FORMATION OF CASE PROBLEMS.

PERFORMANCE ENHANCEMENT
PROGRAM
On Business Studies
[FORMATION OF CASE PROBLEMS]
CHARAK RAY
libra.charak@gmail.com

FORMATION OF CASE PROBLEMS
SUGGESTIVE TIPS TO PREPARE CASE PROBLEMS
1. Attempt should be made to form case problems according to
the word limit as suggested to attempt understanding and
remembering based questions.
2. Case problem for one mark question should not be made.
Identification / Application of concepts in short sentence
should be framed.
3. Case problem for 3-4 marks should be covered in 75-120
words.
4. Case problem for 5-6 marks should be covered in 150 -200
words.
5. Take any theme or topic from any source, preferably from
newspaper which relates to any chapter of either class XI or
XII.
6. Use of key words and lines from the ncert books should be
cautiously used.

7. A teacher must have concept clarity throughout the syllabus
especially on the topic on which case problems is to be
The experiences show, Lack of clarity has always made the
problem confusing and vague. Vague case problem will be
followed by vague questions and the readers won’t be able to
analyse, understand & comprehend what exactly would have
been in the mind of paper setter and will not be able to
respond the way as expected by the paper setter. As a result,
only the students pay the cost of wrong and faulty case
problems.

8. Exact copy of lines from the ncert book should be avoided.
Many a times, it has made the case problems ambiguous, invites
confusion with multiple answers. Ambiguous questions always
invite ambiguous answers. As a result, the readers do not
in the same manner as expected by the paper setter. Take out
relevant information from such source. Relate such information
the topic, its headings and subheadings from the topic given in
ncert and incorporate precise information in your own words.
9. Form the case problems and see if the desired answer comes
out from the case. If not, add relevant information and eliminate
unnecessary information which has nothing to do with the
questions being asked. Many a times, unwanted information
attracts unwanted answers.
10. Share the case problems so formed with other teachers to
their opinion.

CASE PROBLEM ON GST
The small industries in India had to bear adverse impact of
and Services Tax (GST) in July, 2017. These units provide about
90% of the inputs to the large scale industries but the latter
stopped taking their output and asked the former to get them
registered under GST so that they could avail Input Tax Credit.
Government later realised the concerns of small industries and
decided to provide certain incentives to boost their business.
Identify and explain the business risk involved in the above case.
Ans. Legal causes: These causes relate to the rules, regulations
and laws passed by the government which are expected to be
complied by the individuals and business organisations.
Note: Input Tax Credit means to recover the tax already paid on
the purchases from the taxes payable on the sales.

CASE PROBLEM WITH DIVERSE ALTERNATIVES
Seema is running a business of artificial jewellery, bags, purses,
nail art and other fashion accessories. Over the past few years,
business has grown from a local shop to a big business with
branches in the city. Now, she has been finding it tough to
manage the affairs of three different branches on her own. She
also wants to further expand but is confused how to manage
expand it further.
(a) Which form of business is being carried by Seema at present?
(b) Suggest a suitable form of business she should adopt to
expand her business.
(c) Write two merits and demerits each of the business form you
suggest.

Ans:(a) Seema is running sole proprietorship form of business.
(b) She can convert her business into General Partnership to
expand and manage in better ways.
(c) Merits of Partnership: (explain)
Limitations of Partnership: (explain)
Alternative 1 to part (b)
(b) She can convert her business into Limited Liability
Partnership to expand and manage in a better way.
(C) She can convert his business into Private Limited Company
to expand and manage in a better way.
(D) She can convert his business into One Person Company
(O.P.C.) to expand and manage in a better way.

CASE PROBLEM ON GOVT’S INITIATIVE (START UP INDIA)
(Based on unit – Ch 5 & 6): A company, ‘Kala Artists’ is a new
start-up inspired by the PM’s campaign on ‘Startup India and
Standup India’, which provides a diverse collection of pottery,
woodcrafts, glass painting etc., using eco-friendly material. It
decides to spend 5% of its profits to build toilets for rural people
to support ‘Swachh Bharat Abhiyan’. The management plans to
take its business to the pocket of customers round the clock,
which it believes will strengthen rapport with their clients and
support green initiative of government. The management of the
company has also decided to create an attractive website, which
will have complete information about their stores, description of
their products on sale and announcements about all forthcoming
shows. Neera, who is responsible for this job, is reluctant to
e-business model to promote sales because she believes that
customers need to experience the art objects before making a
purchase and other artists may steal their ideas and designs from

(a) By quoting the lines, state what the benefits of e-business
have been highlighted in the above paragraph?
(b) By quoting the lines, state the limitations expressed by
Neeraon the issue of doing e-business.
(c) Which business model/network is ‘Kala Artists’ planning to
pursue?
(d) Which responsibility is the company trying to accomplish
spending a certain part of its profit? Identify any two
in favour of such responsibility.
(e) List the values which the business reflects in the above case.
Additional Questions:
(f) How can a business reach the pocket of customers?

Ans. (a) By quoting the lines, state what the benefits of e-business have
been highlighted in the above paragraph?
Benefits of e-business
• Global Reach/Access
Quoted Lines: ‘‘The management of the company also decided to
attractive website”
• Movement towards a paperless society
Quoted Lines: “It also believes … will lead to green initiative of
government”.
(b) By quoting the lines, state the limitations expressed by Neeraon the
issue of doing e-business.
Limitations expressed by Neera
• Low Personal Touch
Quoted Lines: “Neera, … believes that customers need to experience
art objects before making a purchase”.
• Ethical Fallouts
Quoted Lines: “Neera, …is reluctant to adopt e-business model to

Ans. (c) Which business model/network is ‘Kala Artists’ planning to
pursue?
Business to Customers (B2C)
(d) Which responsibility is the company trying to accomplish by
a certain part of its profit? Identify any two arguments in favour of such
responsibility.
Company is fulfilling the statutory norms of Corporate Social
Responsibility. The arguments in favour of social responsibility are
• Long-term interest of firm
• Avoidance of government regulations
(e) List the values which the business reflects in the above case.
Values Reflected:
• Sensitivity towards environment (eco-friendly material and green
initiative)
• Respect for law and order (statutory contribution towards CSR)
(f) How can a business reach the pocket of customers?
The business can go to the pockets of customers if the company
launches its ‘mobile application’ which can enable customers to make
online purchase.

CASE PROBLEM MADE FROM ADVERTISEMENT
A company which provides online platform to buy and sell the goods,
www.olx.in, launched its latest brand campaign known as the ‘6 Months Break-
Up Challenge’. Through this initiative, it motivated the people to sell their pre-
owned goods which have not been used by them for the last six months. The
initiative was based on the insights gathered from OLX’s annual consumer
survey which helped to understand the behaviour of users towards used
as well as other consumer trends. On seeing the advertisement, Hema was
impressed with the advertisement and decided to sell her LED TV after some
repairs.
She opened her account on the website of the company and uploaded the
pictures of her television giving the impression that the TV was new one
without much use. A buyer bought the TV but after a few weeks it started
giving trouble. The buyer tried to contact Hema but could not contact.
(a) Which mode of transaction has been adopted by Hema in the above case?
(b) Name and explain the business network adopted in the above case.
(c) Which values did Hema ignore while selling the product?

Ans. (a) E-business
(b) Customer to Customer: Such type of mode of business involves
seller and buyer with the help of the third party wherein buyer and
seller contact each other by opening their online accounts at the
website of online service provider.
(c) Values ignored by Reena: Transparency and honesty

CASE PROBLEM FROM NEWSPAPER ARTICLES
In the fierce battle with ‘Amazon’ and ‘Flipkart’ for supremacy in the Indian
e-commerce space, ‘Snapdeal’ decided to reduce the marketing fee it
charges from the online vendors on its portal and have asked the vendors
to lower the price so that it can shore up sales on its portal. Vendors have
agreed to this proposal as they are not likely to affect their incomes. In
addition, it decided to deliver the goods within a day to increase average
purchase and getting towards profitability and hired more employees
preferably females and differently abled (Divyaang) persons.
(a) By quoting the lines, identify the characteristic of management is
highlighted in the above para?
(b) Identify and explain which principle of management you feel applied
with the consent of vendors?
(c) Highlight the values the company is likely to achieve.
(Source: Economic times May16,2016)
1.
Based on first two para & 6 th para of the article

(a)
(b)
(c) Values likely to be achieved:
 Generation of employment opportunities
 Push to national income
1.
SUGGESTED ANSWER
Management is Dynamic: Quoted line (decided to reduce the
marketing fee)
Management is goal-oriented: Quoted line (it can shore up sales
on its portal)
Management is a group activity: Quoted line (Vendors have
agreed to this proposal)
Esprit de Corps: According to this principle, the managers try to
improve team spirit among their workforce to improve efficiency in
operations.
Here, the management of ‘Snapdeal’ and online vendors are working
in team spirit by passing the benefit of commission cut to the buyers
to beat their competitors.

Lalaji, a local vegetable trader, took first mover advantage to sell his
vegetables and groceries online. With the help of venture capitalists, he
raised funds to grow his business, ‘locallalaji.com. In the first year, the
business did well. The industry was flooded with new entrants like, Grofers,
Bigbasket, PepperTap, Zopnow etc. Inspite of sincere efforts by Lalaji, the
business suffered losses. The investors pressurised him for returns. In the
third year of operations, the company stopped paying salaries and loans.
The company was served a legal notice and assets were sold to repay the
debts. Investors demanded that ‘Lalaji’s’ personal assets should be sold but
the auctioneer refused to do so.
(Source: Economic Times Sept. 10,2015 – Localbanya is temporarily out of
business)
(a) Name the form of business organisation followed by Lalaji.
(b) Are the investors justified while asking for Lalaji’s personal assets to be
sold? Explain by highlighting the feature associated with the above
situation.
(c) Identify two values that have affected the spirits of investors when they
could not receive their dues from the company.
2.

(a) The form of business organisation is ‘company’.
(b) Associated Feature is ‘Limited Liability’. The investors are not justified
while asking for the personal assets to be sold because the liability of each
member in a company form of organisation is limited to the extent of face
value of shares held and net reserves.
(c) Values Affected:
Lack of transparency
Lack of accountability
Inefficient financial control
SUGGESTED ANSWER2.

EMERGING MODES OF BUSINESS
MrPankaj was running a home-furnishing business though his physical (brick and
mortar) store at Panipat. He was observing that the sales were declining over the
past two years. His friend Rohan suggested that he should tie up with online
market places. On his advice, he contacted Flipkart, which provided him training
and convinced him that he could do his business from his shop and godown
subject to availability of personal computer and internet. The online partner
provided all sorts of services round the clock at a click of the mouse. He received
the orders from many states and overseas countries and saw that his sales grew
manifolds He felt low sale for some products that required personal attention.
(Source: Economic Times Oct. 26, 2015 -Big Billion Sale)
(a) Identify the modes of business before and after connecting with Flipkart
(b) Distinguish between the two modes of business identified in part (a).
(c) Identify any two merits and limitations each of online business by quoting
the lines from the above case.
(d) List out values being emphasised and undermined in online business.
3.
Based on para 1 & last column

3. EMERGING MODES OF BUSINESS
MrPankaj was running a home-furnishing business though his physical (brick and
mortar) store at Panipat. He was observing that the sales were declining over the
past two years. His friend Rohan suggested that he should tie up with online
market places. On his advice, he contacted Flipkart, which provided him training
and convinced him that he could do his business from his shop and godown
subject to availability of personal computer and internet. The online partner
provided all sorts of services round the clock at a click of the mouse. He received
the orders from many states and overseas countries and saw that his sales grew
manifolds He felt low sale for some products that required personal attention.
(Source: Economic Times Oct. 26, 2015 -Big Billion Sale)
(a) Identify the modes of business before and after connecting with Flipkart
(b) Distinguish between the two modes of business identified in part (a).
(c) Identify any two merits and limitations each of online business by quoting
the lines from the above case.
(d) List out values being emphasised and undermined in online business.

(a) Modes of business
Before associating with Flipkart: Traditional Business
After associating with Flipkart: e-business
(b) Distinguish between traditional Business and e-business
Basis Traditional Business E-Business
1. Operating Cost High Low
2. Ease in doing global business Low High
3. SUGGESTED ANSWER
(c) Merits: Ease of formation and lower investment requirements: Quoted lines (he
could do his business from his shop and godown)
Convenience: Quoted line (online partner provided all sorts of services round the
clock at a click of the mouse)
Global reach / access: Quoted line (received the orders from many states and
overseas countries)
Limitations: Low personal touch: Quoted line (low sale for some products that require
personal communication)
Need to technology capability: Quoted line (subject to availability of personal
computer and internet)

FORMS OF BUSINESS ORGANISATIONS
Seema is running a business of artificial jewellery, bags, purses, nail art and other
fashion accessories. Over the past few years, her business has grown from a local
shop to a big business with three branches in the city. Now, she has been finding it
tough to manage the affairs of three different branches on her own. She also wants
to further expand but is confused how to manage and expand it further.
(a) Which form of business is being carried by Seema at present?
(b) Suggest a suitable form of business she should adopt to expand her business?
(c) Write two merits and demerits each of the business form you suggest.
4.
(a) Seema is running sole proprietorship form of business.
(b) She can convert her business into General Partnership to expand and manage in
better ways
(c) Merits of Partnership:
(i) Easy to form: (explain)
(ii) Mutual Agency Relationship: (explain)
Limitations of Partnership
(i) Lack of continuity: (explain)
(ii) Possibility of conflicts: (explain)

(b) She can convert her business into Limited Liability Partnership to expand and
manage in a better way
(c) Merits of LLP
(I) Limited Liability: (explain)
(ii) Corporate Body: (explain)
Limitations of LLP
Complicated Procedure: LLP is incorporated by following legal procedure under LLP
Act 2008.
Nationality: One partner needs to be resident in India can be partner in LLP.
4.
(C) He can convert his business into Private Limited Company to expand and
manage in a better way.
(c) Merits of Private Limited Company
(i) Personal Finance: A private limited company is not authorized to raise funds from
general public, so there is no legal commitment to outsiders.
(ii) Easy in formation: A simple procedure is followed to form private limited
company as no general public is involved in the management.
Limitations of Private Limited Company
(i) Limited Finance: As private company is not authorised to raise funds from the
general public, so limited capital can be raised from the members.
(ii) Difficult to form: The legal provisions of the companies Act, 2013 have to be
complied with to form private limited company.
SUGGESTED ANSWER

(D) He can convert his business into One Person Company (O.P.C.) to
expand and manage in a better way.
(c) Merits of OPC
(i) Limited Liability: As it is formed on the lines of companies, the liability of
the member (owner) is limited to the extent of share capital and
undistributed profits.
(ii) Personal Freedom: The autonomy to run the business is maintained as
case of sole proprietorship.
Limitations of OPC
Eligibility: Only a natural person who is citizen in India is eligible form OPC.
Restriction on minor: No minor can become member of nominee in an
form of business.
Note: A student is required to mention anyone type of organistion with
reasons under part (b).
4. SUGGESTED ANSWER

FORMATION OF CASE PROBLEMS.

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FORMATION OF CASE PROBLEMS.