ISC Class 12 Business Studies Board Exam Question Paper 2023 with Solutions

ICSE Class 12 Business Studies Board Exam Question Paper with Solutions

SECTION A - 16 MARKS

Question 1

(i) According to Maslow, one of the human needs deals with the realisation of one's own potential. Name this human need. [1 Mark]

Answer: Self-actualisation need.

Teacher's Note:
a) Maslow's hierarchy places self-actualisation at the very top of motivational needs.
b) Students must remember the exact terms used in Maslow's theory to avoid losing marks.

(ii) Which barrier of communication can be overcome by using words familiar to the receiver? [1 Mark]

Answer: Semantic barrier.

Teacher's Note:
a) Semantic barriers arise due to problems and misunderstandings in the expression or interpretation of words.
b) Using simple and clear language helps ensure the message is understood correctly.

(iii) A report may have an attachment containing statistical data, tables, graphs, etc. What is this attachment known as? [1 Mark]

Answer: Appendix.

Teacher's Note:
a) An appendix provides supplementary material that is too detailed to include in the main text of the report.
b) Make sure not to confuse an appendix with a bibliography or footnote.

(iv) Which part of management is concerned with the employees and their interrelationship within the organisation? [1 Mark]

Answer: Human relations management / Personnel management / Human Resource Management.

Teacher's Note:
a) This branch focuses on employee welfare, morale, and interpersonal dynamics at work.
b) Keywords like employee relations and human element are vital for this concept.

(v) Expand FSSAI. [1 Mark]

Answer: Food Safety and Standards Authority of India.

Teacher's Note:
a) FSSAI is a statutory body established under the Food Safety and Standards Act, 2006.
b) Exact spelling of each word in the expansion is mandatory for full credit.

(vi) _________________ involves planning the requirement for staff in near future by the organisation. [1 Mark]

Answer: Manpower planning / Human resource planning.

Teacher's Note:
a) Human resource planning ensures the right number and kind of personnel at the right time.
b) It is the foundational step before recruitment and selection take place.

(vii) _________________ means permanent termination of an employee's services by an organisation due to economic reasons. [1 Mark]

Answer: Retrenchment.

Teacher's Note:
a) Retrenchment is distinct from dismissal, as it occurs due to surplus staff, financial crunch, or automation.
b) Students must clearly distinguish between dismissal, layoff, and retrenchment.

(viii) The _________________ style of leadership reduces resistance to change and increases acceptance of new ideas. [1 Mark]

Answer: Democratic / Participative.

Teacher's Note:
a) Participative leadership involves subordinates in decision making, fostering a sense of ownership.
b) This style is highly effective when introducing organisational changes.

(ix) _________________ provides life insurance cover to the employees under a single insurance policy. [1 Mark]

Answer: Group insurance.

Teacher's Note:
a) Group insurance schemes are commonly offered by employers as part of employee welfare benefits.
b) Premiums are often lower per individual compared to individual policies.

(x) A promotion policy which considers only select few employees as potential candidates for promotion is called a / an _________________ Policy. [1 Mark]
(A) Open
(B) Closed
(C) Confidential
(D) Secured

Answer: (B) Closed

A closed promotion policy restricts promotion opportunities to a very limited group or specific department.

Teacher's Note:
a) Closed promotion policies limit transparency within the internal recruitment process.
b) In contrast, open policies invite applications from all eligible employees.

(xi) Which of the following cannot be completely outsourced by an organisation? [1 Mark]
(A) Recruitment of clerical staff
(B) Tabulation of wages
(C) Training of data entry personnel
(D) Promotion of employees

Answer: (D) Promotion of employees

Promotion involves internal evaluation, performance review, and organizational authority which cannot be outsourced.

Teacher's Note:
a) Routine operational and administrative tasks can easily be outsourced to third-party vendors.
b) Core strategic and managerial decisions regarding employees remain strictly internal.

(xii) With reference to the types of Business Communication, identify the odd one out. [1 Mark]
(A) Formal Communication
(B) Internal Communication
(C) Diagonal Communication
(D) Oral Communication

Answer: (D) Oral Communication

Formal, internal, and diagonal are structural channels of communication, whereas oral is a medium based on expression.

Teacher's Note:
a) Communication types are classified based on direction, network, and expression medium.
b) Oral and written refer to the medium, while formal and diagonal refer to channels and direction.

(xiii) State whether the following are True or False.

(a) Staff Selection is a negative process. [1 Mark]

Answer: True.

Teacher's Note:
a) Selection involves eliminating unqualified candidates at various stages.
b) Recruitment is considered a positive process, while selection is negative.

(b) Public deposits are deposits made by the public in nationalised banks. [1 Mark]

Answer: False.

Teacher's Note:
a) Public deposits refer to unsecured fixed deposits raised directly by companies from the general public.
b) Deposits in nationalised banks are termed bank deposits, not public deposits in financial terminology.

(c) Under special circumstances, low morale of employees may lead to high productivity. [1 Mark]

Answer: False.

Teacher's Note:
a) Low employee morale generally leads to lower productivity, higher absenteeism, and labour turnover.
b) High productivity requires motivated and satisfied employees.

(d) Globalisation has increased competition among companies. [1 Mark]

Answer: True.

Teacher's Note:
a) Globalisation removes trade barriers and brings domestic and international players into the same market.
b) This heightened competition benefits consumers through better quality and lower prices.

SECTION B - 32 MARKS

Question 2

(i) State any four differences between Job Enlargement and Job Enrichment. [4 Marks]

Answer:

Teacher's Note:
a) Horizontal vs vertical loading is the key distinction examiners look for.
b) Students must present differences in tabular form for clarity and full marks.

OR

(ii) Give any four differences between Autocratic style of leadership and Democratic style of leadership. [4 Marks]

Answer:

Teacher's Note:
a) Focus on decision-making authority and communication flow when comparing leadership styles.
b) Tabular presentation ensures proper contrast between the two management approaches.

Question 3

Explain the relevance of the following in a selection procedure: [4 Marks]
(a) Preliminary Screening
(b) Final Interview

Answer:
(a) Preliminary Screening: It is done to eliminate unqualified or unfit job seekers based on the information supplied in the application forms. It saves time and cost for the organization by filtering out unsuitable candidates right at the beginning.
(b) Final Interview: It is the last formal interaction between the employer and the candidate before selection. It helps in assessing the overall personality, confidence, fit, and final suitability of the candidate for the job.

Teacher's Note:
a) Explain both terms clearly stating their specific purpose in the multi-step selection process.
b) Preliminary screening focuses on eliminating clearly unfit applicants, while the final interview confirms the best candidate.

Question 4

Briefly explain any two methods of Off the Job Training. [4 Marks]

Answer:
1. Vestibule Training: Employees are trained away from the actual workplace in a special setup or training center that replicates real equipment and machinery. This prevents disruption of regular work and avoids damage to expensive equipment.
2. Classroom Lectures / Conferences: Educational sessions conducted by experts where theoretical knowledge, concepts, and principles are taught to a group of trainees using audio-visual aids and discussions.

Teacher's Note:
a) Off-the-job training means training is conducted away from the actual floor of work.
b) Other valid methods include case studies, programmed instruction, and role playing.

Question 5

(i) Briefly explain the two factors as given by Herzberg, that affect satisfaction and dissatisfaction of employees. [4 Marks]

Answer:
1. Hygiene Factors (Maintenance factors): These factors do not motivate employees if present, but their absence causes dissatisfaction (e.g., salary, job security, working conditions, company policy).
2. Motivators (Satisfaction factors): The presence of these factors motivates employees to perform better and provides positive satisfaction (e.g., achievement, recognition, advancement, challenging work).

Teacher's Note:
a) Herzberg's Two-Factor Theory separates job dissatisfiers (hygiene) from job satisfiers (motivators).
b) Give examples for each factor to score full marks.

OR

(ii) In the recent past, new trends have emerged at workplaces. With reference to this statement, explain any two emerging trends in human resources. [4 Marks]

Answer:
1. Work From Home / Remote Working: Allowing employees to perform their duties from home or remote locations using digital collaboration tools, enhancing work-life balance.
2. Flexi-time: Giving employees flexibility regarding their working hours rather than adhering to rigid 9-to-5 timings, provided they complete their required hours.

Teacher's Note:
a) Emerging trends reflect technological advancements and changing workforce expectations.
b) Other valid points include gig economy, wellness programs, and virtual onboarding.

Question 6

(i) State any two objectives of Performance Appraisal. [2 Marks]

Answer:
1. To provide feedback to employees regarding their performance and help them improve.
2. To make decisions regarding promotions, transfers, salary increments, and terminations.

Teacher's Note:
a) Performance appraisal evaluates an employee's relative contribution to the organization.
b) Keep the objectives concise and clear.

(ii) What is meant by merit grading method of Performance Appraisal? [2 Marks]

Answer:
Merit grading is a method where employees are evaluated based on predetermined personal traits and qualities (such as initiative, reliability, attendance, and cooperation) and are graded into predefined categories or scales by their superiors.

Teacher's Note:
a) This method rates traits rather than actual output or targets achieved.
b) Focus on the evaluation of personal attributes in the definition.

Question 7

Define the following business entities: [4 Marks]
(i) Sole Proprietorship
(ii) Partnership

Answer:
(i) Sole Proprietorship: A form of business organization owned, managed, and controlled by a single individual who bears all the risks and receives all the profits.
(ii) Partnership: A relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all, formed under the Indian Partnership Act, 1932.

Teacher's Note:
a) Mention key elements like single ownership for sole proprietorship and mutual agency/agreement for partnership.
b) Citing the relevant Act adds weight to the partnership definition.

Question 8

State any four points highlighting the importance of e-business to the buyers. [4 Marks]

Answer:
1. Convenience: Buyers can shop 24x7 from anywhere without visiting physical stores.
2. Wide Choice: Access to a vast global market with a wide variety of products and services from different sellers.
3. Price Comparison: Consumers can easily compare prices, features, and reviews across multiple websites before purchasing.
4. Discounter Offers: E-business often offers better discounts, special deals, and lower prices due to lower overhead costs for sellers.

Teacher's Note:
a) Ensure points specifically highlight benefits to buyers, not sellers.
b) Keywords like convenience, variety, and comparison must be included.

Question 9

Briefly explain any two business regulators. [4 Marks]

Answer:
1. SEBI (Securities and Exchange Board of India): Regulates the securities market, protects investors' interests, and promotes the development of the stock market.
2. RBI (Reserve Bank of India): Regulates the entire banking and financial system of the country, issues currency, and controls credit.

Teacher's Note:
a) Business regulators are statutory bodies established to maintain fair play and protect stakeholders.
b) Other valid examples include IRDAI and TRAI.

SECTION C - 32 MARKS

Question 10

Elucidate any four methods of External Recruitment. [8 Marks]

Answer:
1. Direct Recruitment: Notice is placed on the notice board of the enterprise specifying details of jobs available, and job seekers assemble outside the premises on a specified date for selection (Walk-in interviews).
2. Advertisement: Publishing vacancies in newspapers, journals, or online portals detailing job requirements and organization details to attract a large pool of applicants.
3. Employment Exchange: Government-established offices that act as a link between job seekers and employers looking for personnel.
4. Campus Recruitment: Collaborating with educational institutes like universities, management institutes, and technical colleges to recruit fresh graduates directly.

Teacher's Note:
a) External recruitment involves sourcing candidates from outside the organization.
b) Students should state four distinct methods clearly with brief explanations.

Question 11

(i) (a) Explain piece rate system of wage payment. [2 Marks]

Answer:
Piece rate system is a method of wage payment where workers are paid according to the number of units or output produced, irrespective of the time taken to produce them.

Teacher's Note:
a) Emphasize that remuneration depends directly on output quantity.
b) This system encourages high productivity among workers.

(b) State any three merits and any three demerits of the Piece Rate System. [6 Marks]

Answer:
Merits:
1. Encourages High Production: Workers are motivated to produce more to earn higher wages.
2. Equitable Payment: Efficient workers are rewarded fairly for their hard work and skill.
3. Better Utilisation of Resources: Minimizes wastage of time and materials as workers focus on output.
Demerits:
1. Compromise on Quality: In a rush to produce more units, workers may compromise on product quality.
2. Strain on Workers: Excessive speed and continuous work can lead to fatigue, stress, and health issues.
3. Insecure Earnings: Workers' earnings fluctuate, causing financial insecurity during periods of low output.

Teacher's Note:
a) Clearly separate merits and demerits using headings or bullet points.
b) Three points for merits and three for demerits are required for full marks.

OR

(ii) (a) Define promotion. [2 Marks]

Answer:
Promotion refers to the upward movement of an employee from a lower job position to a higher job position involving higher responsibilities, higher status, and generally increased pay.

Teacher's Note:
a) Promotion is a key method of internal mobility and employee motivation.
b) Keywords like higher status, responsibility, and authority must be mentioned.

(b) State any three advantages and any three disadvantages of Merit based Promotion. [6 Marks]

Answer:
Advantages:
1. Encourages Efficiency: Motivates employees to perform better and improve their skills to earn promotion.
2. Best Utilization of Talent: Ensures capable and competent individuals occupy higher positions.
3. High Morale: Competent workers feel valued and satisfied when their hard work is recognized.
Disadvantages:
1. Demoralization of Senior Staff: Older, experienced employees bypassed due to lack of formal merit metrics may feel discouraged.
2. Subjectivity in Evaluation: Appraising merit can be subjective and prone to bias or favoritism by superiors.
3. Conflict and Jealousy: Can create friction and unhealthy competition among team members.

Teacher's Note:
a) Merit-based promotion focuses strictly on performance and ability rather than seniority.
b) Provide three distinct advantages and three disadvantages.

Question 12

You are employed as the Head of the Department of Mathematics in a school. You have decided to quit the job to pursue higher studies. Draft a Resignation Letter addressed to the Principal of the school. [8 Marks]

Answer:
[Sender's Address]
[Date]

The Principal,
[School Name],
[City]

Subject: Resignation from the post of Head of Department (Mathematics)

Respected Sir / Madam,

Please accept this letter as formal notification that I am resigning from my position as the Head of the Department of Mathematics at [School Name]. My last working day will be [Date, e.g., 30th November 2023], as per the notice period requirement.

I have decided to step down in order to pursue full-time higher studies to further my academic career. My time working at this institution has been immensely rewarding, and I am grateful for the opportunities, support, and guidance provided to me during my tenure.

I am fully committed to ensuring a smooth transition of responsibilities. I am ready to assist in handing over departmental duties and wrapping up pending curriculum work before my departure.

I wish the school and my colleagues continued success in the future.

Yours sincerely,
[Your Name]
Head of Department (Mathematics)

Teacher's Note:
a) A resignation letter must follow a formal business letter format including sender details, date, recipient, subject, polite tone, and proper sign-off.
b) Mentioning the reason (higher studies) and offering assistance with the transition shows professionalism.

Question 13

Read the passage given below and answer the questions that follow.
ABC Ltd. is a hardware manufacturing company listed on National Stock Exchange. The company operates only in Delhi-NCR. The management plans to expand their area of operation across the country. They require funds for their expansion plans.
Briefly explain each source of finance given below.
State whether these sources can be used by ABC Ltd. or not for raising funds. Give a reason to support your answer.
(i) Angel Investors [2 Marks]
(ii) Factoring [2 Marks]
(iii) Global Depository Receipts [2 Marks]
(iv) Loans from Financial Institutions [2 Marks]

Answer:
(i) Angel Investors:
- Explanation: Wealthy individuals who invest their personal capital in early-stage or start-up businesses in exchange for equity ownership.
- Applicability to ABC Ltd.: Cannot be used. Reason: ABC Ltd. is an established listed manufacturing company expanding operations, whereas angel investors typically fund startups.

(ii) Factoring:
- Explanation: A financial service where a firm sells its accounts receivable (debtors) to a financial intermediary (factor) at a discount for immediate cash.
- Applicability to ABC Ltd.: Cannot be used (as a long-term capital source). Reason: Factoring is a short-term working capital financing tool, whereas expansion requires long-term capital.

(iii) Global Depository Receipts (GDRs):
- Explanation: Negotiable instruments issued by a company abroad against its shares, denominated in US Dollars, enabling companies to raise capital in international markets.
- Applicability to ABC Ltd.: Can be used. Reason: ABC Ltd. is a listed company on the National Stock Exchange with sound standing, making it eligible to issue GDRs if it wishes to tap international markets.

(iv) Loans from Financial Institutions:
- Explanation: Term loans provided by specialized financial institutions (like IFCI, ICICI, IDBI) for long-term project finance, modernization, or expansion.
- Applicability to ABC Ltd.: Can be used. Reason: Financial institutions provide long-term funds required specifically for business expansion projects.

Teacher's Note:
a) Case-based questions require both a definition of the financial source and its logical applicability based on the company profile provided.
b) Distinguish clearly between short-term working capital needs and long-term expansion capital.