CBSE Sample Papers for Class 12 Business Studies Paper 4 are part of CBSE Sample Papers for Class 12 Business Studies Here we have given CBSE Sample Papers for Class 12 Business Studies Paper 4.
CBSE Sample Papers for Class 12 Business Studies Paper 4
|Sample Paper Set||Paper 4|
|Category||CBSE Sample Papers|
Students who are going to appear for CBSE Class 12 Examinations are advised to practice the CBSE sample papers given here which is designed as per the latest Syllabus and marking scheme, as prescribed by the CBSE, is given here. Paper 4 of Solved CBSE Sample Papers for Class 12 Business Studies is given below with free PDF download solutions.
Time: 3 Hours
Maximum Marks: 80
(i) Answer to questions carrying 1 mark may be from one word to one sentence.
(ii) Answer to questions carrying 3 marks may have about 50 to 75 words.
(iii) Answer to questions carrying 4 – 5 marks may have about 150 words.
(iv) Answer to questions carrying 6 marks may have about 200 words.
(v) Attempt all the parts of a question together.
Financial markets are classified on the basis of the maturity of financial instruments traded on them. Financial securities with maturity period of more than one year are traded in which type of financial market.
What is BIS?
What is meant by ‘Universal applicability of principles of management’?
‘All advertising is a social waste.’ Comment on the statement.
Name the organisation structure in which training of employee is easier.
What was the main reason behind implementation of demonetisation policy in India in 1978?
“To see whether plans are being implemented and activities are being performed according to schedule”, is a step of planning process. Identify the step.
Through which social process individual group obtains what they need and want through creating, offering and freely exchanging products and services of value with others?
“Controlling is a critical function of management which ensures the success of any organisation.” In the light of this sentence, briefly explain any three importance of controlling.
Samiksha and Amit were both working in a multi-national company. Samiksha was a harpl worker and was soon quite proficient in her work. At the time of performance appraisal, the performance of Samiksha was judged better than Amit. Even then, their boss Mr. Raj Kashyap decided to promote Amit, stating that being a female Samiksha would not be able to handle the complications of a higher post.
- Identify and explain the principle of management which was not being followed by the company.
- State two effects of violating the principle.
Explain how planning is a ‘mental exercise’.
Distinguish between time study and motion study.
What do you understand by ‘operating cycle’?
“Management is a process of getting things done effectively and efficiently.” In the light of the above sentence, explain the concept of effectiveness and efficiency with the help of an example. Also state how they are complementary to each other.
Diwali, Eid, Holi and Christmas are auspicious occasions in our country. People are in a festive mood during this period and are willing to spend more. Producers are offering varieties of sweets, dishes, cards, gifts, clothes and many more products, to satisfy the diverse needs of the consumers and also earn profits in return.
- What values of customers are satisfied in the above case?
- Why is it necessary to study such values for a business unit?
Sunil, the marketing manager of a reputed watch company, faces the problem of selecting the channel of distribution for the company’s new expensive watch. Which channel should he select? Give two reasons in support of your answer and also discuss any two factors which determine the choice of channel.
Kamal is the production manager of Fairly Glow Ltd, which is engaged in the production of cosmetics. The profits of the company are continuously declining. Therefore, the directors of Fairly Glow have decided to take stern steps to reduce costs and increase sales. These decisions have been transferred downline and immediate actions is asked to be taken. Kamal is producing a fairness cream and decides to use a very cheap and harmful ingredient which affects the skin of the customer to reduce the variable cost. Does Government of India provide any law and legislation to protect the interest of consumer? Which right of consumer has the company overlooked in this case?
Identify the plans and explain them with the help of an example.
- They are strict and there is no scope for discretion.
- It provides a prescribed manner in which a task has to be performed.
Marketing companies make use of a number of promotional tools to popularise various products according to their nature, use, size of market, financial resources, target market, media etc. Identify and explain the promotional tool of marketing mix which plays a persuasive, service and informative role and thereby link a business firm to its customers. Also, explain by giving any three reasons how this tool helps in increasing the sales of businessmen.
Due to steep increase in Cash Reserve Ratio (CRR) by the RBI, HDFC Bank is facing acute shortage of cash which may result in imposition of penalty by RBI and a loss of goodwill. Being the financial advisor of the bank, advise that how can it meet these short-term obligations, alongwith reasons in support of your answer. Also mention any two values that are fulfilled by money market instruments.
A newly promoted company, dealing in garments have ascertained the fund requirements to procure fixed assets as well as cater the day-to-day expense of the business. However the manager has not yet decided upon the sources of finance to be used. The decision regarding determination of sources of finance is dependent on many factors. Discuss any five such factors.
Define a formal organisation. Name and define an organisation which emerges within the boundaries of a formal organisation, when people interact beyond their officially assigned roles, also give three importance of it.
Sahil, the director of a garments company, is planning to manufacture bags for the utilisation of waste material from one of his garment unit. He decided that this manufacturing unit will be set-up in a rural area of Odisha, where people have less job opportunities and because of this labour is available at very low rate. He also thought of giving equal opportunities to men and women.
For this, he selected S Chatterjee, Inderjeet Kaur, Aslam and Sarabjeet as heads of sales, accounts, purchase and production departments.
- Identify and state the next two steps that Sahil has to follow in the staffing process after selecting the above heads.
- What benefits does a company derive by following the process of staffing?
RK & Co Ltd is engaged in manufacturing machine components. The target production is 300 units daily. The company had been successfully attaining this target until two months ago. Over the last few months, it has been observed that daily production varies between 150-200 units.
- Identify the possible causes for the decline in production and the steps to be taken to achieve the desired targets.
- Which function of management is being discussed in the above question?
Discuss in briefly the different styles of leadership.
Financial instruments with a maturity of more than one year are traded in the capital market.
BIS is a seal certified by Bureau of Indian Standards that the goods confirm to the prescribed quality standards.
‘Universal applicability of principles of management’ means that the principles of management are intended to apply to all types of organisations at all places.
Advertising misrepresents facts due to which innocent customers are cheated and it also adds to the cost of the product. Thus, it is stated that all advertising is a social waste.
In functional structure of organisation, training of employees is easier as the main focus is only on a limited range of skills.
India faced its second demonetisation in 1978. The main reason behind implementation of demonetisation policy in 1978 was to combat black money.
Follow Up Action This step is concerned with carefully monitoring whether the plans are being implemented and activities are being performed according to schedule or not.
Marketing is the social process through which individual groups obtain what they need and want through offering and freely exchanging products and services.
Importance of controlling may be understood by means of following points:
- Accomplishing Organisational Goals Controlling helps in achieving organisational goals by bringing to light deviations from plans.
- Making Efficient Use of Resources Controlling helps in reducing wastage and spoilage of resources, as each activity is performed in accordance with pre-set standards.
- Facilitating Coordination in Action Controlling provides direction to all activities and efforts, and thus
facilitates coordination in actions of various individuals and departments.
(i) Multi-national company was not following the principle of equity as the manager promoted Amit on the grounds that a female will not be able to handle the complications of a higher post. Fayol in his principle clearly stated that the managers should be fair and impartial while dealing with their subordinates. There should be no discrimination on the basis of caste, sex or religion. The principle of equity implies that similar treatment is assured to employees in similar positions.
(ii) Two effects of violating the principle are :
- Dissatisfaction amongst employees.
- Poor relations between workers and managers.
Planning is a ‘mental exercise’ because of the reasons stated below:
- It requires application of the mind involving foresight, intelligent imagination and sound judgement.
- It is basically an intellectual activity of thinking rather than doing because planning determines the actions to be taken.
- It requires logical and systematic thinking rather than guesswork or intuitional thinking. In other words, thinking for planning must be orderly, based on the analysis of facts and forecasts.
Differences between time study and motion study are:
|Basis||Time Study||Motion Study|
|Meaning||This study helps in determining the standard time to perform a job.||This study is conducted to analyse all the movements of workers while performing a job.|
|Use||Time measuring devices are used to determine the standard time taken by workers.||Devices like stopwatch, cameras, symbols and colours are used to determine motion.|
|Aim||Its main aim is to set standard target for workers.||Its main aim is to eliminate unnecessary movements.|
Operating cycle is the time duration from procurement of raw materials to sales realisation. It is a time gap between production of goods and realisation of sales. The operating cycle is different for different firms depending upon their size and nature of business.
e.g. manufacturing firm’s operating cycle may be different from a trading concern. Operating cycle of one manufacturing firm may be different from another on the basis of scale and type of business.
Operating cycle of a manufacturing concern is shown below:
In management, effectiveness is concerned with doing the right task, completing activities and achieving goals or we can say, it is concerned with end results. On the other hand, efficiency means doing the task correctly with minimum cost.
Though efficiency and effectiveness are different, they reflect two sides of the same coin. e.g. the production target of a firm is 10,000 units in a month. To achieve the target, the production manager works in double shift, employs more workers and is able to complete the target but the costs have increased. Thus, the manager is effective but not efficient because efficient utilisation of resources is not done.
In another case with the same target, the production manager does everything to reduce cost, but he is unable to complete the target by the end of the month. Thus, efficiency is achieved but not effectiveness. Due to non-completion of target the goods don’t reach the market in time and the competitor’s products take over the demand. Thus company incurs huge losses. Therefore, it is important to be both effective and efficient at the same time.
- Producers are offering various varieties of products in market during the festivals of Diwali, Holi, Eid and
Christmas, etc. It satisfies the social values of a customer which are equality of opportunity and national integration, as producers of all communities and religion provide goods and sen/ices for every occasion.
- Business should consider the social environmental forces like customs and traditions, values, social trends, society’s expectations, etc as business is running in the society and for the society. A good understanding of the environment will not only enable the business unit to identify and evaluate but also react to the external forces affecting their firms. It also helps in tapping useful resources and improving performance of the firm.
As a marketing manager, Sunil should select ‘one level channel’ of distribution for the company’s new
expensive watch. In this arrangement, one intermediary is used in between the producer and the customer. The manufacturer sells to the retailer who in turn, sells to the ultimate consumer.
Following are the two reasons for selecting ‘one level channel’ of distribution :
(i) ‘One level channel’ is usually suitable for speciality goods like expensive watches or home appliances.
(ii) This type of distribution network covers wide area of market.
Factors determining choice of channels are as follows:
- Product Related Factor The product related considerations like value of product line, product complexity, nature of product all help in deciding the channel of distribution.
- Company Characteristics Company related factors like financial strength of the company, degree of control, etc also affect the choice of channel of distribution.
Yes, the Indian Government has passed various acts to protect the interest of consumers. In 1986, Consumer
Protection Act was passed to protect the interest of consumer and provide them a safeguard against defective goods, deficient services, unfair trade practices, etc. It also provides for a three-tier redressal process where a consumer can file complaints and ask for compensation.
In the given case, the company has overlooked the consumer’s ‘Right to Safety’. It means that a consumer has a right to be protected against the marketing of such goods and services that are harmful to life and health.
(i) Rules These are specific statements that inform what is to be done. A rule reflects a managerial decision
that a certain action must or must not be taken. They are usually the simplest type of plans because no change is made in them, unless a policy decision is taken. Rules are to be enforced rigidly and there is generally a fine or penalty for violation of rules. They do not allow for any flexibility or discretion e.g. ‘No smoking in the office premises’.
(ii) Methods These are standardised ways or manner in which a task has to be performed considering the objectives e.g. For imparting training to employees at various levels of management, different methods can be adopted. For top level management, orientation programmes, lectures and seminars can be organised whereas, at the supervisory level, on-the-job training methods and work oriented methods are appropriate.
The promotional tool of marketing mix that plays a persuasive, service and informative role and thereby link a business firm to its customers is personal selling. It refers to the oral presentation of message in the form of conversation with one or more prospective customers for the purpose of making sales. Companies appoint sales persons to contact prospective buyers and create awareness about the product and develop product preferences with the aim of making sale.
Importance of Personal Selling to a Business Personal selling is an effective tool of promotion mix. Its importance to business is judged by the following factors:
- Flexible Tool It is personal in nature and offers the salesperson an advantages of adjusting as per the needs of the customer.
- Link with Customers There is a direct contact between the salesman and the prospects, which reduces chances of diffusion and distortion in the desired message.
- Feedback It enables the business to obtain the feedback from the customers and accordingly prepare the strategies for the future.
Being the financial advisor of the bank, we may advise the bank to raise funds through ‘call money’. Call money is a money market instrument that is used by banks to borrow funds from one another for a period of 1 day to 15 days. It has following features due to which it may be used by HDFC Bank:
(i) It is a short term finance repayable on demand.
(ii) It is a tool for inter-bank borrowing.
(iii) It is often used by banks to meet theik CRR requirement.
Values fulfilled by money market instruments are:
(i) Mobilisation of surplus funds and channelising them into most productive use.
(ii) Ensures smooth functioning of money market.
The decision regarding determination of sources of finance is dependent on following factors :
- Cost The cost of raising funds through different sources are different. Thus, before selecting a source of fund, costs should be compared.
- Risk Some degree of risk is involved in every source of finance. More risk is associated with borrowed funds as compared to owner’s fund.
- Cash Flow Position It also helps in selecting the securities as smooth and steady cash flow can easily afford borrowed funds but if a company faces shortage of cash flows, then it must opt for owner’s fund.
- State of Capital Market The conditions of capital market also help in deciding the type of securities to be raised. During boom period, demand is more for equity shares but in depression, debt securities are more in demand.
- Fixed Operating Costs If a business has high fixed operating costs, it must reduce fixed financing costs. Hence, equity financing is better. Similarly, if fixed operating cost are less, more debt financing should be preferred.
Formal Organisation refers to the organisation structure which is designed by the management to accomplish a particular task, it specifies clearly the boundaries of authority and responsibility which are guided by rules and procedures.
Informal organisations emerges within the boundaries of a formal organisation on the basis of interactions and friendship between people working together. It is defined as a network of personal and social relations not established or required by the formal organisation but arising spontaneously as people associate with one another.
Advantages of informal organisation are:
- It brings a feeling of belongingness and self respect. It also satisfies social and cultural needs of employees.
- It brings cohesiveness to formal organisation and makes it more flexible and workable.
- It provides spontaneous and quick channels of communication.
- It provides the necessary environment for individual creativity and innovation.
(i) Selection is done in the third step, in which a prospective candidate is chosen from the pool of candidates. It ensures that the organisation gets the best among the available and it enhances the morale of selected candidate.
The next two steps are as follows:
- Placement and Orientation In this step, employee occupies the position, for which he/she has been selected. After this, a brief presentation about the company is given and employee is introduced to his superiors, subordinates and colleagues.
- Training and Development In this step, training is imparted to the selected candidate, by which he/she can enchance his/her skills, knowledge and through this, one can explore the opportunities.
(ii) Two benefits of staffing in an organisation are :
- Obtaining Competent Personnel It ensures the availability of the most suitable and capable person for various jobs.
- Higher Performance By placing the right person at the right job, it ensures better performance.
(i) The possible causes for the decline in production and the steps which are to be taken to achieve the desired targets are:
|(a)||Defective material||Change the quality specification for the materials used.|
|(b)||Defective machinery||Repair the existing machine or replace the machinery, if it cannot be repaired.|
|(c)||Defective process||Modify the existing process.|
|(d)||Defective physical condition of work||Improve the physical conditions of work.|
|(e)||Obsolete machinery||Undertake technological upgradation of machinery.|
|(f)||De-motivated employees||Declare various incentives to motivate the employees.|
(ii) The function of management being discussed in the question (i) is ‘controlling’, that refers to the comparison of actual performance with the planned performance and taking corrective actions in case of deviations between actual and planned performance.
Different styles of leadership are discussed below:
(i) Authoritative or Autocratic Leadership An autocratic leader exercises complete control over his subordinates. He centralises powers in himself and takes all decisions without consulting the subordinates. He dominates and drives his group through coercion and command. He loves power and never delegates authority. The leader gives orders and expects the subordinates to follow them unquestioningly. He uses rewards and holds threat of penalties to direct the subordinates. He does not delegate authority.
(ii) Democratic or Participative Leadership A consultative or democratic leader takes decisions in consultation and participation with the subordinates. He decentralises authority and allows the subordinates to share his power. The leader does what the group wants and follows the majority opinion. He keeps the followers informed about the matters affecting them. A democratic leader provides freedom of thinking and expression. He listens to the suggestions, grievances and opinions of the subordinates.
(iii) Free Rein or Laissez Faire Leadership Free rein leadership involves complete delegation of authority, so that subordinates themselve take decisions. The free rein leader avoids power and relinquishes the leadership position. He serves only as a ‘contact’ to bring the information and resources needed by the subordinates. This style of leadership is appropriate when the subordinates are well trained, knowledgeable, self-motivated and ready to assume responsibility.
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