CBSE Class 12 Business Studies Question Paper 2020 for 2021 Exam Preparation

CBSE Class 12 Business Studies Question Paper 2020

Time allowed : 3 hoursMaximum Marks: 80

General Instructions

  • This question paper contains five Sections: A, B, C, D and E.
  • Section A contains questions 1 to 8 carrying one marks each. Answer to these questions may be given in one word or a sentence.
  • Section B contains questions 9 to 13 carrying three marks each. Answer to these questions may be given in 50 – 75 words.
  • Section C contains questions 14 to 19 carrying four marks each. Answer to these questions may be given in about 120 words.
  • Section D contains questions 20 to 22 carrying five marks each. Answers to these questions may be given in about 150 words.
  • Section E contains questions 23 to 25 carrying six marks each. Answers to these questions may be given in about 200 words.
  • There is no over-all-choice in the question paper, however, an internal choice has been provided in 3 questions of one mark, 2 questions of three marks, 2 questions of four marks, 1 question of five marks and 1 question of six marks. You have to attempt only one of the choices in such questions.


1. Das is the Managing Director of ‘Gamut Ltd.’, manufacturing different varieties of cheese. He has an efficient team working under him consisting of right – the Production manager, Vinay – the Marketing manager and Adit – the Finance manager. They understand and interpret the policies made by Das, ensure that their departments have adequate manpower, assign them the necessary duties and motivate them to achieve the desired objectives.

State one more function other than those mentioned above, that this team may perform at the level they are working.

2. Differentiate between ‘Authority’ and ‘Responsibility’ on the basis of ‘flow’.


Distinguish between ‘Responsibility’ and ‘Accountability’ on the basis of ‘meaning’.

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3. What is meant by ‘Rule’.


Define ‘Organising’.

4. State any two characteristics of ‘Directing’.


Give the meaning of ‘Management by Exception’.

5. Kamal is working as a gang boss in the assembly unit of ‘Sokia Ltd.’, a laptop manufacturing company. He supervises the work of ten trained workers who perform the various activities related to the assembly of the laptops. One day when he was supervising the work of his workers, he told Ashok, a worker that his work could be improved. Ashok interpreted the comments of Kamal as that his work was not good.

Identify the type of barrier to effective communication in this case.

6. This market helps to save time, effort and money that both buyers and sellers of a financial asset would have to otherwise spend to try and find each other.

Name the market and identify the function being referred to.

7. Kumar wanted to purchase a fuel efficient car having the latest standards regarding minimization of pollution. He saw an advertisement offering such a car and visited the showroom of the company wherein the car was displayed. In his discussion, the Marketing manager told him that the company is providing credit facilities, maintenance services and many other effective services which are helping in bringing repeat sales and developing brand loyalty.

Identify the marketing function which the Marketing manager was discussing with Kumar.

8. ‘Ultra Television Ltd.’ is offering its 90” TV sets at a discount of Rs. 15,000 for a period of one month starting from 1st March 2019.

Identify the sale promotion activity used by ‘Ultra Television Ltd.’


9. Explain any three points of importance of planning function of management.


Explain any three limitations of the planning function of management.

10. Distinguish between Formal and Informal organization on the basis of the following :

(a) Origin

(b) Authority and

(c) Leadership


Distinguish between Functional and Divisional structure on the basis of the following points:

(a) Coordination

(b) Managerial Development and

(c) Cost

11. Explain ‘Vestibule Training’ and ‘Apprenticeship Programme’ as methods of training.

12. One of the functions of the Securities and Exchange Board of India is ‘Promotion of fair practices and code of conduct in the securities market’.

State the category to which this function belongs and state any two other functions of this category.

13. ‘G. Motors’ is the manufacturer of sophisticated cranes. The Production manager of the company, reported to the Chief Executive Officer, Ashish Jain that one of the machines used in manufacturing sophisticated cranes had to be replaced to compete in the market, as other competitors were using axiomatic machines for manufacturing cranes. After a detailed analysis, is was decided to purchase a new automatic machine having the latest technology. It was also decided to finance this machine through long term sources of finance. Ashish Jain compared various machines and decided to invest in the machine which would yield the maximum returns to investors.

(a) Identify the financial decision taken by Ashish Jain.

(b) Explain any three factors affecting the decision identified in (a) above.


14. Explain any four features of the business environment.


Explain any four features of ‘demonetization’.

15. Kunal joined as a shop level manager in the Production department of a textile company in the year 2005. Because of his good work, he became the Deputy Production Manager of the company in the year 2010. He had status and prestige and was well-respected by all in the company. On 1st March 2019, he was promoted as the General Manager of the company. Kunal was very happy on his promotion as now he had become what he was capable of becoming. As a good manager, Kunal decided to motivate his subordinates, after understanding the need Hierarchy theory which is based on various assumptions. He realised that people’s behaviour is based on their needs and the manager can influence the behaviour of his employees by satisfying their needs.

(a) One of the assumptions of Need Hierarchy theory is stated in the above paragraph. State the other three assumptions of this theory.

(b) State the needs of Kunal which are being satisfied through promotion.

16. ‘Foods India Ltd.’ is a company engaged in its production of packaged juice since 2010. Over this period, a large number of competitors have entered the market and are putting a tough challenge to ‘Foods India Ltd.’ To face this challenge and to increase its market shares, the company has decided to replace the old machinery with an estimated cost of Rs. 100 crore. To raise finance, the company has estimated that the cost of issuing the 9% debentures will be Rs. 10,00,000. The company wants to meet its floatation cost.

(a) Explain the instrument that the company may issue for this purpose.

(b) In which type of financial market, is the instrument explained in (a) above traded? Also explain how safe the instruments are in this market.

17. Define a ‘Consumer’ according to the provisions of the Consumer Protection Act, 1986.


State any eight reliefs available to the consumer, if the court is satisfied with the genuineness of the complaint.

18. Explain any four factors which affect the fixation of the price of a product.

19. ‘Smart Stationery Ltd.’ wants to raise funds of Rs. 40,00,000 for its new project. The management is considering the following mix of debt and equity to raise this amount :

Capital StructureAlternative
I (Rs.)II (Rs.)III(Rs.)

Other details are as follows:

Interest Rate on Debt9%
Face Value of Equity SharesRs. 100 each
Tax Rate30%
Earnings Before Interest and Tax (EBIT)Rs. 8,00,000

(a) Under which of the three alternatives will the company be able to take advantage of Trading on Equity?

(b) Does Earning Per Share always rise with increases in debt?


20. Explain any five characteristics of ‘Co-Ordination’.


Explain any five characteristics of ‘Management’.

21. Vikas was the Chief Operating Officer of ‘Yalet Ltd.’ a company providing advanced software solutions to Indian Defence Services. They had been carrying on business successfully for the last twelve years and earning enough profits. But from the last one year, they realised that through the business is getting big orders which are being fulfilled in time, even then the revenues kept on decreasing. Vikas was not able to find out where the problem was. He started keeping a close check on the progress of activities as he could sense that something was wrong. He wanted to take some action before any major damage could be done to the business, Vikas appointed a cyber security expert who monitored the company’s processes and found out that the computer operator was deleting the entries from the computers and pocketing the revenues. He was caught and handed over to the police. This created an atmosphere of order and discipline in the organization and helped in minimizing dishonest behavior on the part of the employees.

(a) Identify the function of management highlighted in the above paragraph.

(b) Explain any four other ways in which this function of management may help the organization.

22. ‘Pushpanjali Ltd.’, is manufacturing chocolate, biscuits, cakes and other similar products. The company is not generating enough profits. Saurabh, the Marketing Manager of the company got a survey conducted to find out the reasons. The findings of the survey revealed that the products of the company from its competitors. Through the customers wanted to buy the products of ‘Pushpanjali Ltd.’ again and again because of its good quality, but they were not able to identify its products in the market. Because of this, the sales of the company could not pick up realised that ‘Pushpanjali Ltd.’ had forgotten to take one of the most important decisions related to the product.

What decision should ‘Pushpanjali Ltd.’ take so that its customers are able to identify its products in the market? Explain the benefits that may result to ‘Pushpanjali Ltd.’ and its customers if the above decision is taken.


23. Explain the following techniques of scientific management:

(a) Time Study

(b) Motion Study

(c) Functional Foremanship


            Explain the following principles of general management:

(a) Division of work

(b) Authority and Responsibility

(c) Discipline

24. ‘E-Solutions Ltd.’ started its operations in the year 2000. At the time of its inception, the company had only ten employees with two departments a Production department and an Administration department. The products supplied and the service provided by the company started gaining popularity over the years. The management had faith in the abilities of the employees and thus they allowed them freedom of action. The management recognized that the decision-makers at different levels of the organization need to be given more autonomy. They took a policy decision that there will be less control of superiors over subordinates. This increased the role of the subordinated in the organization and now they were in a position to take numerous as well as important decisions. As a result, Its business has diversified into many areas. Presently, It has its operations throughout the country with seven branches overseas. Its organizational structure has now changed into a divisional structure and ten thousand people are working with the company.

  • Identify the concept of management which helped the company to diversify into many areas and branches aboard.
  • Explain five points of importance of the concept identified in (a) above.

25. ‘Entertainment India Ltd.’ has been incorporated with the objective of entertaining people by organising festivals, programmes and other similar events depicting the rich cultural heritage of the country. The company management has renowned personalities from the field of art, literature and culture. They decided to give a platform to a young budding musician, poets and artists. The company decided its organizational structure by grouping similar job together. Thereafter, the heads of different departments were also appointed. Nisha, one of the heads, did an analysis of the number, type and qualification necessary for people to be appointed. The information generated in the process of writing job description and the candidate profile was used to develop ‘Situations vacant’ advertisement. This was published in print media and flashed in electronic media. This brought in a flood of response.

Explain the other steps which Nisha has to perform to complete the process being discussed above.

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