Business Studies Class 12 ISC Board Paper Solution 2023

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Business Studies Class 12 ISC Board Paper Solution 2023


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]

Ans: Self-actualization need

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

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

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

Ans: Human Resource Management
(v) Expand FSSAI. [1]

Ans: Food Safety and Standards Authority of India

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

Ans: Manpower Planning

(vii) _______________ means permanent termination for an employee’s services by an organisation due to economic reasons. [1]

Ans: Retrenchment

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

Ans: Participative Leadership

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

Ans: Group Life Insurance

(x) A promotion policy which considers only select few employees as potential candidates for promotion is called a/ an _______________ Policy. [1]

(a) Open

(b) Closed

(c) Confidential

(d) Secured

Ans: (b)Closed

(xi) Which of the following cannot be completely outsourced by an organisation? [1]

(a) Recruitment of electrical staff

(b) Tabulation of wages

(c) Training of data entry personnel

(d) Promotion of employees

Ans: (d) Promotion of Employees

(xii) With reference to the types of Business Communication, identify the odd one out. [1]

(a) Formal Communication

(b) Internal Communication

(c) Diagonal Communication

(d) Oral Communication

Ans: (b) Internal Communication

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

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

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

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

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

Ans: (a) False. Staff Selection is a positive process.

(b) True.

(c) True.

(d) True.


Question 2 [4]

(i) State any four differences between Job Enlargement and Job Enrichment.


(ii) Give any four differences between Autocratic style of leadership and Democratic style of leadership.

Ans: (i)

Job EnlargementJob Enrichment
Job enlargement involves adding more tasks of similar nature to an employee’s job.job enrichment involves adding more responsibilities and challenges to an employee’s job.
Job enlargement is a horizontal expansion of the job.job enrichment is a vertical expansion of the job.
Job enlargement does not involve giving the employee more autonomy or control.Job enrichment involves giving the employee more autonomy and control.
Job enlargement may lead to boredom and monotony.Job enrichment may lead to increased motivation and job satisfaction.

Ans: (ii)

Autocratic style of leadershipDemocratic style of leadership
Autocratic style of leadership is more directive and controlling.Democratic leaders involve employees in the decision-making process.
Autocratic leaders make decisions on their own.Democratic leaders value and encourage employee opinions.
Autocratic leaders may not value employee opinions.Democratic leaders are more flexible and adaptable to change.
Autocratic leaders are less flexible and adaptable to change.democratic leaders are more flexible and adaptable to change.

Question 3 [4]

Explain the relevance of the following in a selection procedure:

(a) Preliminary Screening

(b) Final Interview

Ans: (i) Preliminary Screening is relevant in a selection procedure because it helps in eliminating unqualified and unsuitable candidates at an early stage of the selection process. It saves time and effort by ensuring that only qualified candidates move on to the next stage of the selection process.

Ans: (ii) Final Interview is relevant in a selection procedure because it helps in assessing the candidate’s suitability for the job and the organization. It provides an opportunity for the employer to clarify any doubts or concerns regarding the candidate’s qualifications, experience, and suitability for the job.

Question 4 [4]

Briefly explain any two methods of Off the Job Training.

Ans: Two methods of Off the Job Training are:

  1. Classroom Training: Classroom training is a method of training that takes place outside the workplace. It involves classroom lectures, discussions, and exercises that are designed to enhance the knowledge and skills of employees. Classroom training can be conducted at external training institutes or at the employer’s premises.
  2. Simulation Training: Simulation training is a method of training that involves creating a realistic work environment where employees can practice and develop their skills. This method of training is particularly useful for jobs that involve high-risk situations or complex procedures. Simulation training can be conducted at external training institutes or at the employer’s premises.

Question 5 [4]

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


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

Ans: (i) Two factors given by Herzberg that affect satisfaction and dissatisfaction of employees are:

  1. Hygiene factors: These are the factors that do not motivate employees but are necessary to prevent dissatisfaction. Examples of hygiene factors include salary, working conditions, job security, and company policies.
  2. Motivational factors: These are the factors that motivate employees and lead to job satisfaction. Examples of motivational factors include recognition, responsibility, growth opportunities, and achievement.

Ans: (ii) Two emerging trends in human resources are:

  1. Flexible Work Arrangements: Flexible work arrangements, such as telecommuting, job sharing, and flexible schedules, are becoming more popular as employees seek work-life balance and greater flexibility in their work.
  2. Diversity and Inclusion: Organizations are focusing on diversity and inclusion to create a more inclusive workplace that values and respects individual differences. This includes creating programs and initiatives that promote diversity and inclusion, such as unconscious bias training and diversity recruitment programs.

Question 6

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

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

Ans: (i) Two objectives of Performance Appraisal are:

  1. To provide feedback to employees on their performance: Performance appraisal provides employees with feedback on their strengths and weaknesses and helps them identify areas where they need to improve.
  2. To identify training and development needs: Performance appraisal helps identify employees who require additional training and development to improve their skills and knowledge.

Ans: (ii) The merit grading method of performance appraisal involves assigning a numerical score or grade to employees based on their job performance.

Question 7 [4]

Define the following business entities:

(i) Sole Proprietorship [2]

(ii) Partnership [2]

Ans: (i) Sole Proprietorship: It is a type of business entity where an individual operates a business alone and is responsible for all its profits, losses, and debts. In a sole proprietorship, the owner has complete control over the business, and there is no legal distinction between the owner and the business.

Ans: (ii) Partnership: It is a type of business entity where two or more persons join together to carry on a business with the aim of making a profit. The partners share the profits and losses of the business as per the partnership agreement, and there are various types of partnerships, including general partnerships and limited partnerships.

Question 8 [4]

State any four points highlighting the importance of e-business to the buyers.

Ans: Four points highlighting the importance of e-business to buyers are:

(i) Convenience: E-business provides buyers with the convenience of shopping from anywhere and at any time, without the need to physically visit the store.

(ii) Greater Variety: E-business allows buyers to access a wider range of products and services from multiple vendors, increasing their options and choices.

(iii) Comparison Shopping: E-business enables buyers to compare prices, features, and reviews of products and services from various vendors, helping them make more informed purchasing decisions.

(iv) Lower Costs: E-business can reduce transaction and distribution costs, leading to lower prices for buyers, as vendors can pass on the cost savings to their customers.

Question 9 [4]

Briefly explain any two business regulators.

Ans: Two business regulators and their brief explanations are:

(i) Securities and Exchange Board of India (SEBI): It is a regulatory body established to protect the interests of investors in securities and to promote the development of the securities market in India.

(ii) Reserve Bank of India (RBI): It is the central bank of India and is responsible for regulating the banking system, managing the country’s foreign exchange reserves, and ensuring the stability of the financial system in the country.


Question 10

Elucidate any four methods of External Recruitment. [8]

Ans: External recruitment refers to the process of hiring employees from outside the organization. The following are four common methods of external recruitment:

  1. Job portals: Companies can post job openings on various job portals and websites to attract potential candidates. Candidates can apply for the job online, and the HR department can screen the applications and select the most suitable candidates for the job.
  2. Campus Recruitment: Companies can visit college campuses and recruit fresh graduates for entry-level positions. This method is popular among companies that are looking for young and talented individuals who can bring fresh ideas to the company.
  3. Employee referrals: Companies can encourage their employees to refer potential candidates for job openings. Employee referrals are considered to be a cost-effective way of hiring as the company can save money on advertising and recruitment costs.
  4. Recruitment Agencies: Companies can outsource their recruitment process to third-party recruitment agencies that specialize in finding suitable candidates for various job positions. These agencies have access to a large database of potential candidates and can quickly find the right candidate for the job. However, this method can be expensive as the recruitment agencies charge a fee for their services.

Question 11

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

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


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

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

Ans: (i)(a) Piece rate system of wage payment is a method of remuneration in which the employees are paid according to the number of units produced or tasks completed. The rate of payment is fixed per unit of output or task.

Ans: (i)(b) Merits:

  1. Encourages employees to increase their output as the pay is linked to their productivity.
  2. Simplifies the process of wage administration as the calculation of wages is based on the number of units produced or tasks completed.
  3. Provides motivation to employees to improve their skills and efficiency to earn more.


  1. Employees may compromise on the quality of the work in order to increase the quantity of output.
  2. This can create unhealthy competition among employees leading to strained relationships and decreased teamwork.
  3. This may result in fatigue, stress, and health issues due to the pressure to produce more output to earn more.

Ans: (ii)(a) Promotion is the process of advancing an employee to a higher job position within the same organization due to his/her performance, experience, and potential.

Ans: (ii)(b) Advantages:

  1. Provides motivation to employees to perform better and improve their skills and knowledge to be eligible for promotion.
  2. Encourages employees to remain with the organization for a longer period of time as they see opportunities for career advancement.
  3. Increases job satisfaction and morale among employees who receive promotions.


  1. This may lead to resentment and dissatisfaction among employees who are not promoted, leading to decreased motivation and productivity.
  2. Can create a perception of favoritism and discrimination if the promotion decisions are not based on objective criteria.
  3. This may result in employees being promoted to positions for which they are not qualified, leading to decreased efficiency and effectiveness.

Question 12 [8]

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.


Dear [Principal’s Name],

I am writing to inform you that I have decided to resign from my position as the Head of the Department of Mathematics at [School Name], effective from [Date].

I am grateful for the opportunities and experiences that I have gained during my tenure here. It has been an honor to be a part of this institution and to work alongside such dedicated colleagues.

As much as I have enjoyed my time here, I have decided to pursue higher studies to further my academic and professional goals. I believe that this decision will not only benefit me personally but also enhance my skills and knowledge to contribute better to the education sector in the future.

I will make sure to complete all pending tasks and hand over my responsibilities to my successor before my last working day to ensure a smooth transition. I will also assist in any way possible to facilitate the hiring process of the new Head of the Department.

Thank you once again for the opportunity to work at [School Name]. I have valued my time here and will cherish the memories.


[Your Name]

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]

(ii) Factoring [2]

(iii) Global Depository Receipts [2]

(iv) Loans from Financial Institutions [2]

Ans: (i) Angel Investors: Angel investors are individuals who invest their own money in a business in exchange for an ownership stake. They provide funding to start-ups or small businesses that have high growth potential. ABC Ltd. can use angel investors as a source of finance for their expansion plans, as they are a listed company and have high growth potential.

Ans: (ii) Factoring: Factoring is a financial transaction where a company sells its accounts receivable to a third party, called a factor, at a discount. This provides immediate cash flow to the company. However, since ABC Ltd. is a hardware manufacturing company, it may not have a large number of accounts receivable to sell, making factoring an unsuitable source of finance for them.

Ans: (iii) Global Depository Receipts: Global Depository Receipts (GDRs) are financial instruments that represent ownership in a foreign company. They are listed on an international exchange and are denominated in a foreign currency. ABC Ltd. can use GDRs as a source of finance for their expansion plans, as they are listed on the National Stock Exchange and plan to expand their operations across the country.

Ans: (iv) Loans from Financial Institutions: Loans from financial institutions are a common source of finance for businesses. Financial institutions provide loans based on the creditworthiness of the borrower and the purpose of the loan. ABC Ltd. can use loans from financial institutions as a source of finance for their expansion plans, provided they have a good credit score and a viable business plan.

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