CBSE Class 12 – Business Studies Question Paper 2023
1. Coordination integrates the efforts of different departments and at different levels. Identify the characteristic of coordination highlighted in the above statement.
(a) Coordination ensures unity of action.
(b) Coordination is an all-pervasive function.
(c) Coordination is a deliberate function.
(d) Coordination is the responsibility of all managers.
Answer: (a) Coordination ensures unity of action.
2. Which of the following are the examples of Legal Environment?
(i) Advertisement of alcoholic beverages is prohibited
(ii) Decrease in interest rate on loans
(iii) Increase in demand for organic foods
(iv) Digilockers for storing documents
(v) In 1993, the Supreme Court passed an order to close the iron foundries around Taj Mahal at Agra
Answer: (i) and (v)
3. ______ refers to retention of decision-making authority by higher management levels.
(a) Decentralisation
(b) Departmentalisation
(c) Span of Control
(d) Centralisation
Answer: (d) Centralisation
4. Umang was working as a ‘Production Manager’ at ‘LG Papers Ltd.’ The company had launched new eco-friendly paper straws in the market. He was given a target of producing 5,000 straws a day, by the General Manager. In spite of making the employees work overtime, Umang could not meet the target.
On investigation, it was found that the employees had not received the right training to manufacture these eco-friendly paper straws. So the employees were sent for special training.
The function of management which helped Umang in identifying that he could not meet the target is:
(a) Planning
(b) Organising
(c) Directing
(d) Controlling
Answer: (d) Controlling
5. Statement I: Management is multi-dimensional.
Statement II: The activities involved in managing an enterprise are common to all organisations whether economic, social or political.
Choose the correct option from the options given below:
(a) Statement I is true and II is false.
(b) Statement II is true and I is false.
(c) Both the statements are false.
(d) Both the statements are true.
Answer: (d) Both the statements are true.
6. Which of the following is not a step in the process of the ‘Controlling function of management?
(a) Setting performance standards
(b) Assignment of duties
(c) Taking corrective action
(d) Comparing actual performance with standards
Answer: (b) Assignment of duties
7. ______ as an element of the marketing mix includes the activities that make the firm’s products available to the target customers.
(a) Promotion
(b) Place
(c) Product
(d) Price
Answer: (b) Place
8. The process of defining and grouping the activities of the enterprise and establishing authority relationship among them is:
(a) Directing
(b) Staffing
(c) Management
(d) Organising
Answer: (d) Organising
9. Sangeeta visited ‘Smile Dental Clinic’ for treatment of toothache. She observed that the receptionist was seated at the reception desk, the place fixed for her. Dental instruments were laid neatly in dental instrument trays and the used instruments were placed in the sterilisation area. There was a fixed place for everything and it was present there. There was no hindrance in the work of the dentist and she was working with her maximum efficiency.
The principle of management followed at the ‘Smile Dental Clinic’ was:
(a) Equity
(b) Discipline
(c) Order
(d) Initiative
Answer: (c) Order
10. Match the various characteristics of Business environment given in Column I with their respective explanations in Column II:
Column I
A. Dynamic nature
B. Complexity
C. Relativity
Column II
(i) Environment is a phenomenon that is relatively easier to understand in parts but difficult to grasp in its totality.
(ii) Business environment differs from country to country and even region to region.
(iii) Business environment keeps on changing, whether in terms of technological improvement or shifts in consumer preferences.
Answer: (d) A-(iii), B-(ii), C-(i)
11. ‘Management has its own vocabulary of terms and concepts. Managers need to communicate with one another with the help of a common vocabulary for the better understanding of their work situation.’
Which characteristic of ‘Management as a Science’ is highlighted in the above statement?
(a) Principles based on experimentation
(b) Systematised body of knowledge
(c) Universal validity
(d) Personalised application
Answer: (b) Systematised body of knowledge
12. ‘Alfanzo Ltd.’ is achieving all its objectives in an effective and efficient manner. It is earning enough revenue to cover costs and the risks of the business. Now the company wants to increase the sales volume, the capital investment, the number of employees and the number of products also. By doing this, the management wants to achieve its following objective:
(a) Survival
(b) Profit
(c) Personal
(d) Growth
Answer: (d) Growth
13. During the Covid-19 pandemic, the restaurant industry faced many challenges. The slowdown led to a huge decrease in demand. From April 2022, the effect of Covid started reducing. The economy started picking up and a boom was noticed in the restaurant industry. As a result, a larger amount of working capital was required with increased production and sales.
The factor affecting the working capital requirement discussed above is:
(a) Seasonal factor
(b) Production cycle
(c) Operating efficiency
(d) Business cycle
Answer: (d) Business cycle
14. Adapting to a change in consumer preference towards online shopping, Fast-Service’ started a grocery delivery app. It is a platform that ensures 10-minute deliveries of groceries. Because of this service, ‘Fast-Service’ earned huge profit within a year. It planned to expand its operations and decided to raise funds by directly issuing its securities to investors. The market through which ‘Fast-Service’ has decided to raise funds for its expansion is:
(a) Money market
(b) Primary market
(c) Secondary market
(d) Both Primary and Secondary markets
Answer: (b) Primary market
15. ‘Capital Market instruments are riskier both with respect to returns and principal repayment as compared to Money Market instruments.’
This highlights the following point of difference between ‘Capital Market’ and ‘Money Market’:
(a) Instruments
(b) Duration
(c) Safety
(d) Liquidity
Answer: (c) Safety
16. Which of the following statements does not highlight the importance of financial planning?
(a) Detailed plans of action prepared under financial planning increase waste, duplication of efforts, and gaps in planning.
(b) It helps in forecasting what may happen in the future under different business situations.
(c) It provides a link between investment and financing decisions on a continuous basis.
(d) It helps in avoiding business shocks and surprises and helps the company in preparing for the future.
Answer: (a) Detailed plans of action prepared under financial planning increase waste, duplication of efforts, and gaps in planning.
17. ‘Roma Ltd.’ identified the needs of the customers for the successful marketing of their products. This was important for making an analysis of the available opportunities, threats, weaknesses, and strengths of the organisation and help in deciding what opportunities can best be pursued by it.
By doing so, which of the following functions of marketing is being performed by ‘Roma Ltd.’?
(a) Standardisation and grading
(b) Product designing and development
(c) Marketing planning
(d) Gathering and analysing market information
Answer: (d) Gathering and analysing market information
The symbol which appears on all the ‘Elegant’ cars and which is not
utterable is known as its :
(a)
Brand
(c)
Brand mark
(b) Brand name
(d) Trade mark
Answer:(c) Brand mark.
19. ‘A good physical distribution system should provide for an accurate and speedy processing of orders in the absence of which goods will reach the customers late or in the wrong quantity.’
The component of physical distribution highlighted above is:
(a) Warehousing
(b) Order Processing
(c) Transportation
(d) Inventory Control
Answer: (b) Order Processing
20. ______ involves a variety of programmes designed to promote or protect a company’s image and its individual products in the eyes of the public.
(a) Personal selling
(b) Public relations
(c) Sales promotion
(d) Advertising
Answer: (b) Public relations
21. Hitesh is the Chief Executive Officer of ‘Kids Garments Ltd.’ Due to the festive season, Hitesh got an additional order of 10,000 garments which he had to supply within two days. Due to his goodwill in the market, he did not want to lose the order. So, he decided to achieve the target by operating on double shifts. He achieved the target and supplied the order within two days. But due to double shifts, his cost of production was higher than the regular production cost.
Identify and give the meaning of the two concepts of management discussed in the above para.
Answer:
- Concept 1: Delegation (The act of assigning tasks to others to achieve the target within a specified time frame)
- Concept 2: Cost Control (Managing production costs and aiming to minimize the cost despite the decision to operate at double shifts)
22. ‘The attitudes, skills, and abilities of employees to perform specific jobs are increased by adopting a specific process.’ This process benefits the organization in many ways.
State any three benefits of this process to the organization.
Answer:
- Improved employee performance: Employees gain the necessary skills and knowledge to perform their tasks efficiently.
- Increased productivity: With improved skills, employees can work faster and more accurately, leading to higher productivity.
- Higher employee satisfaction: Employees who receive training feel more confident and satisfied in their roles, leading to better morale.
23. (a) Name the process of holding securities in an electronic form.
Answer: Dematerialization
(ii) Name any two participants of Money Market.
Answer:
- Commercial Banks
- Treasury Bills
(iii) Name the depositories that hold securities in electronic form.
Answer:
- National Securities Depository Limited (NSDL)
- Central Depository Services Limited (CDSL)
OR
(b) State any three factors affecting the dividend decision.
Answer:
- Profitability: Companies with higher profits are more likely to pay dividends.
- Cash Flow Position: A good cash flow ensures the company has enough liquidity to pay dividends.
- Growth Opportunities: Companies with strong growth prospects may reinvest profits instead of paying dividends.
24. (a) Explain the following as points of importance of the “Controlling” function of management:
(i) Judging accuracy of standards
Answer:
- Judging accuracy of standards: The controlling function ensures that the set standards are realistic and achievable. By comparing actual performance with standards, managers can identify discrepancies and make necessary adjustments to improve performance.
(ii) Making efficient use of resources
Answer:
- Making efficient use of resources: Through effective control, management ensures that resources are used optimally. This helps in reducing waste, improving productivity, and increasing profitability.
OR
Explain the relationship between ‘Planning’ and ‘Controlling’ with the help of any three points.
Answer:
- Planning sets standards: Planning involves setting performance standards, and controlling measures actual performance against these standards.
- Controlling ensures adherence to the plan: Through the controlling function, deviations from the plan are identified and corrective actions are taken, ensuring that the objectives set in the planning phase are met.
- Continuous feedback loop: Planning is the basis for action, and controlling provides continuous feedback to ensure that the plan is being executed effectively. If necessary, adjustments are made to the plan based on the feedback.
25. Nitya is a student of class XII of a well-known school. She has a preconceived notion that her teacher always finds fault in her work. One day while checking the project work of class XII, her teacher wanted to appreciate Nitya for her hard work and good performance, but before she could complete her sentence, Nitya left the room without listening to her teacher.
(a) Identify the barrier to communication and also the type/category of the barrier to which it is related.
Answer:
- Barrier to Communication: Psychological barrier
- Category: Prejudices and perceptions (Nitya’s preconceived notion that her teacher always finds fault led to her dismissing the teacher’s appreciation without listening).
(b) Explain two other communication barriers of the type/category identified in (a) above.
Answer:
- Emotional Barriers: Strong emotions like anger, fear, or anxiety can distort communication. For example, if someone is angry, they may not hear or process information clearly.
- Perception Barrier: Misinterpretation of messages based on personal experiences, assumptions, or biases can lead to communication breakdowns.
26. ‘X Ltd.’ issued 14% Debentures of 4,00,000 and 10,000 Equity shares of ₹60 each. This investment resulted in a net profit of ₹2,00,000 before interest and tax. The tax rate was 50%.
(a) Calculate the ‘Return on Investment’ and ‘Earning per Share’ of X Ltd.’
Answer:
-
Return on Investment (ROI): ROI =
Net Profit = ₹2,00,000 before interest and tax
Interest on debentures = 14% of ₹4,00,000 = ₹56,000
Net Profit after interest = ₹2,00,000 – ₹56,000 = ₹1,44,000
Tax = 50% of ₹1,44,000 = ₹72,000
Net Profit after Tax = ₹1,44,000 – ₹72,000 = ₹72,000
Total Investment = ₹4,00,000 (Debentures) + ₹60 × 10,000 (Equity shares) = ₹4,60,000
ROI =
-
Earnings Per Share (EPS):
EPS =
EPS =
(b) State with reason whether the above example is that of favorable or unfavorable financial leverage.
Answer:
- Unfavorable Financial Leverage:
Financial leverage is considered unfavorable when the cost of debt (interest on debentures) exceeds the return generated from the investment, which reduces the overall profitability of the company. In this case, the net profit after tax (₹72,000) is lower than the interest cost on debentures (₹56,000), indicating that the company is not using its borrowed funds effectively to generate higher returns for equity shareholders.
27. “Zeto Ltd.” offers its employees shares at a price which is less than the market price.
(a) Identify the incentive offered by the company and state the type of incentive discussed above.
Answer:
- Incentive: Employee Stock Option Plan (ESOP)
- Type of Incentive: Financial Incentive (The company is offering shares at a discounted price, which is a form of financial reward for employees).
(b) State two other incentives of the type of incentive identified in (a) above.
Answer:
- Bonus Shares: Companies issue additional shares to employees as a reward based on their performance or tenure.
- Profit-sharing: A system where employees receive a share of the company’s profits as part of their compensation.
28. Identify and give the meaning of the concepts highlighted in the following statements:
(a) The process of finding possible candidates for a job.
Answer: Recruitment
- Recruitment is the process of identifying, attracting, and selecting candidates to fill job vacancies within an organization.
(b) An assessment of the number and types of human resources necessary for the performance of various jobs.
Answer: Human Resource Planning
- Human resource planning involves analyzing and forecasting the organization’s human resource needs to ensure that the right number of employees with the necessary skills are available when needed.
(c) Introducing the selected employees to other employees and familiarizing them with the rules and policies of the organization.
Answer: Induction
- Induction is the process of orienting new employees to the organization by introducing them to their colleagues, the organizational culture, rules, and policies.
(d) It ensures that the organization gets the best employees amongst the employees available.
Answer: Selection
- Selection is the process of choosing the best candidate for the job from the pool of applicants, ensuring that the organization hires the most suitable candidates for the roles.
29. (a) “Stock Exchange not only provides liquidity and marketability to existing securities, but performs many other functions.”
Explain any two such functions of Stock Exchange.
Answer:
- Price Determination: The stock exchange provides a platform where the forces of supply and demand determine the prices of securities. This helps in price discovery for listed stocks.
- Facilitating Liquidity: The stock exchange provides a ready market where securities can be bought and sold, ensuring that investors can quickly convert their investments into cash, thereby offering liquidity.
OR
(b) Distinguish between primary market and secondary market on any four bases.
Answer:
| Basis | Primary Market | Secondary Market |
|---|---|---|
| Definition | Market where new securities are issued to the public. | Market where previously issued securities are traded. |
| Purpose | To raise fresh capital for the issuing company. | To provide liquidity to existing securities. |
| Participants | Involves issuers (companies) and investors. | Involves investors buying and selling securities. |
| Example | Initial Public Offering (IPO). | Stock Exchanges (e.g., NSE, BSE). |
30. (a) State the role of consumer organizations and non-governmental organizations for the protection and promotion of consumers’ interests on the basis of any four points.
Answer:
- Awareness Programs: Consumer organizations conduct awareness campaigns to educate consumers about their rights and responsibilities.
- Legal Assistance: These organizations offer legal support to consumers in case of disputes with businesses or service providers.
- Lobbying for Consumer Rights: Consumer organizations lobby with governments for better consumer protection laws and regulations.
- Providing Information: They offer unbiased information and reviews about products and services to help consumers make informed decisions.
OR
(b) State any four reliefs available to consumers if the consumer court is satisfied about the genuineness of the complaint.
Answer:
- Refund of Money: The consumer may be entitled to a full or partial refund of the amount paid for a defective product or service.
- Replacement of Goods: The consumer can demand a replacement of defective goods with new, quality products.
- Compensation for Loss: The consumer may receive compensation for any loss or injury suffered due to defective goods or services.
- Punitive Damages: The court may order the supplier to pay additional compensation as a penalty for their negligence or malpractice.
31. (a) Explain the following principles of management:
(i) Discipline
Answer: Discipline is the principle that emphasizes the importance of following the rules, regulations, and codes of conduct within the organization. It ensures orderliness and proper conduct among employees, which is vital for achieving organizational goals.
(ii) Unity of Command
Answer: Unity of Command means that each employee should receive orders and instructions from only one superior. This avoids confusion, conflicting instructions, and potential disputes, leading to clear responsibility and accountability.
(iii) Unity of Direction
Answer: Unity of Direction refers to the principle that all activities within an organization should be directed toward achieving common goals. The efforts of all members should be coordinated and focused on the same objectives to ensure efficiency.
OR
(b) Explain the following techniques of Scientific Management:
(i) Fatigue Study
Answer: Fatigue study is the process of determining the amount of time an employee can work continuously before becoming tired or less productive. This helps in setting optimal work periods and breaks to maintain efficiency and productivity.
(ii) Motion Study
Answer: Motion study involves analyzing the movements involved in a task to identify and eliminate unnecessary motions. The goal is to simplify work processes, reduce wasted effort, and improve worker efficiency.
(iii) Time Study
Answer: Time study is the technique of measuring the time taken to complete a specific task. This helps in setting performance standards and improving efficiency by identifying areas where time can be reduced without compromising quality.
32. Setting objectives is the first step in the process of one of the significant functions of management. Identify the function of management referred above.
Answer: Planning
(b) State the next five steps of the process.
Answer:
- Identifying the Resources: Identifying the resources required to achieve the objectives.
- Developing the Plan: Creating a detailed plan to accomplish the objectives.
- Organizing Resources: Allocating and organizing resources to implement the plan.
- Implementing the Plan: Carrying out the activities as per the plan.
- Controlling and Monitoring: Measuring progress and making adjustments to ensure the objectives are met.
33. ‘Sweets and More’ is one of India’s most popular brands for snacks and sweets. It offers a wide range of sweets, namkeens, cookies, and frozen foods.
(a) Identify the organisational structure of ‘Sweets and More’.
Answer:
The organisational structure of ‘Sweets and More’ is Divisional Structure. Each category of products (sweets, namkeens, cookies, frozen foods) is treated as a separate business unit, with its own manager and multi-functional teams. This structure allows each division to focus on its specific product line, with separate management and resources.
(b) State three advantages and two disadvantages of the organisational structure identified in (a) above which are not discussed in the above case.
Advantages:
- Specialization: Each division focuses on its specific product category, which allows for more specialization and expertise in managing that product line.
- Flexibility: The divisional structure allows for quick decision-making within each division, enabling a more responsive and adaptable organization.
- Clear Accountability: Since each division has its own manager and responsibility for performance, it becomes easier to assess the performance of each unit, leading to clear accountability.
Disadvantages:
- Duplication of Resources: Since each division functions independently, there might be a duplication of resources and activities, which can lead to higher operational costs.
- Potential for Conflict: Separate divisions might prioritize their own goals over the broader goals of the company, leading to possible conflicts or lack of coordination among the divisions.
34. ‘X Ltd.’ is engaged in the manufacturing of cars. The company surveyed the market and found that customers need a car that runs on eco-friendly fuel instead of petrol or diesel. Keeping the needs of customers as well as social, ethical, and ecological aspects of marketing in mind, the company launched a new model of car that runs on bio-diesel. The launch event was covered by the top news channels and newspapers. This was done to disseminate information about the car and build goodwill of the business. X Ltd. understands that it is imperative to manage public opinion and the company’s relations with the public on a regular basis.
(a) Identify and explain the marketing philosophy involved in the above case.
Answer:
The marketing philosophy involved in the above case is Societal Marketing Concept. This concept emphasizes not just meeting customer needs but also considering the welfare of society. X Ltd. has launched an eco-friendly car that runs on bio-diesel, keeping in mind the environmental and social implications. They are addressing ecological concerns and the ethical responsibility of producing environmentally friendly products, which aligns with societal marketing.
(b) Identify and explain the communication tool that was used by the company.
Answer:
The communication tool used by X Ltd. is Public Relations (PR). The company organized a launch event covered by top news channels and newspapers to disseminate information about their new eco-friendly car. This tool helps in building goodwill, creating a positive image, and communicating important information to the public in a non-paid manner.
(c) Explain any two other promotional tools that can be used by X Ltd. to achieve its objectives.
Answer:
-
Advertising: X Ltd. can use various advertising media such as TV, radio, print, and online platforms to reach a larger audience and create awareness about the eco-friendly car. Advertising can help in communicating the unique selling proposition of the car, such as its eco-friendliness and fuel efficiency.
-
Sales Promotion: X Ltd. can offer sales promotions such as discounts, special financing options, or limited-time offers to encourage customers to buy the new bio-diesel car. This would create a sense of urgency and incentivize customers to make the purchase decision faster.