-Strictly Confidential: (For Internal and Restricted Use Only)

Senior School Certificate Examination

March -----2023
Marking Scheme---Business Studies 66/5/3
General Instructions:
1 You are aware that evaluation is the most important process in the actual and correct
assessment of the candidates. A small mistake in evaluation may lead to serious
problems which may affect the future of the candidates, education system and
teaching profession. To avoid mistakes, it is requested that before starting evaluation,
you must read and understand the spot evaluation guidelines carefully.
2 “Evaluation policy is a confidential policy as it is related to the confidentiality of
the examinations conducted, Evaluation done and several other aspects. Its’
leakage to public in any manner could lead to derailment of the examination
system and affect the life and future of millions of candidates. Sharing this
policy/document to anyone, publishing in any magazine and printing in News
Paper/Website etc may invite action under various rules of the Board and IPC.”
3 Evaluation is to be done as per instructions provided in the Marking Scheme. It
should not be done according to one’s own interpretation or any other consideration.
Marking Scheme should be strictly adhered to and religiously followed. However,
while evaluating, answers which are based on latest information or knowledge
and/or are innovative, they may be assessed for their correctness otherwise and
due marks be awarded to them.
4 The Marking scheme carries only suggested value points for the answers
These are in the nature of Guidelines only and do not constitute the complete answer.
The students can have their own expression and if the expression is correct, the due
marks should be awarded accordingly.
5 The Head-Examiner must go through the first five answer books evaluated by each
evaluator on the first day, to ensure that evaluation has been carried out as per the
instructions given in the Marking Scheme. If there is any variation, the same should
be zero after delibration and discussion. The remaining answer books meant for
evaluation shall be given only after ensuring that there is no significant variation in
the marking of individual evaluators.
6 Evaluators will mark( √ ) wherever answer is correct. For wrong answer CROSS ‘X”
be marked. Evaluators will not put right (✓)while evaluating which gives an
impression that answer is correct and no marks are awarded. This is most common
mistake which evaluators are committing
7 If a question has parts, please award marks on the right-hand side for each part.
Marks awarded for different parts of the question should then be totaled up and
written in the left-hand margin and encircled. This may be followed strictly.
8 If a question does not have any parts, marks must be awarded in the left-hand margin
and encircled. This may also be followed strictly
9 If a student has attempted an extra question, answer of the question deserving more
marks should be retained and the other answer scored out with a note “Extra
Question”.

1
10 No marks to be deducted for the cumulative effect of an error. It should be penalized
only once.
11 A full scale of marks __________(example 0 to 80/70/60/50/40/30 marks as given in
Question Paper) has to be used. Please do not hesitate to award full marks if the
answer deserves it.
12 Every examiner has to necessarily do evaluation work for full working hours i.e., 8
hours every day and evaluate 20 answer books per day in main subjects and 25
answer books per day in other subjects (Details are given in Spot Guidelines).
13 Ensure that you do not make the following common types of errors committed by the
Examiner in the past:-
● Leaving answer or part thereof unassessed in an answer book.
● Giving more marks for an answer than assigned to it.
● Wrong totaling of marks awarded on an answer.
● Wrong transfer of marks from the inside pages of the answer book to the title
page.
● Wrong question wise totaling on the title page.
● Wrong totaling of marks of the two columns on the title page.
● Wrong grand total.
● Marks in words and figures not tallying/not same.
● Wrong transfer of marks from the answer book to online award list.
● Answers marked as correct, but marks not awarded. (Ensure that the right tick
mark is correctly and clearly indicated. It should merely be a line. Same is with
the X for incorrect answer.)
Half or a part of answer marked correct and the rest as wrong, but no marks awarded.
14 While evaluating the answer books if the answer is found to be totally incorrect, it
should be marked as cross (X) and awarded zero (0)Marks
15 Any unassessed portion, non-carrying over of marks to the title page, or totaling
error detected by the candidate shall damage the prestige of all the personnel
engaged in the evaluation work as also of the Board. Hence, in order to uphold the
prestige of all concerned, it is again reiterated that the instructions be followed
meticulously and judiciously
16 The Examiners should acquaint themselves with the guidelines given in the
“Guidelines for spot Evaluation” before starting the actual evaluation.
17 Every Examiner shall also ensure that all the answers are evaluated, marks carried
over to the title page, correctly totaled and written in figures and words.
18 The candidates are entitled to obtain photocopy of the Answer Book on request on
payment of the prescribed processing fee. All Examiners/Additional Head
Examiners/Head Examiners are once again reminded that they must ensure that
evaluation is carried out strictly as per value points for each answer as given in the
Marking Scheme

2
66/5/3
66 MARKING SCHEME– 2023
/3 BUSINESS STUDIES Marks
/3 66/5/3
EXPECTED ANSWERS / VALUE POINTS
SECTION A
1 Q. Which of the following is NOT a factor affecting capital
structure of a company ?
(A) Cost of Debt
(B) Growth Opportunities
(C) Cash Flow Position
(D) Interest Coverage Ratio

1 mark
Ans. (B) Growth opportunities

2 Q. Which of the following statements is incorrect about

Personal Selling?
(A) It is a direct face to face dialogue that involves an interactive
relationship between the seller and buyer.
(B) It refers to short-term incentives designed to encourage the
buyers to make immediate purchase of a product or service.
(c) It allows a sales-person to develop personal relationship with
the prospective customers.
(D) In this it is possible to take a direct feedback from the
customer and to adopt the presentation according to the needs
of the prospects.

Ans. (B) It refers to short-term incentives designed to encourage the

buyers to make immediate purchase of a product or service.
1 mark

3 Q. From the following, identify the channel of distribution in

which goods pass from the manufacturer to the retailers who, in
turn, sell them to the final users.
(A) One level channel
(B) Two level channel
(C) Three level channel
(D) Zero level channel

1 mark
Ans. (A) One level channel
3
4 Q. A name, term, sign, symbol, design or some combination of
them used to Identify the products – goods or services of one
seller or group of sellers and to differentiate them from those of
the competitors is known as
(A) brand.
(B) Brand mark
(C) brand name.
(D) trade mark.

Ans. (A) brand. 1 mark

5 Q. Which of the following statements is incorrect?

(A) Capital Market refers to facilities and institutional
arrangements through which long-term funds, both debt and
equity are raised and Invested.
(B) Secondary market is the market where securities are sold by
the company to the investor directly or through an
intermediary.
(C) Primary Market is the Market where only buying of
securities takes place. Securities can not be sold there.
(D) Money Market is a market for short term funds which deals
in monetary assets whose period of maturity is upto one year.

Ans. (B) Secondary market is the market where securities are sold
1 mark
by the company to the investor directly or through an intermediary.

6 Q. The most commonly used tool of promotion which is a paid

form of communication and in which the sponsor bears the cost
of communicating with the prospects is
(A) advertising.
(B) personal selling.
(C) sales promotion.
(D) public relations.

1 mark
Ans. (A) advertising.
4
7 Q. _______ refers to the increase in profit earned by the equity
shareholders due to the presence of fixed financial charges like
interest.
(A) Capital structure
(B) Earning per share
(C) Trading on equity
(D) Return on investment

1 mark
Ans. (C) Trading on equity

8 Q. Match the factors affecting fixed capital requirements given

in the Column-I with their explanations given in Column-II:
Column – I Column - II
A Nature of i. A trading organisation needs lower
Business investments in fixed assets as
compared to a manufacturing
organisation.
B Technology ii. A textile manufacturing company is
upgradation installing a cement manufacturing
plant and thus its investments in
fixed assets is increasing.
C Diversification iii. A capital-intensive organisation
requires higher investments in fixed
assets as compared to labour-
intensive organisation.
D Choice of iv. Mobile phones became obsolete
Technique faster and are replaced much sooner
than furniture or many other assets.
Hence these type of businesses
require more fixed capital.

a b c d
(A) i iv ii iii
(B) ii iii iv i
(C) iii ii i iv
(D) iv i iii ii

5
 Ans. (A) i iv ii iii 1 mark

9 Q. The next step in the ‘Selection Process’ after ‘Selection

Decision’ is

(A) Job Offer

(B) Medical Examination
(C) Selection Test
(D) Contract of Employment
1 mark
Ans. (B) Medical Examination

10 Q. Identify the external source of recruitment illustrated by the

picture given below:

(A) Direct Recruitment

(B) Casual Callers
(C) Advertisement
(D) Labour contractor

1 mark
Ans. (A) Direct Recruitment

11 Q. The obligation of a subordinate to properly perform the

assigned duty is called:

(A) Authority

6
 (B) Responsibility
(C) Accountability
(D) Decentralisation

Ans. (B) Responsibility 1 mark

12 Q. ‘Digilocker’ is a flagship initiative of ‘Ministry of Electronics

and IT’, Government of India. It aims at digital empowerment
of the citizens by providing access to authentic digital
documents such as academic certificates issued by different
Examination Boards, Driving Licenses, Vehicle registrations etc.
in a digital format.
The above para discusses a few dimensions of Business
Environment.
Identify the correct dimensions from the following:
(A) Economic Environment and Technological Environment
(B) Social Environment and Economic Environment
(C) Social Environment and Political Environment
(D) Political Environment and Technological Environment

1 mark
Ans. (D) Political Environment and Technological Environment

13 Q. ‘Whether the decisions have been translated into desired

actions or not’ can be confirmed by performing which of the
following function of management?
(A) Planning
(B) Organising
(C) Directing
(D) Controlling

Ans. (D) Controlling 1 mark

14 Q. The activities whose outcome not only improves the job

performance but also help individuals in the progress towards
maturity and actualisation of their potential capacities is known
as
(A) training.
(B) education.
7
 (C) development.
(D) performance appraisal

Ans. (C) development. 1 mark

15 Q. The purpose of planning is to meet future events effectively

to the best advantage of an organisation. This statement
highlights which of the following features of planning?

(A) Planning focuses on achieving objectives.

(B) Planning involves decision making.
(C) Planning is the primary function of management.
(D) Planning is futuristic.
1 mark
Ans. (D) Planning is futuristic.

16 Q. “Cartoony Planet’ is a well-known indoor playground for

organising parties for children in Noida. It has many play-
stations and it organises various activities for the kids to enjoy.
Looking at the increasing number of children visiting ‘Cartoony
Planet’, a new indoor playground in the name of ‘Tiny-Tots
House’ came up with advanced swings, play stations and
entertainment activities near ‘Cartoony Planet’.
To compete with the newly opened indoor playground,
‘Cartoony Planet’ also added some advanced swings and
entertainment activities to attract more children.
The above information highlights one of the features of business
environment. Identify the feature from the following:
(A) Uncertainty
(B) Dynamic Nature
(C) Relativity
(D) Interrelatedness

Ans. (B) Dynamic Nature 1 mark

17 Q. ‘Dolma’ and ‘Una’ were gardners with decades of hands-on

experience. They were the first one to recognise the need of
indoor gardens specially for plant-lovers living in apartments.
They took advantage of this opportunity and decided to offer
8
 beautiful designing ideas for indoor gardening through their
innovative venture ‘My Space’.
‘My Space’ offered creative ideas like ‘Garden wall’, ‘Hanging
Garden’, ‘Window Garden’, ‘Book-shelf garden and many
more. Since there were no competitors they soon became the
market leaders in the field.
From the following points identify the importance of Business
Environment highlighted above:
(A) Business Environment helps the firm to identify threats and
early warning signals.
(B) Business Environment helps in tapping useful resources.
(C) Business Environment enables the firm to identify
opportunities and getting the first mover advantage.
(D) Business Environment helps in assisting in planning and
policy formulation

Ans. (C) Business Environment enables the firm to identify

opportunities and getting the first mover advantage. 1 mark

18 Different organisations have different goals. 'Zeepo' is an

upcoming retail chain for providing consumer goods door-to-
door, the objective of this organisation is to increase sales. 'Allie'
is an educational organisation working with an objective of
providing education to under privileged children of the society.
Management of each of these organisations unite the efforts of
their employees towards achieving organisational goals.
The characteristic of management discussed above is:
(A) Management is goal-oriented.
(B) Management is a continuous process.
(C) Management is a dynamic function
(D) Management is an intangible force.

1 mark
Ans. (A) Management is goal-oriented.

19 Q. Statement-I: The concept of product relates to not only the

physical product but also the benefits offered by it from
customer's point of view.
Statement-II: The concept of product does not include the
extended product by way of after sale services, availability of
9
 spare parts, handling complaints etc.
Choose the correct option from the following
(A) Both Statement-I and Statement-II are correct.
(B) Both Statement-I and Statement-II are incorrect.
(C) Statement-I is correct and Statement-Il is incorrect
(D) Statement-I is incorrect and Statement-II is correct.

Ans. (C) Statement-I is correct and Statement-Il is incorrect.

1 mark

20 Q. Himanshu is working as a ‘Marketing Manager' in 'Suvidit-

Air-Conditioners', a well known brand in the field of air-
conditioners. Till last month the company was able to achieve its
sales targets. But this month Himanshu observed that targets
were not being met and the number of air-conditioners sold was
decreasing. He analysed the situation and found that the new
salesman appointed last month was not good and for this he
took necessary action.
Which of the following function of management helped
Himanshu to identify the decrease in sale
(A) Planning
(B) Organising
(C) Directing
(D) Controlling

1 mark
Ans. (D) Controlling

21 Q. Monika, Rashmi and Garima are childhood friends. After

completing their education, Monika joined a school as a teacher.
Rashmi joined a firm as a Chartered Accountant and Garima as
a General Manager in a MultiNational Company. After a long
time in a re-union function of the school, they met each other.
Rashmi said that they were all professionals now.
Garima told Rashmi that she can say this about Monika and
herself, but not about her since Manager is not considered a full
fledged professional.
Why did Garima say that she was not a professional? State any
three points in support of your answer.

10
 Ans. Garima said that she is not a professional as management is
not considered as a full fledged profession because of the following
reasons: (Any three points)

(i) Restricted Entry: There is no restriction on anyone being

designated or appointed as Manager in any business enterprise. Any
one can be called a manager irrespective of educational
qualifications possessed as compared to other professions like a
doctor, a lawyer etc. 1 mark for
each
(ii) Professional Association: There are several associations of reason
practicing managers in India like AIMA (All India Management =
Association) but there is no compulsion for managers to be 1x3
members of such associations nor does it have any statutory =
backing unlike other professions.
3 marks
(iii) Ethical code of conduct: All professionals are bound by a
code of conduct which guides the behaviour of its members, which
is not followed by manager though AIMA has laid down a code of
conduct to regulate the activities of their members.

(iv) Service Motive: The basic motive of a profession is to serve

their clients interests by rendering dedicated and committed service
whereas the basic purpose of management is to help the
organization to achieve its stated goal which is profit maximisation.

(If an examinee has only listed the points, ½ mark for each point
should be awarded)

22 Q. Vibhu joined as a Chief Executive Officer. (CEO) of 'Mega

Marut Ltd.’, a firm manufacturing cars. On the first day he
addressed his subordinates saying that organisations should
have a chain of authority and communication that runs from
top to bottom and should be followed by managers and the
subordinates. He also added that for routine matters a worker
can not directly contact the CEO but in an emergency he/she
may contact directly.
Vibhu discussed an important principle of management.
Identify and explain the principle with the help of an example.

Ans. Principle of management discussed by Vibhu is ‘Scalar

Chain’.

Organisations should have a chain of authority and communication

that runs from top to bottom and should be followed by managers
11
 and the subordinates. The formal lines of authority from highest to 1 mark for
lowest ranks are known as Scalar Chain. identi
fying the
principle
Example: Let us consider a situation where there is one head ‘A’ +
who has two lines of authority under her/him. One line consists of 1 marks
B-C-D-E-F. Another line of authority under ‘A’ is L-M-N-O-P. If for
‘E’ has to communicate with ‘O’ who is at the same level of correct
authority then he/she has to transverse the route E-D-C-B-A-L-M- explan
N-O. This is due to the Scalar chain being followed in this case. ation
This is for routine matters. But in case of emergency ‘E’ may +
directly contact ‘O’ through Gang Plank. 1 mark
for
correct
example
=
1+1+1
=
3 marks

23 Q. (a) Explain (i) Ensuring order and discipline; and (ii)

Facilitating co-ordination in action, as importance of controlling
function of management.

Ans.

(i) Ensuring order and discipline

§ Controlling creates an atmosphere of order and discipline in the

organisation. It helps to minimise dishonest behaviour on the
1½
part of the employees by keeping a close check on their marks
activities.

(ii) Facilitates coordination in action

§ Controlling provides direction to all the activities and efforts for

achieving organsiation’s goals. Each department and employee 1½

12
 is governed by pre-determined standards which are well co- marks
ordinated with one another and ensures that organisational
objectives are accomplished.
=
3 marks

OR OR

Q. (b) Explain: (i) Critical point control; and (ii) Management

by exception, as an important part of 'Analysing Deviations' a
step in the process of controlling.
Ans.

(i) Critical Point Control

§ It suggest that control should focus on key result areas (KRAs)

which are critical to the success of an organisation as it is neither
economical nor easy to keep a check on each and every activity
in an organisation. 1½
marks
§ If anything goes wrong at the critical points, the entire
organisation suffers.

(ii) Management by Exception

§ It is an important principle of management control based on the 1½

belief that an attempt to control everything results in controlling marks
nothing.

§ Thus, only significant deviations which go beyond the =

permissible limit should be brought to the notice of management.
3 marks

24 Q. (a) State any three protective functions of Securities and

Exchange Board of India.

Ans. Protective functions of Securities and Exchange Board of India

are: (Any three)
(i) Prohibition of fraudulent and unfair trade practices.

(ii) Controlling insider trading and imposing penalties for such

practices. 1x3
=
3 marks
(iii) Undertaking steps for investor protection.

13
 (iv) Promotion of fair practices and code of conduct in securities
market.

OR OR

Q. (b) State any three objectives of Securities and Exchange

Board of India.

Ans. Objectives of Securities and Exchange Board of India are:

(Any three)

(i) To regulate stock exchanges and the securities industry to

promote their orderly functioning. 1x3
=
3 marks
(ii) To protect the rights and interests of investors, particularly
individual investors and to guide and educate them.

(iii) To prevent trading malpractices and achieve a balance between

self regulation and statutory regulation.

(iv) To regulate and develop a code of conduct and fair practices by

intermediaries like brokers, merchant bankers etc., with a view to
making them competitive and professional.

25 Q. (a) Tapping external sources for various job positions has

many benefits'. State any four such benefits.

Ans. Benefits of tapping external sources for various job positions:

(Any four)

(i) The management can attract qualified and trained people to apply
for vacant jobs in the organisation.
1x4
(ii) The management has a wider choice while selecting the right
candidate. =

(iii) External sources bring fresh talent in the organisation. 4 marks

(iv) External sources encourage competitive spirit among the

14
 existing staff.

(If an examinee has only listed the points, ½ mark for each point
should be awarded)
OR
OR

Q. (b) 'Due to rapid technological changes jobs have become

more complex and importance of training has increased for
employees.' State any four such benefits.

Ans. Importance of training for employees: (Any four)

(a) It helps in promotion and career growth due to improved skills

and knowledge.
1x4
(b) It helps him to earn more due to improved performance.
=

(c) It reduces accidents as the employees are more efficient to 4 marks

handle machines.

(d) It increases the morale of the employees as the employees are

more satisfied.

(If an examinee has only listed the points, ½ mark for each point
should be awarded)

26 Q. Give the meaning of ‘Formal Communication’ and ‘Informal

Communication’.

Ans.
Formal communication

§ Formal communication is the communication that takes place 2 marks

through official channels designed in the organisation chart.

§ It may be horizontal or vertical.

Informal communication

§ Informal communication is the communication that takes place

15
 without following the formal lines of communication. 2 marks
=
2+2
§ It is generally referred to as grapevine because it spreads in all
=
directions without any regard to the level of authority. 4 marks

(Or any other correct explanation)

OR OR

Q.(b) State any four organisational barriers of communication.

Ans.
Organisational barrier: (Any four)

(i) Organisational policy, implicit or explicit is not supportive to

free flow of communication, it may hamper effectiveness of
communication.

(ii) Rigid Rules and regulations may delay communication.

(iii) Status of the superior may not allow his subordinates to express 1x4
their feelings freely. =
4 marks
(iv) Complexity in organization structure leads to delayed and
distorted communication.

(v) Lack of organizational facilities like frequent meetings,

suggestion box etc. may discourage free flow of communication.

(If an examinee has only listed the points, ½ mark for each point
should be awarded)

27 Q. Sameeksha is a Class-XII student having Business Studies as

one of her subjects. After studying 'Consumer Protection' as
one of the chapters in Business-Studies, she tried to apply the
acquired knowledge while purchasing and using the goods. She
is very fond of cooking and always tries new recipies. This time
she wants to purchase a 'Bread Maker' to prepare homemade
bread. She checked online about the various brands of 'Bread
Maker' available in the market and compared their price, so
that an intelligent and wise choice can be made. Then she went
to a near by market to buy it. Being an informed consumer she
looked for the Standardization Mark, negotiated the price
printed on the label, checked the date of manufacturing and
asked for guarantee or warranty of the product.
16
 After satisfying with all the concerned information she
purchased the Bread Maker and as a responsible consumer
asked for the cash-memo. After coming back home she opened
the packaging of the Bread Maker' and found an instruction
booklet inside. She carefully read all the instructions and
operated the Bread Maker step-by-step and succeeded in
making nice 'Atta Bread' for her family.
Sameeksha has fulfilled many responsibilities of a consumer
while purchasing and using the 'Bread Maker'
State any four responsibilities fulfilled by Sameeksha besides
asking for a cash-memo.

Ans. Responsibilities that Sameksha has fulfilled besides asking for

a cash memo are: (Any four)

(i) Be aware about various goods and services available in the

market so that an intelligent and wise choice can be made.

(ii) Buy only standardised goods as they provide quality assurance

e.g. standardization mark.

(iii) Learn about the risks associated with products and services,
follow manufacturer’s instructions and using the products safely.
1x4
(iv) Read labels carefully so as to have information about prices, net =
4 marks
weight, manufacturing and expiry dates, etc.

(v) Assert yourself to get a fair deal.

(If an examinee has only listed the points, ½ mark for each point
should be awarded)

28 Q. What is meant by ‘Investment Decision’? State how ‘Long

term Investment Decision’ and ‘Short Term Investment Decision’
affect the business.

Ans. The investment decision refers to how the firm’s funds are
invested in different assets to earn the highest possible return for 1 mark
their investors.

17
 Investment decision can be long-term or short-term.

(a) A long-term investment decision is very crucial for any business

since it affects the earning capacity over the long run. It affects the 1 ½
size of assets, the profitability and competitiveness. Moreover, these Marks
decisions normally involve huge amounts of investment and are
irreversible except at a huge cost.

(b) Short term investment decision affects the day to day working of
a business. It affects the liquidity as well as profitability of a 1 ½ marks
business. Efficient cash management, inventory management and =
1
receivables management are necessary for sound working capital +1 ½
management. +1½
=
4 marks

29 Q. Mahamana Enterprises is not only giving salary to its

employees but it also offers bonus to them over and above the
salary. To further encourage the employees, it announced that it
will provide a share in the profits of the company to them. These
incentives are helpful in increasing the purchasing power of the
employees.
State four other incentives of the type of incentive discussed in
the above para.

Ans. Four other incentives of the type of incentive discussed in the

above para are as follows:

(i) Productivity linked wage incentive involves linking payment of

wages of employees to the increase in their productivity at
individual or group level.

(ii) Co-partnership/Stock option is an incentive under

which the employees are offered company shares at a set
price which is lower than market price.

(iii) Retirement Benefits include benefits such as provident 1x4

fund, pension and gratuity that provide financial security to =
employees after their retirement. 4 marks

(iv) Perquisites include incentives such as car allowance,

18
 housing, medical aid and education to the children etc.,
which are offered over and above the salary.

(If an examinee has only listed the incentives, ½ mark for each
incentive should be awarded)

30 Q. Harish is working as a finance manager in 'Kozee Softwares

Ltd.' He has been awarded 'Best employee of the year Award'
because of his foresightedness. He always aims at smooth
operations of all the financial activities by focusing on fund
requirements and their availability in the light of financial
decisions. He takes into consideration the growth, performance,
investments and requirement of funds for a given period so that
financial resources are not left idle and don't unnecessarily add
to the cost.
By doing all this Harish strives to achieve the two main
objectives of an important concept of financial management.
Identify the concept and explain its two objectives.

Ans. The important concept of financial management discussed is

Financial Planning.

Two objectives are: 1 mark for

identi
(i) To ensure availability of funds whenever required: fying
the
§ This includes a proper estimation of the funds required for concept
different purposes such as for the purchase of long-term assets or +
to meet day-to- day expenses of business etc. ½ mark
for each
§ To estimate the time at which these funds are to be made heading
available and to specify possible sources of these funds. +
1 mark
for each
(ii) To see that the firm does not raise resources unnecessarily: explan
ation
=
Financial planning ensures that enough funds are available at right
1+1+2
time. =
4 marks
§ If adequate funds are not available the firm will not be able to
honour its commitments and carry out its plans.

§ On the other hand, if excess funds are available, it will

19
 unnecessarily add to the cost.

31 Q. 31. (a) Explain 'Co-operation, Not Individualism' as a

principle and 'Fatigue Study' as a technique of scientific
management.

Ans.

Cooperation, not individualism

§ It advocates that there should be complete co-operation between

the management and the workers instead of individualism.

§ Competition should be replaced by cooperation. Both should

realise that they need each other. 3 marks

§ For all important decisions taken by the management, workers

should be taken into confidence. The management should be
open to any constructive suggestions made by the employees and
suitably reward them.

Fatigue Study

§ Fatigue Study determines the amount and frequency of rest

intervals in completing task.

§ The rest intervals help the workers to regain stamina and work
again with the same capacity resulting in increased productivity. 3 marks
=
§ There can be many causes for fatigue like long working hours, 3=3
doing unsuitable work etc. Such hindrances in good performance =
should be removed 6 marks

OR OR

(b) Explain 'Cause and effect relationship' as a feature of

principles of management (i) Meeting Changing Environment
requirements; and

(ii) Management Training, education and research as

significance of principles of management.

20
 Ans.

Cause and effect relationship

§ The principles of management establish cause and effect

relationship so that they can be used in similar situations in a large
number of cases.
2 marks
§ But the principles of management are less than perfect since they
mainly apply to human behaviour. Also, in real life, situations are
not identical. So, accurate cause and effect relationships may be
difficult to establish.

(i) Meeting changing environment requirements

Although principles are in the nature of general guidelines, they are

modified and help the managers to meet the changing requirements
of the environment.
2 marks
Management principles are flexible to adapt to the dynamic
business environment.

(ii) Management training, education and research:

Entrance to management institutes is preceded by management

aptitude tests. These tests are developed after understanding of
management principles and how they may be applied in different
situations. 2 marks
=
These principles provide basic groundwork for the development of 2+2+2
=
management as a discipline.
6 marks
32 Q. 32. (a) Explain Policy' and 'Method' as type of Plans.

Ans.

Policy

§ Policies are general statements that guide thinking or channelise

energies towards a particular direction.

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§ Policies define the broad parameters within which a manager 3 marks
may function.

§ A manager may use his discretion to interpret and apply a policy.

Method

§ Method is the prescribed way or manner in which a task has to

be performed taking into consideration the objective of the
organisation.

§ It deals with a task comprising one step of a procedure and

specifies how this step is to be performed. 3 marks

=
§ Selection of right method increases efficiency in completion of a
task. The method may vary from task to task. 3+3

=
6 marks

OR OR

(b) Explain the following limitations of planning:

(i) Planning reduces creativity

(ii) Planning involves huge costs

Ans.

(i) Planning reduces creativity

Planning is an activity which is done by the top management.

Usually the rest of the members just implements these plans. As a
consequence, middle management and other decision makers are
neither allowed to deviate from plans nor are they permitted to act
on their own. Thus, much of the initiative or creativity inherent in
them also gets lost or reduced.

Most of the time, employees do not even attempt to formulate plans.

They only carry out orders. 3 marks

Thus, planning in a way reduces creativity since people tend to

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 think along the same lines as others. There is nothing new or
innovative.

(ii) Planning involves huge costs

When plans are drawn up huge costs are involved in their

formulation. These may be in terms of time and money for example,
checking accuracy of facts may involve lot of time.

Detailed plans require scientific calculations to ascertain facts and

figures. The costs incurred sometimes may not justify the benefits
derived from the plans.

There are a number of incidental costs as well, like expenses on

3 marks
boardroom meetings, discussions with professional experts and
=
preliminary investigations to find out the viability of the plan. 3+3
=
(Or any other correct explanation) 6 marks

33 Q. 'Best Electronics started manufacturing washing machines

under the brand name 'Amaze'. Once the washing machines
were manufactured, packaged, branded, priced and promoted,
they had to be made available to the customers at the right
place, in the right quantity and at the right time.
'Best Electronics' provided for accurate and speedy processing
of orders so that the washing machines reach the customers in
time, in the right quantity and specifications. They also ensured
that the washing machines are physically made available to the
customers. Further, 'Best Electronics arranged for facilities to
store the washing machines at different locations near the
market to minimize the charges on transportation. Explain any
three components of physical distribution discussed in the above
case.

Ans. The three components of Physical Distribution discussed in

above case are:

(i) Order processing

§ Products flow from manufacturers to customers via channel

members while orders flow in the reverse direction from
customers to the manufacturers.

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 § A good physical distribution system should provide for an 2 marks
for each
accurate and speedy processing of orders, in the absence of which
explan
goods will reach the customers late or in wrong quantity ation

(ii) Transportation =

§ It is the means of carrying goods and raw materials from the 2x3
point of production to the point of sale.
=

§ It is an important component because unless the goods are

physically made available the sale cannot be completed. 6 marks

(iii) Warehousing

§ It refers to the act of storing and assorting products in order to

create time utility to them. The basic purpose is to arrange
placement of goods and provide facilities to store them.

§ The need arises because there may be difference between the time
a product is produced and the time it is required for consumption.

(If an examinee has given only the heading, ½ mark for each heading
should be awarded)

34 Q. Due to spread of COVID-19 pandemic, employees of almost

all the companies were working online from their homes. In
2022 when most of the companies called them back to their
office and started working offline, ‘Taty Software Ltd.' still
asked their employees to work from home. Because of this,
employees of Taty Software Ltd. were feeling bored, hence for
recreation they formed a cricket-club. They started meeting
every Saturday and Sunday on a ground near their office
building.
(i) Identify and state the type of organisation formed by the
employees of 'Taty Software Ltd.'
(ii) Also, state any two advantages and two limitations of the
type of organisation identified in (i) above.
1 mark
Ans. (i) The type of organization so formed is ‘Informal
for
Organization’. identify
ing
Informal organization is a network of personal and social relations +

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not established or required by the formal organization but arising 1 mark
spontaneously as people associate with one another. for
correct
statement
(or any other correct meaning) +
1 mark
(ii) Advantages of Informal Organisation: (Any two) for
each
(i) It leads to faster spread of information as well as a quick advantage
=
feedback.
1x2
=
(ii) It fulfills the social needs of the members. 2 marks
+
(iii) It contributes towards fulfillment of organisational objectives 1 mark
by compensating for inadequacies in the formal organisation. for
each
limitation
(If an examinee has only listed the points, ½ mark for each point =
should be awarded) 1x2
=
Limitations of informal organisation: (Any two) 2 marks
=
1+1+2+2
(i) It leads to spread of rumours which becomes a destructive force
=
and may go against the interest of the formal organisation. 6 marks

(ii) It may lead to resistance to change which may delay or restrict

growth.

(iii) It pressurizes members to conform to group expectations which

may be against organisational interest.

(If an examinee has only listed the points, ½ mark for each point
should be awarded)

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