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 SOLUTIONS
INDEX
OF SELF-PRACTICE Q’S

If you want to go to the answer of any Self-practice Q’s and you

know it comes under Objective Q's, then just click on Objective Q's link
FOR EXAMPLE
within the chapter to navigate quickly.

Pg. Pg.

Part A: Principles and Functions of Management

1 : Nature and Significance SA-I 08
of Management
SA-II 09
Objective Q's 01
LA 09
VSA 01
SA-I 01
5 : Organising
SA-II 01 Objective Q's 11
LA 02 CBQ 11

2 : Principles of Management VSA 11

Objective Q's 03 SA-I 12

CBQ 03 SA-II 12

VSA 03 LA 13

SA-I 03
6 : Staffiing
SA-II 04 Objective Q's 14
LA 04 CBQ 14

3 : Business Environment VSA 14

Objective Q's 06 SA-I 14
CBQ 06 SA-II 15
VSA 06 LA 15
SA-I 06
SA-II 07 7 : Directing
Objective Q's 17
LA 07
VSA 17
4 : Planning SA-I 17
Objective Q's 08
SA-II 17
CBQ 08
LA 18
VSA 08
8 : Controlling
Objective Q's 20
CBQ 20
VSA 20
SA-I 20
SA-II 20
LA 21

Part B: Business Finance and Marketing

9 : Financial Management 11 : Marketing
Objective Q's 22 Objective Q's 27
CBQ 22 CBQ 27
VSA 22 VSA 27
SA-I 22 SA-I 27
SA-II 23 SA-II 28
LA 23 LA 28

10 : Financial Markets 12 : Consumer Protection

Objective Q's 24 Objective Q's 31
CBQ 24 CBQ 31
VSA 24 VSA 31
SA-I 24 SA-I 31
SA-II 25 SA-II 32
LA 25 LA 32

SELF PRACTICE
2. (d) Management is a group activity
Explanation: Every member of the
organisation has a different purpose for joining
the organisation, but as a member of the
organisation, they work towards fulfilling the
common organisational goals. This requires
teamwork and coordination of individual
efforts in a common direction.
4. (c) Lower level management
Explanation: First line managers are the entry
level of management, the individuals "on the
line" are in the closest contact with the workers.
5. (a) Management as a science
Explanation: Like science, management is a
systematised body of knowledge consisting of
theories, principles and concepts.
10. (c) Lower Level Management
Explanation: Supervisory/operational/lower
level of management get the targets for
workforce. This level of management includes
supervisors, forceman, inspectors etc.
20. (b) Management as people
[CBSE Marking Scheme SQP Term-1 2021]
30. (c) Assertion (A) is true, but Reason (R) is false
Explanation: Foremen and supervisors
comprise the lower level in the hierarchy of the
organisation. Supervisors directly oversee the
efforts of the workforce. Top level managers
are involved in formulating policies.
31. (c) Assertion (A) is true, but Reason (R) is false.
Explanation: Coordination is an all pervasive
function, it is required at all levels, departments
and functions of management.
40. Top level management—CEO
Middle level management—Divisional Manager
50. Top level management
The Functions of top level management are:
(1) The Top level managers are responsible
for the welfare and survival of the
organisation.
(2) They analyse the business environment
and its implications for the survival of the
firm.
(3) They formulate overall organisational
goals and strategies for their achievement.
(4) They are responsible for all the activities of
the business and for its impact on society.
(Any two/three)
Nature and Significance of Management
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ANSWER SHEET
57. Management is the process of getting things
done with the aim of achieving goals effectively
and efficiently.
Management is considered as a social science
due to the following reasons:
(1) Systematic body of knowledge as
in science: It has its own theories and
principles that had developed over a period
of time.
(2) Based on repeated experiments as in
science: Principles evolved in management
over a period of time are based on repeated
experiments in different organisations.
Scientific principles are derived on the basis
of logical and scientific observations which
is not present in management.
(3) Management deals with human beings:
The outcome of these experiments are not
capable of being accurately predicted.
(4) Scientific principles have universal validity
and application whereas management
principles have personalised application:
Since they have to be modified according
to a given situation, their application and
use is not universal.
So, two of the features of science are present in
management and two of them are not present
in management. Therefore, management is
considered as an inexact science or social
science.
64. These are some function performed by Middle
level Management :
(1) Interpret the policies framed by the top
management.
(2) Ensure that their departments have the
necessary personnel.
(3) Assign necessary duties and responsibilities
to the employees of their respective
departments for the implementation of the
plan.
(4) Motivate employees of their respective
departments to achieve the desired
objectives.
(5) Cooperate with other departments for
smooth functioning. (Any four)
65. Here are some functions performed by
supervisory level of management:
(1) Assigning jobs and tasks to various workers.
(2) Guiding and instructing workers in day-to-
day activities.
1
 (3) Overseeing both the quality and quantity
of production.
(4) Maintaining good relations within lower
levels of the organisation.
(5) Ensuring safe and suitable working
conditions at the factory and representing
workers' concerns and recommendations
before management. (Any four)
69. The features/characteristics of management
are:
(1) Goal-oriented process: Management
always aims at achieving the goals of
the organisation. The achievement of the
pre-determined goals or objectives serves
as a gauge for the effectiveness of any
management action. Thus, it is considered
as a goal-oriented process.
(2) Pervasive: Management is essentially
required in all types of organisations
whether it is political, social, cultural,
business, non-business, profit or non-profit.
(3) Multi-dimensional: The process of
management includes three main
dimensions viz. Management of work,
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Management of people and Management
of operations. Thus, we can say that
management is multi-dimensional.
(4) Continuous process: Managers at all
levels of management perform some
functions simultaneously. These functions
are planning, organising, staffing, directing
and controlling. The task of a manager
consists of an ongoing series of functions.
So, management is a continuous process.
(5) Group activity: Management requires
team work and coordination of individual
efforts in a common direction to achieve
the organisational goals. It always refers to
a group of people involved in managerial
activities.
(6) Dynamic function: Since management is
a dynamic process, it must adapt to the
changing environment. An organisation
interacts with its external environment
which consists of various social, economic
and political factors. Management
must adjust goals, objectives, and other
operations in response to changes in the
environment.

SELF PRACTICE
6. (a) Universal applicability
Explanation: The principles of management are
intended to apply to all types of organisations
and in all countries, business as well as non-
business, small as well as large, public sector
as well as the private sector, manufacturing as
well as the service sectors. However, the extent
of their applicability would vary with the
nature of the organisation, business activity,
and scale of operations.
8. (b) differentiate efficient and inefficient
workers
Explanation: Differential Piece Wage System
refers to a system in which efficient and
inefficient workers are paid at different rates.
9. (c) standardisation
[CBSE Marking Scheme SQP Term-1 2021]
Explanation: Standardisation is a process of
setting the standard for every business activity.
It sets the standards of quality for products
and the performance of men and machines.
14. (b) By experiences of managers
Explanation: Principles of management are
driven by managers by their past experiences
and observations.
18. (c) Science, Not Rule of Thumb
Explanation: This principle is concerned with
selecting the best way of performing a job
through the application of scientific analysis
and not by intuition or hit-and-trial methods.
The work assigned to any employee should be
observed and analysed with respect to each
element or part thereof and the time involved
therein to decide the best way of performing
that work and to determine the standard
output for same.
23. (b) Harmony, Not Discord
Explanation: Sharing of gains between
management and workers leads to complete
harmony. Management should share the gains
of the company with the workers, at the same
time workers should work hard and willing to
embrace change for the good of the company.
31. (b) Statement II is correct and statement I is
wrong
Explanation: The principles of management are
intended to apply to all types of organisations,
business as well as non-business, small as well
large, public sector as well as private sector,
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ANSWER SHEET
manufacturing as well as the services sector.
36. (a) Both Assertion (A) and Reason (R) are true,
and Reason (R) is the correct explanation of
Assertion (A).
Explanation: The objective of motion study is
to eliminate unproductive movements in doing
a task to achieve efficiency and reduce the
time required to do the task.
39. (a) Both Assertion (A) and Reason (R) are true,
and Reason (R) is the correct explanation of
Assertion (A).
Explanation: Taylor divided functional
foremanship into planning department and
production department and advocated
appointment of eight foreman to guide
workers.
42. (A) (b) Division of work
Explanation: According to this principle,
work is divided into small tasks for efficient
working, and specialisation.
45. The main objectives of time study is to
determine the number of workers to be
employed, frame suitable incentive schemes
and determine labour costs.
49. Taylor underlined that management and
employees attitudes and ways of thinking
about one another should completely change.
Workers should provide their complete
attention to their job, and managers should
share any surplus with them.
54. (A) The technique overlooked here is Motion
Study. This study aims to study the different
motions being performed by workers and
machines while doing the job.
(B) The frequent movements can be avoided
either by having work place next to tool
room or by keeping the necessary tool box
at the workplace.
(C) Elimination of unnecessary movements will
help to increase the productivity of workers
and will also improve the efficiency level.
55. (A) Unity of Command: According to Fayol,
each employee should have one, stable
boss. The principle of unity of command is
violated if a worker receives instructions/
orders from two superiors at one time.
According to this principle, every employee
in a formal organisation should report to
and take commands from a single superior.
This principle was very important to Fayol.
Principles of Management 3
 (B) Fatigue Study: If a person doesn't take
breaks while working, he will eventually
become physically and psychologically
exhausted. The rest breaks will enable
employees to rebuild strength and work
at their previous capacity. Productivity will
rise as a result of this. The goal of fatigue
study is to quantify how often and for how
long breaks should be taken while working.
59. The principle of management that Shivani
is unable to apply is Stability of Personnel.
Fayol believes that management should give
workers assurances about job security or
tenure stability at the time of hiring. Employees
should be chosen using the correct process.
Following selection, it is the responsibility of
the business to ensure that employees work
for a minimum specified amount of time. The
employees' abilities should be proven within a
reasonable amount of time.
63. No, the production manager cannot blame
the foreman because he did not give him
the authority to take the required tools and
material from the store.
The principle of "Authority and Responsibility" is
violated in this case. For managers, the authority
must match their level of responsibility.
Authority and accountability ought to be
in harmony. A company should implement
measures to prevent management power
abuse. A manager should simultaneously have
the power necessary to fulfill his duties.
68. Functional foremanship is the technique
of scientific management that could assist
Kanpur Leather Ltd. in efficiently organising
planning and its execution.
(1) The goal of functional foremanship is to
raise the standard of shop floor supervision.
Taylor comes up with a list of traits that
make a successful supervisor or foreman.
(2) Taylor suggested eight specialists because no
one person has all the necessary traits. This
method separates planning from execution.
(3) Four foremen were suggested by Taylor
for planning and four for execution. It is
an expansion of the specialisation and job
division principle.
(4) Route clerk, instruction card clerk, time and
cost clerk, and disciplinarian were the four
foremen for planning.
(5) The four foremen responsible for planning
would, in effect, prepare time and cost
sheets, enforce discipline, and generate
instructions for the workers that would
outline the production route.
(6) Gang boss, speed boss, repair boss, and
inspector are the four foremen assigned to
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the execution. The four execution foremen
were in charge of timely and accurate
task completion, maintaining equipment
ready for use by the workers, ensuring that
equipment was in good operating order,
and inspecting the work's quality.
71. The nature of the principle of management
highlighted in the case are:
(1) General Guidelines: The management
principles provide general guidelines for
managerial behaviour and actions across
a range of issues and circumstances. These
concepts do not give readymade, simple
clarifications to all administrative issues.
This is so because real-time business
conditions are different and powerful and
are a consequence of many factors.
(2) Formation: The development of
management principles is based on
regular experiences and ongoing analysis
of managers in many contexts. They are
based on trials carried out in controlled
environments rather than being created in
a laboratory.
(3) Flexible: Management principles differ
from scientific principles in the sense
that they are not rigid or static. They
can be applied in a variety of situations
and different business settings. It's all
dependent on the manager's creativity.
Since each principle serves a different
purpose, it can be applied in a given
circumstance.
(4) Mainly Behavioural: The primary
objective of management principles is
to influence human behaviour, hence
they are behavioural by nature. The best
possible use of human resources is made
possible by management principles,
which also prevent any duplication of
work. Additionally, it aids in recognising
the connection between an organisation's
material and human resources.
76. (A) Principles of Scientific management
discussed in the paragraph are:
(i) Science, Not Rule of Thumb: To
begin with, he wanted to develop
a standard method that would be
followed throughout the organisation.
So, he investigated traditional methods
through work study and unified the
best practices.
(ii) Development of Each and Every
Person to His or Her Greatest
Efficiency and Prosperity: Vishesh
also believed that each person should
not only be scientifically selected
but should also be given the required
training to increase efficiency.
 (B) Techniques of Scientific Management
discussed in the given paragraph are:
(i) Method Study: 'The standard method,
i.e., the best way of doing the job was
then developed taking into account all
parameters right from the procurement
of raw material to the delivery of the
final product to the customers.
(ii) Motion Study: At the factory, the
ingredients making up a burger were
strategically placed to reduce the time
taken for excess movements.
(iii) Time Study: The standard time and
other parameters were determined
based on work-study.
(iv) Differential Piece Wage System:
Vishesh rewarded the workers for
meeting the standard output.
79. Cooperation, not individualism is violated in
this case. “All the suggestions made by the
workers are not even attended which has
resulted in many strikes during the last couple
of months”. This principle stresses a greater
focus on teamwork than on individualism
among managers and employees. It has a
strong connection to the idea of "Harmony,
not Discord. "This principle states that
management and employees should
80. Difference between Taylor’s and Fayol’s Principles of Management
Basis for Com- Henry Fayol
parison
Meaning Henry Fayol, is a father of modern
management who laid down fourteen
principles of management, for improving
overall administration.
Concept General theory of administration
Emphasis Top level Management
Applicability Universally Applicable
Basis of Infor- Personal Experience
mation
Orientation Managerial Function
System of Wage Sharing of Profit with Managers.
Payment
Approach Manager's Approach
Principles of Management
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cooperate and understand one another. The
manager is responsible for looking after
employees and making decisions after
considering their suggestions. Workers will be
more productive and successful as a result of
this.
Later on, the Development of Each and Every
Person to His or Her Greatest Efficiency
and prosperity is followed: "However, recent
reports from the organisation say that there is
a training module going on for the employees
so that their individual development can
take place to the maximum." This principle
states that any organisation should prioritise
both the expansion of the business and the
personal development of its employees.
Through numerous training programs run by
the organisation, workers can acquires the
necessary skills. The first step in attempting
to increase efficiency should be the hiring of
employees. A systematic approach should be
taken while hiring new employees. They ought
to be given tasks that fit their mental and
physical capabilities.
In the last part, Standardisation is the principle
that is highlighted. Standardisation can be
used for a process, raw material, time, product,
machinery, methods, or working environment.
FW Taylor
F.W. Taylor, is a father of scientific man-
agement who introduced four principles
of management, for increasing overall
productivity.
Scientific Management
Low level Management
Applies to specialised organisations only.
Observation and experimentation
Production and Engineering
Differential Payment System
Engineeer's Approach
5

SELF PRACTICE
3. (d) Attitude of the elected government
representatives towards business.
Explanation: Structures of the economy are
the element of the economical environment,
rise in disposable income of the public is
an element of the social environment, laws
passed by government authorities come
under the legal environment. The working of
government officials and their attitude is part
of the political environment.
6. (b) monetary policy
Explanation: A nation’s overall money supply
is managed by monetary policy, which also
aims to promote economic growth. Interest
rate changes and adjustments to bank reserve
requirements are examples of monetary policy
strategies.
9. (c) Relativity
Explanation: Business environment is a relative
concept whose impact differs from country to
country, region to region, and firm to firm.
16. (d) Composition of family
Explanation: Money supply is an example
of economic environment. The Consumer
Protection Act and Constitution of the country
are examples of the legal environment.
18. (a) It helps in tapping useful resources.
Explanation: A firm can obtain a range of
resources from the environment. A business
firm assembles numerous resources, or
inputs, to engage in any form of activity.
Understanding what the environment has to
offer will help with this.
30. (c) Economic environment
Explanation: Economic environment comprises
factors like interest rates, inflation rates, and
changes in disposable income of people, etc
which have an impact on business enterprise.
The economic environment includes economic
forces like economic policies, economic systems,
economic conditions, economic development, etc.
40. (c) Assertion (A) is true, but Reason (R) is false.
Explanation: Business environment has
changing nature and the speed of this change
is unpredictable, So, to say it as changing at a
slow pace is not right.
42. (b) Both Assertion (A) and Reason (R) are true,
but Reason (R) is not the correct explanation
of Assertion (A).
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ANSWER SHEET
Explanation: Macro factors like production,
investment, distribution, etc. consists of the
economic environment.
43. (b) Both Assertion (A) and Reason (R) are true,
but Reason (R) is not the correct explanation
of Assertion (A).
Explanation: Demand for saree is low in
America and high in India due to the different
social environment of both countries.
48. (A) (b) Political
Explanation: Political environment is
highlighted because of the intervention of
government for subsidies.
(C) (a) Identifying opportunities
Explanation: Ritesh identify the
opportunity for jute multi-pocket which
was not introduced in India.
49. (B) (a) Specific and general forces
Explanation: It includes both specific
and general forces. Specific forces
affect individual enterprises directly and
immediately in their day-to-day work.
General forces have an impact on all
business enterprises and thus may affect
an individual firm only indirectly.
(D) (b) Extent and nature of government
intervention in business
Explanation: The nature and extent of
government intervention is a part of
political environment.
50. (A) (d) Social Environment
Explanation: Customs and traditions are
part of the social environment.
(D) (c) Technological Environment
Explanation: Involvement of technology
and innovations are the part of
technological environment.
52. Opportunity: Liberalisation in external trade
Threat: MRTP Act.
(or any other relevant example)
54. Legal environment includes various legislations
passed by the government, administrative
orders issued by government authorities, court
judgements, and the decisions rendered by
various commissions and agencies at every
level of the government. Centre, state, or local.
57. Technological Environment
64. The two points of importance of business
environment highlighted in the given case are:
 (1) It helps the firms to identify opportunities
and getting the first mover advantage. “KV
Motors Ltd. recognised the need for small
cars in India.”
(2) It helps the firms in improving performance.
“It created a product far superior to their
competitors not only in terms of quality but
also in terms of overall driving experience.
It soon became the leader in the small car
market.”
(3) It helps the firms in planning and policy
formulation. “KV Motors further expanded
its service network and quality creating
an entry barrier for the competitors. It
depicted its strengths through various
brand-building activities.” (Any two)
66. The dimension which is discussed in the given
case is Social Environment. It includes social
aspects that shape the business environment
including things like values, norms, beliefs,
literacy rates, lifestyles, and more.
71. (A) Technological Environment
(B) (1) Specific and general forces
(2) Dynamic nature
(C) (1) It helps the firm to identify threats and
early warning signals.
(2) It helps in planning and policy
formulation.
74. The four point of importance of business
environment are:
(1) Enables to identify business opportunities:
There are many opportunities for business
success in the environment. Understanding
it, enables a company to spot profitable
opportunities and gain advantages before
rivals.
(2) Helps the firm to identify threats and
early warning signals: Environmental
awareness can aid organisational
managers in quickly seeing potential
dangers and acting as an early warning
system. For instance, Bajaj Auto
Business Environment
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significantly enhanced its two-wheelers as
new businesses entered the auto market.
(3) Helps in tapping useful resources: A
business firm can obtain a variety of
resources from the business environment,
including people, machines, finance, raw
materials, power, etc. An enterprise can
establish policies to obtain the necessary
resources and transform them into output.
(4) Helps in coping with rapid changes: The
business world is a highly dynamic place
where changes happen quickly. Changes
like volatile market conditions, a decline
in brand loyalty, etc. Managers must
understand, consider, and create a proper
plan of action to deal with substantial
changes.
78. (A) Social environment: The social aspects
that shape the business environment
include things like values, norms, beliefs,
literacy rates, lifestyles, and more. Social
changes provide business enterprises with
a variety of opportunities and risks.
(B) Economic environment: It affects a
business directly and immediately.
Economic factors that could have an
impact on business firms include interest
rates, inflation rates, changes in people’s
disposable income, monetary policy, stock
market indices, and others.
(C) Political environment: It covers political
conditions including the nation’s overall
stability and peace as well as the
viewpoints that elected officials have
towards the business community.
(D) Legal environment: It consists of a variety
of laws and regulations passed by the
government, administrative orders, judicial
rulings, and decisions made by a variety
of commissions and agencies at every
level of the federal, state, and municipal
governments. Business people must
comply with a variety of laws, thus their
expertise is crucial.
7

SELF PRACTICE
5. (c) Planning
[CBSE Marking Scheme SQP Term-1 2021]
Explanation: Planning involves setting
objectives and developing appropriate courses
of action to achieve the objectives in advance
and within budget with available resources.
10. (d) Reduce creativity
Explanation: Top management is responsible
for planning. Middle management is only
allowed to execute the plans; they are not
allowed to take independent decisions. In the
process, initiative and creativity are lost.
12. (c) Relying on a previously tried and tested
successful plan just because it had worked
before and will work again.
Explanation: Only when the plans are correctly
carried out it is possible for the business to
succeed. If plans are not carried out, they lose
their purpose. Managers may rely on tried-
and-true strategies. Every successful strategy
in the past might not be effective in the
future, and not every situation demands the
adaptation of that plan.
19. (d) Both (a) and (c)
Explanation: Remaining steps, to be taken in
the process of Planning are:
(1) Identifying and evaluating alternative
courses of action.
(2) Selecting an alternative.
(3) Preparation of derivative plans.
(4) Implementing the plan.
28. (d) Assertion (A) is false, but Reason (R) is true.
Explanation: Planning reduces creativity
because managers have to work according to
the plans. They are not free to work on their
own.
31. (a) Both Assertion (A) and Reason (R) are true,
and Reason (R) is the correct explanation of
Assertion (A).
Explanation: Planning is necessary at all
management levels and in all organisational
departments. The extent of planning varies
depending on the department and the level.
32. (a) Both Assertion (A) and Reason (R) are true,
and Reason (R) is the correct explanation of
Assertion (A)
Explanation: Planning helps in expecting
uncertain events but it does not eliminate
them.
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ANSWER SHEET
34. (A) (b) Growth and development
Explanation: In this line, the objective
stated is growth and development which is
discussed in meeting rounds.
(C) (c) Follow up
Explanation: This step of planning process
involves monitoring the execution of plans
and the timeliness of activities. To make
sure that goals are met, monitoring the
plans is also crucial.
35. (B) (d) Developing premises
Explanation: Making assumptions is known
as developing premises. Assumptions can
be related to the resources available with
the organisation.
(D) (b) Follow up action
Explanation: Follow up includes that the
actual results should be according to the
plans. To make sure that goals are met,
monitoring the plans is also crucial.
37. It is stipulated sequence of a course of action
for handling activities. They are specified
in chronological order, e.g. there may be
a procedure for requesting supplies for
production. Procedures are designed to execute
policies and achieve objectives.
For example, procedure may be for purchase of
raw material, selection of employees, redressal
of grievances, etc.
39. Rules are standardised or detailed instructions
that describe what must be done. Because
of how similar their natures are, “Rules” are
viewed as “Plans.” The simplest of all plans are
regarded as rules. Planning strives to consider
and choose the future-oriented path of action.
Similar to this, a rule is a statement that
helps in determining whether or not to take a
particular action.
43. Premises are anticipated future conditions
under which a plan will work.
52. (A) Objectives: The results that the
management expects to attain at the end
of its activities are called objectives.
(1) They might be created with the
management’s ideal future position in
mind. Setting organisational objectives
is the first and most important step in
the planning process.
(2) Objectives must be stated in detail,
be quantifiably, measurable, and take
 the form of a written statement of the
desired outcomes to be attained within
a defined time frame.
(3) For instance, achieving a 20% return
on investment or 10% higher sales
goals. The goals should be specific and
doable.
(B) Strategy: Future choices that define the
direction and scope of an organisation over
the long-term are referred to as strategy.
(1) These are those ways that a company
uses to get ready for diverse chances,
threats, and scenarios.
(2) A new business plan developed by an
organisation’s managers is referred to
as an internal strategy, and strategies
created in response to those of
competitors are referred to as external
strategies.
(3) For instance, choosing the advertising
medium, the distribution routes, etc.
57. Planning is a forward-looking process that is
focused on analysing and projecting future
factors, so this is true. The future, however,
is unpredictable and cannot be controlled.
An organisation's operation is impacted by
a number of external factors. These forces
are complicated and dynamic. For instance,
societal trends, political climate, technological
advancements, and governmental laws and
regulations all change constantly. One cannot
be guaranteed the success rate of the plans
because of these uncertainties; instead, the
plans must be changed to take into account
the shifting environment. Consider the scenario
when a competitor’s arrival causes a decline
in the demand for a company’s products.
The company was unable to anticipate this
development when preparing the production
schedule. As a result, the company’s earlier
strategies are unsuccessful, and new ones
must be created while taking the changing
demand into account. Consider a scenario in
which the government announces a relaxation
of the restrictions on foreign investment,
increasing market competitiveness. The
increasing competition may cause domestic
enterprises’ sales and production plans to fall
short. Thus, it can be claimed that even while
planning entails figuring out specifics for the
future, success is not guaranteed by it.
58. (A) The kind of plan that needs to be created
in this situation is a strategy, and the
processes involved in creating this plan are:
(i) Establishing an objective: The
company may set a long-term goal
of attracting more and more quality-
conscious customers or of being the
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market’s leader in terms of both quality
and trends by the end of the first year.
(ii) Choosing a specific course of action:
To make their products better than
those of competitors, the company
must either spend more money, import
the newest technology, or both.
(iii) Allocating resources to accomplish
the goals: The business must obtain
authorisation before importing
technology, increase funding for
its research and development
department, and hire staff with the
most recent training.
(B) The basic limitations of such plans include:
(1) They can be very costly.
(2) They takes a long time.
(3) Success is not guaranteed.
(4) They might not work in a dynamic
context.
60. (A) Rule is the type of plan highlighted in the given
case.
(B) The three features of plan adopted by the
director of KRBL are:
(1) Rules are specific statements of what
should or should not be done in a
certain situation.
(2) Rules serve as guidelines and leaves no
scope for discretion.
(3) Rules indicate limits of acceptable
behaviour and help maintaining
discipline.
66. (A) Planning is the function of management
which is being discussed in the given
paragraph.
(B) The various steps involved in the planning
process are:
(i) Setting objectives: The planning
process is initiated by setting the
objectives in clear, specific and
measurable terms. The objectives may
be set for the organisation as a whole
and for each department or unit within
the organisation.
“The company plans to increase the
sale of its sedan cars by 20% in next
quarter”.
(ii) Developing premises: Planning
process carried out keeping in view
the assumptions are called premises
and may relate to government policy,
interest rate, inflation, etc. Accurate
forecasts are therefore essential for
successful planning.
“In order to achieve the desired targets
the marketing team of the company
Planning 9
 considers the impact of policy of the
government towards diesel vehicles
and level of competition in this
segment of cars.”
(iii) Identifying alternative courses of
action: The next step in the planning
process involves identification of
various ways in which the goals can be
achieved.
“They explore the various available
options like offering more discount to
dealers and customers, providing more
customer friendly finance options,
lucky draws on test drives, increasing
advertising, offering more of free
accessories on the purchase of the car,
etc.
(iv) Evaluating alternative courses:
In order to select the best option,
the relative positive and negative
aspects of each alternative should be
evaluated in the light of their feasibility
and consequences.
“A through analysis of the various
available options is done keeping
in view the relative viability of each
option.”
(v) Selecting an alternative: The best plan
in adopted to achieve the desired goals
which results more profitability, less
cost and moderate risk. Sometimes, a
combination of plans may be selected
instead of one best course of action.
“The company decides to pursue the
option of offering more discount to
dealers in order to boost the sale of
sedan cars”.
(vi) Implementing the plan: This step
is concerned with putting plans into
action.
“In order to implement the plan, they
determine that prospective customers
be aware about the new available
benefits. Advertisements are made
through various sources of print and
electronic media.”
(vii) Follow up action: Monitoring of plans
is equally important to ensure that
objectives are achieved efficiently and
effectively.
“The market analysts of the company
keep a close watch on the revenue
from the sedan cars to study the effect
of new initiatives by the company to
promote its sales.”
70. (A) Policy and Procedure are the two different
types of plans that Wazir Ahmed proposes
to implement in order to reinstate the
confidence of the staff.
(i) Policy: “……….he lays out a clear cut plan
consisting of a set of general guidelines
for both time bound and performance
related appraisals of the managers at
all levels.”
(ii) Procedure: “Moreover, he develops
standarised processes containing a series
of steps specified in a chronological order
for its implementation.”

(B)
Basis Policy Procedure
(1) Meaning Policies are general statements It is a series of chronological steps
that guide managerial decision- which are performed to do a
making. particular activity.
(2) Level of It is determined by top level It is determined by lower or middle
management management. level management.
(3) Expression It is a general statement. It is a specific statement.
(4) Purpose Policies are framed to achieve A procedure is framed to implement
the objectives of an organisation. a policy.
They all guide in implementing the
strategy.

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SELF PRACTICE
2. (d) Establishes standards for controlling.
Explanation: Planning establishes standards
for controlling not organisation structure.
3. (a) downward
Explanation: In delegation, authority and
responsibility are transferred downward from
superior to subordinate.
5. (d) Departmentalisation
Explanation: After the work has been divided
into smaller, more manageable tasks, similar
tasks are grouped. These groupings make
specialisation easier. Departmentalisation is
a term used to describe this grouping process.
10. (c) organising
Explanation: Organising is the process that
starts the execution of plans by clarifying
roles and working relationships and efficiently
allocating resources to achieve the indicated
and desired results (goals).
14. (b) Organisational structure
[CBSE Marking Scheme SQP Term-1 2021]
Explanation: An Organisational structure can
be defined as the framework within which
managerial and operating tasks are performed.
It specifies the relationships between people,
work, and resources.
21. (b) Benefits of Specialisation
Explanation: The workforce's jobs are
systematically allocated as a result of
organising. The fact that the particular
personnel is performing a certain job regularly,
decreases the workload and increases
production. A worker can specialise by gaining
experience in a certain field by performing the
same task repeatedly.
26. (c) Functional structure
Explanation: Each employee is expected to
gain proficiency concerning one function only.
36. (d) Assertion (A) is false, but Reason (R) is true.
Explanation: Divisional structure is suitable for
organisation that produce multiple products
or diverse lines of products and need product
specialisation. A divisional structure is a
type of organisational structure made up of
independent divisions or units that are based
on distinct goods, regions, customer segments,
etc. For example, a company is divided into four
divisions: shoes, bags, uniforms, and books.
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ANSWER SHEET
38. (d) Assertion (A) is false, but Reason (R) is true.
Explanation: Responsibility is the obligation
of the subordinate to perform the task. That is
why it flows upward.
41. (a) Both Assertion (A) and Reason (R) are true
and Reason (R) is the correct explanation of
Assertion (A).
Explanation: The term "span of management"
describes the number of subordinates that
a superior can control successfully. The
organisation's structure is mostly determined
by the span of management.
42. (A) (b) Decentralisation of authority
Explanation: Everything that goes
to increase the importance of the
subordinates' role is Decentralisation,
and everything which goes to reduce it is
centralisation.
(D) (a) optional
Explanation: It is totally up to the
management whether they want to keep
all decision-making power to themselves or
they want to decentralise decision-making
authority to their subordinates.
43. (B) (a) Authority
Explanation: The ability to make decisions
and to direct the actions of others is
referred to as having authority. The
superior-subordinate relationship is based
on authority. Authorities are restricted
by laws and the organisation's rules and
regulations.
45. After the work has been divided into smaller,
more manageable tasks, similar tasks are
grouped. These groupings make specialisation
easier. Departmentalisation is a term used to
describe this grouping process. Several criteria
can be used as the foundation for creating
departments.
46. Organising can be defined as "Identification and
grouping different activities in the organisation
and bringing together physical, financial and
human resources to establish most productive
relations for the achievement of specific goal
of an organisation."
48. Delegation gives authority to subordinates to
take decisions, which helps in the development
of employees.
Organising 11
 51. The term 'span of management' describes
the number of subordinates that a superior
can control successfully. The organisation's
structure is mostly determined by the span of
management.
56. Divisional structure
62. Steps in the process of organising are as
follows:
(1) Identification and division of work: The
entire task is divided into small manageable
activities that leads to specialisation.
(2) Departmentalisation: All similar jobs and
activities are grouped into departments,
on the basis of functions or products.
(3) Assignment of duties: The duties are
thereafter clearly assigned to the post and
then to the individuals on the basis of their
capabilities. Clear assignment of duties
avoid duplication of work.
(4) Establishing reporting relationships:
Superior subordinate relationship is
created and the question of who reports
to whom is clarified. Every individual in
the organisation knows, whom he has to
report.
63. The four advantages of formal organisation
are:
(1) Due to clarity of mutual relationships,
accountability can be fixed more easily.
(2) It assists in preventing job duplication and
maintaining unity of command.
(3) Leads to effective accomplishment of goals.
(4) Provides stability to the organisation.
66. Moving away from a fully formal
Organisational structure and allowing for
some informal structure is the main shift
needed to solve the problem. A network of
social connections that develop between
employees of a company outside of their
formally specified responsibilities is known as
an informal structure.
The organisation would advantage from an
informal structure in the following ways:
(1) Information spreads more quickly
because there is no clear route or path of
transmission.
(2) Personal connection outside of the
positions that are officially established is
possible in an informal organisation. The
employees feel a sense of belonging to
the company and one another because
of these informal interactions. This aids in
reducing staff turnover.
(3) An informal organisation facilitates the
operations of a formal organisation,
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which aids in the better achievement of
organisational goals.
The business can expand into additional
sewing-related products, such as better, more
complex sewing machines with capabilities like
embroidery.
69. (A) The concept based on which “Structures
Consultants India Ltd” gave their
recommendation to “Good Looks Ltd” is
Decentralisation.
Decentralisation is a type of organisational
structure in which the top management
delegates authority to the middle and
lower levels of management in the
organisation. Daily operations and minor
decision-making authority are delegated
to the middle and lower levels in this sort
of organisational structure, freeing the top-
level management to concentrate more on
important choices like business growth and
diversification.
(B) The importance of decentralisation is as
follows:
(1) Making decisions quickly: Most
decisions are made immediately,
without consulting higher authorities.
An organisation's ability to act
promptly and decisively is essential to
running operations efficiently.
(2) Administrative development: When
managers are given responsibilities
and tasks to find solutions, the
decentralisation process forces them
to reconsider their judgements and
methods. This questioning technique
helps people become more self-
assured, independent, and capable of
making wise decisions, which benefits
the organisation as a whole.
(3) Development of executive skills: It
enables the worker to carry out tasks
on their own, providing them with
priceless exposure. This particular
performance fosters a setting where a
person can advance their knowledge,
take on bigger and more important
duties, and qualify for promotion.
(4) Encourages growth: Decentralisation
also gives department heads the
freedom to operate independently.
The department can develop and
benefit from healthy rivalry with other
departments due to its independence.
The competition will ultimately result
in an improvement and increase in
productivity.
 (5) Higher control: It also assesses
and reviews each department's
performance and provides them
with a thorough understanding of
their work. The largest difficulty with
decentralisation is controlling, though
steady management and scorecards
are being established.
74. (A) Divisional structure is the framework which
the diversified organisation should adopt,
to enable it to cope up with the emerging
complexity.
The advantages of this framework are:
(1) Product specialisation assists in the
overall improvement of department
leader's skills.
(2) Aids in establishing the accountability
and duty of departmental heads.
(3) It offers a sound foundation for
evaluating the performance and
outcomes of each division.
(B) The limitations of divisional structure are:
(1) Disputes may develop between
several divisions on the distribution of
resources.
(2) Since there can be a duplication of
efforts across many product divisions,
costs could go up.
75. (A) Divisional structure is followed by N-guard
company. In this structure, activities are
grouped on the basis of products or services
offered by the business.
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(B) Advantages of a divisional structure are:
(1) Managerial Efficiency: A divisional
structure provides numerous
opportunities for the development of
skills and knowledge of the managers.
The head of each division gains
experience as he or she deals with a
variety of functions simultaneously.
This enables the division head to grow
professionaly and improve proficiency.
(2) Measurement of performance: In a
divisional structure, the performance
of each of the division is judged on
the basis of its profit and lots during
a particualar period. This type of
assessment of performance is easier
and help in taking appropriate and
timely corrective action in case of poor
performance.
Limitations of Divisional structure are:
(1) Departmental Conflicts: Sometimes
conflicts may arise among different
divisions with regard to various
decisions and actions of the
organisation such as those relating to
the allocation of funds and resources.
(2) Increase in Cost: As there exists a
similar function structure under each
division, the same set of functions are
performed under each department.
Thus, there is a high probability of
overlapping of activities, which results
in a rise in cost for the organisation.
Organising 13

SELF PRACTICE
2. (a) Workload Analysis
Explanation: Workload analysis is a technique
used to assess how much time, effort, and
resources are required by an organisation to
identify the actual requirements of Human
Resources (HR) in terms of both quantity and
quality following the firm's goals and plans.
4. (b) Aptitude test
Explanation: An aptitude test is an assessment
or selection test of a person's capacity to learn
new skills.
8. (d) Performance appraisal
Explanation: The steps in the selection
process are preliminary screening, selection
test, employment interview, reference and
background checks, selection decision, medical
examination, job offer, and contract of
employment. So, performance appraisal is the
correct answer.
11. (a) A-(II), B-(IV), C-(III), D-(I)
15. (b) Casual callers
Explanation: Recruitment takes place from a
list of job applications that are kept up to date
with their contact information. Compared to
other sources, it is a less expensive method of
recruitment.
20. (c) Reference and background checking
Explanation: A candidate is asked for several
references to check the information they
have provided. References from academics at
universities, former employers, and teachers
are acceptable.
25. (c) Assertion (A) is true, but Reason (R) is false.
Explanation: It is true that big organisations
maintain records of applicants but these
records are maintained for casual callers, not
for casual vacancies.
27. (c) Assertion (A) is true, but Reason (R) is false.
Explanation: Development is on process of
enabling the overall growth of employees, not
training. Training helps the employees to do
work efficiently.
30. (A) (c) Workforce Analysis
Explanation: Workforce analysis enables
a manager to determine the number and
types of employees required to complete
a task.
(C) (b) Job Offer
Explanation: A letter of appointment
is used to make a job offer. The job
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ANSWER SHEET
description, rules, and regulations, joining
date, reporting time, etc. are all mentioned
in the letter.
31. (B) (d) Estimating Manpower Requirement
Explanation: This step of Staffing includes
workload analysis and workforce analysis.
Workload analysis asseses the number
and types of human resources necessary
for the performance of various jobs and
accomplishment organisational objectives.
33. Through the manager's succession planning,
Staffing ensures continuous survival and
growth of an enterprise.
36. Apprenticeship Programmes
41. (1) To enable managers with the capacity to
take on extra duties.
(2) To arrange managerial promotion systems.
44. Training in the use of machinery can be given
to the employees. The process of improving
an employee's talents and skills necessary for
job performance is referred to as training. It
would enable the workers to improve their task
performance and acquire the machinery-use
skills they need.
Training would benefit both the manager and
the staff in the following ways:
(1) It will ensure the best possible use of
resources by reducing time and financial
wastages.
(2) It would reduce the workload of supervisor.
(3) It would equip workers with the skills
necessary to meet new challenges and
adapt to a variety of circumstances.
(4) It would improve the workers, machine
handling skills and efficiency, which would
reduce their risk of accidents.
46. The steps in the selection procedure, after the
employment interview and before the job offer
are:
(1) Reference and background checks: The
candidate is asked for several references to
check the information they have provided.
References from academics at universities,
former employers, and teachers are
acceptable.
(2) Selection decision: The final decision has
to be made from among the candidates
who pass the jobs, interviews and reference
checks.
(3) Medical examination: The physical
suitability of an applicant for a position
 must be validated by a medical expert
or a licensed clinic approved by the
organisation.
50. (A) The steps followed by Vandana Public
School in the selection process are as
follows:
(i) Preliminary screening: Helps in
rejecting applicants who don't meet
the basic criteria and qualities for the
position. Preliminary interviews are
scheduled for those whose applications
are chosen.
(ii) Selection test: The organisation
conducts a written test for candidates
to assess their practical knowledge.
Important tests helps to choose
employees.
(iii) Employment Interview: Involves a
thorough discussion between the
candidate and the interviewer to assess
the candidate's general suitability
for the role. Candidates are given the
chance to clarify any questions they
may have about their pay, working
conditions, etc.
(B) The school held trade test. This test is
designed to assess and evaluate the
candidate's current skill set. This test assists
in assessing a candidate's theoretical and
practical knowledge of the subject under
consideration.
74.
60. (A) Staffing function is indicated in the given
paragraph.
(B) The two steps of staffing referred in the
given paragraph are:
(i) Recruitment: "Sheril had applied
through the newspaper"
"Nidhi was introduced to the principal
by her friend who working there since
the last three years."
"Rashmita had dropped her bio-data in
the school"
(ii) Selection: "After a grilling interview
with the principal and HOD, Sheril was
appointed as senior teacher"
Sheril was called for a written test
which she cleared and asked to join on
that basis
(C) Recruitment is a positive process of
searching prospective candidates and
stimulating them to apply for jobs in
the organisation whereas selection
is a negative process of choosing the
best amongst the pool of prospective
candidates rejecting the rest.
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70. (A) This company has failed to identify the
human relation approach. This approach
considers human resources as the most
important factor. They are dependent on
personnel officers for all the activities and
they have failed to recognise the importance
of human resource management.
(B) This problem can be solved by setting up a
human resource management department
that performs the following functions:
(i) Human Resource Planning: It means
determining the number and type of
personnel required to fill the vacant
job positions of an organisation.
(ii) Employing people: It means
recruitment, selection, and placement
of personnel.
(iii) Career growth: It relates to training
and development of employees
(iv) Performance appraisal including
feedback.
(v) Motivation by offering financial and
non-financial incentives.
(vi) Compensation or remuneration of
employees keeping in mind their
qualifications and other factors.
(vii) Providing social security and welfare
of people.
(viii) Review and audit of personnel profit
and procedure.
(A) The management function overlooked by
Nakul is Staffing.
Staffing is a managerial function of
filling and keeping filled positions in the
organisational structure. It consists of
manpower planning, recruitment, selection,
training, compensation, promotion and
maintenance of managerial personnel. It
involves, finding the right person for the
right job, having the right qualification,
doing the right job at the right time.
(B) The importance of staffing is as follows:
(i)
Filling the role by obtaining
competent personnel: Understaffing
latest techniques are used for recruiting
and selecting the employees. As a
result, it becomes possible to search for
and selectable candidates for different
posts.
(ii) Placing right person at the right job:
Staffing ensures higher performance
by placing right person on the right job
by proper recruitment and selection.
Employees are given a place according
to their qualification.
Staffing 15
 (iii) Improves job satisfaction and
morale of the employees: Staffing
function does not end only with the
appointment of employees. It includes
training, promotion, compensation, etc.
All these activities help in motivating
the employees and boost up the
morale of the employees.
(iv) Optimum utilisation of human
resources: Through manpower
planning and job analysis, we can
find out the number of employees
and type of employees required in the
organisation. So, there are no chances
of overmanning and shortage or
underutilisation of personnel.
76. The following external resources are used by
Newrange to find new employees:
(1) Placement agencies and Management
consultants: Similar to employment
exchanges, placement agencies offer a
national service that matches the demand
for workers with the supply of qualified
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individuals. The majority of the time, private
organisations manage these agencies.
(2) Direct recruitment: An organisation that
chooses direct hiring posts a sign outside
its premises describing the number
of job openings, the qualifications of
applicants, and the date of the interview.
The decision is made immediately after
interested candidates gather the necessary
information and appear for the interviews.
(3) Employee recommendations: Organisa-
tions ask their employees to recommend
individuals from among their friends or
relatives, and then they evaluate those who
are suitable for recruitment.
The following internal source are used to find
new employees ny new range:
Transfers: Through transfers, job openings are
filled by moving qualified employees from one
department of the company to the department
where the vacancies are located. Transfers can
be thought of is a horizontal process where the
moved personnel often do not receive any more
responsibility or a higher position.

SELF PRACTICE
2. (b) Personal barrier
Explanation: In personal barriers, effective
communication may be influenced by the
sender's and receiver's characteristics. These
include fear to challenge authority, lack of
confidence, unwillingness to communicate, and
lack of proper incentives.
5. (d) Esteem needs
Explanation: According to Maslow's Need
hierarchy theory, esteem needs are crucial
after social needs. These needs are connected
to the demand for approval and respect from
others. Esteem needs may include autonomy,
status, recognition, affection from others, or
social standing.
13. (d) Informal communication
Explanation: Grapevine refers to informal
communication. This is because informal
communication, which doesn't always follow
the formal communication process, travels
throughout the organisation in all directions.
17. (d) Motivation can be either positive or
negative.
Explanation: Positive motivation involves
encouraging employees to perform better at
work and showing appreciation for a job well
done, such as through pay raises, promotions,
and recognition.
Negative motivation refers to forcing others
towards action by threats or punishment. For
instance, sending a memo, being demoted,
withholding raises, etc.
21. (c) Assertion (A) is true, but Reason (R) is false.
Explanation: Motivation is an internal feeling
through which employees get motivated. It is
not visible or touchable. Employees are driven
to act in a particular way by this internal
feeling. Motivation can be positive as well as
negative.
23. (b) Both Assertion (A) and Reason (R) are true,
but Reason (R) is not the correct explanation
of Assertion (A).
Explanation: Informal communication has
no fixed direction due to which detecting the
source of information is difficult.
29. The process of converting the sender's encoded
messages is known as decoding.
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ANSWER SHEET
32. The importance of directing function of
management is as follows:
(1) It helps to initiate action by people in
the organisation towards attainment of
organisational objectives.
(2) It facilitates introduction of needed
changes in the organisation.
34. Giving the staff incentive is necessary for
the current environment. The manager is
responsible for encouraging and motivating
the employees to give their best effort. He
needs to determine what the employees'
wants and requirements are. In other words, it
is necessary to identify and address the source
of the unwillingness to work. Different financial
incentives, including bonus and profit sharing,
as well as non-financial incentives, like work
enrichment and position, can be utilised to
motivate employees.
41. Three measures to overcome the
communication barriers are:
(1) Communicate according to the needs of
receiver: For effective communication it
is important that the message should be
adjusted according to the education and
understanding levels of the receiver.
(2) Be aware of languages tone and content
of message: The content of the message,
tone, language used, manner in which
the message is to be communicated
are the important aspects of effective
communication.
(3) Ensure proper feedback: In order to ensure
the success of communication, questions
may be asked regarding the message
conveyed. Thus, the communication
process may be improved by the feedback
received to ensure that the receiver has
understood the sender's ideas clearly.
47. A democratic leader will work with his team
members to create action plans and reach
decisions. He will encourage the employees
towards decision-making involvement.
This kind of leadership approach is more
prevalent today because leaders understand
that individuals work best when they have
established their own goals. Additionally, they
must accept one another's viewpoints and help
subordinates carry out their responsibilities
and achieve organisational goals. By using
collective forces, they can exert more control.
Features of Democratic Leadership
Directing 17
 (1) A democratic leader delegates authority (4) A democratic leader establishes objectives
in accordance with the capacity of the for job performance and enforces flexible
employee.
work standards.
(2) Every subordinate takes part in making
decisions. (5) A democratic leader prioritises outcomes
(3) The significance of human values is also over actions.
taken into account.
48.
The following points highlight the difference between a manager and a leader.

S. No. Basis of Difference Manager Leader

(1) Existence A manager can exists only in a A leader can exists in formal as
formal organisation. well as informal organisation.
(2) Objecive A manger focuses towards A leader focuses towards the
influencing the behavior of satisfaction of the individual and
employees and achievement of group goals of his follower.
goals of the organisation.
(3) Power and Authority A manager holds formal authority A leader does not command
and can exercise power and formal authority and can only
control to influence the behavior of influence the behaviour of the
the employees. followers through such means as
trust and faith.
(4) Inter-relationship A manager can be a leader as A leader may not be a manager.
well.
(5) Functional Spread The functions of a manager are The function of a leader are
widespread and include planning, limited to directing.
organising, staffing and directing.
51. (A) The communication barrier discussed (iv) Body language and gesture
above is badly expressed message. decoding: While speaking one may
(B) This kind of communication barrier falls in tend to move his/her body in a certain
the category of semantic barriers. manner. If there is not match between
what is said and what is expressed in
(C) Semantic barriers are concerned with
body movements, communication may
problem and obstructions in the process
be wrongly perceived by the receiver.
of encoding and decoding of message into
words or impression of few of these are 52.
Abraham Maslow’s Need hierarchy theory
discussed below: helps in the comprehension of the motivational
(i) Symbols with different meanings: phenomenon. According to Maslow, a person's
Sometimes a word may have several needs can be divided into five categories and
put in a hierarchical order. Knowing what
meanings. The communication will be
these needs will help a manager better
effective only if the receiver perceives
understand how are employees behave within
it in the same manner as intended by
the company and how to motivate them
communicator
appropriately.
(ii) Fauly translation: Many a times it has (1) Physiological Needs: The fundamental
been noted that if the translator is not needs for human survival include things like
proficient with both the languages, food, water, shelter, and sleep. These needs
mistakes may creep in causing different are at the bottom of the hierarchy.
meaning to the communication. (2) Safety or Security Needs: These needs
(iii) Technical jargon: It is usually seen that provide safety and protection against harm
specialists use technical jargon while to the body and the mind. These include
explaining something. If the persons physical and financial security. Some
with whom they are communicating example includes stable employment,
are not specialists in the concerned pension plans, and so on.
field, they may not be able to (3) Affiliation or Belonginess Needs: These
understand the actual meaning of needs are significant when physiological
many such words. and safety needs are met. Needs for love,

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 friendship, affection, and social contact are
among them. The desire for acceptance
and a sense of belonging is a major driver
(5) Self-actualisation Needs: An employee is
of behaviour in people.
(4) Esteem Needs: According to Maslow's
esteem needs are crucial after social needs.
These needs are connected to the demand
for approval and respect from others.
Esteem needs may include autonomy,
status, recognition, affection from others, or
social standing.
inspired and motivated by these needs to
grow and develop to the fullest. As a result,
they are given top priority in the hierarchy
of needs. These include development, self-
fulfillment, and goal-setting.

Directing 19

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SELF PRACTICE
3. (c) It helps in improving employee motivation.
Explanation: Controlling enables employees
in understanding what is expected of them
and the performance criteria that serve as
the basis for their evaluation. This encourages
them to work better.
8. (b) Measurement of actual performance
Explanation: Performance should be evaluated
objectively and consistently, which includes in-
person observations and sample checks. To
make comparisons easier, performance should
be assessed using the same criteria as set
standards.
12. (c) Comparison of actual with standard
performance
Explanation: An actual performance is
compared to the standard. This comparison
will show where the performance between the
actual and desired standards deviates. It may
be presumed that everything is in order if the
performance meets the criteria.
15. (d) co-ordination
Explanation: Controlling ensures that right
decisions are made and that diverse aspects
are kept in good condition. Each department is
managed in accordance with preset guidelines
that work well together.
20. (b) Both Assertion (A) and Reason (R) are true,
but Reason (R) is not the correct explanation
of Assertion (A)
Explanation: Planning and controlling are two
inseparable twins of management. Best plans
can go away without controlling.
22. (c) Assertion (A) is true, but Reason (R) is false.
Explanation: Controlling does not represent
the conclusion of the management function
cycle because it starts at the planning stage.
25. (B) (b) Measurement of actual performance
Explanation: Performance should be
evaluated objectively and consistently,
which includes in-person observations and
sample checks. Performance should be
evaluated using the same criteria as set
standards, as this will make comparisons
easier.
(D) (d) Analysing deviation
Explanation: To determine the causes of
deviations, the standard deviations are
evaluated and examined. This will help in
taking corrective measures.
20 Business Studies Class XII
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ANSWER SHEET
26. (A) (d) Controlling
Explanation: Controlling function
determines the extent to which actual
performance deviates from expectations,
analyse the reasons behind these
deviations, and make an effort to take
corrective action in light of these findings.
(C) (b) Measurement of Actual Performance
Explanation: Performance should be
evaluated objectively and consistently,
which includes in-person observations
and sample checks. To make comparisons
easier, performance should be assessed
using the same criteria as set standards.
29. Controlling is a backward looking process
because it acts as a post-mortem of past
operations to identify deviations from
conventional plans.
32. Comparison of actual performance with
standards and taking corrective action are
two steps in the process of control that are
concerned with compelling events to conform
to the plan.
40. (A) Accomplishing Organisational goals: It
analyses organisational goals progress
and identifies deviations, if any. Activities
might not go as planned in the absence
of a control system. We may, therefore
conclude that it directs the organisation
and keeps it on the right path so that it can
accomplish its goals.
(B) Judging Accuracy of Standards: A good
control system enables the management
to verify whether the standards set are
accurate or not. It also helps management
to carefully monitor changes occurring in
the organisational environment in order to
determine if the standards established are
correct or not.
49. Following are some reasons why Rajeev and
Sanjeev are both correct in their statements:
(1) Rajeev considers planning a forward-
looking activity because it involves making
plans for the future.
(2) Sanjeev may consider planning as a
function that looks backward because it
can be made better with the use of crucial
data that controlling provides in terms of
results attained.
 (3) Rajeev considers controlling as a backward-
looking function since it acts as a post-
mortem on previous actions to identify any
deviations.
(4) Sanjeev considers controlling as a forward-
looking role because it aids in enhancing
performance in the future by offering
instructions for remedial action so that
deviations don't recur in the furure.
50. (A) Controlling
(B) The steps in the process of function of
management discussed in the above
55. (A) Taking corrective action.
paragraph are:
(1) Setting Performance Standards:
“Recently the company had conducted
the 'Time' and 'Motion' study and
concluded that on an average a worker
can assemble ten air-conditioners in a
day. The target volume of the company
in a day is assembling 1,000 units of
air-conditioners.”
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(2) Measurement of actual performance:
“Even then the assembling of air-
conditioners per day is 800 units only.”
(3) Comparing actual performance with
standards: To find out the reason,
the company compared the actual
performance of each worker.”
(4) Analysing Deviations: “observed
through CCTV that some of the workers
were busy gossiping.
(B) Analysing deviations (Critical point control)
(C) Comparing actual performance with the
standard performance
(D) Analysing deviations (Management by
exception)
(E) Setting performance standards
(F) Measurement of actual performance
Controlling 21

SELF PRACTICE
4. (a) Make the debt relatively cheaper
Explanation: When there is an increase in
the tax on corporate profit, the debt becomes
relatively cheaper. The cost of the debt drops
significantly when the tax on corporate profits is
raised. This is because tax liability is determined
by subtracting interest due on debts from
total income. So, as tax value rises, the debt is
comparatively less expensive.
7. (d) Financing decision
Explanation: The amount of funds to be raised
from various long-term sources is the subject
of this decision. Identification of various readily
accessible sources is required. Identification of
funding sources is another decision that must
be made.
12. (a) higher current ratio, higher risk, and higher
profits
Explanation: The amount of current assets
that exceed current liabilities is referred to as
a company's working capital. A company's
current ratio (defined as current assets over
current liabilities), risk, and profitability will all
be higher if it has a higher working capital.
15. (a) Long-term investment decision
Explanation: It refers to long-term investment
choices like buying new land, machinery, or fixed
assets. These decisions are sometimes referred
to as capital budgeting decisions. It influences
a company's long-term earning potential and
profitability as well as having long-term effects
on the enterprise.
19. (b) Financial planning
Explanation: Financial Planning includes
establishing an organisation's financial
blueprint. It is the process of evaluating a
business's funding needs and identifying
potential sources from which it might be raised.
The objective of financial planning is to make
sure that there are adequate finances available
when they are needed.
24. (d) Assertion (A) is false, but Reason (R) is true.
Explanation: A company does not have a strict
dividend policy while having easy access to the
capital market.
26. (d) Assertion (A) is false, but Reason (R) is true.
Explanation: Higher lead time needs a higher
amount of working capital requirement. The
amount of working capital needs lower when
the raw material is available easily.
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ANSWER SHEET
27. (B) (c) higher degree of financial risk
Explanation: A high debt-to-equity
ratio indicates that a business has been
aggressive in using debt to finance its
expansion, which is frequently correlated
with high risk. A company may produce
more earnings if significant amounts of
debt are used to support growth.
(D) (d) trading on Equity
Explanation: Trading on equity is the
process of investing in debt at a profit that
exceeds the cost of the loan's interest in
order to increase the profits for equity
shareholders. Trading on equity is another
term for financial leverage.
28. (B) (c) investment decision
Explanation: A business must choose
where to invest the funds in order to get the
best results. These decisions are referred
to as investment decisions and fall into the
categories of long-term and short-term
investments.
(D) (b) cost
Explanation: The price of raising funds from
various sources varies. A skilled financial
manager chooses the least expensive
source of funding.
31. Technological upgardation.
37. A high debt service coverage ratio indicates
that a company will be better able to cover its
interest and debt repayment responsibilities.
43. Indian Logistics will not need much working
capital because it owns its warehouses and
does not have to pay the rent associated with
renting warehousing facilities. This favourable
position may allow for the reduction of a few
additional expenses as well.
48. Shyam should take into account the following
factors while taking decisions:
(1) Nature of Business: It is advisable that
Shyam starts a trading concern and
engages in buying handicrafts from the
craftsmen and selling them directly to the
prospective buyers. He should not plan to
set up a manufacturing unit as he wants to
make a low investment in fixed capital.
(2) Scale of Operations: It is advisable that
initially Shyam carries out his business on
a small scale.
 (3) Financing Alternatives: It is advisable that
Shyam may opt for procuring fixed assets
on lease instead of purchasing them as
he wishes to make a low investment in
fixed capital. Moreover in a development
financial market leasing facilities are easily
available.
58. (A) Two financial decisions being discussed
are:
(i) Investment Decisions
(ii) Financing Decisions
(B) (i) Factors affecting investment decisions
are:
(1) Cash Flow of the Project: A
company expects regular and
reasonable cash inflow from
an investment when it makes a
significant financial investment in
a particular project. Analysis of
operating cash flow is done before
choosing the desired project.
(2) Rate of Return: Each project is
chosen after considering the level
of risk and potential profits of
various ventures.
(ii) Factors affecting financing decision are:
(1) Fixed Operating Cost: A company
should avoid borrowing money
if its fixed operating costs are
significant. This is because the firm
may find itself in an unfavourable
position and the burden of interest
payments will only grow.
(2) Control Considerations: Increased
equity issuance could reduce
shareholders' influence over the
company. As a result, a corporation
wrong of a takeover offer could
favour debt over equity.
64. The factors affecting the decision that
determines the amount of profit earned to be
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distributed and to be retained in the business
are as follows:
(1) Amount of Earnings: As dividends are paid
from profits, a company's earnings are a
key consideration in choosing how much
dividend to pay or whether to pay dividend
or not. Businesses with high and consistent
earnings could declare high dividend.
(2) Stability of Earnings: A business having
stable earnings is in a better position to
declare higher dividends, other things
remaining the same. In contrary, if a
company's earnings are unstable, they will
likely to pay smaller dividends.
(3) Stability of Dividends: Businesses often
keep to a stable dividend policy. In the
event of a modest or temporary increase
in earnings, the dividend per share remains
unchanged.
(4) Growth Opportunities: If the company has
strong growth potential in the near future,
it will likely hold onto its earnings and pay
little to no dividends.
(5) Cash Flow Position: Since dividend
payments require cash outflow, dividend
declaration must be made with enough
cash in hand.
(6) Shareholder's preference: While deciding
on a dividend, shareholder's preference is
also taken into consideration. The company
may declare a dividend if the shareholders
demand one.
(7) Taxation Policy: A firm must pay tax on
any dividends it declares. If dividend taxes
are higher, businesses will choose to pay
out fewer dividends; whereas, if tax rates
are lower, businesses can declare more
dividends.
(8) Stock Market Reaction: A dividend increase
is excellent news for investors, and stock
prices rise as a result. (Any six)
Financial Management 23

SELF PRACTICE
4. (a) Regulatory function
Explanation: Registration of brokers or sub
brokers is a regulatory function of SEBI.
7. (b) Unique Order Code
[CBSE Marking Scheme SQP 2022]
Explanation: Each transaction on the stock
exchange is assigned a Unique Order Code
number, which the broker informs his client
and prints on the contract note once the order
has been executed.
13. (c) Beneficial owner
Explanation: Mr. Yen is the registered owner
of the securities in this case. But because Mr.
Sen purchased the securities from Mr. Yen
and deposited them with the depository, he is
the true owner, also known as the beneficial
owner, of those shares.
15. (c) Both the statements are correct
Explanation: A money market is a marketplace
for short-term funds that deal in financial
assets with maturities of up to one year. It is a
market where highly liquid, low-risk, unsecured,
and short-term debt instruments are issued
and actively traded every day online and over
the phone.
16. (b) Offer for sale
Explanation: Under this method, securities are
offered for sale instead of being issued directly
to the general public through intermediaries
like issuing houses or stock brokers.
22. (b) Both Assertion (A) and Reason (R) are true,
but Reason (R) is not the correct explanation
of Assertion (A).
Explanation: Capital market securities are
subject to market risk. Companies may fail to
perform as per projects and promoters may
defraud investors.
25. (A) (d) Offer through prospectus
Explanation: Through the issuance of
prospectuses, the public is invited to
subscribe. An advertisement in newspapers
and magazines is used to directly seek
investors in a prospectus.
(D) (a) ` 8000 crores
Explanation: ` 8000 crores money was
raised by the company through the people
system of the stock exchange by agreeing
with the exchange e-IPOS.
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ANSWER SHEET
26. (B) (b) Offer through the prospectus
Explanation: The most widely used method
for public companies to raise money in the
primary market is offer through prospectus.
This involves distributing prospectuses
to the general public in order to invite
subscriptions.
29. Protective function has been performed by SEBI
in the given case and the type of protective
function is prohibition of fraudulent and unfair
trade practices.
32. The two ‘Developmental Functions’ of Securities
and Exchange Board of India are as follows:
(1) Training of intermediaries of the securities
market.
(2) Conducting research and publishing
information useful to all market
participants.
(3) Undertaking measures to develop the
capital markets by adapting a flexible
approach.
36. Identity proof Adhaar number, PAN number
and proof of address are two details that need
to be provided by the investor to the broker
while filling out a client registration form.
39. Offer for Sale: This method involves offering
securities for sale through middlemen like
issuing houses or stock brokers rather than
directly issuing them to the general public.
In this case, a company sells securities to
brokers at an agreed price in order to resell the
securities to the general investing public.
e-IPOs: A company must enter into a
contract with the stock exchange if it plans to
raise capital from the public using the stock
exchange's online system. This is called an
Initial Public Offer (IPO). For the purpose of
accepting applications and placing orders with
the company, SEBI registered brokers must be
recruited.
43. Three functions performed by Financial Market
are:
(1) Mobilisation of Savings and Channelising
them into the Most Productive Uses:
A financial market makes it easier for
investors to transfer savings from savers.
It provides investors with a variety of
investment options, allowing savers to put
their extra money to the best possible use.
 (2) Facilitating Price Discovery: The demand
for money is represented by business
firms, while the supply is represented
by households. The interaction between
supply and demand influences the price
of a financial asset that is traded in a
particular market.
(3) Providing Liquidity to Financial Assets:
Financial markets makes buying and selling
financial assets easy and simple. By doing
this, they give financial assets liquidity,
enabling them to be quickly changed into
cash at any time. Asset owners have easy
access to the financial market's selling
mechanism for their financial assets.
(2) Commercial Paper:
49. Four functions of ‘financial market’ are:
(1) Mobilisation of Savings and Channelising
them into the Most Productive Uses:
A financial market makes it easier for
investors to transfer savings from savers.
It provides investors with a variety of
investment options, allowing savers to put
their extra money to the best possible use.
(2) Facilitating Price Discovery: The demand
for money is represented by business
firms, while the supply is represented
by households. The interaction between
supply and demand influences the price
of a financial asset that is traded in a
particular market.
(3) Providing Liquidity to Financial Assets:
Financial markets make buying and
selling of financial assets easy and simple.
By doing this, they give financial assets
liquidity, enabling them to be quickly
changed into cash at any time. Asset
owners have easy access to the financial
(3) Call Money:
market's selling mechanism for their
financial assets.
(4) Reducing the Cost of Transactions:
Financial markets offer useful information
of the securities that are traded in the
market. It allows both buyers and sellers
of a financial asset to avoid wasting
time, money, and effort trying to find one
another. So, the financial market serves as
a common platform for buyers and sellers
for interacting and fulfilling their specific
demands.
55. (1) Treasury Bill:
(i) A treasury bill is essentially a short-
term borrowing instrument for the
Government of India with a maturity of
less than one year.
(ii) They are issued by Reserve Bank
of India on behalf of the central
government to help it meet its short-
term funding needs.
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(iii) A promissory note is used to issue
treasury bills. They have a low risk of
default, a guaranteed yield, and strong
liquidity. The price at which they are
issued is less than their face value, and
they are returned at par. For this reason
they are also called zero coupon bonds.
(iv)
The interest due on treasury bills is
calculated as the difference between
the price at which they are issued and
their redeeming value, or discount.
(v) Treasury bills can be issued for a
minimum of ` 25,000 and in multiples
thereof.
(i) Commercial paper is a short-term,
unsecured promissory note, negotiable
and transferable and endorsement by
delivery with a fixed maturity period.
(ii) Large and creditworthy companies
issue it to raise short-term capital at
interest rates below the market rates.
It usually matures between 15 days to
one year.
(iii) For significant businesses that are
generally seen as having solid financial
standing, the issuance of commercial
paper offers an alternative to bank
borrowing. It is bought at a loss and
sold back for face value.
(iv) Commercial paper was initially
created to offer short-term funding for
seasonal and working capital needs.
For instance, businesses employ this
instrument for bridge financing
(i) Commercial banks use call money as
a means of borrowing money from
one another to keep the constant Cash
Reserve Ratio (CRR) constant.
(ii) In accordance with RBI norms, banks
are required to hold a minimum
amount of cash in hand. It is a demand-
repayable short-term loan. Call money
has a maturity period of one day to
fifteen days.
(iii) The term "call rate" refers to the
interest charged on call money. Call
rate and returns on other short-
term money market instruments are
inversely correlated.
(iv) Call money demand decreases when
call rate rises, while demand for other
short-term instruments rises as they
become more affordable relative to call
money.
Financial Market 25
 (4) Certificate of Deposit:
(i) Commercial banks and development
financial institutions provide
Certificates of Deposit (CD), which
are unsecured, negotiable, short-term
instruments that are issued in bearer
form.
(ii) At times of low liquidity, when bank
deposit growth is slow but credit
demand is high, they may be granted
to people, businesses, and companies.
They help in quickly mobilising a large
sum of money.

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SELF PRACTICE
4. (d) Marketing planning
Explanation: The process of organising
and defining the marketing objectives of an
organisation is called marketing planning. It
involves the strategies and tactics to achieve
the objectives of the organisation.
7. (d) A-(IV), B-(I), C-(II), D-(III)
Explanation: The product concept emphasises
on the quality of the product. The focus
is on continuous improvement in quality,
incorporating new features, etc. The production
concept emphasises on production and
distribution efficiency of the firms. The selling
concept emphasises convincing and motivating
the consumers to buy the product and societal
marketing concept focuses on long-term issues
through social welfare.
12. (b) ABC Ltd. is targeting to reduce its cost of
production.
Explanation: Marketing not only focuses on
the selling of products but is also focused on
the reduction of cost of production which is
ultimately beneficial for customers.
18. (c) Both the statements are correct
Explanation: Product is a wider term that
includes both the goods and the services.
Goods are tangible and services are intangible.
20. (c) Public relations
Explanation: Public relations involves sharing
information with unbiased media outlets with
the expectation of receiving positive publicity.
23. (b) Product mix
Explanation: The term "product mix" refers
to crucial decisions made concerning product
features such as design, packaging, and
assortment, or the quantity of goods a given
producer gives to the market.
30. (b) Both Assertion (A) and Reason (R) are true,
but Reason (R) is not the correct explanation
of Assertion (A).
Explanation: Esatablished brands charge
higher prices for their products as consumers
trust their products. Most of the companies
would like to introduce new products with the
same brand name as consumers trust their
brands and new products are easily accepted
by the consumers.
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ANSWER SHEET
32.
(c) Assertion (A) is true, but Reason (R) is false.
Explanation: A good design can improve the
performance of a product. But grouping the
products as per quality and size is grading
and not the standardisation. Standardisation
refers to producing goods of pre-determined
specification to achieve uniformity and
consistency in the output.
35. (B) (a) Marketing methods used
Explanation: Other aspects of marketing,
such as the distribution system, efforts of
sales promotion, kind of packaging, product
differentiation, credit availability, etc., also
have an impact on the price-fixing process.
36. (B) (c) Price mix
Explanation: Pricing is the amount of
money that a customer spends to purchase
a product. Because products need a price
tag or other means of establishing the
price before being role in the market.
Pricing plays a significant role in marketing.
(C) (a) Promotion mix
Explanation: Promotion is a crucial
component of the marketing mix that
allows marketers to encourage the
interchange of products and services
in the market by utilising a variety of
communication channels.
39. Helps in the promotion of products.
44. Customer Support Services.
49. Marketing philosophy involved in this case
is marketing concept. Finding wants and
filling them is the main goal of the marketing
concept. To best satisfy their requirements and
wants, the marketer therefore first determines
the preferences and demands of its target
market before producing products in line with
those needs and wants. It seeks to maximise
profits while ensuring customer satisfaction.
52. (A) Societal marketing philosophy
(B) The advantages of branding to the
marketers highlighted in the given case are:
(1) A business organisation can distinguish
its product from that of its rivals by
branding. This makes it possible to
have some control over the market.
(2) It makes it possible to advertise the
product.
(3) It enables the business to set pricing
that is distinct from what its rivals do.
(Any two)
Marketing 27
 55. The two factors affecting the price of a product
are as follows:
(1) Product cost: The cost of producing a good
or service sets the minimum level of price
to be set for a product. All the firms strive
to cover their costs at least in the long run.
In addition, they aim to earn a margin of
profit above it.
(2) Utility and demand of the product: Utility
or satisfaction derived by a consumer from
a product and the intensity of its demand
sets the upper price limit for a product. The
buyer is ready to pay upto a point where
utility from the product is at atleast equal
to sacrifice made in terms of money paid
for it. Similarly, if the demand is elastic, a
small change in the price results in a large
change in the quantity demanded; and if
the demand of a product is inelastic, the
firm is in a better position to set the price.
61. The set of marketing tools that can be
constantly shaped and reshaped by marketing
managers are:
(1) Product mix: It refers to significant
decisions on the product, such as the
product's quality, design, packaging, etc. It
includes branding, packaging, and labelling.
(2) Place/Physical distribution mix: The
movement of goods from the place
of production to the place of final
consumption is referred to as place/
physical distribution. It is focused on
delivering goods and services in the proper
location, in the appropriate quantity, and
at the appropriate time.
(3) Promotion mix: Promotion is a crucial
component of the marketing mix that
allows marketers to encourage the
interchange of products and services
in the market by utilising a variety of
communication channels.
(4) Price mix: Pricing plays a significant part
in marketing. It has a significant role in
shaping a product's demand. Marketers
must appropriately choose a price
by thoroughly analysing a variety of
connected elements, including the target
customers, pricing strategies of rivals, and
company objectives.

65.
Basis of Difference Advertising Personal Selling
(1) Objective The basis objective of advertising The basic objective of personal
is to create interest of the selling is to create awareness
customers towards the product. about the product and induce
decision making.
(2) Personal v/s Impersonal It is an impersonal form of It is a personal form of
communication where the seller communication where the
communicates with customers seller directly interacts with the
through various medium such as potential customers.
television, newspapers, etc.
(3) Reach Advertising has a broader reach as It has a narrower reach as only
the advertisement reaches a large a few people can be contacted
number people simultaneously. directly.
(4) Flexibility It is inflexible as advertisements It is flexible as the seller can
are standardised and cannot be adjust the message as per
adjusted as per the requirements the requirements of different
of different customers. customers.
(5) Target Group It is more suitable where It is more suitable when
marketing is to be done to marketing is to be done for a few
large number of consumers. For selected consumers. For example,
example, advertising is suitable if marketing is to be done for
if marketing is to be done for intermediaries and retailers,
ultimate customers. personal selling is more useful.
(6) Time Involved Advertising reaches a large As through selling only a few
number of people simultaneously. people can be contacted. It takes
Thus, it can cover the entire a lot of time and effort to cover
market in a short period of time. the entire market.

28 Business Studies Class XII

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 (7) Customer Feedback Through advertising, feedbacks As the seller directly contacts
and reactions of the customers the customers he is able to get
cannot be judged.
(8) Medium of Communi- It involves communication through It involves personal communi-
cation mass media such as television, cation through sales persons.
newspapers, radio, etc.
68.
The process of creating, designing, and
producing a product's container or wrapper
is known as packaging. It is one of the most
crucial marketing functions.
Functions of Packaging:
(1) Product protection: The content of product
is protected against spoilage, breakage,
leakage, damage, etc. due to proper
packaging. This protection facility ates its
storage, distribution and transportation.
(2) Product identification: Packaging become
a mean of product differentiation and
identification for some brands.
(3) Product promotion: Packaging has
become a way of promoting the product.
With rising standard of health and hygiene,
people are asking for packed products
instead of loose ones. Further, innovative
packs and increasing the scope of
marketing of product.
69.
Functions of Marketing:
(1) Gathering and Analysing Market
Information: This is the initial step of
marketing, through which the important
information to identify the needs and wants
of the customers is collected for successful
marketing of any good or service. A
detailed analysis of available opportunities,
threats, strengths and weaknesses is made
by the organisation and what opportunity
can best be pursued is identified. Gathering
and analysing information helps to identify
the customer's needs and preferences. It
forms the basis for the product designing
and development.
(2) Marketing Planning: In this function of
marketing a detailed marketing plan is
framed so that marketing objectives can
be achieved. This plan can be to introduce a
new product, promote an existing product,
capture or enhance the existing market
share. It consists of decisions regarding
the type of product, market, means of
production and sale.
(3) Product Designing and Development:
An attractive product design is the key to
effective marketing. Therefore, the product
should be designed in such a way that it
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feedback from the customers and
judge their reactions.
(Any six)
not only improves its performance but also
gives the firm a competitive edge over its
competitors.
(4) Standardisation and Grading:
Standardisation refers to the process of
producing the goods and services with
predetermined specifications, which helps
in achieving uniformity and consistency in
output. It reduces the need for inspection,
testing and evaluation of the products.
Grading is the process of classification
of the products into different groups, on
the basis of some parameters like quality,
quantity, size, etc. It is very useful for the
agricultural products.
(5) Packaging and Labelling: Packaging
refers to designing and developing the
package for the products. Labelling refers
to designing and developing the label to
be put on the package. The label may vary
from a simple tag to complex graphics.
Packaging and labelling have become
so important in modern day marketing
that these are considered as the pillars
of marketing. Packaging is important not
only for protection of the products but also
serves as a promotional tool.
(6) Branding: Brand name helps in creating
product differentiation, i.e., providing basis
for distinguishing the product of a firm
with that of the competitor, which in turn,
helps in building customer’s loyality and
in promoting its sale.
(7) Customer Support Services: To maximise
customer satisfaction, businesses should
develop customer support services
such as after sales services, handling
customer complaints and adjustments,
providing credit services, maintenance
services, technical services and consumer
information helpline. These services
help in bringing repeated sales from the
customers and help to develop brand
loyalty for a product.
(8) Pricing of Products: Pricing is the
process of fixing the price of a product
or service. Prices are generally fixed by
manufacturers after carefully looking into
three factors, i.e., the cost of production,
Marketing 29
 the demand for the product and the
nature of competition.
(9) Promotion: Promotion of products and
services involves informing the customers
about the firm's product, its features, etc.,
and persuading them to purchase these
products. The four important methods of
promotion include advertising, personal
selling, publicity and sales promotion.
(10) Physical Distribution: It is an important
function of marketing to move a product
from the place of its production to place
it is required for consumption. The two
major decisions taken under this function
are decision regarding the channels of
distribution or marketing intermediaries
like wholesalers, retailers, etc. to be used
and physical movement of the product
from the place of its production to the
place it is required by the consumer for
use. Various important decisions related
to managing inventory, storage and
warehousing and transportation of goods
from one place to another are taken
under this function.
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(11) Transportation: It involves physical
movement of goods from one place to
another. As the users of products are wide
spread and geographically separated
from the place where these are produced,
it is necessary to move them to the place
where they are needed for consumption
or use. For example, tea produced in
Assam has to be transported not only
within the state but to other far off places
like Tamil Nadu, Punjab, Jammu and
Kashmir, Haryana, Rajasthan, etc. where it
is consumed.
(12) Storage or Warehousing: Usually there
is a time gap between the production
or procurement of goods and their sale
or use. It may be because of irregular
demand for the products. For example,
woollen garments or raincoats may have
irregular supply because of seasonal
production. So, in order to maintain
smooth flow of products in the market,
there is a need for proper storage of the
products. (Any six)

SELF PRACTICE
5. (d) Nowhere
Explanation: Sheela cannot submit a
complaint under the Consumer Protection Act,
of 2019 because, in accordance with the law,
she is not a consumer. A consumer is a person
who exchanges money for the use of goods or
services. Sheela did not provide any payment
in exchange for the services she received.
11. (c) Right to be heard
Explanation: Whenever a consumer is
dissatisfied with a product or service, they
have the right to complain and be heard. This is
the reason that many progressive companies
have established their own consumer service
and grievance cell.
14. (c) 30 days
Explanation: If the aggrieved party is
unsatisfied by the order passed by the state
commission, they can file an appeal before the
national commission within 30 days from the
date of order of state commission.
19. (d) Assertion (A) is false, but Reason (R) is true
Explanation: The scope of the Consumer
Protection Act, 2019 is wide and it is applicable
for all types of undertakings small as well as
large.
21. (A) (b) Right to Safety
Explanation: It is the right of consumers to
be protected from goods and services that
are harmful to their health and well-being.
Customers have a right to get high-quality
goods, and to ask the seller for quality
assurance.
(D) (a) Consumer Protection Act, 2019
Explanation: Piyali can seek protection
under Consumer Protection Act, 1986
which is now Consumer Protection Act,
2019.
22. (B) (b) Unorganised consumers
Explanation: In the case mentioned above,
"unorganised customers" is a crucial
component from the customer's point of
view. One of the colony's residents, Rishank,
decided to take the case to the consumer
court, but he felt alone in the matter
because other residents were divided and
did not support him.
(D) (b) Removal of defects from the goods
Explanation: If the consumer court is
satisfied about the genuinness of the
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ANSWER SHEET
complaint, it can issue order to remove the
defects from the goods to the aggrieved
party.
24. District Commission
29. While only cases that have been directly filed
in the National Commission and when the
value of the goods and services in question
along with the compensation claimed exceeds
` 10 crore are appealable before the Supreme
Court, he is not permitted to appeal to any
other higher body.
32. No, Pankaj cannot appeal against the District
Commission's decision because he neglected
to file the appeal with the State Commission
within 45 days of the issuance of order.
37. The consumer right 'right to be assured' is being
promoted by the company. Accordingly to this
right, the consumer has a right to choose from
a variety of products at competitive prices.
Also, the marketers should offer wide variety
of products to buyers.
40. Three other functions which may be performed
by this organisation in addition to those
mentioned are:
(1) Educating the general public about
consumer rights by organising training
programmes, seminars and workshops.
(2) Publishing periodicals and other
publications to impart knowledge about
consumer problems, legal reporting, reliefs
available and other matters of interest.
(3) Carrying out comparative testing
of consumer products in accredited
laboratories to test relative qualities of
competing brands and publishing the test
results for the benefit of consumers.
41. The rights of a consumer which Rita Sharma
was able to exercise with the help of the
voluntary organisation are:
(1) Right to be Heard: Whenever a consumer
is dissatisfied with a product or service, he
has the right to complain and be heard.
This is the reason that many progressive
companies have established their own
customer service and grievance cells to
assist customers in getting their complaints
resolved.
(2) Right to Seek Redressal: If the goods or
service does not meet the consumer's
expectations, he has the right to get
Consumer Protection 31
 compensation. A variety of reliefs are
offered to consumers under the Consumer
Protection Act, including replacement
of goods, removal of product defects,
payment of compensation for any loss or
harm incurred by the consumer, etc.
(3) Right to Consumer Education: To defend
their interests, consumers should be aware
of the various rights and protections offered
by the law. Each and every consumer has
the right to be well-informed about his
or her rights and to form organisations
and associations to raise awareness and
educate the public.
44.
(A) The two rights of consumer being violated
in the given case are rights to information
and right to safety.
(B) The two directions which the consumer
court can issue to the company after
being satisfied with the genuineness of the
complaints are as follows:
(1) Not to offer hazardous goods for sale.
(2) To pay a reasonable amount of
compensation for any loss or injury
suffered by the consumer due to the
negligence of the marketer.
46. A business must emphasise consumer
protection because of the following reasons:
(1) Long-term Interest of Business:
Enlightened firms know that it is in
their long-term interest to satisfy their
customers. Customers that are satisfied
not only make more purchases in the future
but also give positive reviews to potential
consumers, which helps grow a company's
customer base.
(2) Business uses Society’s Resources:
Resources that belong to society are used
by businesses. They, therefore, have a
responsibility to provide goods and services
that serve the public interest and do not
undermine public trust in them.
(3) Social Responsibility: A business has
social obligations to several parties, such
as its owners, employees, government, and
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consumers. Customers need to be able to
get high-quality products at reasonable
prices as a result.
(4) Moral Justification: Every business
has a moral obligation to act in the
interests of the consumers and to avoid
any exploitation and unfair commercial
practices, such as sale of defective or
dangerous goods, adulteration, misleading
or fraudulent advertising, hoardings, or
black marketing, etc.
(5) Government Intervention: Government
intervention and potential damage to the
company's reputation are both possible
if a business organisation engages in any
sort of exploitative trade practices. Hence,
protecting consumers is in the best interest
of the business as a whole. (Any four)
51. (A) Suman has fulfilled the following consumer
responsibilities in addition to the request for
a cash memo:
(1) She was aware of the various products
and services in the market and made a
wise decision.
(2) She purchased standardised goods
because standardisation ensures
quality.
(B) The two rights being discussed in the given
case:
(1) Right to Safety: A consumer has the
right to be protected from goods and
services that are harmful to his health
and well-being. He has the right to get
high-quality goods, and must ask the
seller for quality assurance. Quality
marks for industrial goods, food,
agriculture, and gold include ISI, FPO,
AGMARK, Hallmark, etc.,
(2) Right to be assured: A consumer is
free to select from a wide range of
goods at affordable costs. This implies
that marketers should provide a wide
range of products, each with a different
quality, brand, price, size, etc. so that
consumers can select what they want.