Students can access the CBSE Sample Papers for Class 12 Business Studies with Solutions and marking scheme Term 2 Set 5 will help students in understanding the difficulty level of the exam.
CBSE Sample Papers for Class 12 Business Studies Term 2 Set 5 with Solutions
Time allowed: 2 Hours
Maximum Marks: 40
General Instructions:
- This is a Subjective Question Paper containing 12 questions.
- This paper contains 4 questions of 2 marks each, 4 questions of 3 marks each and 4 questions of 5 marks each.
- 2 marks questions are Short Answer Type Questions and are to be answered in 30-50 words.
- 3 marks questions are Short Answer Type Questions and are to be answered in 50-80 words.
- 5 marks questions are Long Answer Type Questions and are to be answered in 80-120 words.
- This question paper contains Case/Source Based Questions.
Question 1.
State the steps in selection procedure, after the employment interview but before the medical examination. (2)
Answer:
The steps in selection procedure, involved after the employment interview but before the medical examination are as follows:
(1) Reference and Background Checks: Many employers request names, addresses, and telephone numbers of references for the purpose of verifying information and, gaining additional information on an applicant. Previous employers, known persons, teachers and university professors can act as references.
(2) Selection Decision: The final decision has to be made from among the candidates who pass the tests, interviews and reference checks. The views of the concerned manager will be generally considered in the final selection because it is he/she who is responsible for the performance of the new employee.
Question 2.
Training is considered as an important part of the staffing process. Explain. (2)
Answer:
Training is an attempt to improve the current or future employee performance by increasing an employee’s ability to perform through learning, usually by changing the employee’s attitude or increasing his or her skills and knowledge.
Question 3.
You are a management guru. You have been asked by a business firm to make its managers understand the importance of controlling. Give any two arguments. (2)
Answer:
Controlling is an indispensable function of management. Without control, the best of plans may go awry. The importance of controlling is as follows. (any two)
(1) Accomplishing organisational goals: The controlling function measures progress towards the organisational goals and brings to light the deviations, if any, and indicates corrective action. It, thus, guides the organisation and keeps it on the right track so that organisational goals might be achieved.
(2) Judging accuracy of standards: A good control system enables management to verify whether the standards set are accurate and objective. A good control system keeps a careful check on the changes taking place in the organisation and in the environment and helps to review and revise the standards in light of such changes.
(3) Making efficient use of resources: By exercising control, a manager seeks to reduce wastage and spoilage of resources.
(4) Improving employee motivation: A good control system ensures that employees
know well in advance what they are expected to do and what are the standards of performance on the basis of which they will be appraised. It, thus, motivates them and helps them to give better performance.
Question 4.
Mr. Rohit is into transport business. His buses are hired by schools for transportation of students. He is willing to expand and diversify his business to inter-state transportation purposes. State any two factors that will affect his fixed capital requirements. (2)
Answer:
The factors affecting fixed capital requirements are: (any two)
- Scale of operations
- Financing alternatives
- Growth prospects
- Nature of Business
- Diversification
- Level of Collaboration
- Technology Upgradation
- Financing Alternatives
Question 5.
What is the meaning of Directing? State any two points of importance of Directing as a function of management.
OR
The workers of‘Glory Ltd.’ are unable to work on new computerised machines imported by the company to fulfill the increased demand. Therefore, the workers are seeking extra guidance from the supervisor and the supervisor is overburdened with the frequent calls of workers.
Suggest how the supervisor, by increasing the skills and knowledge of workers, can make them handle their work independently. Also state any two benefits that the workers will derive by the decision of the supervisor. (3)
Answer:
The process of acquiring human resources and physical assets and placing them under suitable roles and responsibilities should be directed towards achieving organisational goals. Directing or direction is the essence of all operations in an organisation that involves leading human and physical resources together through motivation, collaboration, coordination and delegation.
The points of importance of directing as a function of management are: (any two)
(1) Initiates action: Direction initiates action based on the preconditions set under planning, organising and staffing. This implies that managers stimulate actions by supervising, motivating and leading their subordinates in the right way. Direction activates employees to work for achieving organisational goals.
(2) Integrates employees’ efforts: The work and activities of employees across all levels are interrelated and direction attempts to integrate all individual efforts. Individual efforts are integrated through coordination between plans, resources and human efforts and through guidance, supervision and counselling.
(3) Means of motivation: Organisational goals can be achieved by motivated employees who work willingly and perform to their best of their abilities. Directing helps in motivating employees to contribute their maximum efforts towards achieving organisational goals.
(4) Facilitates changes: Direction enables an organisation to adapt to changing conditions through better leadership and communication.
OR
The supervisor can provide ‘technical training’ to the workers regarding the use of machines. With increased and improved knowledge, the workers will be able to work independently.
The benefits that the workers will derive by the decision of the supervisor are as follows:
- Career growth: Training helps employees to improve their skills and knowledge.
- Increased earnings: Training helps to improve the performance and productivity of workers and with improved performance workers can earn higher wages and incentives.
Question 6.
How are the terms “motive”, “motivation” or “motivator” related to each other. (3)
Answer:
The term ‘motive’ means a need or desire that causes a person to work, while motivation is the condition of being motivated by a motivator and ‘motivator’ gives a person the reasons to work. In other words we can say that “motivation is the process by which a motivator gives a motive to other person to work hard.
Question 7.
“The overall objective of SEBI is to protect the interest of investors and to promote the development of, and regulate the securities market.” In light of the given statement, state any three objectives of SEBI. (3)
Answer:
The objectives of SEBI are: (any three)
- To regulate stock exchanges and the securities industry to promote their orderly functioning.
- To protect the rights and interests of investors, particularly individual investors and to guide and educate them.
- To prevent trading malpractices and achieve a balance between self-regulation by the securities industry and its statutory regulation.
- 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
Question 8.
“Comparing the actual performance with laid standard, finding out deviations and taking corrective action is an important process of a function of management.” Name and explain the process. (3)
Answer:
The name of this function of management is “controlling”. The steps involved in the controlling process are as following:
(1) Step 1: Setting performance standards: The first step in the controlling process is setting up performance standards. Standards serve as benchmark towards which an organisation strives to work.
(2) Step 2: Measurement of actual performance: Once performance standards are set, the next step is measurement of actual performance. Performance should be measured in an objective and reliable manner.
(3) Step 3: Comparing actual performance with standards: This step involves comparison of actual performance with the standards. Such comparison wilL reveal the deviation between actual and desired results.
(4) Step 4: Analysing deviations: Some deviation in performance can be expected in all activities. It is, therefore, important to determine the acceptable range of deviations.
(5) Step 5: Taking corrective action: The final step in controlling process is taking corrective action. No corrective action is required when the deviation are within acceptable limits.
Question 9.
‘In an interview with a leading news channel, Mr. Rakesh Kwatra, CEO of ‘Get My Job’ has suggested that the companies which want more and more people to apply for jobs in their organisation should make the process for applying for jobs easier and candidate friendly.’
Name and explain the next two steps which follow the step, in the process of the function of management being discussed above. (5)
OR
Horizon Shoes Ltd. has received on order for manufacturing and supply of 5,000 pairs of shoes. The supply was to be completed within 90 days. The production manager made all the production schedules accordingly. After 60 days, he assessed that the production was not running according to schedule and the completion of the order may be delayed by a substantial period. He decided to reassess the situation and completed the order within the schedule time. Identify the function of management discussed here and discuss two steps taken by the production manager. (5)
Answer:
Selection is the step in the process of staff ing discussed here. Selection is the process of choosing from among the pool of the prospective job condidates developed at the stage of recruitment. Even in case of highly specialised jobs where the choice space is very narrow, the regour of the selection process serves two important purposes:
(1) It ensures that the organisation gets the best among the available;
(2) It enhances the self-esteem and prestige of those selected and conveys to them the seriousness with which the things are done in the organisation. The rigour involves a host of tests and interviews. Those who are able to successfully negotiate the test and the inverviews are offered an employment contract, a written document containing the offer of employment, the terms and conditions and the date of joining.
The next two steps following the step of selection in the process of staffing are as follows:
(i) Orientation: Joining a job marks the beginning of socialisation of the employee at the work place. Orientation is introducing the selected employee to other employees and familiarising him with the rules and policies of the organisation.
Placement: Placement refers to the employee occupying the position or post for which the person has been selected.
OR
The function of management which enable the management to assess whether the set standards are followed is called controlling. Controlling means ensuring that activities in an organisation are performed as per the plans. Thus, it is a goal oriented function.
The two steps of controlling process taken by production manager in this case are:
(i) Analysing deviations: It is important for a manager to determine the acceptable range of deviations. If the deviations are significant, critical point control and management by exception should be used by the manager. In this case, the delay in completion of order by substantial period is a matter of concern.
(ii) Taking corrective action: The final step in controlling process is taking corrective action. No corrective action is required when the deviations are within acceptable limits. In this case, the delay is expected to be substantial period. The production manager take corrective action which might involve additional workers and equipment to the project and overtime work.
Question 10.
Name and define the activity which essentially involves preparation of financial blue print of an enterprise’s future operations. Also state any two reasons why this activity is important?
Answer:
Financial planning is the blue print of an enterprise’s future operations. It can be defined as the process and function of estimating capital requirements of a business, determining the forms and proportion of sources or capital for use and formulating policies for administration of funds. Financial planning is important because of following reasons:
- Adequate funds: Financial planning aims to plan adequate and sufficient funds to carry out daily business operations that cater to short-term, medium-term and long-term goals.
- Minimum cost of capital: Financial planning involves determining an appropriate mix of equity and debt, which makes capital available at minimum cost.
Question 11.
The issue of equity shares involves huge floatation cost To meet the expenses of floatation companies may decide to tap the money market
(A) Name and explain the money-market instrument the companies can use for the above purpose.
(B) What is the duration for which the companies can get funds through this instrument?
(C) State any other purpose for which this instrument can be used. (5)
Answer:
(A) Commercial Papers can be used for Bridge financing by the company as they are issued by large and credit worthy companies. Bridge financing is the funds raised to meet the floatation costs. The instrument is in the form of an unsecured promissory note and is freely transferable by endorsement It is sold at discount and redeemed at par.
(B) Its maturity period may range from a fortnight to a year.
(C) It is also used to meet the short-term seasonal and working capital requirements of a business enterprise.
Question 12.
State any 5 responsibilities that a consumer should discharge while purchasing, using and consuming goods and services.
OR
How does cost of debt and cost of equity affect the capital structure of an organisation? (5)
Answer:
A consumer should keep in mind the following responsibilities while purchasing, using and consuming goods and services.
(1) Be aware about various goods and services available in the market so that an intelligent and wise choice can be made.
(2) Buy only standardised goods as they provide quality assurance. Thus, look for ISI mark on electrical goods, FPO mark on food products, Hallmark on jewelry etc.
(3) Learn about the risks associated with products and services, follow manufacturer’s instructions and use the products safely.
(4) Read labels carefully so as to have information about prices, net weight, manufacturing and expiry dates, etc.
(5) Assert yourself to ensure that you get a fair deal
(6) Be honest in your dealings. Choose only from legal goods and services and discourage unscrupulous practices like black-marketing, hoarding etc.
(7) Ask for a cash memo on purchase of goods or services. This would serve as a proof of the purchase made.
(8) File a complaint in an appropriate consumer forum in case of a shortcoming in the quality of goods purchased or services availed. Do not fail to take an action even when the amount involved is small
(9) Form consumer societies which would play an active part in educating consumers and safeguarding their interests.
(10) Respect the environment. Avoid waste, littering and contributing to pollution, (any five)
OR
Cost of debt: A firm’s ability to borrow at a lower rate increases its capacity to employ higher debt. Thus, more debt can be used if debt can be raised at a lower rate.
Cost of Equity: Stock owners expect a rate of return from the equity which is commensurate with the risk they are assuming. When a company increases debt, the financial risk faced by the equity holders, increases. Consequently, their desired rate of return may increase. It is for this reason that a company cannot use debt beyond a point.
If debt is used beyond that point cost of equity may go up sharply and share price may decrease inspite of increased EPS. Consequently, for maximisation of shareholders’ wealth, debt can be used only upto a level.