CBSE

Class 12th HALF YEARLY EXAMINATION SET-B

SESSION 2016-2017
Indraprastha School

General Instructions: This question paper contains 25 questions . All the questions are
compulsory.

1. How does management help in achieving personal objectives? State. [1]

2. Why is it said that principles of management are mainly behavioural in nature? [1]
3. “The understanding of business environment enables the firm to identify opportunities
and threats.” What do ‘opportunities’ and ‘threats’ mean here? [1]
4. Cost of debt is less than cost of equity. Still a company cannot go for entire debt. Why? [1]
5. Art of Accounting' (AOA) - a Coaching Institute teaching accounts to school level and
college level students, recently decided to open its new line of institutes named - 'Building
Business Skills' (BBS), for catering to needs of teaching Business Studies and management
to school as well as college level students. The project was earmarked with an amount of
50 lakhs, for establishing 10 such institutes at selected areas. The decision of opening BBS
chains was in view of changed examination pattern, especially board exam of CBSE and
in order to avail the opportunity. Identify the type of one of the functions of management
mentioned above which will help the coaching institute to acquire dominant position in
the market. [1]
6. In a school, twelve students were given an assignment by a librarian. They were told to
unload the shelves containing old books and stock the shelves with new releases. For this
work, the librarian created different groups of students, assigned work to each group and
gave responsibility of supervising students to the class representative. Which process is
discussed here? [1]
7. Ram purchased a colour television for Rs 70000 without cash-memo from an authorised
dealer with a guarantee that the television will be replaced with a new one if one of its
parts becomes defective within 3 months from the date of purchase. Within 10 days a
part of the television was burnt & on complaining the seller refused to replace the
television. Name the Redressal agency under the consumer protection act where Ram can
file the complaint.
8. Name the element of marketing -mix in which a set of firms and individuals create

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 possession, place and time utility and help in market offering. Identify two major
decisions taken under this element. [1]
9. Action Cancer Hospital launched Cob-Rectal Cancer Camp. For this camp, patients were
invited for free check-ups and consultation. This event was popularised through
newspapers and magazines which carried information about special offer, 25% discount
on selected tests and 50% discount on consultation. a. Identify any two promotional tools
being highlighted in the above case. Quote lines from the Para to justify. b. Give the
meaning of the promotional tool not highlighted above. [3]
10. Explain any three characteristics of ‘principles of management.’ [3]
11. It is deciding in advance what to do and how to do? It is one of the basic Managerial
functions. It requires that before doing something, the manager must formulate an idea
of how to work on a particular task. This function is closely connected with creativity and
innovation. It seeks to bridge the gap between where we are and where we want to go
and is performed at all levels of management. Inspite of this the function of management
referred above has a number of limitations. Explain any two such limitations. [3]
12. A Director of a company revealed to his broker friend, information about the bonus issue
that the company was going to make after a fortnight. ‘The broker was engaged in
speculation and expected price rise of securities of the company. He purchased a huge lot
of the company’s securities and sold off after the bonus issue was made. As a result, the
broker friend earned a huge profit. As a token of gratitude, the broker also gave a
substantial share from the profit earned to his friend, the Director. a. Name the
malpractice highlighted above. b. Which function of SEBI prohibits such practice? c. State
any other function of SEBI discussed in category.
13. Manish is engaged in the business of garment manufacturing. Generally he used to sell
his garments in Delhi. Identify the working capital requirements of Manish giving
reasons in support of your answer. Further, Manish wants to expand and diversify his
garment business. Explain any one factor that will affect his fixed capital requirements
[3]
14. Mrs. Sonia was not satisfied with the branded juicer which she had purchased from M/s
Ram Lal and Sons for Rs. 18000. Repeated complaints to the grievance cell were made but
all in vain. a. Which consumer right did Sonia exercise in the above case? b. Which other
consumer right she should exercise now? What can she do to exercise that right? c. State
any 2 remedies available to her. [4]

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15. Authority and responsibility is allocated to all the members of all the departments
according to their skill and competencies. a. Identify and explain the management
function highlighted above. b. Name the steps in the management function so identified
in (a) [4]
16. Aman, Ahmad and Ally are partners in a firm engaged in the distribution of dairy
products in Maharashtra state. Aman is a holder of Senior Secondary School Certificate
from Central Board of Secondary Education with Business Studies as one of his elective
subjects. Ahmad had done his post graduation in History and Ally in dairy farming. One
day there was a serious discussion between Ahmad and Ally regarding the nature of
management, Ahmad argued that management was a profession. Whereas Ally argued
against it saying that the legal and medical profession are the only professions because
they fulfil all the conditions of profession. Aman on the basis of his knowledge of
business studies explained the nature of management as a profession to Ahmad and Ally.
Explain, how Aman would have satisfied both Ahmad and Ally. [4]
17. India played host to various fast food centres like Mc Donald’s, Burger King, etc. which
are leading to the growth of quick service restaurants. These new entrants generate
maximum revenue from online orders. One brand developed a mobi leapp to receive
online orders. a. Which dimension of Business Environment is discussed in the above
case study? b. Explain the feature of Business Environment listed in above case study. c.
State other two features of Business Environment. [4]
18. 'Ganesh Steel Ltd.' is a large and creditworthy company manufacturing steel for the
Indian market. It now wants to cater to the Asian market and decides to invest in new hi-
tech machines. Since the investment is large, it requires long-term finance. It decides to
raise funds by issuing equity shares. The issue of equity shares involves a huge floatation
cost. To meet the expenses of floatation cost, the company decides to tap the money
market. a. Name and explain the money market instrument the company can use for the
above purpose. b. What is the duration for which the company can get funds through this
instrument? c. State any other purpose for which this instrument can be used. [4]
19. Identify and explain the method of floatation in the following cases: a. AB Ltd. has sold 1
lakh equity shares of Rs 10 each at Rs 12 per share to an investment banker, who offered
them to the public at Rs 20 each. b. XY Ltd in order to invite the general public to
subscribe to its shares, prepared a prospectus & initiated the process regarding floatation
of capital. [4]

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20. How are shareholders likely to gain with a loan component in the capital employed?
Explain with the help of an example. [5]
21. Aman a degree holder in Entrepreneurship came to know about Piplantri Village located
in Rajasthan, where in 2006 an initiative was started, in which 111 trees are planted
every time a girl child is born. To keep termites away from the trees the villagers have
planted 2.5 million Aloe Vera plants around the trees. This has turned the village into an
oasis, as the planting of tree led to higher water levels. Aman decided to visit the village
to start a business unit, for the processing and marketing of Aloe Vera into juices, gels
and other products. However, on visiting the village Aman found that the villagers were
suffering exploitation at the hands of local merchants who were engaged in
unscrupulous, exploitative trade practices like hoarding and black marketing of food
products and also selling unsafe, adulterated products to the villagers. After looking at
their plight instead of a business organisation he decided to set up an organisation for the
protection and promotion of the consumer interest of the villagers. State the functions
that the organisation established by Aman will be performing.
22. Pradeep Kumar and sons is a manufacturer of biscuits. It decided to increase profits by at
least 20% in the next quarter. It has many options: a. To increase the working hours of
labourers without additional payment. b. To employ children from local community. c.
To sell its products outside the schools and colleges.
After analysing various pros and cons it opted for Option b and c to achieve the target. i.
Identify the concept of management involved. ii. Mention the steps involved in the above
process by quoting the lines from the question. iii. To complete the process of the concept
identified in (i), what further steps does the manager have to take? [5]
23. “Expenditure on advertisement is a social waste.” Explain any four reasons in support of
this statement. [6]
24. A company has been registered under the Companies Act with an authorized share
capital of 20,000 crores. Its registered office is situated in Delhi and manufacturing unit in
a backward district of Rajasthan. Its marketing department is situated in Bhopal. The
company is manufacturing Fast Moving Consumer Goods (FMCG). a. Suggest with the
help of a diagram a suitable organization structure for the Company and define the
identified structure. b. State any three advantages and one disadvantage of this
organization structure. [6]
25. a. Mr. Prakash, production manager of Pure Water RO systems prepared an incentive

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plan for the employees of production department. Standard number of ROs to be
assembled by an employee was set for 20 units per day and it was decided that if any
employee produces more than the standard units would be given 500 extra on the every
extra unit assembled. This worked as a Source of motivation for efficient employees. Pure
Water Company also promotes its product by donating RO Systems to some schools.
Explain the technique of scientific management followed by Mr. Prakash.
b. Pawan is working as a ‘Production Manager’ in CFL Ltd. engaged in manufacturing of
CFL bulbs. There are no class conflicts between the management and workers. The
working conditions are very good. The company is earning huge profits. As a policy
matter, management is sharing the gains with the workers because they believe that
prosperity of the company cannot exist for a long time without the prosperity of the
employees. Explain the principle of management described in the above Para. [6]

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 Answers

1. Management increases efficiency by reducing costs & increasing productivity through

better planning, organizing, directing & controlling the activities of the organization.
2. Principles of management are not as rigid as principles of pure science. OR Principles of
management deal with human behaviour and cannot be tested in laboratories like the
principles of pure science
3. Business environment is very complex as it is very difficult to know the relative impact of
the social, economic, political, technological or legal factors on change in demand of a
product in the market
4. i. Lender’s risk is lower than risk of equity shareholders ii. Interest paid on debt is a tax
deductible expense
5. Strategy
6. Organising
7. Right to consumer education
8. Public Relations-involves a variety of programmes to promote and protect a company’s
image or its products in the eyes of the public
9. Government and legal regulations Explanation of 2 other factors
10. Explanation of any three significance of management principles
11. Working capital requirements will be less as it is a service industry hence it would not
have to maintain inventory Explanation of any factor affecting fixed capital
requirements:
(Preferably )-Diversification-Fixed capital requirement will be more
12. Plainning - Identification and explanation of any two points of importance of Planning
13. (a) Practice Applied: Insider Trading
(b) Protective function-It controls insider trading and imposes penalties for such practices
(b) SEBI performs the following functions to protect the interest of investors: (any two) - It
undertakes steps for investor protection - It prohibits fraudulent and unfair trade
practices - It prohibits fraudulent and unfair trade practices in the securities market.
14. a. Any two responsibilities: - Buy only standardised product –ISI mark in case of iron -
Learn about the risks associated with the product - Read the label carefully - take cash
memo as a proof of purchase
b. When the consumer court is satisfied with the genuineness of the complaint

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 c. Right to safety –Violated (State the right)
Right to be heard-Exercised (State the right)
15. Explain following features of management as a science
a. Systematised body of knowledge-Explain b. Principles based on experimentation-
explanation, This feature is not fully present in management-reason c. Universal validity
Conclusion-Management is not a pure science but inexact science
16. Points highlighting the significance of understanding business environment are:
(i) Point: He enjoyed first mover advantage.
Quote: “Mr. Ajay ..... comes India to start a new business eLearning for senior secondary
school students in commerce stream.”
(ii) Point: It helped in planning and policy formulation.
Quote: “Which already has an .... but not in India.”
(iii) Point: It helps in improving performance.
Quote: “His business starts flourishing in India.”
(iv) Point: These are warning signals to Mr. Ajay.
Quote: “Now more Indian compwz.ies different other subjects also.”
17. Organising-Explain
Name the steps:
-Identification and Division of work -Departmentalization -Assignment of duties to job
positions -Establishing reporting relationships
18. (i) For the above-mentioned purpose, the company can use Commercial Paper. It is an
unsecured promissory note issued by large and creditworthy companies to raise short-
term funds at lower interest rate than the market rates for a fixed maturity period. (ii)
The company can get funds for a duration of 15 days to one year through this
instrument. (iii) The company can also use this instrument to get short-term funds for
bridge financing
19. i. Private Placement-Example ii. Right issue-Example
20. (i) The concept of management involved here is 'Planning'.
(ii) The steps involved in the above process are: (a) Establishing Objectives: "....wants to
increase profit". (b) Identifying Alternative Course of Action: The various alternatives are:
“ - Purchasing new high speed machines, or - increasing the sale price, or - using waste
material in manufacturing stuffed toys.”
(c) Selecting the Best Alternative: “...using waste material to increase the profit is the best

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 solution.”
(iii) The manager is further required to take the following steps: (a) Formulating and
implementing the plan. (b) Follow-up action
21. Explain Trading on Equity-Meaning
Example
Conclusion
22. a. Yes an NGO can file complaint b. In District forum as value of goods is up to 20 lakhs c.
Any four of the following functions:
Functions of an NGO: /Consumer organisation (any six)
(i) Educating the villagers/general public about consumer rights by organising training
programmes, seminars and workshops. (ii) Publishing periodicals and other publications
to impart knowledge about consumer problems, reliefs available and other matters of
interest. (iii) Carrying out comparative testing of consumer products in accredited
laboratories to test relative qualities of competing brands and publishing the test results
for the benefit of consumers. (iv) Encouraging consumers to strongly protest and take an
action against exploitative and unfair trade practices of sellers. (v) Providing legal
assistance to consumers by way of providing aid, legal advice etc, in seeking legal
remedy. (vi) Filing complaints in consumer courts on behalf of consumers. (vii) Taking an
initiative in filing cases in consumer courts in the interest of the villagers/general public,
not for any individual
23. a. Motion study-Explanation b. Cooperation, not individualism-Explanation
24. Divisional structure-Define
Reason (Suitability)
Advantages
Limitations
25. Explain the following objections to advertising:
a. Adds to costs b. Undermines social values c. Promotes materialism d. Confuses buyers

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