2 CBSE Compartment 2024

General Instructions:
Read the following instructions very carefully and strictly follow them :
(i) This question paper contains 34 questions. All questions are compulsory.
(ii) Marks are indicated against each question.
(iii) Answers should be brief and to the point.
(iv) Answers to questions carrying 3 marks may be from 50 to 75 words.
(v) Answers to questions carrying 4 marks may be in about 150 words.
(vi) Answers to questions carrying 6 marks may be in about 200 words.
(vii) Attempt all parts of a question together.

1. The level(s) of packaging shown in the Which of the following statements is correct
picture given below is/are : with respect to the above ?
(a) Aparna is efficient but Priyanka is
effective.
(b) Aparna is effective but Priyanka is
efficient.
(c) Both Aparna and Priyanka are effective.
(d) Both Aparna and Priyanka are efficient. 1

3. Which of the following options denotes the

(a) Primary level only correct sequence of steps in the process of
(b) Primary and secondary levels ‘Organising’ function of management ?
(c) Primary, secondary and transportation (a) Departmentalisation ® Identification
packaging levels and division of work ® Establishing
authority and reporting relationships ®
(d) Primary and transportation packaging
Assignment of duties
levels 1 (b) Departmentalisation ® Identification
2. Aparna and Priyanka are working in ‘Shreya and division of work ® Assignment of
duties ® Establishing authority and
Industries’, a company dealing in readymade
reporting relationships
garments for women. Each of them was
(c) Identification and division of work ®
assigned the responsibility of producing
Establishing authority and reporting
10 dresses each within 5 days at a cost of relationships ® Assignment of duties
₹ 1,000 per dress. Aparna was able to ®Departmentalisation
produce 10 dresses at a cost of ₹ 1,100 per (d) Identification and division of work
dress within 5 days, whereas Priyanka was ®Departmentalisation ® Assignment
able to produce only 8 dresses at a cost of ₹ of duties ® Establishing authority and
900 per dress in 5 days. reporting relationships 1

CBSE Compartment Paper 2024 1

BUY LATEST EDUCART BOOKS ON AMAZON - https://amzn.to/495npGN

CLASS 12
BOOKS

h i P ra c t i c e
# S a a i !
Zar o o r i H

National
Best-selling
Publisher

Books:
Question Banks & Sample Papers BUY
Latest Syllabus & Paper Pattern at special discount

NCERT Textbooks with Solutions

www.educart.co
4. Which of the following is not a function of 8. The purpose of the principle of ‘unity of
middle level management ? command’ is that :
(a) To interpret the policies framed by the (a) It avoids dual subordination.
top management (b) It subordinates individual interests to
(b) To ensure that their department has the organisational interests.
necessary personnel (c) It promotes a team spirit of unity and
(c) To coordinate the activities of different harmony among employees.
departments (d) It concentrates decision-making authority
(d) To assign necessary duties and at the top level. 1
responsibilities to the personnel in their
9. Which of the following statements is correct
departments 1
for ‘short term investment decisions’ ?
5. ‘If there is a fixed place for everything (a) They affect the earning capacity of a
and it is present there, then there will be business in the long run.
no hindrance in the activities of business/ (b) These decisions normally involve huge
factory.’ amounts of investment.
The principle of management that is (c) These decisions affect the liquidity as
highlighted in the above statement is : well as profitability of a business.
(a) Discipline (b) Order (d) They are irreversible except at a huge
(c) Unity of direction (d) Esprit de corps 1 cost. 1
6. Statement I: As per the Consumer Protection 10. ‘The management should not close its ears
Act, 2019, the District Commission to any constructive suggestions made by
has a jurisdiction to entertain the employees but reward them for their
complaints where value of goods suggestions which results in substantial
or services paid as consideration reduction in costs.’
does not exceed ₹ 10 crores. Which principle of scientific management is
Statement II: If any of the parties is not discussed in the given statement ?
satisfied by the order of the (a) Science, Not Rule of Thumb
District Commission, they can (b) Harmony, Not Discord
appeal against such order to (c) Cooperation, Not Individualism
the State Commission on the (d) Development of Each and Every Person
grounds of facts or law within to His or Her Greatest Efficiency and
a period of forty-five days from Prosperity 1
the date of order.
11. Statement I: Shareholders’ funds involve
Choose the correct option from the
commitment regarding the
following:
payment of returns or the
(a) Statement I is true and Statement II is repayment of capital.
false.
Statement II: Debt is considered to be the
(b) Statement II is true and Statement I is
cheapest of all the sources of
false.
funds and tax deductability of
(c) Both the Statements are true. interest makes it still cheaper.
(d) Both the Statements are false. 1 Choose the correct option from the
7. ‘V.K. Public School’ had a vacancy for following:
an English teacher for Class XII. After (a) Statement I is true and Statement II is
preliminary screening of the applications, false.
they shortlisted 10 candidates. Now, the (b) Statement II is true and Statement I is
school management asked the candidates false.
to give a demonstration lesson related to the
(c) Both the Statements are true.
curriculum of Class XII. The purpose of these
demonstration lessons was to measure the (d) Both the Statements are false. 1
existing teaching skills of the candidates and 12. Prakhar Ltd. is the manufacturer of life-
proficiency in the area of profession. saving drugs. There was an outbreak of
Identify the type of selection test used by flu two years back that spread quickly
‘V.K. Public School’ in the above case : and affected many people. Prakhar Ltd.
(a) Aptitude test (b) Intelligence test made huge investment on research and
(c) Trade test (d) Personality test 1 development and was able to develop a
medicine for the same. The medicine was

2 Business Studies Class XII

BUY LATEST EDUCART BOOKS ON AMAZON - https://amzn.to/495npGN

very effective in controlling the flu and now (c) Assertion (A) is true, Reason (R) is false.
it has become a necessity for the patients. (d) Assertion (A) is false, Reason (R) is true.
As a result, the demand for the medicine 1
increased manifold. Considering the
demand, the company increased the price 15. As per the Consumer Protection Act, 2019,
of the medicine. The government observed the consumer has a right to file a complaint
the situation. Since it was the only available and to be heard in case of dissatisfaction
medicine to combat flu, the Government with a good or a service.
declared it as an essential medicine and The consumer right being referred to here is
regulated its price to make it affordable for .............:
the public.
(a) Right to Safety
From the following, identify the factor(s)
(b) Right to be Heard
affecting the determination of price
discussed in the above case : (c) Right to be Informed
(I) Product cost (d) Right to Seek Redressal 1
(II) Marketing methods used 16. Ashok Industries Ltd. is a company
(III) Utility and demand manufacturing components for automobile
(IV) Government and legal regulations industries. In this company, standards have
(a) (IV) only (b) (I), (III) and (IV) been set for every manufacturing activity
(c) (III) and (IV) (d) (I), (II) and (III) 1 including standardisation of process, raw
13. Techpack Ltd. is a company in Hyderabad material, time, product, machinery and
that produces and sells packaging methods which must be adhered to during
material to various industries across the production. This has been done to bring
nation in a B2B e-business form. It is a excellence in quality of the materials
dynamic company. Over the years, due produced. The foreman of the company,
to rising concerns for climate change and Mehra, has designed the jobs of the
shift of preferences of Indian customers
workers in such a manner that unnecessary
towards environment-friendly products,
movements are eliminated and it takes
the company has shifted to the production
of biodegradable packaging material. less time to complete the jobs efficiently.
Moreover, due to its digital transformation, He has also scientifically analysed the
the company has tremendously benefited as duration and frequency of rest intervals that
its customers could place orders and make should be provided to the workers in the
cashless payments in various online modes. factory so that they can regain stamina and
The dimensions of business environment work efficiently.
discussed in the above case are : Out of the following, which technique
(a) Economic and social environments of scientific management has not been
(b) Social and technological environments discussed in the above paragraph ?
(c) Technological and economic environments (a) Fatigue study
(d) Social and political environments 1 (b) Method study
14. Read the following statements : Assertion (c) Motion study
(A) and Reason (R). Choose the correct (d) Standardisation and simplification 1
alternative from the options given below :
17. Prashant started a grocery retail business.
Assertion (A): While taking dividend decision, Due to increasing popularity of online
the extent of retained earnings
shopping, the degree of competition is very
also influences the financing
high in this business. His requirement of
decision of the firm.
working capital will be high as he would
Reason (R): The firm does not require funds
have to hold larger stocks of finished goods
to the extent of re-invested
retained earnings. to meet urgent orders from customers. The
factor affecting the requirement of working
(a) Both Assertion (A) and Reason (R)
are true and Reason (R) is the correct capital is :
explanation of Assertion (A). (a) Availability of raw material
(b) Both Assertion (A) and Reason (R) are (b) Scale of operations
true and Reason (R) is not the correct (c) Level of competition
explanation of Assertion (A). (d) Inflation 1

CBSE Compartment Paper 2024 3

BUY LATEST EDUCART BOOKS ON AMAZON - https://amzn.to/495npGN

18. In T-pex Ltd, a company trading in stationery almost two lakh people in the IT sector have
items, it was decided that all purchases lost their jobs during the last year.
would be made from AK Ltd. on credit basis This was read and discussed by employees
with credit period of at least 7 days. This of Techwire Ltd. a software development
was done because no other company was company in India. It created a lot of unrest
offering credit facility. among them and their morale came down.
Which type of plan has been referred to in The productivity of the employees started
the above paragraph ? declining. The Chief Executive Officer of the
company observed the insecurity among
(a) Rule (b) Policy
the staff about their jobs. Understanding
(c) Method (d) Strategy 1 his role as the leader, he wrote an e-mail to
19. Match the explanation of different sources all the employees assuring them about the
of external recruitment given in Column I stability of their future income and job.
with the sources given in Column II. This communication gave the employees
psychological and emotional satisfaction
Column I Column II and showed positive results in terms of
(A) Websites designed (I) Casual Callers their performance. The Chief Executive
and dedicated for the Officer was able to make the subordinates
purpose of providing act in a desired manner to achieve the
information about organizational goals, without giving them
both, job seekers and any monetary incentives.
job openings (A) Identify and explain the incentive used
by the Chief Executive Officer to improve
(B) Liaison of business (II) Web
houses with the Publishing the performance of the employees.
educational institutes (B) State the need of the employees as per
to recruit qualified Maslow’s Hierarchy of Needs theory
personnel for various which was satisfied in the above case.
jobs 22. Explain ‘Democratic (Participative) style of
(C) Notice placed on the (III) Campus leadership’. 3
notice-board of the Recruitment OR
enterprise specifying ‘An intelligent manager should make use of
the details of the jobs positive aspects of informal channels and
available minimise the use of negative aspects of this
(D) Database of (IV) Direct channel of communication.’
unsolicited applicants Recruitment In the light of the above statement,
in the office, prepared explain any one positive and any two
and screened to fill negative aspects of informal channels of
vacancies communication. 3
Choose the correct option from the following : 23. Dhiren Patel is the Chief Executive Officer
(a) (A)-(III), (B)-(I), (C)-(IV), (D)-(II) of a milk processing company. He is a very
(b) (A)-(I), (B)-(III), (C)-(IV), (D)-(II) effective manager. He is quite organized in
(c) (A)-(II), (B)-(IV), (C)-(I), (D)-(III) his work and exhibits exemplary behaviour.
(d) (A)-(II), (B)-(III), (C)-(IV), (D)-(I) 1 Dhiren Patel insists that all managers and
20. When the products are sold by a subordinates in the organization should
manufacturer to the end consumer without follow a chain of authority that runs from
involving any intermediary, the type of top to bottom for all communication
channel of distribution used is : purposes.
(a) Zero level channel Identify and explain the general principle of
(b) One level channel management highlighted in the above case.
(c) Two level channel
3
(d) Three level channel 1 24. State any three factors affecting financing
21. A popular magazine published an article
decision. 3
on job cuts across the globe. It stated that OR
due to reasons like cost cutting, market tate any three protective functions of
S
conditions and technological advancement, Securities and Exchange Board of India. 3

4 Business Studies Class XII

BUY LATEST EDUCART BOOKS ON AMAZON - https://amzn.to/495npGN

25. Ishaan wanted to buy five litres of mustard Details Amount
oil. Before he went to the market, he surfed
the Internet to find out about the various Equity (Shareholders’ ₹ 20 Lakh
brands of mustard oil available in the Funds) (2,00,000 shares of
₹ 10 each)
market. On visiting the retail shop, he could
find five different brands of mustard oil but 10% Loan ₹ 10 Lakh
to his surprise, only one of them had ‘FSSAI’ Earning Before Interest ₹ 6 Lakh
certification mark, which he decided to buy. and Tax (EBIT)
He read the label on the oil container to find
out the price and weight of the oil. While Earning Per Share (EPS) ₹2
paying for the oil he ensured that the cashier Tax rate 20%.
gave him the cash memo. (A) Why did EPS in Silk Ltd. rise with the use
Ishaan was a responsible consumer. State of debt ?
any four responsibilities that Ishaan kept (B) If EBIT of the company would have
been ₹ 3 lakh, would using debt still be
in mind while purchasing the mustard oil. 4
favourable for the company ? Explain. 4
26. Anmol Pathak, a restaurant owner, observed
30. Explain the following methods of training:
that over a period of one year, the costs of
(A) Vestibule training
raw material, transportation and packaging
had increased. As a result the total cost had (B) Internship training
increased by 15%. He thought that it was OR
not easy to keep a check on each and every xplain any four features of ‘Directing’
E
activity in the organisation, so he decided function of management. 4
to study deeply the increase in these three 31. BJ Pvt. Ltd. is a company manufacturing
costs. He prepared a table of acceptable and organic shampoos with the brand name
actual increase in cost as given below : ‘Pure Shine’. This name will help the
company in creating product differentiation.
Acceptable Actual To satisfy the needs of the customers in the
S.
Expense increase in increase target market the company used natural
No.
cost in cost ingredients like curry leaves, neem, rice, etc.
1. Raw material 4% 7% The focus of the company is on satisfaction
of customers needs. To have higher demand
2. Transportation 10% 8% of shampoo it decided to fix a lower price in
3. Packaging 10% 20% comparison to the other shampoos available
in the market. To inform the customers
Explain the two concepts related to a
about the shampoo and its features etc., the
function of management that will be used
company used various promotional tools.
by Anmol Pathak to analyse the deviations. For maximum satisfaction of customers, the
27. Give the meaning of Capital Market. company provides the contact details of the
Distinguish between Capital Market and customer care centre to handle customer
Money Market on the basis of the following: complaints.
(A) Participants Identify and explain any three functions of
marketing discussed in the above paragraph.
(B) Duration
4
(C) Investment outlay 4
32. Explain any four points that highlight the
28. Explain any four points of importance of significance of business environment. 6
‘Controlling’ function of management. OR
OR xplain any four points of significance of
E
xplain the relationship between ‘Planning’
E management for an organisation. 6
and ‘Controlling’ with the help of any four 33. Explain with the help of any four points why
points. 4 planning is important in an organisation.
29. Silk Ltd. had an EPS of ₹ 1. It raised a loan OR
of ₹ 10 lakhs at an interest rate of 10% p.a. ‘Effective delegation of authority leads to
from a bank. After one year, the results were many benefits.’ Explain the above statement
as follows : with the help of any four points.6

CBSE Compartment Paper 2024 5

BUY LATEST EDUCART BOOKS ON AMAZON - https://amzn.to/495npGN

34. ‘Health Relax Ltd.’ is one of India’s leading The company had to restructure itself. It
consumer healthcare brands in diagnostic diversified into varied product categories
services. It has an integrated nationwide and created a structure comprising of
network of diagnostic centers. The separate business units. Each unit had a
company was exploring new avenues for its manager responsible for performance who
expansion. The top level managers analysed had authority over the unit. Manpower was
the business environment and found that grouped on the basis of different products
since the year 2023 was the International manufactured.
Year of Millets, it was expected that the
(A) Identify the type of organizational
global demand for millets will grow by
structure of Health Relax Ltd. after
around 5% annually. India being one of the
leading producer and exporter of millets, it restructuring and give its meaning.
was realised that there was a great business (B) Explain any two advantages and
opportunity in the millet industry. The Board two disadvantages of the type of
of Directors approved the idea of venturing organisational structure identified in the
into the business of selling bread, noodles above case. 6
and dosa mix made of millets.

6 Business Studies Class XII

BUY LATEST EDUCART BOOKS ON AMAZON - https://amzn.to/495npGN

ANSWERS
CBSE Compartment Paper, 2024

1. (d)
Primary and transportation packaging Related Theory
levels Various levels of management are:
Explanation: The picture shows individual  Top-level management
bottles packed together, likely in a larger  Middle-level management
container or wrapped for transportation. The
 Lower/Operational level management.
primary packaging refers to the product’s
immediate container. In some cases, the 5. (b) Order
primary package is kept till the consumer is
Explanation: The principle of Order ensures
ready to use the product (e.g., plastic packet
that materials and people are systematically
for socks); whereas in other cases, it is kept
arranged in their designated places. This
throughout the entire life of the product (e.g.,
reduces time wastage and enhances efficiency
plastic water bottle a toothpaste tube, a match
by eliminating unnecessary searching and
box, etc.). The transportation packaging refers
confusion, ensuring smooth operations within
to further packaging components necessary
the organisation.
for storage, identification or transportation.

2. (b) Aparna is effective but Priyanka is

6. (b) Statement II is true and Statement I is
false.
efficient.
Explanation: According to the Consumer
Explanation: Aparna met the target by
producing 10 dresses within the stipulated Protection Act, 2019, the District Commission
time, making her effective. However, she has jurisdiction to entertain complaints
exceeded the budget, showing inefficiency. where the value of goods or services paid as
Priyanka managed to keep the cost lower, consideration does not exceed 1 crore rupees.
indicating efficiency, but failed to meet the Therefore, Statement I is incorrect. However,
production target, lacking effectiveness. Statement II is correct because dissatisfied
parties can appeal to the State Commission
Related Theory
within 45 days.
Efficiency relates to how well resources are used,
and effectiveness relates to meeting targets. Caution
 Students usually have misunderstanding of the
3. (d) Identification and division of work ® jurisdiction amount of the District Commission under
Departmentalisation ® Assignment the Consumer Protection Act, 2019.
of duties ® Establishing authority and
reporting relationships 7. (c) Trade test
Explanation: The process of organising starts Explanation: A trade test is used to assess
with identifying and dividing work among specific skills related to a job. In this case, the
employees. Next, the work is grouped into demonstration lessons were a way to evaluate
departments (departmentalisation). Duties the candidates' teaching skills and proficiency,
are then assigned to individuals, and finally, making it a trade test specific to the teaching
the authority and reporting relationships are profession.
established to ensure smooth workflow.
Related Theory
4. (c) To coordinate the activities of different  ptitude test: This test measures the potential to
A
departments learn new skills.
Explanation: Coordinating the activities of  I ntelligence test: This assesses general mental
different departments is a function generally ability, not specific job-related skills.
associated with top management rather than  Personality test: This assesses personal traits.
middle management. Middle-level managers
are generally responsible for implementing 8. (a) It avoids dual subordination.
the policies of top management, assuring that Explanation: The unity of command principle
their departments are adequately staffed, and ensures that each employee receives
assigning duties within their departments. instruction or orders from only one superior.

CBSE Compartment Paper 2024 7

BUY LATEST EDUCART BOOKS ON AMAZON - https://amzn.to/495npGN

This reduces conflicts and avoids confusion 14. (a) Both Assertion (A) and Reason (R) are true
ensures that the employee's responsibilities and Reason (R) is the correct explanation
which are clear, leads to better organisational of Assertion (A).
efficiency and discipline.
Explanation: Retained earnings lower the
9. (c) These decisions affect the liquidity as well need for external financing, directly impacting
as profitability of a business. both dividend and financing decisions. Since
retained earnings are reinvested into the
Explanation: Short-term investment decisions business, the firm requires fewer additional
affect liquidity as well as profitability of a funds, making the reason a correct explanation
business's liquidity (availability of cash for for the assertion.
operations) and profitability (ability to earn
profits). Such decisions are crucial for managing 15. (b) Right to be Heard
day-to-day operations and ensuring financial Explanation: The consumer has a right to
stability in the short term. file a complaint and to be heard in case of
dissatisfaction with a good or service. It is for
10. (c) Cooperation, Not Individualism this reason that many enlightened business
Explanation: The principle of Cooperation, firms have set up their own consumer service
Not Individualism encourages teamwork and and grievance cells.
employee involvement. By valuing employee
suggestions and rewarding them, management Related Theory
fosters a cooperative environment that Other consumer rights are:
enhances productivity and reduces costs,  Right to Safety: This right is about protection from
leading to better organisational outcomes. hazardous goods and services.
 Right to be Informed: This is about receiving
11. (b) Statement II is true and Statement I is accurate information about the product.
false.  Right to Seek Redressal: This is about getting
Explanation: Debt is cheaper due to the tax compensation or remedy in case of any defect.
deductibility of interest, making it a preferred
funding source. However, shareholders'
16. (b) Method Study
funds do not require fixed returns or capital Explanation: Method study involves critically
repayment, unlike debt, which necessitates examining the way work is done to find more
regular interest payments and principal efficient methods. The paragraph does mention
repayment, making Statement I incorrect. standardisation and simplification (Standards
have been set for every manufacturing
12. (b) (I), (III) and (IV) activity), fatigue study (analysing rest intervals)
Explanation: The price of the medicine is and motion study (eliminating unnecessary
influenced by product cost (research and movements) but does not explicitly mention
development expenses), utility and demand the method study.
(necessity of the medicine), and government
Caution
and legal regulations (price regulation by the
 Students may mistakenly interchange the concepts
government to make it affordable). These
of method study and motion study, not recognising
factors together determine the final price. the specific focus of each technique.

13. (b) Social and technological environments 17. (c) Level of competition
Explanation: The case discusses social Explanation: High competition in the retail
environment (customer preference for business, especially with the rise of online
eco-friendly products) and technological shopping, requires businesses to maintain
environment (digital transformation enabling sufficient inventory. This increases the need
online orders and payments). These dimensions for working capital to quickly fulfill customer
significantly impact the company's operations orders and stay competitive in the market.
and strategies, reflecting the broader business
environment. Related Theory
Factors affecting working capital requirement are
Related Theory inflation
Other dimensions of business environment are  Inflation
 Political  Production cycle
 Economic  Seasonal factors
 Legal  Business cycle

8 Business Studies Class XII

BUY LATEST EDUCART BOOKS ON AMAZON - https://amzn.to/495npGN

18. (b) Policy (B)
As per Maslow’s Need Hierarchy theory,
Explanation: A policy is a general guideline for Safety and Security needs of the
decision-making that directs actions towards employees were satisfied in the given
a specific goal. In this case, the decision to case which include providing security and
purchase only from a supplier offering a 7-day protection from physical and emotional
credit period is a purchasing policy designed harm.
to manage cash flow and supplier relations
effectively. 22. Ch 7
MARKS BREAKDOWN
Related Theory Topic: Styles of Leadership

 Rule: Rules are strict instructions, not general Elaborate the given style.
guidelines like policies. Value Points:
 Method: This refers to the procedure of doing work, (to get full marks)
not decision-making guidelines. Leader develops action plans (1m)
 Strategy: Strategies are broader plans, not specific Encourage the subordinates (1m)
guidelines like policies. Exercises control (1m)

19. (d) (A)-(II), (B)-(III), (C)-(IV), (D)-(I) Democratic (Participative) style of leadership
Explanation: We publishing refers to providing (1) Democratic style of leadership is one in
information related to job to both job seekers which the leader develops action plans
and job providers on the websites specifically and takes decisions in consultation with
designed for this purpose. his subordinates.
Under campus recruitment, business houses (2) A democratic leader will encourage the
tie up with educational institutions to recruit subordinates to participate in decision-
qualified personnel for various jobs. making.
Under direct recruitment, a notice is placed on (3) He exercises control by using forces
the notice board of an enterprise specifying within the group.
details of available job openings.
OR
Under casual callers method, database of
unsolicited applicants is kept in the office,
MARKS BREAKDOWN Ch 7
prepared to fill vacancies in the organisation.
Topic: Informal Communication
20. (a) Zero level channel Write aspects of informal channels of
Explanation: A Zero level channel of communication.
distribution is where the manufacturer sells Value Points:
directly to the consumer without involving any (to get full marks)
intermediaries. This could be done through One positive aspect (1m)
direct sales methods such as online platforms, Two negative aspects (2m)
company-owned stores, or direct mail orders.
There are no wholesalers or retailers involved,
making it the most direct distribution channel. Positive aspects of informal channel of
communication (any one)
21. MARKS BREAKDOWN Ch 7 (1)
Informal channels carry information
rapidly and may be useful to the
Topic: Non-Financial Incentives and Maslow's
Need Hierarchy Theory manager at times.
(A) State and Describe (2)
Informal channels are used by the
Value Points: managers to transmit information
(to get full marks) and know the reactions of his/her
Identifying the incentive (1m) subordinates.
Explanation (1m) Negative aspects of informal channel of
(B) Identify the satisfied need (1m) communication (any two)
(1)
The informal communication spreads
(A) Job Security rapidly but sometimes gets distorted.
It is a non-monetary incentive in which (2) It is very difficult to detect the source of
employees are given certain stability such communication.
about the future income and work so
(3)
It also leads to generate rumours
that they do not feel worried on these
and sometimes may hamper work
aspects and work with greater zeal. environment.

CBSE Compartment Paper 2024 9

BUY LATEST EDUCART BOOKS ON AMAZON - https://amzn.to/495npGN

23. MARKS BREAKDOWN Ch 2 Factors affecting financing decision (any
Topic: Fayol's Principles of management three):
State (1m) & Elaborate the highlighted principle (1) C
ost: The cost of raising funds through
(2m). different sources are different and
Keywords: a prudent financial manager would
Formal lines of authority, runs from top to bottom, normally opt for a source which is the
should not be violated, shorter route, Gang Plank cheapest.
may be used, etc.
(2) Risk: The risk associated with each of the
sources is different.
Scalar Chain
(3) Floatation Cost: Higher the floatation
Explanation of Scalar Chain
cost, less attractive the source.
(1) The formal lines of authority, i.e., a chain
(4) C
ash Flow Position: A stronger cash
of authority and communication that runs
flow position may make debt financing
from top to bottom is known as scalar
more viable than funding through equity.
chain.
(5) F
ixed operating costs: If a business has
(2)
The scalar chain should not be
high fixed operating costs, it must reduce
violated in the normal course of formal
fixed financing costs, thus, lower debt
communication. However, if there is
financing is better.
an emergency, a shorter route known
as Gang Plank may be used so that (6) Control Considerations: Issues of
communication may not be delayed. more equity may lead to dilution of
management’s control over the business
Detailed Answer:
while debt financing has no such
The principle highlighted in the case is the implication.
Scalar Chain.
(7) S
tate of capital market: State of the
(1) This principle emphasises a clear line capital market may also affect the choice
of authority from the top to the bottom of source of fund as during the period
of the organisation. Dhiren Patel, the when stock market is rising, more people
Chief Executive Officer, insists that all invest in equity, whereas depressed
communication should follow this chain, capital market may make issue of equity
ensuring that information flows smoothly shares difficult for any company.
and respects the organisational hierarchy. OR
(2)
This helps maintain order, reduces MARKS BREAKDOWN Ch 10
confusion, and ensures that everyone Topic: SEBI
knows their direct superiors and Write 3 protective functions.(1m + 1m + 1m)
subordinates. Value Points:
(to get full marks)
Caution
Prohibits fraudulent & unfair trade practices
 Students may not fully grasp the concept of the scalar Controls insider trading
chain principle and its application in maintaining a
Steps for investor protection
clear line of authority for communication purposes.
Promotes fair practices & code of conduct
 Students might not explain in detail how the scalar (Any three)
chain principle helps in reducing confusion and
maintaining order within the organisation.
Protective functions of SEBI (any three):
24. MARKS BREAKDOWN Ch 9
(1) It prohibits fraudulent and unfair trade
Topic: Financing Decision practices like misleading statements,
Write 3 factors.(1m + 1m + 1m) manipulations, price rigging etc.
Value Points: (2) It controls insider trading and imposes
(to get full marks) penalties for such practices.
Cost (3) It undertakes steps for investor protection.
Risk
(4) It promotes fair practices and code of
Floatation Cost
conduct in securities market.
Cash Flow Position
Fixed Operating costs Detailed Answer:
Control Considerations
As protective functions, SEBI performs the
State of Capital Market (Any three)
following:

10 Business Studies Class XII

BUY LATEST EDUCART BOOKS ON AMAZON - https://amzn.to/495npGN

(1)
Preventing price rigging: Price rigging (a) Critical Point Control
refers to manipulating the prices of
• Critical Point Control focuses on key
securities with the main objective of
result areas which are critical to the
inflating or depressing the market price
of securities. SEBI prohibits such practices success of an organisation since it is
because these practices can defraud and neither economical nor easy to keep a
cheat investors. check on each and every activity of the
(2)
Prohibits insider trading: A person with organisation.
connections to the company, such as (b) Management by Exception
directors or promoters, is considered Management by Exception states
•
an insider. These insiders have sensitive
that only significant deviations which
information which affects the prices of the
go beyond the permissible limit
securities.
should be brought to the notice of the
(3)
Prohibits fraudulent and unfair
management for corrective action.
trade practices: SEBI does not allow
the companies to make misleading Detailed Answer:
information that is likely to persuade the
To analyse the deviations in costs, Anmol

sale or purchase of securities by any other
person. Pathak can use the following two concepts
related to the controlling function of
25. MARKS BREAKDOWN Ch 12
management:
Topic: Responsibilities of a Consumer
Write 4 responsibilities (1m + 1m + 1m + 1m)
(i) Critical Point Control: It focuses on
Value Points: monitoring key areas that are crucial for the
(to get full marks) organisation’s success. In this case, Anmol
Be aware
identified raw material, transportation,
Buy only standardised goods
Read labels carefully
and packaging as critical cost factors. By
Always ask for Cash Memo concentrating on these key areas, he can
ensure that deviations in these essential
Responsibilities that Ishan kept in mind while aspects are kept under control, thus
purchasing mustard oil: maintaining overall cost efficiency.
(1)
Be aware about various goods and
(ii) Management by Exception: This is a
services available in the market so that
technique where only significant deviations
an intelligent and wise choice can be
made. from the expected performance are brought

(2)
Buy only standardised goods as they to the attention of management. Anmol
provide quality assurance and look for ISI would focus on areas where the actual
mark on electrical goods, FPO mark on increase in cost deviated significantly from
food products, Hallmark on jewellery, etc. the acceptable limits, such as the 20%
(3)
Read labels carefully so as to have increase in packaging costs. By addressing
information about prices, net weight, these major deviations, he can take
manufacturing and expiry dates, etc. corrective actions to manage resources
(4)
Ask for a cash memo on purchase of more effectively and prevent similar issues
goods or services. This would serve as a in the future.
proof of the purchase made.
27. MARKS BREAKDOWN Ch 10
26. MARKS BREAKDOWN Ch 8 Topic: Capital Market and Money Market
Topic: Process of Controlling Explain the meaning (1m) & Differentiate on given
State two concepts (1m + 1m) & Describe them 3 basis (1m + 1m +1m)
(1m +1m). Value Points:
Value Points: (to get full marks)
(to get full marks) Participants
Critical Point Control Duration
Management by Exception Investment Outlay

CBSE Compartment Paper 2024 11

BUY LATEST EDUCART BOOKS ON AMAZON - https://amzn.to/495npGN

Meaning of Capital Market
Capital Market refers to facilities and institutional arrangements through which long term funds, both
debt and equity, are raised and invested.
Distinction between Capital Market and Money Market

Basis Capital Market Money Market

(A) Participants The participants are financial The participants are RBI, financial
institutions, banks, corporates, foreign institutions, banks, corporates,
investors and retail investors.
(B) Duration It deals in medium term and long term It deals in short term securities
securities.
(C) Investment It does not necessarily require a huge The transactions entail huge sums of
outlay financial outlay as the value of units of money as the instruments are quite
securities is generally low. expensive.

maintain discipline and order within the

28. MARKS BREAKDOWN Ch 8 organisation.
Topic: Importance of Controlling (4) Improves employee motivation: Effective
Write 4 importance. (1m + 1m + 1m + 1m) control provides proper feedback to
Value Points: employees, which can enhance their
(to get full marks) motivation and performance by aligning
Accomplishes organisational goals their efforts with organisational goals.
Makes efficient use of resources
OR
Ensures order and discipline
Improves employee's motivation MARKS BREAKDOWN Ch 8
Judges the accuracy of standards
Topic: Relationship between Planning and
Facilitates coordination (Any four)
Controlling
Describe 4 points explaining the relationship between
Importance of ‘Controlling’ function of
Planning & Controlling. (1m + 1m + 1m + 1m)
management (any four): Value Points:
(1) Accomplishes organisational goals (to get full marks)
(2) Makes efficient use of resources Controlling takes place based on standards
(3) Ensures order and discipline developed by planning
(4) Improves employees motivation Planning without controlling is meaningless
Planning is prescriptive whereas controlling is
(5) Judges the accuracy of standards evaluative
(6) Facilitates coordination Planning and controlling both are forward-
Detailed Answer: looking and looking back

I
mportance of ‘Controlling’ function of

R elationship between ‘Planning’ and
management:
‘Controlling’
(1)
Accomplishes organisational goals:
Controlling ensures that activities are (1)
Controlling takes place on the basis of
carried out as planned, leading to the standards developed by planning because
achievement of organisational goals. By if the standards are not set in advance,
setting standards and comparing actual managers have nothing to control.
performance, it ensures that goals are met (2)
Planning without controlling is
effectively. meaningless because once a plan
(2) Makes efficient use of resources: It becomes operational, controlling ensures
involves monitoring the efficient use of that events conform to the plans.
resources. By ensuring that resources are (3)
Planning is prescriptive whereas
used as per plans, wastage is minimised, controlling is evaluative because
thus optimising resource utilisation. planning prescribes an appropriate
(3) Maintain order and discipline: By course of action while controlling
controlling, deviations from standards are evaluates whether decisions have been
recognized and corrected, which helps to translated into desired actions.

12 Business Studies Class XII

BUY LATEST EDUCART BOOKS ON AMAZON - https://amzn.to/495npGN

(4)
Planning and controlling both are Explanation:
forward looking and looking back. They (1) It is unfavourable for the company
are forward looking because while plans because the company’s rate of
are prepared for the future, controlling return on investment (ROI) is not
seeks to improve the future on the basis more than the cost of debt.
of the past experience. They both are
looking back because as while planning (2)
The ROI of the company is
is guided by past experiences, controlling  3 lakh 
  × 100 i.e. 10%, and the
compares the actual performance with  30 lakh 
the standards set in the past. interest rate on debt is also 10%.
Detailed Answer: (3)
In such a case, the EPS will be
elationship
R between 'Planning' and reduced to ₹0.8. This is a situation of
'Controlling': unfavourable financial leverage.
(1) Planning provides standards for Alternative explanation
controlling: Planning sets the goals EBIT 3,00,000
and standards that controlling uses to Less: Interest @ 10% (1,00,000)
measure actual performance. Without
EBT 2,00,000
these benchmarks, controlling wouldn't be
possible. Less: Tax@20 % (40,000)

(2) Controlling checks deviations from EAT 1,60,000

standards: After setting goals, controlling No. of shares 2,00,000
ensures that deviations are detected and EPS ₹ 0.8
corrective actions are taken to align actual Since EPS is falling, it is unfavourable.
performance with the planned objectives.
(3) Planning and controlling are 30. MARKS BREAKDOWN Ch 6
interdependent: Planning sets the path Topic: Methods of Training
to be followed, while controlling ensures
Explain the given methods. (2m + 2m)
that the path is adhered to, making them Keywords:
complementary functions. (A) Learn their jobs on the equipment, appropriate
(4) Controlling improves future planning: The when the use of sophisticated machinery &
equipment
insights gained from controlling are used to
(B) Joint programme of training, selected candidates
improve future planning, making the entire carry on regular studies and also work in office
management process more effective over to gain practical experience, etc.
the period of time.
(A) Vestibule training
29. MARKS BREAKDOWN Ch 9
(1) It is a method of training in which
Topic: Concept of Capital Structure employees learn their jobs on the
(A) Explain the reason. (1m) equipment they will be using, but
(B) State yes or no (1m) & Explain (2m) the training is conducted away from
Value Points: the actual work floor.
(to get full marks)
(2)
This method is used when
Unfavourable for the company
employees are required to handle
ROI of the company
sophisticated machinery and
EPS will be reduced
equipment.

(A) The EPS in Silk Ltd. rose with the use of (B) Internship training
debt because the cost of debt is lower (1) It is a joint programme of training in
than the return that the company is which educational institutions and
earning on funds employed (ROI) which is business firms cooperate.
known as Trading on Equity/ Favourable (2) Selected candidates carry on regular
Financial Leverage. studies for the prescribed period and
(B) If EBIT of the company would have been also work in some factory or office
₹ 3 lakhs, using debt would not have to acquire practical knowledge and
been favourable for the company. skills.

CBSE Compartment Paper 2024 13

BUY LATEST EDUCART BOOKS ON AMAZON - https://amzn.to/495npGN

OR 31. MARKS BREAKDOWN Ch 11
Topic: Functions of Marketing
MARKS BREAKDOWN Ch 7
State (½m+½m+½m) & Describe (1½m+1½m+1½m)
Topic: Features of Directing
Value Points:
Name (½m +½m +½m + ½m) & Explain (½m +½m (to get full marks)
+½m + ½m) 4 features of directing. Branding
Value Points: Pricing
(to get full marks) Promotion
Initiates action Customer Support Services (Any three)
Takes place at every level of management
Continuous process
Flows from top to bottom Functions of marketing (any three):
(1) Branding
Features of ‘Directing’ function of Branding is the process of giving a name
management: to a product which helps in distinguishing
(a) Initiates action the product of a firm with that of the
(b) Takes place at every level of management competitor.
(c) Continuous process (2) Pricing
(d) Flows from top to bottom Pricing refers to determining the price
Detailed Answer: of a product, i.e., the amount of money
customers have to pay to obtain a

Features of ‘Directing’ Function of
product.
Management:
(3)
Promotion
(1) I nitiates Action: The managerial role of

Promotion of products and services
directing is what sets things into action
involves informing the customers about
by directing such as guiding, supervising,
the firm’s product, its features, etc. and
and motivating employees to achieve the
organisation's objectives. It turns plans persuading them to purchase these
into action by providing the necessary products.
instructions and guidance. (4) Customer Support Services
(2)
Takes place at every level of
Customer support services include
management: The role of directing is providing after-sales services, handling
everywhere and happens at every level of customer complaints and adjustments,
management. Managers, whether at the procuring credit services, maintenance
top, middle, or lower levels, must provide services, technical services and consumer
their subordinates with instructions to information to provide maximum
guarantee efficient operation and goal satisfaction to the customers.
fulfillment.
Caution
(3) Continuous Process: Directing is
Common errors students usually make:
an ongoing activity. As long as the
organisation exists, directing is required  Confusing Branding with Advertising - Students
to guide and motivate employees might mistake branding for advertising and not fully
continuously. Maintaining the workforce's understand the concept of creating a unique identity
alignment with the goals is an ongoing for a product.
necessity rather than a one-time action.  Lack of Clarity in Pricing Strategy - Students may not
clearly explain how the company's pricing strategy
(4)
Flows from top to bottom: The
is aimed at increasing demand and attracting more
directing function is delegated from
upper management to lower levels. It is customers.

hierarchical in which lower-level personnel  Inadequate explanation of Customer Support -

are directed by middle management, Students might overlook the importance of customer
which is directed by top management, support in ensuring maximum satisfaction for
guaranteeing coordinated efforts. customers and handling complaints effectively.

14 Business Studies Class XII

BUY LATEST EDUCART BOOKS ON AMAZON - https://amzn.to/495npGN

32. MARKS BREAKDOWN Ch 3 into its operations and maintain its
competitiveness.
Topic: Importance of Business Environment
(5) It helps in assisting in planning and policy
State & Describe (1½m+ 1½m + 1½m + 1½m) formulation: Planning and the creation of
Value Points: policies require a thorough understanding
(to get full marks) of the corporate environment. For instance,
Identify opportunities a company that is aware of economic
Identify threats trends can create plans that fit the
Tapping useful resources demands of the market in the future and
Assisting in policy formulation guarantee long-term success.
Coping with rapid changes
OR
Improving performance (Any four)

MARKS BREAKDOWN Ch 1
Significance of Business Environment (any four)
Topic: Importance of Management
(1) Enables the firm to identify opportunities
Write 4 points of significance.
and getting the first mover advantage
(1½m+1½m+1½m+1½m)
(2) Helps the firm to identify threats and Value Points:
early warning signals (to get full marks)
(3) Helps in tapping useful resources Helps in achieving group goals.
Increases efficiency
(4) Helps in assisting in planning and policy
Creates a dynamic organisation
formulation
Helps in achieving personal objectives
(5) Helps in coping with rapid changes Helps in the development of society
(6) Helps in improving performance
Detailed Answer: Significance of management (any four):
The significance of the business environment (1) Helps in achieving group goals.
are explained through the following points: (2) Increases efficiency
(Any Four) (3) Creates a dynamic organisation
(1) It helps the business to spot opportunities (4) Helps in achieving personal objectives
and gain the first mover advantage:
(5) Helps in the development of society
Firms can identify opportunities early and
seize them before competitors by having Detailed Answer:
a thorough awareness of the business The significance of management for an
environment. For instance, a company can organisation is explained through the following
get a head start in the market if it is the points:
first to recognise the growing demand for (1)
Management helps in achieving group
electric cars. goals: Management is necessary to
(2) It helps in the firm's ability to recognise achieve the organisation's goals. The task
threats and warning signs: Businesses can of a manager is to provide a common
identify possible threats and take proactive direction for each employee's efforts in
steps to reduce risks by evaluating their order to achieve the primary goal of the
business environment. For example, a organisation.
business that notices changes in industry (2) Management increases efficiency:
regulations can modify its activities to stay The aim of a manager is to lower costs
out of trouble in future. and improve productivity through better
(3) It helps in tapping useful resources: planning, organising, directing, staffing, and
Understanding the business environment controlling the activities of the organisation
helps businesses in making effective use of (3) Management creates a dynamic
their resources. For instance, a corporation organisation: Each and every organisation
can set up operations in a region to has to operate in a dynamic environment.
enhance production if it knows in advance It is well known that people in organisation
that skilled personnel are available there. dislike change since it frequently requires
(4) It helps in coping with rapid changes: them to leave behind comfortable, known
Businesses must constantly adapt to the surroundings in favor of ones that are
changing business environment in order more creative and demanding. It aids in
to thrive. For instance, a business that people's adjustment to these changes
keeps up with technology developments so the company can keep its competitive
might incorporate new technologies advantage.

CBSE Compartment Paper 2024 15

BUY LATEST EDUCART BOOKS ON AMAZON - https://amzn.to/495npGN

(4) Management helps in achieving (4) Planning promotes innovative ideas:
personal objectives: Management also The process of planning encourages
ensures that individual goals of employees managers to think creatively and
line up with the aim of the company. For come up with new ideas for achieving
example, employees are more driven to organisational goals. It is the most
contribute to the success of the company challenging activity for the management
and accomplish their own goals when as it guides all future actions leading
management offers opportunities for to the growth and prosperity of the
professional growth and development. business.

33. (5) Planning facilitates decision-making:

MARKS BREAKDOWN Ch 4
It provides a framework for decision-
Topic: Importance of Planning
making by identifying objectives,
State & Describe the importance analysing alternatives, and selecting the
(1½m + 1½m+ 1½m+ 1½m) best course of action.
Value Points:
(to get full marks) (6) Planning establishes standards
Provides direction for controlling: Planning sets the
Reduces the risks of uncertainty benchmarks against which actual
Reduces overlapping and wasteful activities performance can be measured, helping
Promotes innovative ideas in the effective control of organisational
Facilitates decision making activities.
Establishes standards for controlling (Any four) OR

Importance of planning (any four): MARKS BREAKDOWN Ch 5

(1) Provides direction Topic: Importance of Delegation
(2) Reduces the risks of uncertainty State & Describe the importance
(3)
Reduces overlapping and wasteful (1½m + 1½m + 1½m + 1½m)
activities Value Points:
(to get full marks)
(4) Promotes innovative ideas Effective management
(5) Facilitates decision making Employee development
Motivation of employees
(6) Establishes standards for controlling
Facilitation of growth
Detailed Answer: Basis of management hierarchy
Planning is important in an organisation Better coordination (Any four)
because: (Any Four)
(1) Planning provides direction: It helps Benefits of delegation of authority (any four):
to set clear goals and provides a (a) Effective management
roadmap for achieving them, ensuring (b) Employee development
that all activities are aligned with the
(c) Motivation of employees
organisation's objectives.
(d) Facilitation of growth
(2) Planning reduces the risks of
uncertainty: Planning is an activity (e) Basis of management hierarchy
which enables a manager to look ahead (f ) Better coordination.
and anticipate changes. By deciding Detailed Answer:
in advance the tasks to be performed,
planning shows the way to deal with Effective delegation of authority leads to
changes and uncertain events. Changes many benefits.
or events cannot be eliminated but they
The statement can be explained with the
can be anticipated and managerial help of the following points:
responses to them can be developed. (1) E
ffective management: Delegation
(3) Planning reduces overlapping and allows managers to distribute their
wasteful activities: Proper planning workload among subordinates. This
ensures that resources are allocated enables them to focus on strategic tasks,
efficiently, avoiding duplication of efforts resulting in more effective and efficient
and minimising wastage. management.

16 Business Studies Class XII

BUY LATEST EDUCART BOOKS ON AMAZON - https://amzn.to/495npGN

(2)
Employee development: By delegating (3) It promotes flexibility and initiative
authority, employees are given the because each division functions as an
chance to handle responsibilities. This autonomous unit which leads to faster
improves their decision-making skills and decision making.
prepares them for more elevated roles,
contributing to their professional and (4) It facilitates expansion and growth as
personal growth. new divisions can be added without
interrupting the existing operations by
(3)
Motivation of employees: When merely adding another divisional head
authority is delegated, employees and staff for the new product line.
feel appreciated and trusted. They
become more self-assured, driven Disadvantages of Divisional structure: (any two)
to take initiative, and dedicated to (1) Conflicts may arise among different
accomplishing company objectives as a divisions with reference to allocation of
result of this empowerment. funds.
(4)
Facilitation of growth: Delegation (2) It may increase the cost of operations
makes it possible for decision-making Since there may be duplication of
to be decentralised, which promotes the activities across products.
organisation's growth. An organisation (3)
Organisational interest may be
can grow more dynamically and adjust ignored by different divisional heads
to changes more successfully when as they may gain power and in a bid to
tasks are shared. assert their independence may ignore
organisational interests.
34. MARKS BREAKDOWN Ch 5 Detailed Answer:
Topic: Organisational Structure

(A) The type of organisational structure of
(A) State organisational structure (1m) & Explain (1m) Health Relax Ltd. after restructuring is a
(B) Mention 2 advantages (2m) & 2 disadvantages divisional organisational structure.
(2m) Divisional structure is an organisational
Value Points: structure that comprises different business
(to get full marks) units or divisions when the organisation has
Advantages: more than one type of product to offer.
Development of varied skills (B)
Advantages of Divisional Organisational
Fixation of responsibility Structure:
Promotes flexibility & initiative
(1) Product specialisation: By focusing on a
Facilitates expansion and growth (Any two)
single product or service, each division is
Disadvantages: able to gain deep knowledge and make
Conflicts may arise superior decisions that are exclusive to
Increase the cost of operations that product line.
Organisational interests may be ignored
(2) Accountability: Clear accountability and
(Any two)
performance tracking result from the
divisions' independent operations and
(A) Divisional structure self-governing structures, which make
Divisional structure is an organisation it simpler to evaluate each division's
structure which comprises of separate performance.
business units or divisions when the Disadvantages of Divisional Organisational
organisation has more than one category Structure:
of products to offer.
(1) Duplication
of resources: While
(B)
Advantages of Divisional structure: (any each division may have its own set of
two) departments (such as finance and HR),
(1)
Product specialisation helps in the there will likely be redundancy and
development of varied skills in the higher operating costs as a result of
divisional heads and prepares him for the resources being duplicated across
higher positions. divisions.
(2) It helps in fixation of responsibility as (2) Coordination challenges: When divisions
divisional heads are accountable for are autonomous, it might be difficult to
profits, as revenues and costs related coordinate efforts and share information
to different departments can be easily amongst them, which could result in
identified and assigned to them. inefficiencies.

CBSE Compartment Paper 2024 17

BUY LATEST EDUCART BOOKS ON AMAZON - https://amzn.to/495npGN