Updated On : September 15, 2023
Class 12 Business Studies Important Questions are published on its official website for pdf download.
Students who want to test themselves besides learning from the two books of Business Studies for class 12th board exam will consider the given important questions to be helpful.
The given long and short type questions answers are from the NCERT textbook and the latest CBSE Sample paper.
Chapters from 1 to 8 are included in the NCERT book: ‘Principles and Functions of Management’. Questions from this book carry a weightage of 50 marks in the board examination. So, it is crucial to prepare and check the level of questions asked from chapters of this book.
Below are chapter-wise board exam questions that students can expect to see in board examination 2020.
Q1- Explain the term Management?
Ans- Management is a process of getting the work done that is important for an organization to achieve its goal in an efficient and effective manner.
Q2- What are the two important characteristics of management.
Ans- The two important characteristics of management are mentioned below:
Q3- Management is to be considered both science and art. Explain
Ans- The parts of both science and art can be considered in management. Art is the involvement of theories and hypotheses while developing the management of an organization.
While with experimentation and observation, the rules of science can be easily applicable to the managerial system.
Q4- State the basic features of management as a profession
Ans- The basic features of management as a profession are:
Q 5- Coordination is the essence of management. Do you agree? Give reasons.
Ans- Coordination is no doubt the essence of management. Coordination means a path which links up the group functions. It starts from the stage of planning where the objectives and goals of the organisations are set. Division interdependence, common goal, and work allotted are few of the reasons which signify the essence of the management.
Q6- ‘Management is considered to be three-tier machinery’. Why?
Ans- Management is considered to be three-tier machinery because of the three levels involved:
Q 7- Why do you think management has the characteristics of a full-fledged profession?
Ans- There are few characteristics of management making it a full-fledged profession:
Q1- What is meant by ‘Management Principles’?
Ans- Principles of Management refers to the broad and general guidelines for managerial decision making and traits.
Q2- Briefly explain ‘discipline’ and ‘scalar chain’ as the principles of general management.
Ans- Discipline: Discipline implies that an establishment must follow the rules and regulations and make sure that the compliance to set some stipulated policies and rules. Discipline certainly requires some good supervisors at all the levels with clear and unbiased agreements and judicious application of penalties.
Scalar chain: Scalar chain refers to a defined, established pathway of authority and communication in the order of highest to the lowest.
Q3- In what way the Principle of ‘Unity of Command’ is useful to the management? Give a brief explanation.
Ans- The 'Unity of Command' principle states that any person should be answerable to only one authority figure. This principle is violated if an individual receives the command from two or more people. According to Fayol, this principle has an effective role in management.
Q4- What is the importance of the principles of management?
Ans- The importance of the principles of management are mentioned below:
Q 5- Explain in brief the ‘discipline’ and ‘scalar chain’ as the principles of general management.
Ans- The brief explanation of Scalar Chain and Discipline are given below:
Q6- If an organisation is not providing the right place for physical and human resources, which principle is violated?
Ans- In this case, the ‘principle of order’ is violated. To run the tasks smoothly in the organization, it is important that the right people and the right resources are available. The violation of this principle leads to chaos in the workplace.
Q7- Name the organisational structure that assists in increasing managerial and operational efficiency.
Ans- Functional structure assists in increasing managerial and operational efficiency.
Q1- Explain what is Business Environment?
Ans- Business environment means all those external forces which affect the performance of a business organisation. These forces can be political, social, economic, technological or legal. From consumers to government, they all impact the smooth functioning of an enterprise, hence it is important for an organisation to understand the nature of these external forces.
Q2- How can a firm cope up with the varying technical environment?
Ans- By enhancing and developing new ways of performing things.
Q3- Discuss why it is important for business enterprises to understand their environment?
Ans- Check the following points which are important to understand the business environment.
Q4- What is the role of the political environment in shaping the business?
Ans- It involves political conditions such as peace and general stability in the nation and the traits of the elected government representatives hold towards the business concerns. Political stability certainly gains confidence among the society of the business whilst political instability, incorrect law and order situation might bring uncertainty to the business pursuits. For instance, post Globalisation, Government of India permitted many companies to get into the Indian market to boost the different industries like food processing industry etc.
Q5- What are the impacts of demonetization on real estate, private wealth and real estate.
Ans- Demonetisation is the withdrawal of the status of legal tender to the currency in circulation. Demonetisation was announced in India from the midnight of November 8, 2016. The government announced the Demonetization of ₹ 500 and ₹ 1,000 currency notes. Its impact is mentioned in the points below:
Q6- The social environment of business is important for a business enterprise.’ Explain.
Ans- A business is subordinate to an external social environment and also its own internal social environment. The external social environment gives both perils and opportunities for a business. Businesses that break to accommodate social preferences associated with their goods and services will fail. The failure of any establishment in adapting to the changes in the social environment would certainly lead to dissatisfaction amongst its consumers and its products being rejected.
Q7- Mention the benefits of understanding the business environment?
Ans- Take a look at the benefits of understanding the business environment:
Q 8- In what way a firm can cope with the changing technical environment?
Ans- By enhancing their policies and planning and coming up with new ways of performing things.
Q1- What is Planning?
Ans- Planning refers to ascertaining in advance what to do and how to do. This is contemplated as one of the elementary managerial functions.
Q2- What are the qualities that are required for planning?
Ans- Imagination, Intelligence, Sound Judgement and Foresight.
Q3- What are the strategic decisions that are taken by business organisations?
Ans- Strategic decisions include decisions like if the organisation is going to continue to be in the same line of business, or develop the new lines of activity with the existing business or plan on acquiring a dominant position in the same market.
Q 4- Mention any six importance of planning.
Ans- The importance of planning are mentioned in the points below:
Q5- If planning also means making the details for the future, why does it not ensure success?
Ans- Planning also involves working out the details of the future but since the upcoming events and changes are unpredictable, planning does not ensure success. There are a number of external forces that keep affecting the functioning of a business. These forces are changeable and complex in nature.
Q6-What is the 6 importance of Planning?
Ans- The importance of planning is as follows:
Q7- Is planning worth the huge costs involved? Explain.
Ans- Planning certainly involves a huge cost. However, the cost involved in planning is negligible when it is being compared to its importance. Below mentioned are a few factors due to which we can say that planning is a vital action despite the huge costs:
Q1- Name the steps in the process of organising.
Ans- The steps for organising are:
Q2- Name the organisational structure that assists in managerial and operational efficiency.
Ans- Functional structure assists in managerial and operational efficiency.
Q 3- In what way an informal organisation supports a formal organisation.
Ans- These factors of the informal organisation supports the working of formal organisation:
Q4- Which Organisational structure promotes initiative & flexibility
Ans- Divisional structure in the organisation promotes flexibility and initiative.
Q5- Mention the elements of delegation.
Ans- The three main elements of the delegation are:
Q6- Define ‘Delegation.’
Ans- Delegation is defined as the transfer of authority and responsibility by the superior to his/ her subordinates.
Q7- State any 3 merits of a formal organisation.
Ans- Merits of a formal organisation:
Q1- Mention briefly the important sources of recruitment.
Ans- The two very important sources of recruitment in any organisation are.
Q2- Why is ‘employment interview’ conducted in the process of selection?
Ans- The primary purpose of the employee interview is to assess the applicant’s feasibility for the designation by seeking from him or her and to check whether the person is suitable for the job post.
Q3- Why Aptitude test conducted during the process of selection?
Ans- An aptitude test is conducted to measure and scale the applicant’s potential for learning a skill.
Q4- What is Training? In what way is it different from education?
Ans- Training is to enhance the skills, abilities, and competence that is required for a specific job profile. While education means the process which improves the overall knowledge and understanding of the employees.
Q5- Why is an 'employment interview’ conducted by an organisation in the process of selection?
Ans- Organisations conduct employee interviews in order to assess the applicant’s feasibility for the position and to check if the person is suitable for the prescribed job post.
Q6- What is the next step of selection?
Ans- Placement and Orientation.
Q7- The current day human resource management is a broader concept. Explain.
Ans- The current day human resource management involves:
Q1- Mention any three principles of Directing.
Ans- The three principles of Directing are:
Q2- State any two non-financial incentives.
Ans- Status-In a company context, status is referred to as the position or rank given to an employee. In simple words, status can be any managerial post assigned to a person.
Career Advancement Position- It refers to higher-level progression in one’s career. A person’s progress can be a move from an entry-level job to a managerial position with the same field.
Q3- Explain the meaning of ‘motivation’ as an element of directing.
Ans- Motivation in the context of an organisation means the process of making subordinates act in a desired manner so as to achieve certain organisational goals.
Q4- Mention various types of leadership s?
Ans- The different kinds of leadership s are:
Q5-What is meant by ‘Esteem needs’ and ‘self-actualisation needs’ in relation to the motivation of an employee?
Q6- Mention the semantic barriers of communication?
Ans- Semantic barriers of communication are the use or understanding of language. Sometimes certain words, sentences or phrases are misunderstood which can lead to the different meanings which can lead to the obstruction of effective communication. Such barriers in communication that arise out of the difficulty in understanding words and sentences are known as semantic barriers.
Q7- Give three points of importance for directing the function of management.
Ans- The three points highlighting the importance of directing the function of management.
Q8- What are the qualities of a good leader? Do qualities alone ensure that leadership will be successful?
Ans- No, the presence of the leadership qualities does not ensure its success. Some of the qualities of a good leader are:
Q1- What are the steps involved in the process of Controlling?
Ans- The steps that are involved in the controlling process are:
Q2-What is the formula of Return on Investment?
Ans- The formula of Return on Investment is. Return on Investment = Net Income / Cost of Investment
Q3- Explain why planning is an empty exercise without controlling function?
Ans- Planning is considered to be an empty exercise without controlling function because monitoring and implementing the formulated plan is based on the controlling function.
Q4- Discuss how the management audit serves as an effective technique of controlling.
Ans- The following points show the effectiveness of the management audit on controlling:
Q5- Mention three points highlighting the importance of Controlling.
Ans- Points given below highlights the importance of controlling:
Q6- ‘Planning is looking forward and controlling is looking back’.Comment
Ans- Planning It is the first step on deciding what to do, how, where and when a specific work has to be done. It is an activity where a goal and how to accomplish that goal is decided. Whereas, Controlling involves evaluation of performance that matches the standard of the organisation. It is the primary goal and responsibilities of all management in any enterprise. However, the statement ‘Planning is looking forward and controlling is looking back’ is partially right because, though planning is done for the future, the foundation of planning is based on the past experiences and activities. On the other hand, though controlling includes past assessment, it aims in enhancing future performance by taking correct steps and measures.
Q7- What is Controlling.
Ans- Controlling is to ensure that activities in an organisation are performed as per the plans.
Chapters from 8 to 12 are included in the NCERT book: ‘Business Finance and Marketing’. Questions from this book carry a weightage of 30 marks in the board examination. So, it is important to prepare and check the level of questions asked from chapters of this book.
Below are chapter-wise board exam questions that students can expect to see in board examination 2020.
Q1- Mention the main objectives of financial management? Explain.
Ans- The objective of financial management is to opt for the kind of financial decisions that will maximize the shareholders' wealth.
Q2- What are current assets? Give at least four examples of such assets.
Ans- Current asset means those assets which the firm can easily convert into cash or cash equivalents in a short period of time (less than a year). The four examples of current assets are:
Q3- What is Financial Management?
Ans- Financial Management means directing, planning, organizing, and controlling the financial pursuits such as the utilization of the firm of the capital. It means applying the standards of general management to the financial resources of the firm.
Q4- How does the production cycle impact working capital?
Ans- Production cycle impacts working capital as the working capital requirement will be greater with a longer production cycle.
Q5- While performing the financial function every manager makes three decisions. Explain those decisions.
Ans- A manager take the three following decision while performing the financial function
Q6- In what way does working capital affect both the liquidity as well as the profitability of a business?
Ans- Working capital of business means an excess of current assets (such as debtors, stock or cash in hand, etc.) over current liabilities. With the increase in the amount of working capital, the liquidity of the business also increases. But, since current assets offer low returns, the profitability of the business falls with the increase in working capital.
Q7- Explain the factors affecting dividend decisions?
Ans- Few of the factors affecting dividend decisions are:
Q1-Name two money market instruments
Ans- The two money market instruments are:
Q2- Give any four functions of the Stock Exchange.
Ans- The functions of the Stock Exchange are:
Q3- Briefly mention in points the objectives of NSE (National Stock Exchange)
Ans- The objectives of the National Stock Exchange are :
Q4- Discuss the recent Capital Market reforms in India
Ans- A capital market is divided into two parts i.e., Primary Market and Secondary Market. The primary market deals with the issue of new securities. While Secondary market deals in the purchase and sale of the existing securities.
After the 1991 reform, a three-tier system came into the Indian Stock Market. This three-tier system consisted of the National Stock Exchange, Regional Stock Exchanges, and Over the Counter Exchange of India (OTCEI).
Q5- What are the protective functions of the Securities and Exchange Board of India.
Ans- The protective functions of SEBI are:
Q6- What are various Money Market instruments
Ans- The various Money Market Instruments are:
Q7- State the protective function of the Securities and Exchange Board of India.
Ans- The protective function of the Securities and Exchange Board of India is.
Q1- How does labelling act as a silence salesman?
Ans- Labelling acts as a silence salesman because it attracts the customer by providing the necessary information. It acts as a promotional tool.
Q2- Define marketing? Explain its functions in the process of exchange of goods and services?
Ans- Marketing is the process wherein the buyers and sellers interact with each other with the purpose of purchase and sale of goods and services. Marketing involves certain functions like designing the product, planning, packaging, and labeling of the product and many other ways. It also involves activities after the sale of the product.
Q3- Mention a few characteristics a good brand name should have.
Ans- Few characteristics that a good brand should have are as follows.
Q4- Discuss the role of ‘sales promotion' an element of promotion mix.
Ans- Sales promotion is the incentives that are offered to the buyers with the purpose of encouraging them to purchase the product. It attracts customers and induces them to immediately purchase the product.
Q5- Give any four characteristics a good brand name should have.
Ans- The four characteristics that a good brand name should have are:
Q6- What are the different factors that affect the fixation of the price of a product?
Ans- The different factors affecting the fixation of the price of a product are.
Q7- Mention the factors which affect determining the price of a product or service? Explain.
Ans- The factors affecting the product price or service are:
Q1- Mention when as a consumer you are not able to resolve your grievances under the Consumer Protection Act.
Ans- As a consumer, we are not able to resolve our grievances under the Consumer Protection Act when we do not fulfill our responsibility as a customer.
Q2- An organisation is using sub-standard wiring in its cooler. Which consumer right is being violated?
Ans- Right to Safety is being violated.
Q3- What is meant by ‘customer’ as per the Consumer Protection Act, 1986?
Ans- As per the Consumer Protection Act, 1986, the consumer is defined as.
Q4- Mention the Acts passed by the Indian Government for the protection of consumer's interests.
Ans- The various acts passed by the Government are:
Q5- Who can file a complaint in the consumer court?
Ans- Any of the following can file a complaint in a consumer court:
Q6- If an organisation is using substandard wiring in its cooler. Which of the consumer rights is being violated?
Ans: The right to safety is the consumer's right which is getting violated.
Q7- Explain the rights and responsibilities of the consumer?
Ans- Rights of the consumers are:
Responsibilities of the consumers are:
Apart from the above question - answers, students are suggested to go through the below questions and try to find answers by themselves for better practice of the board examination. Weightage for each question is given in brackets along with the respective questions.
Q1-Explain briefly ‘discipline’ and ‘scalar chain’ as principles of general management. (3)
Q2- What is important while analyzing deviations in controlling? (1)
Q3-State any three limitations of planning. (5)
Q4-The Indian corporate sector has come face-to-face with several challenges due government policy changes in business and industry. Explain any five such changes. (5)
Q5-State the meaning of the ‘Product Promotion’ function of packaging. (3)
Q6-“There is no need for human resource planning as so many people are available in the market these days.” Do you agree with this statement? Give reasons.(3)
Q7-What is Organizational Structure? Distinguish between Functional and Divisional structure on the following bases: (i) Formation (ii) Managerial development (iii) Responsibility (iv) Suitability. (6)