ISC Class 12 Business Studies Sample Paper 2024 with Solutions

BUSINESS STUDIES

Maximum Marks: 80
Time Allowed: Three Hours

SECTION A - 16 MARKS

Question 1

(i) Two-thirds of employees at Saturn Hotel are employed full-time. The remaining one third of employees are working on a regular basis but for lesser hours than the full-time staff. Name the emerging trend in human resources used by Saturn Hotel. [1 Mark]

Answer: Part-time employment / Flextime / Flexible work arrangement.

Teacher's Note:
a) Flexible work arrangements allow employees to work on a regular basis with reduced hours compared to full-time staff.
b) Students must ensure they use precise human resource terminology like part-time employment.

(ii) Which characteristic of Human Resource Management states that it is inherent in all organisations and at all levels? [1 Mark]

Answer: Pervasive.

Teacher's Note:
a) Pervasiveness means that Human Resource Management is required in all types of organizations and across all levels of management.
b) Remember that pervasive is a core characteristic applicable to several management functions as well.

(iii) Morale is the attitude of staff towards work, co-employees and the organisation. In this context, what does ‘friction among employees’ indicate? [1 Mark]

Answer: Low morale.

Teacher's Note:
a) Friction and conflicts among employees reflect a negative attitude and poor interpersonal relationships, which point towards low morale.
b) High morale is generally characterized by cooperation, harmony, and enthusiasm.

(iv) Expand CRISIL [1 Mark]

Answer: Credit Rating Information Services of India Limited.

Teacher's Note:
a) CRISIL is a leading credit rating agency in India that provides ratings, research, and risk and policy advisory services.
b) Spelling of each word in financial abbreviations like CRISIL must be memorised accurately.

(v) ___________________ incentives of motivation are tangible and measurable. [1 Mark]

Answer: Financial / Monetary.

Teacher's Note:
a) Financial incentives can be measured directly in terms of money, such as salary, bonus, and allowances.
b) Non-financial incentives, on the other hand, are psychological and difficult to measure directly in monetary terms.

(vi) The maximum number of members that a Private Limited Company can have is ______________. [1 Mark]

Answer: 200.

Teacher's Note:
a) According to the Companies Act, a private company restricts the right to transfer its shares and has a maximum limit of 200 members.
b) Do not confuse the maximum limit of a private company (200) with that of a public company, which has no maximum limit.

(vii) On the basis of _____________, communication may be classified as formal and informal. [1 Mark]

Answer: Organization structure / Relationship / Channels.

Teacher's Note:
a) Communication channels tied to official authority lines are formal, whereas those arising out of social interactions are informal.
b) Students should write precise terms such as 'organization structure' or 'flow of authority'.

(viii) __________________ appraisal evaluates the latent capacity of an employee. [1 Mark]

Answer: Potential.

Teacher's Note:
a) Potential appraisal focuses on identifying the hidden qualities and future capabilities of an employee for higher responsibilities.
b) Distinguish this from performance appraisal, which evaluates past performance against set standards.

(ix) Identify the terminal benefit paid to an employee who leaves the employment either after working for the specified number of years or on superannuation. [1 Mark]
(a) Provident Fund
(b) Public Provident Fund
(c) Voluntary Retirement Scheme
(d) Gratuity

Answer: (d) Gratuity

Gratuity is a statutory retirement benefit given by an employer to an employee for service rendered in the organization.

Teacher's Note:
a) Gratuity is paid upon retirement, resignation, superannuation, or death after completing a minimum specified period of continuous service.
b) Provident fund is a regular savings scheme, while VRS is an early retirement scheme.

(x) There was a major fire at the warehouse of Anil Auto Ltd. The management of the warehouse asked the Supervisor to investigate this incident and submit a report of the same. Which one of the following types of report does the Supervisor need to write? [1 Mark]
(a) A Routine report
(b) A Public Report
(c) An Informative Report
(d) An Interpretative Report

Answer: (d) An Interpretative Report

An interpretative report investigates a specific problem or incident, analyses facts, draws conclusions, and makes recommendations.

Teacher's Note:
a) Incident investigations require probing into causes and consequences, making it an interpretative report rather than just routine reporting.
b) Routine reports are submitted periodically without special investigative analysis.

(xi) Falguni wants to buy some wood for the furniture manufacturing unit of her company. She decides to write letters to various timber merchants to know the prices and availability of different kinds of wood. Identify the type of letter that Falguni needs to write to the timber merchants. [1 Mark]
(a) An enquiry letter
(b) A complaint letter
(c) A quotation letter
(d) An order letter

Answer: (a) An enquiry letter

An enquiry letter is written to gather information regarding prices, terms, and availability of goods from potential suppliers.

Teacher's Note:
a) Letters sent to check prices and stock before purchasing are always classified as business enquiries.
b) Quotations are sent by the seller in response to the buyer's enquiry letter.

(xii) Assertion : Maintenance factors are required to support the mental health of employees.
Reason : Dissatisfiers operate to dissatisfy the employees when they are absent but their presence does not motivate them. [1 Mark]
(a) Both Assertion and Reason are true, and Reason is the correct explanation for Assertion.
(b) Both Assertion and Reason are true, but Reason is not the correct explanation for Assertion.
(c) Assertion is true and Reason is false.
(d) Both Assertion and Reason are false.

Answer: (a) Both Assertion and Reason are true, and Reason is the correct explanation for Assertion.

Herzberg's hygiene or maintenance factors prevent job dissatisfaction and support mental health, though their mere presence does not actively motivate.

Teacher's Note:
a) Maintenance factors include salary, job security, and working conditions which maintain a baseline work environment.
b) The reason correctly explains why these factors are termed maintenance rather than motivators.

(xiii) State whether the following are True or False: [4 Marks]
(a) Retrenchment means the temporary removal of an employee from services due to economic reasons in a going concern. [1 Mark]
(b) Recruitment is a negative process whereas Selection is a positive process. [1 Mark]
(c) Business intermediaries are authorities appointed by the government to regulate organisations. [1 Mark]
(d) Job enlargement implies increasing the scope of the job by adding more tasks to it. [1 Mark]

Answer:
(a) False (Retrenchment is permanent termination of surplus staff, not temporary removal).
(b) False (Recruitment is a positive process while Selection is a negative process).
(c) False (Intermediaries are channel members assisting in distribution, not government regulatory authorities).
(d) True (Job enlargement involves horizontal loading by adding tasks of similar skill and responsibility levels).

Teacher's Note:
a) Read each statement carefully to identify conceptual inversions, such as reversing recruitment and selection processes.
b) Retrenchment is permanent retrenching of employees due to technological changes or economic downturns, not temporary suspension.

SECTION B - 32 MARKS

Question 2 [4 Marks]

(i) Name and explain any two sources of Internal Recruitment. [4 Marks]

Answer:
1. Promotion: Shifting an employee from a lower position to a higher position carrying higher responsibilities, status, and pay.
2. Transfer: Shifting an employee from one job, department, or branch to another without any significant change in status, responsibilities, or pay.

Teacher's Note:
a) Internal sources motivate existing employees and reduce induction costs.
b) Students must clearly name and explain both sources with distinct points.

OR

(ii) State any four merits of Written Communication. [4 Marks]

Answer:
1. Permanent Record: Written messages provide a permanent record that can be referenced for future use and legal evidence.
2. Clarity and Precision: Writing allows time for thought, resulting in carefully drafted, clear, and unambiguous messages.
3. Suitable for Distant Parties: It is ideal for communicating with people located far away without loss of content.
4. Accountability: Fixing responsibility is easier because messages are documented and signed by the sender.

Teacher's Note:
a) Emphasise how written communication minimizes misunderstandings through proper documentation.
b) List four distinct merits clearly to secure full marks.

Question 3 [4 Marks]

With reference to staff benefits, explain the following:
(i) Encashment of leave [2 Marks]
(ii) National Pension System [2 Marks]

Answer:
(i) Encashment of leave: It is a benefit where employees can surrender their accumulated unutilised earned leave and receive monetary compensation in lieu of taking time off.
(ii) National Pension System (NPS): It is a voluntary, long-term retirement savings scheme introduced by the government to enable systematic savings and provide regular pension post-retirement.

Teacher's Note:
a) Leave encashment rewards employees for working without taking all permissible leaves.
b) NPS is a contributory pension system regulated by PFRDA offering tax benefits.

Question 4 [4 Marks]

With the world going digital, e-Recruitment is on the rise. With reference to the above statement, give any two benefits and any two limitations each of e-Recruitment. [4 Marks]

Answer:
Benefits of e-Recruitment:
1. Wider Reach: It allows organisations to access a vast pool of global candidates through job portals and company websites.
2. Cost and Time Effective: It reduces administrative expenses and speeds up the screening and hiring process.
Limitations of e-Recruitment:
1. Digital Divide: Candidates lacking internet access or digital literacy are automatically excluded.
2. Unsuitable Applications: It often attracts a large volume of irrelevant applications, increasing the screening burden.

Teacher's Note:
a) Ensure two distinct benefits and two limitations are explicitly stated as requested in the question.
b) Highlight how online portals have revolutionized modern talent acquisition.

Question 5 [4 Marks]

(i) Give any four differences between Recruitment and Selection. [4 Marks]

Answer:

Teacher's Note:
a) Tabular format is ideal for differentiation questions to clearly contrast points.
b) Emphasize that recruitment creates a pool of candidates while selection narrows down that pool.

OR

(ii) State any four differences between Time-Rate System and Piece-Rate System of staff remuneration. [4 Marks]

Answer:

Teacher's Note:
a) Clearly distinguish between time-based and output-based remuneration systems.
b) Highlight how quality is prioritised in time-rates and quantity in piece-rates.

Question 6

(i) State any two features of Staff Motivation. [2 Marks]

Answer:
1. Psychological Phenomenon: Motivation is an internal psychological force that activates unfulfilled needs within an individual.
2. Complex and Dynamic Process: Human needs vary across individuals and change over time, making motivation a continuous process.

Teacher's Note:
a) Motivation drives individuals towards achieving organizational goals.
b) Mention two distinct characteristics clearly.

(ii) With reference to Financing, briefly explain factoring. [2 Marks]

Answer:
Factoring is a financial service where a business sells its accounts receivable (trade debts) to a financial institution (factor) at a discount for immediate cash liquidity.

Teacher's Note:
a) The factor takes responsibility for collecting receivables and managing credit risk.
b) It helps businesses improve their working capital cycle.

Question 7 [4 Marks]

With reference to job planning, explain the meaning and relevance of job description. [4 Marks]

Answer:
Meaning of Job Description: A job description is a formal written document that outlines the duties, responsibilities, reporting relationships, working conditions, and scope of a specific job.
Relevance of Job Description:
1. It provides clear guidance to employees regarding their expected duties and performance standards.
2. It helps in recruitment and selection by establishing clear qualification criteria for applicants.

Teacher's Note:
a) Job description defines the boundaries and expectations of a specific role.
b) Students must explain both the definition and at least two points of relevance to secure full marks.

Question 8

[Figure: Two leadership diagrams. Image A shows a single leader figure pointing down with the text 'Do 'X'', directing three subordinate figures below. Image B shows three subordinate figures looking up at a question box with the text 'Which is best, 'X' or 'Y'?', pointing up to a single leader figure.]

(i) Identify the two styles of leadership depicted in the above images. [2 Marks]

Answer:
Image A: Autocratic (or Authoritarian) leadership.
Image B: Democratic (or Participative) leadership.

Teacher's Note:
a) Autocratic leaders make decisions unilaterally without consulting subordinates.
b) Democratic leaders involve team members in decision-making and problem-solving.

(ii) State any one feature of each of the above styles of leadership. [2 Marks]

Answer:
1. Autocratic Leadership: Centralized decision-making where absolute authority rests with the leader.
2. Democratic Leadership: Decentralized decision-making encouraging group participation and two-way communication.

Teacher's Note:
a) Link the features directly to the visual representations provided in the question.
b) Keep explanations concise and focused on core leadership traits.

Question 9 [4 Marks]

State any two opportunities and any two threats of globalisation. [4 Marks]

Answer:
Opportunities of Globalisation:
1. Access to a vast global market and international customer base.
2. Facilitates technology transfer and inflow of foreign direct investment.
Threats of Globalisation:
1. Intense competition from multinational corporations can threaten domestic enterprises.
2. Risk of economic vulnerability due to dependence on global economic shocks.

Teacher's Note:
a) Globalisation integrates national economies into a global marketplace.
b) Give two distinct points for both opportunities and threats.

SECTION C - 32 MARKS

Question 10 [8 Marks]

According to Maslow's theory of Hierarchy of Needs, name and explain the human needs which arise after the physiological needs are met. [8 Marks]

Answer:
According to Maslow's Hierarchy of Needs, once physiological needs are satisfied, the next needs that emerge in sequence are:
1. Safety / Security Needs: These include security of job, physical safety, financial stability, and protection against emotional or physical harm.
2. Social / Affiliation Needs: Once safety needs are met, individuals seek love, affection, friendship, acceptance, and a sense of belonging within social and work groups.
3. Esteem Needs: These include self-respect, autonomy, status, recognition, prestige, and achievement from peers and superiors.
4. Self-Actualisation Needs: This is the highest level of need representing the drive to become what one is capable of becoming, achieving personal growth, and realizing one's full potential.

Teacher's Note:
a) Maslow's theory operates on the premise that unsatisfied needs motivate behaviour while satisfied needs no longer motivate.
b) Students must explain all four successive stages following physiological needs in correct order to secure full marks.

Question 11

(i) Briefly explain the following sources of Finance.
(a) Crowd funding. [2 Marks]
(b) Public Deposits [2 Marks]
(c) Discounting of bills of exchange [2 Marks]
(d) Retained profits [2 Marks]

Answer:
(a) Crowd funding: A method of raising capital through small contributions from a large number of individuals, typically via online platforms.
(b) Public Deposits: Unsecured short-term deposits raised directly from the general public by reputed companies offering attractive interest rates.
(c) Discounting of bills of exchange: A short-term financing method where a business encashes its trade bills before maturity from a bank for a nominal discount charge.
(d) Retained profits: Ploughing back a portion of undistributed net profits into the business as internal financing for expansion and growth.

Teacher's Note:
a) Each financing source serves different capital requirements ranging from short-term working capital to long-term equity.
b) Provide clear, concise explanations for each sub-part.

OR

(ii)
(a) What is meant by diagonal communication? [2 Marks]
(b) Explain any three barriers to Communication. [6 Marks]

Answer:
(a) Diagonal communication: Communication that takes place between employees at different levels across different departments or functional areas, bypassing formal hierarchical chains for speed.
(b) Barriers to Communication:
1. Semantic Barriers: Obstacles arising from misunderstandings of words, symbols, or technical jargon used in the message.
2. Psychological Barriers: Emotional states such as anger, mistrust, or premature evaluation that distort message reception.
3. Organisational Barriers: Rigid rules, complex hierarchies, and red tape that delay or restrict the free flow of information.

Teacher's Note:
a) Diagonal communication promotes cross-functional collaboration in modern flat organizations.
b) Explain any three standard communication barriers clearly with appropriate headings.

Question 12 [8 Marks]

A reputed English medium school requires fresh/experienced trained, graduate Science teachers for the Secondary Section of their school. Send your application with a full resume within seven days of this advertisement to P.O Box No. 007. With reference to the above advertisement given in XYZ newspaper, draft a suitable application letter. [8 Marks]

Answer:

A-14, Green Park
New Delhi - 110016
15th May, 2024

The Advertiser
P.O Box No. 007
XYZ Newspaper
New Delhi

Subject: Application for the post of Science Teacher (Secondary Section)

Sir/Madam,

In response to your advertisement in XYZ newspaper dated 12th May 2024 for the post of a trained graduate Science Teacher, I wish to offer my candidature for the same. I possess the requisite academic qualifications and teaching experience.

I have completed my B.Sc. (Physics Honours) and B.Ed. from Delhi University with first class. I have two years of teaching experience at a reputed senior secondary school, where I successfully handled science classes with excellent academic results.

I have enclosed my detailed resume for your perusal. If given an opportunity, I assure you of my utmost dedication and sincere commitment to the institution.

Thanking you.

Yours faithfully,
XYZ

RESUME

Teacher's Note:
a) Job application letters must follow a formal layout including sender address, receiver address, subject, salutation, body, and a structured resume.
b) Ensure all details specified in the prompt, such as P.O Box No. 007 and graduate Science teacher requirement, are correctly incorporated.

Question 13

Read the passage given below and answer the questions that follow.
Kapoor Garments is a well-known brand which manufactures clothes and sells them through their own showrooms. Recently, there was a major reshuffle in staff placements in Kapoor Garments.
Given below are some of the changes in staff placements at Kapoor Garments.
- Anamika, a Sales manager working in the X showroom was shifted to Y showroom as there was a huge footfall of customers in Y showroom.
- Abdul had been working at the Y showroom for the past 25 years. Lately, he began to experience joint pain due to advanced age and found it difficult to stand for the entire day. Hence, he was shifted to the Accounts Department.
- Charu was a short-tempered employee and could not handle customers. Therefore, she was shifted to the Purchase Department.
- Diana, who was due for promotion was shifted from one department to another after every two weeks.
- Ramesh, a housekeeping staff, was not shifted to any department but given an increase in salary.

(i) Identify the type of transfer that takes place in cases of Anamika, Abdul, Charu and Diana. [4 Marks]

Answer:
1. Anamika: Shifted to meet business needs or increase in customer volume, representing a Production / Remedial Transfer (or Replacement / Shift Transfer).
2. Abdul: Shifted due to health grounds / medical reasons, representing a Versatility / Remedial Transfer.
3. Charu: Shifted due to inability to handle customers, representing a Remedial / Personality adjustment Transfer.
4. Diana: Rotated across departments for development and testing prior to promotion, representing a Rotation / Versatility Transfer.

Teacher's Note:
a) Transfers serve various HR objectives such as adjusting to workload changes, accommodating health needs, and preparing employees for promotion.
b) Students must correctly identify each specific type of transfer corresponding to the four workplace scenarios.

(ii) Identify and briefly explain the concept with regard to the increase in Ramesh's salary. [2 Marks]

Answer:
Concept: Increment / Pay Hike / Financial Incentive.
Explanation: An increment is a periodic or performance-based increase in an employee's basic salary or remuneration without altering their job designation or responsibilities.

Teacher's Note:
a) Salary increases act as financial motivators rewarding service or cost-of-living adjustments.
b) Note that Ramesh was given a salary increase without any departmental transfer.

(iii) Distinguish between Transfer and Promotion. [2 Marks]

Answer:
1. Meaning: Transfer involves shifting an employee to a similar job with no significant change in status or salary, whereas promotion involves moving an employee to a higher position with increased responsibility, status, and pay.
2. Nature: Transfer is a lateral movement, whereas promotion is a vertical movement.

Teacher's Note:
a) Lateral versus vertical movement is the key distinction between transfer and promotion.
b) Provide clear comparative points to secure full marks.