ISC Class 12 Business Studies Board Exam Question Paper 2014 with Solutions

ISC Class 12 Business Studies Board Exam Question Paper with Solutions

Part-I

(Answer all questions)

Question 1. Answer briefly each of the questions (i) to (xv) [30 Marks]

(i) Give two points of distinction between external sources and internal sources of recruitment. [2 Marks]

Answer:

Teacher's Note:
a) Internal sources involve filling vacancies from within the existing workforce, boosting employee morale.
b) External sources bring fresh talent and wider choice but involve higher costs and advertising efforts.

(ii) Explain the relevance of medical examination in a selection process. [2 Marks]

Answer:
Medical examination is a vital thing in the selection process. It ensures that the selected candidate is physically fit for the job and he does not suffer from any serious illness/disease which may create problem in future.

Teacher's Note:
a) It helps protect the organization from future liability regarding pre-existing medical conditions.
b) Ensure clarity in medical fitness standards required for strenuous or specific job roles.

(iii) State any two consequences of low morale. [2 Marks]

Answer:
1. High rates of absenteeism.
2. Excessive complaints and grievances.

Teacher's Note:
a) Low morale directly harms productivity and increases labor turnover.
b) Students should list distinct behavioral outcomes associated with low organizational morale.

(iv) What is a pay slip ? How is it different from a pay roll ? [2 Marks]

Answer:
A pay slip is a small paper document which shows full details of monthly wages, deductions made and net wages of an individual. It is different from payroll as a payroll represents full information relating to the pays of all the employees working in an organization.

Teacher's Note:
a) Pay slip is issued individually to every employee.
b) Payroll is a master summary document prepared by the accounts or HR department for all employees.

(v) What is merit grading method of staff appraisal ? [2 Marks]

Answer:
Under merit grading method, the performance of the employees is evaluated against certain grades such as poor, good, very good, excellent or outstanding, satisfactory or unsatisfactory. The grade which describes his performance can be allocated to him.

Teacher's Note:
a) It helps categorize employees systematically based on predetermined performance standards.
b) Ensure proper distinction between grading scales and narrative appraisal methods.

(vi) State any two qualities of a good leader. [2 Marks]

Answer:
1. A good leader has an exemplary character.
2. A good leader is confident.

Teacher's Note:
a) Leadership qualities inspire trust and voluntary cooperation among followers.
b) Analytical thinking and keeping the main goal in focus are also key leadership attributes.

(vii) How can transfer be used as a punishment by the employer ? [2 Marks]

Answer:
Transfer is a mild form of punishment in the hands of employer. It is used due to poor performance or erratic behaviour of an employee. An employer can transfer the services of such employee to a remote or inconvenient place.

Teacher's Note:
a) Punitive transfers are often utilized as an administrative tool short of termination.
b) It disrupts the employee's routine and can act as a strong corrective measure.

(viii) What is the importance of feedback in a communication process ? [2 Marks]

Answer:
Feedback enables us to evaluate the effectiveness of our message. It makes communication meaningful. It is the end-result of an idea and makes communication a continuous process. If our audience does not understand what we mean, we can tell by the response and then refine the message accordingly.

Teacher's Note:
a) Feedback completes the communication loop between sender and receiver.
b) Without feedback, communication remains one-way and prone to misunderstandings.

(ix) 'Post script should be avoided in a business letter.' Comment. [2 Marks]

Answer:
In a business letter, postscript should be avoided, as its use shows the carelessness of the letter writer.

Teacher's Note:
a) A postscript implies that the sender failed to plan the message properly before drafting.
b) Important information must always be incorporated within the main body of the letter.

(x) What is a letter of quotation ? [2 Marks]

Answer:
A letter of quotation is any letter written in reference to the price of a service or product. This could range from a customer or client requesting or accepting a quote, to the supplier or service provider sending the quote amount. Either of these letters could be headed as a letter of quotation.

Teacher's Note:
a) It forms a crucial part of pre-purchase commercial correspondence.
b) It specifies prices, terms of payment, and delivery conditions.

(xi) Explain Information Report. [2 Marks]

Answer:
An informational report presents the data collected or facts observed in an organized form. It is a description of an event as it is and not as it should be. It does not make any recommendations.

Teacher's Note:
a) Its primary purpose is to present objective facts without analysis or persuasion.
b) Contrast this with analytical reports which evaluate data and offer suggestions.

(xii) Distinguish between minutes and reports in the context of company meetings. [2 Marks]

Answer:

Teacher's Note:
a) Minutes are legally binding official records of formal corporate meetings.
b) Reports summarize discussions, inquiries, or committee findings.

(xiii) Why is histogram called a two dimensional graph ? [2 Marks]

Answer:
A histogram is a type of graph that has wide applications in statistics. Histograms allow a visual interpretation of numerical data by indicating the number of data points that lie within a range of values, called a class or a bin. The frequency of the data that falls in each class is depicted by the use of a bar. It is called two-dimensional because both the length (height representing frequency) and the width (representing the class interval size) are considered in representing the data.

Teacher's Note:
a) Unlike a simple line graph which considers only one coordinate dimension, histogram bars have area proportional to frequency.
b) Mentioning both height and width attributes clarifies why it is termed two-dimensional.

(xiv) What is the importance of the PIN code in a postal address ? [2 Marks]

Answer:
PIN code number helps in sorting and distributing the mail by post office staff. It speeds up the delivery of the letters and articles by the post offices.

Teacher's Note:
a) PIN stands for Postal Index Number.
b) It mechanizes and accelerates mail routing across different geographical regions.

(xv) With reference to Post Office Services, expand the following: [2 Marks]
(a) GPO
(b) UPC

Answer:
(a) GPO - General Post Office
(b) UPC - Under Postal Certificate

Teacher's Note:
a) Exact expansion terms are required for full credit.
b) UPC serves as official proof of dispatch for legal or business correspondence.

Part - II

Answer any five questions

Question 2.
(a) Why are advertisements in the newspaper the most popular source of recruitment ? [6 Marks]
(b) Name and explain any four types of training. [8 Marks]

Answer:
(a) Newspaper advertising is very popular due to its following features:
- Newspaper advertising is economical.
- Newspapers have widespread publicity.
- Newspapers have significant readership.
- Newspaper advertising can carry complete information for candidates.

(b) Types of Training:
1. Induction training: It is also known as orientation training given for the new recruits in order to make them familiarize with the internal environment of an organization. It helps the employees to understand the procedures, code of conduct, policies existing in that organization.
2. Job instruction training: This training provides an overview about the job and experienced trainers demonstrates the entire job. Additional training is offered to employees after evaluating their performance if necessary.
3. Vestibule training: It is the training on actual work to be done by an employee but conducted away from the work place.
4. Refresher training: This type of training is offered in order to incorporate the latest development in a particular field. This training is imparted to upgrade the skills of employees. This training can also be used for promoting an employee.

Teacher's Note:
a) Newspaper advertising reaches a vast pool of potential candidates simultaneously.
b) Different training methodologies cater to distinct organizational and skill-enhancement requirements.

Question 3.
(a) Explain time rate system of wage payment. State and explain any two advantages and two disadvantages of this system. [6 Marks]
(b) State and explain any four non-monetary incentives that can be used to motivate employees. [8 Marks]

Answer:
(a) This is the oldest method of wage payment. Time is made a basis for determining wages of worker. Under this system, the wages are paid according to the time spent by workers irrespective of his output of work done. The wage rates are fixed for an hour, a day, week, a month or even a year (seldom used).
For example, a wage rate of Rs. 70 per day is fixed in an industrial unit. Two workers A and B attend work for 28 and 16 days respectively. The wages as per time wage system will be Rs. 1960 and Rs. 1120 for A and B respectively. This method of wage payment does not give weightage to the quantity of goods produced by the workers.
The supervisor may ensure that workers do not waste their time and the quality of goods is also maintained. There are no hard and fast rules for fixing rates of wages. These may be decided according to the level of the past higher positions may be paid higher rates and vice-versa.
Wages are calculated in the method as follows:
Earnings = T × R where T stands for time spent and R is rate of pay.

Advantages:
1. Simplicity: The method of wage payments is very simple. The workers will not find any difficulty in calculating the wages. The time spent by a person multiplied by the rate will determine his wages.
2. Security: Workers are guaranteed minimum wages for the time spent by them. There is no link between wages and output, wages are paid irrespective of output. They are not supposed to complete particular task for getting their wages. They are sure to set certain wages at the end of a specified period of time spent in working.

Limitations:
1. Wastage of time: Workers may waste their time because they will not be following a target of production. Efficient workers may also follow slow workers because there is no distinction between them. This may lead to wastage of time.
2. Low production: Since wages are not related to output, production rate shall be low. The responsibility for increasing production may mostly lie on supervisors. Because of low production, overhead expenses per unit will go up, leading to higher production cost.

(b) Besides the monetary incentives, there are certain non-financial incentives which can satisfy the ego and self-actualization needs of employees. The incentives which cannot be measured in terms of money are under the category of non-monetary incentives. Whenever a manager has to satisfy the psychological needs of the subordinates, he makes use of non-financial incentives. Non-financial incentives can be of the following types:
1. Security of service: Job security is an incentive which provides great motivation to employees. If his job is secured, he will put maximum efforts to achieve the objectives of the enterprise. This also helps since he is very far off from mental tension and he can give his best to the enterprise.
2. Praise or recognition: The praise or recognition is another non-financial incentive which satisfies the ego needs of the employees. Sometimes praise becomes more effective than any other incentive. The employees will respond more to praise and try to give the best of their abilities to a concern.
3. Suggestion scheme: The organization should look forward to taking suggestions and inviting suggestion schemes from the subordinates. This inculcates a spirit of participation in the employees. This can be done by publishing various articles written by employees to improve the work environment which can be published in various magazines of the company. This also is helpful to motivate the employees to feel important and they can also be in search for innovative methods which can be applied for better work methods. This ultimately helps in growing a concern and adapting new methods of operations.
4. Job enrichment: Job enrichment is another non-monetary incentive in which the job of a worker can be enriched. This can be done by increasing his responsibilities, giving him an important designation, increasing the content and nature of the work. This way efficient worker can get challenging jobs in which they can prove their worth. This also helps in the greatest motivation of the efficient employees.

Teacher's Note:
a) Time rate system guarantees fixed income irrespective of output, which benefits quality but discourages fast workers.
b) Non-financial incentives satisfy psychological and social needs, which are critical for long-term motivation.

Question 4.
(a) Define leadership. Explain the importance of autocratic and democratic styles of leadership. [6 Marks]
(b) Define promotion. Discuss any three advantages and any three disadvantages of seniority based promotion. [8 Marks]

Answer:
(a) Leadership is the action of leading people in an organization towards achieving goals. Leaders do this by influencing employee behaviors in several ways. A leader sets a clear vision for the organization, motivates employees, guides employees through the work process and builds morale.

Styles of leadership:
Autocratic Leadership: It is a leader-oriented style. Autocratic leaders make decisions without consulting their team members, even if their input would be useful. This can be appropriate when you need to make decisions quickly, when there is no need for team input, and when team agreement is not necessary for a successful outcome. However, this style can be demoralizing, and it can lead to high levels of absenteeism and staff turnover.
Democratic Leadership: It is participation-oriented leadership. Democratic leaders make the final decisions, but they include team members in the decision-making process. They encourage creativity, and people are often highly engaged in projects and decisions. As a result, team members tend to have high job satisfaction and high productivity. This is not always an effective style to use, though, when you need to make a quick decision.

(b) Promotion refers to upward movement in present job leading to greater responsibilities, higher status and better salary. Promotion may be temporary or permanent depending upon the organizational requirement. According to Clothier and Spriegel, promotion is the transfer of an employee to a job which pays more money or one that carries some preferred status.

Advantages of Seniority based Promotion:
1. It is an objective means of distinguishing among personnel. Under this criterion it is not the management but the system which rank individuals.
2. The measurement with this criterion is both simple and exact.
3. The criterion is in consonance with our culture in which seniority is respected in all walks of life.

Disadvantages of Seniority Based Promotion:
1. Excessive emphasis on seniority leads to the promotion of incompetents. Oldest is not always the ablest. Accumulation of years of experience or length of service does not invariably produce ability.
2. When seniority is the only deciding factor in promotion, initiative inevitably withers away. Human nature being what it is, few people will take the trouble of qualifying themselves for the next rung up the ladder if they can achieve the same goal merely by putting in time.
3. The seniority criterion adversely affects the morale of meritorious workers and drives the ambitious and able men, with little service, out of the organization.

Teacher's Note:
a) Leadership styles dictate how authority is exercised and how subordinates participate.
b) Seniority-based promotion ensures certainty and fairness of tenure but compromises merit and efficiency.

Question 5.
(a) Explain video conferencing. Discuss any two advantages of using it in business world. [6 Marks]
(b) Discuss the advantages of written communication. [8 Marks]

Answer:
(a) Video Conferencing service allows multiple participants to converse with each other regardless of their location through the video end-points or personal computers. It involves video and audio communication. It is about connecting people. A video conference subscriber can add two or more video participants in a particular conference. The customers can schedule their video conferences through the Web. The video conferencing service can be availed by any user through IP or ISDN interface.

Advantages of VC for Business World:
1. Significant Travel Savings: The constant climb of air travel prices barely seems like news anymore, and smart organizations are finding alternatives. Not only is video conferencing a direct replacement for many in-person business trips, but because there is virtually no cost to add additional key employees to a virtual meeting, you can easily bring the right team together.
2. Increased Productivity: Everyone has experienced the classic never-ending conference call from hell, and video conferencing all but eliminates those problems, even from large group calls. Important meetings are shorter and more effective. Video conferencing users report saving a minimum of two hours a week with the technology. The interactivity of group collaboration and document sharing greatly increases productivity.

(b) Advantages of written communication are:
- It serves as evidence of events and proceedings.
- It provides a permanency of record for future references.
- It reduces the possibility of misunderstanding and misinterpretation.
- It can save time when many persons must be contacted.
- It is reliable for transmitting lengthy statistical data.
- It appears formal and authoritative for action.

Teacher's Note:
a) Video conferencing bridges geographical distances and reduces travel expenses significantly.
b) Written communication provides legal validity and permanent record retention.

Question 6.
(a) What is an interview ? Explain any two advantages and any two disadvantages of conducting recruitment interviews. [6 Marks]
(b) Write short notes on: [8 Marks]
(i) Business Reply Card
(ii) Postal Order

Answer:
(a) An interview is a meeting between two or more persons (one is interviewer and the other is interviewee) for the purpose of getting a view of the person seeking a job (interviewee). It is a face-to-face communication, however, nowadays, some companies are interviewing the potential candidates by way of video conferencing.

Advantages of the interview method:
1. Very good technique for getting the information about the complex, emotionally laden subjects.
2. Can be easily adapted to the ability of the person being interviewed.

Disadvantages of the interview method:
1. Time consuming process.
2. Involves high cost.

(b) (i) Business Reply Card: These cards (may be envelopes or postcards) which are used by business firms to seek a reply from the target customer. The target customer may be a subscriber of any membership of the firm or purchaser of some goods or services. For the purpose, a business firm has to obtain a license from the Local Post Office by paying necessary fee. These business postcards do not bear any postage stamps and bears printed address of the company on it. Customer can send their reply/subscriptions etc. in them.
(ii) Postal Order: A postal order is an order issued by one post office on another to pay a certain sum of money to the payee on production of the order. Postal orders can be purchased in different denominations from post offices. It can be crossed also. It is valid for 6 months and can be renewed on payment of a nominal fee for another 6 months.

Teacher's Note:
a) Interviews permit two-way interaction and behavioral assessment of candidates.
b) Business reply cards encourage customer responses by eliminating postage cost barriers for the respondent.

Question 7.
(a) Explain the functions of business letters. [6 Marks]
(b) In connection with company meetings, write short notes on: [8 Marks]
(i) Proxy
(ii) Voting by Poll

Answer:
(a) Functions of business letters:
1. Wide Coverage: A business firm cannot sent its representatives to each and every area of operation. It can approach the persons and other firms through letters.
2. Exchange of Information: Business firms can exchange information with various parties with the help of letters. They can obtain crucial information from other firms with regard to credit worthiness of other parties.
3. Documentary Proof: Letters serve as documentary proof. Letters can be used as a documentary evidence in the Court of Law.
4. Economical: Letters are the economical way of written communication. A message on pages (up to 20 gm) can be sent in merely Rupees 5 envelope all over India.
5. Lasting Impact: Letters have long lasting impact on the readers. A verbal message may be misleading, but a written letter clears the complete picture.

(b) (i) Proxy: Proxy means substitute. Section 176 of the Companies Act provides that any member entitled to attend and vote a meeting of the company is entitled to appoint another person (whether a member or not) to attend a meeting and to vote instead of himself. A proxy so appointed shall not make any request to speak at the meeting. If the members are not satisfied with the result of voting by show of hands, they may demand voting by poll. On a poll, every member is entitled to cast votes in proportion to the number of shares held by him. A proxy can also cast a vote. A proxy is free to distribute his votes in the manner he likes.
(ii) Voting by poll may be demanded by:
- the chairman
- any five members present in person or by proxy and having the right to vote on the motion in question in case of a public limited company, or
- one member in case less than seven persons are present, if more than 7 members are present in case of a private limited company.

Teacher's Note:
a) Business letters establish formal commercial relationships and serve as legal evidence.
b) Proxy voting ensures shareholder representation when members cannot attend meetings personally.

Question 8.
(a) What is a pictogram ? State any four points to be considered while constructing it. [6 Marks]
(b) Draft an interview letter for the post of an accountant in your organization. [8 Marks]

Answer:
(a) A pictogram is a pictorial representation of statistical data. The number of pictures drawn are in proportion to the values of various items to be presented. Symbols are carefully selected to represent the statistical data correctly. Need of pictogram arises due to following reasons:
- Pictograms are attractive.
- They can display data in compact form.
- It is easy to visualize a pictogram.

Points to be considered while constructing a pictogram:
1. Selection of appropriate symbols that clearly represent the subject matter.
2. Maintaining a consistent scale where each symbol represents a fixed numerical quantity.
3. Keeping the size of symbols uniform across comparative data sets.
4. Providing a clear index or legend explaining the numerical value assigned to each symbol.

(b) EVERGREEN PUBLICATIONS (INDIA) PVT LTD
ND-200, TANDA ROAD
JALANDHAR - 144008
Email: evergreenpublicationsf@jla.net.in
Ref No.
Dated: 29.04.2015

Mrs Archita Jathar
742, Chandan Nagar
Jalandhar

Madam,

With reference to your application for the post of Office Assistant in our Company, we shall be glad if you call on us for a personal interview on 2nd May, 2015, at 11.00 am sharp in our office.

Please bring your relevant certificates and testimonials.

Yours faithfully,
(Vikas Sehgal)
Manager-Human Resources Division.

Teacher's Note:
a) Pictograms enhance data readability through intuitive pictorial representations.
b) Business interview letters must clearly state the date, time, venue, and documents required.