COMMON PRE-BOARD EXAMINATION 2022-23

Subject: (BUSINESS STUDIES - 054)

ANSWER KEY

Questions Marks
Q. NO.
1 1
(b) The standards of behaviour of employees are evolved
from group norms.

2 1
(d) More demanding customers

3 1
(c) Span of management

4 1
(b) Interrelatedness

5 1
(a) Management is a continuous process

6 1
(c) Both (a) and (b)

7 1
(c) Social Environment

8 1
(c) Social Objective

9 1
(b) It restricts coordination in action

10 1
(b) Controlling
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11 1
(a) Divisional structure

12 1
(a) Product

13
(a) Commercial bill
1

14 1
(c) Rights issue

15 1
(c) Two level channels
16 (b) On execution of the order 1

17 1
(a) Both Assertion (A) and Reason (R) are true and Reason
(R) is the correct explanation of Assertion (A).

18 1
(d) All of the above

19 1
(a) Gathering and analyzing marketing information

20 1
(c) A – iii B - i C – ii D - iv

21 3
The level of management at which Ashutosh Gupta was working is
the top level. (1Mark)

1. To co-ordinate the activities of different departments.

2. To be responsible for welfare and survival of the organisation.
3. To formulate overall organisational goals and strategies for their
achievement.
4. To be responsible for all the activities of the business and for its
impact on the society.
(Any two points – 2 Marks)

22 3
Specialized activities that Mr. Naresh is supposed to
perform as a human resource manager are:
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 • Recruitment, i.e., search for qualified people
• Analysing jobs, collecting information about jobs to prepare
job descriptions.
• Developing compensation and incentive plans.
• Training and development of employees for efficient
performance and career growth.
• Maintaining labour relations and union management
relations.
• Handling grievances and complaints.
• Providing for social security and welfare of employees.
• Defending the company in law suits and avoiding legal
complications.
(Any three points – 3 Marks)

23 3
(a) The management function is controlling. "Comparing actual
performance with standards is the step involved in the process of
controlling which helped in finding out that the actual production
of a worker is less than the set target. (1 MARK)

(b) A manager has to take the following two further steps

to complete the process of controlling.
(i) Analysing deviations:
Some deviation in performance can be expected in all activities. It
is, therefore, important to determine the acceptable range of
deviations. Also, deviations in key areas of business need to be
attended more urgently as compared to deviations in certain
insignificant areas. Critical point control and management by
exception should be used by a manager in this regard.
(1 MARK)

(ii) Taking corrective action:

The final step in the controlling process is taking corrective action.
No corrective action is required when the deviations are within
acceptable limits. However, when the deviations go beyond the
acceptable range, especially in the important areas, it demands
immediate managerial attention so that deviations do not occur
again and standards are accomplished.
(1 MARK)

OR

a) The function performed is controlling and the steps

discussed are:
(i) Setting performance standards
(ii) Measurement of actual performance
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 (iii) Comparing actual performance with standards
(iv) Analysing deviations
(3 Marks)

24 Naina is working as a commerce teacher in RIMS International 3

school Kerala. One day, she was teaching about capital market in
the class. She informed about during 1980s the capital market in
India witnessed a tremendous growth because of increasing
participation of the public. This ever-increasing investor population
and market capitalisation led to a variety of malpractices on the
part of the companies, brokers, merchant banker’s investment
consultants and others involved in the securities market. These
malpractices and unfair, trading practices eroded investors’
confidence and multiplied investors grievances. The government of
India and stock exchanges were helpless in redressing the
investors problems because of lack of proper penalty provisions in
the existing legislation. In view of this the government of India
decided to set up a regulatory body.

The regulatory body is SEBI (1 Mark)

Objectives of SEBI

1.To regulate stock exchanges and the securities industry to

promote their orderly functioning.
2.To protect the rights and interests of investors, particularly
individual investors and to guide and educate them.
3.To prevent trading malpractices and achieve a balance between
self-regulation by the securities industry and its statutory
regulation.
4.To regulate and develop a code of conduct and fair practices by
intermediaries like brokers, merchant bankers etc., with a view to
making them competitive and professional.
(Any two objectives – 2 Marks)

OR

Participants: The participants in the capital market are financial

institutions, banks, corporate entities, foreign investors and
ordinary retail investors from members of the public. Participation
in the money market is by and large undertaken by institutional
participants such as the RBI, banks, financial institutions and
finance companies. Individual investors although permitted to
transact in the secondary money market, do not normally do so.

Safety: Capital market instruments are riskier both with respect

to returns and principal repayment. Issuing companies may fail to
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 perform as per projections and promoters may defraud investors.
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.

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 report, commercial paper
and certificates of deposit.

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. First, there is the scope of earning capital gains in equity
share. Second, in the long run, the prosperity of a company is
shared by shareholders by way of high dividends and bonus issues.

(4 points – 4 Marks)

25 Under this training method, it is a joint program of training in which 4

educational institutions and business firms cooperate. Identify the
type of training. Also state any other three types of training.

Internship Training (1 Mark)

Types of on-the-job training

(i) Apprenticeship Programmes:

Apprenticeship programmes put the trainee under the guidance of
a master worker. These are designed to acquire a higher level of
skill. People seeking to enter skilled jobs, to become, for example,
plumbers, electricians or iron-workers, are often required to
undergo apprenticeship training. These apprentices are trainees
who spend a prescribed amount of time working with an
experienced guide, or trainer. A uniform period of training is
offered to trainees, in which both fast and slow learn here, are
placed together. Slow learners may require additional training.

(ii) Coaching: In this method, the superior guides and instructs

the trainee as a coach. The coach or counselor sets mutually
agreed upon goals, suggests how to achieve these goals,
periodically reviews the trainees progress and suggests changes
required in behavior and performance. The trainee works directly
with a senior manager and the manager takes full responsibility for
the trainee’s coaching. Classically the trainee is being groomed to
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 replace the senior manager and relieve him from some of his
duties. This gives a chance for the trainee to learn the job also.
(iii) Job Rotation: This kind of training involves shifting the
trainee from one department to another or from one job to
another. This enables the trainee to gain a broader understanding
of all parts of the business and how the organization as a whole
function. The trainee gets fully involved in the departments
operations and also gets a chance to test her own aptitude and
ability. Job rotation allows trainees to interact with other
employees facilitating future cooperation among departments

(Three types – 3 Marks, ½ Mark title, ½ Mark explanation)

OR

Casual callers is the source of recruitment used by the

company. (1 Mark)

b. Other three sources of recruitment belonging to the category

identified above

Direct Recruitment
Advertisement
Employment Exchange
Placement Agencies and Management Consultants
Campus Recruitment
Recommendations of Employees
Labour Contractors
Advertising on Television
Web Publishing

(Any Three types – 3 Marks, ½ Mark title, ½ Mark

explanation)

26 4
Psychological barriers
(i) Premature evaluation: Sometimes people evaluate the
meaning of message before the
sender completes his message. Such premature evaluation may be
due to pre-conceived
notions or prejudices against the communication.

(ii) Lack of attention: The pre-occupied mind of receiver and the

resultant non-listening of message acts as a major psychological
barrier. For instance, an employee explains about his problems to
the boss who is pre-occupied with an important file before him.

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 The boss does not grasp the message and the employee is
disappointed.

(iii) Loss by transmission and poor retention: When

communication passes through various levels, successive
transmissions of the message results in loss of, or transmission of
inaccurate information. This is more so in case of oral
communication. Poor retention is another problem. Usually people
cannot retain the information for a long time if they are inattentive
or not interested.

(iv) Distrust: Distrust between communicator and communicate

acts as a barrier. If the parties do not believe each other, they
cannot understand each other’s message in its original sense.
OR

State any four barriers to communication which are affected by

personal factors of both sender and receiver influence the effective
communication. (4 Points – 4 Marks)
(Mark Title, ½ Mark Explanation)

Personal barriers
(i) Fear of challenge to authority: If a superior perceives that
a particular communication may adversely affect his authority, he
or she may withhold or suppress
such communication.
(ii) Lack of confidence of superior on his subordinates: If
superiors do not have confidence on the competency of their
subordinates, they may not seek their advice or opinions.

(iii) Unwillingness to communicate: Sometimes, subordinates

may not be prepared to communicate with their superiors, if they
perceive that it may adversely affect their interests.

(iv) Lack of proper incentives: If there is no motivation or

incentive for communication, subordinates may not take initiative
to communicate. For example, if there is no reward or appreciation
for a good suggestion, the subordinates may not be willing to offer
useful suggestions.
(4 Points – 4 Marks) (½ Mark Title, ½ Mark Explanation)

27 4
(i) "The cycle company offered him a permanent pensionable job".
According to above line Rahim is able to fulfill his following needs:

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 (a) Physiological Needs (1 Mark)
(b) Safety or Security Needs (1 Mark)
(ii) The other needs followed by the above stated needs that
arc still to be satisfied are:
(a) Affiliation need: It refers to the need for affection,
sense of belongingness, acceptance and friendship. (1
Mark)
(b) Esteem need: It refers to the need for self-respect,
autonomy, status, recognition and attention. (1 Mark)

28 4
Nature of Business, Scale of Operations, Business Cycle, Seasonal
Factors, Production Cycle, Credit Allowed, Credit Availed,
Operating Efficiency, Availability of Raw Material, Growth
Prospects, Level of Competition, Inflation. (Any 4 – 4 Marks) (½
Mark Title, ½ Mark Explanation)

OR

Explain briefly any four factors that affect the fixed capital
requirements of a company.
Nature of Business, Scale of Operations, Choice of Technique,
Technology Upgradation, Growth Prospects, Diversification,
Financing Alternatives, Level of Collaboration.
(Any 4 – 4 Marks) (½ Mark Title, ½ Mark Explanation)

29 4

Dividend Decision
Amount of Earnings, Stability of Earnings, Stability of Dividends,
Growth Opportunities, Cash Flow Position, Shareholders’
Preference, Taxation Policy, Stock Market Reaction, Access to
Capital Market, Legal Constraints, Contractual Constraints.
(Any 4 – 4 Marks) (½ Mark Title, ½ Mark Explanation)

30 4
a. Right to be Informed (1 Mark)
b. Right to safety.
Right to choose.
Right to consumer education.
Right to be heard.
Right to Seek redressal.

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 (Any 3 – 3 Marks) (½ Mark Title, ½ Mark Explanation)

31 6
Time Study:
It reduces the amount of time it takes to execute a specific task.
For each step of the task, time-keeping devices are used. Various
readings are used to determine the standard time for the full
task. The duration of the time study will be determined by the
task's frequency and volume, as well as the process's cycle time
and time measurement costs.

Motion Study:
Motion analysis is the study of actions such as placing objects,
lifting, changing positions and sitting that occur when doing a
routine task. Random motions are encouraged to be reduced so
that the job can be completed in less time.

Fatigue Study:
If a person does not relax while working, he or she will get
emotionally and physically exhausted. Rest periods will aid in the
recovery of vitality and the ability to work at the same level
again. As a result, the potency will be increased. The goal of
fatigue research is to determine the amount and frequency of
rest intervals required to complete a task.

Simplification and Standardisation of work

Standardization refers to the process of setting standards for any

industrial activity, such as the way things are done, the amount
of time they take, the raw materials they use, the machinery they
use, the products they make, the processes they go through, and
the situations they go through. These examples serve as
guidelines that must be followed throughout the process.
Simplification refers to the removal of non-essential kinds, sizes,
and measurements, whereas standardization refers to the
creation of new types rather than existing ones. The goal of
simplification is to eliminate a variety of products that are
redundant. Machines, tools, and labor costs are reduced as a
result. It entails keeping inventory under control, making full use
of commodities, and increasing turnover.
(3x2 = 6 Marks – Any three)

OR

Unity of Command

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 This principle states that that should be a clear chain of command
in the organization. The employees should be clear on whose
instructions to follow. According to Fayol, an employee should
receive orders from only one manager. If an employee works under
two or more managers, then authority, discipline, and stability are
threatened. Moreover, this will cause a breakdown in management
structure and cause employees to burn out.
Equity
Equity is a combination of kindness and justice. This principle
states that managers should use kindliness and justice towards
everyone they manage. This creates loyalty and devotion among
the employees towards the organization they work for.
Remuneration
This principle of management states that employees should be paid
fair wages for the work that they carry out. Any organization that
underpays its workers will struggle to motivate and keep quality
workers. This remuneration should include both financial and non-
financial incentives. Also, there should be a structure in place to
reward good performance to motivate employees

Initiative
This principle states that all employees should be encouraged to
show initiative. When employees have a say as to how best they
can do their job, they feel motivated and respected. Organizations
should listen to the concerns of their employees and encourage
them to develop and carry out plans for improvement.
(3x2 = 6 Marks – Any three)

32 6
Identifying alternative courses of action: Once objectives are
set assumptions are made. Then the next step would be to act
upon them. There may be many ways to act and achieve
objectives. All the alternative courses of action should be identified.
The course of action which may be taken could be either routine or
innovative. An innovative course may be adopted by involving
more people and sharing their ideas. (½ Mark Title, 1.5 Marks
Explanation)

Remaining steps to carried out to complete the process are

as follows:
1. Evaluating alternative courses: The next step is to weigh
pros and cons of each alternative. Each course will have many
variables which have to be weighed against each other. The
positive and negative aspects of each proposal need to be
evaluated in the light of the objective to be achieved.
2. Selecting an alternative: This is the real point of decision
making. The best plan has to be adopted and implemented. The
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 ideal plan, of course, would be the most feasible, profitable and
with least negative consequences. Most plans may not always be
subjected to a mathematical analysis.
3. Implementing the plan: This is the step where other
managerial functions also come into the picture. The step is
concerned with putting the plan into action.
4. Follow up action: To see whether plans are being implemented
and activities are performed according to schedule is also part of
the planning process. Monitoring the plans is equally important to
ensure that objectives are achieved.
(4x1 = 4 Marks)

OR

Planning is of vital importance in the managerial process. Explain

in brief any four reason in support of your answer.
(i) Planning provides directions
(ii) Planning reduces the risks of uncertainty
(iii)Planning reduces overlapping and wasteful activities
(iv)Planning promotes innovative ideas
(v) Planning facilitates decision making
(vi) Planning establishes standards for controlling

(4x1.5 = 6 Marks)

33 6
Importance of Decentralization:

1. “Response does not take time”. Quick decision making-

In a decentralized organization since decisions are taken at levels
which are nearest to the point of action and there is no requirement
for approvals from many levels, the process is much faster.

2. “Who can get a chance to prove their abilities”. Develops

managerial talent for the future- Decentralization gives
managers a chance to prove their abilities and creates a reservoir
of qualified manpower that can be considered to fill up more
challenging positions through promotion.

3. “Identifying those executives who have the necessary

potential to become dynamic leaders”. Develops initiative
among subordinates-Decentralization helps to promote self-
reliance and confidence amongst the subordinates. It also keeps
them in a state wherein they are constantly challenged and have
to develop solutions for the various problems they encounter.

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 4. “This makes it possible to evaluate performance at each
level and each department can be individually held
accountable for their results.” Better control- Feedback from
levels helps to analyze variances and improve operations.

(½ Mark Title, ½ Mark Explanation, ½ Mark Quoting)

(4x1.5 = 6 Marks)

34 6
Functions of marketing referred in above para are as
follows:
(a) Gathering and analysing market information: Marketing
research is the systematic investigation of the facts relevant to
the various aspects in marketing. Marketing research helps
managers to arrive at an appropriate decision. Market information
should be gathered and analysed, appropriately. "use internet to
gather customers" views and opinions"
(b) Standardization and Grading: Standardisation refer to
determining the basic measure/standard of the product with
regard to shape, size, colour quality, quantity, etc. Grading is the
process of classification of the product into different groups, on
the basis of some parameters like quality, quantity, size, etc. "no
predetermined specification in case of rice because of which it
would be difficult to achieve uniformity in the output."

Or
"classified it into three different varieties namely-Popular,
Classic and Supreme, based on the quality."
(c) Branding: It is the process of stamping a product with some
identifying name or mark or a combination of both. "To
differentiate the product from its competitors, she gave it the
name of Malabari Organic Rice."

Or

"She felt that these names would help her in product

differentiation.”
(½ Mark Title, 1 Mark Explanation, ½ Mark Quoting)
(4x2 = 6 Marks)

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