CHENNAI SAHODAYA SCHOOLS COMPLEX

BUSINESS STUDIES MARKING SCHEME

SET – 2
1. b) Middle level
2. a) Contract note
3. d) Number of employees a superior can manage effectively
4. d) Statement 2 is true and statement 1 is false
5. c) higher degree of financial risk
6. b) Measurement of actual performance
7. a)National commission
8. b) Financing Decision
9. d) Economic Environment
10. a) Trade test
11. d) All of these
12. b) Work force analysis
13. d) All the above
14. b) Stability in earnings
15. d) Assertion (A) is false but Reason ( R) is true
16. a) Advertising, personal selling
17. b)Both Assertion(A) and Reason(R) are true but Reason (R ) is not the correct
explanation of Assertion (A )
18. b) (i)-(b) ;(ii)-(c); (iii)-(d);(iv)-(a)
19. c) Assertion (A) is true and Reason (R) is false.
20. a) Right to be heard
21. . i) Identifying alternative course of action
ii) Evaluating the alternative course
iii) Selecting the best alternative
(with explanation) 3x1=3
OR
i) Planning leads to rigidity
ii) Planning may not work in a dynamic environment
iii) Planning reduces creativity
iv) Planning involves huge cost
v) Planning is a time consuming process
vi) Planning does not guarantee success
( any three with explanation) 3X1=3
22. A) (i) Political Environment (ii) Economic environment ½+½=1
B) Inter relatedness: The different elements of business environment are closely inter
related. 1+1=2

23. Financial Planning:

Financial planning is essentially the preparation of a financial blue print of an
organisation’s future operations. 1 mark
Objectives:
(a)To ensure availability of funds whenever required
(b) To see that the firm does not raise resources unnecessarily. 2 X 1= 2

OR
Factors affecting Investment Decision:
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a) Cash flow of the project

b) The rate of return
c) The investment criteria involved (with brief explanation) 3x1=3
24. Informal communication 1 mark
Helpful to carry information quickly.
It takes place without following he formal line of communication
It generates rumours which are not authentic.
(any two) 2 marks
25.Semantic barriers:
i) Badly expressed message
ii) Symbols with different meanings
iii) Faulty translations
iv) Unclarified assumptions
v) Technical Jargons
vi) Body language and gesture decoding ( Any four with explanation) 4 marks
OR
i) Bonus: Bonus is an incentive offered over and above the wages or salary to the
employees
ii) Productivity linked wage incentive: Several wage incentive plan aims at linking
payment of wages to increase in productivity at individuals or group level.
iii) Stock option: employees are given an option to purchase shares of the company at
a price less than market price.
iv) Perquisites: Many companies offer perquisites and fringe benefits like car
allowance, medical aid , housing etc., 4x1=4
26. Ans: The various characteristics of management involved here are:
1. Goal Oriented. The main motive is to tell the employees to keep the target of 20%
increase in sales as the main objective when they work throughout the year.
2. Multidimensional. Various plans are made to harness the potential of the employees
and streamline the processes. Employees—People, and Streamline the process—
Operations.
3. Dynamic. However with the passage of a few days the external business environment
checks the capability of the organization to adapt to the situations
(identifying 2 marks quoting lines 2 marks)
27. Ans: No. I do not agree with this statement 1+3=4
Importance of Controlling.
i) Accomplishing orgaisational goals.
ii) Judging accuracy of standards
iii) Making efficient use of resources.
iv) Improving employee motivation
v) Ensuring order and discipline
vi) Facilitating coordination in action ( any three with explanation)

28. Rule and Method

Rule: Rules are specific statements that tell us what is to be done and what is not to be done .
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They do not allow for any flexibility or discretion. They are usually the simplest type of plans
because there is no compromise or change unless a policy decision is taken.

Method: Methods can be defined as standardized ways in which a given task has to be
performed considering the objectives. Selection of proper method saves time, money and effort
and increases efficiency. A method is more limited in scope than a procedure. It is one step of a
Proceedure. 1+ 1 ½ + 1 ½ =4
29. Product Designing and Development: Another important marketing activity or decision
area relates to product designing and development. The design of the product contributes to
making the product attractive to the target customers. A good design can improve performance
of a product and also give it a competitive advantage in the market.
Standardization and Grading: Standardization refers to producing goods of predetermined
specifications, which helps in achieving uniformity and consistency in the output.
Standardization ensures the buyers that goods conform to the predetermined standards of quality,
price and packaging and reduces the need for inspection, testing and evaluation of the products.
Grading is the process of classification of products into different groups, on the basis of some of
its important characteristics such as quality, size, etc. Grading is particularly necessary for
products which are not produced according to predetermined specifications,.
2+2=4
OR
Differences between advertising and personal selling .( any four) 4x1=4
S.No. Advertising Personal selling

1. Advertising is an impersonal form of Personal selling is a personal form of

communication communication.
2. Advertising involves transmission of In personal selling, the sales talk is
standardized messages, i.e., the same adjusted keeping view of the customer's
message is sent. background and needs
3. Advertising is inflexible as the Personal selling is highly flexible. as
message can’ t be adjusted to the the message can be adjusted
needs of the buyer.
4. It reaches masses, i.e., a large number Only a limited number of people can be
of people can be approached contacted because of time and cost
considerations.
5. In advertising the cost per person The cost per person is quite high in the
reached is very low. case of personal selling
6. Advertising can cover the market in a Personal selling efforts take a lot of
short time. time to cover the entire market
7. Advertising makes use of mass media Personal selling makes use of sales
such television, radio, newspaper, and staff, which has limited reach
magazines.
8. Advertising lacks direct feedback. Personal selling provides
Marketing research efforts are needed direct and immediate feedback. Sales
to judge customers’ reactions to persons come to know about the
advertising customers’ reactions immediately
9. Advertising is more useful in creating Personal selling plays an important role
and building interest of the consumers at the awareness stage of decision
in the firm's products. making
10. Advertising is more useful in Personal selling is more useful in
marketing to the ultimate consumers selling products to the industrial buyers
who are large in numbers or to intermediaries such as dealers and
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retailers who are relatively few in

number

30. The workers need to be trained to handle expensive hi-tech and sophisticated machines
through Vestibule Training method. 1 mark
This is the method where employees learn their jobs on the equipment they will be using. But the
training is conducted away from the actual work floor. Actual work environment re created in a
class room and employees use the same materials , file and equipment. (3 marks)
31. a) Place/ Physical distribution
The physical handling and movement of goods from place of production to the place of
distribution is referred to as physical distribution.
b) Components :
i) Transportation
ii) Warehousing
iii) Inventory control
iv) Order processing
(with explanation) 2+ 4= 6
OR
The decision which ‘Pushpanjali Ltd.’ should take so that its customers are able to identify its
products in the market is Branding.
Benefits that may result to Pushpanjali Ltd (any two)
(i) Enables marking product differentiation.
(ii) Helps in advertising and display programmes.
(iii) Differential pricing.
(iv) Ease in introduction of new product.
Benefits that may result to the customers: (any two)
(i) Helps in product identification
(ii) Ensures quality
(iii) Status symbol 2+2+2 = 6
32. Science not rule of thumb:
Taylor believed that there was only one best method to maximise efficiency which can be
developed through study and analysis and should substitute “Rule of Thumb” or hit and trial
method throughout the organisation.
The scientific method involved investigation of traditional methods through work study
unifying the best practices and developing a standard method, which would be followed
throughout the organisation.
Harmony not Discord:
Taylor emphasised that there should be complete harmony between the management and
workers instead of a kind of class- conflict , the managers versus workers.
To achieve this state, Taylor called for complete mental revolution on the part of both
management and workers.
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The prosperity for the employer cannot exist for a long time unless it is accompanied by
prosperity for the employee an vice versa.
He advocated paternalistic style of management should be in practice.
Cooperation , Not individualism:
This principle is an extension of principle of “ Harmony not Discord”.
There should be complete cooperation between the labour and the management instead of
individualism.
Competition should be replaced by cooperation and there should be an almost equal
division of work and responsibility between workers and management.
Also management should reward workers for their suggestions which results in
substantial reduction in costs.
At the same time workers should desist from going on strike and making unreasonable
demands on the management
Development of each and every person to his or her Greatest efficiency and prosperity
Taylor was of the view that the concern for efficiency could be built in right from the
process of employee selection.
Each person should be scientifically selected and the work assigned should suit his/her
physical, mental and intellectual capabilities.
To increase efficiency they should be given the required training.
Efficient employees would produce more and earn more. This will ensure their greatest
efficiency and prosperity for both company and workers. 4X1½=6

33.functional structure : It is a type of organization structure formed by grouping of jobs of

similar nature under major function and organizing these as separate departments.
Advantages:
i) Functional specialization
ii) Better control and coordination
iii) Efficiency
iv) Minimises costs
v) Facilitates training
vi) Proper attention ( any three)
Disadvantages:
i) Less emphasis on organizational objectives
ii) Problems in coordination
iii) Inter departmental conflicts
iv) Inflexibility
v) Difficulty in fixing Accountability ( any two) 1+ 3+2=6
. OR
The importance of decentralization is highlighted through the following points:
a) Develops initiative among subordinates
b) Develops managerial talent for the future
c) Quick decision making
d) Relief to top Management
e) Facilitates growth
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f) Better control
(importance with suitable explanation) 6X1=6
34. “ Ajith urged Akshay to invest in the forthcoming IPO of a blue chip companies” PRIMARY
MARKET
“Akshay was inclined to buy existing securities” SECONDARY MARKET
Differences between Primary market and Secondary Market(any four) 2+4=6
PRIMARY MARKET SECONDARY MARKET

(i) There is sale of securities by new There is trading of existing shares

companies . only
(ii) Securities are sold by the company to Ownership of existing securities is
the investor directly or through exchanged between investors .
intermediary.
(iii) The flow of funds is from savers to Enhances encashability of shares
investors .(directly promotes capital (indirectly promotes capital formation)
formation)
(iv) Only buying of securities takes place Both buying and the selling of
securities can take place
(v) Prices are determined and decided by Prices are determined by demand and
the management of the company. supply for the security.
(vi) there is no fixed geographical Located at specified places
location

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