AglaSem Schools

AglaSem Schools
AglaSem Schools
AglaSem Schools
AglaSem Schools
AglaSem Schools
AglaSem Schools
AglaSem Schools
 AglaSem Schools

Q. SET No MARKING SCHEME-2013-14 DISTRI-

BUSINESS STUDIES BUTION
DELHI-66/1/1 OF MARKS
66/1/1 66/1/2 66/1/3 EXPECTED ANSWERS / VALUE POINTS
1 6 12 Q. What is meant by ‘management of people’?
Ans. Management of people means dealing with 1 mark
employees as individuals with diverse needs and
behaviour as well as dealing with individuals as a
group of people.
2 5 11 Q. What is the objective of ‘Method Study’ as a
technique of scientific management? 1 mark
Ans. The objective of method study is to find out
one best way of doing the job.
3 4 10 Q. What is included in ‘Political Environment
of business? State. 1 mark
Ans. Political environment includes political conditions
such as general aglasemstabilityandpeacein the country
and specific attitudes that elected government
representatives hold towards business.
4 3 6 Q. Give the meaning of ‘Policy’ a type of plan. 1 mark
Ans. Policy is a general guideline which brings
uniformity in decision making for achievement of
predetermined objectives.

5 1 7 Q. Give the meaning of ‘Authority’ as an element of

delegation.
Ans. Authority refers to the right of an individual to 1 mark
command his sub rdinates and to take action within
the scope of is position.

6 2 5 Q. State any one advantage of ‘Formal

Organisation’.
Ans. Advantages of formal organisation (Any one):
(i) It is easier to fix responsibility. 1 mark
(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 mark
for the heading should be awarded)

7 12 4 Q. Why employees become lethargic when the 1 mark

organisation uses internal sources of recruitment?
State.
Ans. Employees become lethargic when the
organisation uses internal sources of recruitment as

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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 of
human resource management.
Ans. Other specialized activities of human resource
management are: (Any two)
(i) Analysing jobs.
(ii) Selection. ½x 2
(iii) Placement and orientation. =
(iv) Training and development of employees. 1 mark
(v) Performance Appraisal.
(vi) Developing compensation and incentive plans.
(vii) Maintaining labour relations and union
management relations.
(viii) Handling grievances and complaints.
(ix) Providing for social security and welfare of
employees.
(x) Defending the company in law suits and avoiding
legal complications.

9 10 2 Q. Give an example of ‘Employee Recognition

Programmes’ as a non financial incentive.
Ans. Examples of ‘Employee Recognition
Programmes are: (Any one)
(i) Congratulating the employees for good 1 mark
performance.
(ii) Displaying employees achievements on the notice
board or company’s newsletter.
(iii) Awarding best performance
(or any other correct example)
10 9 1 Q What is meant by ‘Encoding’ as an element of
communication? 1 mark
Ans. Encoding means converting the message into
communication symbols such as words, pictures,
gestures, etc.
11 8 8 Q. Define ‘Capital Structure’.
Ans. The capital structure means the proportion of
debt and equity used for financing the operations of a 1 mark
business.
or
It refers to the mix between owner’s funds and
borrowed funds.
12 7 9 Q. How does ‘Inflation’ affect the working capital
requirements of a company? State. 1 mark
Ans. With inflation, the working capital requirements

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become higher as larger amount of money is required

to maintain a constant volume of production and sales.

13 15 16 Q. Rahim was working in an enterprise on daily

wages basis. It was difficult for him to fulfill the
basic needs of his family. His daughter fell ill. He
had no money for his daughter’s treatment. To
meet the expenses of her treatment, he participated ½ mark
in a cycle race and won the prize money. The cycle for
company offered him a permanent pensionable job identification
which he happily accepted. +
(i) By quoting the lines from the above para identify ½ mark for
the needs of Rahim that are satisfied by the offer of quoting the
cycle company. line
(ii) Also, explain two other needs of Rahim followed =½+½
by above that are still to be satisfied. = 1 mark
aglasem
Ans. (i) Needs of Rahim that are satisfied by the offer +
of cycle company are Physiological needs and Safety/ ½mark for
security needs naming the
‘The cycle company offered him permanent need
pensionable job’. +
(ii) The other needs followed by the above stated needs ½mark for its
explanation
that are still to be satisfied re: =1x2
(a) Affiliation/ Belongingness needs. =2marks
These needs refer to the need for affection, sense of
belonging, acceptance and friendship. = 1+2
(b) Esteem needs 3marks
These needs refer to the need for self respect,
autonomy status, recognition and attention.
14 16 15 Q. How directing helps in efficient and effective
functioning of the organisation? Explain by giving
any three points. ½mark for
Ans. Directing helps in efficient and effective the heading
functioning of the organisation because: (any three) +
(i) It helps to initiate action. ½mark for
(ii) It integrates employees’ efforts. explan-
(iii) It guides employees to realise their potential. ation
(iv) It facilitates changes. =1x3
(v) It brings stability and balance in the organisation. = 3 marks
(If an examinee has not given the headings as above
but has given the correct explanations, full credit
should be given)
15 14 13 Q. ‘Financial market plays an important role in the
allocation of scarce resources in an economy by
performing various functions.’ Explain any three

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functions of financial market.

Ans. Financial market plays an important role in the ½mark for
allocation of scarce resources in an economy by the heading
performing the following functions: (Any three) +
(i) Mobilisation of savings and channelising them into ½mark for
most productive use. explan-
(ii) Facilitating price discovery. ation
(iii) Providing liquidity to financial assets. =1x3
(iv) Reducing the cost of transactions. = 3 marks
(If an examinee has not given the headings as above
but has given the correct explanations, full credit
should be given)
16 13 14 Q. Crackers Ltd., a fire cracker manufacturing
company launched some new products on eve of
Diwali which attracted many buyers. To meet the
increased demand, the company employed children ½ mark for
from nearby villages. Although the product was in identification
great demand, appropriate safety warnings were +
not mentioned on the packets that led to many ½ mark
accidents. for its
(i) Identify and explain the import nt product explanation
related decision that was not taken into =½ +½
consideration by the company = 1 mark
(ii) Also, identify any two v lues which were +
schools
violated by the company. 1 mark for
Ans. (i) The important product related decision that each value
was not taken into nsideration by the company is =1x2
Labelling. =2 marks
It is the process of designing the label and putting it on =1+2
the pa kage to provide information regarding the =
product, its contents, methods of use etc. 3 marks
(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)
17 - - Q. State any three points of importance of
consumer protection from the point of view of
consumers.
Ans. Importance of Consumer protection from the 1x3
point of view of consumers: =
(i) It educates consumers about their rights and reliefs
available to them. 3 marks
(ii) It organises consumers in the form of consumer
organisations which would take care of their interests.

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(iii) It protects consumers against exploitative

and unfair trade practices.
(If an examinee has given only the headings,
½ mark 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 Informed
The consumer has a right to have complete information
about the product he intends to buy such as,
ingredients, date of manufacture, price, quantity etc. 1 ½ marks
(ii) Right to safety +
Right to be protected against goods and services 1 ½ marks
which are hazardous to life and those which do not =
conform to the safety norms. 3marks
Q. XYZ Power Ltd. set upaglasemfactoryfor
19 21 22 manufacturing solar lanterns in a remote village as

there was no reliable supply of electricity in rural ½mark for

areas. The revenue earned by the company was identification
sufficient to cover the costs and the risks. The of each
demand of lanterns was increasing day by day, so objective
the company decided to increase production to +
generateschoolshighersales.For this, they decided to ½ mark
employ people from nearby villages as very few job for its
opportunities were available in that area. The explanation
company also decided to open schools and =
crèches for the ildren of its employees. 1x2
(i) Identify and explain the objectives =
of management discussed above. 2 marks
(ii) State any two values which the company +
wanted to communicate to the society. 1 mark for
Ans. (i) The objectives of management referred to are: each value
Organisational objectives =
These refer to the utilisation of human and material 1x2
resources considering the interest of all =
stakeholders. (b) Social objectives 2 marks
These refer to the creation of benefit for =
various constituents of the society. 2+2
=
(If an examinee has explained survival and 4 marks
growth as objectives of management instead of
organisational objectives, full credit is to be given)

(ii) Values which the company wanted to communicate

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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 with
the help of any four points.
Ans. Understanding of business environment is
important for managers to: (Any four): ½mark for
(i) Identify opportunities and get the first the heading
mover advantage. +
(ii) Identify threats and early warning signals. ½mark for
(iii) Tap useful resources. the
(iv) Cope with rapid changesaglasem. explanation
(v) Assist in planning and policy formulation. =1x4
(vi) Improve performance. = 4 marks
(If an examinee has not given the headings above
but has given the correct exp an tion, full credit
should be given)
21 19 20 Q. How is training of employees beneficial for the
organisation? State by giving any four
reasons. Ans.schoolsTrainingofemployees is 1 mark for
beneficial for the organisation as: (Any four): each
(a) It avoids wastage of efforts and money. statement
(b) It enhances employee productivity.
(c) It equips t e future manager to take over in an
emergen y. 1x4
(d) It reduces employees’ turnover. =
(e) It elps the employees to adopt the new/latest 4 marks
technology.
(If an examinee has given only the headings,
½ mark for each heading should be awarded)

22 20 19 Q. Explain any four points that highlight the

importance of financial planning.
Ans. Financial planning is important to: (any four) ½ mark for
(i) Prepare for the future. each heading
(ii) Avoid business shocks and surprises. +
(iii) Coordinate various business functions. ½ mark for
(iv) Reduce waste and duplication of efforts. each
(v) Link the present with the future. explanation
(vi) Link investment and financing decisions. =
(vii) Evaluate actual performance. 4marks

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3. Investment
outlay
4. Duration

5. Liquidity

(If an examinee has not

given the headings as above
but has given the correct
23 - - explanation, full credit
should be given)
24 - 23
Q. Describe any
five limitations of Q. Differentiate between ‘capital-market’ and ‘money-
planning. market’ on the following basis:
Ans. Limitations of (i) Participants; (ii) Instruments; (iii) Invest ent outlay;
planning: (any five) (iv) Duration and (v) Liquidity.
(a) Leads to Ans. Difference between Capital Market and Money
rigidity. Market:
(b) May not work Basis Capital Market Money Market
1. Participants The participants are The participants
in a dynamic financial institutions, re RBI, financial
½mark for
environment. banks, corpor tes, institutions, banks, each heading
(c) Restricts/Reduc aglasem
foreign investors and corporates, +
es creativity. retail investors. ½mark for
(d) Involves huge 2. Instruments Instruments traded are Instruments traded each
shares, debentures and are treasury bill,
costs. b nds. commercial paper, description
(e) Time certificates of =1 x 5
consuming. deposit, call 5marks
(f) Does not money and
guarantee commercial bill,
success
(If an examinee
has not given the
headings as above
but has given the
correct
description, no 1x5
marks should be =
deducted) 5marks
Investment outlay Investment outlay
is small. is large.
It deals in medium It deals in short
term and long term securities
term securities.
Capital market Money market
securities are securities are
comparatively less comparatively
liquid. more liquid.

25 25 - Q. Explain ‘Price’ as an element of marketing–mix.

Also, explain any four factors that affect the
fixation of price of a product. 1 mark
Ans. Price as an element of marketing mix involves
decisions regarding pricing objectives, pricing +

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 AglaSem Schools

Methods, pricing strategies, pricing policies and price

changes. ½mark for
Factors that affect the fixation of price of a product are: each heading
+ ½ mark for
(Any four) its explanation
(a) Product cost =(1 x4)
(b) Utility and demand = 4 marks
(c) Extent of competition in the market, 1+4
(d) Government and legal regulations. =
(e) Pricing objectives. 5marks
(f) Marketing methods used.
(If an examinee has not given the headings as above
but has given the correct explanation, no marks
should be deducted)
26 24 24 Q. Principles of Taylor and Fayol are mutually
complementary. One believed that the management
should not close its ears to constructive suggestions
made by the employees while the other suggested 1 mark for
that a good company should have an mployee identification
suggestion system whereby sugge tions which result +
in substantial time or cost reduction should be 1 ½ marks
rewarded. Identify and explain the principles of for its
Taylor and Fayol referred in the above para. explanation
Ans. (i) The principle of T ylor referred to is =
Cooperation, Not Individualism 2½x2
It states that there shou d be complete cooperation = 5marks
between the lab ur and the management. Competition
should be replaced by cooperation.
(ii) The principle of Fayol referred to is Initiative

It indicates that the subordinates should be encouraged

to make and execute plans within the prescribed limits
of authority.

27 - - Q. ’Organising involves a series of steps in order to ½mark for

achieve the desired goals.” Explain these steps. each heading
Ans. Steps in the process of organising: +
(i) Identification and division of work. 1 mark for
(ii) Departmentalisation. each
(iii) Assignment of duties to job positions. explanation
(iv) Establishing reporting relationships. =1½x4
(If an examinee has not given the headings as above =
but has given the correct explanation, no marks 6marks
should be deducted)
Or OR
Q. With the help of any four points, explain the

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crucial role that organising plays in an enterprise. ½mark for

Ans. Role of organising: (Any four) each heading
(i) Benefits of specialisation. +
(ii) Clarity in working relationships. 1 mark for
(iii) Optimum utilisation of resources. each
(iv) Adaptation to change. explanation
(v) Effective administration. =1½x4
(vi) Development of personnel. =
(vii) Expansion and growth. 6marks
(If an examinee has not given the headings as above
but has given the correct explanation, no marks
should be deducted)
28 27 28 Q. Explain the various steps in the process of
controlling. ½mark for
Ans. Steps in the process of controlling: each heading
(i) Setting performance standards. +
aglasem
(ii) Measurement of actual performance. 1 mark for
(iii) Comparison of actual performance with the each
standards and analysing deviations. explanation
(iv) Taking corrective action. =
(If an examinee has combined or written separately 1½ x4
any of the above stated points but covered all points =
in order, full credit to be given.) 6 marks
(If an examinee has not given the headings above
but has given the correct explanation, no marks
should be deducted)
Or
Q. Explain any f ur points that highlight the OR
importance of controlling.
Ans. Importance of controlling: (Any four) ½mark for
(i) Accomplishing organisational goals. each heading
(ii) Judging accuracy of standards. +
(iii) Making efficient use of resources. 1 mark for
(iv) Improving employee motivation. each
(v) Ensuring order and discipline. explanation
(vi) Facilitating coordination in action. =1½x4
(If an examinee has not given the headings as above =
but has given the correct explanation, no marks 6marks
should be deducted)

29 - - Q. Explain the following as factors affecting the

requirements of fixed capital:
(i) Scale of operations; (ii) Choice of technique;
(iii) Technology upgradation and (iv) Financing
alternatives.
Ans. Factors affecting the requirements of fixed

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capital:
(i) Scale of operations 1½x4
A larger organisation operating at a higher scale needs =
bigger plant and more space and hence higher
investment in fixed assets. 6marks
(ii) Choice of technique
A capital intensive organisation requires higher
investment in plant and machinery and thus requires
higher fixed capital than a labour intensive
organisation.
(iii) Technology upgradation
Industries where assets become obsolete sooner require
higher fixed capital to purchase such assets.
(iv) Financing alternatives
A firm which can avail of financing alternatives like
leasing requires lower investment in fixed assets and
(i) Stability of earnings aglasem
hence requires less fixed capital. OR
Or
Q. Explain the following factors aff cting
dividend decision:
(i) Stability of earnings; (ii) Growth opportunities;
(iii) Cash flow position and (iv) Taxation policy.
Ans. Factors affecting dividend decision:
schools
Companies with stable earnings are in a better position
to declare higher dividends. 1½x4
(ii) Growth opp rtunities =
Companies having good growth opportunities declare
smaller dividend so as to retain more money to finance 6marks
their investment.
(iii) Ca flow position
Companies with stronger cash flows can declare higher
dividend.
(iv) Taxation policy
Companies can declare higher dividends if the tax on
dividend is lower.
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 Market
Information 1½x4
This involves making an analysis of the available = 6marks
opportunities and threats as well as the strengths and
weaknesses of the organisation which helps in deciding

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which opportunities can best be pursued by it.

(ii) Marketing Planning
This involves development of marketing plans like
plan for increasing the level of production, promotion
of the products, etc to achieve the marketing objectives
of the organisation.
(iii) Customer support services
This includes services like after sales services,
handling customer complaints and adjustments,
maintenance services, technical services etc.
(iv) Physical distribution
Physical distribution involves decision regarding
channels of distribution and decision regarding
physical movement of the product from where it is
produced to a place where it is required by the
customers for their consumption or use.
Or
Q. ‘Though advertising is one of the most OR
frequently used medium of promotion of goods and
services, yet it attracts lot of objections. Explain any
four such objections. ½ mark for
Ans. Though advertising is one of the most frequently each heading
used medium of promotion of oods and services, yet +
it attracts lot of objections which are: (Any four) 1 mark for
(i) Adds to Cost: each
Advertising unnecessarily adds to the cost of the explanation
product, which is ultimately passed on to the buyers in =1½x4
the form of high prices. =
(ii) Undermines Social Values:
Advertising undermines social values and promotes
materiali m and discontent among people.
(iii) Confuses the Buyers: 6marks
There are so many products being advertised that the
buyer gets confused as to which one should he buy.
(iv) Encourages Sale of Inferior Products:
Advertising does not distinguish between superior and
inferior products and persuade people to purchase even
the inferior products.
(v) Some Advertisements are in Bad Taste:
Another criticism against advertising is that some
advertisements are in bad taste. They may not be
approved by the society in general.

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