-Strictly Confidential: (For Internal and Restricted Use Only)

Senior Secondary School Certificate Examination

March -----2025
Marking Scheme
Subject---Business Studies(054) 66/7/1

General Instructions-

1 You are aware that evaluation is the most important process in the actual and correct
assessment of the candidates. A small mistake in evaluation may lead to serious
problems which may affect the future of the candidates, education system and teaching
profession. To avoid mistakes, it is requested that before starting evaluation, you must
read and understand the spot evaluation guidelines carefully.
2 “Evaluation policy is a confidential policy as it is related to the confidentiality of
the examinations conducted, Evaluation done and several other aspects. Its’
leakage to public in any manner could lead to derailment of the examination
system and affect the life and future of millions of candidates. Sharing this
policy/document to anyone, publishing in any magazine and printing in News
Paper/Website etc may invite action under various rules of the Board and IPC.”
3 Evaluation is to be done as per instructions provided in the Marking Scheme. It should
not be done according to one’s own interpretation or any other consideration. Marking
Scheme should be strictly adhered to and religiously followed. However, while
evaluating, answers which are based on latest information or knowledge and/or are
innovative, they may be assessed for their correctness otherwise and due marks be
awarded to them. In class - XII, while evaluating two competency based questions,
please try to understand given answer and even if reply is not from marking
scheme but correct competency is enumerated by the candidate due marks should
be awarded.
4 The Marking scheme carries only suggested value points for the answers
These are in the nature of Guidelines only and do not constitute the complete answer.
The students can have their own expression and if the expression is correct, the due
marks should be awarded accordingly.
5 The Head-Examiner must go through the first five answer books evaluated by each
evaluator on the first day, to ensure that evaluation has been carried out as per the
instructions given in the Marking Scheme. If there is any variation, the same should be
zero after deliberation and discussion. The remaining answer books meant for evaluation
shall be given only after ensuring that there is no significant variation in the marking of
individual evaluators.
6 Evaluators will mark( √ ) wherever answer is correct. For wrong answer CROSS ‘X” be
marked. Evaluators will not put right (✓)while evaluating which gives an impression
that answer is correct and no marks are awarded. This is most common mistake which
evaluators are committing.
7 If a question has parts, please award marks on the right-hand side for each part. Marks
awarded for different parts of the question should then be totaled up and written in the
left-hand margin and encircled. This may be followed strictly.

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8 If a question does not have any parts, marks must be awarded in the left-hand margin
and encircled. This may also be followed strictly.
9 If a student has attempted an extra question, answer of the question deserving more
marks should be retained and the other answer scored out with a note “Extra
Question”.
10 No marks to be deducted for the cumulative effect of an error. It should be penalized
only once.
11 A full scale of marks 0-80 as given in Question Paper has to be used. Please do not
hesitate to award full marks if the answer deserves it.
12 Every examiner has to necessarily do evaluation work for full working hours i.e., 8
hours every day and evaluate 20 answer books per day in main subjects and 25 answer
books per day in other subjects (Details are given in Spot Guidelines). This is in view of
the reduced syllabus and number of questions in question paper.
13 Ensure that you do not make the following common types of errors committed by the
Examiner in the past:-
● Leaving answer or part thereof unassessed in an answer book.
● Giving more marks for an answer than assigned to it.
● Wrong totaling of marks awarded on an answer.
● Wrong transfer of marks from the inside pages of the answer book to the title page.
● Wrong question wise totaling on the title page.
● Wrong totaling of marks of the two columns on the title page.
● Wrong grand total.
● Marks in words and figures not tallying/not same.
● Wrong transfer of marks from the answer book to online award list.
● Answers marked as correct, but marks not awarded. (Ensure that the right tick mark
is correctly and clearly indicated. It should merely be a line. Same is with the X for
incorrect answer.)
● Half or a part of answer marked correct and the rest as wrong, but no marks
awarded.
14 While evaluating the answer books if the answer is found to be totally incorrect, it
should be marked as cross (X) and awarded zero (0)Marks
15 Any unassessed portion, non-carrying over of marks to the title page, or totaling error
detected by the candidate shall damage the prestige of all the personnel engaged in the
evaluation work as also of the Board. Hence, in order to uphold the prestige of all
concerned, it is again reiterated that the instructions be followed meticulously and
judiciously
16 The Examiners should acquaint themselves with the guidelines given in the “Guidelines
for spot Evaluation” before starting the actual evaluation.
17 Every Examiner shall also ensure that all the answers are evaluated, marks carried over
to the title page, correctly totaled and written in figures and words.
18 The candidates are entitled to obtain photocopy of the Answer Book on request on
payment of the prescribed processing fee. All Examiners/Additional Head
Examiners/Head Examiners are once again reminded that they must ensure that
evaluation is carried out strictly as per value points for each answer as given in the
Marking Scheme.

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66/ MARKING SCHEME– 2025
7/ BUSINESS STUDIES-054 Marks
1 66/7/1
EXPECTED ANSWERS / VALUE POINTS
1 Q. Which of the following is not a protective function of Securities
and Exchange Board of India?
(A) Controlling insider trading and imposing penalties for such
practices
(B) Training of intermediaries of securities market
(C) Prohibition of fraudulent and unfair trade practices like
making misleading statements, manipulation, etc.
(D) Promotion of fair practices and code of conduct in securities
market

Ans. (B) Training of intermediaries of securities market 1 mark

2 Q. Shreyansh and Sudhir were close friends and were studying in

a reputed engineering college. During campus recruitment in the
final year of engineering, both of them got their dream jobs.
Shreyansh's consultancy firm was in India and Sudhir's was a
manufacturing firm situated out of India. Both looked forward to
join their respective organisations after completing their
engineering degree.
One month after joining the organisation, Sudhir came to India on
an assignment and both friends decided to meet. Shreyansh looked
happy and was all praise for the management of his company. He
told Sudhir that there was complete orderliness in his organisation
and that all employees were happy and satisfied with the work and
the working environment. Targets of the organization too were
met as per the plans. Sudhir, in contrast was unhappy with his job
and was thus on the lookout for another job.
The characteristic of management being highlighted in the above
case by Shreyansh is:

(A) Management is a group activity.

(B) Management is a dynamic function.
(C) Management is an intangible force.
(D) Management is all pervasive.

Ans. (C) Management is an intangible force. 1 mark

3
3 Q. Read the following statements carefully:

Statement 1: Any deviation, whether significant or insignificant,

should be brought to the notice of the management.

Statement II: Control should focus on those Key Result Areas

which are critical to the success of an organisation.

In the light of the above statements, choose the correct alternative

from the options given below:

(A) Statement I is true and Statement II is false.

(B) Statement I is false and Statement II is true.
(C) Both Statement I and Statement II are false.
(D) Both Statement I and Statement II are true.

Ans. (B) Statement I is false and Statement II is true. 1 mark

4 Q. Read the following statements: Assertion (A) and Reason (R).

Assertion (A): The cost of debt is lower than the cost of equity for
a firm.

Reason (R): Lender's risk is lower than the shareholder's risk.

Additionally, interest paid on debt is a deductible
expense for computation of tax liability, whereas
dividends are paid out of after tax profit.

Choose the correct alternative from the options given below:

(A) Both Assertion (A) and Reason (R) are true and Reason (R) is
the correct explanation of Assertion (A).
(B) Both Assertion (A) and Reason (R) are true, but Reason (R) is
not the correct explanation of Assertion (A).
(C) Assertion (A) is true, but Reason (R) is false.
(D) Assertion (A) is false, but Reason (R) is true.

Ans. (A) Both Assertion (A) and Reason (R) are true and Reason (R) 1 mark
is the correct explanation of Assertion (A).

5 Q. 'Apex Shoes', a popular footwear brand had grown rapidly

over the years. It decided to open its own retail outlets across
major cities. To ensure smooth operations, the retail outlets were
4
managed by store managers who were responsible for day-to-day
operations like inventory management, customer service and sales
targets etc. However, for key decisions such as offering discounts
or processing refunds etc., managers had to seek approval from
corporate headquarters.

Quite often, customers would ask for a discount or want to return

the shoes and get a refund. The store managers did not have the
authority to approve this. They had to call the head office for
approval, which caused a delay. These delays affected both
customer satisfaction and footwear sales.

Realizing the need for faster decisions, the Chief Executive Officer
of the company, Atul, decided to selectively disperse the authority
to the store managers to approve discounts, returns and other
customer-related decisions. He believed that store managers could
assume responsibility for effective implementation of their
decisions. This led to faster service, satisfied customers and an
increase in sales.

The concept used by Atul to improve customer satisfaction and

store performance was:

(A) Responsibility (B) Authority

(C) Delegation (D) Decentralisation

Ans. (D) Decentralisation 1 mark

6 Q. The Go-Vegan Movement has been an integral part of western

nations owing to its numerous health and environmental benefits.
India too has witnessed a propelling vegan food market.
Concerned with the quality of life, people have shifted to a variety
of plant-based food alternatives that offer great taste and health
benefits and strengthen the immune system.
The dimension of business environment discussed above is:
(A) Economic environment
(B) Social environment
(C) Technological environment
(D) Political environment

Ans. (B) Social environment 1 mark

5
7 Q. Match the statements given in Column I with the external
source of recruitment given in Column II.

Column(I) Column(II)
1. Many reputed business (i) Recommendation of
organisations keep a employees
database of unsolicited
applicants in their offices. A
list of such job-seekers can
be prepared and can be
screened to fill the vacancies
as they arise.

2. A notice is placed on the (ii) Campus recruitment

notice board of the enterprise
specifying details of the jobs
available. Job-seekers assemble
outside the premises of the
organisation on the specified
date and selection is done on
the spot.

3. Many big organisations (iii) Direct recruitment

maintain a close liaison with
the universities, vocational
schools and management
institutes to recruit personnel
for various jobs. qualified

4. Applicants introduced by (iv) Casual callers

present employees or their
friends and relatives.

Choose the correct option from the following:

(A) 1-(iii), 2-(ii), 3-(i), 4-(iv)

(B) 1-(ii), 2-(i), 3-(iii), 4-(iv)
(C) 1-(iv), 2-(iii), 3-(ii), 4-(i)
(D) 1-(iii), 2-(i), 3-(ii), 4-(iv)

Ans. (C) 1-(iv). 2-(iii), 3-(ii), 4-(i) 1 mark

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8 Q. Radhika purchased an attractive new toaster for her house. In
the beginning it worked fine and she enjoyed using it every
morning. However, one morning as she was using the toaster, it
caught fire and her fingers got partially burnt.

Identify the 'Right' under which she can be protected.

(A) Right to be informed

(B) Right to be assured
(C) Right to safety
(D) Right to consumer education

Ans. (C) Right to safety 1 mark

9 Q. Identify the marketing function displayed in the picture given

below:

(A) Product designing and development

(B) Branding
(C) Marketing planning
(D) Packaging and labelling

Ans. (D) Packaging and labelling 1 mark

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Note: The following question is for the Visually Impaired
Candidates only in lieu of Q. No. 9.

Q. Which of the following functions of marketing gives detailed

information to the consumers about the product, ensures safety of
product and also serves as a promotional tool?

(A) Product designing and development

(B) Branding
(C) Marketing planning
(D) Packaging and labelling

Ans. (D) Packaging and labelling

10 Q. A garment manufacturing firm had set a target of

manufacturing 1000 garments per day. The manager of the firm
saw that the production consistently fell short of the target. It was
observed that employees were spending too much time taking
lunch, reporting late and leaving early on one pretext or the other.

A control mechanism was installed to address the issue. Card

punching was implemented in the organisation. It was made
mandatory for employees to record their entry or exit every time
they enter or leave. Their working hours were monitored and
irregularities addressed. This helped the organisation to meet its
daily production targets.
Identify the point of importance of 'Controlling’ highlighted in the
above case.

(A) Judging accuracy of standards

(B) Accomplishing organisational goals
(C) Making efficient use of resources
(D) Ensuring order and discipline

Ans. (D) Ensuring order and discipline

1 mark

11 Q. Selection test is a mechanism that attempts to measure certain

characteristics of individuals ranging from aptitudes, to
intelligence, to personality. It is one of the steps in the process of
selection. Place the subsequent steps of process of selection in an
organisation in the correct order.

8
A) Employment interview, reference and background checks,
selection decision, medical examination, job offer, contract of
employment
(B) Employment interview, reference and background checks,
medical examination, selection decision, job offer, contract of
employment
(C) Employment interview, medical examination, job offer,
reference and background checks, selection decision, contract of
employment
(D) Employment interview, selection decision, reference and
background checks, job offer, medical examination, contract of
employment

Ans. (A) Employment interview, reference and background

checks, selection decision, medical examination, job 1 mark
offer, contract of employment

12 Q. Identify the incorrect statement with respect to 'importance of

consumer protection' from the business point of view.

(A) Enlightened businesses realise that it is in their long-term

interest to satisfy their customers.
(B) It is the moral duty of any business to take care of consumer's
interest and avoid any form of their exploitation.
(C) Due to widespread ignorance of consumers about their rights
and reliefs available to them, it becomes necessary to educate
them about the same, so as to achieve consumer awareness.
(D) A business engaging in any form of exploitative trade practices
would invite government intervention which can tarnish the
image of the company.

Ans. (C) Due to widespread ignorance of consumers about

their rights and reliefs available to them, it
becomes necessary to educate them about the 1 mark
same, so as to achieve consumer awareness.

13 Q. An institution constituted for the purpose of assisting,

regulating or controlling the business of buying and selling or
dealing in existing securities' is known as:

(A) Securities and Exchange Board of India (SEBI)

(B) Stock Exchange
(C) Capital Market
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(D) Money Market

Ans. (B) Stock Exchange 1 mark

14 Q. Read the following statements: Assertion (A) and Reason (R).

Assertion (A): Increased life expectancy of people and increased

awareness for health care have increased the demand for many
health products and services.

Reason (R): Different elements of business environment are not

inter-related.

Choose the correct alternative from the options given below:

(A) Both Assertion (A) and Reason (R) are true and Reason (R) is
the correct explanation of Assertion (A).
(B) Both Assertion (A) and Reason (R) are true, but Reason (R) is
not the correct explanation of Assertion (A).
(C) Assertion (A) is true, but Reason (R) is false.
(D) Assertion (A) is false, but Reason (R) is true.

Ans. (C) Assertion (A) is true, but Reason (R) is false. 1 mark

15 Q. If any of the parties are not satisfied by the order of the District
Commission, they can appeal against such order to the State
Commission on the grounds of facts or law within a period of
________ from the date of order.

(A) 45 days
(B) 30 days
(C) 60 days
(D) 15 days

Ans. (A) 45 days 1 mark

16 Q. Identify the incorrect statement with respect to financial

leverage.

(A) The proportion of debt in the overall capital is called financial

leverage.
(B) With the increase in financial leverage, the financial risk

10
increases.
(C) The proportion of equity in the overall capital is called
financial leverage.
(D) As the financial leverage increases, the cost of funds declines.

Ans. (C) The proportion of equity in the overall capital is called

financial leverage. 1 mark

17 Q. Which of the following factors affect the capital budgeting

decision of a company?

(A) Investment criteria involved

(B) Floatation costs
(C) Tax Rate
(D) State of Capital Market

Ans. (A) Investment criteria involved 1 mark

18 Q. Rajni, the Chief Executive Officer of a multinational company,

maintained a simple and elegant look. Now she wanted a change,
so she decided to colour her hair in a vibrant colour. After reading
the label carefully, she purchased a well-known hair colour of good
quality. Before applying the colour, she read the instructions
carefully.

However, while applying the colour on her hair, she forgot the
instructions and without testing it on a patch of her skin, she
applied the colour. This led to an allergic reaction with redness
and itching on her scalp, ears and neck.

Identify the responsibility that was ignored by Rajni as a

consumer while using the hair colour.

(A) Be aware about various goods and services available in the

market so that an intelligent and wise choice can be made.
(B) Learn about the risks associated with products and services,
follow manufacturer's instructions and use the product safely.
(C) Assert yourself to ensure that you get a fair deal.
(D) Ask for a cash-memo on purchase of goods or services.

Ans. (B) Learn about the risks associated with products and
services, follow manufacturer’s instructions and use 1 mark
the product safely.
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19 Q. Which of the following factors affect the fixed capital
requirements of a company?

1. Financing alternatives
2. Level of collaboration
3. Production cycle
4. Choice of technique
5. Seasonal factors
6. Level of competition

Choose the correct alternatives from the following:

(A) 2, 3 and 6
(B) 3, 4 and 5
(C) 3, 4 and 6
(D) 1, 2 and 4

Ans. (D) 1, 2 and 4 1 mark

20 Q. Read the following statements carefully:

Statement 1: Training is the process by which the aptitudes, skills

and abilities of employees to perform specific jobs are increased.

Statement II: Training is a job-oriented process.

In the light of the above statements, choose the correct alternative

from the options given below:

(A) Statement I is true and Statement II is false.

(B) Statement I is false and Statement II is true.
(C) Both Statement I and Statement II are true.
(D) Both Statement I and Statement II are false.

Ans. (C) Both Statement I and Statement II are true. 1 mark

21 Q.(a) State any three points of importance of business

environment.

Ans.
Importance of business environment are: (Any three)

1. It enables the firm to identify opportunities early and get the first
12
mover advantage and be the first to exploit them instead of
losing them to competitors.

2. Environmental awareness helps the firm to identify threats and

serve as early warning signals.

3. Understanding business environment enables the enterprise in

tapping useful resources so that it can convert those resources
into outputs that the environment desires.

4. It helps the managers in coping with rapid changes by

understanding and examining the dynamic environment and
developing suitable courses of action. 1x3

5. It helps in assisting in planning and policy formulation by =

understanding and analysing the environment which becomes
the basis for deciding the future course of action (planning) or
framing guidelines for decision making (policy).

6. It helps in improving performance in present and future as

enterprises continuously monitor their environment and adopt
suitable business practices. 3 marks
(If an examinee has given only headings, ½ mark for each heading
should be awarded)

OR
OR
(b) State any three features of demonetisation.

Ans. Features of demonetisation are: (Any three)

(i) Demonetisation is viewed as a tax administration measure and

people with black money had to declare their unaccounted wealth and
pay taxes at a penalty rate.

(ii) Demonetisation is also interpreted as a shift on the part of the

government indicating that tax evasion will no longer be tolerated or
accepted. 1x3

(iii) Demonetisation led to tax administration channelizing savings =

into the formal financial system.

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(iv) It creates a less-cash or cash-lite economy, thus improves tax
compliance. 3 marks

(If an examinee has only listed the underlined points, ½ mark for
each point should be awarded)

22 Q.(a) Explain the following features of 'Planning':

(i) Planning focuses on achieving objectives.

(ii) Planning is a mental exercise.

Ans. Features of ‘Planning’:

(i) Planning focuses on achieving objectives:
• Specific goals are set out in the plans along with the activities to
be undertaken, to achieve the goals.
• Hence, planning contributes to the achievement of
predetermined organizational goals. 1½

(ii) Planning is a mental exercise:

• Planning requires application of the mind involving foresight, +
intelligent imagination and sound judgement.
• It is an intellectual activity of logical thinking rather than doing,
1½
because planning determines the action to be taken. It must be
based on analysis of facts and forecast.
=3 marks

OR
OR

(b) Explain the following types of plans:

(i) Strategy
(ii) Policy

Ans. (b)
(i) Strategy:

▪ A strategy refers to future decisions defining the organisation’s

direction and scope in the long run.

▪ It is a comprehensive plan for accomplishing organisation’s

objectives and involves determining long term objectives, adopting a 1½
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particular course of action and allocating necessary resources.

▪ Whenever a strategy is formulated, the business environment needs +

to be taken into consideration.

(ii) Policy:

• Policy is a general statement that guides thinking and channelizes

energies towards a particular direction. It brings uniformity in
decision making for achievement of predetermined objectives. 1½
• It defines the broad parameters within which a manager may
function. = 3 marks
• A manager may use his discretion to interpret and apply a policy.
.

23 Q. 'Capro Ltd.', an IT services firm was perceived as a passive

provider focusing on fulfilling clients' orders without much
innovation. In an attempt to change its image, the Chief Technical
Officer of 'Capro Ltd.' called a meeting of technical heads in the
conference room. The meeting was important as it was regarding
launching programmes to encourage employees to generate ideas
for value addition that their clients would appreciate and would
help in changing the company's image.

Shrinivas, a technical head was last to enter the conference room

for the meeting and got a seat near the door of the conference
room. As there was constant movement near the conference room,
he could not attentively focus on the meeting, missing out on
important points discussed in the meeting.

(a) Identify and state the elements in the communication process

that led to Shrinivas missing out on important points discussed in
the meeting.
(b) State any two other elements of the communication process
other than the one identified in (a) above.

Ans. (a) The element in the communication process that led to (½ mark for
Shrinivas missing out on important points discussed in the meeting is identifying
Noise.
+
Noise means some obstruction or hindrance caused to sender, message ½ mark for

15
or receiver in the process of communication. statement)

= 1 mark

(b) Other elements of the communication process are: (Any two)

(i) Sender is the person who conveys his thoughts or ideas to the +
receiver.
(ii) Message is the content of ideas, feelings, suggestions, order,
etc., intended to be communicated.
(iii) Encoding is the process of converting the message into 1x2=2
communication symbols such as words, pictures, gestures
etc.
(iv) Media is the path through which encoded message is
transmitted to receiver.
(v) Decoding is the process of converting encoded symbols of
the sender.
(vi) Receiver is the person who receives communication of the
sender.
(vii) Feedback includes all those actions of receiver indicating that = 3 marks
he has received and understood message of the sender.
(If an examinee has only listed the underlined points, ½ mark for
each point should be awarded)
24 Q. Amrit Ltd. and Nimrit Ltd. are two companies manufacturing
automotive parts for automobile companies. Amrit Ltd. had a
capital employed of ₹80 lakhs comprising of equity share capital of
₹40 lakhs divided into 40,000 shares of ₹ 100 each and debt of ₹40
lakhs at 6%. Nimrit Ltd. also had capital employed of ₹80 lakhs
divided into 80,000 equity shares of ₹100 each.
Return on Investment (ROI) of both the companies is 10% and tax
rate is 50%
(a) Calculate Earning Per Share (EPS) for both the companies.
(b) Which of the two companies has better Earning Per Share and
why?

Ans.
(a) Calculation of Earning Per Share

Particulars Amrit Ltd. Nimrit Ltd.

Capital employed ₹80 lakhs ₹80 lakhs
Equity share capital ₹40 lakhs ₹80 lakhs
(40,000 shares (80,000 shares
@₹100 each) @ ₹100 each)

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6% Debt ₹40 lakhs ---------
ROI 10% 10%
Earnings Before ₹8,00,000 ₹8,00,000
Interest and
Tax(EBIT)
Less : Interest on ₹2,40,000 ---------- 1 ½ marks
debt(6%)
Earnings Before Tax ₹5,60,000 ₹8,00,000
(EBT)
Less: Tax @50% ₹2,80,000 ₹4,00,000 +
Earnings After Tax ₹2,80,000 ₹4,00,000
(EAT)
Earning Per ₹7 per share ₹5 per share
Share(EPS) (2,80,000/40,000) (4,00,000/80,000)
=EAT/Number of
equity shares

(If an examinee has shown calculations in any other way, full credit
should to be given)

(½ for the
name of the
(b) Amrit Ltd has better Earning Per Share as compared with company
Nimrit Ltd. The use of debt by Amrit Ltd. has increased the +
EPS because ROI of Amrit Ltd. is 10%, which is greater than 1 mark for
its rate of interest on debt (6%). reason)
=1 ½

= 3 marks
25 Q. 'Mefco Ltd.' has been in online grocery e-commerce business
for the last six years. Recently, it started facing increasing
competition in the market. Understanding that speed of delivery in
the key differentiator amongst online business firms, 'Mefco Ltd.'
planned to launch 'Mefco Fast', a service designed to deliver the
products to the customers within 10 minutes. It studied the market
and made assumptions about the future regarding the convenience
offered by such a service to the consumers who are increasingly
seeking faster delivery options.

(a) Identify the step of the planning process highlighted in the

above case.
(b) State the next three steps to be followed by 'Mefco Ltd.' after
the step identified in (a) above.
17
Ans.

(a) The step of the planning process highlighted in the above case is 1 mark
‘Developing premises’.

+
(b) Next three steps to be followed by ‘Mefco Ltd.’ after the step
identified above are:

(i) Identifying alternative courses of action, by discussing amongst

the members of the organization. 1x3=3
(ii) Evaluating alternative courses of action by weighing pros and
cons of each alternative in the light of the objectives to be
achieved.
(iii) Selecting an alternative which is most feasible, profitable and
with least negative consequences. = 4 marks
(If an examinee has only listed the underlined points, ½ mark for
each point should be awarded)

26 Q. 'Heights Engineering College' is one of the top engineering

colleges in India known for its excellent academic programmes and
strong industry connections. The college has a separate placement
cell which maintains a close liaison with the universities, vocational
schools and management institutes to recruit qualified persons for
various jobs. It works tirelessly to connect students with some of
the best companies for job opportunities.

Shikhar, a brilliant Environmental Engineering student was

excited when he was chosen by 'Nero', a major car manufacturing
company for the post of Production Manager. He received the
employment contract which included the terms, conditions and
date of joining. Shikhar happily accepted the employment offer.
On his first day at the company, Shikhar was given a brief
presentation about the company and was introduced to his
superiors, subordinates and colleagues. He was taken around the
workplace and given charge of the job for which he was selected.
Three months later, after settling into the job, Shikhar was called
by his superior and given positive feedback about his current
performance as per certain pre-determined standards.

State four steps of the staffing process discussed in the above case.
18
Ans. Steps of the staffing process discussed in the above case are:

(a). Recruitment is a process of searching for prospective employees

and stimulating them to apply for jobs in the organisation in order to
create a pool of the prospective job candidates.

(b). Selection is the process of choosing the most suitable candidate

from the pool of prospective candidates, in order to ensure that the
organisation gets the best among available candidates. 1x4

(c). Placement and Orientation refer to employee occupying the post

for which he has been selected and introducing the selected
employees to his seniors, subordinates and colleagues as well as
familiarising him with the rules and policies of the organisation.

(d). Performance appraisal involves evaluation of an employee’s

current/past performance as against certain predetermined standards = 4 marks
and providing feedback.

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

27 Q.(a) Explain ‘Organisational Climate’ and ‘Employee

Recognition’ as non-financial incentives.

Ans.

Organisational Climate:

• It indicates the characteristics which describe an organisation

and distinguish one organisation from the other.
2
• Individual autonomy, reward orientation, consideration to
employees, risk-taking, etc. are the characteristics which help
in developing better organisational climate.

+
Employee Recognition:

• It means acknowledging and appreciating the work performed 2

by the employees by congratulating them, giving them awards

19
etc.

• When such appreciation is given to the work performed by =

employees, they feel motivated to perform/work at higher level. 4 marks

OR
OR

(b) Explain any two psychological barriers to effective

communication.

Ans. (½ mark for

Psychological barriers to effective communication (Any two with naming the
suitable explanation): barrier and
(i) Premature evaluation 1 ½ marks
(ii) Lack of attention for
(iii) Loss by transmission and poor retention explanation)
(iv) Distrust
2x2
(If an examinee has not given the headings as above but has given =
the correct explanation, full credit should be given) 4 marks

28 Q.(a) State any four features of 'Motivation' as an element of

Directing.

Ans.
Features of ‘Motivation’ as an element of Directing are:

(i) Motivation is an internal feeling as the urge, drives,

desires, aspirations, striving or needs of human being
influence human behaviour.
(ii) Motivation produces goal directed behaviour, with the 1x4
objective of improving employees’ performance.
(iii) Motivation can be either positive like increase in pay,
promotion, recognition etc. or negative like punishment, =4 marks
stopping increments, threatening etc.
(iv) Motivation is a complex process as any type of
motivation may not have uniform effect on all the
members because they are heterogeneous in their
20
expectations, perceptions and reactions.

(If an examinee has only listed the underlined points, ½ mark for
each point should be awarded)

OR
OR
(b) State any four points of importance of ‘Directing’ function
of management.

Ans.

Importance of Directing function (Any four)

(i) Directing helps to initiate action by people in the organisation
towards attainment of desired objectives by guiding the people
and clarifying the doubts in performing a task.
(ii) Directing integrates employees’ efforts in the organisation in
such a way that every individual effort contributes to the
organisational performance.
(iii) Directing guides employees to fully realise their potential and
capabilities by motivating and providing effective leadership.
(iv) Directing facilitates introduction of needed changes in the 1x4
organisation by reducing resistance to change through
motivation, communication and leadership.
(v) Effective directing helps to bring stability and balance in the =4 marks
organisation by fostering cooperation and commitment among
the people.
(If an examinee has only listed the underlined points, ½ mark for
each point should be awarded)

29 Q. 'Reliable Appliances' and 'Modern Appliances' are two

reputed companies, both manufacturing refrigerators. They have
been in this business for many years, have a good reputation and a
large customer base. The companies follow different marketing
management philosophies and cater to different kinds of
customers.

'Reliable Appliances' focuses on producing large quantities of

affordable basic refrigerators that meet the essential needs of
customers. It follows a belief that customers will prefer products
that are widely available and affordable. The company focuses on
mass production to keep costs low. As a result, it attracts budget
conscious consumers. On the other hand, 'Modern Appliances'

21
operates in the premium segment of the refrigerator market,
attracting affluent buyers. It focuses on manufacturing
refrigerators with advanced features such as Wi-Fi connectivity,
built-in touch screen interface and advanced cooling systems, etc.
It believes that customers will prefer products that offer superior
quality with innovative features. For this, the company
continuously improves its products' features and quality to
differentiate itself from its competitors.

(a) Identify the 'Marketing Management Philosophies' of 'Reliable

Appliances' and 'Modern Appliances'.
(b) Differentiate between the marketing management philosophies
identified in (a) above on the basis of the following:
(i) Main focus
(ii) Means
(iii) Ends

Ans.

(a). Reliable Appliances used ‘Production’ marketing management ½+½

philosophy and Modern Appliances used ‘Product’ marketing = 1 mark
management philosophy.

(b).
Bases Production Product philosophy
philosophy
(i)Main Its main focus is on Its main focus is on
focus quantity of product. quality, performance
and features of +
product.
(ii)Means According to this According to this
philosophy, philosophy, product
products are to be improvements are
made available at key to success. 1x3
an affordable price.
(iii)Ends Its objective is to Its objective is to
earn profit through earn profit through
volume of product quality. =
production.

4 marks

30 Q. ‘Silver Mills' started their business as a B2B supplier of high

22
quality millet seeds. The firm was set up in a backward area of
Ransdhan. The firm was earning just enough revenues to cover its
cost. Over a period of time, due to rising awareness amongst
people about the health benefits of millets and with the year 2023
declared as 'International Year of Millets', the demand for millets
increased and the firm was able to earn profits. This gave a vital
incentive to the firm to continue its successful operations. It then
expanded its operations and introduced millet flour, millet-based
snacks and millet-based beverages. With increase in its operations,
it provided employment opportunities specially to women,
involving them in dehusking, cleaning and packing of millets.

State the objectives of management highlighted in the above case.

Ans.
Objectives of management highlighted in the above case are:

(a) Organisational objectives:

The main objective of any organization should be to utilize human
and material resources to the maximum possible advantage to fulfil 1½
the economic objectives of a business.
These are: Survival, Profit and Growth. +

(i) In order to survive, an organisation must earn enough

revenues to cover costs.
(ii) Profit provides vital incentive and is essential for covering
costs and risks of the business. 1½
(iii) A business needs to add to its prospects in the long run,
hence management must exploit fully the growth potential
of the organisation to remain in the industry. +

(b). Social objectives involve consistently creating economic value for

various constituents of society by using environmental friendly
methods of production, providing employment opportunities, etc. 1

=4 marks
(If an examinee has only listed the points, ½ mark for each point
should be awarded)

31 Q. (a) Explain the following principles of Scientific Management:

23
(i) Science not Rule of Thumb
(ii) Harmony, not Discord
(iii) Development of Each and Every Person to His or Her Greatest
Efficiency and Prosperity

Ans.

Principles of Scientific Management:

(i) Science, not Rule of Thumb:

•It states that there is only one best method to maximise efficiency,
which can be developed through work study and analysis. This best
method should substitute ‘Rule of Thumb’ throughout the organisation.
2
•Scientific method involves unifying the best practices and developing
a standard method to be followed throughout the organisation.
+
(ii) Harmony, not Discord:
•This principle emphasises that there should be complete harmony
between the management and the workers. Both should realise that
each one is important. There should be complete mental revolution on
the part of both management and workers and both should transform
their thinking.

•Management should share the gains of the company, if any, with the 2
workers. At the same time, workers should work hard and be willing to
embrace change for the good of the company.

(iii) Development of Each and Every Person to His or Her

Greatest Efficiency and Prosperity:
• It states that each person should be scientifically selected and
assigned work to suit their physical, mental and intellectual
capabilities. To increase efficiency of the workers, they should be 2
trained to learn the best method developed through scientific study.
• Efficient employees would produce more and earn more. This
will ensure greatest efficiency and prosperity for both the
company and the workers. = 6 marks

24
OR OR

(b) Explain the following features of principles of management:

(i) Universal applicability

(ii) Cause and effect relationships
(iii) General guidelines

Ans.
Features of principles of management:

(i) Universal applicability:

• The principles of management are intended to apply to all
types of organisations, business as well as non-business, small
as well as large, etc.
• However, the extent of their applicability would vary with the 2
nature of the organisation, business activity, scale of
operations, etc.
+
(ii) Cause and effect relationships:
• The principles of management are intended to establish
relationship between cause and effect so that they can be used
in similar situations in a large number of cases.
• The principles of management are less than perfect since they 2
mainly apply to human behaviour and in real life, situations are
not identical, so accurate cause and effect relationships may be
difficult to establish.

(iii) General guidelines:

• The principles are guidelines to action but do not provide +
readymade solutions to all managerial problems.
• This is so because real business situations are very 2
complex and dynamic and are a result of many factors.

= 6 marks
32 Q. ‘TnG' is a leading manufacturer of baby care and feminine care
products and has a good market reputation. It has Production,
Marketing, Human Resources, Customer Service and Research
and Development departments. To capitalise on its brand name
and to take advantage of new business opportunities, the company
decided to diversify into manufacturing of new range of products
like 'Beauty and Wellbeing'. 'Home Care', 'Personal Care',
25
'Nutrition', etc. For this, the company had to add more employees
and create more departments and choose a good organisational
structure which would help the company in achieving its
objectives.

(a) Explain the organisational structure that "TnG' should choose

after it decided to diversify. Also give reason in support of your
answer.
(b) State how the organisational structure explained in (a) above
will help the organisation and the heads of different departments.
Give two points in favour of each.

Ans.
(a) TnG should choose divisional structure after it decided to
diversify. This organisational structure comprises of separate business 1 mark
units or divisions, each unit having a divisional manager responsible
for its performance. +

(Ifan examinee has only identified the organisational structure and

not explained it, ½ mark should be awarded)

Reason:
Divisional structure is suitable when an organisation grows and starts
manufacturing a large variety of products using different productive
resources. 1 mark
(b) Advantages of divisional structure to the organization:
(i) Divisional heads are accountable for profits, as revenues and +
costs related to different departments can be easily identified
and assigned to them, which helps the organization in
fixation of responsibility.
1x2 =2
(ii) It facilitates expansion and growth as new divisions can be
added without interrupting the existing operations by merely
adding another divisional head and staff for the new product
line.

Advantages of divisional structure to the heads of different

departments: +
(i) Product specialisation helps in the development of varied
skills in a divisional head and prepares him for higher

26
positions.

(ii) Each division functions as an autonomous unit which helps 1x2 =2

the divisional head in faster decision making as well as
promotes flexibility and initiative.
= 6 marks
(If an examinee has only listed the underlined points, ½ mark for
each point should be awarded)

33 Q.(a) Explain the following factors affecting requirements of

working capital of a company:

(i) Nature of business

(ii) Inflation
(iii) Seasonal factors
(iv) Growth prospects

Ans. Factors affecting requirements of working capital of a

company :

(i) Nature of business:

• A trading organisation usually needs a smaller amount of
working capital as compared to a manufacturing
organisation because there is usually no processing.
• Service industries which usually do not have to maintain
1½
inventory require less working capital.

(ii) Inflation:
• With rising prices, larger amounts are required even to +
maintain a constant volume of production and sales.
• The working capital requirement of a business becomes
higher with higher rate of inflation. 1½

(iii) Seasonal factors: +

• In peak season, because of higher level of activity, larger
amount of working capital is required by the business.
• As against this, the level of activity as well as the
requirement for working capital will be lower during the 1½

27
lean season by the business.

(iv) Growth prospects: +

• If the growth potential of a concern is higher, it will require
larger amount of working capital. 1½
• This is to enable it to meet higher production and sales target
whenever required. =

6 marks

OR OR

(b) Explain the following factors affecting dividend decisions of a

company:

(i) Stability of dividend

(ii) Shareholders' preference
(iii) Access to capital market
(iv) Legal constraints

Ans:

(i) Stability of dividend:

• Companies generally follow a policy of stabilising dividend
per share.
• The increase in dividends is generally made when there is 1½
confidence that their earning potential has gone up and not just
the earnings of the current year.

(ii) Shareholders’ preference: +

• If the shareholders desire that at least a certain amount is paid
as dividend, in general the companies are likely to declare the
same. 1½
• There are always some shareholders who depend upon a
regular income from their investments.
+

28
(iii) Access to capital market:
• Large and reputed companies depend less on retained
earnings to finance their growth as they have easy access to 1½
the capital market.
• Such companies pay higher dividends than the smaller
companies which have relatively low access to the market. +

(iv) Legal constraints:

• Certain provisions of the Companies Act place restrictions on 1½
payouts as dividend.
=
• Such provisions must be adhered to while declaring the
dividend. 6 marks
34 Q. Recognising the growing demand for luxury, convenience and
personalised experience due to increased disposable income and
busy work schedules, 'Ramneek Bros.’ had launched a high end
concierge service company two years ago. The company offers
customised exclusive services to ultra wealthy clients such as
making restaurant reservations, booking private jets, arranging
tickets for shows, etc.

Ramneek Bros. charges premium prices for their services

reflecting the exclusive and top quality offerings they provide. The
company also provides a mobile app allowing their clients to access
and request for services from anywhere in the world. To
communicate availability and features of their services, Ramneek
Bros. advertises in high class. magazines and depends upon word
of mouth recommendations from existing clients. As a result, the
company has successfully established itself as a market leader in
their field.

Quoting lines from the above case, identify and explain any three
elements of marketing mix.

Ans. Elements of marketing mix are (Any three):

Product/Product mix:

29
Quote: “The company offers customized exclusive services to ultra
wealthy clients such as making restaurant reservations, booking
private jets, arranging tickets for shows, etc.”

Product means goods or services or ‘anything of value’, which is

offered to the market 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. (½ mark for
identifying
Price/Price mix:
the element
Quote: “Ramneek Bros. charges premium prices for their services +
reflecting the exclusive and top quality offerings they provide.” ½ mark for
quoting
Price is the amount of money customers have to pay to obtain the +
product. It involves decisions regarding the basic price of the product, + 1 mark
discount to customers, traders, credit terms etc. for
explanation

Place/Physical Distribution mix:

=2 marks)
Quote: “The company also provides a mobile app allowing their
clients to access and request for services from anywhere in the world.”

Place or Physical Distribution include activities that make firm’s

products available to the target customers.

It includes decisions like selection of dealers or intermediaries

(channels of distribution), providing support to the
intermediaries, managing inventory, storage and warehousing
and transportation of goods from the place it is produced to the
=2x3
place it is required by the buyers.

Promotion/Promotion mix:

Quote: “…Ramneek Bros. advertises in high class magazines and

depends upon word of mouth recommendations from existing clients.”

Promotion refers to communicating availability, features, merits,

etc. of the products and services to the target customers and

30
persuading them to buy it.

It uses a combination of promotional tools such as advertising,

personal selling and sales promotion techniques.
= 6 marks

31