CBSE Business Studies Past year paper Delhi (Set - 1) Solution - 2016, Class 12 | Additional Study Material for Commerce PDF Download

 Page 1


  
 
CBSE XII  | Business Studies 
Delhi Board Paper Set 1 – 2016 Solution 
 
     
CBSE 
Class XII Business Studies 
Delhi Board Paper Set 1 – 2016 Solution 
 
Answer 1 
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 2 
As an element of delegation, authority implies empowering different individuals in an 
organisation to guide their subordinates and to allot performance targets to them. It also 
includes giving adequate decision-making powers to individuals to perform their job. 
Answer 3 
The organisational structure which promotes efficiency of manpower is ‘Functional 
Structure ’. 
Answer 4 
The key role of a gang boss is to provide for all inputs required by workers to initiate their 
tasks. He reports to the in-charge of production under functional foremanship.  
Answer 5 
Investment decisions or capital budgeting decisions made by a company affect its size of 
assets, profitability and competitiveness. 
Answer 6 
‘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 7 
The market function concerned with informing customers about a firm’s products is 
promotion. 
Answer 8 
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 9 
Three features of planning: 
i. Attainment of goals: Planning lays a foundation for the key goals of an organisation 
to be achieved. It makes sure that the organisation uses all its available resources to 
achieve the desired level of output in a given time. It ensures that the organisation 
Page 2


  
 
CBSE XII  | Business Studies 
Delhi Board Paper Set 1 – 2016 Solution 
 
     
CBSE 
Class XII Business Studies 
Delhi Board Paper Set 1 – 2016 Solution 
 
Answer 1 
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 2 
As an element of delegation, authority implies empowering different individuals in an 
organisation to guide their subordinates and to allot performance targets to them. It also 
includes giving adequate decision-making powers to individuals to perform their job. 
Answer 3 
The organisational structure which promotes efficiency of manpower is ‘Functional 
Structure ’. 
Answer 4 
The key role of a gang boss is to provide for all inputs required by workers to initiate their 
tasks. He reports to the in-charge of production under functional foremanship.  
Answer 5 
Investment decisions or capital budgeting decisions made by a company affect its size of 
assets, profitability and competitiveness. 
Answer 6 
‘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 7 
The market function concerned with informing customers about a firm’s products is 
promotion. 
Answer 8 
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 9 
Three features of planning: 
i. Attainment of goals: Planning lays a foundation for the key goals of an organisation 
to be achieved. It makes sure that the organisation uses all its available resources to 
achieve the desired level of output in a given time. It ensures that the organisation 
  
 
CBSE XII  | Business Studies 
Delhi Board Paper Set 1 – 2016 Solution 
 
     
follows a particular strategy in routine to achieve the desired results ultimately. For 
example, if an organisation expects to increase its turnover by 30% in one year, then 
plans are formulated in accordance with that desired expectation of results. 
ii. Basis of subsequent functions: Planning serves as a basis or foundation for 
subsequent functions of management, i.e. directing, controlling, staffing and 
organising. When the desired performance/output level is planned, the other 
functions come into play. Without a plan, all other functions of management would 
serve no purpose at all. 
iii. Broad scope: Plans are made and followed by all levels of a particular organisation 
to achieve their certain standards of performance. Top level managers make plans 
to initiate and implement different policies. Middle level managers make plans to 
get the workers to understand and follow the policies. Lower level managers plan to 
supervise and guide workers to achieve their targets. 
Answer 10 
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 no 
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 11 
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 1 – 2016 Solution 
 
     
CBSE 
Class XII Business Studies 
Delhi Board Paper Set 1 – 2016 Solution 
 
Answer 1 
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 2 
As an element of delegation, authority implies empowering different individuals in an 
organisation to guide their subordinates and to allot performance targets to them. It also 
includes giving adequate decision-making powers to individuals to perform their job. 
Answer 3 
The organisational structure which promotes efficiency of manpower is ‘Functional 
Structure ’. 
Answer 4 
The key role of a gang boss is to provide for all inputs required by workers to initiate their 
tasks. He reports to the in-charge of production under functional foremanship.  
Answer 5 
Investment decisions or capital budgeting decisions made by a company affect its size of 
assets, profitability and competitiveness. 
Answer 6 
‘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 7 
The market function concerned with informing customers about a firm’s products is 
promotion. 
Answer 8 
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 9 
Three features of planning: 
i. Attainment of goals: Planning lays a foundation for the key goals of an organisation 
to be achieved. It makes sure that the organisation uses all its available resources to 
achieve the desired level of output in a given time. It ensures that the organisation 
  
 
CBSE XII  | Business Studies 
Delhi Board Paper Set 1 – 2016 Solution 
 
     
follows a particular strategy in routine to achieve the desired results ultimately. For 
example, if an organisation expects to increase its turnover by 30% in one year, then 
plans are formulated in accordance with that desired expectation of results. 
ii. Basis of subsequent functions: Planning serves as a basis or foundation for 
subsequent functions of management, i.e. directing, controlling, staffing and 
organising. When the desired performance/output level is planned, the other 
functions come into play. Without a plan, all other functions of management would 
serve no purpose at all. 
iii. Broad scope: Plans are made and followed by all levels of a particular organisation 
to achieve their certain standards of performance. Top level managers make plans 
to initiate and implement different policies. Middle level managers make plans to 
get the workers to understand and follow the policies. Lower level managers plan to 
supervise and guide workers to achieve their targets. 
Answer 10 
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 no 
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 11 
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 1 – 2016 Solution 
 
     
Answer 12 
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 13 
Three functions performed by non-governmental organisations for consumer protection: 
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 14 
Importance of management can be highlighted using the following points: 
1. Attainment of objectives: Management performs the task of attaining the key 
objectives of an organisation by planning, organising, directing, staffing and 
controlling various resources available in the organisation. 
2. Efficient utilisation of resources: Management aims to utilise all resources 
available in an organisation efficiently. Efficiency implies minimisation of cost and 
time to achieve certain standard of performance. 
3. Adaptability: Management makes sure that the organisation is adaptable to 
changes pertaining in the market at any moment. It prepares the organisation to 
face forthcoming challenges and face competitors in the best possible manner. 
4. Social welfare: Management helps in social welfare by manufacturing good quality 
products at fair price in the market. Social welfare is made possible by the 
management through the value delivered by them in their product. 
Answer 15 
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.  
Page 4


  
 
CBSE XII  | Business Studies 
Delhi Board Paper Set 1 – 2016 Solution 
 
     
CBSE 
Class XII Business Studies 
Delhi Board Paper Set 1 – 2016 Solution 
 
Answer 1 
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 2 
As an element of delegation, authority implies empowering different individuals in an 
organisation to guide their subordinates and to allot performance targets to them. It also 
includes giving adequate decision-making powers to individuals to perform their job. 
Answer 3 
The organisational structure which promotes efficiency of manpower is ‘Functional 
Structure ’. 
Answer 4 
The key role of a gang boss is to provide for all inputs required by workers to initiate their 
tasks. He reports to the in-charge of production under functional foremanship.  
Answer 5 
Investment decisions or capital budgeting decisions made by a company affect its size of 
assets, profitability and competitiveness. 
Answer 6 
‘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 7 
The market function concerned with informing customers about a firm’s products is 
promotion. 
Answer 8 
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 9 
Three features of planning: 
i. Attainment of goals: Planning lays a foundation for the key goals of an organisation 
to be achieved. It makes sure that the organisation uses all its available resources to 
achieve the desired level of output in a given time. It ensures that the organisation 
  
 
CBSE XII  | Business Studies 
Delhi Board Paper Set 1 – 2016 Solution 
 
     
follows a particular strategy in routine to achieve the desired results ultimately. For 
example, if an organisation expects to increase its turnover by 30% in one year, then 
plans are formulated in accordance with that desired expectation of results. 
ii. Basis of subsequent functions: Planning serves as a basis or foundation for 
subsequent functions of management, i.e. directing, controlling, staffing and 
organising. When the desired performance/output level is planned, the other 
functions come into play. Without a plan, all other functions of management would 
serve no purpose at all. 
iii. Broad scope: Plans are made and followed by all levels of a particular organisation 
to achieve their certain standards of performance. Top level managers make plans 
to initiate and implement different policies. Middle level managers make plans to 
get the workers to understand and follow the policies. Lower level managers plan to 
supervise and guide workers to achieve their targets. 
Answer 10 
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 no 
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 11 
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 1 – 2016 Solution 
 
     
Answer 12 
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 13 
Three functions performed by non-governmental organisations for consumer protection: 
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 14 
Importance of management can be highlighted using the following points: 
1. Attainment of objectives: Management performs the task of attaining the key 
objectives of an organisation by planning, organising, directing, staffing and 
controlling various resources available in the organisation. 
2. Efficient utilisation of resources: Management aims to utilise all resources 
available in an organisation efficiently. Efficiency implies minimisation of cost and 
time to achieve certain standard of performance. 
3. Adaptability: Management makes sure that the organisation is adaptable to 
changes pertaining in the market at any moment. It prepares the organisation to 
face forthcoming challenges and face competitors in the best possible manner. 
4. Social welfare: Management helps in social welfare by manufacturing good quality 
products at fair price in the market. Social welfare is made possible by the 
management through the value delivered by them in their product. 
Answer 15 
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.  
  
 
CBSE XII  | Business Studies 
Delhi Board Paper Set 1 – 2016 Solution 
 
     
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 16 
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 
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 
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: 
Page 5


  
 
CBSE XII  | Business Studies 
Delhi Board Paper Set 1 – 2016 Solution 
 
     
CBSE 
Class XII Business Studies 
Delhi Board Paper Set 1 – 2016 Solution 
 
Answer 1 
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 2 
As an element of delegation, authority implies empowering different individuals in an 
organisation to guide their subordinates and to allot performance targets to them. It also 
includes giving adequate decision-making powers to individuals to perform their job. 
Answer 3 
The organisational structure which promotes efficiency of manpower is ‘Functional 
Structure ’. 
Answer 4 
The key role of a gang boss is to provide for all inputs required by workers to initiate their 
tasks. He reports to the in-charge of production under functional foremanship.  
Answer 5 
Investment decisions or capital budgeting decisions made by a company affect its size of 
assets, profitability and competitiveness. 
Answer 6 
‘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 7 
The market function concerned with informing customers about a firm’s products is 
promotion. 
Answer 8 
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 9 
Three features of planning: 
i. Attainment of goals: Planning lays a foundation for the key goals of an organisation 
to be achieved. It makes sure that the organisation uses all its available resources to 
achieve the desired level of output in a given time. It ensures that the organisation 
  
 
CBSE XII  | Business Studies 
Delhi Board Paper Set 1 – 2016 Solution 
 
     
follows a particular strategy in routine to achieve the desired results ultimately. For 
example, if an organisation expects to increase its turnover by 30% in one year, then 
plans are formulated in accordance with that desired expectation of results. 
ii. Basis of subsequent functions: Planning serves as a basis or foundation for 
subsequent functions of management, i.e. directing, controlling, staffing and 
organising. When the desired performance/output level is planned, the other 
functions come into play. Without a plan, all other functions of management would 
serve no purpose at all. 
iii. Broad scope: Plans are made and followed by all levels of a particular organisation 
to achieve their certain standards of performance. Top level managers make plans 
to initiate and implement different policies. Middle level managers make plans to 
get the workers to understand and follow the policies. Lower level managers plan to 
supervise and guide workers to achieve their targets. 
Answer 10 
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 no 
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 11 
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 1 – 2016 Solution 
 
     
Answer 12 
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 13 
Three functions performed by non-governmental organisations for consumer protection: 
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 14 
Importance of management can be highlighted using the following points: 
1. Attainment of objectives: Management performs the task of attaining the key 
objectives of an organisation by planning, organising, directing, staffing and 
controlling various resources available in the organisation. 
2. Efficient utilisation of resources: Management aims to utilise all resources 
available in an organisation efficiently. Efficiency implies minimisation of cost and 
time to achieve certain standard of performance. 
3. Adaptability: Management makes sure that the organisation is adaptable to 
changes pertaining in the market at any moment. It prepares the organisation to 
face forthcoming challenges and face competitors in the best possible manner. 
4. Social welfare: Management helps in social welfare by manufacturing good quality 
products at fair price in the market. Social welfare is made possible by the 
management through the value delivered by them in their product. 
Answer 15 
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.  
  
 
CBSE XII  | Business Studies 
Delhi Board Paper Set 1 – 2016 Solution 
 
     
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 16 
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 
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 
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: 
  
 
CBSE XII  | Business Studies 
Delhi Board Paper Set 1 – 2016 Solution 
 
     
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 19 
The Stock Exchange serves the sole purpose of providing a market space for purchase and 
sale of securities in a transparent manner. Its functions can be explained using the 
following points: 
i. To serve as a platform for securities transfer: The Stock Exchange serves as a 
common platform among buyers and sellers of securities to provide them with 
liquidity, i.e. ease of convertibility into cash. It also provides free market mechanism 
to ensure that time and cost of transactions are minimised. 
ii. To provide fair deals through market price determination: The market demand 
and market supply are forces which determine the price of a security. The Stock 
Exchange makes sure that all buyers deal in that price only and not higher. 
iii. To provide investment opportunities: The Stock Exchange lists all securities and 
allows people to invest in different companies and reap the returns on that 
investment. This results in the benefit of both companies and investors and hence 
serves as a foundation of economic growth. 
iv. Facilitates prediction: The Stock Exchange facilitates prediction of prices of 
different securities in accordance with the legal code of conduct for the trade of 
securities to allow investors to trade cautiously. 
Answer 20 
Types of plans being discussed in the given paragraph: 
1. Objective: An objective broadly outlines the key task or target to be reached at the 
end of a certain time period by the organisation. In the given case, the objective is 
highlighted in the words ‘One of her objectives was to earn 10% profit on the 
amount invested in the first year’. 
2. Policy: A policy is a code of conduct to be followed by a particular organisation in a 
particular scenario. It is not specific and hence is interpreted according to the 
situation. In the given case, the lines ‘raw materials like fruits, vegetables, spices etc. 
will be purchased on three months credit from farmers cultivating organic crops 
only’ highlights a policy. 
3. Procedure: A procedure comprises guidelines to be followed in a specific order to 
make a policy decision to come into reality. In the given case, the line ‘Decide to