Class 12 Business Studies Sample Paper 2022-23

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Students can download the latest Class 12 Business Studies Sample Paper 2023 from the myCBSEguide app and our student dashboard. Class 12 Business Studies is a very dynamic subject. If you go through the latest model question paper issued by CBSE for class 12 Business Studied, you will find that the pattern is really changed. As compared to the previous year’s question papers, the new Business Studies question paper is full of case studies and real-life examples.

What’s New in Class 12 BST Question Paper?

As discussed, CBSE has made some changes in the exam pattern of Class 12 Business Studies Sample Paper 2023 this year. They have more focus on competency-based questions. Especially, they have given more preference to the questions based on real-life situations.

  • The first 20 questions are MCQs but you can find a variety of questions in this section. There are not only simple MCQs but also matching, arranging, identifying and analyzing type questions.
  • Most of the 3-marker questions are normal but 4 and 6 markers have mostly case studies with real-life implications of the concepts.

How to download Business Studies Sample Papers?

Here, we are providing the only paper with a solution for Class 12 Business Studies Sample Paper 2023. You can get many such fully solved model papers from the myCBSEguide app and student dashboard:

Class 12 Business Studies Sample Paper 2023


Class 12 – Business Studies
Sample Paper – 1 (2022-23)

Maximum Marks: 80
Time Allowed: : 3 hours

General Instructions:

  1. This question paper contains 34 questions.
  2. Marks are indicated against each question.
  3. Answers should be brief and to the point.
  4. Answers to the questions carrying 3 marks may be from 50 to 75 words.
  5. Answers to the questions carrying 4 marks may be about 150 words.
  6. Answers to the questions carrying 6 marks may be about 200 words.
  7. Attempt all parts of the questions together.

  1. Human Resource Department of any organisation has to ensure the adequate number of employees available throughout the organisation. At which level a human resource manager works?
    a) Top-level management
    b) Middle-level management
    c) All of these
    d) Operational management
  2. Match the CATEGORY being marketed in Column I with the correct EXAMPLE in Column II.
    Column IColumn II
    (a) Ideas(i) Film festival
    (b) Experience(ii) Family Planning
    (c) Events(iii) Mountaineering

    a) (a) – (ii), (b) – (i), (c) – (iii)
    b) (a) – (iii), (b) – (i), (c) – (ii)
    c) (a) – (ii), (b) – (iii), (c) – (i)
    d) (a) – (iii), (b) – (ii), (c) – (i)

  3. Match the following and select the appropriate option.
    (i) Setting objectives(a) Assumption about future
    (ii) Developing Premises(b) Monitoring the plans
    (iii) Evaluating alternatives(c) Increase in sales by 20%
    (iv) Follow-up action(d) Weigh the pros and cors

    a) (i) – (c), (ii) – (a), (iii) – (d), (iv) – (b)
    b) (i) – (c), (ii) – (a), (iii) – (b), (iv) – (d)
    c) (i) – (d), (ii) – (b), (iii) – (a), (iv) – (c)
    d) (i) – (d), (ii) – (c), (iii) – (a), (iv) – (b)
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  4. Mr. Raghav, Finance manager of Manav InfraTech Pvt. Ltd., prepared a detailed plan of financial needs of the firm in coming six months and the sources from where funds will be acquired to meet out these needs as company is planning to open a new branch in other states of India. Identify the financial concept discussed here:
    a) Working capital
    b) Business cycle
    c) Financial planning
    d) Capital structure
  5. Mr. X purchased a car for ₹ 15 lakhs but he is not satisfied with the quality and performance of the car. The company of the car did not provide any remedy to him. Under which authority of Consumer Protection Act, 2019 can he file an appeal?
    a) National Commission
    b) None of these
    c) District Commission
    d) State Commission
  6. Which of the following is not a feature of controlling?
    a) The nature and extent of control doesn’t remain same at all levels of management.
    b) Controlling is a continuous process.
    c) The nature and extent of control remains same at all levels of management.
    d) Controlling is pervasive.
  7. The National Stock Exchange of India was recognized as stock exchange in the year:
    a) 1992
    b) 1993
    c) 1995
    d) 1994
  8. Security Agents Ltd. provides security services. They gave an advertisement in newspaper for hiring males for the post of Security Guard who are reliable and keep client information confidential. 75 candidates approached them and Security Agents Ltd. finalized 10 candidates to be selected after conducting required test and interview. Out of the following, identify the next step to be followed by Security Agents Ltd.
    a) Reference and background check
    b) Job offer 
    c) Selection decision
    d) Medical examination
  9. Which amount of the following statements is true?
    1. Higher competition requires larger stocks to meet urgent orders from customers which results into requirement of more working capital.
    2. The companies having growth prospects require lesser amount of working capital.
    3. If the rate of inflation is high, an organisation is required to invest less in working capital.
    4. All of the above

    a) Option (iv)
    b) Option (i)
    c) Option (iii)
    d) Option (ii)

  10. In order to make the Annual Day of the school a successful event, the Headmistress of the school segregated all the activities into task groups each one dealing with a specific area. For instance, decorations, refreshments, backstage support, etc. Each group was put under the charge of one teacher. Identify the function of management performed by the Headmistress by dividing the activities and assigning the duties?
    a) Planning
    b) Directing
    c) Staffing
    d) Organising
  11. Acquiring a new fixed asset is an example of:
    a) working capital decision
    b) Capital budgeting decisions
    c) financing decision
    d) Dividend decision
  12. Which of the following is not a feature of primary market?
    a) There is no fixed geographical location
    b) Prices of securities are determined by the issuing company
    c) Investor can sell securities in the market
    d) Parties involved are issuing company and the investors
  13. Principle of ________ requires good superiors at all levels, clear and fair agreements and judicious application of penalties.
    a) Discipline
    b) Direction
    c) Unity of Command
    d) Order
  14. R-Ox Ltd. wants to increase their market share by 4.5% in next two years. It spent a lot of money to hire specialized people for framing their plans, collecting important facts about environment who took lot of time to frame plans for the company. The competition has started increasing, and it is not able to beat its competitors because it has already spent a huge amount. The plan failed and company suffered a huge loss. Identify the limitation of planning stated in the given case.
    a) Planning is a time-consuming process.
    b) Planning involves huge cost.
    c) Planning may not work in a dynamic environment.
    d) All of these.
  15. That part of management which is connected with the financial activities is called ________ management.
    a) Working capital
    b) Personnel
    c) Production
    d) Financial
  16. Which of the following is the function of financial market?
    a) Mobilisation of savings and channeling them into the productive lines
    b) All of these
    c) Facilitating price discovery for the financial assets
    d) Providing liquidity to financial assets
  17. The work performed by Top Level Management is ________.
    a) Easy
    b) Oversee the efforts of workforce
    c) Complex and Stressful
    d) Concerned with control of operative employees
  18. The government has been doubling down on its efforts to switch to 100% electric vehicles by 2030. Many companies such as Tata Motors, Kinetic Motors, Maruti Suzuki, and Hyundai Motors are all readying their EV models for a 2020 launch in order to support the plan.
    Identify the type of plan being described in the above lines.
    a) Strategy
    b) Programme
    c) Objective
    d) Method
  19. Samara Ltd. has Debt Equity ratio of 3 : 1 whereas Gehlot Ltd. has Debt Equity ratio of 1 : 1. Name the advantage Samara Ltd. will have over Gehlot Ltd., when the rate of interest is lower than the rate of return on investment of the company.
    a) Low risk
    b) Greater flexibility
    c) Trading on equity
    d) Low cost of equity
  20. Controlling function of an organisation is:
    a) Backward looking
    b) Forward looking
    c) Forward as well as backward looking
    d) None of the above
  21. Three groups of employees of ‘Gama Limited’ are working at different posts. The first group of employees is responsible for the welfare and survival of the organisation. In order to discharge its responsibility properly, this group continuously keeps a watch over the Business Environment. With a view to coping with the changes going on in the Business Environment, this group immediately discusses the change to be brought about in the company’s plans. The second group of employees is responsible for maintaining quality and safety standards, and minimising wastages. The responsibility of the third group of employees is to explain the policies decided by the top management and developing the feeling of cooperation among all the departments of the company.
    1. Identify the concept of management described in the paragraphs given above.
    2. Identify the three types of concept identified in 6a’ by quoting the relevant lines.
  22. Sunidhi has started a designer studio in the basement of her residence after completing her masters in fashion designing. She has appointed ten employees to take care of the various aspects of the work. She interacts regularly with each employee to tell exactly what is expected of him/her and what he/she needs to do to be regarded as a good performer. At the same time she allows a free work environment wherein the employees openly chit chat with each other in order to fulfil their social and emotional needs. Sometimes, these interactions also lead to spreading rumours which are not authentic.
    In context of the above case:

    1. Name and explain the two types of communication being referred to in the above paragraph.
    2. How does effective communication increases managerial efficiency?
  23. State any three points of importance of financial planning.


    Give the meaning of Financial Management. State its main objective.

  24. State any eight reliefs available to a consumer under the provision of CPA, 1986.


    State any two functions performed by non-governmental organisation for consumer protection.

  25. A company is manufacturing garments. The manager wants to increase the profits by:
    1. Purchasing new high-speed machines, or
    2. Increasing the sales price, or
    3. Using waste material in manufacturing stuffed toys. He decided that ‘using waste material’ to increase the profit is the best solution for him.
      1. Identify the concept of management involved.
      2. Mention the steps involved in the above process.
      3. To complete the process of the concept identified in (a), what further steps does the manager have to take?


    Wazir Ahmed joins ‘Ashiyana Ltd.’ a company dealing in real estate, as a human resource manager. Through a series of interactions with his team during lunch breaks, he comes to know that quite a few managers at middle and senior levels have recently left the organisation as their promotions were overdue. Therefore, in order to reinstate the confidence of the staff, he lays out a clear cut plan consisting of a set of general guidelines for both time bound and performance related appraisals of the mangers at all levels. Moreover, he develops standardized processes containing a series of steps specified in a chronological order for its implementation.
    In context of the above case:

    1. Identify the two different types of plans that Wazir Ahmed proposes to implement in order to reinstate the confidence of the staff by quoting lines from the paragraph.
    2. Distinguish between the two types of plans as identified in part (a).
  26. There are two managers, Rahul and Pawan. Rahul is saying that ‘Controlling is forward looking whereas according to Pankaj ‘Controlling is looking back’. Who is correct? Explain why?


    Vishesh works as an interior designer. He gets a contract to redesign a play school. He employs three painters on the site assuming that an average painter will be able to paint 10 desks in a day. At the end of the first day of their work, Vishesh finds that the painter A, painter B, and painter C have painted 12, 14 and 15 desks respectively. On comparing the actual performance with the planned performance, he realises that the standard set by him is too low. Consequently, he decides to review and revise the standard and raise it.
    In the context of the above case:

    1. Identify the function of management being performed by Vishesh.
    2. “Planning and controlling are both backwards-looking as well as forward-looking functions.” Explain the statement with reference to the above paragraph.
  27. There are three departments, Arts, Science and Commerce in a college. Dr. Sahil Budhiraja is the head of all the three departments. He is an M.Com., PhD. Dr. Rekha Sood is the Principal of the college. She always keeps this in mind that whatever message she is to convey to the teachers should be routed through the medium of head of the department. All teachers have also been instructed that they too should communicate with the Principal through the medium of head of the department. Thus there is a pre-defined arrangement of communication in the college. Dr. Budhiraja is looking after three departments of different nature. He is not able to control them properly. A principal is also not satisfied with his performance.
    Identify and explain two principles of management mentioned in the above paragraph. Quote the lines of the identified principles.
  28. Neha was a regional sales manager in ‘Good Look Garments Ltd. ‘for ten years. On the retirement of the marketing manager, Neha applied for the same post as she was extremely ambitious and had dedicated all her energies to obtain the post of a marketing manager. However, the top management of the company decided to fill this post by selecting a better person from outside the company. Because of this Neha was heart-broken and her performance declined.
    When the new marketing manager joined, one of her major problems was how to motivate and inspire Neha to her former level of performance.
    Suggest any three non-financial incentives that the new marketing manager may use to motivate Neha.
  29. These days, the development of a country is also judged by its system of transferring finance from the sector where it is in surplus to the sector where it is needed most. To give strength to the economy, SEBI is undertaking measures to develop the capital market. In addition to this there is another market in which unsecured and short-term debt instruments are actively traded everyday. These markets together help the savers and investors in directing the available funds into their most productive investment opportunity.
    1. Name the function being performed by the market in the above case.
    2. Also, explain briefly three other functions performed by this market.
  30. Harish purchased a medicine from ‘Bhatia Medical Stores’ for his son, who had high fever. Even after giving the medicine his son’s condition did not improve and he had to be hospitalised. Doctor informed Harish that the medicine given to his son was spurious. Harish complained about this to Bhatia Medical Stores’. As a result, ‘Bhatia Medical Stores’ decided to file a complaint against the manufacturer in the consumer court. Can ‘Bhatia Medical Stores’ do this? Give reason in support of your answer. Also explain who is a consumer as per ‘Consumer Protection Act 1986’.
  31. Mr Naresh recently completed his MBA from one of the Indian Institutes of Management in Human Resource Management. He has been appointed as Human Resource Manager in a Truck, Manufacturing Company. The company has 1,500 employees and has an expansion plan in hand that may require additional 500 persons for various types of jobs. Mr Naresh has been given the complete charge of the company’s Human Resource Department.
    List out the specialised activities that Mr Naresh is supposed to perform as the Human Resource Manager of the company.


    Ashish, the Marketing Head, Raman, the Assistant Manager, and Jyoti, the Human Resource Manager of Senor Enterprises Ltd. decided to leave the company. The Chief Executive Officer of the company called Jyoti, the Human Resource Manager and requested her to fill up the vacancies before leaving the organization. Informing that her subordinate Miss Alka Pandit was very competent and trustworthy, Jyoti suggested that if she could be moved up in the hierarchy, she would do the needful. The Chief Executive Officer agrees for the same. Miss Alka Pandit contacted Keith Recruiters who advertised for the post of marketing head for Senor Enterprises Ltd. They were able to recruit a suitable candidate for the company.
    Raman’s vacancy was filled up by screening the database of unsolicited applications lying in the office.

    1. Name the internal/external sources of recruitment used by Senor Enterprises Ltd. to fill up the above-stated vacancies.
    2. Also, state any one merit of each of the above-identified sources of recruitment.

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  32. Naman and Govind after finishing their graduation under the vocational stream decided to start their own travel agency which will book Rail Tickets and Air Tickets on a commission basis. They also thought of providing tickets within ten minutes through the use of the internet. They discussed the idea with their Professor Mr. Mehta who liked the idea and suggested them to first analyze the business environment which consists of investors, competitors and other forces like social, political, etc. that may affect their business directly or indirectly. He further told them about the technological improvements and shifts in consumer preferences that were taking place and hence they should be aware of the environmental trends and changes that may hinder their business performance. He emphasized on making plans keeping in mind the threat posed by the competitors so that they can deal with the situation effectively. This alignment of business operations with the business environment will result in better performance.
    1. Identify and state the component of the business environment highlighted in the above Para.
    2. State any two features of the business environment as discussed by Professor Mehta with Naman and Govind.
    3. Also, state two points of importance of the business environment as stated by Professor Mehta in the above situation.


    The government of India announced the Demonetization of ₹ 500 and ₹ 1,000 currency notes with effect from the midnight of November 8, 2016. As a result, the existing ₹ 500 and ₹ 1,000 currency notes ceased to be legal tender from that date. New currency notes of the denomination of ₹ 500 and ₹ 2,000 were issued by Reserve Bank of India after the announcement.
    This step resulted in a substantial increase in the awareness about and use of Point of Sale machines, e-wallets, digital cash and other modes of cashless transactions. Also, increased transparency in monetary transactions and disclosure led to a rise in government revenue in the form of tax collection.

    1. Enumerate the dimensions of the business environment highlighted above.
    2. State the features of Demonetization.
  33. Voltage fluctuations have been common and quite high in India. They harm our electrical appliances like televisions, refrigerators, and air conditioners, often leaving them in a permanently damaged condition. N-Guard Company decided to manufacture stabilizers for North India where the voltage fluctuation ranges from 220 V to 230 V.
    Once the demand for North India was taken care of, they decided to launch stabilizers of varying voltages from 90 V – 260 V for meeting the requirements of voltage fluctuations in other regions of India also. Three engineers were appointed for the South, West and East regions of India, as the voltage was different in all the three regions. Though all the engineers were appointed to manufacture stabilizers, the product differed from region to region.

    1. Identify the organizational structure of the N-Guard Company.
    2. State any two advantages and two limitations of the structure identified in the above para.
  34. Advertisement is an important business activity. On the one hand, it makes available to the people information regarding different new and old products and on the other, it is also a source of living for many persons. Impressed by these traits of advertisement Tanu, Manu and Sanchit, three students of Class-XII made up their mind to go ahead with project work on an advertisement. All the three conversed with the people about advertisement. Each one of them, on the basis of his survey, concluded as under:
    i. Tanu opined that advertisement costs get transferred to consumers in the form of high prices.
    ii. Manu was of the opinion that advertisement showed reality in a twisted form.
    iii. Sanchit maintained that advertisement was turning people from reality to artificiality.

    1. What do the above remarks about advertisement hint at? Clarify it.
    2. Identify two values that advertisement presents to society.

Class 12 – Business Studies
Sample Paper – 1 (2022-23)


  1. (b) Middle-level management
    Explanation: Middle-level management
  2. (c) (a) – (ii), (b) – (iii), (c) – (i)
    Explanation: (a) – (ii), (b) – (iii), (c) – (i)
  3. (a) (i) – (c), (ii) – (a), (iii) – (d), (iv) – (b)
    Explanation: (i) – (c), (ii) – (a), (iii) – (d), (iv) – (b)
  4. (c) Financial planning
    Explanation: Financial planning is broader in scope as it does not end by raising estimated finance. It includes long term investment decision. In financial planning finance manager analyses various investments plans and selects the most appropriate.
  5. (c) District Commission
    Explanation: Under the Consumer Protection Act, 2019, the District CDRC will entertain complaints when the value of goods or service is upto ₹ 1 crore.
  6. (c) The nature and extent of control remains same at all levels of management.
    Explanation: The nature and extent of control remains same at all levels of management.
  7. (a) 1992
    Explanation: The National Stock Exchange of India was promoted by leading Financial institutions at the behest of the Government of India, and was incorporated in November 1992 as a tax-paying company.
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  8. (a) Reference and background check
    Explanation: After interview, reference and background of the employee is checked. Many employers request names, addresses, and telephone numbers of references for the purpose of verifying information and, gaining additional information on an applicant. Previous employers, known persons, teachers and university professors can act as references.
  9. (b) Option (i)
    Explanation: Higher level of competitiveness may necessitate larger stocks of finished goods to meet urgent orders from customers. This increases the working capital requirement. Competition may also force the firm to extend liberal credit terms.
  10. (d) Organising
    Explanation: Organising essentially implies a process which coordinates human efforts, assembles resources and integrates both into a unified whole to be utilised for achieving specified objectives.
  11. (b) Capital budgeting decisions
    Explanation: The decision to invest in fixed assets must be taken very carefully as the investment is usually quite large. Such decisions once taken are irrevocable except at a huge loss. Such decisions are called capital budgeting decisions.
  12. (c) Investor can sell securities in the market
    Explanation: Investor can sell securities in the market
  13. (a) Discipline
    Explanation: Discipline
  14. (d) All of these.
    Explanation: Planning requires a lot of time to collect information, its analysis and interpretation. So, it is a time consuming process. When plans are drawn up huge costs are involved in their formulation. The environment in which a business survives is dynamic as it keeps on changing. The dynamic environment may sometimes lead to failure of plans.
  15. (d) Financial
    Explanation: Financial Management is concerned with optimal procurement as well as the usage of finance.
  16. (b) All of these
    Explanation: All of these
  17. (c) Complex and Stressful
    Explanation: The work performed by Top Level Management is complex and stressful because these top-level managers are responsible for the welfare and survival of the organisation. They are responsible for all the activities of the business and for its impact on society.
  18. (a) Strategy
    Explanation: Strategy is the correct option.
  19. (c) Trading on equity
    Explanation: If the ROI of the company is higher, it can choose to use trading on equity to increase its EPS, i.e., its ability to use debt is greater.
  20. (c) Forward as well as backward looking
    Explanation: Controlling is a forward and backwards-looking function because it assesses the work is done and analyses deviations from the set standards and based on these deviations it attempts to take the required corrective measures to guides the future course of action and aims at improving future performance.
    1. Here the levels of management have been described.
    2. Here the following three levels of management have been highlighted:
      1. “The first group………………..of the organisation” (Top-Level Management)
      2. “The second group……………………wastages” (Lower-Level Management)
      3. “The responsibility of third group…………departments of the company” (Middle-Level Management).
    1. The two types of communication being referred to in the above paragraph are formal communication and informal communication.
      1. Formal communication: Formal communication refers to the interchange of information officially. The flow of communication is controlled and is a deliberate effort. This makes it possible for the information to reach the desired place without any hindrance, at a little cost and in a proper way. This is also known as ‘Through Proper Channel Communication.’
      2. Informal communication: Informal communication is casual communication between coworkers in the workplace. It is unofficial in nature and is based in the informal, social relationships that are formed in a workplace outside of the normal hierarchy of business structure. That is why informal business communication can take place between the CEO and an hourly worker. This type of communication is important in the workplace as it can help with employee morale and can encourage the feeling of belonging for the employees as well as a client or customer.
    2. Effective communication increases managerial efficiency by lubricating the working of the entire organisation through a quick and effective performance of managerial functions. It enables the management to express the goals and targets, issue instructions, allocate jobs and responsibilities and look after the performance of subordinates.
  21. Financial planning helps you determine your short and long-term financial goals and create a balanced plan to meet those goals.
    Its importance can be highlighted from the following factors:

    1. Adequate funds have to be ensured.
    2. Financial Planning helps in ensuring a reasonable balance between outflow and inflow of funds so that stability is maintained.
    3. Financial Planning ensures that the suppliers of funds are easily investing in companies which exercise financial planning.


    Financial Management means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise. It means applying general management principles to financial resources of the enterprise.
    The primary objective of financial management is Wealth maximisation. Wealth maximization is the concept of increasing the value of a business in order to increase the value of the shares held by stockholders. The concept requires a company’s management team to continually search for the highest possible returns on funds invested in the business, while mitigating any associated risk of loss. This calls for a detailed analysis of the cash flows associated with each prospective investment, as well as constant attention to the strategic direction of the organization.

  22. The reliefs available to a consumer under the CPA, 1986 are
    1. ‘Remove its defects’ order can be passed by the authority if after proper testing the product proves to be defective.
    2. Orders can be passed to replace the defective product with a new non-defective productive of the same type.
    3. Orders can be passed to refund the price paid by the complainant for the product.
    4. To pay a reasonable amount of compensation for any loss suffered.
    5. To pay punitive damages in appropriate circumstances.
    6. Not to offer hazardous goods for sale.
    7. To withdraw the hazardous goods from sale.
    8. To cease the manufacture of hazardous goods.


    Consumer organizations and NGO’s perform several functions for the protection and promotion of interest of consumers. These include:

    1. Educating the general public about consumer rights by organising training programmes, seminars, and workshops.
    2. Publishing periodicals and other publications to impart knowledge about consumer problems, legal reporting, reliefs available and other matters of interest.
    1. Planning is the concept used above.
    2. The steps involved are: Identifying alternative courses of action, Evaluating alternative courses and Selecting the best alternative.
    3. Other steps which are to be taken in the planning process are
    • Implementing the plan -The step is concerned with putting the plan into action, i.e., doing what is required.
    • follow-up action-To see whether plans are being implemented and activities are performed according to schedule


    1. Policies and Programmes are the two different types of plans that Wazir Ahmed proposes to implement in order to reinstate the confidence of the staff.
    2. Difference between Policies and Programmes: Policies are general statements or understandings which provide guidance in decision-making to various managers. A programme is a sequence of activities designed to implement policies and accomplish objectives.

  23. Both Rahul and Pawan are partially correct as Controlling is both forward as well as backward looking.
    (i) Controlling as a forward looking function: Controlling is a forward looking function because it helps to analyse deviations and to apply them for future decision making. These deviations helps in planning and to avoid wastage of resources.
    (ii) Controlling as a Backward looking function:
    While performing controlling function the manager compares the actual performance with the Past Planned Performance in order to complete and make the planning function successful and acheive the desired results.


    1. Controlling is the function of management being performed by Vishesh. Controlling is one of the important functions of a manager. In order to seek planned results from the subordinates, a manager needs to exercise effective control over the activities of the subordinates. In other words, the meaning of controlling function can be defined as ensuring that activities in an organization are performed as per the plans. Controlling also ensures that an organization’s resources are being used effectively & efficiently for the achievement of predetermined goals.
    2. Planning and controlling are both backward looking as well as forward looking: Controlling is backward looking because like a postmortem of past activities the manager looks back to previous year’s performance to find out its deviation from standard planning is also backward looking because planning is guided by past experiences and feedback report of controlling function. Planning is forward looking because plans are prepared for future. It involves looking in advance and making policy for maximum utilization of resources in future. Controlling is also forward looking because controlling does not end only by comparing past performance with standard. It involves finding the reasons for deviations and suggests the measures so that these deviations do not occur in future. So, this statement that planning is forward looking and controlling is backward looking is only partially correct as planning and controlling are both forward looking as well as backward looking.
    1. She always keeps this in mind that whatever she is to convey to the teachers she communicates it through the medium of head of the department. (Principle of Scalar Chain)
      College is following this principle. By following this principle orderly flow of communication is established.
    2. Dr. Budhiraja is looking after three departments of different nature. (Principle of Unity of Direction)
      College is ignoring this principle. Nature of the three departments of the college is different. As such, their heads should not only be different but also such persons as belong to the concerned department. By pursuing this principle, the efficiency of the organisation improves.
  24. Non-Financial incentives that the new marketing manager may use to motivate Neha are:

    1. Job Enrichment: Job enrichment 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 the opportunity for personal growth and meaningful work experience. If jobs are enriched and made interesting, the job itself becomes a source of motivation to Neha.
    2. Employee Recognition programs: Employee recognition means, evaluation of their work and due recognition. Recognition means acknowledgment with a show of appreciation. Neha can also be motivated by this program.
    3. Employee participation: Neha must be made involve in the decision making of the issues related to her. In many companies, these programs are in practice in the form of joint management committees, etc.
    1. The function performed by the market here is mobilisation of savings and channelising them into the most productive use/allocative function.
    2. The other three functions of financial market are:
      1. Facilitating price discovery: The price of any goods or services is determined by the forces of demand and supply.  Like goods and services, the investors also try to discover the price of their securities. The financial market is helpful to the investors in giving them proper price.
      2. Reduce the cost of transactions: Financial market provides complete information regarding price, availability and cost of various financial securities So, investors and companies do not have to spend much on getting this information.
      3. Provides liquidity to financial assets: The investors can invest their money, wherever they desire, in securities through the medium of financial market and convert them into cash by selling their financial assets through the mechanism of financial market.
    1. Bhatia Medical Stores cannot file a complaint. This is because Bhatia Medical Stores is not a consumer as per Consumer Protection Act, 1986 because they bought the goods for resale/commercial purpose.
    2. A ‘consumer’ is generally understood as a person who uses or consumes goods or avails of any service. Under the Consumer Protection Act, a consumer is defined as:
      1. Any person who buys any goods for a consideration, which has been paid or promised, or partly paid and partly promised, or under any scheme of deferred payment. It includes any user of such goods, when such use is made with the approval of the buyer, but does not include a person who obtains goods for re-sale or any commercial purpose.
      2. Any person who hires or avails of any service, for a consideration which has been paid or promised, or partly paid and partly promised, or under any system of deferred payment. It includes any beneficiary of services when such services are availed of with the approval of the person concerned, but does not include a person who avails of such services for any commercial purpose.
  25. Mr Naresh is working as a Human Resource manager. The duties of Human Resource Managers are:
    1. Training and development of employees for efficient performance.
    2. Maintaining labour relations and union-management relations.
    3. Handling grievances and complaints.
    4. Providing for social security and welfare of employees.

    Thus, their work, which is often decidedly administrative in nature, involves documenting grievances, terminations, absences, performance reports, and compensation and benefits information. Beyond administrative duties, however, HR assistants are also often involved in recruiting, hiring, and training new employees.


    1. The internal and external sources of recruitment used by Senor Enterprise Ltd. to fill up the above-stated vacancies are stated below:
      1. The vacancy for the post of Human Resource Manager has been filled up through Promotion.
      2. The vacancy for the post of Marketing Head has been filled up through Placement Agencies and Management Consultants.
      3. The vacancy for the post of Assistant Manager has been filled up through Casual Callers.
    2. The relative merit of each of the internal and external sources of recruitment used by Senor Enterprise Ltd. to fill up the above-stated vacancies are stated below:
      1. Promotion: It boosts the morale of not only the employee who is promoted but also fo other employees as they get an assurance that their competence will also be recognized in due course.
      2. Placement Agencies and Management Consultants provide specialized services to the organizations to recruit technical, professional and managerial personnel at the middle and top levels.
      3. Casual Callers as a source of recruitment reduces the cost of recruiting the workforce in comparison to other sources.

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    1. Technological Environment is the component of the business environment highlighted in the above Para. Technological environment refers to the state of science and technology in the country and related aspects such as rate of technological progress, institutional arrangements for development and application of new technology, etc.
    2. The two features of the business environment as discussed by Professor Mehta with Naman and Govind are as follows:
      (i) Complex: A business environment has a plethora of factors, events, conditions, and influences arising from a variety of sources. Therefore, it is very difficult to understand all the factors affecting a given environment at any time.
      (ii) Dynamic: Like the natural environment, a business environment also keeps changing constantly. This is due to a wide range of influencing factors. These factors create dynamism in the environment causing it to continuously change its shape and character.
    3. The two points of importance of business environment as stated by Professor Mehta in the above situation are:
      (i) Enables to Identify Business Opportunities: All changes are not negative. If they understood and evaluated them, they can be the reason for the success of a business. It is very necessary to identify a change and use it as a tool to solve the problems of the business or populous.
      (ii) Helps in Tapping Useful Resources: Careful scanning of the Business Environment helps in tapping the useful resources required for the business. It helps the firm to track these resources and convert them into goods and services.


    1. The Dimensions of business environment highlighted above are:
      1. Political dimension: ‘The government of India announced Demonetization of ₹ 500 and ₹ 1,000 currency notes with effect from the midnight of November 8, 2016.’
      2. Legal dimension: ‘As a result, the existing ₹ 500 and ₹ 1,000 currency notes ceased to be legal tender from that date.’
      3. Technological dimension: ‘The step resulted in a substantial increase in the awareness about and use of Point of Sale machines, e-wallets, digital cash and other modes of cashless transactions.’
    2. Features of Demonetization are:
      1. Acted as a Measure of tax administration- As a result of demonetization, various black money holders had to declare the unaccounted wealth and pay taxes along with a penalty.
      2. Acted as a Measure to avoid tax evasion- As the wealth was to be accounted for in a determinate period, it was a clear indicator that the government will not tolerate tax evasion.
      3. Acted as a Measure of channelizing savings into the financial system- As surplus money was deposited in banks the financial system was able to become more robust.
      4. Helped to Create ‘cash-less’ or cash-lite’ economy- for increasing financial saving and reducing tax evasion.
      5. Acted as a means of curbing black marketing, corruption and circulation of fake currency.
    1. The divisional structure is followed by the N-Guard Company. N-Guard Company decided to appoint different engineers for all the regions. Though all the engineers were appointed to manufacture stabilizers the product differed from region to region. In the divisional structure activities are grouped on the basis of products or services offered by the business.
    2. The advantages of a divisional structure are:
      i) Managerial efficiency: A divisional structure provides numerous opportunities for the development of skills and knowledge of the managers. The head of each division gains experience as he or she deals with a variety of functions simultaneously. This enables the division head to grow professionally and improve proficiency.
      ii) Measurement of performance: In a divisional structure, the performance of each of the divisions are judged on the basis of its profit and loss during a particular period. This type of assessment of performance is easier and helps in taking appropriate and timely corrective action in case of poor performance.
      The limitations of a divisional structure are:
      i) Departmental conflicts: Sometimes conflicts may arise among different divisions with regard to various decisions and actions of the organization such as those relating to the allocation of funds and resources.
      ii) Increase in cost: As there exists a similar functional structure under each division, the same set of functions are performed under each department. Thus, there is a high probability of overlapping activities, which results in a rise in cost for the organization.
    1. The remarks in the above paragraph hint at objections against the advertisement. According to all the three participants in the project work, the main disadvantages of advertisement are as under:
      1. It Adds to Costs: An organisation has to spend a huge amount on advertisement. It increases the cost of the products. To meet the expenditure, the price of the product is raised. No manufacturer pays for advertising expenses out of his Advertising, therefore, it leads to an unnecessary rise in prices. In this regard, it is said that advertising costs are passed on to the consumers in the form of high prices.
      2. It Confuses the Buyers: Many a time distorted version of reality is depicted in the advertising. Under the influence of advertisements, consumers go in for the product. When they use it, they feel cheated. Then they realize that the information given in the advertisement about the product was quite different from the actual product. In this way, advertisement states people’s confidence in it. Therefore, it is said that advertising confuses consumers rather than helping them.
      3. It undermines Social Values: Advertisement is a kind of day-dreaming for the people. It drives people away from reality into the realm of artificiality. Through its medium people are regularly informed about new products. Only very few products of any worth for them. The brilliance of new products overwhelms them. They are tempted to buy them but lack the necessary resources. Consequently, they feel frustrated with their lot. Considering it a social evil, it can be said that advertisement undermines social values.
    2. Values:
      1. Adds to knowledge.
      2. Provides employment opportunities.


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