CBSE Class 12 Business Studies Differences – All Chapters

CBSE Class 12 Business Studies Differences – Chapter-Wise Comparison Tables

We know that you want to learn all the differences in CBSE Class 12 Business Studies. However, the problem is that they are not available in one place, whether in a Business Studies book or on a website.

Therefore, we have solved this problem by preparing fresh chapter-wise comparison tables covering Class 12 Business Studies topics such as Management, Planning, Organising, Staffing, Directing, Financial Markets, and Marketing.

On this page, you can find all the differences from every chapter for class 12th (CBSE) Business Studies. 

Let's start.

Chapter 1: Nature and Significance of Management


Differences between Effectiveness and Efficiency

Basis Effectiveness Efficiency
Meaning Effectiveness in management is concerned with doing the right tasks, completing activities, and achieving goals. Efficiency refers to completing the task at minimum cost and with optimum utilization of resources.
Task Being effective or doing work effectively basically means finishing the given task. Efficiency involves cost-benefit analysis.
Focus It is concerned with the end result. It focuses on deriving more benefits by using fewer resources.
Use of Resources — Management is concerned with the efficient use of resources because a reduction in cost leads to higher profits.

Chapter 2: Principles of Management


Differences between Henry Fayol and F.W. Taylor

Basis for Comparison Henry Fayol F.W. Taylor
Meaning Henry Fayol is the father of modern management who laid down fourteen principles of management for improving overall administration. F.W. Taylor is the father of scientific management who introduced four principles of management for increasing overall productivity.
Concept The general theory of administration. Scientific management.
Emphasis Top-level management. Lower-level / floor-level management.
Applicability Universally applicable. Applies to specialized organizations only.
Basis of Formation Personal experience. Observation and experimentation.
Orientation Managerial function. Production and engineering.
System of Wage Payment Sharing of profit with managers. Differential payment system.
Approach Manager's approach. Engineer's approach.
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Chapter 3: Business Environment

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Chapter 4: Planning

  1. Differences between Single-use Plan and Standing Plan

Basis of Comparison Single-Use Plan Standing Plan
Use A single-use plan is used only once. A standing plan is used again and again.
Purpose A single-use plan is developed for a one-time event or course of action that is not likely to repeat. A standing plan is made for activities that occur regularly over a period of time.
Duration It is discarded when the project is over. It is usually developed once but used over and over again, with necessary modifications from time to time.
Examples Single-use plans include budgets, programmes, and projects. Standing plans include policies, procedures, methods, rules, etc.

  1. Differences between Rules and Methods

Basis of Comparison Rules Methods
Meaning Rules are norms for the actions and non-actions of employees. Methods are formalised ways of doing routine and repetitive jobs.
Rigidity Rules are very specific and very rigid. Methods are specific but flexible.
Purpose Rules improve the behaviour of employees. Methods bring quantity improvement and standardisation.
Consequences If rules are not followed, there is a strict penalty for it. If methods are changed, there can be a warning but no penalty.
Example Rule - No smoking. Follow the straight-line method of depreciation.

  1. Differences between Policies and Objectives

Basis of Comparison Policies Objectives
Meaning Policies are an organisation's way of solving a particular problem. Objectives are the end results of an organisation.
Description Policies describe how the work is to be done. Objectives describe what is to be done.
Role Policies explain the mode of achieving the objectives. Objectives are the endpoint of planning.
Level of Management Policies are framed by top, middle, and lower-level managers. Objectives are generally formed by top-level managers only.

  1. Differences between Policies and Procedures

Basis of Comparison Policies Procedures
Meaning Policies are an organisation's own way of tackling a problem. Procedures are step-by-step ways of doing a job.
Guidance Policies are a guide to thinking for decision-making. Procedures are a guide to actions.
Derivation Policies are derived from the objectives of the company. Procedures are required for the implementation of policy.
Rigidity Policies are more rigid. Procedures are less rigid.
Expression Policies are expressed in general terms. Procedures are expressed in specific terms.
Example A school's policy to give admission to students securing more than 60% marks. A procedure for maintaining admission can be:
a) Separate file.
b) Keeping admission forms in the file.
c) Checking data and filling in the form with the original document, etc.

  1. Differences between Policies and Rules

Basis of Comparison Policies Rules
Meaning Policies are an organisation's own way of handling a problem. Rules are norms regarding the actions and non-actions of employees.
Nature A policy is a general statement. A rule is a specific statement.
Guidance A policy is a guide for decision-making and thinking. A rule is a guide to the behaviour of employees.
Description A policy describes what is to be done under different situations. Rules describe what is to be done and what is not to be done by employees.
Rigidity Policies are less rigid. Rules are very rigid.
Example Policy of giving admission to students securing more than 60% marks. No smoking on office premises.

  1. Differences between Procedures and Methods

Basis of Comparison Procedures Methods
Meaning Procedures are sequences of steps to be followed for performing some important jobs. Methods are formalised ways of doing routine and repetitive jobs.
Rigidity Procedures are more rigid. Methods are less rigid or flexible.
Purpose Procedures help in the implementation of policy. Methods help in the standardisation and coordination of activity.
Example Procedure for giving admission in a school or giving contracts to an outside agency. Methods of valuation of stock or methods of production.

  1. Differences between Strategy and Policy

Basis of Comparison Strategy Policy
Meaning It is a comprehensive plan which includes various steps. It is a single plan.
Purpose It is formulated for solving challenging and unforeseen problems. It is formed to carry out routine functions.
Use Every time, a new strategy is prepared to solve different problems. A common policy is used for all routine problems.
Nature It is temporary in nature. It is permanent in nature.
Resources It allocates human and other resources. It uses the resources for decision-making.

Chapter 5: Organising

  1. Differences between Functional Structure and Divisional Structure

Basis of Comparison Functional Structure Divisional Structure
Formation Formation is based on functions. Formation is based on product lines and is supported by functions.
Specialisation Functional specialisation. Product specialisation.
Responsibility Difficult to fix responsibility on a department. Easy to fix responsibility for performance.
Managerial Development Difficult, as each functional manager has to report to the top management. Easier, as autonomy and the chance to perform multiple functions help in managerial development.
Cost Functions are not duplicated; hence, it is economical. There is duplication of resources in various departments; hence, it is costly.
Coordination Difficult for a multi-product company. Easy, because all functions related to a particular product are integrated into one department.

  1. Differences between Formal Organisation and Informal Organisation

Basis of Comparison Formal Organisation Informal Organisation
Meaning Structure of authority relationships created by the management. Network of social relationships arising out of interaction among employees.
Origin Arises as a result of company rules and policies. Arises as a result of social interaction.
Authority Arises by virtue of position in management. Arises out of personal qualities.
Behaviour It is directed by rules. There is no set behaviour pattern.
Flow of Communication Communication takes place through the scalar chain. Flow of communication is not through a planned route. It can take place in any direction.
Nature Rigid. Flexible.
Leadership Managers are leaders. Leaders may or may not be managers. They are chosen by the group.

  1. Differences between Authority, Responsibility and Accountability

Basis of Comparison Authority Responsibility Accountability
Meaning Right to command. Obligation to perform an assigned task. Answerability for the outcome of the assigned task.
Delegation Can be delegated. Cannot be entirely delegated. Cannot be delegated at all.
Origin Arises from formal position. Arises from delegated authority. Arises from responsibility.
Flow Flows downward from superior to subordinate. Flows upward from subordinate to superior. Flows upward from subordinate to superior.

  1. Differences between Delegation and Decentralisation

Basis of Comparison Delegation Decentralisation
Nature Delegation is a compulsory act because no individual can perform all tasks on his own. Decentralisation is an optional policy decision. It is done at the discretion of the top management.
Freedom of Action More control by superiors; hence, less freedom to take one's own decisions. Less control over executives; hence, greater freedom of action.
Status It is a process followed to share tasks. It is the result of the policy decision of the top management.
Scope It has a narrow scope as it is limited to the superior and his immediate subordinate. It has a wide scope as it implies the extension of delegation to the lowest level of management.
Purpose To lessen the burden of the manager. To increase the role of the subordinates in the organisation by giving them more autonomy.
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Read complete revision notes by clicking here.

Chapter 6: Staffing

  1. Differences between Internal and External Recruitment
Basis of Comparison Internal Recruitment External Recruitment
Meaning Internal recruitment means making use of existing staff to fill vacant job positions in the organisation. External recruitment means making use of new personnel or outsiders to fill vacant job positions in the organisation.
Time It is less time-consuming. It is more time-consuming.
Economy This process is more economical as it does not involve any cost of searching external sources. This process is costly as vacancies have to be notified in newspapers, magazines, etc.
Quality There is a limited choice, so better quality may not be assured. It provides a wider choice, and the best quality is assured.
  1. Differences between Recruitment and Selection
Basis of Comparison Recruitment Selection
Meaning It is a process of searching for suitable candidates to fill vacant job positions. It is a process of screening and selecting the most eligible candidates and offering them jobs.
Stage It precedes the staffing function. It always starts where recruitment ends.
Contract of Service There is no contractual relation created. Selection involves a contract of service between the employer and employee.
Nature It is a positive process as more and more candidates are induced to apply for the job. It is a negative process as more candidates are rejected than the number of selected candidates.
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Chapter 7: Directing

  1. Differences between Formal and Informal Communication
Basis of Comparison Formal Communication Informal Communication
Meaning It refers to communication taking place within the official chain of command. It refers to communication between individuals and groups which are not officially recognised.
Relations It establishes relations between subordinates and superiors, and the relations are highly impersonal. It establishes personal relationships among individuals irrespective of the levels.
Nature It is more rigid in nature and cannot be modified. It is flexible and dynamic, and varies from individual to individual.
Expression It is mostly expressed in written form. It mostly tends to be oral.
Channel It follows a formal or established line of command. It is based on informal relationships, and no fixed line of command is followed.
Record The records of formal communication are maintained for future reference. No records of informal communication are maintained.
Need It serves the needs of the organisation. It serves the needs of individuals working in organisations.
Fixation of Responsibility It is easy to fix responsibility in formal communication because the source of information is known. It is not possible to fix responsibility because the source of information is not known.
Speed Speed is generally slow in formal communication because all information has to pass through an established chain of command. Speed is very fast in informal communication as it cuts across all the official channels.
  1. Differences between Autocratic, Democratic, and Laissez Faire Style
Basis of Comparison Autocratic Style Democratic Style Laissez-Faire Style
Decision-making The leader alone makes a decision. The leader decides in consultation with subordinates. Subordinates themselves make decisions.
Communication One-way, i.e., downward communication. Two-way communication. Free-flow communication.
Motivation Technique Fear and punishment (negative motivation). Reward and involvement (positive motivation). Self-direction and self-control.
Delegation of Authority No delegation. Delegation of authority to some extent. Complete delegation of authority.
Focus Leader control. Group-centred. Individual-centred.
Role of Leader Provides direction. Maintains teamwork. Provides support and resources.
Growth and Development No scope for initiative and creativity ("I" Style). Scope for initiative and creativity ("We" Style). Full scope for initiative and style ("You" Style).
Discipline Obedience to order and discipline. Interchange of ideas. Self-discipline or control.
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Chapter 8: Controlling

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Chapter 9: Financial Management

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Chapter 10: Financial Markets

  1. Differences between Money and Capital Market
Basis of Comparison Money Market Capital Market
Participants The participants are RBI, commercial banks, Non-Banking Finance Companies (NBFCs), State Governments, large corporate houses, and mutual funds. The participants are financial institutions, banks, corporates, foreign investors, and retail investors.
Instruments Instruments traded are treasury bills, commercial paper, certificates of deposit, call money, etc. Equity shares, preference shares, debentures, and bonds.
Investment Outlay Money market securities have a large investment outlay, with a minimum amount of Rs 25,000. Capital market securities have a small investment outlay, i.e., Rs 10 or Rs 100.
Duration The money market deals in short-term securities whose period of maturity is up to one year. The capital market deals in medium-term and long-term securities with a period of maturity of more than one year.
Liquidity Money market instruments enjoy a higher degree of liquidity. Capital market securities are considered liquid but are less liquid than money market securities.
Safety The instruments of the money market are safe or less risky due to their short duration and the soundness of issuers. The instruments of the capital market are riskier concerning returns as well as principal repayment, as the issuing company may fail.
Expected Return The expected return of the money market is less due to the short duration. The expected return is higher in the capital market as, along with regular dividends or interest, there are chances of capital gain.
  1. Differences between Primary and Secondary Market
Basis of Comparison Primary Market Secondary Market
Securities Traded It involves the issue of securities by new companies or new issues of securities by existing companies to investors. It involves trading in existing shares only.
Company Involvement Securities are sold by the company to the investors directly. Ownership of existing securities is exchanged between investors. The company is not involved at all.
Capital Formation It directly promotes capital formation. It indirectly promotes capital formation.
Buying/Selling Only buying of securities takes place. Both buying and selling of securities take place.
Price Determination Prices are determined by the management of the company. Prices are determined by the forces of demand and supply of securities.
Location It has no fixed geographical location. It has a fixed geographical location.
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Chapter 11: Marketing


Differences between Advertising and Personal Selling

Basis of Comparison Advertising Personal Selling
Meaning Advertising is an impersonal form of communication. Personal selling is a personal form of communication.
Message Advertising involves the transmission of standardised messages, i.e., the same message is sent to all customers in a market segment. In personal selling, the sales talk is adjusted keeping in view the customer's background and needs.
Flexibility Advertising is inflexible as the message cannot be adjusted to the needs of the buyer. Personal selling is highly flexible as the message can be adjusted.
Reach It reaches masses, i.e., a large number of people can be approached. Only a limited number of people can be contacted because of time and cost considerations.
Cost per Person In advertising, the cost per person reached is very low. The cost per person is quite high in the case of personal selling.
Market Coverage Advertising can cover the market in a short time. Personal selling efforts take a lot of time to cover the entire market.
Media / Reach Advertising makes use of mass media such as television, radio, newspapers, and magazines. Personal selling makes use of sales staff, which has limited reach.
Feedback Advertising lacks direct feedback. Marketing research efforts are needed to judge customers' reactions to advertising. Personal selling provides direct and immediate feedback. Salespersons come to know about the customers' reactions immediately.
Usefulness Advertising is more useful in creating and building interest of consumers in the firm's products. Personal selling plays an important role at the awareness stage of decision-making.
Suitability Advertising is more useful in marketing to ultimate consumers who are large in number. Personal selling is more helpful in selling products to industrial buyers or to intermediaries such as dealers and retailers who are relatively few in number.
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The End

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A List of Notes:
Chapter 1  |  Chapter 2  |  Chapter 3  |  Chapter 4  |  Chapter 5  |  Chapter 6  |  Chapter 7  |  Chapter 8  |  Chapter 9  |  Chapter 10  |  Chapter 11  |  Chapter 12

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