WEST CHENNAI SAHODAYA CLUSTER EXAM 2024-25
BUSINESS STUDIES (054)
CLASS XII
Max. Marks -80 MARKING SCHEME -SET I
ANSWERS MARKS
1. b) Management as an Art 1
2. b) Decentralisation 1
3. c) Both Assertion (A) and Reason (R) are true, and Reason (R) is the 1
correct explanation of the Assertion (A)
4. c) Both the statements are true 1
5. c) The scope for induction of fresh talent is reduced 1
6. b) Technological and Social environment 1
7. c) Assert yourself to ensure that you get a fair deal 1
8. d) Both Assertion (A) and Reason (R) are true but Reason (R) is not the 1
correct explanation of Assertion (A).
9. d) Reference and background checking, selection decision, medical 1
examination, job offer, contract of employment.
10. c) It helps in improving employee motivation 1
11. c) Ensuring that the firm faces neither a shortage nor a glut of unusable 1
funds
12. b) State Commission 1
13. d) (i), (iii), (ii) 1
14. c) Increasing the level of production, promotion of product etc., and 1
specifying the action programmes.
15. d) Time based pay as well as performance based financial incentives 1
16. c) Appeal against District Commission’s order can be filed in National 1
Commission.
17. b) Increased use of debt always lowers the overall cost of capital of the firm 1
18 c) (i) and (ii) 1
19. a) Right to be informed 1
20. (a) Statement I is true and Statement II is false. 1
1
21. (A) Objectives : Objectives are goals established to guide the efforts of the 1 ½
business. Management should clearly define objectives of the enterprise as
a whole and also each of its sections and subdivisions. They refer to the end
point towards which all business activities are directed. They are the end
result of every activity.
Strategy: Strategy is a comprehensive detailed action plan used to tackle
unforeseen circumstances for accomplishing organisation’s objectives. 1 ½
When the managers of an organization prepare a new strategy for the
business, it is called internal strategy and when some strategies are prepared
to respond to the strategies of the competitors, such strategies are called
external strategies.
OR
Planning promotes innovative ideas – Planning requires high thinking
21 (B) because it is an intellectual process. It forces managers to adopt 1 ½
multidimensional thinking. This makes them innovative and creative.
Planning facilitates decision-making – Planning enables the management
to respond to the changing environment. It requires continuous monitoring 1 ½
of internal and external environment for new ideas and developments which
makes the enterprise more dynamic. Decision-making involves choosing
the best alternative from the available alternatives.
22. (A) The three measures to overcome the communication barriers –
(i) Communicate according to the needs of the receiver – The manager 1
should organize the message with the level of education and
understanding of the subordinates.
(ii) Consult others before communicating – While planning the message,
the sender can collect the suggestions from all the persons concerned,
which contribute to the success of entire communication system. The
level of understanding of the receiver should be crystal clear to the 1
communicator.
(iii) Use properly language and content of message – The sender should
draft the message in clear language. The tone of the message should not 1
hurt the feelings of the receiver and also the message should be brief.
(any other relevant points also considered)
OR
(B) Assumptions of Maslow’s need hierarchy theory: 1
(i) People’s behavior is based on their needs. Satisfaction of such needs
influences their behaviour. 1
(ii) People’s needs are in hierarchial order, starting from basic needs to
other higher level needs.
(iii) A satisfied need can no longer motivate a person only next higher level
1
need can motivate him.
(any other relevant points also considered)
23. (a) Rate of return on investment = 2,00,000/10,00,000 * 100 = 20% ½
SOURCES Amount (in Rs.)
Equity shares of Rs.60 each 6,00,000
14% Debentures 4,00,000
Total Capital 10,00,000
EBIT 2,00,000
2
Less: Interest @14% 56,000 ½
EBT 1,44,000
Less: Tax @50% 72,000 ½
EAT 72,000 ½
No. of equity shares 10,000
EPS 72,000/10,000 ½
b) Since Return on investment > Rate of interest it is a case of favourable ½
financial leverage.
24. Following are the points of importance of understanding Business Quoting
Environment discussed: (Any two). each ½
(a) It helps to identify opportunities and get first mover advantage: Mark
“After hearing this news, Mega Bank decided to launch a “Mega Mobility
+
Card” ……………………………. increasing trend of digitization.
The dynamic business environment provides numerous opportunities Identify each
for a business to evolve as per the changing needs. Therefore, early ½ mark
identification of the forthcoming opportunities helps an enterprise to be the
+
first to exploit them instead of losing them to the competitors.
(b) It helps in improving performance: ”Improve their Explanation
performance….”. each ½ mark
Sometimes the changes in the external environment may pose as a
threat and hinder a firm’s performance. An awareness about the business
environment helps the managers to identify such threats on time and take
necessary decisions and action.
(c) It helps in assisting in planning and policy formulation: “They
laid down a plan to hire more people in their marketing department and
prepared guidelines to train their sales force”.
(d) It helps the firm in identifying threat and early warning signal:
“ Improve existing card facility…………….”.
25. (a) Coordination is the quality of management that Rithik has introduced
in the working of the production department as a corrective measure to Identify
control the output of the workers. 1mark
Coordination is the process which helps to integrate the efforts of different +
individuals with diverse needs to secure a unity of action in the pursuit of Explain 1
common goals. mark
(b) The two points highlighting the importance of coordination are stated +
below:
State each
(i) Growth in size: With the growth in the size of an organization, there carries 1
is a proportionate increase in the number of its employees. So there is a mark
greater need to unify the efforts of diverse individuals towards the
realization of organizational goals.
(ii) Functional differentiation: As a result of functional differentiation
in an organization, its people and activities get divided into small
3
departments on the basis of functional like marketing, finance etc., Since
each such department tends to formulate its own objectives, policies etc.,
there is a need to reconcile the goals pursued by each of such departments
with the goals of the organization as a whole.
26.(A) (a) ‘Some learning opportunities are designed and delivered to improve
skills and abilities of employees’. – This statement is related with 1
Training .
Training refers to a process designed to maintain to improve current job
1
performance . Under it, an effort to made to make an employee expert at
1
doing a particular job.
(b)’’Some others are designed to help in the growth of individuals in all
respects’.- This statement is related with Development. 1
Development refers to a process designed to develop skills necessary for
(B) future work activities. Under it, an effort is made to make the employee Each
expert in all fields. benefits
OR carries
The benefits of training to an organization are as follows: 1 mark
(i) Training is a systematic learning. Always better than hit and trial
methods which lead to waste of efforts and money.
(ii) It enhances employee productivity both in terms of quantity and quality,
leading to higher profits.
(iii) Training equips the future manager who can take over in case of
emergency.
(iv) Training increases employee morale and reduces absenteeism and
employee turnover.
27. (a) Organisational barrier is being overcome by providing organization 1 mark for
facilities through a number of channels of expression to their employees to identify
communication their ideas and thoughts. +
Types each
(b) Two other types of communication barriers are described below:
carries 1 ½
(i) Psychological barriers: Sometimes the emotional or psychological marks
factors acts as barriers to communicators. Thus, the state of mind of both
sender and receiver of communication reflects in effective communication.
(ii) Semantic barriers: These barriers are concerned with problems and
obstructions in the process of encoding and decoding of message into words
or impression. Normally such barriers result on account of use of wrong
words, faulty translations, different interpretations etc.
4
28. (A) Planning and Controlling are inseparable twins of management because:
(a) Planning provides the basis for controlling. The desired standards are 1
set in the process of planning in clear, specific and terms . In the process of
controlling the actual performance is measured and compared with these
standards and the deviations if any are identified and appropriate corrective
action is taken. Planning without controlling is meaningless and controlling
without planning is blind.
(b) Planning is prescriptive where is controlling is evaluative. Planning is
1
an intellectual activity which is concerned with thinking, articulating and
analyzing various alternative course of actions and prescribing the best
alternative in order to achieve the desired goals efficiently and effectively.
Controlling on the other hand is concerned with ensuring that events
conform to plans. Thus, it involves monitoring and measuring the extent to
which the desired goals have been realized.
1
(c) Planning is looking ahead and controlling is looking back. Planning is
futuristic in nature as it involves chalking out the future course of action. It
bridges the gap between where we are and where we want to go. Thus it is
deemed to be a forward looking function of management. Controlling on the
other hand involves post mortem of the past activities to find out deviations
from the standards. Therefore, controlling is said to be a backward looking
function of management. However, on closer introspection we realize that
the feedback provided through the process of planning in terms of revising
the standards helps to improve future performances. Hence, like planning
controlling is also forward looking function.
(d) Planning precedes controlling and controlling succeeds planning. Thus, 1
planning and controlling are interrelated and reinforce each other because:
(i) Planning is based on facts and makes controlling process easier and adds
to the effectiveness.
(ii) Controlling also adds to the effectiveness of planning process by
providing valuable feedback based on past experiences.
OR
(B) Importance of Controlling (any four):
(i) Helps in achieving the objectives: Controlling ensures that results of 1
operations conform as closely as possible to the pre-determined
objectives. It ensures the use of humans and material resources in the
best possible manner.
1
(ii) Facilitates decision-making: Controlling facilitates decision-making,
enables managers to identify the gap between thinking and doing
functions of management. It helps in finding out the problems of work
performance and take appropriate decisions aimed at rectifying the
deficiencies.
5
(iii) Improves employee’s morale: Controlling creates an atmosphere of 1
order and discipline in the organization. It improves employee morale.
(iv) Helps in better coordination: Controlling facilitates the work of
coordination. This is possible by keeping all activities and efforts directed
1
towards the achievement of goals in conformity with plans and
programmes.
(v) Ensures order and discipline
(vi) Helps in judging accuracy of standards
(vii) Helps in efficient use of resources
29. The two limitations of planning discussed above are:
(a) Planning is time consuming: It is a time consuming process and is not 1
practicable during emergency or crisis. It requires a lot of time to collect
information, its analysis and interpretation before preparing plans.
(b) Planning leads to rigidity: The existence off a plan puts managerial
1
activities in a rigid framework. Programmes are carried out according to
the plan and deviations are considered to be highly undesirable.
The two features of planning discussed above are:
(a) Planning is futuristic: Planning involves looking into future, 1
analyzing the conditions and predicting future events. The plans are
drawn through forecasting and foreseeing the future events.
(b) Planning is a mental exercise: Planning requires application of the
1
mind involving foresight, intelligent imagination and sound judgement. It
is basically an intellectual activity of thinking rather than doing because
planning determines the action to be taken.
30. The major activities undertaken under physical distribution of products are:
(a) Order Processing: The order placed by the buyers should be processed 1
accurately and speedily to ensure the goods reach customers at the right time
and as per the specifications provided.
(b) Transportation: It creates place utility by transferring the goods from the
1
place of production to the place of sale.
(c) Warehousing: It involves storing and assorting of the products, thus
creating time utility to maximise customer’s satisfaction. Larger the number 1
of warehouses a firm has greater would be its customers’ satisfaction.
(d) Inventory control: The marketer has to maintain an adequate level of 1
inventory so that the product is available as and when a customer’s demand
arises. Higher the level of inventory, higher will be the level of service to
customer but the cost of carrying the inventory will also be high, so a balance
has to be maintained between them.
6
31. (i) The steps discussed in the above para are: `
(a) Selection of broker The buying and selling can be through a SEBI 1
broker. For this purpose, a broker is to be selected and the investor has to
sign a client-broker agreement with him which will enable the broker to
buy/sell securities on behalf of the investor. 1
(b) Opening demat account with a depository participant.
(ii) The next four steps of the trading procedure are: 1
(a) Placing an order: Investor places an order with the broker to buy or sell
shares. He can communicate the same via email or telephone or personally.
Brokers go ahead with the deal and order confirmation slip is issued to the
investor by the broker. 1
(b) Match the order: The broker goes online and matches the share and the
best price available. 1
(c) Executing the order: When the shares can be brought and sold at the
price mentioned, it is updated to the broker terminal and order is executed
electronically. The broker then issues trade confirmation slip to the
investor. 1
(d) Issue of contract note: After the trade has been executed, within 24
hours the broker issues contract note which contains details regarding
number and price of shares.
7
32. (A) Formal and Informal Organisation:
Basis Formal Organisation Informal Organisation
Meaning Structure of authority Network of social
relationships created by relationships arising out of
the management interaction among 1
employees.
Origin Arises as a result of Arises as a result of social
company rules and interaction 1
policies
Authority Arises by virtue of Arises out of personal
position in management qualities.
Behaviour It is directed by rules There is no set behavior 1
pattern
1
Flow of Communication takes Flow of communication is
Communication place through the scalar not through a planned
chain route. It can take place in 1
any direction
1
Nature Rigid Flexible
OR
Decentralisation is an optional policy, yet an organization chooses to be
decentralized because of its importance which is as follows:
(a) Develops initative among subordinates: Decentralisation gives
(B) 1
authority to the employees to take decisions. This promotes self-reliance
and confidence among them.
(b) Develops managerial action: Through decentralization, the employees
1
prove their abilities and create a reserviour of qualified manpower than
can take up higher positions in the near future.
(c) Quick decision-making: Decisions are taken at a level nearest to the
point of action. Further, no approval is required which ensures quick 1
decision making. 1
(d) Relief to top management: The top management can devote more time
to make important policy decisions. There is little need for personal
supervision as other forms of control such as return on investment are
1
there.
(e) Facilitate growth: Decentralisation gives autonomy to lower levels
management and allows them to function in the best suited manner. This
foster a sense of competition amongst the departments. Each department
competes with other and in a bid to out do the other, the productivity level 1
increases.
(f) Better control: Through decentralization, each level and department is
held accountable for its results. It can easily be ascertained as to what
extent the organizational objectives and contribution of each department
has been achieved
33 The various principles of management that Dev is applying for the
successful management of his eye care centre are described below:
(i) Order: According to Fayol, “People and materials must be an suitable
2
places at appropriate time for maximum efficiency”. The principle of order
states that ‘A place for everything (everyone) and everything (everyone) in
its (her/his) place’. A sense of orderliness will lead to increased productivity
and efficiency in the organization.
8
(ii) Espirit De Corps: According to Fayol, “ Management should promote a 2
team spirit of unity and harmony among employees.” A manger should
replace ‘I’ with ‘We’ in all his conversations with workers to promote
teamwork. The approach will give rise to a spirit of mutual trust and
belonginess among team members. It will also reduce the need for using
penalities.
(iii) Equity: According to Fayol, “Good sense and experience are needed to 2
ensure fairness to all employees, who should be treated as fairly as possible”.
This principle emphasizes on kindliness and justice in the behavior of
managers towards workers. The managers should not discriminate against
everyone on account of gender, religion, language, caste, belief or nationality
etc.
34. (A) The various features of marketing are:
(a) Needs and wants: Satisfaction of the needs and wants of individuals and 1½
organisations is the main target of marketing.
(b) Creating a market offering: Efforts are made to create an attractive
‘market offer’ for which detailed analysis of requirements of buyers is done. 1½
(c) Customer Value: Customers want maximum/satisfaction for their
1½
money. Therefore, seller should offer best quality product which proves its
worth/ value in the eyes of customers.
(d) Exchange mechanism: Exchange is the essence of marketing which
1½
involves two or more parties coming together to obtain the product or
service for which something is given in return.
OR
Role of Public relations: (any four)
(B)
(i) Press relations: Generating news requires skill in developing and
researching a story and getting the media to accept press releases is a difficult
1½
task. The public relations departments is in contact with the media to present
true facts and a correct picture about the company.
(ii) Product publicity: New products require special effort to publicise them
1½
and the company has to sponsor such programmes. The public relations
department manages the sponsoring of such events.
(iii) Corporate communication: The image of the organization needs to be
promoted through communicating with the public and the employees within
the organization. This is usually done with the help of newsletter, annual 1½
reports, brouchers, articles and audio-visual materials.
(iv) Lobbying: The organization has to deal with government officials to
deal with government officials and different ministers in charge of corporate 1½
affairs, industry, finance with respect to policies relating to business and the
economy. The public relations department then has to be really proactive in
promoting or decoding regulations that effect them.
(v) Counselling: The public relations department advices the management
in general issues which affect the public and the position the company would
like to take on a particular issue. The company can build goodwill by
contributing money and time to certain causes like environment, wildlife etc.
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