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

Senior School Certificate Examination

SOLUTIONS
March -----2024
Marking Scheme---Business Studies (054)
66/2/2
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.
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.

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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 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– 2024
/2 BUSINESS STUDIES -054 Marks
/1 66/2/2
EXPECTED ANSWERS / VALUE POINTS
1 Q. Read the following statements: Assertion (A) and Reason
(R). Choose the correct alternative from those given below:
Assertion (A): Decentralization is an optional policy decision.

Reason (R): It is done at the discretion of the top

management.
Alternatives:
(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 1 mark
(R) is the correct explanation of Assertion (A).

2 Q. ‘Lack of confidence of superior in his subordinates' is one

of the barriers of communication. Identify the communication
barrier:
(A) Personal barrier
(B) Psychological barrier
(C) Semantic barrier
(D) Organizational barrier

Ans. (A) Personal barrier

1 mark

3 Q. _________is the process of holding securities in an

electronic form.
(A) Rolling Settlement
(B) Registration
(C) Dematerializațion
(D) Depository

Ans. (C) Dematerializațion 1 mark

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4 Q. 'Lens-o' was started as an online eyewear company selling
glasses and contact lenses on their website. Recently, it set up
a uniquely designed offline store, so that customers can also
buy their products from the company showroom.
Which channel of distribution is used by the company:
(A)Zero level channel
(B) One level channel
(C) Two level channel
(D) Three level channel

Ans. (A) Zero level channel 1 mark

5 Q. Akash Mehra is the Marketing Manager of 'Kedanta

Enterprises'. He gives orders and expects his subordinates to
obey those orders. Communication is only one-way with the
subordinates only acting according to the command given by
him.
Identify the leadership style of Akash Mehra:
(A) Authoritative
(B) Participative
(C) Free-rein
(D) Pragmatic

Ans. (A) Authoritative 1 mark

6 Q. The selection tests which are used to measure individual's

potential for learning new skills are called:
(A) Aptitude Tests
(B) Intelligence Tests
(C) Personality Tests
(D) Interest Tests

Ans. (A) Aptitude Tests 1 mark

7 Q. ‘Increase in profit earned by equity shareholders due to

the presence of fixed financial charges like interest' is referred
to as:
(A) Capital structure
(B) Financing decision
(C) Return on Investment
(D) Trading on equity

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Ans (D) Trading on equity 1 mark

8 Q. ‘JKSD India Ltd.' recently introduced a new range of

'fresh from kitchen' jams, ketchups, salad dressings and
peanut butter, etc. They appointed salespersons to contact
prospective customers in leading malls to create awareness
about their products and develop product preferences with
the aim of making sales.
Which tool of promotion is being used by 'JKSD India Ltd.' to
market its products:
(A) Advertising
(B) Personal Selling
(C) Sales Promotion
(D) Public Relations

Ans. (B) Personal Selling 1 mark

9 Q. ‘Vishesh Constructions', a construction company, decided

to strictly implement 'No Helmet, No Entry’ and put the
following sign at their construction sites:

Identify the type of plan indicated by the above sign:

(A) Policy
(B) Rule

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(C) Method
(D) Programme

Ans. (B) Rule 1 mark

10 Q. __________is the process of searching for prospective

employees and stimulating them to apply for jobs in the
organization.
(A) Training
(B) Selection
(C) Development
(D) Recruitment

Ans. (D) Recruitment 1 mark

11 Q. Which of the following is not a feature of marketing:

(A) Needs and wants
(B) Storage and warehousing
(C) Customer value
(D) Creating a market offering

Ans. (B) Storage and warehousing 1 mark

12 Q. Financial market allocates or directs funds available for

investment into the most productive investment opportunity.
In doing so, it performs the __________function.
(A) Creative
(B) Exchange
(C) Allocative
(D) Productive

Ans (C) Allocative 1 mark

13 Q. 'A public issue of equity may reduce the management

holding in the company and make it vulnerable to takeover.
This factor also influences the choice between debt and equity,
especially in companies in which the current holding of
management is on a lower side.'
The factor affecting choice of capital structure discussed in
the above case is:

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(A) Flexibility
(B) Cost of debt
(C) Cost of equity
(D) Control

Ans. (D) Control 1 mark

14 Q. From the following, choose the incorrect statement about

the importance of 'Directing' function of management:
A) Directing helps to initiate action by people in the
organization towards attainment of desired objectives.
(B) Directing integrates employees' efforts in the organization
in such a way that every individual effort contributes to
the organization's performance.
(C) Directing facilitates introduction of needed changes in the
organization.
(D) Directing helps in estimating manpower requirements for
the organization.

Ans. (D) Directing helps in estimating manpower requirements 1 mark

for the organization.

15 Q. Sudha and Shweta were twin sisters. After completing

their education from college, they decided to start a business.
As they were Commerce students, they knew the importance
of deciding in advance 'what to do' and 'how to do'. It was
very challenging for them as this decision was to guide all
their future actions. While discussing the same with their
mother, they got a new idea of starting a 'Cloud Kitchen'.
Both the sisters were very excited to start this. The idea took
the shape of a concrete plan and within a month, they were
successful in starting their 'Cloud Kitchen.'
Identify the point of importance of planning highlighted in the
above case:
(A) Planning reduces the risk of uncertainty.
(B) Planning promotes innovative ideas.
(C) Planning establishes standards for controlling.
(D) Planning reduces overlapping and wasteful activities.

Ans. (B) Planning promotes innovative ideas.

1 mark
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16 Q. A name, term, symbol, design, or some combination of
these, used to identify the products, goods or services of one
seller or group of sellers and to differentiate them from those
of the competitors is known as:
(A)Brand
(B) Trade Mark
(C) Brand Name
(D) Brand Mark

Ans. (A) Brand 1 mark

17 Q. Sunita opened her travel agency named 'Sunita Travels' in

July, 2023. She created separate departments for reservations,
hotel bookings, online queries and payment handling. Which
organisation structure is used by Sunita:
(A) Functional structure
(B) Divisional structure
(C) Informal structure
(D) Vertical structure

Ans. (A) Functional structure 1 mark

18 Q. Statement I: Controlling ensures that activities in an
organization are performed as per the plans.
Statement II: Controlling function of a manager is a pervasive
function.
Choose the correct option from the options given below:
(A) Statement I is true and Statement II is false.
(B) Statement II is true and Statement I is false.
(C) Both the Statements are true.
(D) Both the Statements are false.

Ans. (C) Both the Statements are true. 1 mark

19 Q. Sushant was an able Project Manager at 'Keiro Ltd.'

Sushant's Head, Naveen handed over a new project to
Sushant. Sushant already had enough work in hand. So,
Sushant decided to divide the work assigned to him, among
three of his subordinates. He himself kept that part of the
work which he himself could perform effectively and got his

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subordinates to help him with what remained. The project got
completed well in time because of this. The concept of
management used by Sushant to complete the project was:
(A) Delegation
(B) Decentralization
(C) Accountability
(D) Authority

Ans. (A) Delegation 1 mark

20 Q. Match the Marketing Management philosophies given in

Column I with their main focus given in Column II:

Column I Column II

1. Production concept i) Customers’ needs

2. Product concept ii) Quality, performance and

features of product.
3. Marketing concept iii) Customers’ needs and
societal well-being.
4. Societal Marketing iv) Quantity of product
concept
Choose the correct option from the following:

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

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

21 Q. a) State any three 'regulatory functions' of Securities and

Exchange Board of India.

Ans(a). Regulatory functions of SEBI: (Any three)

1. Registration of brokers and sub-brokers and other players in the

market.

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2. Registration of collective investment schemes and Mutual 1x3
Funds. =
3 marks
3. Regulation of stock brokers, portfolio exchanges, underwriters
and merchant bankers and the business in stock exchanges and
any other securities market.

4. Regulation of takeover bids by companies.

5. Calling for information by undertaking inspection, conducting

enquiries and audits of stock exchanges and intermediaries.

6. Levying fee or other charges for carrying out the purposes of

the Act.

7. Performing and exercising such power under Securities

Contracts (Regulation) Act 1956, as may be delegated by the
Government of India.

OR

(b) State any three objectives of Securities and Exchange

Board of India.

Ans (b). Objectives of SEBI: (Any three)

1. To regulate stock exchanges and the securities industry to

promote their orderly functioning.

2. To protect the rights and interests of investors, particularly

individual investors and to guide and educate them.
1x3
3. To prevent trading malpractices and achieve a balance between
self-regulation by the securities industry and its statutory =
regulation. 3 marks

4. To regulate and develop a code of conduct and fair practices by

intermediaries like brokers, merchant bankers etc., with a view to
making them competitive and professional.

22 Q. After studying Entrepreneurship in Class XII, Neel

completed a baking course and started a bakery, 'Cakes and

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Bakes'. He set a target of earning a modest 10% return on
investment in the first year. As he was supplying healthy
bakery products, the demand kept increasing. 'Cakes and
Bakes' became a famous bakery in a year. He now wanted to
develop a plan to define the direction and scope of 'Cakes and
Bakes' for the long run. He made a marketing plan to decide
if he could charge higher price to improve his return on
investment, how to advertise the products, etc.
Quoting lines from the above paragraph, identify and explain
two types of plans discussed in the above case.
Ans. Two types of plans are:
i) Objective ½ mark for
‘He set a target of earning a modest 10% return on investment in quoting+ ½
mark for
the first year.’
identifying+
An objective is the end which the management seeks to achieve. ½ mark for
An objective need to be expressed in specific terms and is to be explaining
achieved within a given time period
=
ii) Strategy
‘He now wanted to develop a plan to define the direction and 1 ½ x2
scope of ‘Cakes and Bakes’ for the long run.’ =
A strategy is a comprehensive plan for accomplishing an
organisation’s objectives. Whenever a strategy is formulated, the 3 marks
business environment needs to be taken into consideration.

23 Q. Piyush is the Production Manager of a shoe company

called 'Comforty'. He has 1000 workers working under him in
his department. Piyush booked a special order for 300 pairs of
gents shoes at an estimated cost price of ₹500 per pair plus
20% profit margin. The order is to be completed within 10
days. After completion of the order, Piyush found out that the
production cost of one pair of shoes was ₹600. He tried to find
out the reason, but he couldn't. He reported it to the Chief
Executive Officer. The Chief Executive Officer appointed
Abhay to find out the cause. Abhay was not only a specialized
Cost Accountant, but also a qualified Human Resource

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Manager. After two days, Abhay reported that the set targets
could be completed with the help of only 800 workers, which
revealed that there was overmanning in the organisation. The
organization was not utilizing the human resources optimally,
which had led to higher labour cost.
The above case highlights one of the points of importance of
an important function of management.
(i)Identify the function of management.
(ii) State any two points of importance of the function of
management identified in part (i), except the one discussed in
the above case.
Ans. (i) Controlling 1 mark
(ii) Importance of controlling: (Any two)
(a) It ensures order and discipline among employees by keeping a
1x2
close check on their activities.
(b) It improves employee motivation as the employees’ know =
well in advance the standards of performance on the basis of
which they will be appraised. 2 marks
(c) It facilitates coordination in action as each department in
governed by pre-determined standards which are well coordinated
with one another. 1+2

(If an examinee has only listed the underlined points, ½ mark =

for each point should be awarded)

3 marks

24 Q. (a) Explain any three points of importance of ‘Controlling’

function of management.
Ans. (a) Importance of Controlling : (Any three with
½ mark for
explanation) heading + ½
(i) Accomplishing organisational goals. mark for
(ii) Making efficient use of resources. explanation
(iii) Ensuring order and discipline.

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(iv) Improving employee motivation. 1x3
(v) Judging accuracy of standards.
=3 marks
(vi) Facilitating coordination in action.

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

OR

(b) Explain the relationship between ‘Planning' and

'Controlling’ functions of management with the help of any
three points.
Ans.(b) Relationship between Planning and Controlling : (Any
three)
Planning and controlling are inseparable twins of management
1. Planning without controlling is meaningless and
Controlling is blind without planning.
Once a plan becomes operational, controlling is necessary to
monitor the progress, measure it, discover deviations and initiate
corrective measures to ensure that events conform to plans. So,
Planning without controlling is meaningless. A system of control
presupposes the existence of certain standards which are provided
by planning. Therefore, controlling is blind without planning
2. Planning is a prerequisite for controlling while controlling
1x3
seeks to compel events to conform to plans.
=
Without planning there is no predetermined understanding of the
desired performance while controlling seeks to compel events to
conform to plans
3 marks
3. Planning is prescriptive while controlling is evaluative.
Planning is basically an intellectual process involving thinking,
articulation and analysis to discover and prescribe an appropriate
course of action for achieving objectives. Controlling, on the
other hand, checks whether decisions have been translated into
desired action.

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4. Planning is forward-looking while controlling is looking
back.
Planning involves looking ahead as plans are prepared for future
and are based on forecasts about future conditions. On the
contrary, controlling is like a postmortem of past activities to find
out deviations from the standards. In that sense, controlling is
looking back.
5. Controlling is forward-looking while planning is looking
back.
The corrective action in controlling seeks to improve the
performance in the future or to revise future plans. So, controlling
is also forward looking. However, planning is guided by past
experiences and the corrective action initiated by control function
aims to improve future performance. Thus, planning is also
looking back.

25 Q. ‘VBR Cinema', an Indian multiplex cinema hall was the

first to recognize the change in consumption habits of people.
It changed its food menu from burgers, pizza, soft drinks, etc.
and switched over to healthier options like salads and
smoothies, soups and anjeer-based sweets. Within a month,
the revenue of the multiplex from sale of food items doubled.
'VBR Cinema', by continuously monitoring the environment
and adopting suitable business practices, was able to improve
its revenues and profits and was hopeful that it will continue
to succeed in the market in the long run too.
Identify and explain one dimension of business environment
and one point of importance of understanding the business
environment highlighted in the above case.
Ans. Dimension of Business Environment- 1 mark for
Social Environment- identifying
dimension
The social environment of business includes the social forces like
+
customs and traditions, values, social trends, society’s 1 mark for
expectations from business, etc. explanation
=
2marks
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Importance of understanding the business environment
1 mark for
highlighted above- identifying
It helps to improve performance- importance+
The enterprises that continuously monitor their environment and 1 mark for
adopt suitable business practices are the ones which not only explanation
improve their present performance but also continue to succeed in
the market for a longer period. =2 marks

=2+2
= 4 marks

26 Q.(a) Explain any four advantages of external sources of

recruitment.
Ans. (a) Advantages of external sources of recruitment: (with
½ mark for
explanation)
heading+ ½
(i) Qualified Personnel mark for
(ii) Wider Choice explanation
(iii) Fresh Talent =
(iv) Competitive Spirit
1x4=

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

OR
(b) Explain 'Direct Recruitment' and 'Casual Callers' as
external sources of recruitment.

Ans. (b) Direct Recruitment

 A notice is placed on the notice-board of the enterprise

specifying the details of the jobs available. Unskilled or
semi-skilled job-seekers assemble outside the premises of
the organisation on the specified date and selection is done
on the spot.
 It is very inexpensive as it does not involve any cost of 2 marks
advertising the vacancies.

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Casual Callers:
 Many reputed business organisations keep a database of
unsolicited applicants in their offices. A list of such job- 2 marks
seekers can be prepared and can be screened to fill the
=
vacancies as they arise. 2+2
 It reduces the cost of recruiting workforce.
=
4 marks

27 (a) Explain the following factors affecting the requirements of

fixed capital:
(i) Technology upgradation
(ii) Choice of technique
Ans.(a) (i) Technology upgradation
 In certain industries, assets become obsolete sooner and
their replacements become due faster. 2 marks
 Higher investment in fixed assets may, therefore, be
required in such cases.
(ii) Choice of technique
 A capital-intensive organisation requires higher investment
in plant and machinery as it relies less on manual labour. 2 marks
The requirement of fixed capital for such organisations
would be higher. =
 Labour intensive organisations on the other hand require 2+2
less investment in fixed assets. Hence, their fixed capital
=4 marks
requirement is lower.

OR

(b) Explain the following factors affecting dividend decision:

(i) Stability of earnings
(ii) Taxation policy

Ans. (b) (i) Stability of earnings

 Other things remaining the same, a company having stable
earning is in a better position to declare higher dividends.
2 marks

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 As against this, a company having unstable earnings is
likely to pay smaller dividend.
(ii) Taxation policy 2 marks
 If tax on dividend is higher, it is better to pay less by way =
of dividends.
 As compared to this, higher dividends may be declared if 2+2
tax rates are relatively lower. =
4 marks
28 Distinguish between 'Money Market’ and ‘Capital Market’ on
the following basis:
(i) Participants
(ii) Instruments
(iii) Duration
(iv) Liquidity

Ans. Difference between Money Market and Capital Market

Basis Money market Capital Market

i Participants The participants areThe participants are
institutional financial institutions,
participants such asbanks, corporate
the RBI, banks, entities, foreign
financial institutions
investors and 1x4
and finance ordinary retail
companies. investors from =
members of the public.
ii Instruments The main instrumen- The main instruments
ts traded in the traded in the capital 4 marks
money market are market are – equity
short term debt shares, debentures,
instruments such as bonds, preference
T-bills, trade bills shares etc.
reports, commercial
paper and certificates
of deposit.
(iii) Duration Money market The capital market
instruments have a deals in medium and
maximum tenure of long term securities
one year, and may such as equity shares
even be issued for a and debentures.
single day.

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(iv) Liquidity It has higher degree It has lesser liquidity.
of liquidity.

29 Q. 'Inaya Ltd.' is a multinational technology company

focusing on artificial intelligence, online advertising and
search engine technology. The company is generating good
profits and takes care of the well-being of its staff.
The company offers benefits like car allowance, medical aid
and allowance for children's education to all employees above
the Manager's level. It regularly contributes towards the
Employees' Provident Fund and pays gratuity on retirement
to its employees. Under a special incentive scheme, the
employees are offered shares of 'Inaya Ltd.' at a set price
which is lower than the market price. Each year, the company
keeps aside funds to pay one percent of base salary as bonus
to its employees. No wonder 90% of the employees would
recommend working at 'Inaya Ltd.' to a friend.
Explain four incentives being provided by 'Inaya Ltd.' to
motivate their employees for better performance.
Ans. Incentives provided by ‘Inaya Ltd.’ to motivate their
employees for better performance are:
(i) Perquisites:
Perquisites such as car allowance, housing and medical aid etc., ½ mark for
heading and
are offered to employees over and above the salary to provide ½ mark for
motivation to them. explanation
(ii) Retirement benefits:
Retirement benefits such as provident fund, pension and gratuity, =
which provide financial security to employees after their 1x4
retirement, act as an incentive when they are in service in the
organisation.
(iii) Stock option/Co-partnership
Co-partnership/stock option is an incentive in which employees
are offered company shares at a set price, which is lower than
market price, to create a feeling of ownership and make them =
contribute for the growth of the organisation. 4 marks

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(iv) Bonus:
Bonus is an incentive offered over and above the wages/salaries
to the employees for higher performance.

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

30 Q. Ashwin was a fashion designer. On losing his job, he

decided to sell the designer clothes online under the brand
name 'Kogue. The garments were made of good quality fabric
with intricate designs and skilled craftsmanship, making them
expensive to produce. Realizing that the online market is very
competitive, he decided to charge areasonable price for the
garments. The price would cover the cost of production and
sale of garments as well as give him 10% margin over and
above the cost.
Identify and explain two factors affecting the price
determination discussed in the above case.
Ans. Following are the two factors affecting the price
determination:
½ mark for
(i) Product cost identifying +
The cost sets the minimum level or the floor price at which 1 ½ mark
the product may be sold. Generally, all marketing firms for
explanation
strive to cover all their costs, at least in the long run. In
=
addition, they aim at earning a margin of profit over and
above the costs. 2+2
(ii) Extent of competition in the market
The price will tend to reach the upper limit in case there is
lesser degree of competition while under conditions of free =
competition, the price will tend to be set at the lowest level. 4 marks
Competitors’ prices, their anticipated reactions, quality and
features of the competitive products must be considered
before fixing the price of a product.

31 Q. Ashish wanted to purchase one LCD TV for his home. He

decided to go to various stores selling electronic items to check
the available varieties of different brands. One of his friends
took him to a manufacturer selling LCD TV at almost half the
price. The manufacturer described its various features and

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insisted that Ashish buys the LCD TV from him. Seeing the
features, Ashish decided to buy the TV from him, even when
the TV was not having any standardisation mark on it. When
Ashish asked for the cash memo, the manufacturer
discouraged him, saying that it will attract additional tax. He
further told Ashish not to worry and promised that if there
would be any problem with the TV, he would replace it
immediately. The TV started malfunctioning within a month
and Ashish asked for its replacement. The manufacturer
refused to replace the LCD TV, telling him that the problem
is due to mishandling of the TV. Ashish decided to file a
complaint in the Consumer Court against the manufacturer.
(i) Identify and explain two consumer rights discussed in the
above case.
(ii) State two consumer responsibilities that Ashish did not
fulfil while buying the LCD TV.
Ans. (i) Consumer Rights (Any two)
 Right to choose/Right to be assured-
The consumer has the freedom to access variety of
products at competitive prices. This implies that the
marketers should offer a wide variety of products in 1 mark for
terms of quality, brand, prices, size, etc. and allow the identifying +
consumer to make a choice from amongst these. 1 mark for
 Right to be heard- explanation
The consumer has a right to file a complaint and to be
heard in case of dissatisfaction with a good or a service.
It is because of this reason that many enlightened
business firms have set up their own consumer service =2x2
and grievance cells.
 Right to safety-
The consumer has a right to be protected against goods = 4 marks
and services which are hazardous to life, health and
property. Thus, consumers are educated that they should
use electrical appliances which are ISI marked as this
would be an assurance of such products meeting quality
specifications.

(ii) Consumer responsibilities not fulfilled by Ashish

(Any two)
1x2

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 Buy only standardised goods as they provide quality =2 marks
assurance.
 Ask for a cash memo on purchase of goods or 4+2
services. =6 marks
 Be honest in your dealings.

32 Q. (a) Explain the following principles of general

management:
(i) Unity of command
(ii) Equity
(iii) Initiative
Ans. (a) (i) Unity of command
 There should be one and only one boss for every individual
employee. 2 marks
 Dual subordination should be avoided to prevent confusion
regarding tasks to be done.
(ii) Equity
 This principle emphasises kindliness and justice in the
behaviour of managers towards workers.
 There should be no discrimination against anyone on 2 marks
account of sex, religion, language, caste, belief or
nationality etc.
(iii) Initiative
 Initiative means taking the first step with self-motivation. 2 marks
It is thinking out and executing the plan and should be =
encouraged.
 A good company should have an employee suggestion 2+2+2
system whereby initiative/suggestions which result in
=6 marks
substantial cost/time reduction should be rewarded.

OR OR
(b) Explain the following points of significance of principles of
management:
(i) Meeting changing environment requirements
(ii) Management training, education and research

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(iii) Optimum utilisation of resources and effective
administration
Ans. (b) (i) Meeting changing environment requirements
 The principles are in the nature of general guidelines but
they are modified and help managers to meet changing
requirements of the environment.
 Management principles are flexible to adapt to dynamic
business environment.
(ii) Management training, education and research 2
 Principles of management are at the core of management
theory and are used as a basis for management training,
education and research.
 They provide basic groundwork for the development of
management as a discipline and are part of curriculum for
professional managerial courses. 2
(iii) Optimum utilisation of resources and effective
administration
 Resources both human and material available with the
company are limited and have to be used in such a manner 2
that they should give maximum benefit with minimum cost. =
 Principles of management limit the boundary of managerial
discretion so that their decisions may be free from personal 2x3
prejudices and biases. =6 marks

33 Q. (a) Distinguish between ‘Functional Structure' and

'Divisional Structure' on any six bases.

Ans(a). Difference between Functional Structure and Divisional

Structure

Basis Functional Divisional structure

structure

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Formation It’s formation is It’s formation is based 1x6
=
based on on product lines
6 marks
functions. supported by functions
Specialisation It leads to It leads to product
Functional specialisation.
specialisation.
Responsibility Difficult to fix Easy to fix
responsibility. responsibility.
Cost It is economical It is costly.
Coordination Coordination is Coordination is easy
difficult for a for a multiproduct
multiproduct company.
company
Managerial Managerial Managerial
Development development is development is easier.
difficult, as each Autonomy as well as
functional the chance to perform
manager has to multiple functions
report to the top helps in managerial OR
management. development.

OR

(b) Explain any four limitations of 'Planning' function of ½ mark for

management. heading+
Ans. Limitations of Planning (Any four with explanation): 1mark for
(i) Planning leads to rigidity explanation
(ii) Planning may not work in a dynamic environment =
(iii) Planning reduces creativity 1 ½ x4
(iv) Planning involves huge costs =6 marks
(v) Planning is a time-consuming process
(vi) Planning does not guarantee success

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

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34 Q. Nalini has an online flower and gifts retail business. She
has eight outlets in four cities of India. From November to
February, during the wedding season, the demand shoots up.
She coordinates the efforts of her staff in a conscious and
deliberate manner and plans for the wedding season demand
in the month of June itself. She ensures that there is adequate
workforce and continuously monitors whether work is
proceeding according to plans. She also briefs the marketing
department in time to prepare their promotional and
advertising campaigns. Thus, her coordination with all
departments of the organization begins at the planning stage
and continues till controlling. This acts as a binding force
between the departments and ensures that all action is aimed
at achieving organizational goals. As a result, Nalini is able to
give a common focus to group effort to ensure that the
business is performing as planned, year after year.
Quoting lines from the above paragraph, identify and explain
four features of an important concept of management
highlighted in the above case.
Ans. Features of coordination :
(i)Coordination is a deliberate function.
‘She coordinates the efforts of her staff in a conscious and
deliberate manner and plans for the wedding season demand in ½ mark for
the month of June itself.’ quote+ ½
A manager has to coordinate the efforts of different people in a mark for
conscious and deliberate manner. heading+ ½
mark for
(ii) Coordination is a continuous process.
explanation
‘Thus, her coordination with all departments of the organization =
begins at the planning stage and continues till controlling.’
Coordination is not a one-time function but a continuous process
1 ½ x4
which begins at the planning stage and continues till controlling.
(iii) Coordination ensures unity of action = 6 marks

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‘This acts as a binding force between the departments and
ensures that all action is aimed at achieving organizational
goals.’
The purpose of coordination is to secure unity of action in the
realisation of a common purpose.
(iv) Coordination integrates group efforts
‘Nalini is able to give a common focus to group effort to ensure
that the business is performing as planned, year after year.’
Coordination unifies unrelated or diverse interests into purposeful
work activity.
(If an examinee has given the correct statement without giving
the headings, full marks for each statement is to be awarded)

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