CBSE SAMPLE QUESTION PAPER (2026-27)
SUBJECT: BUSINESS STUDIES (054)
CLASS: XII | SA-1 (HALF YEARLY) | SET - 2
Time Allowed: 3 Hours
Maximum Marks: 80
General Instructions
- This question paper contains 34 questions. All questions are compulsory.
- Questions 1 to 20 are objective-type questions carrying 1 mark each.
- Questions 21 to 24 are short-answer type questions carrying 3 marks each.
- Questions 25 to 30 are short-answer type questions carrying 4 marks each.
- Questions 31 to 34 are long-answer type questions carrying 6 marks each.
- Internal choices have been provided in select questions. You must attempt only one of the choices in such questions.
SECTION A
1.
Management is considered to be the "essence" of management. Which of the following concepts is being referred to?
[1]
2.
According to Fayol's principle of 'Scalar Chain', a shorter route can be provided in emergencies to avoid delay in communication. This shorter route is known as:
[1]
3.
The Reserve Bank of India recently reduced the repo rate, making housing loans cheaper. Consequently, real estate companies saw a surge in the demand for new apartments.
Which dimension of the business environment is primarily highlighted here?
[1]
4.
Which of the following is an example of a 'Standing Plan'?
[1]
5.
The number of subordinates that can be effectively managed by a superior refers to:
[1]
6.
Which of the following selection tests provides clues to a person's emotions, reactions, maturity, and value system?
[1]
7.
Under which network of communication does a subordinate communicate only with his immediate superior and his immediate subordinate?
[1]
8.
If an organization finds that the deviation in production is due to an unrealistic or highly ambitious standard, the most appropriate corrective action would be to:
[1]
9.
Which level of management is responsible for integrating diverse elements and coordinating the activities of different departments according to the overall objectives of the organization?
[1]
10.
F.W. Taylor advocated the separation of the planning function from the execution function. This concept was implemented through:
[1]
11.
Business environment is highly uncertain as it is very difficult to predict future happenings, especially when environment changes are taking place too frequently. This highlights which feature of the business environment?
[1]
12.
The marketing team spent weeks collecting data, holding boardroom meetings, and debating the future market trends. By the time their plan was finalized, the competitor had already launched a similar product, making their entire effort useless.
Which limitation of planning is highlighted here?
[1]
13.
In the context of the elements of delegation, which of the following flows strictly upwards?
[1]
14.
When an employee learns the job while actually doing it on the factory floor, the training method is categorized as:
[1]
15.
A manager gives an instruction: "Please dispatch the goods." The subordinate assumes it means dispatching them immediately by air, while the manager meant dispatching them by road next week. This is a semantic barrier caused by:
[1]
16.
Which concept of controlling dictates that a manager should not waste time on minor deviations but should focus entirely on the Key Result Areas (KRAs)?
[1]
17.
Developing assumptions about the future, such as forecasting inflation rates or changes in government tax policies, corresponds to which step of the planning process?
[1]
18.
Based on the visual representation above, what is the specific management concept being illustrated regarding the nature of Authority?
[1]
19.
Assertion (A): Staffing is an inherent part of Human Resource Management (HRM).
Reason (R): In large organizations, staffing is handled by a specialized Human Resource Department which deals with recruitment, compensation, and labor relations.
[1]
20.
Assertion (A): Controlling is a pervasive function of management.
Reason (R): It is required at all levels of management and in all types of organizations to ensure that activities are progressing according to plans.
[1]
SECTION B
21.
The Production Manager of 'PurePlastics' achieved his target of manufacturing 10,000 chairs. However, to meet the deadline, he ordered his workers to do double shifts and operated the machinery without proper maintenance. Consequently, the cost of producing each chair escalated by 25% due to high overtime wages and machine breakdowns.
Analyze the performance of the Production Manager in terms of 'Effectiveness' and 'Efficiency'. Provide a clear reason for your analysis.
[3]
22.
To increase motivation, the CEO of an IT firm announced a new policy: "Any employee who brings in a new corporate client will be rewarded with a 5% commission on the deal value, alongside a formal appreciation letter during the annual meeting."
Identify the specific elements of the Directing function highlighted here. Furthermore, categorize the incentives mentioned into Financial and Non-Financial types.
[3]
23.
Explain the 'Technological Environment' and 'Social Environment' with the help of one suitable business example for each.
OR
Explain any three points highlighting the 'Importance of Planning' in a modern organization.
[3]
24.
Distinguish between 'Formal Organization' and 'Informal Organization' on the basis of: (a) Origin, (b) Flow of Communication, and (c) Nature of Authority.
[3]
SECTION C
25.
'Zenith Motors' urgently needs to appoint a 'Chief Design Engineer'. The HR manager is evaluating two options. Option A is to promote Mr. Karan, a brilliant junior engineer currently working in their Delhi branch. The HR manager argues that Mr. Karan knows the company culture perfectly and his promotion will motivate the entire junior staff. Option B is to publish an advertisement in international engineering journals to hire an outsider. The CEO favors Option B, arguing that the company's designs have become stale and predictable, and they desperately need a completely fresh perspective that an outsider will bring, despite the high cost of the recruitment process.
Based on the arguments presented, identify and explain two merits of Internal Recruitment and two merits of External Recruitment discussed in the case.
[4]
26.
'TechWave Solutions' was suffering from a massive employee turnover rate. Employees felt treated like mere cogs in a machine. The management decided to revamp their approach. First, they introduced an 'Employee Stock Option Plan (ESOP)', allowing workers to buy company shares at a heavily discounted price. Second, they created joint management committees, ensuring that representatives of the workers were consulted before finalizing any major factory floor policies. Third, they started a 'Wall of Fame' in the main lobby, displaying the photos of the best performers of the month.
Identify and explain the one financial incentive and the two non-financial incentives implemented by 'TechWave Solutions' to solve their crisis.
[4]
27.
Controlling is a systematic process involving a series of definitive steps. Explain the first four steps involved in the process of Controlling.
[4]
28.
Management is an activity that is necessary wherever there is a group of people working in an organization. Explain the main functions performed by the 'Top Level Management' and the 'Lower/Supervisory Level Management'. (Give two functions for each).
[4]
29.
The Managing Director of a shoe manufacturing firm noticed that the managers and the workers were in a state of constant conflict. The managers felt that workers were deliberately slowing down production, while the workers felt that the managers were setting impossible targets without sharing the profits. The Managing Director called a town hall meeting. He urged both groups to realize that their survival depended on each other. He emphasized that prosperity for the employer cannot exist for a long time unless it is accompanied by prosperity for the employees. He completely eliminated the old "rule of thumb" methods and replaced them with systematic work studies.
Identify and explain the two principles of Scientific Management (given by F.W. Taylor) applied by the Managing Director.
OR
"Business environment is complex and dynamic." Explain any four features of the Business Environment to justify this statement.
[4]
30.
The Board of Directors of 'Omega Corp' set a clear endpoint for their annual planning: "To increase total market share by 20% by the end of the financial year." To ensure this goal was met without financial chaos, the Finance Manager drafted a detailed statement explicitly allocating ₹5 Crores for the marketing department's ad spend. Furthermore, to guide the sales executives, a broad standing parameter was established: "We will only sell our products on a cash basis; no credit will be allowed under any circumstances." Finally, a strict mandate was issued stating, "Use of mobile phones on the factory floor is strictly prohibited," carrying a severe penalty for violation.
By quoting the relevant lines from the paragraph, identify and explain the four different types of plans formulated by the management of 'Omega Corp'.
[4]
SECTION D
31.
'MegaMart Retail' began as a single grocery store in Delhi. The founder, Mr. Singh, tightly held all decision-making powers. From selecting the suppliers to approving the leave of a cashier, every file had to be signed by him. This centralized approach worked perfectly when the business was small. However, over a decade, MegaMart expanded to 150 stores across India. Mr. Singh found himself buried in paperwork. Approvals took weeks, and local store managers were frustrated because they could not instantly offer discounts to counter local competitors without Delhi's permission. Realizing the crisis, Mr. Singh fundamentally changed the organization's philosophy. He systematically passed down the authority to make day-to-day operational and pricing decisions to the respective regional store managers. Suddenly, the local managers felt highly motivated and reacted to local market trends within hours. Mr. Singh, now free from daily operations, focused his entire energy on acquiring a rival retail chain.
Identify the management philosophy adopted by Mr. Singh to solve the crisis. Deeply explain the importance of this philosophy by highlighting **four specific benefits** it provided to 'MegaMart Retail', as evident from the case.
[6]
32.
'FutureSoft IT' required 50 new software developers. The HR department initiated the process. First, they published a detailed advertisement on prominent job portals. Second, they received thousands of applications and the HR team spent a week filtering out candidates who did not have the required B.Tech degree. Third, the shortlisted candidates were asked to take a rigorous online coding examination to test their technical logic and an emotional intelligence test to see how they handle stress. Fourth, those who cleared the tests were called to the headquarters for a deep, one-on-one conversation with the technical directors. Fifth, the company secretly contacted the professors of the selected freshers to verify their character. Finally, the candidates were sent to an affiliated hospital to ensure they had no severe health conditions that would hinder their work before the final job offer was generated.
The case describes a highly systematic staffing function. Identify the exact process being discussed. By quoting lines from the paragraph, identify and thoroughly explain the **first six sequential steps** of this process executed by 'FutureSoft IT'.
[6]
33.
Consider the following three distinct scenarios in different departments of 'Apex Industries':
Scenario 1: Mr. Arun, the head of the packaging unit, dictates the exact schedule for every worker. He does not listen to any grievances or suggestions regarding the packaging material. If a worker fails to meet the target, he immediately deducts their daily wage. His department has high productivity but terrible employee turnover.
Scenario 2: Ms. Kavita, the head of the marketing unit, needs to finalize the new advertising budget. She calls her entire team into the boardroom. She presents the constraints, listens to the creative ideas of her junior executives, debates the options, and then formulates an action plan that the majority agrees upon. Her team is highly loyal and satisfied.
Scenario 3: Mr. David, the head of the R&D unit, manages a team of highly qualified scientists. He provides them with the required laboratory budget and completely steps back. He allows the scientists to set their own research goals, manage their own time, and solve their own technical hurdles without any interference from him, acting only as a point of contact for external resources.
Identify the **three distinct leadership styles** exhibited by Mr. Arun, Ms. Kavita, and Mr. David. Deeply explain the characteristics and suitability of each style as observed in the case.
OR
Abraham Maslow’s 'Need Hierarchy Theory' provides a profound framework for understanding human motivation. Outline the fundamental assumptions upon which this theory is based. Furthermore, explain the five specific hierarchical levels of human needs as proposed by Maslow.
[6]
34.
The CEO of 'Skyline Aviation' was frustrated. He told his Board of Directors, "We spend months drafting the perfect flight schedules and passenger growth targets. However, if we do not constantly monitor whether our flights are actually departing on time or if our customer service ratings are meeting our standards, our plans are entirely useless."
The Operations Head replied, "Exactly. And conversely, if we don't have those predefined targets and schedules to begin with, how will we ever know what to measure or whether our current performance is good or bad? We would be operating completely blind."
Based on the conversation above, explain the deep interconnected relationship between Planning and Controlling. Also, state the first two sequential steps involved in the controlling process.
OR
Organizing involves creating a structure that best suits the enterprise. Differentiate between a 'Functional Structure' and a 'Divisional Structure' on the basis of: (a) Formation, (b) Specialization, (c) Fixation of Responsibility, (d) Managerial Development, and (e) Cost. Mention one specific situation where each structure is highly suitable.
[6]
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