CBSE Class 12 Board Exam Business Studies Flashcards

24 sample cards from the Business Studies deck

Sampled from the end of the deck, so these are different cards from the ones shown on the syllabus page.

1. Differentiate between a policy, a procedure, a rule and a method.

   Policy = general guideline for decision-making; Procedure = step-by-step sequence to perform an activity; Rule = a specific statement of what must/must not be done (no discretion); Method = the prescribed manner of performing a task.

2. Define organising as a function of management.

   Organising is identifying and grouping activities, assigning duties, delegating authority and creating responsibility, and coordinating relationships to achieve goals.

3. List the steps in the organising process.

   1) Identification and division of work, 2) Departmentalisation, 3) Assignment of duties, 4) Establishing reporting (authority) relationships.

4. Differentiate between functional structure and divisional structure of an organisation.

   Functional structure groups jobs of a similar nature into departments (production, marketing, finance) — suits single-product firms; divisional structure groups activities by product line, each division being a self-contained unit — suits multi-product firms.

5. Differentiate between formal and informal organisation.

   Formal organisation is deliberately created by management with defined authority/responsibility and official communication; informal organisation arises spontaneously from social interaction, has no fixed structure, and communication flows in all directions (grapevine).

6. Define delegation of authority and name its three elements.

   Delegation is the downward transfer of authority from a superior to a subordinate. Its three elements are authority, responsibility and accountability.

7. Differentiate between delegation and decentralisation.

   Delegation is the transfer of authority from one person to another (a process, between two individuals); decentralisation is the systematic delegation of authority throughout the organisation to the lowest levels (a philosophy/policy of the whole organisation).

8. Define staffing and state why it is called a separate function.

   Staffing is filling and keeping filled the positions in the organisation structure — managing the human resources. It is separate because of growing size of organisations, scarcity of talent, high employee turnover, and increasing complexity of human behaviour.

9. List the steps in the staffing process.

   Estimating manpower requirements, recruitment, selection, placement and orientation, training and development, performance appraisal, promotion and career planning, and compensation.

10. Differentiate between recruitment and selection.

    Recruitment is a positive process of searching for and attracting prospective candidates and inducing them to apply; selection is a negative process of choosing the most suitable candidate and rejecting others.

11. Name the internal and external sources of recruitment.

    Internal: transfers and promotions. External: direct recruitment, casual callers, advertisement, employment exchange, placement agencies/consultants, campus recruitment, recommendations, labour contractors, web publishing.

12. Differentiate between training, development and education.

    Training increases job-related knowledge and skills for the present job; development is the overall growth of an employee for future responsibilities; education is broad theoretical knowledge. Training is job-oriented; development is career/growth oriented.

13. Define directing and list its four elements.

    Directing is instructing, guiding, communicating with and inspiring people to achieve organisational objectives. Its elements are supervision, motivation, leadership and communication.

14. State Maslow's need hierarchy in ascending order.

    Physiological needs, Safety/security needs, Social/affiliation/belonging needs, Esteem needs, and Self-actualisation needs.

15. Differentiate between financial and non-financial incentives, giving examples of each.

    Financial incentives are monetary rewards (pay, bonus, profit-sharing, perquisites, stock options); non-financial incentives satisfy psychological/social needs (status, job security, employee recognition, job enrichment, employee participation, career advancement).

16. Differentiate between formal and informal communication.

    Formal communication flows through officially established channels (vertical/horizontal); informal communication (grapevine) flows freely through social relations without official channels and spreads rapidly.

17. Define controlling and explain its relationship with planning.

    Controlling is comparing actual performance with planned (standard) performance and taking corrective action. Planning and controlling are inseparable: planning is the basis of control and control is the essence of planning — planning is prescriptive, controlling is evaluative.

18. List the steps in the controlling process (in order).

    1) Setting performance standards, 2) Measurement of actual performance, 3) Comparing actual performance with standards, 4) Analysing deviations, 5) Taking corrective action.

19. What is 'Management by Exception' and 'critical point control' in the controlling process?

    Management by exception means a manager attends only to significant deviations beyond the permissible limit; critical point control means concentrating control on key result areas that are crucial to organisational success rather than every minor detail.

20. Define financial management and state the financial decisions it involves.

    Financial management is the planning, raising, controlling and administering of funds used in the business. It involves three decisions: investment (capital budgeting) decision, financing decision, and dividend decision.

21. State the primary objective of financial management.

    The primary objective is wealth maximisation, i.e. maximising the market value (shareholders' wealth) of the firm's equity shares.

22. Define financial leverage (trading on equity) and the financial markets distinction.

    Financial leverage / trading on equity is the use of fixed-cost funds (debt and preference capital) in the capital structure to increase the return on equity (EPS). Financial markets are split into money market (short-term funds, up to 1 year) and capital market (medium and long-term funds).

23. List the main money market instruments.

    Treasury Bills (T-bills/zero-coupon), Commercial Paper, Call Money, Certificate of Deposit, and Commercial Bills (trade bills).

24. Differentiate between the primary market and the secondary market.

    The primary (new issue) market is where new securities are issued and sold to the public for the first time, so funds go to the company; the secondary (stock exchange) market is where existing/already-issued securities are traded among investors, providing liquidity but no fresh funds to the company.

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