ISC Class 12 Business Studies Sample Paper 2025 with Solutions

SECTION A - 16 MARKS

Question 1

(i) In order to adapt to changing work dynamics and provide flexibility to its employees, ABC Consulting Pvt. Ltd. decided to allocate a project to a group comprising employees in geographically dispersed settings.
Identify the emerging trend in Human Resources used by the ABC Consulting Pvt. Ltd. [1 Mark]

Answer: Virtual Teams

Teacher's Note:
a) Virtual teams consist of members who interact through digital communication technologies across geographical boundaries.
b) Ensure students understand modern HR trends like remote working and virtual collaboration.

(ii) Which characteristic of Human Resource Management deals with providing competent employees to an organisation, both now and in the future? [1 Mark]

Answer: Future-oriented

Teacher's Note:
a) HRM is proactive and focuses on anticipating future workforce requirements.
b) Do not confuse this with routine administrative personnel functions.

(iii) Observe the relation between the first two words and then fill in the fourth word.
(a) Recruitment: Positive :: Selection: ___________.
(b) Verbal communication : Oral communication :: Non verbal communication: ___________ [2 Marks]

Answer:
(a) Negative
(b) visual communication

Teacher's Note:
a) Recruitment invites maximum applicants (positive process), whereas selection rejects unsuitable candidates (negative process).
b) Non-verbal communication includes visual cues, facial expressions, and body language.

(iv) As per Maslow's classification of Human Needs, safety needs consist of physical safety and ______________ safety. [1 Mark]

Answer: economic

Teacher's Note:
a) Safety and security needs cover both physical safety from harm and economic safety such as job security.
b) Students must memorize all levels of Maslow's hierarchy in correct sequence.

(v) The Partnership Act limits the maximum number of partners in a non-banking partnership firm to _________________. [1 Mark]

Answer: fifty / 50

Teacher's Note:
a) As per the Companies Miscellaneous Rules, the maximum limit is 50 partners.
b) Banking partnerships have a lower limit of 10 partners.

(vi) On the basis of _____________, Communication may be classified as internal and external. [1 Mark]

Answer: area of operation

Teacher's Note:
a) Internal communication takes place within the organization, while external communication involves outside parties.
b) Focus on the exact classification basis specified in textbooks.

(vii) ________________ method of Performance Appraisal eliminates the subjective bias on the part of raters. [1 Mark]

Answer: Merit grading

Teacher's Note:
a) Merit grading or objective appraisal systems minimize personal bias.
b) Subjectivity is a major limitation of traditional rating scales.

(viii) Casual leave is a type of leave granted to an employee that can be availed in an unexpected situation or an unforeseen event.
Select the MOST APPROPRIATE instance for casual leave.
(a) Mr. Aggarwal avails one week leave to take care of his wife who is in her last week of pregnancy.
(b) Ms. Khan takes one day leave to take her mother to the hospital as she had slipped and injured herself.
(c) Mr. D'Mello takes three days leave for his knee replacement surgery.
(d) Ms. Prabhjot takes four days leave to visit her parents in the village. [1 Mark]

Answer: (b) Ms. Khan takes one day leave to take her mother to the hospital as she had slipped and injured herself.

Casual leave is meant for short, unforeseen personal emergencies.

Teacher's Note:
a) Maternity, planned surgery, and long family visits fall under specific leave categories like maternity leave, medical leave, or earned leave.
b) Casual leave is typically of short duration for sudden emergencies.

(ix) Mr. Rathi, CEO of a firm, frequently travels for work related to business. However, he ensures that he is present in office every Monday to monitor business operations. On his arrival, his personal assistant, Mr. Varma has to submit a report on the working of the previous week.
Which one of the following reports does Mr. Varma submit?
(a) Routine Report
(b) Special Report
(c) Statutory Report
(d) Public Report [1 Mark]

Answer: (a) Routine Report

Weekly operational reports submitted regularly are routine reports.

Teacher's Note:
a) Routine reports are prepared at regular, prescribed intervals.
b) Special reports are prepared for specific, non-recurring situations.

(x) Staff dismissal involves permanent separation of an employee from the payroll. It is a drastic step and should therefore be resorted to with great care.
Which one of the following situations indicates staff dismissal?
(a) When an employee has reached the age of superannuation.
(b) When an employee fails to work according to the job requirements.
(c) When there is an acute shortage of raw material to continue work in the factory.
(d) When the employer relieves certain employees to reduce the cost of production. [1 Mark]

Answer: (b) When an employee fails to work according to the job requirements.

Dismissal is a punitive measure for poor performance or misconduct.

Teacher's Note:
a) Superannuation is retirement, shortage of material leads to lay-off, and cost reduction leads to retrenchment.
b) Dismissal is strictly disciplinary.

(xi) Read the two statements given below and choose the correct option.
Statement I: In order to ensure effective learning, a teacher must minimise the barriers to communication.
Statement II: Communication is incomplete without feedback.
(a) Statement I is true but Statement II is false.
(b) Statement I is false but Statement II is true.
(c) Both Statement I and Statement II are true, and Statement II is the correct explanation for Statement I.
(d) Both Statement I and Statement II are true. But Statement II is not the correct explanation for Statement I. [1 Mark]

Answer: (d) Both Statement I and Statement II are true. But Statement II is not the correct explanation for Statement I.

Both statements are individually correct facts about communication.

Teacher's Note:
a) Statement II does not serve as the direct cause or explanation for Statement I.
b) Students must carefully analyze the logical relationship between statements in assertion-reason or dual statement questions.

(xii) State whether the following are True or False:
(a) SEBI regulates the prices of the securities listed in the market.
(b) A public deposit is a deposit made by public in the nationalised banks.
(c) Human Resource Management is significant to an enterprise since it provides psychological satisfaction to people.
(d) Venture Capital is one of the primary sources of finance for Start-ups. [4 Marks]

Answer:
(a) False
(b) False
(c) False
(d) True

Teacher's Note:
a) SEBI regulates securities markets and protects investors, but does not fix security prices directly.
b) Public deposits are unsecured fixed deposits raised directly by companies from the public, not banks.

SECTION B - 32 MARKS

Question 2

(i) Briefly explain any two limitations of e-Recruitment as a source of Staff Recruitment. [4 Marks]

Answer:
1. Access barrier: Both the employer and prospective employees must have reliable access to the internet.
2. Digital literacy: Both parties must possess the required technical competence to navigate online portals and websites.

Teacher's Note:
a) Candidates must state any two valid limitations with appropriate key phrases.
b) Headings are optional, but explanations must be precise.

OR

(ii) Briefly explain any two barriers to Communication. [4 Marks]

Answer:
1. Semantic Barriers: Arise due to misunderstanding of words, symbols, or language used in the message between the sender and receiver.
2. Organizational Barriers: Created by rigid rules, complex hierarchies, and organizational policies that obstruct smooth flow of information.

Teacher's Note:
a) Clearly name the barrier and provide a concise explanation.
b) Common categories include semantic, physical, organizational, and socio-psychological barriers.

Question 3

With reference to staff selection, explain the significance of the following.
(i) Application Blank [2 Marks]
(ii) Placement [2 Marks]

Answer:
(i) Application Blank: Helps in weeding out unsuitable candidates and provides standardized data for framing interview questions.
(ii) Placement: Ensures proper matching of employee skills with job requirements, leading to increased work efficiency and reduced employee turnover.

Teacher's Note:
a) Focus strictly on the significance and relevance in the selection process rather than just defining the terms.
b) Emphasize how application blanks filter candidates and placement ensures job fit.

Question 4

State any four requirements of a sound promotion policy. [4 Marks]

Answer:
1. Clear Criteria and Eligibility: The policy must explicitly define the standards and qualifications required for promotion.
2. Transparency: The rules and procedures must be open and clearly communicated to all employees.
3. Equitable and Non-Discriminatory: Promotions must be based on merit and performance without bias or favoritism.
4. Appeal Mechanism: An effective grievance handling or appeal procedure should exist for employees who are not promoted.

Teacher's Note:
a) Each requirement must be explained in a sentence or two.
b) A fair promotion policy boosts employee morale and organizational commitment.

Question 5

(i) Distinguish between Authoritative and Democratic styles of Leadership on the following basis:
(a) Effect on motivation and morale
(b) Development of subordinates
(c) Speed of work
(d) Resistance to change [4 Marks]

Answer:

Teacher's Note:
a) Differences must explain both concepts clearly in complete sentences for each basis.
b) Explaining only one concept does not constitute a valid distinction.

OR

(ii) Distinguish between Piece rate system and Time rate system of remuneration on the following basis:
(a) Quality of work
(b) Wastage of resources
(c) Attitude of Trade Unions
(d) Weightage to efficiency [4 Marks]

Answer:

Teacher's Note:
a) Both remuneration systems must be contrasted clearly across all four parameters.
b) Ensure comparative sentences are written for each point.

Question 6

What is meant by the following terms with reference to the sources of finance?
(i) Peer to peer Funding [2 Marks]
(ii) Factoring [2 Marks]

Answer:
(i) Peer to Peer Funding: Involves direct lending and borrowing between individuals or small businesses through online platforms without involving traditional financial institutions.
(ii) Factoring: A financial strategy where a business sells its accounts receivable (invoices) to a third party (factor) at a discount to obtain immediate cash flow while transferring collection risk.

Teacher's Note:
a) Definitions must include at least two distinctive features for each term.
b) Highlight the role of technology in peer-to-peer lending and working capital conversion in factoring.

Question 7

Briefly outline the role of Job Analysis in the following processes.
(i) Recruitment and Selection [2 Marks]
(ii) Training and Development [2 Marks]

Answer:
(i) Recruitment and Selection: Job analysis serves as a realistic basis for hiring by defining job expectations and helping create targeted interview questions and tests.
(ii) Training and Development: Helps in identifying training needs, designing appropriate curriculums, and evaluating training effectiveness.

Teacher's Note:
a) Do not write general definitions of job analysis; focus strictly on its functional role in the specified HR processes.
b) Connect job analysis directly to skill gap identification and selection accuracy.

Question 8

Elements of Communication Process
[Figure: Illustration showing communication stages labeled a, b, c, d, and e on a mobile interface and user icons]
(i) Identify elements a, b, c and d in the communication process. [2 Marks]
(ii) Evaluate the significance of element 'e' in the communication process. [2 Marks]

Answer:
(i) Element a: Source / Sender
Element b: Encoding / Message
Element c: Channel and Medium
Element d: Receiver
(ii) Significance of element 'e' (Feedback): Feedback judges the effectiveness of the message, ensures two-way communication, builds relationships, resolves conflicts, and confirms mutual understanding.

Teacher's Note:
a) Element identification must follow standard communication model terminology.
b) Feedback completes the communication loop, transforming a one-way transmission into interactive dialogue.

Question 9

ABC Ltd., a well-known IT firm has opened a new branch in Ahmednagar. In order to maintain their standards, the Company is committed to hiring the best brains in the field.
As the HR Manager of ABC Ltd., suggest any two strategies that the firm can use to attract suitable candidates. Justify your suggestion. [4 Marks]

Answer:
1. Campus Recruitment: Partnering with premier technical institutes to directly tap into fresh, highly qualified talent.
2. Advertisements in leading professional portals and newspapers: To reach a wide pool of experienced professionals across the IT sector.

Teacher's Note:
a) Students can also suggest placement agencies or e-recruitment.
b) Justification must link the strategy to hiring top-tier IT talent effectively.

SECTION C - 32 MARKS

Question 10

(i) Name and explain any two types of training. [4 Marks]

Answer:
1. Orientation / Induction Training: Imparted to new employees to introduce them to the organization's rules, policies, culture, and colleagues.
2. Refresher Training: Conducted for existing employees to update their knowledge and skills in line with technological advancements.

Teacher's Note:
a) Name and briefly explain two distinct types of training.
b) Ensure methods of training (like vestibule or apprenticeship) are not confused with types of training.

(ii) Draw a specimen of a payslip. [4 Marks]

Answer:

ABC ENTERPRISES LTD. - MONTHLY PAYSLIP

Teacher's Note:
a) Payslip must incorporate organization name, employee details, earnings, deductions, and net salary totals.
b) Formatting as a clean statement table ensures maximum marks.

Question 11

(i) Briefly explain the following:
(a) Outsourcing [2 Marks]
(b) e-business [2 Marks]
(c) Globalisation [2 Marks]
(d) Communication [2 Marks]

Answer:
(a) Outsourcing: Contracting out non-core business functions to outside third-party experts to leverage specialized knowledge and reduce operating costs.
(b) e-business: Conducting business activities, transactions, and operations through electronic and telecommunication networks.
(c) Globalisation: Integration of a country's economy with the world economy, treating the entire world as a single market.
(d) Communication: An exchange of facts, ideas, opinions, or emotions between two or more parties to create mutual understanding.

Teacher's Note:
a) Explain each concept concisely in a paragraph incorporating its core features.
b) Ensure commercial terminology is accurate.

OR

(ii) Briefly explain the following:
(a) Business Regulators [2 Marks]
(b) Business Intermediaries [2 Marks]
(c) Reports [2 Marks]
(d) Group Insurance [2 Marks]

Answer:
(a) Business Regulators: Government-appointed bodies (like RBI, SEBI) established to regulate specific sectors and protect stakeholder interests.
(b) Business Intermediaries: Individuals or organizations (like stockbrokers, merchant bankers) acting as middlemen between economic groups.
(c) Reports: Organized statements of facts prepared after investigation regarding a specific subject for interested persons.
(d) Group Insurance: Insurance coverage provided for a group of employees, typically funded by the employer, offering cost-effective protection.

Teacher's Note:
a) Definitions must cover key defining features and examples where applicable.
b) Emphasize the regulatory and intermediary roles in modern commerce.

Question 12

Ms. Chopra has applied for the post of an accountant in a firm in response to its advertisement in a daily newspaper.
Design the letter to be sent by the firm to Ms. Chopra, as she fulfils the criteria for recruitment. [8 Marks]

Answer:
ABC ENTERPRISES LIMITED
24, MG Road, Fort, Mumbai - 400001
--------------------------------------------------
Ref: ABC/HR/2025/112
Date: March 28, 2025

Ms. Sunita Chopra
12, Park View Apartments
Andheri West, Mumbai - 400058

Subject: Call for personal interview for the post of Accountant

Dear Ms. Chopra,

With reference to your application in response to our advertisement in 'The Daily News' dated March 15, 2025, we are pleased to inform you that you fulfill our selection criteria for the post of Accountant.

You are requested to appear for a personal interview with the Selection Committee at our corporate office on April 8, 2025, at 10:30 AM.

Please bring along original copies of your academic certificates, experience testimonials, and a passport-size photograph. Please note that no TA/DA will be admissible for the journey.

Yours faithfully,

(Signature)
R. K. Malhotra
Head - Human Resources
For ABC Enterprises Limited

Teacher's Note:
a) The letter must be drafted on a professional letterhead format including all formal components (reference number, date, address, subject, salutation, body, and authorized signature).
b) Consistent left alignment and courteous tone are essential.

Question 13

Read the passage given below and answer the questions that follow.
IBM's CEO, Arvind Krishna, says, employees' careers could suffer if they work from home. Krishna told Bloomberg in the Monday interview: "In the short term you probably can be equally productive, but your career does suffer. Moving from there to another role is probably less likely because nobody's observing them in another context," he said. "It will be tougher. Not impossible, but probably a lot tougher."
He added that remote workers do not acquire skills, such as dealing with difficult clients.
Source (edited): https://www.businessinsider.in/careers/news/ibm-chief-says-employees-ca…
(i) Identify and explain the type of staff appraisal Arvind Krishna is referring to. [4 Marks]
(ii) What is meant by work from home? [2 Marks]
(iii) Explain the two ways by which an employee can be moved from one position / department to another in an organisation. [2 Marks]

Answer:
(i) Potential Appraisal: Arvind Krishna is referring to potential appraisal, which assesses an employee's future capabilities and suitability for higher-level roles and promotions within an organization.
(ii) Work from home: A work arrangement where employees perform their job duties remotely from their residences using digital collaboration tools and internet connectivity.
(iii) The two ways to move an employee within an organization are:
1. Promotion: Advancement of an employee to a higher position with increased salary, status, and responsibilities.
2. Transfer: Lateral movement of an employee from one department or location to another without significant change in pay, status, or responsibilities.

Teacher's Note:
a) Answers must be derived directly from the passage context combined with standard business studies principles.
b) Distinguish clearly between potential appraisal, promotion, and transfer.