CBSE Past Year Question Paper - 2015 (Delhi), Business Study, Class 12 Commerce Notes | EduRev

Business Studies (BST) Class 12

Commerce : CBSE Past Year Question Paper - 2015 (Delhi), Business Study, Class 12 Commerce Notes | EduRev

The document CBSE Past Year Question Paper - 2015 (Delhi), Business Study, Class 12 Commerce Notes | EduRev is a part of the Commerce Course Business Studies (BST) Class 12.
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(Q1) What is meant by “efficiency’ in management ?


(A4) Directing is the management function discussed above as this function refers to instructing, guiding, communicating and inspiring people so that objectives can be achieved


(Q2) How does management help in achieving personal objectives ? State. 


 (Q3) Define ‘planning premises'. (1)


(Q4) 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)


(Q5) Explain how ‘cost of debt' affects the choice of capital structure of a company.


(A5) Cost of Debt: The capacity of a company to take debt depends the cost of debt. In case the rate of interest on the debt capital is less, more debt capital can be utilised and if the rate of interest on the debt capital is more, less debt capital can be used.


(Q6) “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 requirement of “Indian Logistics' will be high or low.


 (A6) The working capital requirement of ‘Indian logistics' will be high as firm operates at large scale requires more working capital as their inventory level, debtors etc. are generally high.


(Q7) ‘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.” 


 (A7) ‘Beauty Products Ltd.” follows societal marketing concept as this concept suggests that the company should earn profits through customer satisfaction and protection of society.


(Q8) On Sonika’s birthday her mother gave her a pair of gold earrings. After one month, Sonika observed that the earrings are losing their shine. She checked the mark on the earrings 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.


 (A8) No, Sonika cannot appeal against the decision of the district forum after two months because if she is aggrieved by the order of District forum, she can appeal against such order within 30 days not after that.


(Q9) What is meant by “functional structure’ of an organisation ? State its any two advantages.


 (Q10) Explain how the ‘product related factors’ affect the choice of channels of distribution. 


 (Q11) 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. 



(A11) Democratic leadership style has been adopted

  • A democratic leader gives order only after consulting the group and works out the policies with the acceptance of the group.
  • This style of leadership wins greater confidence, cooperation, loyalty and initiative of the group. It raises morale of the employees.
  • Under this style, leader never asks people to do things without working out the long term plans on which they are working.
  • This style is of mutual benefit as it allows the subordinates to become a part of the team and helps the leader in making better decisions

 (Q12) ‘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. 


(A12) (i) Mobilisation of Savings and Channelising them into the most productive uses : A financial market offers mobility to the savings of people. It helps them to invest their savings in various financial assets or instruments and earn income and capital appreciation. Thus, financial market helps to channelise surplus funds into the most productive use.

(ii) Facilitates Price Discover : A financial market includes both the suppliers and investors of fund. The demand and supply of funds determine the price of various financial instruments. For example, price of share at a stock exchange is determined by its demand supply by the buyer and the seller respectively.

(iii) Provide Liquidity to Financial Assets : Financial market provides a ready market for buying and selling of securities. The presence of this market assures investors that their investment can be really converted into cash.

(iv) Reduces the Cost of Transaction : The financial market is a common platform where a person can simply buy sell securities through brokers, who charge a nominal commission for their services. Thus, financial market reduces the cost of transaction.


 (Q13) Neeraj, a sales representative of ‘Omida Ltd.' has changed seven jobs in the last one year. He is a hardworking person but is not able to finalise deals with the customers 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.


(A13) (a) Badly expressed message

(b) Semantic Barrier


(i) Symbols with different meanings : The same word or symbol may carry different meanings to different people and convey different meanings under different circumstances. For example, if a manager says “This is the ideal (perfect) method”, and subordinate interprets as “This is idle (useless) method”, then communication will be ineffective.

(ii) Faulty Translations Sometimes, messages are in a language (like English), which may not be clearly understandable to the receiver. In such cases, it becomes necessary to translate the message into known language (like Hindi). If the translator is not proficient in translation, it may act as barrier in communication.


(Q14) What is meant by “business environment"? State any three points of its importance. 



 (Q15) Explain the following rights of a consumer as provided under Consumers Protection Act, 1986:

(a) Right to be informed; and 

(b) Right to seek redressal.


(A15) (a) Right to be Informed : The consumer has a right to have a complete information about the product i.e., its ingredients, date of manufacture, price, quantity, directions for use etc. It is the legal requirement in India that all such information should be on the package and label of the product.

(b) Right to seek Redressal : Every consumer has the right to seek redress against (a) restrictive trade practices (which restrict competition in the market) or unfair trade practices. (b) Defective Goods (c) Excess Charging of price (d) Deficient Services (e) Supply of Hazardous Goods. He can claim replacement of defective goods, removal of defect in the product, refund of money or compensation for loss/injury suffered etc.


(Q16) 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 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.

(A16) (a) Decentralisation

(b) Decentralisation is preferred due to the following points:

(i) Quick decision making : In decentralisation, decisions are taken at their own level. There is no need for permission from many levels. Thus, decisions are taken quickly at their concerned level.

(ii) Develops initiative among subordinates : Decentralisation helps to promote self-dependence because the subordinates are given freedom to take their own decisions. Thus, it develops initiative among subordinates. Decentralisation is also helpful in identifying those executives who have the potential to become dynamic leaders.

(iii) Develops managerial talent for the future: Decentralisation gives the chance to subordinates to prove their abilities by giving best performance. Thus, decentralisation means education of management as well as an opportunity for trained manpower to use its talent.

(iv) Better control : Decentralisation facilitates evaluation of performance at every level. Departments can be individually held accountable for their results. The contribution of each department towards organisational objectives can be assessed.


(Q17) 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.


(A17) Training helps the supervisor to increase the skills and knowledge of workers which make them handle their work independently.

Along with the organisation the employees ar: also benefitted by training. The advantage: to them are cited below :

(a) Increase in Capacity and Efficiency Through training one learns the art of doing a special job methodically. It increases the skill and efficiency of the employee.

(b) Increase in Market Value : Trained employees have a better market value. Increased market value means that other organisations are always willing to employ trained personnel at higher remuneration. Consequently, if any employee is feeling uneasy in an organisation because of low remuneration, he can very easily join another organisation at higher remuneration.

(c) Fewer Accidents : Reduction of accidents is not only beneficial to the organisation it also protects the life of the worker. By learning the art of operating the machine, the rate of accidents can be minimised. This art can be learnt by training alone.


(Q18) ‘Aapka Vidyalaya’ believes in holistic development of students and encourages team building through a mix of curricular, co-curricular and sport 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 realised 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.

(A18) (a) Espirit De-Corps

(b) Goal oriented: No goal in the hand - no need of management. In other words, we need management when we have some goals to be achieved. A manager on the basis of his knowledge and experience tries to achieve the goals which are already decided.

Group Activity: It means that it is not a single person who consummates all the activities of an organisation but it is always a group of persons.

(c)        (1) Providing an appropriate environment to the workers.

(2) Overall development of the economy.


(Q19) ‘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.



(A19) (a) Commercial Papers are those unsecured promissory nots which are issued by well-reputed companies. Their buyers are banks, insurance companies, unit trust and firms. They can be sold in two ways-directly and indirectly. In other words, the company can directly sell the commercial paper to the buyer or can take the help of some agency. For example, in order to expand its business a company is going to issue equity shares. The company shall have to bear heavy floatation costs. The money spent in meeting the floatation costs can be met by issuing commercial paper.

(b) In this market, the company can get funds through this intrument is for a period of 15 days to 12 months (1 year).

(c) Following are the purpose for which this instrument can be used :

(1) It is used to meet the demand of a short term seasonal need and the requirement of working capital.

(2) Since the instrument is unsecured, it is issued only by highly credit -worthy or trusted firms.

Commercial banks and mutual funds are the main investors in this instrument.


(Q20) State any other five features of ‘Planning’. 


(A20) (i) Primacy of planning : Planning is the first and foremost activity of managerial functions. The process of management starts with planning. Planning gives base for all other functions like organising, staffing, directing, controlling, etc.

(ii) Intellectual Process : Planning is process which needs the activity to think in logical way and understanding things. It needs the ability or skill to view future opportunity and threats. The person who does planning should have the ability to see the problems, analyse and find an alternative way to solve these problems. Choosing the right course of action is the most important skill needed by the manager, who does the planning.

(iii) Continuous process: Planning is a continuous process because after the plans are derived out cosmetic changes have to be made in the plans in order to cope with the dynamic environment, The old plans are revised and new plans are formulated depending upon the need of the hour.

(iv) Forward Looking : Planning is forward looking process based on forecasting the future events and conditions. The purpose of planning is to face the future events effectively to the best advantage of an organisation.

(v) Interdependent process : Planning affects and is affected by the programmes of different departments. In short, programmes constitute an integrated effort/approach.


(Q21) 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 oranisation and made her a part of high level joint management committee. Smita was now punctual in office and her performance started improving. 

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

(b) Name the element of the above function of management which helped Rita to improve Smita's behaviour. 

(c) State any three features of the element identified in (b) above.


(A21) (a) Directing  

(b) Motivation

(c) Following points support the statement:

(i) Improving performance levels Motivation helps to improve performance levels of employees as well as of organisation. Proper motivation satisfies the needs of employees, they in turn devote all energies for optimum performance in their work.

(ii) Reduction in employees turnover : It helps to reduce employee turnover and thereby saves the cost of new recruitment and training of managers.

(iii) Reduction in resistance to change : It helps the managers to introduce changes smoothly without much resistance from people.


(Q22) 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 emloyees. 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.


(A22) (a) Staffing, Directing

(b) Steps under staffing

Estimating the manpower requirement


Steps under directing

Initiate actions


(c)        (1) Women empowerment

(2) Providing employment to rural and special abilities persons,


(Q23) With the help of a diagram explain ‘Functional Foremanship’ as a technique of scientific management.


 (Q24) “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 & 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. 


(A24) Dividend Decision: Dividend refers to that part of profits, which is distributed amongst its shareholders. Dividend decision involves deciding the amount of profit to be distributed among shareholders and amount of profit to be retained in the business to meet investment requirements.

Factors Affecting Dividend Decision : The decision of payment of dividend depends on the following factors :

(1) Earnings : Dividends are paid out of current and previous year's earnings. So, more earnings will ensure greater dividend, whereas less earnings will lead to declaration of low rate of dividend.

(2) Stability of Dividends : Some companies follow the policy of paying stable and steady dividends as it satisfies the shareholders and helps in building company's reputation. Small investors and even big companies and financial institutions prefer to invest in a company with regular and stable dividend policy.

(3) Shareholder Preference : The preferences of shareholders are usually kept in mind while declaring dividend If company has large number of retired, old or poor shareholders, then it will declare more dividends as such shareholders expect regular and stable amount of dividend. However, if majority of shareholders are young and rich, then company may declare low dividend as such shareholders prefer capital gain by reinvesting the profits of company. Firm must design a dividend policy, which meets the expectation of majority shareholders.





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


 (Q8) Define “Planning’. 


 (Q9) What is meant by “divisional structure’ of an organisation ? State its any two advantages. 


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


 (Q15) Explain the following rights of a consumer as provided under Consumer Protection Act, 1986 :

(a)  Right to Safety; and 

(b)  Right to be Heard.


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


 (Q23) Explain the following techniques of scientific management :

(i)            Differential piece wage system; and

(ii)          Motion study





(Q7) What is meant by “effectiveness’ in management ? 


 (Q8) Define ‘formal organisation'. 


 (Q9) State any three limitations of ‘divisional structure’ of an organisation. 


 (Q15) Explain the following rights of a consumer as provided under Consumer Protection Act, 1986:

(a) Right to choose; and

(b) Right to consumer education. 


 (Q20) State any five limitations of ‘Planning’ function of management.


(Q25) Explain the following techniques of scientific management : 

(i)            Time study; and 

(ii)               Simplification of work.


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