Most important questions CBSE Class 12th Business Studies
25 Most Important Questions with Answers (Chapter-wise)
📍 Chapter 1: Nature and Significance of Management
Q1. Define management and state its crucial characteristics. (3 marks)
Answer:
Management is the process of planning, organizing, directing, and controlling resources to achieve organizational goals efficiently and effectively.
Characteristics:
- Goal-oriented
- Pervasive
- Multidimensional
- Continuous
- Dynamic
- Group activity
Q2. Explain management as an art, science, and profession. (5 marks)
Answer:
- Art: Uses personal judgment and creativity.
- Science: Based on methodical knowledge and cause-effect relationships.
- Profession: Has an organized body of knowledge, formal training, and ethics although lacks strict legal entry barriers.
Q3. Differentiate between efficiency and effectiveness. (2 marks)
Answer:
- Efficiency: Completing a task with minimal cost and time (input-based).
- Effectiveness: Completing tasks to achieve goals (output-based).
📍 Chapter 2: Principles of Management
Q4. State any five principles of management by Henri Fayol. (5 marks)
Answer:
- Division of Work
- Unity of Command
- Unity of Direction
- Scalar Chain
- Discipline
Q5. Explain any four principles of Scientific Management by F.W. Taylor. (4 marks)
Answer:
- Science, not Rule of Thumb
- Harmony, not Discord
- Cooperation, not Individualism
- Development of each person to greatest efficiency
Most important questions CBSE class 12th business studies
📍 Chapter 3: Business Environment
Q6. What is business environment? Mention its types. (3 marks)
Answer:
Business environment refers to external and internal factors that impact business operations.
Types:
- Internal environment: Policies, employees, culture
- External environment:
- Micro: Customers, suppliers
- Macro: Political, economic, social, technological, legal
Q7. Why is understanding business environment important? (3 marks)
Answer:
- Helps identify opportunities and threats
- Aids in strategy formation
- Improves performance and adaptability
📍 Chapter 4: Planning
Q8. Define planning. What are its main steps? (5 marks)
Answer:
Planning is deciding in advance what to do, how to do it, when and by whom.
Steps in Planning:
- Setting objectives
- Developing alternatives
- Evaluating alternatives
- Selecting the best plan
- Implementing the plan
- Following up
Q9. Distinguish between policy and procedure. (2 marks)
Answer:
- Policy: General guideline for decision-making.
- Procedure: Specific steps to implement a policy.
📍 Chapter 5: Organising
Q10. What is organising? Mention its significance. (4 marks)
Answer:
Organising is the process of identifying and grouping work, defining authority and responsibility, and establishing relationships.
Significance:
- Specialization
- Clarity in working relationships
- Optimum resource use
- Growth and expansion
Q11. Differentiate between formal and informal organisation. (2 marks)
Answer:
- Formal: Official structure with defined roles.
- Informal: Socially formed, unofficial relationships.
Q12. Define decentralisation. Give two merits. (3 marks)
Answer:
Decentralisation is delegating decision-making to lower levels.
Merits:
- Quick decision-making
- Managerial development
- More control and flexibility
Most important questions CBSE Class 12th Business Studies
📍 Chapter 6: Staffing
Q13. What is staffing? Explain its steps. (4 marks)
Answer:
Staffing is the process of hiring and developing required personnel.
Steps:
- Manpower Planning
- Recruitment
- Selection
- Placement & Orientation
- Training & Development
- Performance Appraisal
- Promotion and Compensation
Q14. Distinguish between internal and external sources of recruitment. (3 marks)
Answer:
- Internal: Promoting from within; cheaper, motivating
- External: Hiring from outside; brings new talent, expensive
📍 Chapter 7: Directing
Q15. Why is directing considered the heart of management? (4 marks)
Answer:
Directing initiates action and coordinates employee efforts towards goals. It includes supervision, motivation, communication, and leadership, making it central to executing plans.
Q16. Explain four non-financial incentives. (4 marks)
Answer:
- Recognition
- Responsibility
- Promotion
- Job security
📍 Chapter 8: Controlling
Q17. What is controlling? Describe the steps in the control process. (4 marks)
Answer:
Controlling is ensuring actual performance matches plans.
Steps:
- Set performance standards
- Measure actual performance
- Compare with standards
- Take corrective action
📍 Chapter 9: Financial Management
Q18. Define financial management. State its objectives. (3 marks)
Answer:
Financial management is planning, organizing, and controlling financial resources.
Objectives:
- Ensure liquidity
- Maximize shareholder value
- Optimize resource utilization
Q19. Distinguish between fixed and working capital. (2 marks)
Answer:
- Fixed Capital: Long-term assets like land, machinery
- Working Capital: Short-term funds for daily operations
📍 Chapter 10: Financial Markets
Q20. What is a financial market? Mention its types. (3 marks)
Answer:
A financial market facilitates the transfer of funds from savers to borrowers.
Types:
- Money Market (short-term)
- Capital Market (long-term)
Q21. What is a stock exchange? State two of its functions. (3 marks)
Answer:
Stock exchange is an organized market for trading securities.
Functions:
- Liquidity for investments
- Price determination
- Investor protection
📍 Chapter 11: Marketing
Q22. Define marketing mix. List its four elements. (4 marks)
Answer:
Marketing mix is a mix of product, price, place, and promotion strategies to market goods/services effectively.
Elements:
- Product
- Price
- Place
- Promotion
📍 Chapter 12: Consumer Protection
Q23. What is consumer protection? Mention two rights of consumers. (3 marks)
Answer:
Consumer protection safeguards buyers from exploitation.
Rights:
- Right to Safety
- Right to be Informed
- Right to Choose
- Right to be Heard
Q24. Why is consumer protection important for businesses? (3 marks)
Answer:
- Builds customer trust
- Encourages repeat purchases
- Avoids legal issues
- Enhances brand reputation
Most important questions CBSE Class 12th Business Studies
📍 Case-Based Question
Q25. A company fails to meet its daily production target due to absenteeism. Identify the function of management involved and suggest a solution. (4 marks)
Answer:
Function involved: Staffing and Directing
Solution: Improve recruitment, offer non-financial incentives, enhance supervision and motivation
Final Tip for Students
- Practice these questions with NCERT and sample papers.
- Use headings, bullet points, and examples in answers.
- Revise key concepts daily and attempt mock tests.
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