CBSE Business Studies Past year paper All India (Set - 1) - 2018, Class 12 Commerce Notes | EduRev

Business Studies (BST) Class 12

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Commerce : CBSE Business Studies Past year paper All India (Set - 1) - 2018, Class 12 Commerce Notes | EduRev

 Page 1


  
 
CBSE XII  | BUSINESS STUDIES 
All India Board Paper Set 1 – 2018 
 
     
 
CBSE 
Class XII Business Studies 
All India Board Paper Set 1 – 2018 
Time: 3 hrs. Max. Marks: 80 
 
General Instructions: 
(i) Answers to questions carrying 1 mark may be from one word to one sentence. 
(ii) Answers to questions carrying 3 marks may be from 50-75 words. 
(iii) Answers to questions carrying 4-5 marks may be about 150 words. 
(iv) Answers to questions carrying 6 marks may be about 200 words. 
(v) Attempt all parts of a question together.   
 
Question 1 
Define ‘Decentralisation’.  [1] 
 
Question 2 
Give the meaning of ‘Method’ as a type of plan.  [1] 
 
Question 3 
Saurabh decided to start a chocolates manufacturing business. He set then target of earning 
10% profit on sales in the first year. As a good businessman, he was concerned about the future 
of the business, which was uncertain. He gathered information that the demand for chocolates 
is increasing day-by-day. He used this information as the base for future planning and shared it 
with his team. On the basis of the gathered information, he scheduled a meeting in the 
following week to find innovative ways to achieve the objectives. 
List the first two steps, which have been followed by Saurabh that are related to the process of 
one of the functions of management.  [1] 
 
Question 4 
In the paint industry, various raw materials are mixed in different proportions with petroleum 
for manufacturing different kinds of paints. One specific raw material is not readily and 
regularly available to the paint manufacturing companies. Bonler Paints Company is also facing 
this problem and because of this there is a time lag between placing the order and the actual 
receipt of the material. But once it receives the raw materials, it takes less time in converting it 
into finished goods. 
Identify the factor affecting the working capital requirements of this industry.  [1] 
 
Question 5 
An investor wanted to incest `20,000 in Treasury Bills for a period of 91days. When he 
approached the Reserve Bank of India for this purpose he came to know that it was not 
possible. 
Identify the reason why the investor could not invest in the Treasury Bill.  [1] 
Page 2


  
 
CBSE XII  | BUSINESS STUDIES 
All India Board Paper Set 1 – 2018 
 
     
 
CBSE 
Class XII Business Studies 
All India Board Paper Set 1 – 2018 
Time: 3 hrs. Max. Marks: 80 
 
General Instructions: 
(i) Answers to questions carrying 1 mark may be from one word to one sentence. 
(ii) Answers to questions carrying 3 marks may be from 50-75 words. 
(iii) Answers to questions carrying 4-5 marks may be about 150 words. 
(iv) Answers to questions carrying 6 marks may be about 200 words. 
(v) Attempt all parts of a question together.   
 
Question 1 
Define ‘Decentralisation’.  [1] 
 
Question 2 
Give the meaning of ‘Method’ as a type of plan.  [1] 
 
Question 3 
Saurabh decided to start a chocolates manufacturing business. He set then target of earning 
10% profit on sales in the first year. As a good businessman, he was concerned about the future 
of the business, which was uncertain. He gathered information that the demand for chocolates 
is increasing day-by-day. He used this information as the base for future planning and shared it 
with his team. On the basis of the gathered information, he scheduled a meeting in the 
following week to find innovative ways to achieve the objectives. 
List the first two steps, which have been followed by Saurabh that are related to the process of 
one of the functions of management.  [1] 
 
Question 4 
In the paint industry, various raw materials are mixed in different proportions with petroleum 
for manufacturing different kinds of paints. One specific raw material is not readily and 
regularly available to the paint manufacturing companies. Bonler Paints Company is also facing 
this problem and because of this there is a time lag between placing the order and the actual 
receipt of the material. But once it receives the raw materials, it takes less time in converting it 
into finished goods. 
Identify the factor affecting the working capital requirements of this industry.  [1] 
 
Question 5 
An investor wanted to incest `20,000 in Treasury Bills for a period of 91days. When he 
approached the Reserve Bank of India for this purpose he came to know that it was not 
possible. 
Identify the reason why the investor could not invest in the Treasury Bill.  [1] 
  
 
CBSE XII  | BUSINESS STUDIES 
All India Board Paper Set 1 – 2018 
 
     
 
Question 6 
Why is the understanding of ‘Marketing Management Philosophies’ important?  [1] 
 
Question 7 
Give the constitution of the District Consumer Disputes Redressal Forum under the Consumer 
Protection Act, 1986.  [1] 
 
Question 8 
‘Buy one get one free’ is printed on the label of the package of a mosquito repellant. 
State the labelling function being performed by this statement.  [1] 
 
Question 9 
Differentiate between formal and informal organisations on the basis of (i) origin, (ii) 
authority, and (iii) flow of communication.   [3] 
 
Question 10 
State the steps in the selection procedure, after the employment interview and before the job 
offer.  [3] 
 
Question 11 
Sandhya is a successful manager at Manisons Enterprises. She has a team of twelve people 
working under her. She encourages them to set their own objectives and take decisions. She 
respects their opinions and supports them, so that they can perform their duties and 
accomplish organisational objectives. To manage and exercise effective control she uses forces 
within the group. 
As an intelligent manager, at times, she also makes use of positive aspects of informal 
communication. This way, she is able to unify diverse interests and ensure that targets are met. 
(a) There are many theories and styles of influencing people's behaviour. Identify the style 
used by Sandhya which is based on the use of authority. 
(b) State two positive aspects of the communication discussed above, which Sandhya is using 
as an intelligent manager.   [3] 
 
Question 12 
The Return on Investment (ROI) of a company ranges between 10-12% for the past three 
years. To finance its future fixed capital needs, it has the following options for borrowing debt: 
Option ‘A’ : Rate of interest 9% 
Option ‘B’ : Rate of interest 13% 
Which source of debt, ‘Option A’ or ‘Option B’, is better? Give reasons in support of your 
answer. Also state the concept being used in taking the decision. [3] 
 
Question 13 
Explain briefly any two points of importance of consumer protection from the point of view of 
business.  [3] 
Page 3


  
 
CBSE XII  | BUSINESS STUDIES 
All India Board Paper Set 1 – 2018 
 
     
 
CBSE 
Class XII Business Studies 
All India Board Paper Set 1 – 2018 
Time: 3 hrs. Max. Marks: 80 
 
General Instructions: 
(i) Answers to questions carrying 1 mark may be from one word to one sentence. 
(ii) Answers to questions carrying 3 marks may be from 50-75 words. 
(iii) Answers to questions carrying 4-5 marks may be about 150 words. 
(iv) Answers to questions carrying 6 marks may be about 200 words. 
(v) Attempt all parts of a question together.   
 
Question 1 
Define ‘Decentralisation’.  [1] 
 
Question 2 
Give the meaning of ‘Method’ as a type of plan.  [1] 
 
Question 3 
Saurabh decided to start a chocolates manufacturing business. He set then target of earning 
10% profit on sales in the first year. As a good businessman, he was concerned about the future 
of the business, which was uncertain. He gathered information that the demand for chocolates 
is increasing day-by-day. He used this information as the base for future planning and shared it 
with his team. On the basis of the gathered information, he scheduled a meeting in the 
following week to find innovative ways to achieve the objectives. 
List the first two steps, which have been followed by Saurabh that are related to the process of 
one of the functions of management.  [1] 
 
Question 4 
In the paint industry, various raw materials are mixed in different proportions with petroleum 
for manufacturing different kinds of paints. One specific raw material is not readily and 
regularly available to the paint manufacturing companies. Bonler Paints Company is also facing 
this problem and because of this there is a time lag between placing the order and the actual 
receipt of the material. But once it receives the raw materials, it takes less time in converting it 
into finished goods. 
Identify the factor affecting the working capital requirements of this industry.  [1] 
 
Question 5 
An investor wanted to incest `20,000 in Treasury Bills for a period of 91days. When he 
approached the Reserve Bank of India for this purpose he came to know that it was not 
possible. 
Identify the reason why the investor could not invest in the Treasury Bill.  [1] 
  
 
CBSE XII  | BUSINESS STUDIES 
All India Board Paper Set 1 – 2018 
 
     
 
Question 6 
Why is the understanding of ‘Marketing Management Philosophies’ important?  [1] 
 
Question 7 
Give the constitution of the District Consumer Disputes Redressal Forum under the Consumer 
Protection Act, 1986.  [1] 
 
Question 8 
‘Buy one get one free’ is printed on the label of the package of a mosquito repellant. 
State the labelling function being performed by this statement.  [1] 
 
Question 9 
Differentiate between formal and informal organisations on the basis of (i) origin, (ii) 
authority, and (iii) flow of communication.   [3] 
 
Question 10 
State the steps in the selection procedure, after the employment interview and before the job 
offer.  [3] 
 
Question 11 
Sandhya is a successful manager at Manisons Enterprises. She has a team of twelve people 
working under her. She encourages them to set their own objectives and take decisions. She 
respects their opinions and supports them, so that they can perform their duties and 
accomplish organisational objectives. To manage and exercise effective control she uses forces 
within the group. 
As an intelligent manager, at times, she also makes use of positive aspects of informal 
communication. This way, she is able to unify diverse interests and ensure that targets are met. 
(a) There are many theories and styles of influencing people's behaviour. Identify the style 
used by Sandhya which is based on the use of authority. 
(b) State two positive aspects of the communication discussed above, which Sandhya is using 
as an intelligent manager.   [3] 
 
Question 12 
The Return on Investment (ROI) of a company ranges between 10-12% for the past three 
years. To finance its future fixed capital needs, it has the following options for borrowing debt: 
Option ‘A’ : Rate of interest 9% 
Option ‘B’ : Rate of interest 13% 
Which source of debt, ‘Option A’ or ‘Option B’, is better? Give reasons in support of your 
answer. Also state the concept being used in taking the decision. [3] 
 
Question 13 
Explain briefly any two points of importance of consumer protection from the point of view of 
business.  [3] 
  
 
CBSE XII  | BUSINESS STUDIES 
All India Board Paper Set 1 – 2018 
 
     
 
Question 14 
Aradhana and Gandharv are heads of two different departments in 'Yumco Ltd.' 'They are 
efficient managers and are able to motivate the employee of their respective departments to 
improve performance. However, their drive to excel in their own sphere of activity instead of 
giving emphasis on objectives of the enterprise has hindered the interaction between the 
departments that Aradhana and Gandharv are heading. Often there are inter-departmental 
conflicts and they have become incompatible. This has proved to be harmful in the fulfilment of 
the organisational objectives. The situation has deteriorated to such an extent that the CEO of 
'Yumco Ltd.' has hired a consultant, Rashmi, to resolve the problem. After studying the 
situation closely, Rashmi found that the problem has arisen due to inflexibility and a narrow 
perspective on the part of both Aradhana and Gandharv. She is of the view that this situation is 
a result of the type of organisational structure 'Yumco Ltd.’ has adopted.  
From the above information, identify the organisational structure adopted by ‘Yumco Ltd.’ and 
state any three advantages of the structure so identified.  [4] 
 
Question 15 
In 2015, Naveen left his luxurious life in Mumbai, where he worked as a manager for Blue Birds 
Ltd. He shifted to Begampur, Chhattisgarh to fulfil his grandmother's dream of converting their 
25-acre ancestral land into a fertile farm. For this he set out specific goals along with the 
activities to be performed to achieve the goals. 
Every activity was a challenge since he was clueless about farming. He learnt every activity 
from filling the land to sowing the seeds. To aid farmers he launched his own company 
'Innovative Agriculture Solutions Pvt. Ltd.’ 
It was difficult initially as no one trusted an urban youth telling farmers about farming. But 
when everything was discussed in detail the farmers started taking interest. He wanted to 
ensure that the future events meet effectively the best interests of the company. Through sales 
forecasting, he prepared an annual plan for production and sales. 
He also found that the farmers grew only paddy, which was an activity of 3 - 4 months and land 
remained idle for the rest 8-9 months of the year. He not only identified but evaluated various 
alternatives through which the farms could be utilised for the remaining months of the year. 
Through correct foresight and logical and systematic thinking based on analysis of all facts, all 
alternative were examined and evaluated. He promoted a plan to the farmers, where after 
harvesting paddy, vegetables could be grown. 
The above case highlights the features of one of the functions of management. By quoting lines 
from the above identify and explain these features.   [4] 
 
Question 16 
Explain any four points of importance of the controlling function of management. [4] 
 
Question 17 
Ram Murthy, the CEO of ‘Goodcare Hospitals’, a leading chain of hospitals, decided to reward 
the good work of the doctors of his organisation. For this he instituted two running trophies. A 
‘Healthcare Achievers Trophy’ to acknowledge and appreciate the tireless efforts of the doctors 
Page 4


  
 
CBSE XII  | BUSINESS STUDIES 
All India Board Paper Set 1 – 2018 
 
     
 
CBSE 
Class XII Business Studies 
All India Board Paper Set 1 – 2018 
Time: 3 hrs. Max. Marks: 80 
 
General Instructions: 
(i) Answers to questions carrying 1 mark may be from one word to one sentence. 
(ii) Answers to questions carrying 3 marks may be from 50-75 words. 
(iii) Answers to questions carrying 4-5 marks may be about 150 words. 
(iv) Answers to questions carrying 6 marks may be about 200 words. 
(v) Attempt all parts of a question together.   
 
Question 1 
Define ‘Decentralisation’.  [1] 
 
Question 2 
Give the meaning of ‘Method’ as a type of plan.  [1] 
 
Question 3 
Saurabh decided to start a chocolates manufacturing business. He set then target of earning 
10% profit on sales in the first year. As a good businessman, he was concerned about the future 
of the business, which was uncertain. He gathered information that the demand for chocolates 
is increasing day-by-day. He used this information as the base for future planning and shared it 
with his team. On the basis of the gathered information, he scheduled a meeting in the 
following week to find innovative ways to achieve the objectives. 
List the first two steps, which have been followed by Saurabh that are related to the process of 
one of the functions of management.  [1] 
 
Question 4 
In the paint industry, various raw materials are mixed in different proportions with petroleum 
for manufacturing different kinds of paints. One specific raw material is not readily and 
regularly available to the paint manufacturing companies. Bonler Paints Company is also facing 
this problem and because of this there is a time lag between placing the order and the actual 
receipt of the material. But once it receives the raw materials, it takes less time in converting it 
into finished goods. 
Identify the factor affecting the working capital requirements of this industry.  [1] 
 
Question 5 
An investor wanted to incest `20,000 in Treasury Bills for a period of 91days. When he 
approached the Reserve Bank of India for this purpose he came to know that it was not 
possible. 
Identify the reason why the investor could not invest in the Treasury Bill.  [1] 
  
 
CBSE XII  | BUSINESS STUDIES 
All India Board Paper Set 1 – 2018 
 
     
 
Question 6 
Why is the understanding of ‘Marketing Management Philosophies’ important?  [1] 
 
Question 7 
Give the constitution of the District Consumer Disputes Redressal Forum under the Consumer 
Protection Act, 1986.  [1] 
 
Question 8 
‘Buy one get one free’ is printed on the label of the package of a mosquito repellant. 
State the labelling function being performed by this statement.  [1] 
 
Question 9 
Differentiate between formal and informal organisations on the basis of (i) origin, (ii) 
authority, and (iii) flow of communication.   [3] 
 
Question 10 
State the steps in the selection procedure, after the employment interview and before the job 
offer.  [3] 
 
Question 11 
Sandhya is a successful manager at Manisons Enterprises. She has a team of twelve people 
working under her. She encourages them to set their own objectives and take decisions. She 
respects their opinions and supports them, so that they can perform their duties and 
accomplish organisational objectives. To manage and exercise effective control she uses forces 
within the group. 
As an intelligent manager, at times, she also makes use of positive aspects of informal 
communication. This way, she is able to unify diverse interests and ensure that targets are met. 
(a) There are many theories and styles of influencing people's behaviour. Identify the style 
used by Sandhya which is based on the use of authority. 
(b) State two positive aspects of the communication discussed above, which Sandhya is using 
as an intelligent manager.   [3] 
 
Question 12 
The Return on Investment (ROI) of a company ranges between 10-12% for the past three 
years. To finance its future fixed capital needs, it has the following options for borrowing debt: 
Option ‘A’ : Rate of interest 9% 
Option ‘B’ : Rate of interest 13% 
Which source of debt, ‘Option A’ or ‘Option B’, is better? Give reasons in support of your 
answer. Also state the concept being used in taking the decision. [3] 
 
Question 13 
Explain briefly any two points of importance of consumer protection from the point of view of 
business.  [3] 
  
 
CBSE XII  | BUSINESS STUDIES 
All India Board Paper Set 1 – 2018 
 
     
 
Question 14 
Aradhana and Gandharv are heads of two different departments in 'Yumco Ltd.' 'They are 
efficient managers and are able to motivate the employee of their respective departments to 
improve performance. However, their drive to excel in their own sphere of activity instead of 
giving emphasis on objectives of the enterprise has hindered the interaction between the 
departments that Aradhana and Gandharv are heading. Often there are inter-departmental 
conflicts and they have become incompatible. This has proved to be harmful in the fulfilment of 
the organisational objectives. The situation has deteriorated to such an extent that the CEO of 
'Yumco Ltd.' has hired a consultant, Rashmi, to resolve the problem. After studying the 
situation closely, Rashmi found that the problem has arisen due to inflexibility and a narrow 
perspective on the part of both Aradhana and Gandharv. She is of the view that this situation is 
a result of the type of organisational structure 'Yumco Ltd.’ has adopted.  
From the above information, identify the organisational structure adopted by ‘Yumco Ltd.’ and 
state any three advantages of the structure so identified.  [4] 
 
Question 15 
In 2015, Naveen left his luxurious life in Mumbai, where he worked as a manager for Blue Birds 
Ltd. He shifted to Begampur, Chhattisgarh to fulfil his grandmother's dream of converting their 
25-acre ancestral land into a fertile farm. For this he set out specific goals along with the 
activities to be performed to achieve the goals. 
Every activity was a challenge since he was clueless about farming. He learnt every activity 
from filling the land to sowing the seeds. To aid farmers he launched his own company 
'Innovative Agriculture Solutions Pvt. Ltd.’ 
It was difficult initially as no one trusted an urban youth telling farmers about farming. But 
when everything was discussed in detail the farmers started taking interest. He wanted to 
ensure that the future events meet effectively the best interests of the company. Through sales 
forecasting, he prepared an annual plan for production and sales. 
He also found that the farmers grew only paddy, which was an activity of 3 - 4 months and land 
remained idle for the rest 8-9 months of the year. He not only identified but evaluated various 
alternatives through which the farms could be utilised for the remaining months of the year. 
Through correct foresight and logical and systematic thinking based on analysis of all facts, all 
alternative were examined and evaluated. He promoted a plan to the farmers, where after 
harvesting paddy, vegetables could be grown. 
The above case highlights the features of one of the functions of management. By quoting lines 
from the above identify and explain these features.   [4] 
 
Question 16 
Explain any four points of importance of the controlling function of management. [4] 
 
Question 17 
Ram Murthy, the CEO of ‘Goodcare Hospitals’, a leading chain of hospitals, decided to reward 
the good work of the doctors of his organisation. For this he instituted two running trophies. A 
‘Healthcare Achievers Trophy’ to acknowledge and appreciate the tireless efforts of the doctors 
  
 
CBSE XII  | BUSINESS STUDIES 
All India Board Paper Set 1 – 2018 
 
     
 
who rendered selfless services to the patients and another ‘Beti Bachao Trophy’ to recognise 
the outstanding work done by the doctors in saving the girl child.   
The CEO also wanted to improve the health services in rural areas all over the country. He 
decided that all doctors must work in rural areas for at least six months. He also decided that 
the paramedical staff should be employed locally. 
(a) Identify the incentive provided by ‘Goodcare Hospitals’ to its doctors through running 
trophies. 
(b) Which need of the doctors will be satisfied through the incentive identified in part (a)? 
State. 
(c) State any two values that the CEO of ‘Goodcare Hospitals’ is trying to communicate to the 
society.  [4] 
 
Question 18 
State the protective functions of Securities and Exchange Board of India.  [4] 
 
Question 19 
Sumit purchased an ISI marked washing machine of a famous brand ‘MG’ from TG Electronics 
Ltd. The shopkeeper asked him to wait for two days for installation of the machine. His friend, 
Vivek, was very fond of experimenting with new electronic products. He told Sumit that there 
is no need to wait for the company’s representative to install the machine and that he could do 
it. So, both of them installed the machine without following the manufacturer’s instructions. 
Initially, the machine worked effectively and the wash was good. But after two days, the 
machine stared stopping in between the wash cycle. Sumit and Vivek tried their best to start 
the machine but failed in their efforts. Sumit, therefore, approached TG Electronics Ltd., which 
refused to provide any service on the plea that the installation of the machine was not done by 
the company.  
(a) State the responsibility which Sumit had to fulfil as an aware consumer to get the services 
of the company. 
(b) Explain briefly any two rights which Sumit could have exercised had he fulfilled his 
responsibility identified in part (a).  [4] 
 
Question 20 
What is meant by co-ordination? State its any four features.  [5] 
 
Question 21 
‘Konark Ltd.’ Is an electronic goods manufacturing enterprise situated in Shivpuri, Madhya 
Pradesh. It is earning a very low revenue in comparison to a competing electronic goods 
manufacturing enterprise, ‘Nova Ltd.’ situated in Mumbai. Both Konark’s and Nova’s 
operations are affected directly by the investors, customers, competitors and suppliers, which 
are unique to their respective locations. In addition to this, individual firms of this field are 
affected indirectly by the factors like the money supply in the economy, composition of the 
families, the technological changes etc. 
(a)    Identify and state the feature of the concept discussed in the above paragraph. 
Page 5


  
 
CBSE XII  | BUSINESS STUDIES 
All India Board Paper Set 1 – 2018 
 
     
 
CBSE 
Class XII Business Studies 
All India Board Paper Set 1 – 2018 
Time: 3 hrs. Max. Marks: 80 
 
General Instructions: 
(i) Answers to questions carrying 1 mark may be from one word to one sentence. 
(ii) Answers to questions carrying 3 marks may be from 50-75 words. 
(iii) Answers to questions carrying 4-5 marks may be about 150 words. 
(iv) Answers to questions carrying 6 marks may be about 200 words. 
(v) Attempt all parts of a question together.   
 
Question 1 
Define ‘Decentralisation’.  [1] 
 
Question 2 
Give the meaning of ‘Method’ as a type of plan.  [1] 
 
Question 3 
Saurabh decided to start a chocolates manufacturing business. He set then target of earning 
10% profit on sales in the first year. As a good businessman, he was concerned about the future 
of the business, which was uncertain. He gathered information that the demand for chocolates 
is increasing day-by-day. He used this information as the base for future planning and shared it 
with his team. On the basis of the gathered information, he scheduled a meeting in the 
following week to find innovative ways to achieve the objectives. 
List the first two steps, which have been followed by Saurabh that are related to the process of 
one of the functions of management.  [1] 
 
Question 4 
In the paint industry, various raw materials are mixed in different proportions with petroleum 
for manufacturing different kinds of paints. One specific raw material is not readily and 
regularly available to the paint manufacturing companies. Bonler Paints Company is also facing 
this problem and because of this there is a time lag between placing the order and the actual 
receipt of the material. But once it receives the raw materials, it takes less time in converting it 
into finished goods. 
Identify the factor affecting the working capital requirements of this industry.  [1] 
 
Question 5 
An investor wanted to incest `20,000 in Treasury Bills for a period of 91days. When he 
approached the Reserve Bank of India for this purpose he came to know that it was not 
possible. 
Identify the reason why the investor could not invest in the Treasury Bill.  [1] 
  
 
CBSE XII  | BUSINESS STUDIES 
All India Board Paper Set 1 – 2018 
 
     
 
Question 6 
Why is the understanding of ‘Marketing Management Philosophies’ important?  [1] 
 
Question 7 
Give the constitution of the District Consumer Disputes Redressal Forum under the Consumer 
Protection Act, 1986.  [1] 
 
Question 8 
‘Buy one get one free’ is printed on the label of the package of a mosquito repellant. 
State the labelling function being performed by this statement.  [1] 
 
Question 9 
Differentiate between formal and informal organisations on the basis of (i) origin, (ii) 
authority, and (iii) flow of communication.   [3] 
 
Question 10 
State the steps in the selection procedure, after the employment interview and before the job 
offer.  [3] 
 
Question 11 
Sandhya is a successful manager at Manisons Enterprises. She has a team of twelve people 
working under her. She encourages them to set their own objectives and take decisions. She 
respects their opinions and supports them, so that they can perform their duties and 
accomplish organisational objectives. To manage and exercise effective control she uses forces 
within the group. 
As an intelligent manager, at times, she also makes use of positive aspects of informal 
communication. This way, she is able to unify diverse interests and ensure that targets are met. 
(a) There are many theories and styles of influencing people's behaviour. Identify the style 
used by Sandhya which is based on the use of authority. 
(b) State two positive aspects of the communication discussed above, which Sandhya is using 
as an intelligent manager.   [3] 
 
Question 12 
The Return on Investment (ROI) of a company ranges between 10-12% for the past three 
years. To finance its future fixed capital needs, it has the following options for borrowing debt: 
Option ‘A’ : Rate of interest 9% 
Option ‘B’ : Rate of interest 13% 
Which source of debt, ‘Option A’ or ‘Option B’, is better? Give reasons in support of your 
answer. Also state the concept being used in taking the decision. [3] 
 
Question 13 
Explain briefly any two points of importance of consumer protection from the point of view of 
business.  [3] 
  
 
CBSE XII  | BUSINESS STUDIES 
All India Board Paper Set 1 – 2018 
 
     
 
Question 14 
Aradhana and Gandharv are heads of two different departments in 'Yumco Ltd.' 'They are 
efficient managers and are able to motivate the employee of their respective departments to 
improve performance. However, their drive to excel in their own sphere of activity instead of 
giving emphasis on objectives of the enterprise has hindered the interaction between the 
departments that Aradhana and Gandharv are heading. Often there are inter-departmental 
conflicts and they have become incompatible. This has proved to be harmful in the fulfilment of 
the organisational objectives. The situation has deteriorated to such an extent that the CEO of 
'Yumco Ltd.' has hired a consultant, Rashmi, to resolve the problem. After studying the 
situation closely, Rashmi found that the problem has arisen due to inflexibility and a narrow 
perspective on the part of both Aradhana and Gandharv. She is of the view that this situation is 
a result of the type of organisational structure 'Yumco Ltd.’ has adopted.  
From the above information, identify the organisational structure adopted by ‘Yumco Ltd.’ and 
state any three advantages of the structure so identified.  [4] 
 
Question 15 
In 2015, Naveen left his luxurious life in Mumbai, where he worked as a manager for Blue Birds 
Ltd. He shifted to Begampur, Chhattisgarh to fulfil his grandmother's dream of converting their 
25-acre ancestral land into a fertile farm. For this he set out specific goals along with the 
activities to be performed to achieve the goals. 
Every activity was a challenge since he was clueless about farming. He learnt every activity 
from filling the land to sowing the seeds. To aid farmers he launched his own company 
'Innovative Agriculture Solutions Pvt. Ltd.’ 
It was difficult initially as no one trusted an urban youth telling farmers about farming. But 
when everything was discussed in detail the farmers started taking interest. He wanted to 
ensure that the future events meet effectively the best interests of the company. Through sales 
forecasting, he prepared an annual plan for production and sales. 
He also found that the farmers grew only paddy, which was an activity of 3 - 4 months and land 
remained idle for the rest 8-9 months of the year. He not only identified but evaluated various 
alternatives through which the farms could be utilised for the remaining months of the year. 
Through correct foresight and logical and systematic thinking based on analysis of all facts, all 
alternative were examined and evaluated. He promoted a plan to the farmers, where after 
harvesting paddy, vegetables could be grown. 
The above case highlights the features of one of the functions of management. By quoting lines 
from the above identify and explain these features.   [4] 
 
Question 16 
Explain any four points of importance of the controlling function of management. [4] 
 
Question 17 
Ram Murthy, the CEO of ‘Goodcare Hospitals’, a leading chain of hospitals, decided to reward 
the good work of the doctors of his organisation. For this he instituted two running trophies. A 
‘Healthcare Achievers Trophy’ to acknowledge and appreciate the tireless efforts of the doctors 
  
 
CBSE XII  | BUSINESS STUDIES 
All India Board Paper Set 1 – 2018 
 
     
 
who rendered selfless services to the patients and another ‘Beti Bachao Trophy’ to recognise 
the outstanding work done by the doctors in saving the girl child.   
The CEO also wanted to improve the health services in rural areas all over the country. He 
decided that all doctors must work in rural areas for at least six months. He also decided that 
the paramedical staff should be employed locally. 
(a) Identify the incentive provided by ‘Goodcare Hospitals’ to its doctors through running 
trophies. 
(b) Which need of the doctors will be satisfied through the incentive identified in part (a)? 
State. 
(c) State any two values that the CEO of ‘Goodcare Hospitals’ is trying to communicate to the 
society.  [4] 
 
Question 18 
State the protective functions of Securities and Exchange Board of India.  [4] 
 
Question 19 
Sumit purchased an ISI marked washing machine of a famous brand ‘MG’ from TG Electronics 
Ltd. The shopkeeper asked him to wait for two days for installation of the machine. His friend, 
Vivek, was very fond of experimenting with new electronic products. He told Sumit that there 
is no need to wait for the company’s representative to install the machine and that he could do 
it. So, both of them installed the machine without following the manufacturer’s instructions. 
Initially, the machine worked effectively and the wash was good. But after two days, the 
machine stared stopping in between the wash cycle. Sumit and Vivek tried their best to start 
the machine but failed in their efforts. Sumit, therefore, approached TG Electronics Ltd., which 
refused to provide any service on the plea that the installation of the machine was not done by 
the company.  
(a) State the responsibility which Sumit had to fulfil as an aware consumer to get the services 
of the company. 
(b) Explain briefly any two rights which Sumit could have exercised had he fulfilled his 
responsibility identified in part (a).  [4] 
 
Question 20 
What is meant by co-ordination? State its any four features.  [5] 
 
Question 21 
‘Konark Ltd.’ Is an electronic goods manufacturing enterprise situated in Shivpuri, Madhya 
Pradesh. It is earning a very low revenue in comparison to a competing electronic goods 
manufacturing enterprise, ‘Nova Ltd.’ situated in Mumbai. Both Konark’s and Nova’s 
operations are affected directly by the investors, customers, competitors and suppliers, which 
are unique to their respective locations. In addition to this, individual firms of this field are 
affected indirectly by the factors like the money supply in the economy, composition of the 
families, the technological changes etc. 
(a)    Identify and state the feature of the concept discussed in the above paragraph. 
  
 
CBSE XII  | BUSINESS STUDIES 
All India Board Paper Set 1 – 2018 
 
     
 
(b)    Also, state any four points of importance of this concept.  [5] 
 
Question 22 
After acquiring the necessary knowledge and skills on starting an Aloevera Farm. Ashok 
wanted to be the leading manufacturer of Aloevera products worldwide. He observed that the 
products were expensive as the demand of the products was more than supply. He was also 
keen to promote methods and practices that were economically visible, environmentally sound 
and at the same time protecting public health. 
Ashok's main consideration was about the amount of money paid by the consumers in 
consideration of the purchase of Aloevera products. He also thought that competitors prices 
and their anticipated reactions must also be considered for this. 
After gathering and analysing information and doing correct marketing planning, he came to 
know that the consumers compare the value of a product to the value of money which they are 
required to pay. The consumers will be ready to buy a product when they perceived that the 
value of the product is at least equal to the value of money which they would pay. 
Since he was entering into a new market, he felt that he may not be able to cover all costs. He 
knew that in the long run the business will not be able to survive unless all costs are covered in 
addition to a minimum profit. 
He examined the quality and features of the products of the competitors and the anticipated 
reactions of the consumers. Considering the same he decided to add some unique features to 
the packaging and also decided to provide free home delivery of the products. 
The above case relates to a concept which is considered to be an effective competitive 
marketing weapon. In conditions of perfect competition most of the firms compete with each 
other on this concept in the marketing of goods and services. 
(a) Identify the concept. 
(b) Explain briefly any four factors discussed in the above case related to the concept so 
identified.  [5] 
 
Question 23 
Karan Nath took over ‘D’ north Motor Company' from his ailing father three months ago. In the 
past the company was not performing well. Karan was determined to improve the company's 
performance. He observed that the methods of production as well as selection of employees in 
the company were not scientific. 
He believed that there was only one best method to maximise efficiency. He also felt that once 
the method is developed, the workers of the company should be trained to learn that 'best 
method'. 
He asked the Production Manager to develop the best method and carry out the necessary 
training. The Production Manager developed this method using several parameters right from 
deciding the sequence of operations, place for men, machines and raw materials till the 
delivery of the product to the customers. This method was implemented throughout the 
organisation. It helped in increasing the output, improving the quality and reducing the cost 
and wastage. 
Identify and explain the principles and the technique of scientific management followed by the 
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