CBSE Past Year Question Paper - 2014 (Delhi Set - 2), Business Study, Class 12 Commerce Notes | EduRev

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CBSE Question Paper

Delhi - SET -2

Q1. ‘ Indian Logistics’ has its own warehousing arrangements at key locations across the country. Its warehousing services help business
firms to reduce their overheads, increase efficiency and cut down distribution time

State with reason, whether the working capital requirements of ‘Indian Logistics’ will be high or low.

(1)

Ans. Low, as it is a service industry, which usually do not have to maintain inventory.

Q2. ‘ Beauty Products Ltd’ is a natural and ethical beauty brand famous for offering organic beauty products for men and women. The company uses plant based materials for its products and is the No.1 beauty brand in the country. It not only satisfies its customers but also believes in overall protection of the planet. Identify the marketing management philosophy being followed by ‘Beauty Products Ltd.’

(1)

Ans. Societal marketing concept.

Q3. On Sonika’s birthday her mother gave her a pair of gold earrings. After one month Sonika observed that the ear-rings are losing their shine. She checked the mark on the ear-rings and found that it was not a proper Hallmark and her mother had been cheated by the shopkeeper. So, she filed a complaint in the district forum which rejected it. Not satisfied by the decision of district forum, she was very much disturbed and after two months decided to appeal further.
Can Sonika appeal against the decision of the district forum? Give reason in support of your answer.

(1)

Ans. No, Sonika cannot appeal now as the appeal has to be filed within 30 days of passing of the order by the district forum.

Q4. How does management help in achieving personal objectives? State.

(1)

Ans. Management helps in achieving personal objectives by motivating and leading in such a way that the individual members are able to achieve
personal goals while contributing to the overall organisational objectives.

 

Q5. Alliance Ltd. is engaged in manufacturing plastic buckets. The objective of the company is to manufacture 100 buckets a day. To
achieve this, the efforts of all departments are co-ordinated and interlinked and authority-responsibility relationship is established
among various job positions. There is clarity on who is to report to whom.
Name the function of management discussed above.

(1)

Ans. Organising.

 

Q6. Explain how’ cost of debt’ affects the choice of capital structure of a company.

(1)

Ans. ‘Cost of debt’ affects the choice of capital structure of a company as low interest rates increase a firm’s capacity to employ higher debt.

 

Q7. What is meant by ‘co-ordination’ in management?

(1)

Ans. Co-ordination is the process by which a manager synchronises the activities of different departments towards the achievement of a common
goal.
(or any other correct definition)

 

Q8. Define ‘ Planning’.

(1)

Ans. Planning is the process of setting objectives for a given time period, formulating various courses of action to achieve them and then selecting the best possible alternative from among the various courses of action available.
(or any other correct definition)

 

Q9. What is meant by ‘ divisional structure’ of an organization? State its any two advantages.

(3)

Ans. Divisional structure is an organisation structure comprising of separate business units or divisions created on the basis of different products,
geographical area, customer groups etc.
Advantages of divisional structure: (Any two)
(i) Product specialisation helps in the development of varied skills.
(ii) It helps in the fixation of responsibility as divisional heads are accountable for profits, revenues and costs related to their departments.
(iii) It promotes flexibility, initiative and faster decision making as each division is an autonomous unit.
(iv)It facilitates expansion and growth as new divisions can be added without interrupting the existing operations.
 

(If an examinee has given only the heading, ½ mark for each heading should be awarded)

 

Q10. ‘ Financial market plays an important role in the allocation of scarce resources in an economy by performing many important functions’
Explain any three such functions.

(3)

Ans. Financial market plays an important role in the allocation of scarce resources in an economy by performing the following functions: (Any three)
(i) Mobilisation of savings and channelising them into most productive use.
(ii) Facilitating price determination/ discovery.
(iii) Providing liquidity to financial assets.
(iv) Reducing the cost of transactions.
(If an examinee has not given the headings as above but has given the correct explanation, full credit be given)

Q11. Neeraj, a sales representative of ‘ Omida Ltd’ has changed seven jobs in the last one year. He is a hard working person but is not able to finalise deals with the customer due to his inadequate vocabulary and omission of needed words. Sometimes he uses wrong words because of which intended meaning is not conveyed. All this created a misunderstanding between him and his clients.
(a) Identify the communication barrier discussed above.
(b) State the category of this communication barrier.
(c) Explain any other communication barrier of the same category.

(3)

Ans. (a) Badly expressed message.
(b) Semantic barrier which arises from problems and obstructions in the process of encoding and decoding of message into words or impressions.
(c) Other barriers in the same category are: (Any one)
(i) Symbols with different meanings
(ii) Faulty translations
(iii) Unclarified assumptions
(iv) Technical jargon
(v) Body language and gesture decoding

 

Q12. Explain how the ‘product related factors’ affect the choice of channels of distribution?

(3)

Ans. Product related factors which affect the choice of channels of distribution (any three):
(i) Nature of Product.
(ii) Perishability of Product.
(iii) Value of Product.
(iv) Complexity of Product.

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

 

Q13 . Pramod was a supervisor at ‘ Annapurna Aata’ factory. The factory was producing 200 quintals of aata every day. His job was to make sure that the work goes on smoothly and there was no interruption in production. He was a good leader who would give orders only after
consulting his subordinates and work out the policies with the acceptance of the group.
Identify and describe the leadership style being adopted by Pramod.

Ans. Democratic style of leadership.

  • A democratic leader favours decision making by the group. This improves the attitude of the employees towards their jobs and the organization thereby increasing their morale.
  • Using this style is of mutual benefit – it allows them (subordinates) to become part of the team and helps leaders (seniors) to make better decisions.

 

Q14. What is meant by principles of management? State any three points of their importance.

(4)

Ans. Principles of management are broad and general guidelines for managerial decision making and behaviour.
Importance of principles of management :(any three):
(i) They provide the managers with useful insights into reality.
(ii) They help in optimum utilisation of resources as the wastages associated with trial and error approach can be overcome.
(iii) They help in effective administration as the decisions are free from personal bias.
(iv) They help in taking scientific decisions which are based on objective assessment of the situation.
(v) They help in meeting changing environment requirements as they can be modified according to the needs of the environment.
(vi) They help in fulfilling social responsibility by responding to the demands of the public.
(vii) They are used as a basis for management training, education and research by providing the basic groundwork for the development of
management as a discipline.

(If an examinee has given only the heading, ½ mark for each heading should be awarded)

 

Q15. Explain the following rights of a consumer as provided under Consumers Protection Act,1986:
(a) Right to Safety; and
(b) Right to be Heard.

(4)

Ans. (a) Right to Safety

  • Right to be protected against goods and services which are hazardous to life and health.
  • Right to get protection against the risks caused due to the use of substandard products or products that do not conform to the safety norms.

(b) Right to be Heard:

  • The consumer has right to file a complaint and to be heard in case of dissatisfaction with a product or a service.
  • It is because of this reason many firms have set up their own consumer service and grievance cells.

 

Q16. 'Ganesh Steel Ltd.' is a large and credit-worthy company manufacturing steel for the Indian market. It now wants to cater to the
Asian market and decides to invest in new hi-tech machines. Since the investment is large, it requires long-term finance. It decides to raise
funds by issuing equity shares. The issue of equity shares involves huge floatation cost. To meet the expenses of floatation cost the company decides to tap the money market.
(a) Name and explain the money-market instrument the company can use for the above purpose.
(b) What is the duration for which the company can get funds through this instrument?
(c) State any other purpose for which this instrument can be used.

Ans. (a) Commercial paper.
It is an instrument issued by large and creditworthy companies to raise short
term funds at lower rates of interest than the market rates. It is an unsecured, negotiable promissory note with a fixed maturity period.
(b) 15 days to one year.
(c) It can also be used for seasonal and working capital needs.

 

Q17. ‘Aapka Vidyalaya' believes in holistic development of students and encourages team building through a mix of curricular, co-curricular
and sports activities. On its founders day a stage performance had to be put up. A committee of ten prefects was constituted to plan different aspects of the function. They all decided to use recycled paper for decoration. There was a spirit of unity and harmony and all members supported each other. With mutual trust and belongingness the programme was systematically planned and executed. Kartik, one of the prefects realized that unknowingly the group had applied one of the principles of management while planning and executing the programme.
He was so inspired by the success of the function that he asked his father to apply the same principle in his business. His father replied that he was already using this principle.
(a) Identify the principle of management applied for the success of the programme.
(b) State any two features of management highlighted in the above para.
(c) Identify any two values which 'Aapka Vidyalaya' communicated to the society.

(4)

Ans. (a) Principle of management - Espirit de corps.
(b) Features of management: (Any two)

(i) MANAGEMENT IS PERVASIVE.
‘…he asked his father to apply the same principle in his business’.
Management is pervasive as it can be applied to all types/ levels of organisations.

(ii) MANAGEMENT IS A GROUP ACTIVITY
‘There was a spirit of unity and harmony and all members supported each other.
Management is a group activity because it requires team work and/or coordination of individual efforts.

(iii) MANAGEMENT IS GOAL ORIENTED.
‘….the programme was systematically planned and executed’.
Management is goal oriented as it unites the efforts of different individuals towards achieving organisational goals.

(iv) MANAGEMENT IS MULTI-DIMENSIONAL
‘…programme was systematically planned and executed’.
OR
‘There was a spirit of unity and harmony and all members supported each other’.
Management is multi-dimensional as it involves management of work, people and operations.

(v) MANAGEMENT IS INTANGIBLE

‘With mutual trust and belongingness….’.
OR
‘There was a spirit of unity and harmony and all members supported each
other’.
Management is intangible as it cannot be seen but its presence can be felt in
the way the organisation functions.
(IF AN EXAMINEE HAS IDENTIFIED THE FEATURE OF MANAGEMENT CORRECTLY, FULL CREDIT BE GIVEN FOR EITHER QUOTING THE LINE OR GIVING THE STATEMENT)

(c) Values being communicated to the society: (Any two)
(i) Concern for the environment.
(ii) Holistic development of children.
(iii) Teamwork
(or any other correct value)

 

Q18. The workers of 'Vyam Ltd.' are unable to work on new and hi-tech machines imported by the company to fulfill the increased demand. Therefore, the workers are seeking extra guidance from the supervisor. The supervisor is overburdened with the frequent calls of workers. Suggest how the supervisor, by increasing the skills and knowledge of workers, can make them handle their work independently?

Also state any three benefits that the workers will derive by the decision of the supervisor.

(4)

Ans. Training of employees/ Vestibule training/ On the job training.
Benefits the workers will derive by the decision of the supervisor: (Any three)
(a) It helps in promotion and career growth due to improved skills and knowledge.
(b) It helps them to earn more due to improved performance.
(c) It reduces accidents as the employees are more efficient to handle machines.
(d) It increases the morale of the employees as the employees are more satisfied.
(If an examinee has given only the heading, ½ mark for each heading should be awarded)

 

Q19. Samir Gupta started a telecommunication company, ‘ Donira Ltd.’ to manufacture economical mobile phones for the Indian rural market with 15 employees. The company did very well in its initial years. As the product was good and marketed well, the demand of its products went up. To increase production the company decided to recruit additional employees. Samir Gupta, who was earlier taking all the decisions for the company had to selectively disperse the authority. He believed that subordinates are competent, capable and resourceful and can assume responsibility for effective implementation of their decisions. This paid off and the company was not only able to increase its production but also expanded its product range.

(a)Identify the concept used by Samir Gupta through which he was able to steer his company to greater heights.
(b) Also explain any three points of importance of this concept.

(4)

Ans. (a) Decentralisation.
(b) Importance of decentralisation: (Any three)
(i) Develops initiative among subordinates.
(ii) Develops managerial talent for the future.
(iii) Quick decision making.
(iv) Relief to top management.
(v) Facilitates growth.
(vi) Better control.
(if an examinee has not given the headings as above but has given the correct explanation, full credit should be given)
(IF THE CONCEPT IS WRONGLY IDENTIFIED BUT THE POINTS OF IMPORTANCE ARE CORRECT, DUE CREDIT BE GIVEN)

 

Q20. State any five points which highlight the importance of delegation of authority.

(5)

Ans. Importance of delegation of authority: (Any five)
(i) It helps in effective management as the managers get more time to concentrate on important matters.
(ii) It helps in development of employees as the employees get more opportunities to utilize their talent.
(iii) It helps to motivate employees as the employees feel encouraged and try to improve their performance further.
(iv) It facilitates growth by providing a ready workforce to take up leading positions in new ventures.
(v) It establishes a management hierarchy through clear superior subordinate relationships.
(vi) It helps in better co-ordination by avoiding overlapping of duties.
(If an examinee has given only the heading, ½ mark for each heading should be awarded)

 

Q21. A company was manufacturing 'LED bulbs' which were in great demand. It was found that the target of producing 300 bulbs a day was not met by the employees. On analysis, it was found that the workers were not at fault. Due to electricity failure and shortage of workers, the company was not able to achieve the set targets and alternative arrangements were needed.
To meet the increased demand, the company assessed that approximately 88 additional workers were required out of which 8 would work as heads of different departments and 10 would work as subordinates under each head. The required qualifications and job
specifications were also enlisted. It was also decided that necessary relaxation should be given to encourage women, persons from backward and rural areas and persons with special abilities to assume responsible positions in the organisation. All efforts were made to match the ability of the applicants with the nature of work.
(a) Identify the functions of management discussed above.
(b) State the two steps in the process of each function discussed in the above para.
(c) List any two values which the company wants to communicate to the society.

(5)

Ans. (a) Staffing and controlling.
(b) Steps in Staffing:
(i) Estimating manpower requirements which involves knowing how many persons are needed and of what type.
‘To meet the increased demand, the company assessed that …. subordinates under each head’.
(ii) Recruitment which involves searching for prospective employees and stimulating them to apply for jobs in the organisation.
 

(IF AN EXAMINEE HAS ONLY IDENTIFIED ‘ESTIMATING MANPOWER REQUIREMENTS’ AS A STEP IN THE STAFFING PROCESS, FULL CREDIT IS TO BE GIVEN)
 

Steps in controlling: (Any two)
(i) Comparison of actual performance with the standards which would reveal the deviation between actual and desired results.
‘It was found that the target of producing 300 bulbs a day was not met by the employees’.
(ii) Analysing deviations which would help to find out the causes of deviation.
On analysis, it was found that the workers were not at fault….alternative arrangements were needed.
(iii) Taking corrective action, if required.
To meet the increased demand, the company assessed that approximately ….as subordinates under each head.
(If an examinee has given the steps of the process not discussed above , ½ mark may be deducted)
 

(c) Values which the company wants to communicate to the society: (Any two)
(i) Using environment friendly methods of production.
(ii) Women empowerment.
(iii) Upliftment of underprivileged sections of the society.
(or any other correct value)

 

Q22. Smita had been working as an assistant manager with 'Johnson Enterprises' for the last ten years. She was very popular amongst her colleagues because of her commitment and dedication towards the work. When the manager senior to her retired, all her colleagues thought that now Smita would be promoted. But to everyone's surprise the vacant post was filled by an outsider, Mrs. Rita. Smita felt demoralised and her performance started declining. She would abstain herself often and could not meet her targets.
Mrs . Rita was a good leader, who would not only instruct her subordinates but would also guide and inspire them. She noticed Smita’s
behaviour and felt that her performance could be improved. She started involving Smita in decision making-issues related to the organization and made her a part of high level joint-management committee. Smita was now punctual in office and her performance started improving.

(i) Identify the function of management being performed by Rita.

(ii) Name the element of the above function of management which helped Rita to improve Smita's behaviour.
(iii) State any three features of the element identified in (ii) above.

(3)

Ans. (i) Directing.
(ii) Motivation.
(iii) Features of motivation: (Any three)
(a) It is an internal feeling.
(b) It produces goal directed behaviour.
(c) It can be positive or negative.
(d) It is a complex process.

(If an examinee has identified the element in part (b) as non financial incentive, full credit is to be given)

 

Q23. Explain the following techniques of scientific management:
(i) Differential piece wage system; and
(ii) Motion Study.

(6)

Ans. (i) Differential Piece Wage System

  •  Differential Piece Wage System is a technique which differentiates between efficient and less efficient workers. It rewards the efficient workers and motivates the less efficient ones to improve their efficiency.
  •  In this plan, there are two piece rates – one for those workers who produce the standard output or more, and the other for those who produce less than the standard output.
  • Example: Standard output (per worker per day) = 10 units.

          Wage rate I =Rs.2 per unit (for output<10 units)

          Wage rate II =Rs.3 per unit (for output>=10 units)

CBSE Past Year Question Paper - 2014 (Delhi Set - 2), Business Study, Class 12 Commerce Notes | EduRev

Difference in units produced = 2
Difference in wages = Rs.15

(ii) Motion Study

  •  It is a technique to study the movements which are undertaken while doing a well defined job.
  •  The movement could be productive, incidental and unproductive.
  •  It seeks to eliminate unnecessary and wasteful movements so that it takes less time to complete a job efficiently.

 

Q24. 'Hayaram' is a famous chain selling a large variety of products in the Indian market. Their products include chips, biscuits, sweets and squashes. It charges a comparatively higher price than its competitors as it sells quality products. Besides, it offers regular discounts to its customers and easy credit terms to its retailers. It has five of its own retail shops. It also sells its products through various grocery stores so that the products are made available to customers at the right place, in the right quantity and at the right time. It regularly uses different communication tools to increase its sales. The above para describes the combination of variables used by
Hayaram to prepare its market offering. Identify and explain the variables.

(6)

Ans. The combination of variables used by Hayaram to prepare its market offering are:

(i) PRODUCT
It refers to the combination of various aspects relating to the product or service to be offered for sale. It relates to decisions regarding planning,
designing and developing the right type of products and services for the consumers. It includes branding, labelling and packaging.
‘Their products include chips, biscuits, sweets and squashes’.
(ii) PRICE
Price Mix involves different Pricing Methods, Pricing strategies, Pricing Policies and Price Changes. It involves decisions regarding the basic price of the product, discount, allowances, terms of payment etc. ‘It charges a comparatively higher price than its competitors’.
OR
‘It offers regular discounts to its customers and easy credit terms to its retailers’.
(iii) PLACE/PHYSICAL DISTRIBUTION
It includes activities that make firm’s products available to the target customers. It consists of all the activities involved in transferring ownership
and physical possession of the product to the consumers.
It consists of physical distribution i.e. activities involving the movement of products or services from producers to consumers as well as channels of distribution i.e. the route through which the goods move form the producer to the consumer.
‘It has five of its own retail shops’.
OR
‘It also sells its products through various grocery stores….right time’.
(iv) PROMOTION
It consists of all the activities aimed at persuading customers to buy the product through advertising, personal selling, sales promotion and publicity.
‘It regularly uses different communication tools to increase its sales’.


(FULL CREDIT BE GIVEN IF AN EXAMINEE HAS NOT QUOTED THE LINES FROM THE ABOVE PARA BUT HAS GIVEN THE
CORRECT EXPLANATION)

 

Q25. 'Sarah Ltd.' is a company manufacturing cotton yarn. It has been consistently earning good profits for many years. This year too, it has been able to generate enough profits. There is availability of enough cash in the company and good prospects for growth in future. It is a well managed organisation and believes in quality, equal employment opportunities and good remuneration practices. It has many
shareholders who prefer to receive a regular income from their investments.
It has taken a loan of Rs. 40 lakhs from IDBI and is bound by certain restrictions on the payment of dividend according to the terms of loan agreement.
The above discussion about the company leads to various factors which decide how much of the profits should be retained and how much has to be distributed by the company.
Quoting the lines from the above discussion identify and explain any four such factors.

Ans. Factors affecting dividend decision: (Any four)
(i
) Stability of earnings
‘It has been consistently earning good profits for many years’.
Stability of earnings affects dividend decision as a company having stable earnings is in a position to declare higher dividends.
(ii) Cash Flow position
‘There is availability of enough cash in the company’.
A good cash flow position is necessary for declaration of dividend.
(iii) Growth Prospects
‘Good prospects for growth in the future’.
If a company has good growth opportunities, it pays out less dividend.
(iv) Shareholders’ preference
‘It has many shareholders who prefer to receive regular income from their investments’.
Shareholder’s preference is kept in mind by the management before declaring dividends.
(v) Contractual constraints
‘It has taken a loan of Rs.40 Lakhs from IDBI and ….agreement’
While taking dividend decision, companies keep in mind the restrictions imposed by the lenders in the loan agreement.

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