CBSE Class 12 Business Studies Question Paper 2025 Solved Code 66-1-3

1. HG Air Conditioner Pvt. Ltd. is lagging behind its scheduled production target by a month. Despite a high demand, the company is struggling to meet its production target. Even after taking measures like training of employees and assigning additional workers and equipment to the project, the targets could not be met. The Production Manager, now, decided to revise the standards.
Identify the step of the controlling process under which the Production Manager decided to revise the standards. [1 Mark]
(A) Setting performance standards
(B) Measurement of actual performance
(C) Analysing deviations
(D) Taking corrective action

Answer: (D) Taking corrective action

Teacher's Note:
a) When training and extra resources fail, revising the standards is itself a corrective action.
b) Do not choose "Setting performance standards" - that is the first step, done before work begins.

2. There are two statements, Assertion (A) and Reason (R) :
Assertion (A) : Coordination ensures unity of action.
Reason (R) : Coordination act as a binding force between departments and ensures that all action is aimed at achieving the goals of the organisation.
Choose the correct alternative from the alternatives given below : [1 Mark]
(A) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
(B) Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).
(C) Assertion (A) is correct, but Reason (R) is wrong.
(D) Assertion (A) is wrong, but Reason (R) is correct.

Answer: (A) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).

Teacher's Note:
a) Coordination is called the "binding force" because it links all departments to one common goal.
b) Unity of action is a result of this binding force, so R explains A.

3. There are two Statements, Assertion (A) and Reason (R).
Assertion (A) : Larger the lead time, larger is the quantity of material required to be stored and larger shall be the amount of working capital required.
Reason (R) : If the raw material do not have a record of un-interrupted availability, higher stock levels may be required.
Choose the correct alternative from the alternatives given below : [1 Mark]
(A) Assertion (A) is false and Reason (R) is true.
(B) Both Assertion (A) and Reason (R) are false.
(C) Assertion (A) is true and Reason (R) is false.
(D) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

Answer: (D) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

Teacher's Note:
a) Lead time and availability of raw material are both factors affecting working capital requirement.
b) Uncertain supply forces firms to keep more stock, which needs more working capital.

4. One of the responsibilities of an aware consumer is to buy only standardised goods as they provide quality assurance. Identify the quality certification mark to be seen by a consumer in the picture given below : [1 Mark]
(A) ISI Mark
(B) Agmark
(C) Hallmark
(D) FPO/FSSAI Mark

[Figure: Picture of an electric iron with its power cord and plug.]

Answer: (A) ISI Mark

Teacher's Note:
a) ISI mark is used for electrical and industrial goods like an electric iron.
b) Remember: Agmark for agricultural products, Hallmark for jewellery, FPO/FSSAI for food products.

For Visually Impaired Candidates (in lieu of Q. 4)

Madhu wants to buy Jewellery for her daughter's marriage. Which of the following quality certification mark should she look for while buying Jewellery : [1 Mark]
(A) FPO/FSSAI Mark
(B) ISI Mark
(C) Hallmark
(D) Eco-mark

Answer: (C) Hallmark

Teacher's Note:
a) Hallmark certifies the purity of gold and silver jewellery.
b) Eco-mark is for environment friendly products, not jewellery.

5. Shridhan wanted to purchase an electric car. He visited a retail showroom of a car company where these cars were displayed. The Marketing Manager of this showroom told Shridhan that the company offers credit facilities, maintenance services and many other services that help in bringing repeat sales and developing brand loyalty for their cars. The marketing function being discussed by the Marketing Manager in the above case is [1 Mark]
(A) Product Designing and Development
(B) Marketing Planning
(C) Customer Support Services
(D) Branding

Answer: (C) Customer Support Services

Teacher's Note:
a) Credit facilities, maintenance and after-sales services are customer support services.
b) The clue words are "repeat sales" and "brand loyalty", which are the aims of customer support.

6. Bimal Rai is working in Funny Bunny Ltd. The company manufactures games and toys for children. The basic task of Bimal Rai is to integrate diverse elements and coordinate the activities of different departments. He also analyses the business environment and its implications for the survival of the firm. The level of management at which Bimal Rai is working is : [1 Mark]
(A) Top level
(B) Middle level
(C) Operational level
(D) Both Middle and Operational level

Answer: (A) Top level

Teacher's Note:
a) Integrating diverse elements and analysing the business environment are functions of top management.
b) Top management is responsible for the survival and welfare of the organisation.

7. The risk related to inability to meet fixed financial charges like interest payment and other repayment obligations is known as : [1 Mark]
(A) Operating risk
(B) Financial risk
(C) Business risk
(D) None of the above

Answer: (B) Financial risk

Teacher's Note:
a) Financial risk rises as the proportion of debt in the capital structure increases.
b) Link the words "fixed financial charges" and "interest" directly to debt and financial risk.

8. Which of the following statement is correct with respect to 'Exchange Mechanism', a feature of Marketing ? [1 Mark]
(A) For an exchange it is necessary that there should be involvement of atleast three parties.
(B) The parties do not have the freedom to reject other parties offer.
(C) The acceptance of the offer for each party has to take place on the basis of compulsion.
(D) For an exchange it is necessary that each party should be capable of offering something of value to the other.

Answer: (D) For an exchange it is necessary that each party should be capable of offering something of value to the other.

Teacher's Note:
a) An exchange needs at least two parties, not three.
b) Each party is free to accept or reject the offer; there is no compulsion.

9. Sadhna, a graduate of a reputed institute of management, is a successful manager. She applies her acquired knowledge in a personalised and skillful manner in difficult situations at work. She uses her imagination and creativity in handling these situations.
The aspect of the nature of management highlighted in the above case is : [1 Mark]
(A) Management as an Art
(B) Management as a Science
(C) Management as a Profession
(D) Management both as a Science and as a Profession

Answer: (A) Management as an Art

Teacher's Note:
a) Personalised application of knowledge, creativity and imagination are features of an art.
b) Science is about systematic, universally valid principles, not personal skill.

10. Statement - I : Motivation is a complex process as individuals are heterogeneous in their expectations, perceptions and reactions.
Statement - II : Motivation can be either positive or negative.
Choose the correct option from the following : [1 Mark]
(A) Statement I is true and Statement II is false.
(B) Statement II is true and Statement I is false.
(C) Both Statement I and Statement II are true.
(D) Both Statement I and Statement II are false.

Answer: (C) Both Statement I and Statement II are true.

Teacher's Note:
a) Both statements are features of motivation given in the textbook.
b) Positive motivation uses rewards like promotion; negative motivation uses punishment or demotion.

11. Organising provides a clear description of jobs and related duties. This helps to avoid confusion and duplication.
The point of importance of organizing described above is : [1 Mark]
(A) Adaptation to change
(B) Effective administration
(C) Development of personnel
(D) Expansion and growth

Answer: (B) Effective administration

Teacher's Note:
a) Clear description of jobs and duties, avoiding confusion and duplication, points to effective administration.
b) Do not confuse it with "clarity in working relationships", which is about reporting lines.

12. Match the concepts of marketing in Column - I with their respective explanations in Column - II : [1 Mark]
Column - I | Column - II
(a) Product concept | (i) Its main focus is on quality, performance and feature of the product.
(b) Selling concept | (ii) Its main focus is on satisfaction of customer needs.
(c) Marketing concept | (iii) Its main focus is on aggressively persuading buyer to purchase the existing product.
(d) Societal concept | (iv) Its main focus is on satisfaction of customer needs and society's well-being.
Choose the correct options from the following :
(a) (b) (c) (d)
(A) (iv) (iii) (ii) (i)
(B) (iii) (ii) (i) (iv)
(C) (ii) (i) (iii) (iv)
(D) (i) (iii) (ii) (iv)

Answer: (D) (i) (iii) (ii) (iv)

Teacher's Note:
a) Product concept - quality; Selling concept - aggressive selling; Marketing concept - customer needs; Societal concept - customer needs plus social welfare.
b) Match the first and last pairs first; that quickly eliminates wrong options.

13. Statement - I : Regulation of takeover bids by companies is one of the Regulatory functions of Securities and Exchange Board of India.
Statement - II : Training of intermediaries of securities market is one of the Development functions of Securities and Exchange Board of India.
Choose the correct option from the following : [1 Mark]
(A) Statement I is correct and Statement II is incorrect.
(B) Statement II is correct and Statement I is incorrect.
(C) Both Statement I and Statement II are correct.
(D) Both Statement I and Statement II are incorrect.

Answer: (C) Both Statement I and Statement II are correct.

Teacher's Note:
a) Regulatory functions include registration of intermediaries and regulation of takeover bids.
b) Development functions include training of intermediaries and promoting research.

14. Which of the following statement is correct about personal selling : [1 Mark]
(A) It is an impersonal form of communication.
(B) Personal selling does not allow a sales person to develop personal relationships with the prospective customers.
(C) Personal selling involves oral presentation of message in the form of conversation with one or more prospective customers for the purpose of making a sale.
(D) Personal selling refers to short-term incentives, which are designed to encourage the buyers to make immediate purchase of a product or service.

Answer: (C) Personal selling involves oral presentation of message in the form of conversation with one or more prospective customers for the purpose of making a sale.

Teacher's Note:
a) Personal selling is a personal, face-to-face form of communication.
b) Option (D) describes sales promotion, not personal selling.

15. 'High inflation rates generally result in constraints on business enterprises as they increase the various costs of business such as the purchase of raw materials and payment of wages and salaries to employees etc.' The dimension of business environment referred to above is : [1 Mark]
(A) Political Environment
(B) Technological Environment
(C) Social Environment
(D) Economic Environment

Answer: (D) Economic Environment

Teacher's Note:
a) Inflation rate, interest rates and income levels are economic factors.
b) Look for money-related keywords to identify the economic environment.

16. In an informal organisation, authority arises out of ________. [1 Mark]
(A) Virtue of position in management
(B) Company's rules and policies
(C) Scalar chain
(D) Personal qualities

Answer: (D) Personal qualities

Teacher's Note:
a) In formal organisation authority comes from position; in informal organisation it comes from personal qualities.
b) Options (A), (B) and (C) all describe the formal organisation.

17. Alfa Graphics Ltd. was a reputed Indian company which had been in business for many years. The Chief Executive Officer of the company, Rohit Gupta always believed in understanding the business environment as well as responding and adapting to it.
When he found that a foreign multinational company, Leno Graphics, is entering the Indian market with new substitutes, he prepared to meet this threat by reducing cost and creating good quality and aesthetically appealing layouts, advertisements, logos etc. As a result, Alfa Graphics Ltd. was not only able to retain its own customers, but also started getting new projects.
The point of importance of Business Environment discussed above is : [1 Mark]
(A) Tapping useful resources.
(B) Identifying threats and early warning signals
(C) Improving performance
(D) Identifying opportunities and getting first mover advantage

Answer: (B) Identifying threats and early warning signals

Teacher's Note:
a) The clue is "prepared to meet this threat" when a foreign competitor entered the market.
b) Getting new projects is a result, but the point highlighted is identifying the threat early.

18. Which of the following is not a protective function of Securities and Exchange Board of India : [1 Mark]
(A) Prohibition of fraudulent and unfair trade practices.
(B) Controlling insider trading and imposing penalties for such practices.
(C) Promotion of fair practices and code of conduct in securities market.
(D) Undertaking measures to develop the capital markets by adapting a flexible approach.

Answer: (D) Undertaking measures to develop the capital markets by adapting a flexible approach.

Teacher's Note:
a) Developing the capital market with a flexible approach is a development function of SEBI.
b) Protective functions protect investors, for example by stopping insider trading and unfair practices.

19. Salim and Karim are good friends. They started a business of selling high quality seeds for growing organic vegetables. They are offering 200 varieties of vegetable seeds suitable for terrace gardens, balconies and backyards. Due to the growing trend towards healthy consumption habits, there is a huge demand for their seeds. The dimension of business environment being discussed above is : [1 Mark]
(A) Economic Environment
(B) Political Environment
(C) Social Environment
(D) Legal Environment

Answer: (C) Social Environment

Teacher's Note:
a) Health and fitness trends and consumption habits are social factors.
b) The key phrase is "growing trend towards healthy consumption habits".

20. 'The application of principles of management dependent upon the prevailing situation at a particular point of time and application of these principles has to be changed as per requirements.' This statement highlights which of the following features of principles of management : [1 Mark]
(A) General guidelines
(B) Flexible
(C) Contingent
(D) Mainly behavioural

Answer: (C) Contingent

Teacher's Note:
a) Contingent means the use of principles depends on the prevailing situation.
b) Flexible means principles can be modified by managers; do not confuse the two.

21. Madhwan was appointed as a Human Resource Manager in 'Health Grow Ltd.' six months back. As a Human Resource Manager, he has to perform many specialised activities and duties like analyzing jobs by collecting information about jobs and prepare job descriptions, training and development of employees etc.
State three other specialized activities that Madhwan must perform in addition to the above as a Human Resource Manager of Health Grow Ltd. [3 Marks]

Answer:
Three other specialised activities of Madhwan as Human Resource Manager are:
1. Recruitment, i.e., searching for qualified people for the jobs.
2. Developing compensation and incentive plans for employees.
3. Maintaining labour relations and union-management relations.

Teacher's Note:
a) Other accepted points are handling grievances, providing social security and welfare, and defending the company in law suits.
b) Do not repeat job analysis or training, as the question already mentions them.
c) Write exactly three points, one mark each.

22. (a) Give the meaning of 'Leadership'. State any two features of 'Leadership'. [3 Marks]

Answer:
Meaning: Leadership is the process of influencing the behaviour of people by making them strive voluntarily towards achievement of organisational goals.
Features of Leadership:
1. Leadership indicates the ability of an individual to influence others.
2. Leadership tries to bring change in the behaviour of others.

Teacher's Note:
a) The word "voluntarily" is the key word in the meaning of leadership.
b) Other accepted features: it shows interpersonal relations between leaders and followers, it is exercised to achieve common goals, and it is a continuous process.
c) Meaning carries 1 mark and each feature carries 1 mark.

OR

(b) State any three 'Personal Barriers' to communication. [3 Marks]

Answer:
1. Fear of challenge to authority: If a superior feels that a message may adversely affect his authority, he may withhold or suppress it.
2. Lack of confidence of superior on his subordinates: If the superior does not trust the competency of subordinates, he may not seek their advice or opinions.
3. Unwillingness to communicate: Subordinates may not communicate with their superior if they feel it may adversely affect their interests.

Teacher's Note:
a) The fourth accepted barrier is lack of proper incentives for good suggestions.
b) Give the heading and a one-line explanation; only headings earn half marks.
c) Do not mix personal barriers with semantic or psychological barriers.

23. P. Madhav is the production manager of 'Trendy Style Pvt. Ltd.', a firm manufacturing office furniture. His objective is to increase production by 20% in the next one year. But the Sales Manager, R. Shetty does not approve of the increase in production, till changes are brought about in the quality of wood, locks, handles etc. to incorporate latest trends. This kind of conflict brings to light an important concept of management that can help to link the activities of various departments.
(i) Identify and explain the concept discussed above.
(ii) State any two points of importance of the concept identified in (i) above. [3 Marks]

Answer:
(i) The concept is Coordination. Coordination is the process by which a manager synchronises the activities of different departments towards the achievement of a common goal.
(ii) Importance of coordination:
1. Growth in size: As the organisation grows and the number of people increases, coordination integrates their efforts and harmonises individual goals with organisational goals.
2. Functional differentiation: An organisation is divided into departments like production, sales and finance; coordination links the activities of these departments.

Teacher's Note:
a) Identification carries half a mark and meaning carries half a mark.
b) Another accepted point is specialisation, where coordination reconciles differences among specialists.
c) The conflict between production and sales managers is the clue to coordination.

24. (a) State any three points of importance of Financial Planning. [3 Marks]

Answer:
1. It helps in forecasting what may happen in future under different situations, so the firm can face them in a better way.
2. It helps in avoiding business shocks and surprises and prepares the company for the future.
3. It helps in coordinating various business functions, like sales and production, by providing clear policies and procedures.

Teacher's Note:
a) Other accepted points: reduces waste and duplication, links present with future, links investment and financing decisions, and makes evaluation of performance easier.
b) Only listing points without a line of explanation earns half marks each.

OR

(b) State any three factors that affect the fixed capital requirements of a company. [3 Marks]

Answer:
1. Nature of business: A trading concern needs lower investment in fixed assets than a manufacturing organisation.
2. Scale of operations: A large organisation operating at a higher scale needs higher investment in fixed assets than a small one.
3. Choice of technique: A capital-intensive organisation needs more investment in plant and machinery, while a labour-intensive one needs less.

Teacher's Note:
a) Other accepted factors: technology upgradation, growth prospects, diversification, financing alternatives (leasing) and level of collaboration.
b) Always show the direction of effect - whether the factor increases or reduces fixed capital.

25. (a) State any four benefits of staffing to the organisation. [4 Marks]

Answer:
1. It helps in discovering and obtaining competent personnel for various jobs.
2. It makes for higher performance by putting the right person on the right job.
3. It ensures continuous survival and growth of the enterprise through succession planning for managers.
4. It helps to ensure optimum utilisation of human resources by avoiding overmanning as well as shortage of personnel.

Teacher's Note:
a) Improving job satisfaction and morale of employees is another accepted benefit.
b) "Right person on the right job" is the key phrase examiners look for.
c) Write exactly four points for four marks.

OR

(b) State any four merits of internal sources of recruitment. [4 Marks]

Answer:
1. Employees are motivated to improve their performance, as a promotion at a higher level may lead to a chain of promotions at lower levels.
2. It simplifies the process of selection and placement, as existing employees can be evaluated more accurately and economically; it is also reliable as candidates are already known.
3. People recruited from within do not need induction training.
4. It helps in shifting the workforce from surplus departments to those where there is a shortage of staff.

Teacher's Note:
a) Another accepted merit is that filling jobs internally is cheaper than external recruitment.
b) Do not write demerits like "no fresh talent", which are often mixed up with merits.

26. (a) Explain the following external sources of recruitment :
(i) Employment Exchange
(ii) Web Publishing [4 Marks]

Answer:
(i) Employment Exchange:
1. It is a source of recruitment run by the Government for unskilled and skilled operative jobs.
2. It helps to match personnel demand and supply by acting as a link between job-seekers and employers.
(ii) Web Publishing:
1. It refers to using the Internet as a source of recruitment.
2. Certain websites are specially designed to give information about job seekers and job openings; they are visited both by prospective employees and by organisations searching for suitable people.

Teacher's Note:
a) Each source carries 2 marks, so give two clear points for each.
b) Mention "run by the Government" for employment exchange and "Internet/websites" for web publishing.

OR

(b) Explain the following non-financial incentives which motivate employees for higher performance :
(i) Employee Empowerment
(ii) Job Enrichment [4 Marks]

Answer:
(i) Employee Empowerment:
1. It means giving more autonomy and powers to subordinates.
2. Empowerment makes people feel that their jobs are important; this feeling helps them use their skills and talents better in job performance.
(ii) Job Enrichment:
1. It is concerned with designing jobs that include a greater variety of work content, require a higher level of knowledge and skill, give workers more autonomy and responsibility and provide opportunity for personal growth.
2. If jobs are enriched and made interesting, the job itself becomes a source of motivation to the individual.

Teacher's Note:
a) Keywords: "autonomy and powers" for empowerment and "variety, responsibility and growth" for job enrichment.
b) Both are non-financial incentives, so do not mention money in the explanation.

27. VK Ltd. is a fast moving consumer goods company. It has shareholders spread all over India. Most of its shareholders depend upon a regular income from their investment.
VK Ltd. has been earning consistent profits. The management of the company keeps in mind the preference of the shareholders regarding payment of dividend. Since its shareholders, in general, desire that atleast a certain amount is paid as dividend to them every year, the company declares dividend every year.
Atul, the Finance Manager of the company identified promising growth opportunities. He suggested to the Chief Executive Officer to retain the earnings to finance the required investments instead of declaring dividend every year. For this, the Chief Executive Officer decided to call a General Body Meeting of the shareholders.
(i) Identify two factors affecting dividend decision discussed above.
(ii) State two other factors that affect the dividend decision of a company. [4 Marks]

Answer:
(i) The two factors discussed are:
1. Shareholders' Preference - "The management of the company keeps in mind the preference of the shareholders regarding payment of dividend."
2. Growth Opportunities - "Atul, the Finance Manager of the company identified promising growth opportunities."
(ii) Two other factors:
1. Amount of Earnings: Dividends are paid out of current and past earnings, so higher earnings allow higher dividends.
2. Cash Flow Position: Enough cash must be available in the company for the declaration of dividend.

Teacher's Note:
a) Part (i) carries half a mark for each factor; part (ii) carries one and a half marks for each factor.
b) Other accepted factors: stability of earnings, stability of dividends, taxation policy, stock market reaction, access to capital market, legal and contractual constraints.
c) Do not repeat shareholders' preference or growth opportunities in part (ii).

28. 'Tech Work' an Artificial Intelligence (AI) startup started in 2024. It was earning good profits. It wanted to expand its business and for its research and development, it required Rs. 100 crores.
The Chief Executive Officer of 'Tech Work' consulted the Finance Manager who suggested that there is a market which facilitates transfer of investible funds from savers to entrepreneurs seeking to establish new enterprises or expand existing ones through the issue of securities.
The management of 'Tech Work' decided to raise funds from the investors by issuing equity shares @ Rs. 200 per share for the first time.
(i) Name the type of capital market through which 'Tech Work' decided to raise funds for its expansion.
(ii) State three features of the market identified in (i) above. [4 Marks]

Answer:
(i) Primary Market (New Issue Market).
(ii) Features of the Primary Market:
1. It deals with new securities, sold by new companies or issued afresh by existing companies to investors.
2. Securities are sold by the company directly to the investors (or through an intermediary).
3. Only buying of securities takes place in the primary market; securities cannot be sold there.

Teacher's Note:
a) "Issuing equity shares for the first time" is the clue for the primary market.
b) Other accepted features: it directly promotes capital formation, prices are decided by the company's management, and it has no fixed geographical location.
c) Do not describe features of the stock exchange (secondary market) here.

29. Abha had guests at home. She ordered vegetable, biryani from 'Biryani House'. The biryani came in a beautiful packaging and Abha opened it with lot of excitement. However, when she started serving biryani to the guests, she realised that it was non-vegetarian. She checked the package and noticed that there was no indication whether it was a vegetarian or non-vegetarian biryani. She contacted 'Biryani House' for the same. The manager at 'Biryani House' apologized and immediately sent a vegetarian biryani along with complimentary sweet dish.
Identify and explain the two consumer rights discussed in the above case. [4 Marks]

Answer:
(a) Right to be Informed:
1. The consumer has a right to have complete information about the product he intends to buy, such as ingredients, date of manufacture, price and quantity.
2. For this reason, the law in India requires manufacturers to give such information on the package and label of the product. Here, the package had no indication whether the biryani was vegetarian or non-vegetarian.
(b) Right to Seek Redressal:
1. The consumer has a right to get relief if the product or service falls short of his expectations.
2. The Consumer Protection Act provides relief such as replacement of the product, removal of defect, or compensation for loss or injury. Here, the manager sent a vegetarian biryani as a replacement.

Teacher's Note:
a) The marking scheme gives full credit if "Right to be Heard" is explained correctly instead of "Right to Seek Redressal".
b) Each right carries 2 marks: name it and give its explanation.

30. Ganesh Jain is the Marketing Manager at 'KL Foods Ltd'. He has a team of four employees working under him - Kavya, Ritesh, Pooja and Madhav. Kavya and Ritesh are temporary employees while Pooja and Madhav's job is permanent. All four of them have been working hard and consistently met all targets. Ganesh Jain wanted to reward them for their good performance. He understood that in all human beings, there exists a hierarchy of needs. So, he identified the need level of each of the employees to provide motivation to them.
Kavya and Ritesh were made permanent in the job with a good pension plan while Pooja and Madhav were given an autonomy status.
(i) Identify and state the need of employees recognized by Ganesh Jain in the above case.
(ii) State any two assumptions on which Maslow's Need Hierarchy Theory is based on. [4 Marks]

Answer:
(i) Needs recognised by Ganesh Jain:
1. Kavya and Ritesh - Safety and Security Needs: These needs provide security and protection from physical and emotional harm, such as job security and a pension plan.
2. Pooja and Madhav - Esteem Needs: These needs refer to self-respect, autonomy status, recognition and attention.
(ii) Assumptions of Maslow's Need Hierarchy Theory:
1. People's behaviour is based on their needs; satisfaction of such needs influences their behaviour.
2. People's needs are in a hierarchical order, starting from basic needs to higher level needs.

Teacher's Note:
a) Other accepted assumptions: a satisfied need can no longer motivate, and a person moves to the next level only when the lower need is satisfied.
b) Permanent job and pension point to safety needs; autonomy status points to esteem needs.
c) Name the need for each pair of employees separately to get full marks in part (i).

31. (a) Explain any three points of importance of management. [6 Marks]

Answer:
1. Management helps in achieving group goals: Management gives a common direction to the individual efforts of all members towards achieving the overall goals of the organisation.
2. Management increases efficiency: Managers reduce costs and increase productivity through better planning, organising, staffing, directing and controlling of activities.
3. Management creates a dynamic organisation: Organisations work in a changing environment; management helps people adapt to change so that the organisation keeps its competitive edge.

Teacher's Note:
a) Each point carries half a mark for the heading and one and a half marks for the explanation.
b) Other accepted points: management helps in achieving personal objectives and in the development of society.
c) Explain each point in two or three lines; headings alone will not get full marks.

OR

(b) Explain the following principles of general management :
(i) Division of work
(ii) Authority and Responsibility
(iii) Discipline [6 Marks]

Answer:
(i) Division of Work:
1. Work can be performed more efficiently if it is divided into specialised tasks; the aim is to produce more and better work for the same effort.
2. Each job is performed by a trained and competent specialist, which leads to specialisation and efficient, effective output.
(ii) Authority and Responsibility:
1. Managers need authority that is equal (commensurate) to their responsibility.
2. The organisation should build safeguards against abuse of managerial power, while the manager must have the authority needed to carry out his responsibility.
(iii) Discipline:
1. It is the obedience to organisational rules and employment agreement, which are necessary for the working of the organisation.
2. It requires good superiors at all levels, clear and fair agreements and judicious application of penalties.

Teacher's Note:
a) Each principle carries 2 marks; give two clear points for each.
b) For authority and responsibility, the key word is "commensurate" (equal balance).
c) These are Fayol's principles, so do not write Taylor's techniques here.

32. (a) Explain the following points of importance of 'Planning' function of management :
(i) Planning facilitates decision making.
(ii) Planning reduces overlapping and wasteful activities.
(iii) Planning establishes standards for controlling. [6 Marks]

Answer:
(i) Planning facilitates decision making:
1. Planning helps the manager to look into the future and choose from among various alternative courses of action.
2. The manager evaluates each alternative and selects the most viable one.
(ii) Planning reduces overlapping and wasteful activities:
1. Planning is the basis for coordinating the activities and efforts of different divisions, departments and individuals, which avoids confusion and misunderstanding.
2. Since planning ensures clarity in thought and action, work goes on smoothly without interruptions.
(iii) Planning establishes standards for controlling:
1. Planning provides the goals or standards against which actual performance is measured.
2. By comparing actual performance with the standards, managers know whether goals are achieved; any deviation can then be corrected.

Teacher's Note:
a) Each point carries 2 marks; explain each with two clear sentences.
b) Remember: planning is looking ahead and controlling is looking back, so planning is the basis of controlling.

OR

(b) Explain 'Procedure', 'Method' and 'Programme' as types of plans. [6 Marks]

Answer:
(i) Procedure:
1. It consists of routine steps on how to carry out activities and details the exact manner in which any work is to be performed.
2. It specifies the steps in a chronological order.
(ii) Method:
1. Method is the prescribed way or manner in which a task has to be performed.
2. It deals with a task comprising one step of a procedure and specifies how this step is to be performed.
(iii) Programme:
1. A programme is a detailed statement about a project which outlines the objectives, policies, procedures, rules, resources required and the budget to implement any course of action.
2. It includes the entire range of activities, with the minutest details such as procedures, rules and budgets worked out within the broad policy framework.

Teacher's Note:
a) The keyword for procedure is "chronological order" of steps.
b) Do not confuse procedure (sequence of steps) with method (how one step is done).
c) Each type of plan carries 2 marks.

33. DG Ltd., an E-plane car company has developed a revolutionary flying car for passenger mobility. This hybrid flying car can accommodate upto two persons and features innovative wing like doors for comfortable entry. The seats are designed for utmost comfort, crafted from high quality materials.
The distinguishing feature of this flying car is that its production will be in India and it will utilise biofuel alongside electricity, ensuring a sustainable mode of transportation.
DG Ltd. has obtained the first testing approval for its category. Priced at Rs. 2.5 crores, the company has to take decisions in respect of discounts to customers, credit terms etc., so that the customers perceive the price to be in line with the value of the product.
To make the flying car available to the target customers, DG Ltd. is in the process of selecting dealers or intermediaries to reach the customers, providing support to the intermediaries etc.
To communicate the availability, features, merits etc. of the product to the target customers and persuade them to buy the flying car. DG Ltd. decided to go in for digital marketing campaigns, press releases and demos conducted by influencers and journalists.
The above case describes the combination of elements used by DG Ltd. to prepare its market offering.
Quoting lines from the above para, identify and explain the elements. [6 Marks]

Answer:
The elements of the marketing mix used by DG Ltd. are:
1. Product (Product Mix): "This hybrid flying car can accommodate upto two persons and features innovative wing like doors for comfortable entry. The seats are designed for utmost comfort, crafted from high quality materials."
Product means goods, services or anything of value offered to the market for sale. It covers decisions on planning, designing and developing the right products for consumers, including branding, labelling and packaging.
2. Price (Price Mix): "Priced at Rs. 2.5 crores, the company has to take decisions in respect of discounts to customers, credit terms etc., so that the customers perceive the price to be in line with the value of the product."
Price is the amount of money customers pay to obtain the product. It involves decisions on the basic price, discounts to customers and traders, and credit terms.
3. Place (Physical Distribution): "To make the flying car available to the target customers, DG Ltd. is in the process of selecting dealers or intermediaries to reach the customers, providing support to the intermediaries etc."
Place includes activities that make the firm's products available to target customers, such as selecting channels of distribution, supporting intermediaries, managing inventory, warehousing and transportation.
4. Promotion (Promotion Mix): "To communicate the availability, features, merits etc. of the product to the target customers and persuade them to buy the flying car. DG Ltd. decided to go in for digital marketing campaigns, press releases and demos conducted by influencers and journalists."
Promotion means communicating the availability, features and merits of products to target customers and persuading them to buy, using tools like advertising, personal selling and sales promotion.

Teacher's Note:
a) Each element carries one and a half marks: half for naming, half for quoting and half for explaining.
b) For Product, the line "The distinguishing feature of this flying car is that its production will be in India and it will utilise biofuel alongside electricity..." is also accepted as the quote.
c) Quote the exact lines from the case; a quote without the element's name will lose marks.

34. 'Royal Glaze Ltd.' continues to maintain its position as one of the largest consumer goods companies in the world. Its organisational structure is designed to facilitate the achievement of its objectives in alignment with its vision statement. The company maintains two distinct product divisions in its organisational structure - 'Foods' and 'Home Care'.
Looking ahead, the company is focusing on embracing changes so that it can continue to be the market leader. As part of its expansion plans, it is planning to venture into the electronics segment in the near future.
(i) Identify the organisational structure of 'Royal Glaze Ltd'.
(ii) Draw the organisational structure chart of 'Royal Glaze Ltd.' considering its future plans to enter into Electronics segment.
(iii) State any three advantages of the type of organisational structure drawn in (ii) above. [6 Marks]

Answer:
(i) Divisional Structure.
(ii) Organisational chart (described in words): At the top is the Managing Director. Below the Managing Director are three product divisions - Foods, Home Care and Electronics. Each division has its own functional departments under it, such as Production, Marketing, Finance and Human Resources.
(iii) Advantages of divisional structure:
1. Product specialisation: It helps in the development of varied skills in a divisional head, which prepares him for higher positions.
2. Fixation of responsibility: Divisional heads are accountable for profits, so responsibility for poor performance of a division can be easily fixed.
3. Flexibility and initiative: Each division works as an autonomous unit, which leads to faster decision making.

Teacher's Note:
a) Marks split: 1 mark for identification, 2 marks for the chart and 3 marks for three advantages.
b) The chart must show the new Electronics division alongside Foods and Home Care, each with its functional departments.
c) Another accepted advantage is that it facilitates expansion and growth, as new divisions can be added easily.

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