CBSE SAMPLE QUESTION PAPER (2026-27)
SUBJECT: BUSINESS STUDIES (054)
CLASS: XII | SA-2 (FULL SYLLABUS) | SET - 1
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.
Successful organizations do not achieve their goals by chance but by following a deliberate process called:
[1]
2.
According to Taylor, "Even a small production activity like loading pigs of iron into boxcars can be scientifically planned and managed." This highlights which principle of scientific management?
[1]
3.
The rapid rise of e-commerce platforms like Amazon and Flipkart has severely impacted the sales of traditional brick-and-mortar retail shops. Local shopkeepers are now forced to adopt digital payment methods to survive.
Which dimension of the business environment is primarily responsible for this shift?
[1]
4.
Which type of plan provides the prescribed ways or exact manner in which a particular task has to be performed within an established procedure?
[1]
5.
The form of organizational structure which is most suitable for a multi-product manufacturing company operating in different geographical regions is:
[1]
6.
The process of searching for prospective employees and stimulating them to apply for jobs in the organization is called:
[1]
7.
Which of the following is NOT an element of the directing function of management?
[1]
8.
The formula `Return on Investment (ROI) = (EBIT / Total Investment) × 100` helps a financial manager to fundamentally analyze the:
[1]
9.
A company issued new equity shares to the public to raise funds for setting up a massive manufacturing plant. The company hired underwriting agencies to guarantee the sale of these shares.
In which specific financial market is this transaction taking place?
[1]
10.
Under the Marketing Concept, the primary focus of the business is on:
[1]
11.
Under the Consumer Protection Act, 2019, if the value of goods or services paid as consideration exceeds ₹1 Crore but does not exceed ₹10 Crores, the complaint must be filed in the:
[1]
12.
The decision of acquiring a new piece of highly expensive robotic machinery for the factory floor falls under which category of financial decisions?
[1]
13.
Which instrument of the money market is a short-term, unsecured promissory note issued by large and creditworthy companies to raise funds?
[1]
14.
A company attaches a small slip to its product containing detailed information about its ingredients, weight, manufacturing date, and statutory warnings. This function of marketing is known as:
[1]
15.
Which promotional tool is defined as a 'paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor'?
[1]
16.
A leader who completely delegates the authority to his subordinates and only acts as a contact person to provide resources from the outside is practicing which leadership style?
[1]
17.
When a superior grants authority to a subordinate, the subordinate becomes obligated to properly perform the assigned duty. This obligation is known as:
[1]
18.
[1]
19.
Assertion (A): Trading on equity is profitable only when the Return on Investment (ROI) is greater than the rate of interest on debt.
Reason (R): When ROI is higher than the interest rate, the use of fixed-cost debt funds increases the Earning Per Share (EPS) for the equity shareholders.
Reason (R): When ROI is higher than the interest rate, the use of fixed-cost debt funds increases the Earning Per Share (EPS) for the equity shareholders.
[1]
20.
Assertion (A): Under the Consumer Protection Act, a consumer has the right to be protected against goods that are hazardous to life and property.
Reason (R): This is known as the Right to Seek Redressal, which ensures the consumer gets compensation for injuries sustained from defective products.
Reason (R): This is known as the Right to Seek Redressal, which ensures the consumer gets compensation for injuries sustained from defective products.
[1]
SECTION B
21.
'ElectroDrive Motors' recently noticed a massive shift in their industry. The government drastically reduced the subsidies on fossil fuels and simultaneously offered massive tax rebates to companies manufacturing electric vehicles (EVs). Anticipating the future, 'ElectroDrive' immediately redesigned their entire assembly line to produce EVs, beating their competitors to the market and capturing a 40% market share.
Identify the two dimensions of the business environment highlighted in the case above. Furthermore, state any one point highlighting the importance of the business environment that 'ElectroDrive Motors' leveraged.
[3]
22.
State any three regulatory functions performed by the Securities and Exchange Board of India (SEBI) to protect the interests of investors and regulate the securities market.
[3]
23.
Mrs. Sharma purchased a geyser from a reputed local electronics store. Despite following all the instructions precisely, the geyser suffered a severe short circuit the very first time she turned it on, permanently damaging the wiring in her house. She immediately filed a complaint in the District Commission, demanding justice.
Assuming the District Commission finds the electronics store guilty of selling a defective product, state any three specific reliefs/remedies that the court can order the store to provide to Mrs. Sharma.
OR
Briefly explain the 'Right to Information' and the 'Right to Consumer Education' as recognized under the Consumer Protection Act, 2019.
[3]
24.
"Controlling acts as a crucial feedback mechanism for planning." Elaborate on this statement by explaining the relationship between Planning and Controlling.
[3]
SECTION C
25.
The CEO of 'Alpha Textiles' visited the factory floor and noticed a high level of inefficiency. He observed that workers were wasting hours walking across the massive factory just to fetch their specialized tools. To solve this, he mandated a strict scientific principle: "Every tool, raw material, and worker must have a designated, logical place, and they must be strictly found in that place during working hours." Furthermore, he ensured that the workers' wages were determined purely by a mathematical calculation of their daily output, abandoning the old system of managers deciding wages based on personal favoritism.
Identify and explain the specific principle of general management (given by Henri Fayol) and the specific principle of scientific management (given by F.W. Taylor) applied by the CEO to resolve the factory's inefficiencies.
[4]
26.
Delegation of authority is an essential process for any organization to function smoothly. Explain any four points highlighting the importance of 'Delegation' in an organization.
OR
Differentiate between 'Functional Structure' and 'Divisional Structure' on the basis of: (a) Formation, (b) Specialization, (c) Managerial Development, and (d) Fixation of Responsibility.
[4]
27.
'Zenith Aviation' recently hired a batch of new pilots to fly their highly advanced commercial airplanes. The management realized that directly putting these new pilots into the real cockpits with passengers would be catastrophically dangerous and could lead to multi-million dollar damages. Instead, the company placed the pilots in a highly sophisticated, computerized dummy airplane structure on the ground, which replicated the exact environment and controls of the real aircraft. The pilots were trained there for three months.
Identify the specific method of training utilized by 'Zenith Aviation'. Is this an 'On-the-job' or 'Off-the-job' method? Explain the meaning of this method and state two benefits of using it.
[4]
28.
'Vertex Pharmaceuticals' is planning to set up a new massive research laboratory. The Finance Manager needs to estimate the Working Capital requirements for the upcoming year. He analyzes several variables. First, he notes that inventing a new medicine is a highly lengthy process, taking almost 12 months from mixing raw chemicals to getting the final approved pill ready for the market. Second, he realizes that the hospitals and clinics buying their medicines demand a strict 90-day credit period before making payments. Lastly, he observes that the overall economy is currently suffering from high inflation, causing the daily prices of raw chemicals to rise rapidly.
By quoting the relevant lines from the paragraph, identify and explain the three factors affecting the 'Working Capital' requirements of 'Vertex Pharmaceuticals'.
[4]
29.
Pricing is a crucial element of the Marketing Mix. Apart from the cost of the product, explain any four essential factors that a marketing manager must consider before determining the final price of a product.
[4]
30.
During an urgent board meeting at 'Global Synthetics', the Production Manager was presenting critical data regarding a severe machine breakdown. However, the Finance Manager was constantly checking his smartphone and thinking about an upcoming family vacation, entirely missing the gravity of the situation. Meanwhile, the Marketing Manager did not share his brilliant idea to solve the crisis because he held a deep-seated fear that the authoritarian CEO would openly mock him and challenge his authority in front of everyone.
Identify the two distinct categories of communication barriers present in the case above. Explain the specific barrier highlighted under each category.
[4]
SECTION D
31.
'FutureTech Wearables' recently launched a highly advanced smartwatch. Initially, they believed that if the watch was technologically superior, customers would automatically flock to buy it without any persuasion. They spent all their capital on research and development, completely ignoring the packaging and distribution networks. Consequently, sales were disastrously low. Realizing their mistake, the CEO drastically shifted the company's approach. First, they conducted a massive pan-India survey to find out exactly what features athletes and office workers wanted in a smartwatch. Second, they redesigned the watch based entirely on this customer feedback. Third, to make the product accessible, they abandoned their single-showroom strategy and partnered with 500 retail electronic stores across the country, ensuring the watches were available everywhere. Finally, to convince buyers, they hired a massive team of trained executives to give direct, face-to-face live demonstrations of the watch's health-tracking features inside these retail stores.
Based on the comprehensive case study above, answer the following questions:(a) Identify and explain the **initial Marketing Philosophy** adopted by the company that led to their failure.
(b) Identify and explain the **new Marketing Philosophy** they adopted that led to their success.
(c) Identify the **specific element of the Marketing Mix** related to partnering with 500 retail stores.
(d) Identify and explain the **specific element of the Promotion Mix** used to give face-to-face demonstrations.
[6]
32.
'CityCare Super-Specialty Hospital' requires ₹150 Crores to build a new cardiac surgery wing equipped with the latest robotic technology. The Board of Directors is evaluating the Capital Structure decision. The Chief Financial Officer (CFO) strongly advises taking a long-term Bank Loan (Debt). He argues that the hospital has incredibly stable and predictable cash flows throughout the year, meaning they will never struggle to pay the fixed monthly installments. Furthermore, he points out that the current corporate tax rate is extremely high at 35%, making debt an exceptionally lucrative option. However, one of the senior directors warns that the hospital already has several existing heavy loans, and their 'Interest Coverage Ratio' (ICR) has dropped dangerously low. He strongly suggests issuing new Equity Shares to the public instead, arguing that the stock market is currently experiencing a massive boom (Bullish phase), making it the perfect time to attract investors.
Analyze the financial scenario presented above. By quoting lines from the paragraph, identify and deeply explain the **four distinct factors affecting the Capital Structure Decision** (Financing Decision) debated by the management of 'CityCare Super-Specialty Hospital'. Based on the concept of 'Trading on Equity', briefly explain how the 35% tax rate makes debt a cheaper source of finance.
OR
The Primary Market and Secondary Market are two distinct, yet deeply interconnected components of the Capital Market. Differentiate between the 'Primary Market' and the 'Secondary Market' on the basis of: (a) Nature of Securities traded, (b) Flow of Capital, (c) Determination of Prices, and (d) Specified Geographical Location. Furthermore, explain how the Secondary Market provides 'Liquidity' to the Primary Market.
[6]
33.
'MegaCorp Logistics' is expanding its operations across India. They urgently need to hire 100 new warehouse supervisors. The HR department initiates the staffing process. First, they estimate that currently, they only have 50 supervisors, but the expansion requires 150, clearly indicating an understaffing situation. To bridge this gap, they publish advertisements in local newspapers across various states to attract a large pool of candidates. Once the applications are received, they conduct a series of rigorous aptitude and personality tests to weed out unsuitable candidates, finally choosing the best 100 individuals. After handing them the employment contracts, the HR team takes the new supervisors on a detailed tour of the massive warehouses, introducing them to their respective managers and explaining the company's safety protocols and cafeteria rules. Finally, the new supervisors are assigned to their specific workstations to commence their duties.
The case above illustrates the meticulous execution of the staffing function. By quoting lines from the paragraph, identify and thoroughly explain the **first five sequential steps of the Staffing Process** performed by the HR department of 'MegaCorp Logistics'.
[6]
34.
Mr. Anil is the CEO of 'Pioneer Steel Ltd.' He realized that his middle-level managers were feeling stagnant and demotivated because they were doing the same repetitive tasks every day. To solve this, Mr. Anil decided to enrich their jobs. He assigned them highly challenging projects that required advanced analytical skills and gave them complete autonomy to execute these projects without constant monitoring. He also offered them the opportunity to buy company shares at a 20% discount compared to the market price, making them feel like true owners of the business.
While Mr. Anil was excellent at motivating his team, he was also very strict about organizational targets. He set a firm standard: "The wastage of raw steel during production must not exceed 2%." At the end of the month, the quality control report revealed a wastage rate of 3.5%. Recognizing this as a critical deviation in a Key Result Area, Mr. Anil immediately launched an investigation. He discovered that a specific cutting machine had a faulty blade. He instantly ordered the replacement of the blade to prevent future wastage.
Based on the comprehensive case study above, answer the following questions:While Mr. Anil was excellent at motivating his team, he was also very strict about organizational targets. He set a firm standard: "The wastage of raw steel during production must not exceed 2%." At the end of the month, the quality control report revealed a wastage rate of 3.5%. Recognizing this as a critical deviation in a Key Result Area, Mr. Anil immediately launched an investigation. He discovered that a specific cutting machine had a faulty blade. He instantly ordered the replacement of the blade to prevent future wastage.
(a) Identify and explain the **one Financial Incentive** and **one Non-Financial Incentive** utilized by Mr. Anil to motivate his managers.
(b) Identify and explain the **specific principle of analyzing deviations** used by Mr. Anil when he noticed the 3.5% wastage.
(c) Identify the **exact final step of the controlling process** executed by Mr. Anil when he replaced the faulty blade.
[6]
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