-Strictly Confidential: (For Internal and Restricted Use Only)

Senior School Certificate Examination

March -----2024
Marking Scheme---Business Studies (054) 66/2/1
General Instructions:
1 You are aware that evaluation is the most important process in the actual and correct
assessment of the candidates. A small mistake 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.
2 “Evaluation policy is a confidential policy as it is related to the confidentiality of
the examinations conducted, Evaluation done and several other aspects. Its’
leakage to public in any manner could lead to derailment of the examination
system and affect the life and future of millions of candidates. Sharing this
policy/document to anyone, publishing in any magazine and printing in News
Paper/Website etc may invite action under various rules of the Board and IPC.”
3 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/or are
innovative, they may be assessed for their correctness otherwise and due marks be
awarded to them. In class -XII, while evaluating two competency based questions,
please try to understand given answer and even if reply is not from marking
scheme but correct competency is enumerated by the candidate due marks should
be awarded.
4 The Marking scheme carries only suggested value points for the answers
These are in the nature of Guidelines only and do not constitute the complete answer.
The students can have their own expression and if the expression is correct, the due
marks should be awarded accordingly.
5 The Head-Examiner must go through the first five answer books evaluated by each
evaluator on the first day, to ensure that evaluation has been carried out as per the
instructions given in the Marking Scheme. If there is any variation, the same should be
zero after deliberation and discussion. The remaining answer books meant for evaluation
shall be given only after ensuring that there is no significant variation in the marking of
individual evaluators.
6 Evaluators will mark( √ ) wherever answer is correct. For wrong answer CROSS ‘X” be
marked. Evaluators will not put right (✓)while evaluating which gives an impression
that answer is correct and no marks are awarded. This is most common mistake which
evaluators are committing.
7 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 totaled up and written in the
left-hand margin and encircled. This may be followed strictly.
8 If a question does not have any parts, marks must be awarded in the left-hand margin
and encircled. This may also be followed strictly.
9 If a student has attempted an extra question, answer of the question deserving more
marks should be retained and the other answer scored out with a note “Extra

1
 Question”.
10 No marks to be deducted for the cumulative effect of an error. It should be penalized
only once.
11 A full scale of marks 80 as given in Question Paper has to be used. Please do not
hesitate to award full marks if the answer deserves it.
12 Every examiner has to necessarily do evaluation work for full working hours i.e., 8
hours every day and evaluate 20 answer books per day in main subjects and 25 answer
books per day in other subjects (Details are given in Spot Guidelines). This is in view of
the reduced syllabus and number of questions in question paper.
13 Ensure that you do not make the following common types of errors committed by the
Examiner in the past:-
● Leaving answer or part thereof unassessed in an answer book.
● Giving more marks for an answer than assigned to it.
● Wrong totaling of marks awarded on an answer.
● Wrong transfer of marks from the inside pages of the answer book to the title page.
● Wrong question wise totaling on the title page.
● Wrong totaling of marks of the two columns on the title page.
● Wrong grand total.
● Marks in words and figures not tallying/not same.
● Wrong transfer of marks from the answer book to online award list.
● Answers marked as correct, but marks not awarded. (Ensure that the right tick mark
is correctly and clearly indicated. It should merely be a line. Same is with the X for
incorrect answer.)
● Half or a part of answer marked correct and the rest as wrong, but no marks
awarded.
14 While evaluating the answer books if the answer is found to be totally incorrect, it
should be marked as cross (X) and awarded zero (0)Marks
15 Any unassessed portion, non-carrying over of marks to the title page, or totaling error
detected by the candidate shall damage the prestige of all the personnel engaged in the
evaluation work as also of the Board. Hence, in order to uphold the prestige of all
concerned, it is again reiterated that the instructions be followed meticulously and
judiciously
16 The Examiners should acquaint themselves with the guidelines given in the “Guidelines
for spot Evaluation” before starting the actual evaluation.
17 Every Examiner shall also ensure that all the answers are evaluated, marks carried over
to the title page, correctly totaled and written in figures and words.
18 The candidates are entitled to obtain photocopy of the Answer Book on request on
payment of the prescribed processing fee. All Examiners/Additional Head
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

66 MARKING SCHEME– 2024

2
/2 Marks
/1 BUSINESS STUDIES - 054
66/2/1
EXPECTED ANSWERS / VALUE POINTS
1 Q. ‘Vishesh Constructions', a construction company, decided to
strictly implement 'No Helmet, No Entry’ and put the following sign
at their construction sites:

Identify the type of plan indicated by the above sign:

(A) Policy
(B) Rule
(C) Method
(D) Programme

Ans. (B) Rule 1 mark

2 Q. Akash Mehra is the Marketing Manager of 'Kedanta Enterprises'.

He gives orders and expects his subordinates to obey those orders.
Communication is only one-way with the subordinates only acting
according to the command given by him.
Identify the leadership style of Akash Mehra:
(A) Authoritative
(B) Participative
(C) Free-rein
(D) Pragmatic

Ans. (A) Authoritative 1 mark

3
3 Q. From the following, choose the incorrect statement about the
importance of 'Directing' function of management:
A) Directing helps to initiate action by people in the organization
towards attainment of desired objectives.
(B) Directing integrates employees' efforts in the organization in such
a way that every individual effort contributes to the organization's
performance.
(C) Directing facilitates introduction of needed changes in the
organization.
(D) Directing helps in estimating manpower requirements for the
organization.

Ans (D) Directing helps in estimating manpower requirements for the 1 mark
organization.

4 Q. __________is the process of searching for prospective employees

and stimulating them to apply for jobs in the organization.
(A) Training
(B) Selection
(C) Development
(D) Recruitment

Ans. (D) Recruitment 1 mark

5 Q. _________is the process of holding securities in an electronic form.

(A) Rolling Settlement
(B) Registration
(C) Dematerializațion
(D) Depository

Ans. (C) Dematerializațion 1 mark

6 Q. Sudha and Shweta were twin sisters. After completing their

education from college, they decided to start a business. As they were
Commerce students, they knew the importance of deciding in advance
'what to do' and 'how to do'. It was very challenging for them as this
decision was to guide all their future actions. While discussing the
same with their mother, they got a new idea of starting a 'Cloud
Kitchen'. Both the sisters were very excited to start this. The idea
took the shape of a concrete plan and within a month, they were

4
 successful in starting their 'Cloud Kitchen.'
Identify the point of importance of planning highlighted in the above
case:
(A) Planning reduces the risk of uncertainty.
(B) Planning promotes innovative ideas.
(C) Planning establishes standards for controlling.
(D) Planning reduces overlapping and wasteful activities.

Ans. (B) Planning promotes innovative ideas. 1 mark

7 Q. Match the Marketing Management philosophies given in Column I

with their main focus given in Column II:

Column I Column II

1. Production concept i) Customers’ needs

2. Product concept ii) Quality, performance and

features of product.
3. Marketing concept iii) Customers’ needs and
societal well-being.
4. Societal Marketing iv) Quantity of product
concept
Choose the correct option from the following:

(A) 1-(i), 2-(ii), 3-(iii), 4-(iv)

(B) 1-(ii), 2-(iii), 3-(i), 4-(iv)
(C)1-(iv), 2-(ii), 3-(i), 4-(iii)
(D) 1-(ii), 2-(iv), 3-(i), 4-(iii)

Ans. (C)1-(iv), 2-(ii), 3-(i), 4-(iii) 1 mark

8 Q. Read the following statements: Assertion (A) and Reason (R).

Choose the correct alternative from those given below:
Assertion (A): Decentralization is an optional policy decision.
Reason (R): It is done at the discretion of the top management.
Alternatives:
(A) Both Assertion (A) and Reason (R) are true and Reason (R) is the
correct explanation of Assertion (A).
(B) Both Assertion (A) and Reason (R) are true, but Reason (R) is not

5
 the correct explanation of Assertion (A).
(C) Assertion (A) is true, but Reason (R) is false.
(D) Assertion (A) is false, but Reason (R) is true.

Ans. (A) Both Assertion (A) and Reason (R) are true and Reason (R) is
the correct explanation of Assertion (A). 1 mark

9 Q. Sushant was an able Project Manager at 'Keiro Ltd.' Sushant's

Head, Naveen handed over a new project to Sushant. Sushant already
had enough work in hand. So, Sushant decided to divide the work
assigned to him, among three of his subordinates. He himself kept
that part of the work which he himself could perform effectively and
got his subordinates to help him with what remained. The project got
completed well in time because of this. The concept of management
used by Sushant to complete the project was:
(A) Delegation
(B) Decentralization
(C) Accountability
(D) Authority

Ans. (A) Delegation 1 mark

10 Q. ‘Lack of confidence of superior in his subordinates' is one of the

barriers of communication. Identify the communication barrier:
(A) Personal barrier
(B) Psychological barrier
(C) Semantic barrier
(D) Organizational barrier

Ans. (A) Personal barrier 1 mark

11 Q. 'A public issue of equity may reduce the management holding in

the company and make it vulnerable to takeover. This factor also
influences the choice between debt and equity, especially in
companies in which the current holding of management is on a lower
side.'
The factor affecting choice of capital structure discussed in the above
case is:
(A) Flexibility
(B) Cost of debt

6
 (C) Cost of equity
(D) Control

Ans. (D) Control 1 mark

12 Q. Statement I: Controlling ensures that activities in an organization

are performed as per the plans.
Statement II: Controlling function of a manager is a pervasive
function.
Choose the correct option from the options given below:
(A) Statement I is true and Statement II is false.
(B) Statement II is true and Statement I is false.
(C) Both the Statements are true.
(D) Both the Statements are false.

Ans (C) Both the Statements are true. 1 mark

13 Q. 'Lens-o' was started as an online eyewear company selling glasses

and contact lenses on their website. Recently, it set up a uniquely
designed offline store, so that customers can also buy their products
from the company showroom.
Which channel of distribution is used by the company:
(A)Zero level channel
(B) One level channel
(C) Two level channel
(D) Three level channel

Ans. (A) Zero level channel 1 mark

14 Q. Sunita opened her travel agency named 'Sunita Travels' in July,

2023. She created separate departments for reservations, hotel
bookings, online queries and payment handling. Which organisation
structure is used by Sunita:
(A) Functional structure
(B) Divisional structure
(C) Informal structure
(D) Vertical structure

Ans. (A) Functional structure 1 mark

15 Q. ‘JKSD India Ltd.' recently introduced a new range of 'fresh from

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 kitchen' jams, ketchups, salad dressings and peanut butter, etc. They
appointed salespersons to contact prospective customers in leading
malls to create awareness about their products and develop product
preferences with the aim of making sales.
Which tool of promotion is being used by 'JKSD India Ltd.' to
market its products:
(A) Advertising
(B) Personal Selling
(C) Sales Promotion
(D) Public Relations
1 mark
Ans. (B) Personal Selling

16 Q. The selection tests which are used to measure individual's

potential for learning new skills are called:
(A) Aptitude Tests
(B) Intelligence Tests
(C) Personality Tests
(D) Interest Tests

Ans. (A) Aptitude Tests 1 mark

17 Q. Financial market allocates or directs funds available for

investment into the most productive investment opportunity. In doing
so, it performs the __________function.
(A) Creative
(B) Exchange
(C) Allocative
(D) Productive

Ans. (C) Allocative 1 mark

18 Q. A name, term, symbol, design, or some combination of these, used

to identify the products, goods or services of one seller or group of
sellers and to differentiate them from those of the competitors is
known as:
(A)Brand
(B) Trade Mark
(C) Brand Name
(D) Brand Mark

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 Ans. (A) Brand 1 mark

19 Q. ‘Increase in profit earned by equity shareholders due to the

presence of fixed financial charges like interest' is referred to as:
(A) Capital structure
(B) Financing decision
(C) Return on Investment
(D) Trading on equity

Ans. (D) Trading on equity 1 mark

20 Q. Which of the following is not a feature of marketing:

(A) Needs and wants
(B) Storage and warehousing
(C) Customer value
(D) Creating a market offering

Ans. (B) Storage and warehousing 1 mark

21 Q. Piyush is the Production Manager of a shoe company called

'Comforty'. He has 1000 workers working under him in his
department. Piyush booked a special order for 300 pairs of gents
shoes at an estimated cost price of ₹500 per pair plus 20% profit
margin. The order is to be completed within 10 days. Áfter
completion of the order, Piyush found out that the production cost of
one pair of shoes was ₹600. He tried to find out the reason, but he
couldn't. He reported it to the Chief Executive Officer. The Chief
Executive Officer appointed Abhay to find out the cause. Abhay was
not only a specialized Cost Accountant, but also a qualified Human
Resource Manager. After two days, Abhay reported that the set
targets could be completed with the help of only 800 workers, which
revealed that there was overmanning in the organisation. The
organization was not utilizing the human resources optimally, which
had led to higher labour cost.
The above case highlights one of the points of importance of an
important function of management.
(i)Identify the function of management.

9
 (ii) State any two points of importance of the function of management
identified in part (i), except the one discussed in the above case.
Ans. (i) Controlling 1 mark
(ii) Importance of controlling: (Any two)
(a) It ensures order and discipline among employees by keeping a close
1x2
check on their activities.
(b) It improves employee motivation as the employees’ know well in =
advance the standards of performance on the basis of which they will be
appraised. 2 marks
(c) It facilitates coordination in action as each department in governed by
pre-determined standards which are well coordinated with one another.
(If an examinee has only listed the underlined points, ½ mark for each
point should be awarded) 1+2

=
3 marks

22 Q. (a) Explain any three points of importance of ‘Controlling’

function of management.
½ mark
Ans. (a) Importance of Controlling : (Any three with explanation)
for
(i) Accomplishing organisational goals. heading +
(ii) Making efficient use of resources. ½ mark
(iii) Ensuring order and discipline. for
explanati
(iv) Improving employee motivation.
on
(v) Judging accuracy of standards. =
(vi) Facilitating coordination in action.
(If an examinee has not given the heading as above but has given the 1x3
correct explanation, full credit should be given.)
=3 marks
OR OR

(b) Explain the relationship between ‘Planning' and 'Controlling’

functions of management with the help of any three points.
Ans.(b) Relationship between Planning and Controlling : (Any three)
Planning and controlling are inseparable twins of management
1. Planning without controlling is meaningless and Controlling is

10
 blind without planning.
Once a plan becomes operational, controlling is necessary to monitor the
1x3
progress, measure it, discover deviations and initiate corrective measures =
to ensure that events conform to plans. So, Planning without controlling is 3 marks
meaningless. A system of control presupposes the existence of certain
standards which are provided by planning. Therefore, controlling is blind
without planning
2. Planning is a prerequisite for controlling while controlling seeks to
compel events to conform to plans.
Without planning there is no predetermined understanding of the desired
performance while controlling seeks to compel events to conform to plans
3. Planning is prescriptive while controlling is evaluative.
Planning is basically an intellectual process involving thinking,
articulation and analysis to discover and prescribe an appropriate course
of action for achieving objectives. Controlling, on the other hand, checks
whether decisions have been translated into desired action.
4. Planning is forward-looking while controlling is looking back.
Planning involves looking ahead as plans are prepared for future and are
based on forecasts about future conditions. On the contrary, controlling is
like a postmortem of past activities to find out deviations from the
standards. In that sense, controlling is looking back.
5. Controlling is forward-looking while planning is looking back.
The corrective action in controlling seeks to improve the performance in
the future or to revise future plans. So, controlling is also forward looking.
However, planning is guided by past experiences and the corrective action
initiated by control function aims to improve future performance. Thus,
planning is also looking back.
23 Q. a) State any three 'regulatory functions' of Securities and
Exchange Board of India.

Ans(a). Regulatory functions of SEBI: (Any three)

1. Registration of brokers and sub-brokers and other players in the market.

2. Registration of collective investment schemes and Mutual Funds.

3. Regulation of stock brokers, portfolio exchanges, underwriters and

11
 merchant bankers and the business in stock exchanges and any other
securities market. 1x3

4. Regulation of takeover bids by companies. =

5. Calling for information by undertaking inspection, conducting enquiries
and audits of stock exchanges and intermediaries.

6. Levying fee or other charges for carrying out the purposes of the Act.

7. Performing and exercising such power under Securities Contracts

3 marks
(Regulation) Act 1956, as may be delegated by the Government of India.

OR OR

(b) State any three objectives of Securities and Exchange Board of

India.

Ans (b). Objectives of SEBI: (Any three)

1. To regulate stock exchanges and the securities industry to promote their

orderly functioning.

2. To protect the rights and interests of investors, particularly individual

investors and to guide and educate them.

3. To prevent trading malpractices and achieve a balance between self- 1x3

regulation by the securities industry and its statutory regulation.

4. To regulate and develop a code of conduct and fair practices by =3 marks

intermediaries like brokers, merchant bankers etc., with a view to making
them competitive and professional.

24 Q. After studying Entrepreneurship in Class XII, Neel completed a

baking course and started a bakery, 'Cakes and Bakes'. He set a
target of earning a modest 10% return on investment in the first year.
As he was supplying healthy bakery products, the demand kept
increasing. 'Cakes and Bakes' became a famous bakery in a year. He
now wanted to develop a plan to define the direction and scope of
'Cakes and Bakes' for the long run. He made a marketing plan to

12
 decide if he could charge higher price to improve his return on
investment, how to advertise the products, etc.
Quoting lines from the above paragraph, identify and explain two
types of plans discussed in the above case.
Ans. Two types of plans are:
i) Objective ½ mark
‘He set a target of earning a modest 10% return on investment in the first for
quoting+
year.’ ½ mark
An objective is the end which the management seeks to achieve. for
An objective need to be expressed in specific terms and is to be achieved identifyin
within a given time period g+ ½
mark for
ii) Strategy
explainin
‘He now wanted to develop a plan to define the direction and scope of g
‘Cakes and Bakes’ for the long run.’ =
A strategy is a comprehensive plan for accomplishing an organisation’s 1 ½ x2
=
objectives. Whenever a strategy is formulated, the business environment
3 marks
needs to be taken into consideration.

25 Q. 'Inaya Ltd.' is a multinational technology company focusing on

artificial intelligence, online advertising and search engine
technology. The company is generating good profits and takes care of
the well-being of its staff.
The company offers benefits like car allowance, medical aid and
allowance for children's education to all employees above the
Manager's level. It regularly contributes towards the Employees'
Provident Fund and pays gratuity on retirement to its employees.
Under a special incentive scheme, the employees are offered shares of
'Inaya Ltd.' at a set price which is lower than the market price. Each
year, the company keeps aside funds to pay one percent of base salary
as bonus to its employees. No wonder 90% of the employees would
recommend working at 'Inaya Ltd.' to a friend.
Explain four incentives being provided by 'Inaya Ltd.' to motivate
their employees for better performance.
Ans. Incentives provided by ‘Inaya Ltd.’ to motivate their employees for
½ mark
better performance are: for
(i) Perquisites: heading
13
 Perquisites such as car allowance, housing and medical aid etc., are and ½
mark for
offered to employees over and above the salary to provide motivation to
explanati
them. on
(ii) Retirement benefits:
Retirement benefits such as provident fund, pension and gratuity, which 1x4
provide financial security to employees after their retirement, act as an
incentive when they are in service in the organisation.
(iii) Stock option/Co-partnership
Co-partnership/stock option is an incentive in which employees are =
offered company shares at a set price, which is lower than market price, to 4 marks
create a feeling of ownership and make them contribute for the growth of
the organisation.
(iv) Bonus:
Bonus is an incentive offered over and above the wages/salaries to the
employees for higher performance.

(If an examinee has not given the headings as above but has given the
correct explanation, full credit should be given.)

26 Q. (a) Explain ‘Vestibule Training' and 'Apprenticeship Programme’

as methods of training.

Ans. Vestibule Training

 Employees learn their jobs on the equipment they will be using, but
the training is conducted away from the actual work floor.
 Actual work environments are created in a class room and this is
usually done when employees are required to handle sophisticated 2 marks
machines and equipment.
+
Apprenticeship Programme 2 marks
 Apprenticeship programmes put the trainee under the guidance of a
master worker. These are designed to acquire a higher level of skill. = 4 marks
 A uniform period of training is offered to trainees, in which both
fast and slow learn here, are placed together. Slow learners may
require additional training.

OR

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 (b) State any four advantages of internal sources of recruitment.

Ans(b). Advantages of internal sources of recruitment: (Any four)

(i) Employees are motivated to improve their performance as a

promotion at a higher level may lead to a chain of promotion at
lower levels in the organisation.
(ii) Internal recruitment also simplifies the process of selection and
placement as the candidates are already known to the
organization.
(iii) People recruited from within the organisation do not need
induction training.
(iv) Transfer has the benefit of shifting workforce from the surplus
departments to those where there is shortage of staff.
(v) Filling of jobs internally is cheaper as compared to getting 1x4
candidates from external sources.
(If an examinee has only listed the underlined points, ½ mark =4 marks
for each point should be awarded)

27 Q 27. (a) Explain the following factors affecting the requirements of

fired capital:
(i) Scale of operations
(ii) Financing alternatives
Ans. (i) Scale of operations
A larger organisation operating at a higher scale needs bigger plant,
more space etc. and therefore, requires higher investment in fixed
assets when compared with the small organisation. 2 marks
(ii) Financing Alternatives
Availability of leasing facilities, may reduce the funds required to
2 marks
be invested in fixed assets, thereby reducing the fixed capital
requirements. When an asset is taken on lease, the firm pays lease =2+2
rentals and uses it. By doing so, it avoids huge sums required to
purchase it. =4 marks

OR OR

(b) Explain the following factors affecting dividend decision:

(i) Cash flow position

15
 (ii) Growth Opportunities

Ans(b). (i) Cash flow position 2 marks

The payment of dividend involves an outflow of cash. A company may be
earning profit but may be short on cash. Availability of enough cash in the
company is necessary for declaration of dividend.

(ii) Growth opportunities

Companies having good growth opportunities retain more money out of

2 marks
their earnings to finance the required investment. The dividend in growth
companies is, therefore, smaller, than that in the non-growth companies. =
2+2=
4 marks
28 Q. Distinguish between Primary Market and Secondary Market on
any four bases.

Ans. Difference between Primary Market and Secondary Market: (Any

four)
Primary Market Secondary Market
i It involves sale of There is trading of
securities by new existing shares only.
companies or new issue
of securities by existing
company to investors.
ii Securities are sold Ownership of securities is
by the company to the exchanged
investors directly. between investors.
ii It directly promotes It indirectly promotes
i capital formation. capital formation.
iv Only buying of Both the buying and
securities takes place. selling of securities takes 1x4
place.
v Prices are determined and Prices are determined by =
decided by the demand and supply for
management of the the security.
company.
vi There is no fixed Located at specified
geographical location. places. 4 marks

29 Q. Ashwin was a fashion designer. On losing his job, he decided to sell

16
 the designer clothes online under the brand name 'Kogue. The
garments were made of good quality fabric with intricate designs and
skilled craftsmanship, making them expensive to produce. Realizing
that the online market is very competitive, he decided to charge a
reasonable price for the garments. The price would cover the cost of
production and sale of garments as well as give him 10% margin over
and above the cost.
Identify and explain two factors affecting the price determination
discussed in the above case.
Ans. Following are the two factors affecting the price determination:
(i) Product cost
½ mark
The cost sets the minimum level or the floor price at which the for
product may be sold. Generally, all marketing firms strive to cover identifyin
all their costs, at least in the long run. In addition, they aim at g+1½
mark for
earning a margin of profit over and above the costs.
explanati
(ii) Extent of competition in the market on
The price will tend to reach the upper limit in case there is lesser =
degree of competition while under conditions of free competition,
the price will tend to be set at the lowest level. Competitors’ prices, 2+2
=
their anticipated reactions, quality and features of the competitive 4 marks
products must be considered before fixing the price of a product.

30 Q. ‘VBR Cinema', an Indian multiplex cinema hall was the first to

recognize the change in consumption habits of people. It changed ita
food menu from burgers, pizza, soft drinks, etc. and switched over to
healthier options like salads and smoothies, soups and anjeer-based
sweets. Within a month, the revenue of the multiplex from sale of
food items doubled. 'VBR Cinema', by continuously monitoring the
environment and adopting suitable business practices, was able to
improve its revenues and profits and was hopeful that it will continue
to succeed in the market in the long run too.
Identify and explain one dimension of business environment and one
point of importance of understanding the business environment
highlighted in the above case.
Ans. Dimension of Business Environment- 1 mark
Social Environment- for
identifyin
The social environment of business includes the social forces like customs
g
17
 and traditions, values, social trends, society’s expectations from business, dimensio
n
etc.
+
1 mark
for
explanati
on
=
2marks

1 mark
Importance of understanding the business environment highlighted above- for
identifyin
It helps to improve performance- g
The enterprises that continuously monitor their environment and adopt importan
suitable business practices are the ones which not only improve their ce+ 1
present performance but also continue to succeed in the market for a mark for
explanati
longer period. on=2
marks
=2x2
= 4 marks

31 Q. Nalini has an online flower and gifts retail business. She has eight
outlets in four cities of India. From November to February, during
the wedding season, the demand shoots up. She coordinates the
efforts of her staff in a conscious and deliberate manner and plans for
the wedding season demand in the month of June itself. She ensures
that there is adequate workforce and continuously monitors whether
work is proceeding according to plans. She also briefs the marketing
department in time to prepare their promotional and advertising
campaigns. Thus, her coordination with all departments of the
organization begins at the planning stage and continues till
controlling. This acts as a binding force between the departments and
ensures that all action is aimed at achieving organizational goals. As a
result, Nalini is able to give a common focus to group effort to ensure
that the business is performing as planned, year after year.
Quoting lines from the above paragraph, identify and explain four
features of an important concept of management highlighted in the

18
 above case.
Ans. Features of coordination :
½ mark
(i)Coordination is a deliberate function. for
‘She coordinates the efforts of her staff in a conscious and deliberate quote+ ½
manner and plans for the wedding season demand in the month of June mark for
heading+
itself.’
½ mark
A manager has to coordinate the efforts of different people in a conscious for
and deliberate manner. explanati
(ii) Coordination is a continuous process. on
‘Thus, her coordination with all departments of the organization begins at =
1 ½ x4
the planning stage and continues till controlling.’
Coordination is not a one-time function but a continuous process which = 6 marks
begins at the planning stage and continues till controlling.
(iii) Coordination ensures unity of action
‘This acts as a binding force between the departments and ensures that all
action is aimed at achieving organizational goals.’
The purpose of coordination is to secure unity of action in the realisation
of a common purpose.
(iv) Coordination integrates group efforts
‘Nalini is able to give a common focus to group effort to ensure that the
business is performing as planned, year after year.’
Coordination unifies unrelated or diverse interests into purposeful work
activity.

(If an examinee has given the correct statement without giving the
headings, full marks for each statement is to be awarded)

32 Q.a) Explain the following principles of Scientific Management:

(i) Science, Not Rule of Thumb
(ii) Harmony, Not Discord
(iii) Development of Each and Every Person to His or Her Greatest
Efficiency and Prosperity

Ans.(a) (i) Science, Not Rule of Thumb

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 •It states that there is only one best method to maximise efficiency. This 2 marks
method can be developed through scientific study and analysis of each
element of a job and should substitute ‘Rule of Thumb’.
•The standard method should be followed throughout the organisation.
(ii) Harmony, Not Discord
2 marks
•This principle emphasizes that there should be complete harmony
between management and workers. This requires ‘Mental revolution’ on
the part of both management and workers.
• Both management and the workers should transform their thinking.
Management should share gains of the company if any with the workers
and workers should work hard and be willing to embrace change for the
good of the company.
(iii) Development of Each and Every Person to His and Her Greatest
Efficiency and Prosperity
 This principle is concerned with efficiency of employees which
could be built in right from the process of employee selection. 2 marks
 The work assigned to employees should suit their capabilities. They
should be given the required training to increase their efficiency. =2+2+2
Efficient employees would produce more and earn more. This will =
ensure their greatest efficiency and prosperity for both the 6 marks
company and the workers.

OR
OR
(b) Explain the following points of significance of principles of
management:
(i) Providing managers with useful insights into reality
(ii) Scientific decisions
(iii) Fulfilling social responsibility
Ans. (b) (i) Providing managers with useful insights into reality
 Principles of management provide useful insights into reality by
2 marks
enabling the managers to learn from past mistakes and conserve
time by solving recurring problems quickly.
 Adherence to the principles will add to their knowledge, ability
and understanding of managerial situations and circumstances.

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 (ii) Scientific decisions
 Principles of management help in taking scientific decisions
2 marks
because the decisions based on principles are free from bias.
 They are based on the objective assessment of the situation
(iii) Fulfilling social responsibility
2 marks
 The increased awareness of the public forces businesses to fulfil
their social responsibilities. =2+2+2
 Management theory and principles have also evolved in response
to these demands. = 6 marks

33 Q(a). Differentiate between 'Formal Organization' and 'Informal

Organization' on any six bases.
Ans. (a) Difference between Formal Organisation and Informal
Organisation (Any six)
Basis Formal Informal Organisation
Organisation
i It is a structure of It is a network of social
Meaning authority relation-ships arising out of
relationships created interac-tion among
by management employees.
ii It arises as a result of It arises as a result of social
Origin company rules and interaction.
policies
1x6
iii It arises out of It arises out of personal
=
Authority postion in manage- qualities.
6 marks
ment..
iv It is directed by rules There is no set behaviour
Behaviour pattern.
v It is rigid in nature. It is flexible in nature.
Nature
vi Managers are leaders Leaders may or not be
Leadership managers. They are selec-
ted by the group.
vii Communication Flow of communication is
Flow takes place through not through a planned
of the scalar chain route.
communicatio It can take place in any
n direction.

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 OR OR

(b) Explain any four points of importance of Planning function of

management.
Ans. (b) Importance of Planning function of management: (Any four
with explanation)
½ mark
(i) Planning provides direction. for
(ii) Planning reduces the risk of uncertainty. heading
(iii) Planning reduces overlapping and wasteful activities. +
(iv) Planning promotes innovative ideas. 1 mark
(v) Planning facilitates decision making. for
(vi) Planning establishes standards for controlling explanati
on
(If the examinee has not given the heading as above but has given the =
correct explanation, full credit should be given) 1 1/2x4
=
6 marks

34 Q. Ashish wanted to purchase one LCD TV for his home. He decided

to go to various stores selling electronic items to check the available
varieties of different brands. One of his friends took him to a
manufacturer selling LCD TV at almost half the price. The
manufacturer described its various features and insisted that Ashish
buys the LCD TV from him. Seeing the features, Ashish decided to
buy the TV from him, even when the TV was not having any
standardisation mark on it. When Ashish asked for the cash memo,
the manufacturer discouraged him, saying that it will attract
additional tax. He further told Ashish not to worry and promised that
if there would be any problem with the TV, he would replace it
immediately. The TV started malfunctioning within a month and
Ashish asked for its replacement. The manufacturer refused to
replace the LCD TV, telling him that the problem is due to
mishandling of the TV. Ashish decided to file a complaint in the
Consumer Court against the manufacturer.
(i) Identify and explain two consumer rights discussed in the above
case.
(ii) State two consumer responsibilities that Ashish did not fulfil while
buying the LCD TV.

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Ans. (i) Consumer Rights (Any two) 1 mark
 Right to choose/Right to be assured- for
The consumer has the freedom to access variety of products at identifyin
competitive prices. This implies that the marketers should offer a g+1
wide variety of products in terms of quality, brand, prices, size, mark for
etc. and allow the consumer to make a choice from amongst explanati
these. on
 Right to be heard-
The consumer has a right to file a complaint and to be heard in =2x2
case of dissatisfaction with a good or a service. It is because of = 4 marks
this reason that many enlightened business firms have set up their
own consumer service and grievance cells.
 Right to safety-
The consumer has a right to be protected against goods and 1x2
services which are hazardous to life, health and property. Thus, =2
consumers are educated that they should use electrical appliances marks
which are ISI marked as this would be an assurance of such
products meeting quality specifications.
(ii) Consumer responsibilities not fulfilled by Ashish (Any two)
 Buy only standardised goods as they provide quality
assurance. 4+2
 Ask for a cash memo on purchase of goods or services. =6 marks
 Be honest in your dealings.

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