AglaSem Schools

www.schools.

aglas

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AglaSem Schools

www.schools.

aglas

em.co

m

AglaSem Schools

www.schools.

aglas

em.co

m

AglaSem Schools

www.schools.

aglas

em.co

m

AglaSem Schools

www.schools.

aglas

em.co

m

AglaSem Schools

www.schools.

aglas

em.co

m

AglaSem Schools

www.schools.

aglas

em.co

m

AglaSem Schools

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aglas

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1

Q. SET No MARKING SCHEME-2013-14BUSINESS STUDIES

DELHI-66/1/1EXPECTED ANSWERS / VALUE POINTS

DISTRI-BUTION

OF MARKS

66/1/1 66/1/2 66/1/3

1 6 12 Q. What is meant by ‘management of people’?Ans. Management of people means dealing withemployees as individuals with diverse needs andbehaviour as well as dealing with individuals as agroup of people.

1 mark

2 5 11 Q. What is the objective of ‘Method Study’ as atechnique of scientific management?Ans. The objective of method study is to find out onebest way of doing the job.

1 mark

3 4 10 Q. What is included in ‘Political Environment ofbusiness? State.Ans. Political environment includes politicalconditions such as general stability and peace in thecountry and specific attitudes that elected governmentrepresentatives hold towards business.

1 mark

4 3 6 Q. Give the meaning of ‘Policy’ as a type of plan.Ans. Policy is a general guideline which bringsuniformity in decision making for achievement ofpredetermined objectives.

1 mark

5 1 7 Q. Give the meaning of ‘Authority’ as an element ofdelegation.Ans. Authority refers to the right of an individual tocommand his subordinates and to take action withinthe scope of his position.

1 mark

6 2 5 Q. State any one advantage of ‘FormalOrganisation’.Ans. Advantages of formal organisation (Any one):(i) It is easier to fix responsibility.(ii) It avoids duplication of efforts.(iii) It maintains unity of command(iv) It leads to effective accomplishment of goals.(v) It provides stability to the organisation.(If an examinee has given only the heading, ½ markfor the heading should be awarded)

1 mark

7 12 4 Q. Why employees become lethargic when theorganisation uses internal sources of recruitment?State.Ans. Employees become lethargic when theorganisation uses internal sources of recruitment as

1 mark

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they are sure of time bound promotions.8 11 3 Q. “Recruitment’ is one of the specialized activity

performed by human resource management.Mention any two other specialized activities ofhuman resource management.Ans. Other specialized activities of human resourcemanagement are: (Any two)(i) Analysing jobs.(ii) Selection.(iii) Placement and orientation.(iv) Training and development of employees.(v) Performance Appraisal.(vi) Developing compensation and incentive plans.(vii) Maintaining labour relations and unionmanagement relations.(viii) Handling grievances and complaints.(ix) Providing for social security and welfare ofemployees.(x) Defending the company in law suits and avoidinglegal complications.

½ x 2=

1 mark

9 10 2 Q. Give an example of ‘Employee RecognitionProgrammes’ as a non financial incentive.Ans. Examples of ‘Employee RecognitionProgrammes are: (Any one)(i) Congratulating the employees for goodperformance.(ii) Displaying employees achievements on the noticeboard or company’s newsletter.(iii) Awarding best performance

(or any other correct example)

1 mark

10 9 1 Q. What is meant by ‘Encoding’ as an element ofcommunication?Ans. Encoding means converting the message intocommunication symbols such as words, pictures,gestures, etc.

1 mark

11 8 8 Q. Define ‘Capital Structure’.Ans. The capital structure means the proportion ofdebt and equity used for financing the operations of abusiness.

orIt refers to the mix between owner’s funds andborrowed funds.

1 mark

12 7 9 Q. How does ‘Inflation’ affect the working capitalrequirements of a company? State.Ans. With inflation, the working capital requirements

1 mark

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become higher as larger amount of money is requiredto maintain a constant volume of production and sales.

13 15 16 Q. Rahim was working in an enterprise on dailywages basis. It was difficult for him to fulfill thebasic needs of his family. His daughter fell ill. Hehad no money for his daughter’s treatment. Tomeet the expenses of her treatment, he participatedin a cycle race and won the prize money. The cyclecompany offered him a permanent pensionable jobwhich he happily accepted.(i) By quoting the lines from the above para identifythe needs of Rahim that are satisfied by the offer ofcycle company.(ii) Also, explain two other needs of Rahim followedby above that are still to be satisfied.Ans. (i) Needs of Rahim that are satisfied by the offerof cycle company are Physiological needs and Safety/security needs‘The cycle company offered him a permanentpensionable job’.

(ii) The other needs followed by the above stated needsthat are still to be satisfied are:(a) Affiliation/ Belongingness needs.These needs refer to the need for affection, sense ofbelonging, acceptance and friendship.(b) Esteem needsThese needs refer to the need for self respect,autonomy status, recognition and attention.

½ mark foridentification

+½ mark forquoting the

line= ½ + ½

= 1 mark+

½ mark fornaming the

need+

½ mark for itsexplanation

= 1 x 2=2marks

= 1+23marks

14 16 15 Q. How directing helps in efficient and effectivefunctioning of the organisation? Explain by givingany three points.Ans. Directing helps in efficient and effectivefunctioning of the organisation because: (any three)(i) It helps to initiate action.(ii) It integrates employees’ efforts.(iii) It guides employees to realise their potential.(iv) It facilitates changes.(v) It brings stability and balance in the organisation.(If an examinee has not given the headings as abovebut has given the correct explanations, full creditshould be given)

½ mark forthe heading

+½ mark for

explan-ation

= 1 x 3= 3 marks

15 14 13 Q. ‘Financial market plays an important role in theallocation of scarce resources in an economy byperforming various functions.’ Explain any three

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functions of financial market.Ans. Financial market plays an important role in theallocation of scarce resources in an economy byperforming the following functions: (Any three)(i) Mobilisation of savings and channelising them intomost productive use.(ii) Facilitating price discovery.(iii) Providing liquidity to financial assets.(iv) Reducing the cost of transactions.(If an examinee has not given the headings as abovebut has given the correct explanations, full creditshould be given)

½ mark forthe heading

+½ mark for

explan-ation

= 1 x 3= 3 marks

16 13 14 Q. Crackers Ltd., a fire cracker manufacturingcompany launched some new products on eve ofDiwali which attracted many buyers. To meet theincreased demand, the company employed childrenfrom nearby villages. Although the product was ingreat demand, appropriate safety warnings werenot mentioned on the packets that led to manyaccidents.(i) Identify and explain the important productrelated decision that was not taken intoconsideration by the company(ii) Also, identify any two values which wereviolated by the company.Ans. (i) The important product related decision thatwas not taken into consideration by the company isLabelling.It is the process of designing the label and putting it onthe package to provide information regarding theproduct, its contents, methods of use etc.

(ii) Values violated by the company:-concern for safety of human beings.-respect for law (employing children as labour).-concern/ sensitivity for the environment.

(or any other correct value)

½ mark foridentification

+½ mark for

itsexplanation

= ½ + ½= 1 mark

+1 mark foreach value

= 1 x 2=2 marks

=1+2=

3 marks

17 - - Q. State any three points of importance ofconsumer protection from the point of view ofconsumers.Ans. Importance of Consumer protection from thepoint of view of consumers:(i) It educates consumers about their rights and reliefsavailable to them.(ii) It organises consumers in the form of consumerorganisations which would take care of their interests.

1 x 3=

3 marks

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(iii) It protects consumers against exploitative andunfair trade practices.(If an examinee has given only the headings, ½mark for each heading should be awarded)

18 - - Q. Explain the following rights of consumers:(i) Right to be informed;(ii) Right to safety.Ans. . (i) Right to be InformedThe consumer has a right to have complete informationabout the product he intends to buy such as,ingredients, date of manufacture, price, quantity etc.(ii) Right to safety

Right to be protected against goods and services whichare hazardous to life and those which do not conformto the safety norms.

1 ½ marks+

1 ½ marks=

3marks

19 21 22 Q. XYZ Power Ltd. set up a factory formanufacturing solar lanterns in a remote village asthere was no reliable supply of electricity in ruralareas. The revenue earned by the company wassufficient to cover the costs and the risks. Thedemand of lanterns was increasing day by day, sothe company decided to increase production togenerate higher sales. For this, they decided toemploy people from nearby villages as very few jobopportunities were available in that area. Thecompany also decided to open schools and crèchesfor the children of its employees.(i) Identify and explain the objectives ofmanagement discussed above.(ii) State any two values which the company wantedto communicate to the society.Ans. (i) The objectives of management referred to are:Organisational objectivesThese refer to the utilisation of human and materialresources considering the interest of all stakeholders.(b) Social objectivesThese refer to the creation of benefit for variousconstituents of the society.

(If an examinee has explained survival and growthas objectives of management instead oforganisational objectives, full credit is to be given)

(ii) Values which the company wanted to communicate

½ mark foridentification

of eachobjective

+½ markfor its

explanation=

1 x 2=

2 marks+

1 mark foreach value

=1 x 2

=2 marks

=2+2

=4 marks

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to the society are: (Any two)(a) Providing employment opportunities.(b) Development of backward regions.(c) Providing basic amenities to employees.(d) Concern for the environment.

(or any other correct value)

20 22 21 Q. Why is the understanding of business-environment important for managers? Explain withthe help of any four points.Ans. Understanding of business environment isimportant for managers to: (Any four):(i) Identify opportunities and get the first moveradvantage.(ii) Identify threats and early warning signals.(iii) Tap useful resources.(iv) Cope with rapid changes.(v) Assist in planning and policy formulation.(vi) Improve performance.(If an examinee has not given the headings as abovebut has given the correct explanation, full creditshould be given)

½ mark forthe heading

+½ mark for

theexplanation

= 1 x 4= 4 marks

21 19 20 Q. How is training of employees beneficial for theorganisation? State by giving any four reasons.Ans. Training of employees is beneficial for theorganisation as: (Any four):(a) It avoids wastage of efforts and money.(b) It enhances employee productivity.(c) It equips the future manager to take over in anemergency.(d) It reduces employees’ turnover.(e) It helps the employees to adopt the new/latesttechnology.(If an examinee has given only the headings, ½mark for each heading should be awarded)

1 mark foreach

statement

1x4=

4 marks

22 20 19 Q. Explain any four points that highlight theimportance of financial planning.Ans. Financial planning is important to: (any four)(i) Prepare for the future.(ii) Avoid business shocks and surprises.(iii) Coordinate various business functions.(iv) Reduce waste and duplication of efforts.(v) Link the present with the future.(vi) Link investment and financing decisions.(vii) Evaluate actual performance.

½ mark foreach heading

+½ mark for

eachexplanation

=4marks

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(If an examinee has not given the headings as abovebut has given the correct explanation, full creditshould be given)

23 - - Q. Describe any five limitations of planning.Ans. Limitations of planning: (any five)(a) Leads to rigidity.(b) May not work in a dynamic environment.(c) Restricts/Reduces creativity.(d) Involves huge costs.(e) Time consuming.(f) Does not guarantee success(If an examinee has not given the headings as abovebut has given the correct description, no marksshould be deducted)

½ mark foreach heading

+½ mark for

eachdescription

= 1 x 55marks

24 - 23 Q. Differentiate between ‘capital-market’ and ‘money-market’ on the following basis:(i) Participants; (ii) Instruments; (iii) Investment outlay;(iv) Duration and (v) Liquidity.Ans. Difference between Capital Market and MoneyMarket:

Basis Capital Market Money Market1. Participants The participants are

financial institutions,banks, corporates,foreign investors andretail investors.

The participantsare RBI, financialinstitutions, banks,corporates,

2. Instruments Instruments traded areshares, debentures andbonds.

Instruments tradedare treasury bill,commercial paper,certificates ofdeposit, callmoney andcommercial bill,

3. Investmentoutlay

Investment outlay issmall.

Investment outlayis large.

4. Duration It deals in mediumterm and long termsecurities.

It deals in shortterm securities

5. Liquidity Capital marketsecurities arecomparatively lessliquid.

Money marketsecurities arecomparativelymore liquid.

1 x 5=

5marks

25 25 - Q. Explain ‘Price’ as an element of marketing–mix.Also, explain any four factors that affect thefixation of price of a product.Ans. Price as an element of marketing mix involvesdecisions regarding pricing objectives, pricing

1 mark

+

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Methods, pricing strategies, pricing policies and pricechanges.

Factors that affect the fixation of price of a product are:(Any four)(a) Product cost(b) Utility and demand(c) Extent of competition in the market,(d) Government and legal regulations.(e) Pricing objectives.(f) Marketing methods used.(If an examinee has not given the headings as abovebut has given the correct explanation, no marksshould be deducted)

½ mark foreach heading+ ½ mark for

its explanation=(1 x4)

= 4 marks1+4

=5marks

26 24 24 Q. Principles of Taylor and Fayol are mutuallycomplementary. One believed that the managementshould not close its ears to constructive suggestionsmade by the employees while the other suggestedthat a good company should have an employeesuggestion system whereby suggestions which resultin substantial time or cost reduction should berewarded. Identify and explain the principles ofTaylor and Fayol referred in the above para.Ans. (i) The principle of Taylor referred to isCooperation, Not IndividualismIt states that there should be complete cooperationbetween the labour and the management. Competitionshould be replaced by cooperation.

(ii) The principle of Fayol referred to is InitiativeIt indicates that the subordinates should be encouragedto make and execute plans within the prescribed limitsof authority.

1 mark foridentification

+1 ½ marks

for itsexplanation

=2 ½ x 2

= 5marks

27 - - Q. ’Organising involves a series of steps in order toachieve the desired goals.” Explain these steps.Ans. Steps in the process of organising:(i) Identification and division of work.(ii) Departmentalisation.(iii) Assignment of duties to job positions.(iv) Establishing reporting relationships.(If an examinee has not given the headings as abovebut has given the correct explanation, no marksshould be deducted)

OrQ. With the help of any four points, explain the

½ mark foreach heading

+1 mark for

eachexplanation

= 1 ½ x 4=

6marks

OR

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crucial role that organising plays in an enterprise.Ans. Role of organising: (Any four)(i) Benefits of specialisation.(ii) Clarity in working relationships.(iii) Optimum utilisation of resources.(iv) Adaptation to change.(v) Effective administration.(vi) Development of personnel.(vii) Expansion and growth.(If an examinee has not given the headings as abovebut has given the correct explanation, no marksshould be deducted)

½ mark foreach heading

+1 mark for

eachexplanation

= 1 ½ x 4=

6marks

28 27 28 Q. Explain the various steps in the process ofcontrolling.Ans. Steps in the process of controlling:(i) Setting performance standards.(ii) Measurement of actual performance.(iii) Comparison of actual performance with thestandards and analysing deviations.(iv) Taking corrective action.(If an examinee has combined or written separatelyany of the above stated points but covered all pointsin order, full credit to be given.)(If an examinee has not given the headings as abovebut has given the correct explanation, no marksshould be deducted)

OrQ. Explain any four points that highlight theimportance of controlling.Ans. Importance of controlling: (Any four)(i) Accomplishing organisational goals.(ii) Judging accuracy of standards.(iii) Making efficient use of resources.(iv) Improving employee motivation.(v) Ensuring order and discipline.(vi) Facilitating coordination in action.(If an examinee has not given the headings as abovebut has given the correct explanation, no marksshould be deducted)

½ mark foreach heading

+1 mark for

eachexplanation

=1 ½ x 4

=6 marks

OR

½ mark foreach heading

+1 mark for

eachexplanation

= 1 ½ x 4=

6marks

29 - - Q. Explain the following as factors affecting therequirements of fixed capital:(i) Scale of operations; (ii) Choice of technique;(iii) Technology upgradation and (iv) Financingalternatives.Ans. Factors affecting the requirements of fixed

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capital:(i) Scale of operationsA larger organisation operating at a higher scale needsbigger plant and more space and hence higherinvestment in fixed assets.(ii) Choice of techniqueA capital intensive organisation requires higherinvestment in plant and machinery and thus requireshigher fixed capital than a labour intensiveorganisation.(iii) Technology upgradationIndustries where assets become obsolete sooner requirehigher fixed capital to purchase such assets.(iv) Financing alternativesA firm which can avail of financing alternatives likeleasing requires lower investment in fixed assets andhence requires less fixed capital.

OrQ. Explain the following as factors affectingdividend decision:(i) Stability of earnings; (ii) Growth opportunities;(iii) Cash flow position and (iv) Taxation policy.Ans. Factors affecting dividend decision:(i) Stability of earningsCompanies with stable earnings are in a better positionto declare higher dividends.(ii) Growth opportunitiesCompanies having good growth opportunities declaresmaller dividend so as to retain more money to financetheir investment.(iii) Cash flow positionCompanies with stronger cash flows can declare higherdividend.(iv) Taxation policyCompanies can declare higher dividends if the tax ondividend is lower.

1 ½ x 4=

6marks

OR

1 ½ x 4=

6marks

30 28 27 Q. Explain the following functions of marketing:(i) Gathering and analysing market information;(ii) Marketing planning;(iii) Customer support services and(iv) Physical distribution.Ans. (i) Gathering and Analysing MarketInformationThis involves making an analysis of the availableopportunities and threats as well as the strengths andweaknesses of the organisation which helps in deciding

1 ½ x 4= 6marks

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which opportunities can best be pursued by it.(ii) Marketing PlanningThis involves development of marketing plans likeplan for increasing the level of production, promotionof the products, etc to achieve the marketing objectivesof the organisation.(iii) Customer support servicesThis includes services like after sales services,handling customer complaints and adjustments,maintenance services, technical services etc.(iv) Physical distributionPhysical distribution involves decision regardingchannels of distribution and decision regardingphysical movement of the product from where it isproduced to a place where it is required by thecustomers for their consumption or use.

OrQ. ‘Though advertising is one of the mostfrequently used medium of promotion of goods andservices, yet it attracts lot of objections. Explain anyfour such objections.Ans. Though advertising is one of the most frequentlyused medium of promotion of goods and services, yetit attracts lot of objections which are: (Any four)(i) Adds to Cost:Advertising unnecessarily adds to the cost of theproduct, which is ultimately passed on to the buyers inthe form of high prices.(ii) Undermines Social Values:

Advertising undermines social values and promotesmaterialism and discontent among people.(iii) Confuses the Buyers:

There are so many products being advertised that thebuyer gets confused as to which one should he buy.(iv) Encourages Sale of Inferior Products:

Advertising does not distinguish between superior andinferior products and persuade people to purchase eventhe inferior products.(v) Some Advertisements are in Bad Taste:

Another criticism against advertising is that someadvertisements are in bad taste. They may not beapproved by the society in general.

OR

½ mark foreach heading

+1 mark for

eachexplanation

= 1 ½ x 4=

6marks

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