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    Cbse Cl12 Ead Business Studies Answers To Sample Paper 8

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    Mahathi Amudhan

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    Answers to Sample Paper 8 1 . (c) Assertion (A) is true but Reason (R) is false 2. (d) Planning is futuristic 3 4. . (c) Planning, Organising, Staffing, Directing, Controlling. . (6) Legal environment 5. (c) (i) and (iti) 6. (@) Product 7. (a) Management is a dynamic function 8. - (a). Marketing Philosophies 9. (b) Financial planning 10, (6) B-(i) u = (a) Right to safety 12 (c) Both the statements are true 1B. . (b) Employee recognition programme 14, (b) decreases 15, (d) It is not offered for attention, acquisition, use or consumption. 16. (d) Training 17. (©) Planned performance 18. (c) % 1,00,00,000 19, 20. (a) authority delegated (©) Strategy 21. ‘The importance of consumer protection from the consumers’ point of view is: (@) Consumer ignorance # Asconsumers are ignorant about their rights and reliefs available to them, it becomes necessary to educate them to protect consumers from unethical malpractices by businesses. (®) Unorganised consumers + Consumers need to be organised in the form of consumer organisations which would take care of their interests. (©) Widespread exploitation of consumers + The need for consumer protection arises from the need to protect consumers from the loss or injury or other prevailing unscrupulous, exploitative and unfair trade practices like defective and unsafe products, adulteration, false and misleading advertising, hoarding, black-marketing, etc. of the sellers. Business Studies — 12, — a 22, ‘The fixed capital requirement of Dheeraj’s company will be less. The reason for this less requirement will be a financial alternative in the form of lease to outright purchase, As an asset is taken on lease, the firm pays lease rentals and uses it. By doing so, it avoids huge sums required to purchase it. Availability of leasing facilities, thus, may reduce the funds required to be invested in fixed assets, thereby reducing the fixed capital requirements, Or Financial Management means management of flow of funds and involves decisions relating, to procurement of funds, investment of funds and distribution of earnings to the owners. It means planning, organising, directing and controlling the financial activities of an organisation. The importance of Financial Management is as follows: (a) Size and composition of fixed assets of the business, ‘+ Fixed assets have an important contribution in increasing the earning capacity of the business. ‘+ Long-term investment decisions also called capital budgeting decision would raise the size of fixed assets ‘* For example, capital budgeting decision to invest a sum of & 100 crores in fixed assets would raise the size of fixed assets block by this amount. (&) Quantum of current assets and its break-up into cash, inventory and receivables ‘+ With an increase in the investment in fixed assets, the working capital requirement also increases. ‘he total investment in current assets and its break-up into cash, inventory and, receivables is to be determined by financial management decisions. (©) Amount of long-term and short-term funds to be used ‘+ Financial management involves decision about the proportion of long-term and, short-term funds (d) Break-up of long-term financing into debt, equity ete. + The proportion to be raised by way of debt and/or equity is also a financial management decision, The amounts of debt, equity share capital, preference share capital are affected by the financing decision. (¢) Allitems in the Profit and Loss Account, e.., Interest, Expense, Depreciation, ete. ‘+ Higher amount of debt means higher interest expense in future. + Similarly, use of higher equity requires higher payment of dividends. + Similarly, an expansion of business which is a result of capital budgeting decision is likely to affect all items in the profit and loss account of the busine: (any ovo) Business Studies — 12 @ 23, (@) Inthe given case, the function of marketing which has been highlighted is ‘Standardisation’ and ‘Grading’ (b) The advantages of standardisation are: ‘+ The buyers ensure that they get products as per the pre-determined standards of, ‘quality, price and packaging. ++ It reduces the need for inspection, testing and evaluation of the products. The advantages of grading are: ‘+ Grading helps in classification of products into different groups which are not produced according to pre-determined specifications. For example, agricultural products like wheat, rice, ete. ‘+ Grading ensures that goods belong to a particular quality ‘+ Grading helps in realising higher prices for high quality output, (any two) 24, The technique of scientific management adopted by Mr. Ajit is ‘Fatigue Study’ + Fatigue study seeks to determine the amount and frequency of rest intervals in completing, atask, + Ithelps the workers to regain stamina and work again with the same capacity + This will result in increased productivity. + The causes for fatigue are long working hours, having uncordial relations with the boss or bad working conditions et. Or ‘The principle of management followed in the given case is ‘Principle of Equity’ * The principle of equity implies that similar treatment is assured to employees in similar positions. + This principle emphasises kindliness and justice in the behax workers uur of managers towards + According to this principle, managers should be fair and impartial while dealing with their subordinates and there should be no discrimination on the basis of sex, religion, language, caste, belief, nationality etc. + Equity is essential to create and maintain cordial relations between a manager and his subordinates. * This will ensure loyalty and devotion. 25. Quote: “It employs 10 operating managers who give guidance and provide support to the workers.” Supervision: It means guiding the efforts of employees and other resources to achieve desired results. Quot Motivation: It means stimulating people to action to accomplish desired goals. : ‘Double wages for working overtime and triple wages for working on holidays.” Business Studies — 12 8) or (@) The function of management being performed by Mrs Anjali is Directing. It refers to the process of instructing, guiding, counselling, motivating and leading people in the organisation to achieve its objectives. (®) The clement of above-mentioned function of management is Motivation, It means incitement or inducement to act o move. Itis the process of stimulating people to action to accomplish desired goals. (©) The features of motivation are: (#) Motivation is an internal feeling «The urge, drives, desires, aspirations, striving or needs of human being, which are internal, influence human behaviour. + For example, people may have the urge or desire for possessing a motorbike, comfortable house, reputation in the society. (ii) Motivation produces goal directed behaviour + If the employee is interested in promotion, it helps to produce behaviour to improve performance. (iii) Motivation can be either positive or negative + Positive motivation provides positive rewards like increase in pay, promotion, recognition ete. + Negative motivation uses negative means like punishment, stopping increments, threatening etc. which also may induce a person to act in the desired way. (iv) Motivation is a complex process # As the individ reactions, any type of motivation may not have uniform effect on all the members. (any two) are heterogeneous in their expectations, perceptions and 26. (a) Coordination is the quality of management that Kartik has introduced in the working of the production department as a corrective measure to control the output of the workers. Coordination is the process which helps to integrate the efforts of different individuals with diverse nei isto secure a unity of action in the pursuit of common goals. (®) The two points highlighting the importance of coordination are: (0) Growth in size * With the growth in the size of an organisation, there is a proportionate increase in the number of its employees. + So there is a greater need to unify the efforts of diverse individuals towards the realisation of organisational goals. Business Studies — 12 4 (i) Functional differentiation + Asa result of functional differentiation in an organisation, its people and activities, get divided into small departments on the basis of functions like marketing, finance ete. + Since each such department tends to formulate its own objectives, policies ete, there is a need to reconcile the goals pursued by each of such department with the goals of the organisation as a whole (iii) Specialisation * Modern organi cialisation. + Specialisation arises out of the complexities of modern technology and the diversity of tasks to be performed. + Organisations, therefore, need to employ a number of specialists. Specialists tions are characterised by a high degree of sp ‘usually think that they only are qualified to evaluate, judge and decide according to their professional criteria + They do not take advice or suggestions from others in matters pertaining to their area of specialisation. + This often leads to conflict amongst different specialists as well as others in the organisation. + Therefore, coordination is required by an independent person to reconcile the differences in approach, interest or opinion of the specialists. (any wo) 27. Product Cost + Product cost includes costs of producing, distributing and selling the product. + The cost sets the minimum level or floor price at which the product may be sold, * Price should cover total cost (Fixed costs/overheads + Variable costs-+ Semi-variable costs) in the long run, including a margin of profit over and above the costs. + Ther xe three types of costs > Fixed costs: These costs do not vary with the level of activity'volume of production, e.g rent of a building, salary ete. > Variable costs: These costs vary in direet proportion with the level of activity/volume of production, e.g. cost of raw material, > Semi-variable costs: These costs vary with the level of activity/volume of production but not in direct proportion, e.g. salary plus commission for sales. Utility and Demand # The demand for a product will depend on its utility and its price. * The law of demands states that lower the price higher the demand, * Another factor to consider when determining the price is the elasticity of demand. Business Studies — 12 6) ‘This means the corresponding change in demand to the change in the price of a product. Elasticity of demand is responsiveness of demand to change in prices of a product. When the demand is elastic, a small rise in price results in decrease in the quantity demanded by large amount, Total revenue also decreases. So, a firm fixes lower prices. ‘When the demand of the product is inelastic, the total revenue increases when the price is increased, So, a firm fixes higher pri 28, Various dimensions of business environment are: (a) Legal environment: ‘The court passed an order that all schools must have water purifiers for the school children (b) Social environment: ‘Society in general is more concerned about quality of life.” (©) Technological environment: ‘Innovative techniques are being developed to manufacture water purifiers at competitive rates” (@) Economic environment: ‘Incomes are rising and children at home are also drinking purified water.” 29. ‘The first four steps in the process of Planning are: (a) Setting Objectives ‘© The first and foremost step is setting objectiv: ‘* Objectives should be stated clearly for all departments, units and employees. They ive direction to all departments. ‘+ Departments/units then need to set their own objectives within the broad framework of the organisation's philosophy. ‘+ Objectives or goals specify what the organisation wants to achieve, ‘+ It could mean an increase in sales by 20% which could be objective of the entire orga sation. ++ Ifthe end result is clear it becomes easier to work towards the goal. (b) Developing Premises ‘+ Planning premises are the anticipated environment in which the plans are expected to operate. ‘+ These include assumptions and forecasts in the future and knowing conditions that will affect the course of the plan. ‘+ These assumptions are called premises. ‘+ Assumptions are the base material upon which plans are to be drawn, + The base material may be in the form of forecasts, existing plans or any past information about policies. Business Studies — 12 6) + For example, forecasting is important in developing premises as itis a technique of gathering information, Forecasts can be made about the demand, fashion, policy change, interest rates, prices of capital goods, tax rates ete. + Accurate forecasts therefore become essential for successful plans. (©) Identifying alternative courses of action + After setting up objectives and developing premises for the same, next step is to identify the alternative course of action. + There are various ways in which a task can be performed, + These steps are called course of action. + An organisation needs to find out all the possible courses of action. + An organisation should come up with these alternatives through brain storming, 1ch, experiences, ideas from various people orstakcholders, and experimentation, (d) Bvaluating alternative courses + The next step is to weigh the pros and cons of each alternative +The positive and negative aspects of each proposal need to be evaluated in the light, of the objective to be achieved. «+ Alternatives are evaluated in the ight of their feasibility and consequences, or ‘The two limitations indicated in the given case are: (@) Planning does not guarantee success + The success of an enterprise is possible only when plans are properly drawn up and implemented. + Any plan needs to be translated into action or it becomes meaningless. Managers have a tendency to rely on previously tried and tested successful plans. «# Ttis not always true that just because a plan has worked before it will work again. «* This kind of complacency and false sense of security may actually lead to failure instead of success. (®) Planning may not work in dynamic environment + The business environment is dynamic, nothing is constant. + The environment consists of a number of dimensions, economic, political, physical, legal and socia dimensions. + The organisation has to constantly adapt itself to changes. Business Studies — 12 a ‘+ It becomes difficult to accurately assess future trends in the environment if ‘economic policies are modified or political conditions in the country are not stable or there is a natural calamity. ‘+ Planning cannot foresee everything and thus, there may be obstacles to effective planning. 30. (a) ‘The concept of financial market which is highlighted in the given case is ‘Capital Market’ (b) The objectives of Securities and Exchange Board of India (SEBI) are: () To regulate stock exchanges and the securiti industry to promote their proper functioning (i) To protect the rights and interests of investors, particularly individual investors and. to guide and educate them (iii) To prevent trading malpractices and achieve a balance between self-regulation by the securities industry and its statutory regulation (iv) 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 (any three) 31. The importance of organising which is highlighted here is ‘Benefits of specialisation’. ‘+ Organising leads to a systematic allocation of jobs amongst the work force. ‘+ This reduces the work load ‘+ Repetitive performance of a specific job on a regular basis helps a worker gain experience and gets specialised in that job. ‘+ Asa result, organising leads to specialisation and also increases productivity. The importance of Organising is as follows: (a) Clarity in working relationship ‘© The establishment of working relationships clarifies lines of communi specifies who is to report to whom. + The superior-subordinate relationship is clearly defined in organising. ‘+ It helps in creating a hierarchical order. * Ithelps in creating well defined jobs and also cl fying the limits of authority and responsibility of each job. (6) Optimum utilisation of resources * The proper yament of jobs avoids overlapping/duplication of work. * This helps in preventing confusion. ‘* It minimises the wastage of resources and efforts. Business Studies — 12 6) (©) Adaption to change ‘+ A properly designed organisational structure is flexible which facilitates adjustment to changes in workload caused by change in external environment related to technology, products, resources and markets, ‘+ Te paves the way for a smooth transition, + Italso provides much needed stability to the enterprise as it can then continue to survive and grow in spite of changes. (@) Effective administration ‘+ Organising provides a clear description of jobs and related duties. + This helps to avoid confusion and duplication. ‘+ Clarity in working relationships enables proper execution of work. ‘+ This brings effectiveness in administration, (©) Development of personnel ‘+ When managers delegate their authority, it reduces their workload so they can focus on more important issues related to growth and innovation, ‘+ Delegation develops in the subordinate’ ability and helps them to realise their full potential ‘+ Organising stimulates creativity amongst the employees. () Expansion and growth, ‘+ Organising helps in the growth and diversification of an enterprise by enabling it to deviate from existing norms and taking up new challenges. + Itallows the business enterprise by adding more job positions, departments, product lines, new geographical territories ete. (any three) Or Delegation of authority is a process in which the authority is shared amongst the subordinates. When the work of a manager gets beyond his capacity, there should be some. system of sharing the work. This is how delegation of authority becomes an important tool in organisation function, Through delegation, a manager, in fact, is multiplying himself by

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