CBSE Class 12 Question Paper 2026 Solution Business Studies

FOR CBSE CLASS 12 EXAM PREPARATION

CBSE Class 12 2026
Question Paper
Solution · Business
Studies
EXAM YEAR TYPE SUBJECT

CBSE Class 12 2026 Question Paper Solution Business Studies

Notes · Sample Papers · Previous Year Papers · Mock Tests

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(For Internal and Restricted use only)
Senior Secondary School Examination, 2026 (XIIth)
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SUBJECT NAME: - BUSINESS STUDIES (Q.P. CODE 66/1/1)

General Instructions: -

1 The CBSE has decided to introduce On Screen Marking (OSM) for the evaluation of
Class XII answer Book with the 2026 Examination.
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You are aware that evaluation is the most important process in the actual and correct
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assessment of the candidates. A small mistake in evaluation may lead to serious
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problems which may affect the future of the candidates, education system and teaching
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profession. To avoid mistakes, it is requested that before starting evaluation, you must
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a“Evaluation policy is a confidential policy as it is related to the confidentiality of
read and understand the spot evaluation guidelines carefully.
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the examinations conducted, evaluation done and several other aspects. Its
leakage to public in any manner could lead to derailment of the examination
system and affect the life and future of millions of candidates. Sharing this
policy/document to anyone, publishing in any magazine and printing in
Newspaper/Website, etc. may invite action under various rules of the Board and
IPC.”
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Evaluation is to be done as per instructions provided in the Marking Scheme. It should

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not be done according to one’s own interpretation or any other consideration. Marking
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Scheme should be strictly adhered to and religiously followed. However, while

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evaluating, answers which are based on latest information or knowledge and/or
are innovative, they may be assessed for their correctness otherwise and due
marks be awarded to them. In Class-XII, while evaluating two competency-based
questions, please try to understand given answer and even if reply is not from
marking scheme but correct competency is enumerated by the candidate, due
marks should be awarded.
5 The Marking scheme carries only suggested value points for the answers.
These are in the nature of Guidelines only and do not constitute the complete answer.
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The students can have their own expression and if the expression is correct, the due
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marks should be awarded accordingly.
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evaluator on the first day, to ensure that evaluation has been lcarried
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instructions given in the Marking Scheme. If there is any variation, the same should
be zero after deliberation and discussion. The remaining answer books meant for
evaluation shall be given only after ensuring that there is no significant variation in
the marking of individual evaluators.
7 Evaluators will mark ( √ ) wherever answer is correct. For wrong answer CROSS ‘X’
be marked. Evaluators will not put right (✓) while evaluating which gives an
impression that answer is correct and no marks are awarded. This is most common
mistake which evaluators are committing.
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8 If a question has parts, please award marks on the right-hand side for each part in the
OSM Portal. Marks awarded for different parts of the question will be totaled up by
the OSM System.
9 If a question does not have any parts, marks must be awarded in the left-hand margin
in the OSM Portal. This may also be followed strictly.
10 No marks to be deducted for the cumulative effect of an error. It should be penalized
only once.
11 A full scale of marks 80 as given in Question Paper has to be used. Please do not
hesitate to award full marks if the answer deserves it.
12 Every examiner has to necessarily do evaluation work for full working hours i.e., 8
hours every day and evaluate 20 answer books per day in main subjects and 25 answer
books per day in other subjects (Details are given in Spot Guidelines).This is in view
of the reduced syllabus and number of questions in question paper.
13 Ensure that you do not make the following common types of errors committed by the
Examiner in the past :-
● Answers marked as correct, but marks not awarded. (Ensure that the right tick
mark is correctly and clearly indicated. It should merely be a line. Same is with
the X for incorrect answer.)
● Half or a part of answer marked correct and the rest as wrong, but no marks
awarded.
14 While evaluating the answer books if the answer is found to be totally incorrect, it
should be marked as cross (X) and awarded zero (0) Marks.
15 The Examiners should acquaint themselves with the guidelines given in the
“Guidelines for Spot Evaluation” before starting the actual evaluation.
16 The candidates are entitled to obtain photocopy of the Answer Book on request on
payment of the prescribed processing fee. All Examiners/Additional Head
Examiners/Head Examiners are once again reminded that they must ensure that
evaluation is carried out strictly as per value points for each answer as given in the
Marking Scheme.
17 If a candidate attempts both alternatives/options in a question where only one
option/ alternative is required to be attempted, the Evaluator shall award marks
in both the options. The system will take the higher of two scores and disregard
the other response.
18 In a question having two options/alternatives, if a candidate has attempted only
one, then the evaluator shall mark “NA” (Not attempted) against the option that
has not been attempted by the candidate.

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66/ MARKING SCHEME– 2026 MARKS
1/1 BUSINESS STUDIES
66/1/1
EXPECTED ANSWERS/ VALUE POINTS
1 Q Ritika wanted to buy a new washing machine. She visited ‘Elec
Duniya’, a large electronics store. She saw there many different
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brands and models on display like KM, Neo, Unipool, INH etc.
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The salesperson at the store explained the differences in quality,
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brand reputation and prices of different washing machines. Ritika
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could now compare fully automatic, semi-automatic, top load and

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front load washing machines. The salesperson encouraged her to take
her time, check different brands and resolve her queries. Ritika also
went to another shop nearby to compare prices and features of
different washing machines.
After comparing all the available options, Ritika chose a 'Neo' front
load washing machine because it offered the best features within her
budget.
The consumer right exercised by Ritika in the above case is:
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(A) Right to be heard

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(B) Right to be assured
(C) Right to consumer education
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(D) Right to seek redressal
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Ans. (B) Right to be assured 1 Mark

2 Q The workers in Alpha manufacturing company were using
traditional methods for production of metal parts. Since no standard
procedure existed, workers relied on personal experience and guess
work. As a result, productivity in the assembly line began to decline.
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To improve productivity, the company hired a consultant
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specializing in scientific management. The consultant explained that
there was only one best method to maximize efficiency and this
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So, to develop the scientific method, the consultant carefully
investigated the traditional methods through work-study and by
unifying the best practices, he developed a standard method that
would be followed by everyone in the organization.
After applying scientific method, there was a three fold increase in
productivity within six months.

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The principle of scientific management which helped the company in
increasing the productivity was:
(A) Science, not Rule of Thumb
(B) Harmony, Not Discord
(C) Cooperation, Not Individualism
(D) Development of Each and Every Person to His or Her Greatest
Efficiency and Prosperity

Ans. (A) Science, not Rule of Thumb
1 Mark
3 Q Read the following statements carefully:
Statement-I: Consumers should get together and form themselves
into consumer associations for protection and
promotion of their interests.
Statement-II: The Consumer Protection Act provides for setting up
a two-tier enforcement machinery for the redressal
of consumer grievances.
With reference to given statements, choose the correct alternative
from the following:
(A) Both the statements are true.
(B) Both the statements are false.
(C) Statement I is true, Statement II is false.
(D) Statement I is false, Statement II is true.

Ans. (C) Statement I is true, Statement II is false. 1 Mark

4 Q

Identify the element of communication process from the above
picture:
(A) Feedback
(B) Media
(C) Noise
(D) Decoding

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Ans. (C) Noise 1 Mark

For Visually Impaired Candidates:

Q The element of communication process that converts the message
into communication symbols is:
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(A) Feedback
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(B) Media

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(C) Decoding

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(D) Encoding

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Ans. 1 Mark

5 Q Read the following statements -Assertion (A) and Reason (R):
Assertion (A): Many enlightened business firms have set up their own
consumer service and grievance cells.
Reason (R): The consumer has a right to file a complaint and to be
heard in case of dissatisfaction with a good or service.

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Choose the correct alternative from the alternatives given below:
(A) Both Assertion (A) and Reason (R) are false.
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(B) Assertion (A) is false and Reason (R) is true.
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(C) Both Assertion (A) and Reason (R) are true, but Reason (R) is
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not the correct explanation of Assertion (A).
(D) Both Assertion (A) and Reason (R) are true and Reason (R) is
the correct explanation of Assertion (A).

Ans. (D) Both Assertion (A) and Reason (R) are true and Reason (R) is
the correct explanation of Assertion (A). 1 Mark

6 Q Sudha is a corporate executive and has to attend a felicitation
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function to be held in her office tomorrow. So she decides to colour
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her hair. On recommendation of her friend, she purchased

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'NATURO' hair colour. After reading essential details such as shade,
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its ingredients, usage instructions and expiry date mentioned on the

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a developer bottle from the box and threw away the box.
The level of packaging of box thrown away by Sudha was:
(A) Primary packaging
(B) Transportation packaging
(C) Secondary packaging
(D) General packaging

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Ans. (C) Secondary packaging 1 Mark

7 Q Read the following statements-Assertion (A) and Reason (R):

Assertion (A) : Money market instruments have a higher degree of
liquidity as compared to capital market securities.
Reason (R) : Money market instruments are traded on the stock
exchanges.

Choose the correct alternative from the alternatives given below:
(A) Both Assertion (A) and Reason (R) are true and Reason (R) is the
correct explanation of Assertion (A).
(B) Both Assertion (A) and Reason (R) are true, but Reason (R) is not
the correct explanation of Assertion (A).
(C) Assertion (A) is true and Reason (R) is false.
(D) Assertion (A) is false and Reason (R) is true.

Ans. (C) Assertion (A) is true and Reason (R) is false.
1 Mark
8 Q Ravi purchased gold jewellery from a reputed jewellery store. He
ensured that the jewellery had a hallmark which confirm its purity
and authenticity. To avoid paying goods and services tax (GST) he
asked the salesperson to write the gold weight and making charges
on a slip of paper and hand over it to him.
Which of the following responsibilities of a consumer was not fulfilled
by Ravi while purchasing jewellery?
(A) Be aware about various goods and services available in the
market so that an intelligent and wise choice can be made.
(B) Ask for a cash memo on purchase of goods and services.
(C) Buy only standardized goods as they provide quality assurance.
(D) Assert yourself to ensure that you get a fair deal.

Ans. (B) Ask for a cash memo on purchase of goods and services. 1 Mark

9 Q ‘CARO Tech Solutions’ aimed at development of a software
system for the company's growing operations. The project was to be
completed within six months with a budget of ₹ 12,00,000.
The software development team successfully completed its project on
time by outsourcing a part of the project, leading to an additional
expense of ₹ 2,00,000.
From the following, identify whether the software development team
is:
(A) Efficient and Effective

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(B) Efficient but not effective a
(C) Effective but not efficient
(D) Neither efficient nor effective

Ans. (C) Effective but not efficient
1 Mark
10 Q Due to severe winter and rising pollution levels, 'Green India
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Electronics' planned to launch a new eco-friendly heater in the
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market. It conducted a survey and found that the demand of this

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product was very high. As the winter season lasts only for 2 to 3
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months, the Chief Executive Officer wanted that there should be

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close coordination among all the managers to deliver orders on time.
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Top level managers were asked to work in coordination with their
subordinates to ensure that company's policies were properly
followed. To ensure that the heaters would be ready on time, the
production manager co-ordinated with the operational level
managers. Operational level managers co-ordinated the activities of
the workers to ensure that work proceeded according to plans. As a
result 'Green India Electronics' was able to launch its heaters on
time, in the market.
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The feature of co-ordination discussed in the above case is:
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(A) Co-ordination is a deliberate function.
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(B) Co-ordination is the responsibility of all managers.
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(C) Co-ordination is a continuous process.
(D) Co-ordination ensures unity of action.

Ans. (B) Co-ordination is the responsibility of all managers. 1 Mark

11 Q ‘Business environment keeps on changing whether in terms of
technological improvement, shifts in consumer preferences or entry
of new competitors in the market.’
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The feature of business environment highlighted in the above
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statement is:

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(A) Totality of external forces
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(B) Complexity

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a (D) Relativity

Ans. (C) Dynamic nature 1 Mark

12 Q A position when a company is unable to meet its fixed financial
charges like interest payment, dividend on preference shares and
repayment obligations is referred to as_________.
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(A) Trading on equity
(B) Financial risk
(C) Business risk
(D) Operating risk

Ans. (B) Financial risk 1 Mark

13 Q Identify the incorrect statement with respect to the importance of
planning function of management:
(A) Planning provides directions by stating in advance how work is
to be done.
(B) Planning eliminates uncertainty by looking ahead and
anticipating changes.
(C) Planning facilitates decision making by making a choice among
various alternative courses of action.
(D) Planning promotes innovative ideas as new ideas can take the
shape of concrete plans.

Ans. (B) Planning eliminates uncertainty by looking ahead and 1 Mark
anticipating changes.

14 Q Organising is the process that initiates implementation of plans by
clarifying jobs and working relationships and effectively deploying
resources for attainment of identified and desired results.
Organising process thus involves a series of steps that need to be
taken in order to achieve the desired goal.
Arrange the steps of the process of organizing in the correct order:
(A) Identification and Division of work, Assignment of duties,
Departmentalisation, Establishing authority and reporting
relationships
(B) Identification and Division of work, Assignment of duties,
Establishing authority and reporting relationships,
Departmentalisation
(C) Departmentalisation, Identification and Division of work,
Establishing authority and reporting relationships, Assignment
of duties
(D) Identification and Division of work, Departmentalisation,
Assignment of duties, Establishing authority and reporting
relationship

Ans. (D) Identification and Division of work, Departmentalisation,
Assignment of duties, Establishing authority and reporting relationship 1 Mark

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15 Q Identify the feature of planning which states that
planning is to meet future events effectively to the best advantage of
an organisation:
(A) Planning involves decision making
(B) Planning is futuristic
(C) Planning is a mental exercise
(D) Planning focuses on achieving objectives
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Ans. (B) Planning is futuristic 1 Mark

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16 Q Match the principle of management given in Column I with its

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explanation given in Column II:
a Column-I Column - II
(a) Discipline (i) There should be one and only one boss
for every individual employee in the
organisation.
(b) Unity of (ii) There should be a place for everything
direction (everyone) and everything (everyone)
should be in its (his/her) place.
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(c) Order (iii) There should be obedience to
organisational rules and employment
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agreement which is necessary for the

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working of the organisation.
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(d) Unity
command
of (iv)
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Each group of activities having the
same objective must have one head
and one plan.
Choose the correct option from the following:

(a) (b) (c) (d)

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(A) (iii) (iv) (i) (ii)

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(B) (iv) (iii) (ii) (i)

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(C) (iv) (iii) (i) (ii)

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Ans. (D) (iii) (iv) (ii) (i) 1 Mark

17 Q The step of controlling process which reveals the deviation between
actual performance and desired results is:
(A) Setting performance standards
(B) Analysing deviations
(C) Taking corrective action
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(D) Comparing actual performance with the standards

Ans. (D) Comparing actual performance with the standards 1 Mark

18 Q ‘Certain provisions of the Companies Act place restrictions on
payouts as dividend. Such provisions must be adhered to while
declaring the dividend.’ The factor affecting dividend decision
discussed above is:
(A) Access to capital market
(B) Contractual constraints
(C) Legal constraints
(D) Stock market reaction

Ans. (C) Legal constraints 1 Mark

19 Q Read the following statements carefully:
Statement-I : Control should focus on key result areas which are
critical to the success of an organization.
Statement-II : Only significant deviations which go beyond the
permissible limit should be brought to the notice of
management.

With reference to the given statements, choose the correct alternative
from the following:
(A) Both the statements are true.
(B) Both the statements are false.
(C) Statement I is true and Statement II is false.
(D) Statement I is false and Statement II is true.

Ans. (A) Both the statements are true. 1 Mark

20 Q Which of the following is NOT an organisational barrier to
communication?
(A) Status
(B) Organisational facilities
(C) Lack of proper incentives
(D) Rules and regulations

Ans. (C) Lack of proper incentives 1 Mark

21 Q ‘Riya Mart’ is a company manufacturing disposable crockery.
They have been in business for the past five years, but were not
earning good profits. Concerned about this, the Chief Executive

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Officer (CEO), Verma, ordered an internal a
audit. The audit
uncovered several issues like inventory pilferage, employees coming
late and their performance not up to the mark. To stop inventory
pilferage, Verma, the CEO, introduced surprise stock checks and
installed an automated inventory management system to track stock
movements. A biometric attendance system was also set up to keep a
check on employees coming late. In addition to this, to motivate
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employees for better performance, they were told in advance what
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they are expected to do and what are their standards of performance

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. As a result of these steps, the inventory pilferage reduced, employees

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became more punctual and their performance improved.

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(i)
Verma, the Chief Executive Officer of the company.
(ii) State any two points of importance of the function identified in (i)
above, which are not discussed in the above para.

Ans (i) The function of management performed by Verma is
Controlling. ( ½ mark

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Controlling implies the measurement of accomplishment against the identificat
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standard and the correction of deviations to assure attainment of ion and ½
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objectives according to plans. mark for

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(ii) Importance of controlling which are not discussed in the above )
para are (Any TWO)
• It helps in accomplishing organisational goals as it measures
progress towards the organisational goals and brings to light the
deviations, if any.
• It facilitates coordination in action as each department and

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employee is governed by predetermined standards.

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• It helps in judging accuracy of standards by reviewing and
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revising the standards in the light of changes taking place in the

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• By ensuring that each activity is performed in accordance with 1 x 2 = 2
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use of resources
(If an examinee has only listed the points, ½ mark for each point should
be awarded) (1+ 2) =
3marks
22 Q ‘Soal Footwear Ltd.’ is known for its high quality athletic shoes
and casual sneakers. With increasing competition and changing
consumer preferences, it decided to diversify its product range by
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adding clothing, bags and accessories under the same brand
umbrella. This diversification aimed to capture a larger share of the
market and increase customer loyalty.
(i) Suggest with reason which type of organisational structure will be
suitable for 'Soal Footwear Ltd.'
(ii) State any two advantages of the organisational structure
suggested in (i) above.

Ans (i) Divisional structure ½

Reason: Divisional structure is suitable where a large variety of products ½
are manufactured / the company has decided to diversify its product
range.
+
(ii) Advantages of Divisional structure (any TWO)
(a) Product specialisation helps in the development of varied skills in a
divisional head and thus prepares him for higher positions. 1 x 2 =2
(b) Divisional heads are accountable for profits as revenues and costs
related to different departments can be easily identified and assigned to
them.
(c) It promotes flexibility and initiative because each division functions
as an autonomous unit which leads to faster decision making.
(d) It facilitates expansion and growth as new divisions can be added
without interrupting the existing operations by merely adding another
divisional head and staff for the new product line.

(1+ 2=
(If an examinee has only listed the points, ½ mark for each point should 3 Marks)
be awarded)

23 Q (a) State any three measures to improve communication
effectiveness.
Ans. Measures to improve the communication effectiveness (Any
THREE)
(i) Clarify the ideas before communication which should be
studied in depth, analysed and stated in such a manner that is
clearly conveyed to subordinates.
(ii) To communicate according to the needs of receiver the
manager should adjust his communication according to the
education and understanding levels of subordinates. 1x3 =
(iii) Consulting others before communicating may help to gain 3 Marks
ready acceptance and willing cooperation of subordinates.

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(iv) Manager should be aware of languages,atone and content
of message so that it is understandable to the receiver and does
not offend the sentiments of listeners.
(v) To convey things of help and value to listeners as it is better
to know the interests and needs of the people with whom you
are communicating.
(vi) Ensure proper feedback by asking questions regarding the
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message conveyed.
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(vii) Communicate for present as well as future as it is needed to

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meet the existing commitments, to maintain consistency and
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to aim at future goals of the enterprise also.

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(viii) Follow up communications on the instructions given to
a subordinates which help in removing hurdles if any in
implementing the instructions.
(ix) Manager should be a good listener as a patient and attentive
listening solves half of the problems.

(If an examinee has only listed the points, ½ mark for each point should
be awarded)

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Q (b) State any three features of leadership.
Ans. Features of leadership ( Any THREE)
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(i)
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Leadership indicates ability of an individual to influence
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 (1 x 3 )
organisation.
= 3 Marks
(v) Leadership is a continuous process.
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Ans. Functions of middle level management ( Any THREE)
(i) They interpret the policies framed by top management.
(ii) They ensure that their department has the necessary personnel.
(iii) They assign necessary duties and responsibilities to personnel
in their department.
(iv) They motivate people in their department to achieve desired
objectives. (1x3)

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(v) They cooperate with other departments for smooth functioning
of the organization. = 3 Marks
(vi) They implement and control plans and strategies developed by
top management.
(vii) They are responsible for all the activities of the first line
managers.

OR OR
Q (b) State any three features of ‘Demonetisation’.
Ans. Features of Demonetisation (Any THREE)
(i) Demonetisation is tax administration measure as it requires
declaration of unaccounted wealth and payment of taxes at a penalty
rate.
(ii) It is interpretated as a shift on the part of the government that tax
evasion will no longer be tolerated or accepted. (1x 3 )
(iii) It leads to tax administration channelizing savings into the formal
financial system.
(iv) It creates a less-cash or cash-lite economy improving tax = 3 marks
compliance.

25 Q ‘Sheetal Cosmetics Ltd.’, is a fast growing beauty and skin care
company known for its innovative products and aggressive market
expansion. As the company increased its marketing activities like
new product launches, accelerated advertising campaigns, social
media promotions and influencer collaborations etc., the workload of
the marketing department grew sharply. Despite working long
hours, the marketing manager Arjun couldn't give adequate
attention to strategic planning and high impact decisions as minor
operational issues began consuming most of his time. Noticing this,
the Chief Executive Officer (CEO) advised Arjun that it was now
impractical for him to handle the entire volume of work alone, so he
should allow his subordinates to take up routine tasks. This would
not only help him manage his time better but also satisfy the
subordinate's need for recognition. This will also provide
opportunities to the subordinates to develop and exercise initiative.

(i) Identify the concept suggested by CEO that will help Arjun to
manage volume of work effectively.
(ii) State any three points of importance of the concept identified in
(i) above.
1
Ans. (i) Delegation

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(ii) Importance of delegation (Any THREE):
(i) Delegation leads to effective management as by empowering the
employees the managers get more time to concentrate on important 1x3
matters. =
(ii) It leads to employee development as employees get more 3
opportunities to utilize their talent and develop themselves for
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higher positions.
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(iii) It motivates the employees as when a superior entrusts a

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subordinate with a task, it involves trust on the superior’s part and
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commitment on part of subordinates.

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(iv) It facilitates growth as it helps in the expansion of an organisation
a by providing a ready workforce to take up leading positions in new
ventures.
(v) It establishes superior-subordinate relationships, which are the basis
of hierarchy of management.
(vi) It leads to better coordination as clarity in reporting relationships
help in developing and maintaining effective coordination amongst
the departments, levels and functions of management (1 + 3 = 4

m Marks)

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(If an examinee has only listed the points, ½ mark for each point
should be awarded)
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26
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Q (a) State any four merits of internal sources of recruitment.
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a
Ans. Merits of Internal Sources of recruitment: ( Any FOUR)
(i) Employees are motivated to improve their performance as a
promotion at a higher level may lead to a chain of promotion at
lower levels in the organisation which motivates the employees
to improve their performance.
(ii) It simplifies the process of selection and placement as the
candidates that are already working in the enterprise can be
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evaluated more accurately and economically; also as they are
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known to the organisation it is a more reliable source

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(iii) Transfer is a tool of training as it helps the employees to prepare
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them for higher jobs and people recruited from within the 1 x 4

g organisation do not need induction training. a
a (iv) Transfer has the benefit of shifting workforce from the surplus = 4 marks
departments to those where there is shortage of staff.
(v) It is economical as filling of jobs internally is cheaper as
compared to getting candidates from external sources.

OR
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Q (b) State any four benefits of training to the employees. OR
Ans. Benefits of training to the employees:
(i) Improved skills and knowledge due to training lead to better career of
the individual.
(ii) Increased performance by the individual help him to earn more.
(iii) Training makes the employee more efficient to handle machines and
makes them less prone to accidents. 1x4
(iv) Training increases the satisfaction and morale of employees.
= 4 marks
27 Q (a) Explain the following points of importance of planning:
(i) Planning establishes standards for controlling
(ii) Planning reduces overlapping and wasteful activities

Ans. (i) Planning establishes standards for controlling:

• Planning provides the goals or standards against which actual
performance is measured. By comparing actual performance with 2
the standard, managers can know whether goals have been
attained and deviations corrected. +
• Planning is a prerequisite for controlling. If there were no goals
and standards, then finding deviations which are a part of
controlling would not be possible.
2
(ii) Planning reduces overlapping and wasteful activities
• Planning serves as the basis of coordinating the activities and =
efforts of different divisions, departments and individuals. 4 marks
• It helps in avoiding confusion and misunderstanding by
eliminating useless and redundant activities.

OR OR
Q (b) Explain the following types of plans:
(i) Objective
(ii) Method

Ans. (i) Objectives:
• Objectives are the desired future position that the management
would like to reach, which need to be expressed in specific terms
and should be in the form of a written statement.
• They are usually set by top management of the organization and 2
focus on broad, general issues. Different departments and units in
the organisation may have their own objectives.
(ii) Method: +

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a a task has to be
• Method is the prescribed way or manner in which
performed considering the objective.
• It deals with a task comprising one step of a procedure and
specifies how this step is to be performed. It may vary from task 2
to task.

= 4 Marks
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28 Q Rajiv was on the board of directors of ‘Tako Solutions', a software

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development company and 'Sabka Mart Retail', a large supermarket
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chain. He wanted to apply management principles in both the

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companies to improve efficiency and profitability.
a
He knew that management principles can be applied as much to
‘Tako Solutions' as to 'Sabka Mart Retail' though the extent to which
the principles can be applied will differ, because the nature of work,
scale of operations and business activities in a software firm and a
supermarket chain are not the same.
Rajiv also knew that the management principles would not provide
readymade solutions because real world situations faced by the two
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companies were very complex and dynamic. Still, he believed that
even small guidelines could help in solving many problems and will
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improve the way both companies worked.

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Identify and explain the two points that highlight the nature of
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principles of management, in the above case.

Ans. (i) Universal applicability ( ½ mark
The principles of management are intended to apply to all types for
of organisations, business as well as non-business, small as well identificat
large, public sector as well as private sector, manufacturing as ion + 1 ½
well as the services sectors. mark for

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However, the extent of their applicability would vary with the explanati

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nature of the organisation, business activity, scale of operations on)

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and the like.

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las (ii) General guidelines
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The principles are guidelines to action but do anot provide
ag readymade, straitjacket solutions to all managerial problems
because real business situations are very complex and dynamic
and are a result of many factors.
However, the importance of principles cannot be underestimated
because even a small guideline helps to solve a given problem. (2+2 = 4
Marks)

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29 Q ‘GW Industries', known for its paper products, decided to produce
and launch a new line of sustainable packaging called ' ‘EcoPac’.
As management is a complex activity, the Chief Executive Officer of
the company translated the work into clear goals and assigned the
means to achieve those. He knew that human resources are the
greatest asset of an organization, so getting work done through them
is also a major task. The production of high quality sustainable
packaging also required a proper production process. This was put
in place for managing the flow of input materials and technology to
convert these materials into high quality sustainable packaging.
In this way 'GW industries' took care of various aspects for
successful launch of 'EcoPac'.
A characteristic of management is discussed in the above case.
Identify and explain the characteristic.

Ans. Management is multidimensional
1
It has three dimensions which are:
a) Management of work:
• All organisations exist for the performance of some work and ( ½ mark
Management translates this work in terms of goals to be for
achieved and assigns the means to achieve it. heading +
b) Management of people: ½ mark
• It implies dealing with employees as individuals with diverse for
needs and behavior and dealing with individuals as a group of explanati
people. on)
c) Management of operations: 1x3
• It requires a production process which entails the flow of
input material and the technology for transforming this input
into the desired output for consumption.
1 + 3 = 4
marks

30 Q ‘Eco Care’, a start-up, plans to launch a reusable water bottle for
environmentally conscious millennials and Gen Z. For this, they
conducted a market research to identify the needs of the customers
so that an informed decision could be taken for successful marketing
of the product. They wanted to work carefully on the design to make
the bottle attractive to the target customers.
On the basis of consumer views and opinions, they developed a stylish
stainless steel bottle with double wall insulation to keep beverages
cold for 24 hours, giving it a competitive advantage in the market.

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a focused on
They named the bottle 'Eco-Sip' creating a brand identity
sustainability and simplicity. It would also help in product
differentiation. The packaging was made using hundred percent
recyclable cardboard, with details of sustainability, features, price
etc. printed on it.
State the four functions of marketing that are carried out by 'Eco
Care' in the above case.
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Ans. The functions of marketing carried out by ‘Eco Care’are:

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(i) Gathering and analysing market information is necessary to
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identify the needs of the customers to analyse the available

g l a opportunities and threats as well as strengths and weaknesses of
a an organisation.
(ii) Product designing and development contributes to making the
product attractive to the target customers, improve performance 1 x 4 = 4
of a product and also give it a competitive advantage in the Marks
market.
(iii)Branding involves decision whether to sell the product in its
generic name or give it a brand name as brand name helps in

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creating product differentiation, which in turn, helps in building
customer loyalty and in promoting its sale.
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(iv) Packaging and labelling refers to designing and developing
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the package for the products and designing and developing the

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label to be put on the package.

(If an examinee has only listed the points, ½ mark for each point should
be awarded)

31 Q ‘Koka Manufacturing Ltd.' is a large scale manufacturer in the
electronics industry. In this industry assets are prone to obsolescence
and their replacement becomes due faster with change in technology.
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The company is constantly under pressure to upgrade its machinery
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and equipment as it would help company to stay competitive,

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improve its product quality and reduce production costs. So instead
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of purchasing the machinery, company decides to lease the required

g machinery, giving it flexibility to upgrade equipment at the end of a
a lease term. This helps company to maintain operational efficiency,
technological competitiveness and financial flexibility.
Identify and explain four factors that would affect the fixed capital
requirements of ‘Koka Manufacturing Ltd.’.

Ans. The four factors affecting fixed capital requirements of Koka
Manufacturing Ltd. are as follows:
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(i) Nature of business
A trading concern needs lower investment in fixed assets
compared with a manufacturing organisation; since it does not ( ½ mark
require to purchase plant and machinery, etc. for
(ii) Scale of operation identificat
A larger organisation operating at a higher scale needs a bigger ion + 1
plant, more space etc. and therefore, requires higher investment in mark for
fixed assets when compared with the small organisation. explanati
(iii)Technology upgradation on)
In certain industries, assets become obsolete sooner.
Consequently, their replacement become due faster. Higher
investment in fixed assets may, therefore, be required in such
cases.
(iv) Financing alternatives
When an asset is taken on lease, the firm pays lease rentals and
uses it. Availability of leasing facilities may reduce the funds
required to be invested in fixed assets, thereby reducing the fixed
capital requirements. 1½x4=6
Marks
32 Q (a) Explain the following steps in the staffing process:
(i) Estimating manpower requirements
(ii) Selection
(iii) Placement and orientation
Ans. (i) Estimating manpower requirements
• Estimating manpower requirements involves knowing how many
persons are needed and also of what type. 2
• ·
• Understanding the manpower requirements would necessitate
workload analysis and workforce analysis, which reveal whether we
are understaffed, overstaffed or optimally staffed.
(ii) Selection +
• Selection is the process of choosing from among the pool of the
prospective job candidates developed at the stage of recruitment.
• The purpose of selection process is to ensure that the organization 2
gets the best among the available and enhances the self-esteem
and prestige of those selected.
(iii) Placement and Orientation
• Placement refers to the employee occupying the position or post +
for which the person has been selected.
2
• Orientation is introducing the selected employee to other
employees and familiarising him with the rules and policies of the
organisation. = 6 marks

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OR
OR
Q (b) Explain the following non - financial incentives:
(i) Status
(ii) Organisational climate
(iii) Job security
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Ans.
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(i) Status:
• It means ranking of positions in the organisation. The authority,
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responsibility, rewards, recognition etc. of a job indicate the status

g l a given to a person holding a managerial position. 2
a • Psychological, social and esteem needs of an individual are
satisfied by status given to their job. +
(ii) Organisational climate:

• It indicates the characteristics which describe an organisation and
distinguish one organisation from the other. 2
• Individual autonomy, reward orientation, consideration to
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employees, risk-taking, etc. are the characteristics which help in
developing better organisational climate.
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(iii)Job security
l as +
• Employees want stability a g about future income and work so that
they do not feel worried on these aspects and work with greater
zeal. 2
• This becomes more important where there are inadequate job
opportunities and too many aspirants for these. = 6 marks

33 Q Ria ran a small online bakery business. Her business was doing
very well. She saved a good amount of money every month and now
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wanted to invest it wisely. She was in a dilemma to keep her savings
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in a bank account or to invest it in the stock market. Her friend

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Aabha, who had done a certification course from National Stock
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Exchange, encouraged her to invest in the stock market. She

g explained to Ria that if she invests in the stock market, she could a
a disinvest and reinvest whenever she wanted, which would provide
her good liquidity. Aabha also told her that the membership of stock
exchange is well regulated and all trading takes place within the legal
framework. As a result, investors get a fair and safe deal. Ria was
still apprehensive as she had heard that there is a lot of speculation
in the stock market. She wanted to be cautious. Aabha clarified that
speculation does exist, but it happens in a restricted and controlled
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way. She also told Ria that the stock exchange is keen to promote
wider share ownership and does so by educating public about
investments etc. As a result, young people have started investing in
the stock market. After all this discussion, Ria felt confident and
decided to invest a part of her savings in the stock market.
Quoting lines, identify and explain the four functions of stock
exchange highlighted in the above case.

Ans. Four functions of stock exchange in the above case are as
follows:

1. “She explained to Ria that if she invests in the stock market, she ( ½ mark
could disinvest and reinvest whenever she wanted, which would for
provide her good liquidity.” quoting +
½ mark
Providing liquidity and marketability to existing securities: for
identificat
The basic function of a stock exchange is the creation of a continuous ion + ½
market where securities are bought and sold which provide liquidity and mark for
marketability. explanati
on)
2. “Aabha also told her that the membership of stock exchange is
well regulated and all trading takes place within the legal
framework. As a result, investors get a fair and safe deal.”

Safety of transactions

The membership of a stock exchange is well- regulated and its dealings
are well defined according to the existing legal framework, which
ensures that the investing public gets a safe and fair deal on the market.

3. “Aabha clarified that speculation does exist, but it happens in a
restricted and controlled way”

Providing scope for speculation

The stock exchange provides sufficient scope within the provisions of law
for speculative activity in a restricted and controlled manner.

4. “She also told Ria that the stock exchange is keen to promote
wider share ownership and does so by educating the public about

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a started investing
investments etc. As a result, young people have
in the stock market”

Spreading of equity cult
1½x4=6
The stock exchange can play a vital role in ensuring wider share Marks
ownership by regulating new issues, better trading practices and taking
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effective steps in educating the public about investments.
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34 Q (a) Explain the following elements of Marketing Mix:

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(i) Product
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(ii) Price

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a
Ans.
(i) Product:
• Product means goods or services or anything of value
which is offered to the market for sale. It also includes the 2
extended product or what is offered to the customers by
way of after sales services, handling complaints,
availability of spare parts.
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• The important product decisions include deciding about
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the features, quality, packaging, labelling and branding of
the products.
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(ii) Price:
g laof money customers have to pay to +

a
• Price is the amount
obtain the product. Generally, the level of price affects the 2
level of demand.
• It involves determining objectives of price setting and
analysis of factors affecting price to make decisions
regarding the basic price of the product, discount to
customers, traders, credit terms etc. +
(iii) Promotion:
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m • Promotion of products and services include activities that
.co
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s e of the products and services to the target customers and
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persuading them to buy it.

ag • Most marketing organisations undertake various
promotional activities and spend substantial amounts of
2

money on the promotion of their goods by using a number =
of tools such as advertising, personal selling, public
relations and sales promotion techniques. 6 marks

OR
OR
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Q (b) Explain the following components of physical distribution:
(i) Order Processing
(ii) Warehousing
(iii) Inventory Control
Ans.
(i) Order Processing
• Products flow from manufacturers to customers via channel
members while orders flow in the reverse direction, from
customers to the manufacturers.
• A good physical distribution system should provide for an
accurate and speedy processing of orders, in the absence of which 2
goods would reach the customers late or in wrong quantity or
specifications leading to customer dissatisfaction.
(ii) Warehousing
• Warehousing refers to the act of storing and assorting products
in order to create time utility in them and its basic purpose is +
to arrange placement of goods and provide facilities to store
them.
• The need for warehousing arises because there may be
difference between the time a product is produced and the time 2
it is required for consumption.
(iii) Inventory Control
• An important decision in relation to inventory is deciding
about the level of inventory. Higher the level of inventory, +
higher will be the level of service to customers but the cost of
carrying the inventory will also be high because lot of capital
would be tied up in the stock. Thus, a balance is to be 2
maintained in respect of the cost and customer satisfaction.
• The decision regarding level of inventory involves prediction
about the demand for the product. A correct estimate of the =
demand helps to hold inventory and cost level down to a
minimum. 6 Marks

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