Page 1
CBSE XII | Business Studies
Delhi Board Paper Set 2 – 2016 Solution
CBSE
Class XII Business Studies
Delhi Board Paper Set 2– 2016 Solution
Answer 1
Investment decisions or capital budgeting decisions made by a company affect its size of
assets, profitability and competitiveness.
Answer 2
The market function concerned with informing customers about a firm’s products is
promotion.
Answer 3
‘Level of collaboration’ is the factor which affects the business decision of ‘Fashionate Pvt.
Ltd.’ Such collaboration results in division of fixed capital investment for all the parties
involved and hence results in efficient utilisation of resources.
Answer 4
The organisational structure which promotes efficiency of manpower is ‘Functional
Structure’.
Answer 5
Management is the process of getting things done. Here, the term ‘process’ implies key
tasks performed by the managers for the attainment of organisational goals in an effective
and efficient manner.
Answer 6
The right exercised by Manoj was ‘right to be informed’. In the given case, the consumer, i.e.
Manoj, was unable to see the ingredients of the product he purchased. According to the
Consumer Protection Act, 1986, all consumers have a right to know about the quality,
quantity, MRP and ingredients of the products they purchase from the market. Manoj
exercised this right to know about the ingredients of the packet of chips he purchased.
Answer 7
As an element of delegation, responsibility is the duty or task allocated to an employee or
worker to be performed under his/her tenure of work. The flow of responsibility is
upward. This implies that employees are responsible for the work assigned to them by
their supervisor and not vice versa.
Answer 8
In functional foremanship, a speed boss ensures that workers are achieving their work
target in a timely manner and are not misusing time during their working hours. A speed
boss works directly under the production in-charge of the organisation and cooperates
with the gang boss, repair boss etc. to achieve the desired speed efficiency level.
Answer 9
Three functions performed by non-governmental organisations for consumer protection:
Page 2
CBSE XII | Business Studies
Delhi Board Paper Set 2 – 2016 Solution
CBSE
Class XII Business Studies
Delhi Board Paper Set 2– 2016 Solution
Answer 1
Investment decisions or capital budgeting decisions made by a company affect its size of
assets, profitability and competitiveness.
Answer 2
The market function concerned with informing customers about a firm’s products is
promotion.
Answer 3
‘Level of collaboration’ is the factor which affects the business decision of ‘Fashionate Pvt.
Ltd.’ Such collaboration results in division of fixed capital investment for all the parties
involved and hence results in efficient utilisation of resources.
Answer 4
The organisational structure which promotes efficiency of manpower is ‘Functional
Structure’.
Answer 5
Management is the process of getting things done. Here, the term ‘process’ implies key
tasks performed by the managers for the attainment of organisational goals in an effective
and efficient manner.
Answer 6
The right exercised by Manoj was ‘right to be informed’. In the given case, the consumer, i.e.
Manoj, was unable to see the ingredients of the product he purchased. According to the
Consumer Protection Act, 1986, all consumers have a right to know about the quality,
quantity, MRP and ingredients of the products they purchase from the market. Manoj
exercised this right to know about the ingredients of the packet of chips he purchased.
Answer 7
As an element of delegation, responsibility is the duty or task allocated to an employee or
worker to be performed under his/her tenure of work. The flow of responsibility is
upward. This implies that employees are responsible for the work assigned to them by
their supervisor and not vice versa.
Answer 8
In functional foremanship, a speed boss ensures that workers are achieving their work
target in a timely manner and are not misusing time during their working hours. A speed
boss works directly under the production in-charge of the organisation and cooperates
with the gang boss, repair boss etc. to achieve the desired speed efficiency level.
Answer 9
Three functions performed by non-governmental organisations for consumer protection:
CBSE XII | Business Studies
Delhi Board Paper Set 2 – 2016 Solution
i. Educating consumers: Trainings and seminars are conducted to educate
consumers regarding various consumer rights. Also, consumers are educated to
perform their responsibilities while using various products.
ii. Print media: The print media publishes articles and journals to educate consumers
about their rights and procedures to exercise them.
iii. Product reviewers: Product reviewers test the quality and safety standards of
different products and educate consumers about them.
Answer 10
SEBI intervened to perform the following two functions in the given case:
i. Regulatory functions: SEBI performed various inspections to determine whether
Mr Sanjay is guilty or not. This is a regulatory function.
ii. Protective functions: SEBI imposed heavy fines on Mr Sanjay to make sure that the
interests of all the investors stay protected.
Answer 11
a. Two communication barriers because of which ‘Bikmac Enterprises’ were not able to
achieve their targets:
i. Barriers at the personal level: Clear lines of communication are hindered by
personal barriers present in an organisation. This happens when the management
does not entrust its confidence in employees. Managers should conduct discussions
and ask employees for inputs to ensure that such barriers are resolved.
ii. Barriers at the organisational level: Policies which suppress the initiatives to
empower employees such as centralisation of all decisions, high attrition rates and
low perks result in dissatisfaction among employees. This dissatisfaction hinders
their performance.
b. i. One barrier at the organisational level is ‘Rigid code of conduct’. If an
organisation follows extremely rigid rules and regulations, all its employees remain
suppressed and dissatisfied. Organisations should promote good communication
lines with their employees.
ii. One barrier at the personal level is ‘Disregard and fear’. When managers do
not appreciate employees for their contribution, employees lose their motivation to
perform. Also, fear blocks all lines of communication with managers. This results in
personal barriers.
Answer 12
Internal/external recruitment sources used by ‘Senor Enterprises Ltd.’ to fill various
positions:
1. Promotion: The Human Resource Manager was recruited using promotion.
Promotion is an internal source of recruitment.
2. Placement consultants: The Marketing Head was recruited through an external
source of placement consultants.
3. Casual callers: The Assistant Manager was recruited using existing applications.
Page 3
CBSE XII | Business Studies
Delhi Board Paper Set 2 – 2016 Solution
CBSE
Class XII Business Studies
Delhi Board Paper Set 2– 2016 Solution
Answer 1
Investment decisions or capital budgeting decisions made by a company affect its size of
assets, profitability and competitiveness.
Answer 2
The market function concerned with informing customers about a firm’s products is
promotion.
Answer 3
‘Level of collaboration’ is the factor which affects the business decision of ‘Fashionate Pvt.
Ltd.’ Such collaboration results in division of fixed capital investment for all the parties
involved and hence results in efficient utilisation of resources.
Answer 4
The organisational structure which promotes efficiency of manpower is ‘Functional
Structure’.
Answer 5
Management is the process of getting things done. Here, the term ‘process’ implies key
tasks performed by the managers for the attainment of organisational goals in an effective
and efficient manner.
Answer 6
The right exercised by Manoj was ‘right to be informed’. In the given case, the consumer, i.e.
Manoj, was unable to see the ingredients of the product he purchased. According to the
Consumer Protection Act, 1986, all consumers have a right to know about the quality,
quantity, MRP and ingredients of the products they purchase from the market. Manoj
exercised this right to know about the ingredients of the packet of chips he purchased.
Answer 7
As an element of delegation, responsibility is the duty or task allocated to an employee or
worker to be performed under his/her tenure of work. The flow of responsibility is
upward. This implies that employees are responsible for the work assigned to them by
their supervisor and not vice versa.
Answer 8
In functional foremanship, a speed boss ensures that workers are achieving their work
target in a timely manner and are not misusing time during their working hours. A speed
boss works directly under the production in-charge of the organisation and cooperates
with the gang boss, repair boss etc. to achieve the desired speed efficiency level.
Answer 9
Three functions performed by non-governmental organisations for consumer protection:
CBSE XII | Business Studies
Delhi Board Paper Set 2 – 2016 Solution
i. Educating consumers: Trainings and seminars are conducted to educate
consumers regarding various consumer rights. Also, consumers are educated to
perform their responsibilities while using various products.
ii. Print media: The print media publishes articles and journals to educate consumers
about their rights and procedures to exercise them.
iii. Product reviewers: Product reviewers test the quality and safety standards of
different products and educate consumers about them.
Answer 10
SEBI intervened to perform the following two functions in the given case:
i. Regulatory functions: SEBI performed various inspections to determine whether
Mr Sanjay is guilty or not. This is a regulatory function.
ii. Protective functions: SEBI imposed heavy fines on Mr Sanjay to make sure that the
interests of all the investors stay protected.
Answer 11
a. Two communication barriers because of which ‘Bikmac Enterprises’ were not able to
achieve their targets:
i. Barriers at the personal level: Clear lines of communication are hindered by
personal barriers present in an organisation. This happens when the management
does not entrust its confidence in employees. Managers should conduct discussions
and ask employees for inputs to ensure that such barriers are resolved.
ii. Barriers at the organisational level: Policies which suppress the initiatives to
empower employees such as centralisation of all decisions, high attrition rates and
low perks result in dissatisfaction among employees. This dissatisfaction hinders
their performance.
b. i. One barrier at the organisational level is ‘Rigid code of conduct’. If an
organisation follows extremely rigid rules and regulations, all its employees remain
suppressed and dissatisfied. Organisations should promote good communication
lines with their employees.
ii. One barrier at the personal level is ‘Disregard and fear’. When managers do
not appreciate employees for their contribution, employees lose their motivation to
perform. Also, fear blocks all lines of communication with managers. This results in
personal barriers.
Answer 12
Internal/external recruitment sources used by ‘Senor Enterprises Ltd.’ to fill various
positions:
1. Promotion: The Human Resource Manager was recruited using promotion.
Promotion is an internal source of recruitment.
2. Placement consultants: The Marketing Head was recruited through an external
source of placement consultants.
3. Casual callers: The Assistant Manager was recruited using existing applications.
CBSE XII | Business Studies
Delhi Board Paper Set 2 – 2016 Solution
Answer 13
Three limitations of planning:
i. Inflexibility: Since all other steps in the process of management depend on
planning, it becomes quite inflexible to alter a plan when it is in the process of being
implemented. In scenarios of unplanned external changes, it often becomes a cost
and time burden on the organisation to change the course of a plan. It is therefore
suggested to companies to keep a certain degree of flexibility in their plan to
cooperate with unforeseen circumstances.
ii. Inability to deal with potential business changes: At times, planning fails to
accommodate changes in business functioning because of predefined assumptions
about business. Therefore, it becomes a tedious task to alter the plan according to
forthcoming changes.
iii. Hindrance to new initiatives: Planning often reduces the scope of new initiatives
because of required structural adjustments demanded by those initiatives. Hence, it
sometimes becomes a hindrance in efficiency and effectiveness of organisational
procedures. To put new initiatives into action, necessary structural adjustments are
advised when formulating a plan every time.
Answer 14
a. In the given scenario, ‘Public Relations’ is the communication tool used by the company
to restore its good image. The sole purpose of Public Relations is to create and maintain
cordial relationship of the company with its stakeholders, customers and lenders. Such
positive public relations of the company are key foundations for its survival and growth.
b. Importance of Public Relations can be highlighted as follows:
1. It allows the organisation to attain its goals in a hassle-free manner without
constantly worrying about its public image.
2. It assists the organisation in creating and maintaining a market for its product
among consumers, thus increasing its brand loyalty among consumers.
3. Public Relations among the stakeholders and consumers also allows an organisation
to survive in the business in the long run and deal with its new potential
competitors effectively.
4. It also complements the promotional ventures undertaken by the organisation to
increase its customer base.
Answer 15
a. ‘Informal Organisation’ allows communication to flow in all directions.
b. Another advantage of informal organisation is that it allows employees to feel sociable,
interactive and competitive. This results in better employee engagement and work
culture. All these factors result in better productivity for the organisation by the
employees.
c. ‘Steelo Ltd.’ wanted to communicate following two values of the organisation:
i. Socially responsible corporation
ii. Employee-centric organisation
Page 4
CBSE XII | Business Studies
Delhi Board Paper Set 2 – 2016 Solution
CBSE
Class XII Business Studies
Delhi Board Paper Set 2– 2016 Solution
Answer 1
Investment decisions or capital budgeting decisions made by a company affect its size of
assets, profitability and competitiveness.
Answer 2
The market function concerned with informing customers about a firm’s products is
promotion.
Answer 3
‘Level of collaboration’ is the factor which affects the business decision of ‘Fashionate Pvt.
Ltd.’ Such collaboration results in division of fixed capital investment for all the parties
involved and hence results in efficient utilisation of resources.
Answer 4
The organisational structure which promotes efficiency of manpower is ‘Functional
Structure’.
Answer 5
Management is the process of getting things done. Here, the term ‘process’ implies key
tasks performed by the managers for the attainment of organisational goals in an effective
and efficient manner.
Answer 6
The right exercised by Manoj was ‘right to be informed’. In the given case, the consumer, i.e.
Manoj, was unable to see the ingredients of the product he purchased. According to the
Consumer Protection Act, 1986, all consumers have a right to know about the quality,
quantity, MRP and ingredients of the products they purchase from the market. Manoj
exercised this right to know about the ingredients of the packet of chips he purchased.
Answer 7
As an element of delegation, responsibility is the duty or task allocated to an employee or
worker to be performed under his/her tenure of work. The flow of responsibility is
upward. This implies that employees are responsible for the work assigned to them by
their supervisor and not vice versa.
Answer 8
In functional foremanship, a speed boss ensures that workers are achieving their work
target in a timely manner and are not misusing time during their working hours. A speed
boss works directly under the production in-charge of the organisation and cooperates
with the gang boss, repair boss etc. to achieve the desired speed efficiency level.
Answer 9
Three functions performed by non-governmental organisations for consumer protection:
CBSE XII | Business Studies
Delhi Board Paper Set 2 – 2016 Solution
i. Educating consumers: Trainings and seminars are conducted to educate
consumers regarding various consumer rights. Also, consumers are educated to
perform their responsibilities while using various products.
ii. Print media: The print media publishes articles and journals to educate consumers
about their rights and procedures to exercise them.
iii. Product reviewers: Product reviewers test the quality and safety standards of
different products and educate consumers about them.
Answer 10
SEBI intervened to perform the following two functions in the given case:
i. Regulatory functions: SEBI performed various inspections to determine whether
Mr Sanjay is guilty or not. This is a regulatory function.
ii. Protective functions: SEBI imposed heavy fines on Mr Sanjay to make sure that the
interests of all the investors stay protected.
Answer 11
a. Two communication barriers because of which ‘Bikmac Enterprises’ were not able to
achieve their targets:
i. Barriers at the personal level: Clear lines of communication are hindered by
personal barriers present in an organisation. This happens when the management
does not entrust its confidence in employees. Managers should conduct discussions
and ask employees for inputs to ensure that such barriers are resolved.
ii. Barriers at the organisational level: Policies which suppress the initiatives to
empower employees such as centralisation of all decisions, high attrition rates and
low perks result in dissatisfaction among employees. This dissatisfaction hinders
their performance.
b. i. One barrier at the organisational level is ‘Rigid code of conduct’. If an
organisation follows extremely rigid rules and regulations, all its employees remain
suppressed and dissatisfied. Organisations should promote good communication
lines with their employees.
ii. One barrier at the personal level is ‘Disregard and fear’. When managers do
not appreciate employees for their contribution, employees lose their motivation to
perform. Also, fear blocks all lines of communication with managers. This results in
personal barriers.
Answer 12
Internal/external recruitment sources used by ‘Senor Enterprises Ltd.’ to fill various
positions:
1. Promotion: The Human Resource Manager was recruited using promotion.
Promotion is an internal source of recruitment.
2. Placement consultants: The Marketing Head was recruited through an external
source of placement consultants.
3. Casual callers: The Assistant Manager was recruited using existing applications.
CBSE XII | Business Studies
Delhi Board Paper Set 2 – 2016 Solution
Answer 13
Three limitations of planning:
i. Inflexibility: Since all other steps in the process of management depend on
planning, it becomes quite inflexible to alter a plan when it is in the process of being
implemented. In scenarios of unplanned external changes, it often becomes a cost
and time burden on the organisation to change the course of a plan. It is therefore
suggested to companies to keep a certain degree of flexibility in their plan to
cooperate with unforeseen circumstances.
ii. Inability to deal with potential business changes: At times, planning fails to
accommodate changes in business functioning because of predefined assumptions
about business. Therefore, it becomes a tedious task to alter the plan according to
forthcoming changes.
iii. Hindrance to new initiatives: Planning often reduces the scope of new initiatives
because of required structural adjustments demanded by those initiatives. Hence, it
sometimes becomes a hindrance in efficiency and effectiveness of organisational
procedures. To put new initiatives into action, necessary structural adjustments are
advised when formulating a plan every time.
Answer 14
a. In the given scenario, ‘Public Relations’ is the communication tool used by the company
to restore its good image. The sole purpose of Public Relations is to create and maintain
cordial relationship of the company with its stakeholders, customers and lenders. Such
positive public relations of the company are key foundations for its survival and growth.
b. Importance of Public Relations can be highlighted as follows:
1. It allows the organisation to attain its goals in a hassle-free manner without
constantly worrying about its public image.
2. It assists the organisation in creating and maintaining a market for its product
among consumers, thus increasing its brand loyalty among consumers.
3. Public Relations among the stakeholders and consumers also allows an organisation
to survive in the business in the long run and deal with its new potential
competitors effectively.
4. It also complements the promotional ventures undertaken by the organisation to
increase its customer base.
Answer 15
a. ‘Informal Organisation’ allows communication to flow in all directions.
b. Another advantage of informal organisation is that it allows employees to feel sociable,
interactive and competitive. This results in better employee engagement and work
culture. All these factors result in better productivity for the organisation by the
employees.
c. ‘Steelo Ltd.’ wanted to communicate following two values of the organisation:
i. Socially responsible corporation
ii. Employee-centric organisation
CBSE XII | Business Studies
Delhi Board Paper Set 2 – 2016 Solution
Answer 16
Dimensions of business environment being referred to in the given case:
1. Economic environment: A fall in loan interest rate implies a variation in the economic
environment of the country.
Explanation: Economic environment includes the effect of changes in the interest rates,
levels of income and stock market fluctuations. Example: An increase in imports leads to a
fall in the price of domestic currency and vice versa.
2. Technological environment: Development of a car which is powered by fuel
produced from garbage implies a change in technological environment of the economy.
Explanation: Technological environment takes into account various changes in technology
of an economy. It involves infrastructural changes or changes related to the information
technology revolution. For example, smartphones and e-commerce are the foundations of
most business start-ups in the modern era. Competing with different market players would
require a company to launch an app and a website.
Answer 17
‘Motivation’ is the element of function of management used in the given scenario. A
variation in travel policies changes the perspective of employees towards the organisation
and resulted in better utilisation of time by employees. All employees started feeling equal
and this increased their belongingness with the organisation.
Features of motivation can be highlighted using the following points:
1. Motivation is an invisible force: Motivation is a feeling of belongingness within an
employee. It cannot be seen or touched. However, its results can clearly be felt among
the employees through their performance.
2. Motivation helps in achieving goals: Motivation is a positive awakening force which
increases the productivity and quality standards of work done by employees.
3. Motivation can also be negative: A positive motivation can take the form of
appraisal or promotion. On the other hand, negative motivation can take the form of
pay-cut and demotion.
4. Motivation is not a simple process: All employees get motivated for different
reasons at different times. Some employees get motivated by appreciation, whereas
some employees get motivated by appraisals.
Answer 18
Principles of management serve as a guiding light in the decision-making process of an
organisation. Managers refer to the principles of management while making difficult
business choices in real world situations. The importance of principles of management can
be explained using the following points:
Page 5
CBSE XII | Business Studies
Delhi Board Paper Set 2 – 2016 Solution
CBSE
Class XII Business Studies
Delhi Board Paper Set 2– 2016 Solution
Answer 1
Investment decisions or capital budgeting decisions made by a company affect its size of
assets, profitability and competitiveness.
Answer 2
The market function concerned with informing customers about a firm’s products is
promotion.
Answer 3
‘Level of collaboration’ is the factor which affects the business decision of ‘Fashionate Pvt.
Ltd.’ Such collaboration results in division of fixed capital investment for all the parties
involved and hence results in efficient utilisation of resources.
Answer 4
The organisational structure which promotes efficiency of manpower is ‘Functional
Structure’.
Answer 5
Management is the process of getting things done. Here, the term ‘process’ implies key
tasks performed by the managers for the attainment of organisational goals in an effective
and efficient manner.
Answer 6
The right exercised by Manoj was ‘right to be informed’. In the given case, the consumer, i.e.
Manoj, was unable to see the ingredients of the product he purchased. According to the
Consumer Protection Act, 1986, all consumers have a right to know about the quality,
quantity, MRP and ingredients of the products they purchase from the market. Manoj
exercised this right to know about the ingredients of the packet of chips he purchased.
Answer 7
As an element of delegation, responsibility is the duty or task allocated to an employee or
worker to be performed under his/her tenure of work. The flow of responsibility is
upward. This implies that employees are responsible for the work assigned to them by
their supervisor and not vice versa.
Answer 8
In functional foremanship, a speed boss ensures that workers are achieving their work
target in a timely manner and are not misusing time during their working hours. A speed
boss works directly under the production in-charge of the organisation and cooperates
with the gang boss, repair boss etc. to achieve the desired speed efficiency level.
Answer 9
Three functions performed by non-governmental organisations for consumer protection:
CBSE XII | Business Studies
Delhi Board Paper Set 2 – 2016 Solution
i. Educating consumers: Trainings and seminars are conducted to educate
consumers regarding various consumer rights. Also, consumers are educated to
perform their responsibilities while using various products.
ii. Print media: The print media publishes articles and journals to educate consumers
about their rights and procedures to exercise them.
iii. Product reviewers: Product reviewers test the quality and safety standards of
different products and educate consumers about them.
Answer 10
SEBI intervened to perform the following two functions in the given case:
i. Regulatory functions: SEBI performed various inspections to determine whether
Mr Sanjay is guilty or not. This is a regulatory function.
ii. Protective functions: SEBI imposed heavy fines on Mr Sanjay to make sure that the
interests of all the investors stay protected.
Answer 11
a. Two communication barriers because of which ‘Bikmac Enterprises’ were not able to
achieve their targets:
i. Barriers at the personal level: Clear lines of communication are hindered by
personal barriers present in an organisation. This happens when the management
does not entrust its confidence in employees. Managers should conduct discussions
and ask employees for inputs to ensure that such barriers are resolved.
ii. Barriers at the organisational level: Policies which suppress the initiatives to
empower employees such as centralisation of all decisions, high attrition rates and
low perks result in dissatisfaction among employees. This dissatisfaction hinders
their performance.
b. i. One barrier at the organisational level is ‘Rigid code of conduct’. If an
organisation follows extremely rigid rules and regulations, all its employees remain
suppressed and dissatisfied. Organisations should promote good communication
lines with their employees.
ii. One barrier at the personal level is ‘Disregard and fear’. When managers do
not appreciate employees for their contribution, employees lose their motivation to
perform. Also, fear blocks all lines of communication with managers. This results in
personal barriers.
Answer 12
Internal/external recruitment sources used by ‘Senor Enterprises Ltd.’ to fill various
positions:
1. Promotion: The Human Resource Manager was recruited using promotion.
Promotion is an internal source of recruitment.
2. Placement consultants: The Marketing Head was recruited through an external
source of placement consultants.
3. Casual callers: The Assistant Manager was recruited using existing applications.
CBSE XII | Business Studies
Delhi Board Paper Set 2 – 2016 Solution
Answer 13
Three limitations of planning:
i. Inflexibility: Since all other steps in the process of management depend on
planning, it becomes quite inflexible to alter a plan when it is in the process of being
implemented. In scenarios of unplanned external changes, it often becomes a cost
and time burden on the organisation to change the course of a plan. It is therefore
suggested to companies to keep a certain degree of flexibility in their plan to
cooperate with unforeseen circumstances.
ii. Inability to deal with potential business changes: At times, planning fails to
accommodate changes in business functioning because of predefined assumptions
about business. Therefore, it becomes a tedious task to alter the plan according to
forthcoming changes.
iii. Hindrance to new initiatives: Planning often reduces the scope of new initiatives
because of required structural adjustments demanded by those initiatives. Hence, it
sometimes becomes a hindrance in efficiency and effectiveness of organisational
procedures. To put new initiatives into action, necessary structural adjustments are
advised when formulating a plan every time.
Answer 14
a. In the given scenario, ‘Public Relations’ is the communication tool used by the company
to restore its good image. The sole purpose of Public Relations is to create and maintain
cordial relationship of the company with its stakeholders, customers and lenders. Such
positive public relations of the company are key foundations for its survival and growth.
b. Importance of Public Relations can be highlighted as follows:
1. It allows the organisation to attain its goals in a hassle-free manner without
constantly worrying about its public image.
2. It assists the organisation in creating and maintaining a market for its product
among consumers, thus increasing its brand loyalty among consumers.
3. Public Relations among the stakeholders and consumers also allows an organisation
to survive in the business in the long run and deal with its new potential
competitors effectively.
4. It also complements the promotional ventures undertaken by the organisation to
increase its customer base.
Answer 15
a. ‘Informal Organisation’ allows communication to flow in all directions.
b. Another advantage of informal organisation is that it allows employees to feel sociable,
interactive and competitive. This results in better employee engagement and work
culture. All these factors result in better productivity for the organisation by the
employees.
c. ‘Steelo Ltd.’ wanted to communicate following two values of the organisation:
i. Socially responsible corporation
ii. Employee-centric organisation
CBSE XII | Business Studies
Delhi Board Paper Set 2 – 2016 Solution
Answer 16
Dimensions of business environment being referred to in the given case:
1. Economic environment: A fall in loan interest rate implies a variation in the economic
environment of the country.
Explanation: Economic environment includes the effect of changes in the interest rates,
levels of income and stock market fluctuations. Example: An increase in imports leads to a
fall in the price of domestic currency and vice versa.
2. Technological environment: Development of a car which is powered by fuel
produced from garbage implies a change in technological environment of the economy.
Explanation: Technological environment takes into account various changes in technology
of an economy. It involves infrastructural changes or changes related to the information
technology revolution. For example, smartphones and e-commerce are the foundations of
most business start-ups in the modern era. Competing with different market players would
require a company to launch an app and a website.
Answer 17
‘Motivation’ is the element of function of management used in the given scenario. A
variation in travel policies changes the perspective of employees towards the organisation
and resulted in better utilisation of time by employees. All employees started feeling equal
and this increased their belongingness with the organisation.
Features of motivation can be highlighted using the following points:
1. Motivation is an invisible force: Motivation is a feeling of belongingness within an
employee. It cannot be seen or touched. However, its results can clearly be felt among
the employees through their performance.
2. Motivation helps in achieving goals: Motivation is a positive awakening force which
increases the productivity and quality standards of work done by employees.
3. Motivation can also be negative: A positive motivation can take the form of
appraisal or promotion. On the other hand, negative motivation can take the form of
pay-cut and demotion.
4. Motivation is not a simple process: All employees get motivated for different
reasons at different times. Some employees get motivated by appreciation, whereas
some employees get motivated by appraisals.
Answer 18
Principles of management serve as a guiding light in the decision-making process of an
organisation. Managers refer to the principles of management while making difficult
business choices in real world situations. The importance of principles of management can
be explained using the following points:
CBSE XII | Business Studies
Delhi Board Paper Set 2 – 2016 Solution
i. Developed through practical experimentation: Management principles are
developed by notable management alumni. This makes them practical and
implementable in complex business problems without any chance of error.
ii. Factually verifiable: Because the principles of management explain the key logic
behind decisive judgements written in them, they are factually verifiable and
understandable by most managers of the real world. This makes it easier for
managers to implement them.
iii. Guidelines for new managers: Management principles are taught primarily in all
business schools to students to make sure that all upcoming managers know the
foundation of management and to make them follow the best management practices
when they solve any business problem.
iv. Efficiency: Principles of management assist in judicious allocation of productive
resources in the formulation of the end product. They synchronise all resources to
develop a cost- and time-efficient production system. It therefore helps the
organisation to grow faster and outperform its potential competitors.
Answer 19
Financial market is a common platform where buyers and sellers of securities interact and
exchange their holdings of bonds such as shares, debentures etc. Functions of a financial
market are as follows:
i. Channelisation of funds: Financial markets primarily operate to channelise funds
from investors to companies. They serve the dual purpose of providing investors
with the interest on their funds and companies with the required finance to pursue
their business operations.
ii. Determining the price: The determination of fair price of securities is facilitated by
financial markets as it provides a place where buyers can meet sellers and
undertake different transactions of securities. Such a commonplace ensures trading
at a fair and justifiable price of the security which is determined by the opposite
forces of demand and supply.
iii. Ease of convertibility in cash: Because financial markets operate in a transparent
and legal manner for the purchase and sale of securities, any person can convert
his/her bonds into cash or a cash equivalent at any particular time in a hassle-free
manner.
iv. Minimising brokerage and other transaction charges: Financial markets aim at
minimisation of unnecessary brokerage and transfer charges levied by different
dealers by making the relevant information available at all times. It also aims to
digitalise the transaction for optimisation in terms of time and cost.
Answer 20
a. Lines from the paragraph which highlight the use of informal communication in the
organisation:
i. Colleague sent a text message to his immediate superior.
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