Class 12 Business Studies Sample Paper 11 with Solutions (MCQs, Case-Based & Descriptive Questions)

Free CBSE Class 12 Business Studies Sample Paper (Solved)

Imagine buying a pair of headphones online: you compare brands, check product labels, read reviews, and decide whether the price is worth it. Without realising it, you are already using ideas from Class 12 Business Studies!

Our free CBSE Class 12 Business Studies sample paper turns everyday business decisions into board exam practice.

On this page, you can begin practising 34 questions covering the following Class 12 BST chapters:

• Principles of Management
• Business Environment
• Planning
• Organising
• Staffing
• Directing
• Controlling
• Financial management
• Financial markets
• Marketing Management
• Consumer Protection

Type of questions in the below sample paper/worksheet:

• Multiple-choice questions (MCQs)
• Assertion–reason questions
• Case-based questions
• Descriptive questions

Before you proceed further, below are the quick details:

• Class: 12
• Subject: Business Studies
• Sample Paper Number: 11
• Time Allowed: 3 Hours
• Maximum Marks: 80
• Sample Paper Status (Solved/Unsolved): Solved

Table of Contents

Questions

Answers

The worksheet begins from here.

Questions

General instructions:

• This question paper contains 34 questions.
• Answers to the questions carrying 3 marks may be from 50 to 75 words.
• Answers to the questions carrying 4 marks may be about 150 words.
• Answers to the questions carrying 6 marks may be about 200 words.
• Attempt all parts of the questions together.

Q1. The health and fitness trend has become popular among a large number of urban people. This has created a demand for products like organic food, diet soft drinks, gyms, food supplements, etc. Identify the dimension of business environment being reflected here.

1. Social environment
2. Political environment
3. Technological environment
4. Economic environment

Q2. A manager believes in making the job more challenging for the employees by giving them higher targets that need the use of a variety of skills and providing more autonomy to achieve them. The incentive given by the manager is:

1. Status
2. Organisational climate
3. Job enrichment
4. Employee empowerment

Q3. 'Caveat Venditor' implies:

1. Let the buyers beware
2. Consumer is king
3. Seller is supreme
4. Let the seller beware

Q4. A consumer buys a new refrigerator and pays the full price for it. Later, he discovers that its compressor is second-hand. He approaches the dealer, but the dealer does not listen to him. Which right of the consumer has been violated by the dealer here?

1. Right to be heard
2. Right to seek redressal
3. Right to safety
4. Right to education

Q5. The dispersal of decision-making authority among all the levels of an organisation is:

1. Decentralisation of authority
2. Delegation of authority
3. Scalar Chain
4. Authority and Responsibility

Q6. For the following two statements, choose the correct option:

Statement I: Formal communication follows the officially established line of command and communication.

Statement II: Informal communication carries the message at a faster pace.

Choose the correct option from the options given below:

1. Statement I is true and II is false
2. Statement II is true and I is false
3. Both the statements are true
4. Both the statements are false

Q7. Which function of management is closely related to the planning function of management?

1. Controlling
2. Staffing
3. Directing
4. Organising

Q8. What is the other name of a long-term investment decision?

1. Capital budgeting
2. Gross working capital
3. Financial management
4. Working capital

Q9. Read the following statements—Assertion (A) and Reason (R)—and choose one of the correct alternatives given below:

Assertion (A): Planning bridges the gap from where we are to where we want to go.

Reason (R): It involves setting objectives and developing appropriate courses of action to achieve these objectives.

Alternatives:

1. Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
2. Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
3. Assertion (A) is true, but Reason (R) is false.
4. Assertion (A) is false, but Reason (R) is true.

Q10. Manufacturers send goods to retailers in corrugated boxes containing many units. This is:

1. Primary packaging
2. Secondary packaging
3. Transportation packaging
4. None of these

Q11. __________ is the process of synchronisation of different activities of an organisation.

1. Coordination
2. Departmentalisation
3. Organisational structure
4. Management

Q12. Motivation is a complex process because __________.

1. it can be either positive or negative.
2. it produces goal-directed behaviour.
3. it may not have a uniform effect on all the members.
4. it is an internal feeling.

Q13. Which marketing philosophy focuses on the existing product rather than on the quality and quantity of the product or customer need?

1. Production concept
2. Product concept
3. Selling concept
4. Marketing concept

Q14. Violation of which of the following principles increases the recruitment, selection and training costs of employees?

1. Initiative
2. Unity of Command
3. Esprit de Corps
4. Stability of Personnel

Q15. PQ Ltd. provided an incentive scheme to its employees. The employees are offered the company's shares at a set price which is lower than the market price. This incentive is:

1. Retirement benefit
2. Co-partnership/Stock option
3. Productivity-linked wage incentives
4. Perquisites

Q16. Which of the following is not a feature of planning?

1. Planning is a mental exercise.
2. Planning is continuous and pervasive.
3. Planning is the primary function of management.
4. Planning involves huge cost and time.

Q17. Identify the type of organisation structure adopted by a company which leads to occupational specialisation, minimal duplication of efforts, results in economies of scale and lowers the cost.

1. Functional structure
2. Divisional Structure
3. Formal organisation
4. Informal organisation

Q18. All trading in securities is now done through computer terminals instead of the open outcry system. This is:

1. Dematerialisation of securities
2. Demutualisation of stock exchange
3. Electronic trading system
4. None of these

Q19. Which of the following is not an advantage of branding to the customers?

1. Ensures quality
2. Product identification
3. Status symbol
4. Facilitates use of product

Q20. Standards should be set in __________ terms for effective controlling.

1. Qualitative
2. Quantitative
3. Both (a) and (b)
4. Neither (a) nor (b)

Q21. Mrs. Chhatwal is working as a Human Resource Consultant in a firm manufacturing garments, which is facing a problem of high employee turnover. The Managing Director has invited suggestions from her for retaining the talented employees. Mrs. Chhatwal recommends that the good employees be rewarded in a way that creates a feeling of ownership amongst the employees and, at the same time, makes them contribute towards the growth of the organisation.

1. Identify the incentive which has been suggested by Mrs. Chhatwal to the Managing Director of the Company.
2. Also, explain any two other incentives of the same type.

Or

Which needs of the employees, as per Maslow's Need Hierarchy theory, will be satisfied by the following incentives?

1. Providing them with a safe working environment
2. Encouraging the use of informal organisation structure
3. Delegating them the authority

Q22. 'How well one delegates determines how well he manages.' In the light of this statement, explain any three points of importance of delegation.

Q23. Dee Industries is facing a lot of opposition as it pays lower salaries to female workers compared to male workers for equal work. Which dimension of business environment is being referred to? Discuss.

Or

Name and explain the technique of Taylor which is the strongest motivator for a worker to reach standard performance.

Q24. State any three protective functions of the Securities and Exchange Board of India.

Q25. Capital Structure decisions are essentially the optimisation of the risk-return relationship. Discuss. Explain any three factors affecting the choice of capital structure.

Or

Discuss any four factors affecting the working capital requirements of a business firm.

Q26. Ayasha Ltd. assured its employees that, in spite of the recession, no worker would be retrenched from the job.

1. Name and explain the type of incentive offered to the employees.
2. Explain one more incentive of the same category.

Q27. Read the statements given in points 1 and 2 and answer the questions that follow.

1. An import-export company was able to track dishonest employees by using computer monitoring as a part of its control system.

   1. Identify the importance of controlling so that the best of plans cannot go awry.
   2. How does a good control system motivate employees and help them to give better performance?

2. In large organisations, certain pieces are checked at random for quality.

   1. Name the technique adopted by large organisations for measurement of performance in an objective and reliable manner.
   2. When can the comparison of performance be made easier?

Q28. In an organisation, the production department blames the marketing department, and the marketing department blames the production department for the non-achievement of the organisational goals. They are neither ready to listen to each other nor bring any changes in their workings to help each other.

This force is a vital element of one principle of management given by Fayol and one principle of Scientific Management given by Taylor. Identify these principles and explain them.

Q29. A company needed to appoint an accountant. For this, it had received 40 applications. Out of these, 15 were not eligible as per the requirements, so the company rejected their applications outright. To ensure that everybody gets a chance to prove their worth, they conducted an intelligence test and a trade test. It was followed by a round of face-to-face conversation between the shortlisted candidate and the Finance Manager.

1. Identify the process being followed above.
2. State, by quoting the lines, the stages of the above process followed.

Or

BG Handicrafts has been doing good business for the last five years. Ankit, the manager, reported a decline in the number of orders received in the year. He ordered that the progress of all activities in the organisation be tracked to bring to light the deviations and to initiate the corrective action required.

Explain the steps involved in the function Ankit is performing here.

Q30. The Consumer Protection Act, 2019 seeks to protect and promote the interests of consumers. The Act provides for six rights to consumers with a view to empowering them. But consumer protection can be achieved only when consumers understand and fulfil their responsibilities. State such responsibilities of a consumer.

Q31. A company earned a profit of ₹20 lacs during the year-end. It had some expansion plans in the near future; therefore, it decided to retain the profits. At the same time, it did not want to disappoint its investors. It, therefore, decided to capitalise its reserves and issue bonus shares to them.

1. Which financial decision is being referred to?
2. Discuss the factors affecting it.

Or

The capital market has an institutional arrangement to facilitate buying and selling of existing securities. It helps existing investors to disinvest and fresh investors to enter the market. Explain the functions of such an institutional arrangement.

Q32. Aryan Industries manufactures plastic goods. It has plans to enter the international market. For this, it has hired the services of professionals who are going to help it in planning by collecting facts and figures, conducting surveys, etc. The professionals studied the demand pattern of people in some countries, their occupations and the literacy rate. They also tried to study the Export Import (EXIM) Policy of not only our country but also other countries so as to estimate its possible impact on the company's future plans. A lot of money was spent on all this, and the management feared that the costs might exceed the gains. Finally, a comprehensive plan stating the objectives, budget involved, policies and procedures to be followed was laid down.

1. Which step of planning has been performed by the professionals? Explain it and give the next two steps of planning.
2. Which limitation of planning is being referred to? Explain by quoting the relevant line.

Or

Shweta works as a corporate event coordinator in an event management company. She has been made the overall official in charge of organising a painting exhibition for one of the clients of the company. For ensuring that the exhibition takes place successfully, she identifies the various activities involved and divides the whole work into various task groups like marketing committee, decoration committee and reception committee. In order to facilitate coordination within and among committees, she appoints a supervisor for each group. Each member in the group is asked to report to their respective supervisors, and all the supervisors are expected to work as per Shweta's orders.

1. Identify and explain the function of management being performed by Shweta.
2. Explain the steps involved in the performance of the function of management as identified in part (a).

Q33. Mr. Sunil, the Marketing Manager of Zebra Ltd., had to take a few important decisions related to the sale of the product. These decisions were of utmost importance as they would not only facilitate the customers in product identification, usage and differentiation but would also help the company in providing the relevant information to the consumer.

1. Identify and explain the element of the marketing mix being referred to here.
2. State and discuss its components.

Q34.

1. Explain any two principles of scientific management from the following:
   1. Harmony, not discord
   2. Science, not rule of thumb
   3. Development of each and every person to his or her greatest efficiency and prosperity
2. Distinguish between 'Centralisation' and 'Decentralisation' principles of management.

Answers

Q1. (a) Social environment

Q2. (c) Job enrichment

Q3. (d) Let the seller beware

Q4. (a) Right to be heard

Q5. (a) Decentralisation of authority

Q6. (c) Both the statements are true

Q7. (a) Controlling

Q8. (a) Capital budgeting

Q9. (a) Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).

Q10. (c) Transportation packaging

Q11. (a) Coordination

Q12. (c) It may not have a uniform effect on all the members.

Q13. (c) Selling concept

Q14. (d) Stability of Personnel

Q15. (b) Co-partnership/Stock Option

Q16. (d) Planning involves huge cost and time.

Q17. (a) Functional structure

Q18. (c) Electronic trading system

Q19. (d) Facilitates use of product

Q20. (c) Both (a) and (b)

Q21.

1. Mrs. Chhatwal suggested Financial Incentive (Stock option/Co-partnership).
2. The two other incentives of the same type are:
   1. Pay and allowances: Salary is the topmost priority/incentive for work to any employee in the organisation. If the performance of an employee improves each year, then he may be rewarded by a hike in salary and other allowances.
   2. Bonus: It is a reward that is offered on a one-time basis for high performance. A bonus may be in cash or in some other form, e.g., many sales organisations periodically offer prizes, such as trips, for their top salespeople.
   3. Profit sharing: It is often discussed that labour, being the live factor in production, is entitled to share in the surplus earned by his firm. Employers often use this device to exhort their loyalty and reduce the influence of trade unions. This provides a group incentive to the workers for higher productivity and greater profitability.

   (Any two)

Or

1. Safety Needs
2. Affiliation Needs
3. Esteem Needs

Q22. The importance of delegation of authority may be outlined as follows:

1. Reduces workload of managers: Delegation of authority permits a manager to share his workload with his subordinates. By passing on some of his own work to the subordinates, the manager is able to concentrate on more important aspects of his work. Delegation of authority takes place at all levels of management in a systematic manner.
2. Basis of superior-subordinate relations: In the delegation process, only superiors and subordinates are involved. If superiors share or pass on their responsibilities and authorities to their subordinates, it indicates a good relationship between superiors and subordinates because superiors will transfer their responsibilities and authorities only when they have trust in their subordinates.
3. Effective management/Improves managerial effectiveness: The manager who delegates authority can perform much more than the one who does not. This is because the manager who delegates can get some work done by his subordinates and is able to concentrate on important matters which need his attention, take appropriate decisions and act accordingly. The manager increases his own effectiveness and that of his work unit by enlisting the co-operation and skills of his subordinates.

Q23. Social Environment is being referred to in the given situation. It refers to the attitudes, beliefs, expectations, customs and values of society at a given point in time. The expectations of society from the business impact its working and policies. The attitude of people towards the products and services offered by the business can decide its future. The composition and rate of population growth and the type of family structure are also parts of it. All business concerns need to study it in detail to be successful.

Or

Differential piece wage system is the strongest motivator for a worker to reach standard performance. It is a method of wage payment in which efficient and inefficient workers are paid at different rates. The efficient workers are paid at a higher rate than the inefficient ones. Workers are paid on the basis of the number of pieces produced. If a worker produces more than a certain number of pieces, he is given a higher wage per piece on his total output. But if his output is below the number, he is given a lower rate per piece. Due to different rates for different sets of workers, it is known as the differential piece rate plan.

Q24. The three protective functions of the Securities and Exchange Board of India are:

1. It prohibits fraudulent and unfair trade practices like price rigging and manipulation in the securities market.
2. It prohibits insider trading and imposes penalties for such practices.
3. It undertakes steps for the protection of investors.
4. It promotes fair practices and a code of conduct in the securities market.

(Any three)

Q25. Capital Structure decision is concerned with deciding the right or optimal mix of debt and equity in order to fulfil the financial requirements of a company. Increased use of debt increases the financial risk, but at the same time, it leads to an increase in the earnings per share of the shareholders. Equity does not involve any risk, but it is a costly way of financing. Thus, the capital structure decision is basically concerned with deciding that proportion of debt and equity where the risk is minimum and the returns are maximum.

Following are the factors affecting the choice of capital structure:

1. Cash flow position: A company must have enough cash in hand or liquidity if it has to raise capital through debentures to pay interest in time. If cash inflows are not enough, then it should issue shares.
2. Cost of debt: A firm's ability to borrow at a lower rate increases its capacity to employ higher debt. Thus, more debt can be used if debt can be raised at a lower rate.
3. Control: To retain control over the management of the company, debentures and preference shares should be issued to raise capital.

Or

The factors affecting the working capital requirement of a business firm are:

1. Nature of business: A trading business requires less working capital than a manufacturing concern. This is because no processing work is there in a trading concern. Similarly, service industries do not maintain inventory and, thus, the requirement of working capital is low.
2. Scale of operations: An organisation operating on a higher scale requires a large amount of working capital as compared to one operating on a lower scale.
3. Business cycle: In the boom period, sales and production are high and, thus, working capital is more. On the other hand, at the time of depression, sales as well as production will be small and hence the working capital requirement will be lesser.
4. Production cycle: It is the time span between the receipt of raw material and its conversion into finished goods. Working capital requirement will be higher in firms with longer processing cycles and lower in those with shorter processing cycles.
5. Credit allowed/Credit availed: In case a liberal credit policy is there, the business may require more working capital and vice versa.

(Any four)

Q26.

1. Ayasha Ltd. offered the non-financial incentive of job security to its employees. This incentive provides stability to the workers about the future and enables them to work with full zeal and without any worry.
2. Another non-financial incentive can be 'Employee participation'. It means involving the employees in the decision-making process. They should have their say when decisions which affect them are taken.

(Or any other relevant point)

Q27.

1. 1. Ensuring order and discipline
   2. Improving employee motivation: A good control system ensures that employees know well in advance what they are expected to do and what the standards of performance are on the basis of which they will be appraised.
2. 1. Sample Checking
   2. Performance should be measured in the same units in which standards are set, as this would make their comparison easier.

Q28. Esprit de Corps by Henry Fayol: This principle is based on teamwork and unity. It states that the spirit of loyalty and devotion unites the members of the group. Team spirit helps in developing an atmosphere of mutual trust and understanding. It will also minimise the need for using penalties.

Cooperation, not Individualism by FW Taylor: It lays stress on mutual cooperation between workers and management in order to achieve organisational goals. He stressed replacing competition with cooperation. There should be equal division of work and responsibility between workers and management.

Q29.

1. Selection
2. The steps followed are as follows:
   1. Preliminary screening: 'For this, it had received 40 applications. Out of these, 15 were not eligible as per the requirements, so the company rejected their forms outright.'
   2. Selection tests: 'To ensure that everybody gets a chance to prove their worth, they conducted an intelligence test and trade test.'
   3. Employment interview: 'It was followed by a round of face-to-face conversation between the shortlisted candidate and the Finance Manager.'

Or

The process of controlling includes the following steps:

1. Setting performance standards: Standards are the benchmarks which every organisation strives to achieve. These should be set in quantitative terms to make their comparison with actual performance easier.
2. Measurement of actual performance: The actual performance is measured in an objective and reliable manner. The superior prepares the performance report of an employee. This can be done by personal observation, sample checking, accounting ratios, etc. As far as possible, performance should be measured in the same units in which standards are set.
3. Comparison of actual performance with standards: Comparison of actual performance with standard performance will reveal the deviation between the two.
4. Analysing deviations: Some amount of deviation can be expected in all activities; therefore, it is important to determine the acceptable range of deviations. Two important concepts worth discussing here are:
   1. Critical point control: The key result areas are those areas which are critical to the success of an organisation. The deviations in these areas should be dealt with urgently.
   2. Management by exception: An effort to control everything may end up in controlling nothing. Only significant deviations that go beyond the permissible limits should be brought to the notice of management.
5. Taking corrective action: Corrective action might involve revising standards, training employees, employing more workers, purchasing new machinery, etc., if the deviations go beyond the acceptable limits.

Q30. The various responsibilities of a consumer are:

1. Must exercise his/her rights: Consumers must be aware of their own rights with regard to the products or services they buy from the markets and should exercise them whenever required.
2. Be an aware consumer: The consumer must be cautious before purchasing any good or service. He must insist on getting full information on the quality, quantity, utility, price, etc., of the good or service. This will ensure a better purchase.
3. Filing complaints: Sometimes, consumers ignore the loss incurred, believing that the loss is small, but this attitude encourages corrupt business practices to continue. So, a consumer should file complaints for the redressal of genuine grievances.
4. Quality conscious: A consumer must be quality conscious. He should look for quality certification marks like ISI, Agmark, FPO, Woolmark, etc., while making purchases.
5. Insist on cash memo: A consumer must ask for a cash memo from the shopkeeper because if there is any defect in the goods purchased and the consumer has to make a complaint, the cash memo must be there as proof of purchase. A seller is always bound to give a cash memo.
6. Advertisements often exaggerate: Consumers should compare the uses of the product given in the advertisement copy and the actual product. Any discrepancy should be brought to the notice of the sponsor of the advertisement.

(Any four)

Q31.

1. Dividend decision
2. The factors affecting the dividend decision are as follows:
   1. Preferences of shareholders: Some shareholders invest their savings in shares in the hope of getting a regular income and, as such, are interested in a stable and regular dividend. The management may follow a policy which serves the purpose of the majority group.
   2. Earnings: The amount of dividend to be paid to shareholders depends on the earnings of the company. The higher the earnings, the more would be the amount of dividend.
   3. Stability of earnings: If unstable earnings are there, a lower dividend will be declared, and if stable earnings are there, the company will declare higher dividends.
   4. Cash flow position: If a company is having a sound cash flow position, then it can pay a higher amount of dividend. In case of a shortage of cash, the company can satisfy the shareholders by giving them a dividend in non-cash form, i.e., issuing bonus shares.
   5. Taxation policy: The dividend is tax-free in the hands of the investors, but the companies need to pay the dividend tax on the amount of dividend paid. If tax rates on dividends are lower, then higher rates of dividends can be declared by the company and vice versa.

Or

Such an institutional arrangement is a stock exchange. Following are the functions of a stock exchange:

1. Provides liquidity and marketability to existing securities: The main function of a stock exchange is to provide a ready and continuous market for the sale and purchase of securities. The presence of a continuous market is an assurance to investors that their investments can be converted into cash as and when required by them. This provides both liquidity and marketability to already existing securities.
2. Pricing of securities: The prices of shares on a stock exchange are determined by the forces of demand and supply. The valuation of securities is useful for investors, government and creditors. Such a valuation provides instant information to both buyers and sellers in the market.
3. Safety of transactions: Stock exchanges are subject to severe rules and regulations. Companies whose securities are traded here have to undergo strict scrutiny before they are permitted to transact dealings. This ensures that the investing public gets a safe and fair deal in the market.
4. Contributes to economic growth: A stock exchange is a market in which existing securities are resold and traded. Through this process of disinvestment and reinvestment, savings get channelised into their most productive avenues. This leads to capital formation and economic growth.
5. Spreading of equity cult: The stock exchange plays a vital role in ensuring wider share ownership by regulating new issues, better trading practices and taking effective steps in educating the public about investments.
6. Providing scope for speculation: Healthy speculation is undertaken within the provisions of law, which is considered necessary for liquidity and price continuity.

Q32.

1. Planning Premises is the step of Planning performed by the professionals. Planning premises are the anticipated future conditions in which a plan will be executed. Therefore, planning premises form the base upon which the plan is based. If planning premises go wrong, then the entire plan will fail.

   The next two steps in the process of planning are:

   1. Identifying alternative courses of action: The next step is finding out the alternative courses of action to achieve objectives. Many innovative ideas and suggestions are considered in this step, and alternatives are generated through a discussion with the members of the organisation.
   2. Evaluating alternative courses: Planning requires that each alternative should be evaluated, taking into account the relevant facts and the pros and cons of each alternative. The merits and demerits as well as the consequences of each alternative course of action must be examined before a choice is made.

2. Planning is a costly affair: "A lot of money was spent on all this, and the management feared that the costs may exceed the gains."

   Planning involves spending a lot of money on hiring professionals, conducting surveys, processing the information, etc. This makes it a costly affair, and it becomes a useless exercise if the benefits from it are not much in terms of the money spent on it.

Or

1. Shweta performed the function of Organising in management. Organising as a process deals with initiating the implementation of plans by clarifying jobs and working relationships and effectively deploying resources for the attainment of set objectives.
2. The steps involved in the process of organising are:
   1. Identification and division of work: Organising starts with identifying the work as per the plans and dividing it into manageable activities, ensuring that duplication of work is avoided and the burden of work is properly shared among the employees.
   2. Departmentalisation: Once the work has been divided into small and manageable activities, similar activities are grouped together into departments. This process of departmentalisation can be done on the basis of area, products or any other suitable base.
   3. Assignment of duties: After defining the work of different job positions, work is allocated to various employees in accordance with their skills and competencies. Effective performance can be achieved through a proper match between the nature of a job and the ability of an individual.
   4. Establishing reporting relationships: After assigning the work, the accountability relationship is made clear. This helps to create a hierarchical structure and helps in better coordination among various departments.

Q33.

1. The element of the marketing mix being referred to is Product Mix. It includes the goods/services or anything of value offered to the market for sale. It involves decisions regarding its features, quality, packaging, labelling and branding of the products. It also includes extended products, after-sales services, grievance handling, availability of spare parts, etc.
2. The components of the product mix are as follows:
   1. Packaging: Packing is the act of designing and producing the package for a product. A package is a wrapper or container in which a product is enclosed. Packaging reduces the risk of spoilage, breakage, etc., in the process of storage and transportation of goods.
   2. Labelling: Labelling means putting identification marks on the package. It helps to provide detailed information related to the product, like date of manufacture, expiry, price, weight or any other information as required by law.
   3. Branding: It is the process of giving a name or symbol to a product in order to identify it and differentiate it from competitors. It gives an identity to the product that is unique from its generic name.

Q34.

1. 1. Harmony, not discord: In an organisation, there may exist a class conflict between management and workers. Taylor recognised that this conflict helped none, neither the workers nor the management. He emphasised complete harmony between management and workers. They both should realise the importance of one another. There should be a complete mental revolution on the part of management and workers. Management should share the gains with the workers, and workers should work hard and be willing to embrace change for the good of the company. They should understand that the true interests of the two are one and the same, and the prosperity of one should be accompanied by the prosperity of the other.
   2. Science, not rule of thumb: Through this principle, Taylor insists that every job in the organisation should be based on scientific inquiry. He opposed the use of intuition, rule of thumb and trial-and-error methods in management. Taylor believed that there is only one best method to maximise efficiency, which can be developed through scientific study and analysis. Scientific methods involve investigation of traditional methods through work study, unifying the best practices and developing a standard method, which would be followed throughout the organisation.
   3. Development of each and every person to his or her greatest efficiency and prosperity: Workers' development is very important for building and sustaining efficiency in an organisation. Taylor advocated that the workers should be trained to learn the best method of doing work, which can be developed only through scientific analysis. Further, each person in an organisation should be scientifically selected, and the work should be assigned to him according to his/her physical, mental and intellectual capabilities. Efficient employees would produce more and more, and this will ensure the greatest efficiency and prosperity for both the organisation and the workers.

   (Any two)

2. • The concentration of decision-making authority by top management is called centralisation, and the dispersal of decision-making authority among the lower levels of management is known as decentralisation.
   • There should be a proper balance between centralisation and decentralisation of authority.
   • Various factors should be considered by the management while deciding the extent of centralisation and decentralisation.
   • For example, decisions in respect of determining the objectives and policies, expansion of business, etc., should remain in the hands of the superior. On the other hand, authority for the purchase of raw material, recruitment of workers, etc., should be delegated to the level dealing with it.

The End

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