ISC Class 12 Business Studies Sample Paper 2023 with Solutions

BUSINESS STUDIES

SECTION A - 16 MARKS

Question 1

(i) At which stage of the Selection Procedure is the minimum qualification of recruited candidates checked? [1 Mark]

Answer: Scrutiny of applications / Application Blank stage.

Teacher's Note:
a) The minimum qualification is checked at the very beginning of the selection process when application forms are screened.
b) Students often confuse this with the interview stage; ensure application scrutiny is mentioned accurately.

(ii) Name the first need as given in Maslow’s Hierarchy of Human Needs. [1 Mark]

Answer: Physiological needs.

Teacher's Note:
a) Physiological needs form the base of Maslow's pyramid, including basic survival requirements like food, water, and shelter.
b) Always quote the exact term from the hierarchy to avoid losing marks.

(iii) Which system of wage payment is supported by the Trade Unions? [1 Mark]

Answer: Time Rate System.

Teacher's Note:
a) Trade unions generally support the time rate system because it ensures wage security and prevents the exploitation of workers.
b) Piece rate is often resisted by unions as it can lead to unhealthy competition and insecurity among slower workers.

(iv) The Ministry of Corporate Affairs has sent the Certificate of Incorporation to ABC Ltd. via an email. Which online means of business has been used by the Ministry? [1 Mark]

Answer: B2G (Business to Government) commerce / B2B or B2G electronic transaction.

Teacher's Note:
a) Interactions between government bodies and business firms are classified under B2G (Business-to-Government) e-commerce.
b) Clearly distinguish between B2C, B2B, and B2G applications in e-business.

(v) What does the abbreviation HRA stand for? [1 Mark]

Answer: House Rent Allowance.

Teacher's Note:
a) HRA is a component of employee compensation given to meet accommodation expenses.
b) Memorize standard business and HR abbreviations as they frequently appear in objective questions.

(vi) Job Specification is a written statement of the ___________ required for performing a job. [1 Mark]

Answer: qualifications, skills, experience, and physical characteristics (or human qualities).

Teacher's Note:
a) Job specification focuses on the employee specifications needed for a role, unlike job description which focuses on job tasks.
b) Keywords like qualifications, experience, and skills must be included.

(vii) ___________ means integrating the economy of a country with the world economy. [1 Mark]

Answer: Globalisation.

Teacher's Note:
a) Globalisation refers to the opening up of the economy and integration with international markets.
b) Do not confuse globalisation with privatisation or liberalisation.

(viii) _________ means getting high end knowledge work done from an outside agency to improve the efficiency and quality of business. [1 Mark]

Answer: Knowledge Process Outsourcing (KPO).

Teacher's Note:
a) KPO involves high-end knowledge-intensive business processes such as research, analytics, and legal services.
b) Distinguish KPO clearly from basic Business Process Outsourcing (BPO).

(ix) __________ is a sheet containing full information related to the pay of all the employees working in the organisation. [1 Mark]

Answer: Pay roll.

Teacher's Note:
a) A payroll sheet records earnings, deductions, and net pay for all employees in a pay period.
b) Accurate payroll management is a critical function of human resource management.

(x) Which one of the following is a benefit of e-recruitment? [1 Mark]
(A) The cost of recruitment per candidate is high.
(B) It requires investment in creating websites and portals.
(C) It weeds out the unqualified candidates through filters in the system.
(D) Trade unions support e-recruitment.

Answer: (C) It weeds out the unqualified candidates through filters in the system.

Filtering resumes automatically using keywords and parameters reduces manual effort and improves efficiency.

Teacher's Note:
a) E-recruitment reduces costs and widens reach, making option C the correct benefit.
b) Options A and B describe drawbacks or investments rather than direct ongoing benefits.

(xi) Which of the following is NOT a component of the 360-degree appraisal? [1 Mark]
(A) Self Appraisal
(B) Industry Appraisal
(C) Peer Appraisal
(D) Superior Appraisal

Answer: (B) Industry Appraisal

Industry appraisal is not part of an internal performance evaluation feedback loop.

Teacher's Note:
a) 360-degree feedback includes evaluations from superiors, peers, subordinates, self, and sometimes customers.
b) Industry appraisal is an external market concept and does not feature in internal appraisal systems.

(xii) With reference to regulators, identify the odd one out of the following: [1 Mark]
(A) RBI
(B) LIC
(C) IRDA
(D) FSSAI

Answer: (B) LIC

LIC is a financial institution / life insurance corporation, whereas RBI, IRDA, and FSSAI are regulatory bodies.

Teacher's Note:
a) RBI regulates banking, IRDA regulates insurance, and FSSAI regulates food safety; all are regulators.
b) LIC is a regulated entity (market participant) rather than the regulator itself.

(xiii) State whether the following statements are True or False:
(a) A Public Limited Company should have a minimum number of two members. [1 Mark]

Answer: False (A public company requires a minimum of seven members).

Teacher's Note:
a) Private companies require a minimum of two members, whereas public companies require at least seven.
b) Read incorporation requirements carefully to avoid mixing up private and public company rules.

(b) Sound policies and practices of management are morale depressants. [1 Mark]

Answer: False (They are morale boosters).

Teacher's Note:
a) Good HR policies enhance employee motivation and job satisfaction.
b) Depressants lower morale, so sound practices are positive boosters.

(c) Under the democratic leadership style, the leader gives complete freedom to his followers. [1 Mark]

Answer: False (Complete freedom is given under the laissez-faire or free-rein leadership style).

Teacher's Note:
a) Democratic leaders consult subordinates in decision-making but retain ultimate authority, unlike free-rein leaders.
b) Distinguish clearly between democratic and laissez-faire leadership styles.

(d) Job Training is given to the new employees to familiarise them with the organisation. [1 Mark]

Answer: False (Orientation or induction training is given for familiarisation; job training is for skill enhancement).

Teacher's Note:
a) Orientation introduces new hires to the company environment, rules, and colleagues.
b) Job training specifically imparts technical skills required to perform the assigned job.

SECTION B - 32 MARKS

Question 2 [4 Marks]

(i) State any four merits of seniority-based promotion. [4 Marks]

Answer:
1. Objectivity and transparency: Length of service is an objective and verifiable criterion, reducing bias and favoritism in promotions.
2. Boosts morale and loyalty: Employees feel secure that their long service and experience will be duly rewarded, fostering organizational loyalty.
3. Rewards experience: Employees gain valuable practical knowledge over time, ensuring maturity in handling responsibilities.
4. Easy to understand and administer: The rules are simple, clear, and universally accepted, leaving little room for industrial disputes.

Teacher's Note:
a) Clearly state four distinct advantages of seniority-based promotions in bullet points.
b) Note that while objective, seniority can sometimes demoralize young, talented, and ambitious employees.

OR

(ii) Name and explain any two types of Reports. [4 Marks]

Answer:
1. Routine Reports: These are periodic reports submitted at regular intervals (daily, weekly, monthly, or annually) regarding routine operational activities, such as sales reports or attendance reports.
2. Special Reports: These are prepared for specific, non-recurring occasions or problems, such as a report investigating a sudden drop in production efficiency or evaluating the feasibility of a new project.

Teacher's Note:
a) Define the types clearly and provide brief business examples for each.
b) Ensure the distinction between periodic routine reporting and ad-hoc special investigations is highlighted.

Question 3 [4 Marks]

State any two professional and any two social significances of Human Resource Management. [4 Marks]

Answer:
Professional significance:
1. Optimum utilization of human resources: HRM ensures proper recruitment, training, and placement of personnel to maximize productivity.
2. Development of competencies: Continuous training and appraisal programs help employees upgrade their professional skills and career growth.
Social significance:
1. Employment generation: Effective HR planning creates diverse job opportunities for society.
2. Fair remuneration and welfare: HRM ensures fair wages, safe working conditions, and social security benefits, enhancing the standard of living of workers.

Teacher's Note:
a) Divide the answer clearly into professional and social headings as asked in the question.
b) Give two distinct points for each category to secure full marks.

Question 4 [4 Marks]

Money is not the only motivation for an employee.
With reference to the above statement, name and explain any two non-monetary incentives of motivation. [4 Marks]

Answer:
1. Status: Offering higher designation, authority, perks, and a better office cabin satisfies an employee's psychological and ego needs.
2. Job Enrichment / Job Security: Providing greater autonomy, challenging tasks, and confirmation of permanent service gives psychological stability and intrinsic motivation.

Teacher's Note:
a) Explain non-monetary incentives such as status, job security, employee participation, or recognition.
b) Emphasize that non-monetary incentives fulfill psychological, social, and emotional needs beyond financial compensation.

Question 5 [4 Marks]

(i) Briefly explain any two intermediaries of SEBI. [4 Marks]

Answer:
1. Stock Brokers: Registered intermediaries who act as agents for buyers and sellers of securities in the stock market.
2. Merchant Bankers: Institutions that manage public issues, underwriting, portfolio management, and corporate advisory services.

Teacher's Note:
a) Mention recognized intermediaries such as brokers, sub-brokers, merchant bankers, or underwriters.
b) Keep explanations concise and focused on their role in the securities market.

OR

(ii) Briefly explain the two types of retirement. [4 Marks]

Answer:
1. Superannuation (Normal Retirement): Retirement upon attaining the predetermined age of retirement as per the service rules of the organization.
2. Voluntary Retirement (VRS): Retirement taken by an employee voluntarily before reaching the age of superannuation, often as part of organizational downsizing or personal choice.

Teacher's Note:
a) Clearly distinguish between normal retirement (age-based) and voluntary retirement (choice or scheme-based).
b) Mention compulsory or forced retirement as another variant if required, but superannuation and VRS are the primary types.

Question 6

With reference to the selection procedure, explain the significance of:

(i) Application Blank. [2 Marks]

Answer:
1. It serves as a preliminary screening tool providing standardized biodata (education, experience, personal details) of the candidate.
2. It helps the employer assess suitability, verify minimum qualifications, and frame questions for the subsequent interview.

Teacher's Note:
a) Highlight that the application blank is a formal record filled by the candidate.
b) Keep points concise for a 2-mark sub-part.

(ii) Medical Examination. [2 Marks]

Answer:
1. It ensures that the candidate is physically and mentally fit to perform the specific job requirements.
2. It protects the organization from future liabilities arising from pre-existing illnesses or disability claims.

Teacher's Note:
a) State both the employer's benefit (fitness assessment) and risk protection.
b) Ensure direct relevance to the selection stage.

Question 7 [4 Marks]

Oral communication is often considered a non-reliable medium that has no legal proof. However, it remains the most popular method of communication in organisations.
Give any four reasons to support the above statements. [4 Marks]

Answer:
1. Speed and immediacy: Oral communication allows instant transmission of messages and rapid feedback without procedural delays.
2. Personal touch: It enables face-to-face interaction, allowing managers to observe body language, tone, and expressions, fostering better interpersonal relations.
3. Flexibility and clarity: Doubts and queries can be clarified immediately on the spot through two-way dialogue.
4. Economy: It saves time, stationery, and administrative costs compared to formal written correspondence.

Teacher's Note:
a) Focus on why oral communication is popular despite its lack of legal proof.
b) List advantages such as speed, feedback, flexibility, and personal connection.

Question 8

(i) What is the meaning of e-business? [1 Mark]

Answer: E-business refers to conducting business activities, commerce, and industry using electronic networks like the internet.

Teacher's Note:
a) Define e-business broadly to include not just buying and selling (e-commerce) but also customer service, production, and collaboration.
b) Keep the definition crisp and exact for 1 mark.

(ii) State any three features of e-business. [3 Marks]

Answer:
1. Ease of formation: It is relatively easy to start compared to traditional physical businesses.
2. Global reach: It transcends geographical boundaries, giving businesses access to a worldwide market.
3. Paperless society: Digital transactions significantly reduce dependence on paperwork and physical documentation.

Teacher's Note:
a) List any three distinct characteristics of electronic business.
b) Mention speed, 24/7 availability, or digital connectivity as valid alternative features.

Question 9

(i) What is meant by outsourcing? [2 Marks]

Answer: Outsourcing is the process of contracting non-core business activities and operational processes to specialized external agencies to improve efficiency and reduce costs.

Teacher's Note:
a) Emphasize that non-core functions are transferred to outside experts.
b) Mention cost reduction and core competency focus as key motives.

(ii) Name and explain any two parties involved in outsourcing. [2 Marks]

Answer:
1. Client / Outsourcing Organization: The original company that delegates its non-core business processes to an external service provider.
2. Service Provider / Vendor: The external specialist agency that undertakes and executes the outsourced processes.

Teacher's Note:
a) Identify the client and the vendor as the primary parties.
b) Briefly explain the role of each in 2 marks.

SECTION C - 32 MARKS

Question 10

(i) Define remuneration. [2 Marks]

Answer: Remuneration refers to the total compensation given to an employee in exchange for their services, comprising financial payments (wages, salaries, bonuses) and non-financial benefits (perks, allowances).

Teacher's Note:
a) Ensure the definition covers both monetary and non-monetary rewards.
b) Accurate terminology ensures full marks.

(ii) State any six distinctions between the Time Rate System and Piece Rate System of wage payment. [6 Marks]

Answer:

Teacher's Note:
a) Present differences in a clear tabular format covering at least six distinct points.
b) Ensure comparison parameters (basis, quality, wastage, suitability, unions, supervision) are clearly articulated.

Question 11

(i) (a) State any four differences between Angel Investors and Venture Capitalists. [4 Marks]

Answer:

Teacher's Note:
a) Tabulate four clear differences based on source, funding stage, amount, and involvement.
b) Ensure accurate business terminology is used.

(b) Briefly explain the process of financing a business through Retained Profits and Crowd Funding. [4 Marks]

Answer:
1. Retained Profits (Ploughing back of profits): A portion of net earnings is retained within the organization instead of being distributed as dividends. This acts as an internal, self-financing source for expansion and modernization without incurring interest or dilution of control.
2. Crowd Funding: A method of raising small amounts of capital from a large number of individuals, typically via internet platforms. Entrepreneurs pitch their ideas online to gather contributions from public supporters or investors.

Teacher's Note:
a) Explain both retained earnings (internal financing) and crowd funding (digital public financing) clearly.
b) Highlight the absence of interest burden in retained profits and the role of online platforms in crowd funding.

OR

(ii) Blake and Mouton have identified five combinations in their graphic model of alternative combinations of leadership styles or behaviours.
With reference to the above statement, explain any four such combinations. [8 Marks]

Answer:
1. Impoverished Management (1,1): Low concern for production and low concern for people. The leader exerts minimum effort to get required work done and maintain organization membership.
2. Country Club Management (1,9): High concern for people and low concern for production. The leader focuses exclusively on creating a friendly, comfortable atmosphere without worrying about output.
3. Task / Authority-Compliance Management (9,1): High concern for production and low concern for people. Work conditions are arranged in such a way that human elements interfere to a minimum degree.
4. Team Management (9,9): High concern for production and high concern for people. Trabajo is accomplished through committed people; interdependence through a common stake in organization purpose leads to relationships of trust and respect.

Teacher's Note:
a) Explain any four styles from the Managerial Grid (e.g., 1,1; 1,9; 9,1; 9,9; or 5,5 Middle of the Road).
b) Mention the coordinate numbers (concern for production, concern for people) for accuracy.

Question 12 [8 Marks]

Draft an interview letter for the post of Operations Manager in an MNC. [8 Marks]

Answer:

Global Ventures Inc.
B-42, Connaught Place, New Delhi - 110001
Email: hr@globalventures.com

Ref: GV/HR/2023/452
Date: October 15, 2023

Mr. Rajesh Sharma
12 A, Civil Lines
New Delhi - 110054

Subject: Call for Interview for the post of Operations Manager

Dear Mr. Sharma,

With reference to your application for the post of Operations Manager in our organization, we are pleased to invite you for a personal interview as per the schedule given below:

Date: October 25, 2023
Time: 10:30 AM
Venue: Conference Room, 3rd Floor, Global Ventures Inc., Connaught Place, New Delhi.

Please bring all your original educational certificates, experience testimonials, and a passport-size photograph along with this letter.

Kindly confirm your availability by email or telephone by October 20, 2023.

Yours sincerely,

(Signature)
A. K. Mehta
Head - Human Resources
Global Ventures Inc.

Teacher's Note:
a) Ensure all standard components of a formal interview letter are included: sender's address, date, receiver's address, subject, reference, clear timing, venue, and formal sign-off.
b) Maintain a professional and courteous tone.

Question 13

Big Zenith Ltd. is a highly reputed company that has recently made some new appointments.
The new employees were very happy on being recruited. In an informal gathering, they shared how they were recruited by the organisation. Mr. Abrar Ahmed, Senior Sales Manager said that he was vertically shifted to the post. Mr. Aman Varma said that he was introduced to the company by the present Sales Manager Mr. John D’Costa. Ms. Renu Arora said that she had applied through the newspaper and was appointed as Assistant HR Manager. Ms. Sarah Johnson said that she was directly recruited from IIM Ahmedabad when she was in the last semester of PGDBM.

Identify and briefly explain the source of recruitment used for:

(i) Mr. Abrar Ahmed. [2 Marks]

Answer:
Source: Promotion (Internal Source).
Explanation: Vertical shifting of an employee to a higher position with higher status, responsibility, and pay is known as promotion.

Teacher's Note:
a) Identify promotion correctly as an internal source of recruitment.
b) Explain the vertical movement aspect clearly.

(ii) Mr. Aman Varma. [2 Marks]

Answer:
Source: Recommendation of existing employees (Internal / External Referral Source).
Explanation: Present employees recommend their friends, relatives, or acquaintances for vacancies in the organization.

Teacher's Note:
a) Identify employee recommendations / references correctly.
b) Note that recommendations bridge internal connections with candidate sourcing.

(iii) Ms. Renu Arora. [2 Marks]

Answer:
Source: Advertisement (External Source).
Explanation: Vacancies are advertised in newspapers, journals, or media to attract a large number of qualified external applicants.

Teacher's Note:
a) Identify newspaper advertising as an external recruitment source.
b) Highlight its wide reach.

(iv) Ms. Sarah Johnson. [2 Marks]

Answer:
Source: Campus Recruitment (External Source).
Explanation: Organizations visit educational and management institutes (like IIMs) to recruit students directly before they complete their professional courses.

Teacher's Note:
a) Identify campus placement / campus recruitment correctly.
b) Mention that it establishes a direct link between colleges and corporate employers.