CBSE Class 12 Sample Paper 2026 Solution for BusinessStudies

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BUSINESS STUDIES (054)
CLASS XII (2025-26) Marks
MARKING SCHEME

1 b) Management is a continuous process 1

2 d) Formed by practice and experimentation 1

3 d) Both Assertion (A) and Reason (R) are true, and Reason (R) is 1
the correct explanation of the Assertion.

d) Statement II is true, Statement I is false
4 1

5 c) Time based pay plus incentives 1

6 d) 2,3,4 1

7 c) product 1

8 b) Deviations should be analysed to find out the causes. 1

9 c) Such employees are not likely to be good employees as their 1
background is not sufficiently known.

10 b) iii,ii,vii,i,iv,v,vi 1

11 c) Depository is like a bank and keeps securities in electronic form 1
on behalf of investors.

12 b) Customer value 1

13 c) Aiv, B iii,Ci ,Dii 1

14 b) Planning does not work in a dynamic environment. 1

15 c) Training and development 1

16 a) Long term investment decision 1

17 c) Risk consideration 1

18 c) Capital Market 1

d) Contractual constraints
19 1

20 b) Both the statements are false. 1

21 A) (i) Develops initiative among subordinates: Decentralisation 1X3=3
Helps to promote self-reliance and confidence amongst the
subordinates. This is because when lower managerial levels are any 3
given freedom to make their own decisions they learn to depend
on their own judgement.
(ii) Develops managerial talent for the future: Decentralisation
gives them a chance to prove their abilities and creates a
reservoir of qualified manpower who can be considered to fill up
more challenging positions through promotions.
(iii) Quick decision making: In a decentralised
organisation,since decisions are taken at levels which are
nearest to the points of action and there is no requirement for
approval from many levels, the process is much faster. There
are also less chances of information getting distorted because
it doesn’t have to go through long channels.
(iv) Relief to top management:Decentralisation diminishes the
amount of direct supervision exercised by a superior over the
activities of a subordinate because they are given the freedom
to act and decide albeit within the limits set by the
superior.Decentralisation also leaves the top management with
more time which they can devote to important policy decisions
rather than occupying their time with both policy as well as
operational decisions
(v) Facilitates growth: Decentralisation awards greater
autonomy to the lower levels of management as well as
divisional or departmental heads. With each department doing
its best in a bid to outdo the other, the productivity levels
increase and the organisation is able to generate more returns
which can be used for expansion purposes.
(vi) Better control: Decentralisation makes it possible to
evaluate performance at each level and the departments can be
individually accountable for their results.
OR
B) (a) The formal communication may lead to procedural delays
as the established chain of command has to be followed which
increases the time taken for decision making.
(b) Poor organisational practices may not provide adequate
recognition to creative talent, since it does not allow any
deviations from rigidly laid down policies. 1×3=3
(c) It is difficult to understand all human relationships in an
enterprise as it places more emphasis on structure and work.
Hence, the formal organisation does not provide a complete
picture of how an organisation works.

22 a) The Marketing Management philosophy followed by Anabel
Creation is the Selling concept..

This business philosophy assumes that the customers would not
buy, or not buy enough, unless they are adequately convinced 1+2=3
and motivated to do so.Therefore, firms must undertake
aggressive selling and promotional efforts to make customers (any 2)
buy their products. The use of promotional techniques such as
advertising, personal selling and sales promotion are considered
essential for selling of products.

b)The Production Concept- The focus of business activities is on
production of goods. It is believed that profits can be maximised
by producing at large scale, thereby reducing the average cost of
production.Consumers would favour those products which are
widely available at an affordable price. Thus, availability and
affordability of the products are considered to be the key to the
success of a firm.

The Product Concept- products. The focus of business activity is
on bringing continuous improvement in the quality, incorporating
new features etc. Thus, product improvement became the key to
profit maximisation of a firm, under the concept of product
orientation.

The Marketing Concept- It assumes that in the long run an
organisation can achieve its objective of maximisation of profit by
identifying the needs of its present and prospective buyers and
satisfying them in an effective way. All the decisions in a firm are
taken from the point of view of the customers.Customer’s
satisfaction becomes the focal point of all decision making in the
organisation.

The Societal Marketing Concept- The business orientation
should not be short-sighted to serve only consumers’ needs. It
should also consider large issues of long-term social welfare.The
societal marketing concept holds that the task of any
organisation is to identify the needs and wants of the target
market and deliver the desired satisfaction in an effective and
efficient manner so that the long-term well-being of the
consumers and the society is taken care of.

23 (i) Participants: The participants in the capital market are
financial institutions, banks, corporate entities, foreign investors 1X3=3
and ordinary retail investors from members of the public.
Participation in the money market is by and large undertaken by (Any3)
institutional participants such as the RBI, banks, financial
institutions and finance companies.

(ii) Instruments: The main instruments traded in the capital
market are – equity shares, debentures, bonds, preference
shares etc. The main instruments traded in the money market
are short term debt instruments such as T-bills, trade bills
reports, commercial paper and certificates of deposit.

(iii) Investment Outlay: Investment in the capital market i.e.
securities does not necessarily require a huge financial outlay.
The value of units of securities is generally low i.e. Rs 10, Rs 100
and so is the case with a minimum trading lot of shares which is
kept small i.e. 5, 50, 100 or so. This helps individuals with small
savings to subscribe to these securities. In the money market,
transactions entail huge sums of money as the instruments are
quite expensive.

(iv) Duration: The capital market deals in medium and long term
securities such as equity shares and debentures. Money market
instruments have a maximum tenure of one year, and may even
be issued for a single day.

(v) Liquidity: Capital market securities are considered liquid
investments because they are marketable on the stock
exchanges. However, a share may not be actively traded, i.e. it
may not easily find a buyer. Money market instruments on the
other hand, enjoy a higher degree of liquidity as there is formal
arrangement for this. The Discount Finance House of India
(DFHI) has been established for the specific objective of
providing a ready market for money market instruments.

(vi) Safety: Capital market instruments are riskier both with
respect to returns and principal repayment. But the money
market is generally much safer with a minimum risk of default.
This is due to the shorter duration of investing and also to
financial soundness of the issuers, which primarily are the
government, banks and highly rated companies.

(vii) Expected return: The investment in capital markets generally
yield a higher return for investors than the money markets. The
possibility of earnings is higher if the securities are held for a
longer duration.

OR

B)Protective functions performed by Securities and Exchange 1×3=3
Board of India:
Any 3

1. Prohibition of fraudulent and unfair trade practices like making
mis- leading statements, manipulations, price rigging etc.

2. Controlling insider trading and imposing penalties for such
practices.

3. Undertaking steps for investor protection.

4. Promotion of fair practices and code of conduct in the
securities market.

24 The level at which necessary workforce would be appointed for a)1 mark for
implementing and controlling the plans and strategies is Middle identification
Level. He is required to do the following to carry out the main
task at the Middle Level :( any two) b)1x2=2

(i) interpret the policies framed by top management,

(ii) ensure that their department has the necessary personnel, (Any2)

(iii) assign necessary duties and responsibilities to them,

(iv) motivate them to achieve desired objectives

(v) co- operate with other departments for smooth functioning of
the organisation. At the same time they are responsible for all the
activities of first line managers.

25 A) a) Customer support services- Customer support services such
as after sales services, handling customer complaints and
adjustments, procuring credit services, maintenance services,
technical services and consumer information aim at providing
maximum satisfaction to the customers, which is the key to
marketing success. They are very effective in bringing repeat
2×2=4
sales from the customers and developing brand loyalty for a
product.

b) Packaging refers to designing and developing the package for
the products. Labelling refers to designing and developing the
label to be put on the package. The label may vary from a simple
tag to complex graphics. Packaging and labelling have become so
important in modern day marketing that these are considered as
the pillars of marketing. Packaging is important not only for
protection of the products but also serves as a promotional tool.

OR

B) a) Personal selling- Features

(i) Personal Form: In personal selling a direct face-to-face dialogue
takes place that involves an interactive relationship between the
seller and the buyer.
2×2=4
(ii) Development of Relationship:

Personal selling allows a salesperson to develop personal
relationships with the prospective customers, which may become
important in making sales.

b) Advertising-

Features (any two)

(i) Paid Form: Advertising is a paid form of communication. That
is, the sponsor has to bear the cost of communicating with the
prospects.

(ii) Impersonality: There is no direct face-to-face contact between
the prospect and the advertiser. It is therefore referred to as an
impersonal method of promotion. Advertising creates a
monologue and not a dialogue.

(iii) Identified Sponsor: Advertising is undertaken by some
identified individual or company, who makes the advertising efforts
and also bears the cost of it.

A)a) Planning is pervasive: Planning is required at all
26 levels of management as well as in all departments of the 2X2 =4
organisation. It is not an exclusive function of top
management nor of any particular department. But the
scope of planning differs at different levels and among
different departments. For example, the top management
undertakes planning for the organisation as a whole. Middle
management does the departmental planning. At the lowest
level, day-to-day operational planning is done.
b) Planning is futuristic: Planning essentially involves
looking ahead and preparing for the future. The purpose of
planning is to meet future events effectively to the best
advantage of an organisation. It implies peeping into the
future, analysing it and predicting it.Through forecasting,
future events and conditions are anticipated and plans are
drawn accordingly.
OR
B) a) Strategy
A strategy provides the broad contours of an organisation’s
business. It will also refer to future decisions defining the
organization's direction and scope in the long run. A
strategy is a comprehensive plan for accomplishing an
organisation
objectives. This comprehensive plan will include three
dimensions, 2×2=4
(i) determining long term objectives, (ii) adopting a
particular course of action, and (iii) allocating resources
necessary to achieve the objective. Whenever a strategy is
formulated, the business environment needs to be taken
into consideration.
b) Procedure
Procedures are routine steps on how to carry out activities.
They detail the exact manner in which any work is to be
performed. They are specified in a chronological
order.Procedures are specified steps to be followed in
particular circumstances. They are generally meant for
insiders to follow.

27 a) The feature of the business environment highlighted is Inter a) 1 mark for
relatedness. Different elements or parts of the business identification +1
environment are closely inter- related. For example, increased life mark for stating
expectancy of people and increased awareness for health care
have increased the demand for many health products and services +
like soft drinks, fat-free cooking oil, and health resorts. New health
products and services have, in turn, changed people’s lifestyles. b)1 mark each
for explanation
b) Any two other features :
Any 2
(i) Totality of external forces:

Business environment is the sum total of all things external to
business firms and, as such, is aggregative in nature.

(ii) Specific and general forces: Business environment includes
both specific and general forces. Specific forces (such as
investors,customers, competitors and suppliers) affect individual
enterprises directly and immediately in their day-to-day working.
General forces (such as social, political, legal and technological
conditions) have an impact on all business enterprises and thus
may affect an individual firm indirectly.

(iii) Relativity: Business environment is a relative concept since it
differs from country to country and even region to region. Political
conditions in the USA, for instance, differ from those in China or
Pakistan. Similarly, demand for sarees may be fairly high in India
whereas it may be almost non-existent in France.

(iv) Dynamic nature: Business environment is dynamic in that it
keeps on changing whether in terms of technological
improvement, shifts in consumer preferences or entry of new
competition in the market.

(v) Uncertainty: Business environment is largely uncertain as it is
very difficult to predict future happenings, especially when
environment changes are taking place too frequently as in the
case of information technology or fashion industries.

(vi) Complexity: Since a business environment consists of
numerous interrelated and dynamic conditions or forces which
arise from different sources, it becomes difficult to comprehend at
once what exactly constitutes a given environment. It is a complex
phenomenon that is relatively easier to understand in parts but
difficult to grasp in its totality.

A good control system helps the organisation in the following
28 ways:

(i) Accomplishing organisational goals: The controlling function
measures progress towards the organisational goals and brings
to light the deviations, if any, and indicates corrective action. It,
thus, guides the organisation and keeps it on the right track
sothat organisational goals might be achieved.

(ii) Judging accuracy of standards: A good control system 1x4=4
enables management to verify whether the standards set are
accurate and objective. An efficient control system keeps a
careful check on the changes taking place in the organisation
and in the environment and helps to review and revise the (Any4)
standards in light of such changes.

(iii) Making efficient use of resources: By exercising control, a
manager seeks to reduce wastage and spoilage of resources.
Each activity is performed in accordance with predetermined
standards and norms. This ensures that resources are used in
the most effective and efficient manner.

(iv) Improving employee motivation:A good control system
ensures that employees know well in advance what they are
expected to do and what are the standards of performance on
the basis of which they will be appraised. It, thus, motivates them
and helps them to give better performance.

(v) Ensuring order and discipline: Controlling creates an
atmosphere of order and discipline in the organisation. It helps to
minimise dishonest behaviour on the part of the employees by
keeping a close check on their activities.

(vi) Facilitating coordination in action: Controlling provides
direction to all activities and efforts for achieving organisational
goals. Each department and employee is governed by pre-
determined standards which are well coordinated with one
another. This ensures that overall organisational objectives are
accomplished.

29 Functional Foremanship: Taylor advocates separation of 1+3=4
planning and execution functions. This concept is extended to
the lowest level of the shop floor. Under the factory manager
there is a planning incharge and a production incharge. Under
planning incharge four personnel namely instruction card clerk,
route clerk, time and cost clerk and a disciplinarian work. These
four personnel would draft instructions for the workers, specify
the route of production, prepare time and cost sheet and ensure
discipline respectively. Under Production incharge, personnel
who work are speed boss, gang boss, repair boss, and
inspector. These respectively are responsible for timely and
accurate completion of jobs, keeping machines and tools etc.,
ready for operation by workers, ensure proper working
condition of machines and tools and check the quality of
work.Each worker has to take orders from these eight foremen.

30 The remaining steps in selection process are:

(i)Selection Decision: The final decision has to be made from
among the candidates who pass the tests, interviews and
reference checks. The views of the concerned manager will be 1x4=4
generally considered in the final selection because it is he/she
who is responsible for the performance of the new employee.

(ii) Medical Examination: After the selection decision and before
the job offer is made, the candidate is required to undergo a
medical fitness test. The job offer is given to the candidate being
declared fit after the medical examination.

(iii) Job Offer: The next step in the selection process is job offer
to those applicants who have passed all the previous hurdles.
Job offer is made through a letter of appointment/confirm his
acceptance. The appointee must be given reasonable time for
reporting.

(iv)Contract of Employment: After the job offer has been made
and the candidate accepts the offer, certain documents need to
be executed by the employer and the candidate like the
attestation form. This form contains certain vital details about the
candidate, which are authenticated and attested by him or her.
Attestation form will be a valid record for future reference. Basic
information that should be included in a written contract of
employment are: Job Title, Duties, Responsibilities, Date when
continuous employment starts and the basis for calculating
service, rates of pay, allowances, hours of work, leave rules,
sickness, grievance procedure, disciplinary procedure, work
rules, termination of employment.

31 a)The concept of Financial Management discussed is Working a)1 mark for
Capital Decision. identification+1
mark for stating
Working capital decisions are concerned with the decisions about
the levels of cash, inventory and receivables. These decisions +
affect the day-to-day working of a business.
b)2x2=4
b) The factors that will affect the choice of Working capital are:
=6
1.Credit Allowed: Different firms allow different credit terms to their
customers. These depend upon the level of competition that a firm
faces as well as the credit worthiness of their clientele. A liberal
credit policy results in a higher amount of debtors, increasing the
requirement of working capital.

2. Availability of Raw Material: if the raw materials and other
required materials are available freely and continuously, lower
stock levels may suffice. The time lag between the placement of
order and the actual receipt of the materials (also called lead time)
is also relevant. Larger the lead time, larger the quantity of material
to be stored and larger shall be the amount of working capital
required.

32 a) Leadership- Leadership is the process of influencing the (1+1=2)
behaviour of people by making them strive voluntarily towards
achievement of organisational goals. +

b) Any four features: (1x4=4)

(i) Leadership indicates the ability of an individual to influence =6
others.

(ii) Leadership tries to bring change in the behaviour of others.

(iii)Leadership indicates interpersonal relations between leaders
and followers.

(iv) Leadership is exercised to achieve common goals of the
organisation.

(v) Leadership is a continuous process.

33 a) The types of framework highlighted are Functional Structure (1+1=2)
and Divisional Structure.
+
a. Distinction between Functional Structure and Divisional
Structure: (1x4=4)

(any four) =6

Basis Functional Divisional Structure
Structure

Formation Formation is Formation is based on
based on functions product lines and is
supported by functions.

Specialisation Functional Product specialisation.
specialisation.

Responsibility Difficult to fix on a Easy to fix responsibility
department. for
performance.

Managerial Difficult, as each Easier, autonomy as well
Development functional as the chance to perform
manager multiple
has to report to the functions helps in
top management managerial
development.

Cost Functions are not Duplication of resources
duplicated hence in
economical. various departments,
hence
costly.

Coordination Difficult for a multi- Easy, because all 1X6=6
product company. functions related to a
particular
product are integrated in
one
department.

34. A) Reliefs available to a consumer under Consumer Protection
Act, 2019(any six):

(i) To remove the defect in goods or deficiency in service.

(ii) To replace the defective product with a new one, free from
any defect.

(iii) To refund the price paid for the product, or the charges paid
for

the service. 1x6=6

(iv) To pay a reasonable amount of compensation for any loss or
injury suffered by the consumer due to the negligence of the
opposite party.

(v) To pay punitive damages in appropriate circumstances.

(vi) To discontinue the unfair/ restrictive trade practice and not

to repeat it in the future.

(vii) Not to offer hazardous goods for sale.

(viii) To withdraw the hazardous goods from sale.

(ix) To cease manufacture of hazardous goods and to desist from
offering hazardous services.

(x) To pay any amount (not less than 5% of the value of the
defective

goods or deficient services provided), to be credited to the

Consumer Welfare Fund or any other organisation/person, to be
utilised in the prescribed manner.

(xi) To issue corrective advertisement to neutralise the effect of a
misleading advertisement.

(xii) To pay adequate costs to the appropriate party.

OR

B)1. Right to Safety: The consumer has a right to be protected
against goods and services which are hazardous to life and
health. For instance, electrical appliances which are
manufactured with substandard products or do not conform to 1x6=6
the safety norms might cause serious injury. Thus, consumers
are educated that they should use electrical appliances which are
ISI marked as this would be an assurance of such products
meeting quality specifications.

2. Right to be Informed: The consumer has a right to have
complete information about the product he intends to buy
including its ingredients, date of manufacture, price, quantity,
directions for use, etc.

3. Right to Choose: The consumer has the freedom to choose
from a variety of products at competitive prices. This implies that
the marketers should offer a wide variety of products in terms of
quality, brand, prices, size, etc. and allow the consumer to make
a choice from amongst these.

4. Right to be Heard: The consumer has a right to file a complaint
and to be heard in case of dissatisfaction with a good or a
service. It is because of this reason that many enlightened
business firms have set up their own consumer service and
grievance cells. Many consumer organisations are also working
towards this direction and helping consumers in redressal of their
grievances.

5. Right to seek Redressal: The consumer has a right to get relief
in case the product or service falls short of his expectations. The
Consumer Protection Act provides a number of reliefs to the
consumers including replacement of the product, removal of
defect in the product, compensation paid for any loss or injury
suffered by the consumer, etc.

6. Right to Consumer Education: The consumer has a right to
acquire knowledge and to be a well informed consumer
throughout life. He should be aware about his rights and the
reliefs available to him in case of a product or service.

Study Materials
Notes

Model Papers Class 6 Notes

Sample Papers Class 7 Notes
Half Yearly Sample Papers Class 8 Notes

Class 9 Notes
Important Resources
Class 10 Notes
Periodic Table
Class 11 Notes
Writing Skills / Formats

Maps of India / World Class 12 Notes

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