to it or deviation from the marking
scheme.
Ø Wrong transference of marks from the inside pages of the answer books to the title
page.
Ø Wrong question wise totaling on the title page.
Ø Wrong totaling of marks of the two columns on the title page.
Ø Wrong grand total.
Ø Marks in words and figures not tallying.
Ø Wrong transference of marks from answer books to award list.
Ø Answer marked as correct but marks not awarded.
Ø Half or a part of answer marked correct and the rest as wrong but no marks awarded.
12. Marks should be awarded keeping in view the total marks of a particular question
and not the total marks of the question paper. For example, if one mark is given to a 3
marks question even if nothing is correct, then that one mark constitutes 33% of the total
marks for this answer.
13. The examiner shall also have to certify in the answer book that they have evaluated
the answer book strictly in accordance with the value points given in the marking
scheme and correct set of question papers.
14. While evaluating the answer scripts, if the answer is found to be totally incorrect,
it should be marked as (x) and awarded zero (0) marks.
15. A full scale of marks 0-80 has to be used. Please do not hesitate to award full marks
if the answer deserves it. Similarly, wherever an examinee writes an answer upto the
mark, his/ her marks should not be deducted unnecessarily.
16. As per the orders of Hon’ble Supreme Court, the candidates would now be permitted
to obtain photocopy of the Answer Book on request on payment of the prescribed
fee. All examiners/ Head Examiners are once again reminded that they must ensure
that evaluation is carried out strictly as per value points for each answer as given in the
Marking Scheme.
2
ZONE 5
66 66 66 MARKING SCHEME – 2018-19 Distribution
/5 /5 /5 BUSINESS STUDIES of Marks
/1 /2 /3 66/5/1
EXPECTED ANSWERS / VALUE POINTS
SECTION A
1 4 3 Q. Various input resources are required by management
to complete a task effectively and efficiently. Name any
two.
2 - - Q. Define ‘Organising’.
OR OR
OR OR
4
5 - - Q. How does ‘Cost of Debt’ affect the capital structure of
an enterprise?
OR OR
Q. How does ‘Cost of Equity’ affect the capital structure
of an enterprise?
5
7 3 1 Q. Vivek purchased a bike from Saranath Automobiles
with a written guarantee to repair or replace, if
necessary, within six months or 5,000 kms of distance
travelled whichever is earlier. After covering the distance
of 400 kms in two months, the gears of the bike started
giving problems. Vivek took the bike to the dealer who
refused to listen to his complaint. He was confused about
what he should do.
Suggest the rights that Vivek may exercise in the above ½ mark for
case. naming
each
Ans. (a) Right to Safety right
=
(b) Right to seek redressal ½x2
=
1 mark
½ mark for
Ans. Personal Selling. naming
the tool
+
This is because it is a complex product requiring technical ½ mark for
details and is best sold through shorter channels. the reason
=
1 mark
SECTION B
9 - - Q. Explain any three limitations of ‘Planning’ function of
management.
OR OR
Ans.
(a) Critical point control
7
The key result areas are set as critical points since it is
neither economical nor easy to keep a check on each and +
every activity of the organisation.
OR OR
8
The work performed by Shiv may be described as an
important element of directing. Name the element and
state two other functions which may be performed by
Shiv in addition to those highlighted above.
(b) In this market, funds are raised through both - debt and
equity i.e. equity shares, preference shares, bonds,
debentures etc. 1x2
=
(c) It includes Primary and Secondary market. 2 marks
=
9
(d) The participants in this market are financial institutions,
banks, corporate entities, foreign investors and ordinary
retail investors. 1+2
=
(e) Investment in this market does not necessarily require a 3 marks
huge financial outlay.
10
(iii) Carrying out comparative testing of consumer products =
in accredited laboratories. 3 marks
SECTION C
14 18 17 Q. Define ‘Management’. Explain how management is a
multidimensional activity.
11
(a) Totality of all external forces affecting a business. ½ mark for
heading
(b) Includes both general and specific forces +
(c) Inter-relatedness ½ mark
(d) Dynamic nature for its
(e) Uncertainty explanation
(f) Complexity 1x3
(g) Relativity =
3 marks
(If an examinee has given only the headings, ½ mark for =
each heading should be awarded) (1+3)
=
4 marks
15 17 16 Q. One of the questions that needs to be answered in the
organizing function is ‘At what level are decisions
made’? Decision making authority in an organization can
be pushed down to the lower levels or it may lie with the
top management. However it is not an ‘either or’
concept.
When an organization grows in size or complexity, there
is tendency towards sharing decision making authority
with the lower levels. This is because in large
organizations, employees who are closely involved with
certain operations tend to have more knowledge about
them than the top management.
An important concept of organizing function is discussed
above. Identify the concept and state any three points of
its importance.
1 mark
Ans. Decentralisation
+
Importance of decentralisation: (Any three)
12
positions in future.
OR OR
13
knowledge.
1x4
(ii) It helps them to earn more due to improved performance. =
4 marks
(iii) It reduces accidents as the employees are more efficient
to handle machines.
14
‘His father requested him to appoint his friend’s son, Prem
as an accountant who is well qualified for this post’
15
on the part of the companies, brokers, merchant bankers,
investment consultants and others involved in the
securities market. These malpractices and unfair trading
practices eroded investor confidence and multiplied
investors’ grievances. The Government of India and the
stock exchanges were helpless in redressing the investors’
problems because of lack of proper penalty provisions in
the existing legislation. In view of this the Government of
India decided to set up a regulatory body.
(a) Name the regulatory body which the Government of
India decided to set up.
(b) Also state any three objectives of the regulatory body
identified in part (a) above.
16
factors which affect the marketing decisions. Jay
explained that there were a large number of factors
affecting marketing decisions which may be divided into
two categories:
(i) controllable factors, and (ii) non-controllable factors.
Jay further explained that controllable factors became
marketing tools that can be constantly shaped and
reshaped by marketing managers, to achieve marketing
success.
Identify and explain the set of marketing tools that can
be constantly shaped and reshaped by marketing
managers.
(i) Product
(iv) Promotion
SECTION D
17
20 21 20 Q. ‘Scientific Management means knowing exactly what
you want men to do and seeing that they do it in the best
and the cheapest way.’ Taylor developed various
techniques for application of Scientific Management
principles and was able to achieve a three-fold increase in
productivity in Bethlehem Steel Company, where he
worked. One of the techniques helps to determine the
number of workers to be employed; frame suitable
incentive schemes and labour costs. Another technique
recognises those workers who are able to
accomplish/exceed the fair day’s work and is based on
the premise that efficiency is the result of the joint efforts
of the managers and the workers.
Quoting the lines from the above paragraph, identify and
explain the two techniques of Scientific Management.
18
§ In this plan, there are two piece rates – a higher piece rate
for those workers who produce the standard output or
more, and a lower one for those who produce less than =
the standard output. 2 ½ marks)
=
2½+2½
=
5 marks
21 20 21 Q. Matta Auto Ltd. is manufacturing different types of
commercial vehicles. Their sales were rupees two
hundred crores in the previous year. The company
decided to increase sales by 20% during the current year.
It conducted internal as well as external audits for the
same. Through internal audit, they analysed the
strengths and weaknesses of the business across all
departments. External audit focused on the opportunities
and the threats in the constantly changing business
environment. Thus, a comprehensive plan was prepared
taking into consideration the business environment and
the necessary resources were allocated to achieve the
target. The company directed its offices throughout the
country to follow the plan. The company’s commitment
to develop effective plans to achieve a consistent increase
in sales has ensured its continual growth over the past
one decade.
Identify and explain the two types of plans discussed
above. 1 mark for
identifying
Ans. The two types of plans discussed above are: each type
(a) Objectives of plan
(b) Strategy (1 x 2)
=
2 marks
Objectives
+
§ Objectives are the ends, which the management seeks to
achieve.
§ Objectives needs to be expressed in specific terms that is 1 ½ marks
quantified and is to be achieved within a given time
period.
§ They are usually set by top management of the
organisation and focus on broad, general issues.
Strategy
OR OR
20
(c) Career advancement opportunity. incentive
+
(d) Job enrichment. ½ mark for
explanation
(e) Employee recognition =
1x 5
(f) Job security. =
5 marks
(g) Employee participation.
SECTION E
23 - - Q. Explain any four characteristics of coordination.
OR OR
Q. Explain any four points highlighting the nature of
principles of management.
21
1 mark for
(iii) Formed by practice and experimentation. explanation
=
(iv) Flexible. 1½x4
=
(v) Mainly behavioural. 6 marks
(vii) Contingent
22
identifying
(i) Organisational barrier each barrier
½x2
(ii) Psychological barrier = 1 mark)
(½ mark
Organisational barriers are barriers related to organisational for
structure, authority relationships, rules and regulations. explaning
each
Psychological barriers are concerned with the state of mind barrier
of both the sender and the receiver =
½ x2
=
1 mark)
Psychological barriers:
23
‘Chintamani and the workers did not believe in each other
and so could not understand each other’s messages in the
original sense’
+
(If an examinee has given only the heading, ½ mark for
each heading should be awarded)
24
compared the risk associated with each source as well as
the cost of raising funds.
(a) State the two financial decisions discussed in the
above situation.
(b) Explain any two factors affecting each of the decisions
that still have to be considered by the finance manager.
Ans. (a)
(i) Investment decision/ Capital budgeting decision/ Long (½ mark for
term Investment decision identifying the
decision
It involves deciding about how the funds are invested in +
different assets so that they are able to earn the highest ½ mark for
possible return for the investors. stating
=
(ii) Financing decision 1x2
=
It refers to the decision about the quantum of finance to be 2 marks)
raised from various long term sources.
+
(½ mark for
Factors affecting Investment decision: (any two) each
heading
(i) Cash flows of the project +
½ mark for
(ii) The rate of return of the project explanation
=
(iii) The investment criteria involved 1 x2
=
(iv) Financing alternatives 2 marks)
25
(ix) Stock market conditions/ State of capital markets =
(x) Capital structure of other companies 6 marks
26
66/5/2
29
job.
OR OR
SECTION B
13 9 11 Q. Gopal, Mohan and Shyam are three friends having
their separate small manufacturing units in an industrial
estate. They are hard-working and honest and undertake
their respective production activities following the good
practices of business. They use good quality raw
materials and adopt standardised process. They fix the
prices of their products with a reasonable profit margin.
But all of them are worried about the malpractices like
manufacturing sub-standard, duplicate and defective
goods by the fellow manufacturers. Therefore, they
decided to form an organisation with a constitution of its
own which is free from government interference. This
organisation would encourage consumers to strongly
protest and take action against unscrupulous,
exploitative and unfair trade practices of sellers.
State three other functions which may be performed by
this organisation in addition to those mentioned above.
30
(ii) Publishing periodicals and other publications to impart
knowledge about consumer problems.
1x3
(iii) Carrying out comparative testing of consumer products =
in accredited laboratories. 3 marks
31
(vi) To ensure safety standards are maintained.
(b) In this market, funds are raised through both - debt and
equity i.e. equity shares, preference shares, bonds,
debentures etc. 1x2
=
(c) It includes Primary and Secondary market. 2 marks
=
(d) The participants in this market are financial institutions,
banks, corporate entities, foreign investors and ordinary
retail investors. 1+2
=
(e) Investment in this market does not necessarily require a 3 marks
huge financial outlay.
Ans. First three steps in the process of organising are: ½ mark for
each
(i) Identification and division of work heading
+
32
(ii) Departmentalisation ½ mark
for each
(iii) Assignment of duties explanation
=1 x3
(If an examinee has not given the headings as above but 3 marks
has given the correct explanation, no marks should be
deducted)
OR OR
Q. Explain any three points of importance of
‘organising’ function of management.
33
(ii) Judging accuracy of standards
OR OR
SECTION C
17 14 15 Q. Ganesh was concerned about the sedentary lifestyle
people are leading nowadays. Their dependency on
outside food is also increasing because corporate work
culture demands working till late night at offices. So, he
decided to start a restaurant, ‘Healthy Eating Point’ to
provide healthy food options to customers. After
completing planning and organising functions, he
identified the various job positions that are required to
be filled i.e. a General Manager, an Accountant, two
34
Chefs, two boys for serving the food in the restaurant
and three boys for home delivery of food. He decided
that his father, Karan, would be the General Manager of
the restaurant. He would be paid ₹50,000 per month for
his services. His father requested him to appoint his
friend’s son, Prem as an accountant who is well qualified
for this post. Ganesh agreed to this proposal. Earlier,
Prem had a business of providing unskilled workers to
different organisations from remote areas of the country.
Prem took permission from Ganesh to continue with the
old business. Ganesh happily agreed and asked him to
provide five boys for serving and delivering the food. For
the appointment of the two Chefs, Ganesh approached a
renowned Hotel Management Institute and was satisfied
with the Chefs provided by the institute.
(a) Quoting the lines from the above paragraph, explain
the two sources of recruitment being used by Ganesh for
filling up the various job positions.
(b) Also, give the meaning of the function of management
discussed in the above case.
35
‘For the appointment of the two Chefs, Ganesh approached
a renowned Hotel Management Institute and was satisfied
with the Chefs provided by the institute’
+
It is a source of recruitment in which organisations maintain
a close liaison with educational institutions like universities,
vocational schools and management institutes to recruit
qualified personnel for technical, professional and
managerial jobs.
(i) Product
36
each tool
+
(ii) Price ½ mark
for
Price may be defined as the amount of money paid by the each
buyer (or received by the seller) in consideration for the explanation
purchase of a product or a service. =
1x 4
(iii) Place or Physical Distribution =
4 marks
Place or Physical Distribution is concerned with making the
goods and services available at the right place, in right
quantity and at the right time so that the consumers can
purchase the same.
(iv) Promotion
37
Ans. (a) Regulatory body - SEBI (Securities and Exchange 1 mark
Board of India)
38
(i) It gives relief to the top management as, when the
subordinates are given the freedom to act, the top
management gets more time to devote on important policy
decisions rather than handling operational decisions.
39
(a) Management of work ½ mark for its
explanation
(b) Management of people 1x3
=
(c) Management of operations 3 marks
=
(1+3)
=
4 marks
OR
OR
Q. Give the meaning of ‘Business Environment’. Explain
any three features of Business Environment.
40
emergency.
OR
SECTION D
21 20 21 Q. Matta Auto Ltd. is manufacturing different types of
commercial vehicles. Their sales were rupees two
hundred crores in the previous year. The company
decided to increase sales by 20% during the current
year. It conducted internal as well as external audits for
the same. Through internal audit, they analysed the
strengths and weaknesses of the business across all
departments. External audit focused on the opportunities
and the threats in the constantly changing business
environment. Thus, a comprehensive plan was prepared
taking into consideration the business environment and
the necessary resources were allocated to achieve the
target. The company directed its offices throughout the
country to follow the plan. The company’s commitment
41
to develop effective plans to achieve a consistent increase
in sales has ensured its continual growth over the past
one decade.
Identify and explain the two types of plans discussed
above. 1 mark for
identifying
Ans. The two types of plans discussed above are: each type
(a) Objectives of plan
(b) Strategy (1 x 2)
=
2 marks
Objectives
+
§ Objectives are the ends, which the management seeks to
achieve.
§ Objectives needs to be expressed in specific terms that is 1 ½ marks
quantified and is to be achieved within a given time
period.
§ They are usually set by top management of the
organisation and focus on broad, general issues.
Strategy
42
worked. One of the techniques helps to determine the
number of workers to be employed; frame suitable
incentive schemes and labour costs. Another technique
recognises those workers who are able to
accomplish/exceed the fair day’s work and is based on
the premise that efficiency is the result of the joint efforts
of the managers and the workers.
Quoting the lines from the above paragraph, identify and
explain the two techniques of Scientific Management.
§ In this plan, there are two piece rates – a higher piece rate
for those workers who produce the standard output or
more, and a lower one for those who produce less than =
the standard output. 2 ½ marks)
=
2½+2½
43
=
5 marks
- 22 - Q. Explain the steps in the selection proess after
‘Employment Interview’.
(In case the examinee has not written the steps in the
right sequence, ½ mark may be deducted)
OR OR
(In case the examinee has not written the steps in the
right sequence, ½ mark may be deducted)
SECTION E
44
25 23 24 Q. ‘Monisha Consumer Goods’ is a leading consumer
goods chain with a network of 46 stores primarily across
Mumbai, Delhi and Pune. It was started by Monisha
Gupta in 1987. It has a large market share in Mumbai,
Delhi and Pune. Looking for an opportunity to expand, it
has decided to open a new branch in Kerala. It has to
decide on what new resources it will invest in so that it is
able to earn the highest possible return for its investors.
Once the company believes that it will be able to generate
higher revenues and profits, it also has to decide on how
this project will get funded. The finance manager, Atul
was told to have an optimal capital structure by striking
a balance between various sources of getting the project
funded so as to increase shareholders’ wealth. Atul, after
assessing the cash flow position of the company,
evaluated the cost of different sources of finance and
compared the risk associated with each source as well as
the cost of raising funds.
(a) State the two financial decisions discussed in the
above situation.
(b) Explain any two factors affecting each of the
decisions that still have to be considered by the finance
manager.
(½ mark for
each
Factors affecting Investment decision: (any two) heading
+
(i) Cash flows of the project ½ mark for
explanation
(ii) The rate of return of the project =
1 x2
45
(iii) The investment criteria involved =
2 marks)
(iv) Financing alternatives
+
(If an examinee has not given the headings as above but (½ mark for
has given the correct explanation, full credit should be each
given) heading
+
Factors determining financing decision: (any two) ½ mark for
(i) Interest coverage ratio explanation
(ii) Debt service coverage Ratio =
(iii) Return on Investment 1 x2
(iv) Tax rate =
(v) Fixed operating costs 2 marks)
(vi) Flexibility =
(vii) Control 2+2+2
(viii) Regulatory framework =
(ix) Stock market conditions/ State of capital markets 6 marks
(x) Capital structure of other companies
46
communication barriers under each of the types
identified in part (a) because of which ‘Global India
Ltd.’ could not meet its production targets.
(c) State any two recommendations that might have been
given by the committee to improve communication
effectiveness.
(½ mark
Organisational barriers are barriers related to organisational for
structure, authority relationships, rules and regulations. explaning
each
Psychological barriers are concerned with the state of mind barrier
of both the sender and the receiver =
½ x2
=
1 mark)
Psychological barriers:
47
(i) Loss by transmission and poor retention may act as a
barrier to communication.
(½ x 2
‘The company also had a number of managerial levels =1 mark)
causing further delay and distorted communication’
48
½ mark for
(b) Help in optimum utilisation of resources and effective the heading
administration. +
1 mark
(c) Help in taking scientific decisions. for its
explanation
(d) Help in meeting changing environment requirements. =
1½ x 4
(e) Help in fulfilling social responsibility. =
6 marks
(f) Used as a basis for management training, education and
research.
OR OR
49
66/5/3
66 MARKING SCHEME – 2018-19 Distribution
/5 BUSINESS STUDIES of Marks
/3 66/5/3
EXPECTED ANSWERS / VALUE POINTS
SECTION A
7 3 1 Q. Vivek purchased a bike from Saranath Automobiles
with a written guarantee to repair or replace, if
necessary, within six months or 5,000 kms of distance
travelled whichever is earlier. After covering the
distance of 400 kms in two months, the gears of the bike
started giving problems. Vivek took the bike to the
dealer who refused to listen to his complaint. He was
confused about what he should do.
Suggest the rights that Vivek may exercise in the above ½ mark for
case. naming
each
Ans. (a) Right to Safety right
=
(b) Right to seek redressal ½x2
=
1 mark
=
1 mark
OR OR
OR OR
Q. Differentiate between ‘Placement’ and ‘Orientation’.
Ans.
Placement refers to the employeeoccupying the position by
the employee for which he has been selected.
1 mark
Orientation refers to introducing the selected employee to
other employees and familiarising him with the rules and
policies of the organisation.
52
- - 8 Q. How does ‘Cash Flow Position’ affect capital
structure of an enterprise?
SECTION B
12 11 9 Q. ‘Financial markets are classified on the basis of the
maturity of financial instruments traded in them.’ Name
the market in which the instruments with more than one
year maturity are traded. Also state any two features of
this market.
(b) In this market, funds are raised through both - debt and
equity i.e. equity shares, preference shares, bonds,
debentures etc. 1x2
=
(c) It includes Primary and Secondary market. 2 marks
=
(d) The participants in this market are financial institutions,
banks, corporate entities, foreign investors and ordinary
retail investors. 1+2
=
(e) Investment in this market does not necessarily require a 3 marks
huge financial outlay.
53
of higher duration of investing.
54
materials and adopt standardised process. They fix the
prices of their products with a reasonable profit margin.
But all of them are worried about the malpractices like
manufacturing sub-standard, duplicate and defective
goods by the fellow manufacturers. Therefore, they
decided to form an organisation with a constitution of its
own which is free from government interference. This
organisation would encourage consumers to strongly
protest and take action against unscrupulous,
exploitative and unfair trade practices of sellers.
State three other functions which may be performed by
this organisation in addition to those mentioned above.
(a) Authority.
55
(b) Responsibility. its explanation
=
- Responsibility refers to the obligation of a subordinate to 1x3
properly perform the assigned duty. =
3 marks
- It flows upwards.
(c) Accountability.
- It flows upwards.
OR
OR
56
of duties and duplication of effort.
Ans.
(a) Improving employee motivation
57
developed by planning.
SECTION C
18 16 14 Q. Nayar is working as P.G.T. Commerce in a CBSE
affiliated school of Kerala. One day he was teaching
about capital market in the class. He informed the class
that during 1980’s the capital market in India witnessed
a tremendous growth because of increasing participation
of the public. This ever increasing investors’ population
and market capitalisation led to a variety of malpractices
on the part of the companies, brokers, merchant
bankers, investment consultants and others involved in
the securities market. These malpractices and unfair
trading practices eroded investor confidence and
multiplied investors’ grievances. The Government of
India and the stock exchanges were helpless in
redressing the investors’ problems because of lack of
proper penalty provisions in the existing legislation. In
view of this the Government of India decided to set up a
regulatory body.
(a) Name the regulatory body which the Government of
India decided to set up.
(b) Also state any three objectives of the regulatory body
identified in part (a) above.
1 mark
Ans. (a) Regulatory body - SEBI (Securities and Exchange
Board of India)
58
(ii) To protect the rights and interests of investors,
particularly individual investors and to guide and educate
them.
1x3
(iii) To prevent trading malpractices and achieve a balance =
between self regulation and statutory regulation. 3 marks
59
Ans. (a) Sources of recruitment being used by Ganesh for
filling up the various job positions are: (Any two)
60
organizing function is ‘At what level are decisions
made’? Decision making authority in an organization
can be pushed down to the lower levels or it may lie with
the top management. However it is not an ‘either or’
concept.
When an organization grows in size or complexity, there
is tendency towards sharing decision making authority
with the lower levels. This is because in large
organizations, employees who are closely involved with
certain operations tend to have more knowledge about
them than the top management.
An important concept of organizing function is discussed
above. Identify the concept and state any three points of
its importance.
61
each level of management. The departments can be held
accountable for their results.
62
(e) Uncertainty 1x3
(f) Complexity =
(g) Relativity 3 marks
=
(If an examinee has given only the headings, ½ mark for (1+3)
each heading should be awarded) =
4 marks
19 15 18 Q. Jay is working as the Chief Executive Officer of a soft
drinks company. The company is doing its business in
collaboration with a soft drinks company of France.
Jay’s friend, Swami a teacher of Business Studies in a
reputed college was discussing the ‘Marketing’ chapter
with his students. He wanted clarity from Jay about the
factors which affect the marketing decisions. Jay
explained that there were a large number of factors
affecting marketing decisions which may be divided into
two categories:
(i) controllable factors, and (ii) non-controllable factors.
Jay further explained that controllable factors became
marketing tools that can be constantly shaped and
reshaped by marketing managers, to achieve marketing
success.
Identify and explain the set of marketing tools that can
be constantly shaped and reshaped by marketing
managers.
(i) Product
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quantity and at the right time so that the consumers can
purchase the same.
(iv) Promotion
OR OR
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(b) The employees may become lethargic if they are sure
of time bound promotions.
=
(c) A new enterprise cannot use internal sources of
recruitment. Also, all vacancies in any organsiation cannot
be filled through internal sources. 4 marks
SECTION D
20 21 20 Q. ‘Scientific Management means knowing exactly what
you want men to do and seeing that they do it in the best
and the cheapest way.’ Taylor developed various
techniques for application of Scientific Management
principles and was able to achieve a three-fold increase
in productivity in Bethlehem Steel Company, where he
worked. One of the techniques helps to determine the
number of workers to be employed; frame suitable
incentive schemes and labour costs. Another technique
recognises those workers who are able to
accomplish/exceed the fair day’s work and is based on
the premise that efficiency is the result of the joint efforts
of the managers and the workers.
Quoting the lines from the above paragraph, identify and
explain the two techniques of Scientific Management.
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+
§ In this plan, there are two piece rates – a higher piece rate
for those workers who produce the standard output or
more, and a lower one for those who produce less than =
the standard output. 2 ½ marks)
=
2½+2½
=
5 marks
21 20 21 Q. Matta Auto Ltd. is manufacturing different types of
commercial vehicles. Their sales were rupees two
hundred crores in the previous year. The company
decided to increase sales by 20% during the current
year. It conducted internal as well as external audits for
the same. Through internal audit, they analysed the
strengths and weaknesses of the business across all
departments. External audit focused on the opportunities
and the threats in the constantly changing business
environment. Thus, a comprehensive plan was prepared
taking into consideration the business environment and
the necessary resources were allocated to achieve the
target. The company directed its offices throughout the
country to follow the plan. The company’s commitment
to develop effective plans to achieve a consistent increase
in sales has ensured its continual growth over the past
one decade.
Identify and explain the two types of plans discussed
above. 1 mark for
identifying
Ans. The two types of plans discussed above are: each type
(a) Objectives of plan
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(b) Strategy (1 x 2)
=
2 marks
Objectives
+
§ Objectives are the ends, which the management seeks to
achieve.
§ Objectives needs to be expressed in specific terms that is 1 ½ marks
quantified and is to be achieved within a given time
period.
§ They are usually set by top management of the
organisation and focus on broad, general issues.
Strategy +
§ A strategy is a comprehensive plan for accomplishing an
organisation’s objectives taking business environment into
consideration.
§ It provides the broad contours of an organisations business
1 ½ marks
and defines the organisation’s direction and scope in the
long run.
§ It includes determining long term objectives, adopting a
particular course of action, and allocating resources
=
necessary to achieve the objectives.
1½+1½
=
3 marks
=
2+3
=
5 marks
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=
(iii) Directing is a continuous process. 1x4
=
(iv) Directing flows from top to bottom. 4 marks
=
1+4
=
5 marks
OR
OR
Ans. 1 mark
Training is the process by which the aptitudes, skills and
abilities of the employees to perform specific jobs are +
improved.
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electricians are often required to undergo such
programme.
SECTION E
24 24 23 Q. Chintamani is the Production Manager of ‘Global
India Ltd.’ manufacturing and exporting steel. During
the year 2017-18, the company could not meet its
production targets. The Chief Executive Officer of the
company constituted a committee of experts to find out
the reasons and give its recommendation so that the
production target could be met in the future. The
company analysed the production related records and
found out that there were problems due to
communication. ‘Global India Ltd.’ had rigid rules and
would insist on communication through prescribed
channels, which led to delays, the company also had a
number of managerial levels causing further delay and
distorted communication.
Moreover, the Production Manager, Chintamani, was
using a tone that quite often offended the sentiments of
the workers. Also, Chintamani and the workers did not
believe in each other and so could not understand each
other’s messages in the original sense.
(a) Identify and give the meaning of the types of
communication barriers discussed above.
(b) Quoting lines from the above, state two
communication barriers under each of the types
identified in part (a) because of which ‘Global India
Ltd.’ could not meet its production targets.
(c) State any two recommendations that might have been
given by the committee to improve communication
effectiveness.
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(ii) Psychological barrier = 1 mark)
(½ mark
Organisational barriers are barriers related to organisational for
structure, authority relationships, rules and regulations. explaning
each
Psychological barriers are concerned with the state of mind barrier
of both the sender and the receiver =
½ x2
=
1 mark)
Psychological barriers:
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+
(If an examinee has given only the heading, ½ mark for
each heading should be awarded)
71
(a) State the two financial decisions discussed in the
above situation.
(b) Explain any two factors affecting each of the
decisions that still have to be considered by the finance
manager.
(½ mark for
each
Factors affecting Investment decision: (any two) heading
+
(i) Cash flows of the project ½ mark for
explanation
(ii) The rate of return of the project =
1 x2
(iii) The investment criteria involved =
2 marks)
(iv) Financing alternatives
+
(If an examinee has not given the headings as above but (½ mark for
has given the correct explanation, full credit should be each
given) heading
+
Factors determining financing decision: (any two) ½ mark for
(i) Interest coverage ratio explanation
(ii) Debt service coverage Ratio =
(iii) Return on Investment 1 x2
(iv) Tax rate =
(v) Fixed operating costs 2 marks)
(vi) Flexibility =
(vii) Control 2+2+2
(viii) Regulatory framework =
(ix) Stock market conditions/ State of capital markets 6 marks
72
(x) Capital structure of other companies
Unity of command
Scalar chain
OR
OR
§ Taylor believed that there was only one best method to 2 marks
maximise efficiency.
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