ISC Business Studies Previous Year Question Paper 2010 Solved for Class 12
Maximum Marks: 80
Time allowed: Three hours
- Candidates are allowed additional 15 minutes for only reading the paper. They must NOT start writing during this time.
- Answer Question 1 (Compulsory) from Part I and five questions from Part II, choosing two questions from Section A, two questions from Section B and one question from either Section A or Section B.
- The intended marks for questions or parts of questions are given in brackets [ ].
(Answer all questions)
Answer briefly each of the questions (i) to (xv): [15 × 2]
(i) State two merits of internal recruitment.
(ii) ‘Training helps in reducing supervision of employees’. Justify.
(iii) List any two work conditions where time rate system of remuneration is more suitable than the piece rate system.
(iv) Mention four indicators of low morale amongst employees of an organisation.
(v) How does challenging work motivate employees ?
(vi) State two limitations of Maslow’s Theory of the hierarchy of human needs.
(vii) ‘Transfer is a mild form of punishment’. Explain.
(viii) What are the functions of a telephone recording and an answering set?
(ix) List the steps involved in report writing.
(x) What is meant by casting vote ?
(xi) Explain the term Point of Order.
(xii) Why is a histogram called a two dimensional graph?
(xiii) How does a business reply card help a business concern?
(xiv) Explain the term adjournment in the context of company meetings.
(xv) Write the expanded forms of the following:
(i) (a) It helps in minimizing labor turnover.
(b) It helps in boosting the morale of existing employees.
(ii) Training increases the knowledge and skills of the employees. They get expertise in their related jobs. Therefore, it helps in reducing supervision of employees.
(iii) (a) When number of units cannot be counted or work cannot be measured.
(b) When quality of production has to be given weight age over quantity of production.
(iv) (a) High rate of wastage and spoilage.
(b ) High rate of absenteeism.
(c) High rate of labor turnover.
(d) High rate of strikes.
(v) Challenging work certainly motivates employees. By giving a challenging work to the capable employees increases the sense of faith for their institution. Challenging work helps the employees in building their reputation in the institution. They are trusted by the other employees. This motivates the employees.
(vi) Recent research challenges the order that the needs are imposed by Mas low’s pyramid. As an example, in some cultures, social needs are placed more fundamentally than any others. Further, Mas low’s hierarchy fails to explain the “starving artist” scenario, in which the aesthetic neglects their physical needs to pursuit of aesthetic or spiritual goals. Little evidence suggests that people satisfy exclusively one motivating need at a time, other than situations where needs conflict.
(vii) Transfer is a mild form of punishment. It is true. When the employee neglects work or conflicts with other employees or does the act of misconduct, the management can transfer the erring employee to a new place. Transfer from one place to another (unimportant place) is a very common practice while punishing the employees.
(viii) A telephone recording and answering set has a remote listening facility whereby the answerphone owner can ring their home number and, by either sending a tone down the line using a special device, or by entering a code on the remote telephone’s keypad, can listen to messages when away from home. The owner may record his or her message that will be played back to the caller, or an automatic message will be played if the owner does not record one. Answering machines can usually be programmed to take the call at a certain number of rings.
Many devices offer a “toll saver” function, whereby the machine answers only after several rings (typically four) if no messages have been left, but answers after a smaller number of rings (usually two) if there are messages. This allows the owner to know whether there are messages waiting; if there are none, he or she can hang up the phone on the third ring without incurring a call charge.
(ix) Steps involved in report writing are :
- Clarity purpose and expectations
- Decide on appropriate structure for report
- Circulating the draft
- Integrating Comments
- Writing Executive Summary
- Circulating Final Draft
(x) The vote that gives one group a majority when the other votes are equally divided. The person in charge of a committee, for example, often has the right to give a casting vote.
(xi) Point of order: This is a motion for expressing any objection or complaint by a member against – the speech maker. Point of order can be raised on the following conditions.
- Incorrect procedure of meeting.
- Irrelevant issues are raised by any member;
- If a member uses some unpleasant language;
- Infringement of the rules of the society;
- When a member passes defamatory or insulting remarks on some other member.
- When a quorum has fallen due to the early leaving of some member or members and a member objects to it.
(xii) A histogram is a bar chart representing a frequency distribution; heights of the bars represent observed frequencies. Histogram is prepared using X and Y axis of a chart. Therefore, it is called two dimensional graph.
(xiii) Business reply card is helps a business concern to procure mail orders, suggestions on its products, survery reports, etc. Business reply card is a prepaid card in which the sender does not need to affix postage stamps. Postage is borne by the business concern.
(xiv) In the case there is any difficulty in holding any annual general meeting (except the first annual meeting), the registrar may, for any special reasons shown, grant an extension of time for holding the meeting by a period not exceeding 3 months provided the application for the purpose is made before the due date of the annual general meeting.
However generally delay in the completion of the audit of the annual accounts of the company is not treated as “special reason” for granting extension of time for holding its annual general meeting Generally. In such circumstances, an AGM is convened and held at the proper time all matters other than the accounts are discussed. All other resolutions are passed and the meeting is adjourned to a later date for discussing the final accounts of the company. However, the adjourned meeting must be held before the last day of holding the AGM.
(xv) (a) NB means: Nota Bene.
(b) PABX means: Private Automatic Branch Exchange
(Answer any five questions)
(a) Why is induction training important in an organization ? 
(b) Discuss any five methods of raising staff morale in an organization. [ 10]
(a) Induction and training have vital importance in today’s business world. A good induction and training program can greatly improve well being and productivity throughout a company, whilst bad one can not only cause confusion, but also to large decreases in productivity through staff not knowing their function, or their place in the company.
(b) Methods of Raising Morale
Monetary Incentives: Monetary incentives like good salaries and wages help to encourage the employees for greater productivity. The management should evolve such a wage/salary structure which enables the workers to earn at a reasonable level and to live a decent life. Assurance of a sound wage structure builds up morale of workers.
Non-Monetary Incentives: Non-monetary incentives are also helpful in boosting the morale of employees. These incentives may be provided to them in the form of medical aid, recreational facilities, holiday homes, creche facility to the children of working couples, etc.
Job Security: Security of job boosts the morale of the employees. The management should follow a good labour policy that ensures the security of the job to its employees. The workers should also be assured that in case their services are not required in their present jobs, they will be absorbed in alternative jobs sooner or later or immediately.
Sound Promotion Policy: A sound promotion policy is a must to boost the morale of the employees. Promotion policy should be so adopted by the management that it gives proper weightage to merit and seniority. If only one base either seniority or merit is adopted, it will not be good for the morale of the employees.
Healthy Working Conditions: The working conditions in the organisation play a crucial role in boosting the morale of the employees. Working conditions should be healthy so that employees may work with best efforts and attain organisational objectives.
Redressal of Grievances: Employees’ morale remains high if there is a proper redressal system of grievances of the employees. The employeess should be convinced that there is fairness and the impartiality in dealing with their grievances. The morale of the employees is high if their grievances are redressed properly and quickly.
Effective Leadership: The morale of the employees is also influenced.
Question 3. .
(a) Explain Laissez-Faire leadership. Discuss its advantages and disadvantages. 
(b) Define promotion. Explain three advantages and three disadvantages of seniority based promotion. 
(a) The laissez faire style is sometimes described as a “hands off’ leadership style because the leader provides little or no direction to the followers.
The characteristics of the laissez faire style include.
- Allows followers to have complete freedom to make decisions concerning the completion of their work or ask questions of the leader.
- The leader provides the followers with the materials they need to accomplish their goals and answers questions to the follower’s questions.
In this style the leader lets the employees manage themselves and there is no delegation taking place from the management. This style is often called “hands off” leadership as the leader evades his duties and does not direct the employees.
Advantages: This kind of style is positive only in the case when the employees are very responsible and in case of creative jobs where* a person is guided by his own aspirations. In these cases, less direction is required so this style can be good.
Disadvantages : This style has more disadvantages because usually it is the result of the lack of interest of the leader that leads to his adopting this style. It proves poor management and makes the employees lose their sense of direction and focus. The disinterest of the management and leadership causes the employees to become less interested in their job and their dissatisfaction increases.
(b) Promotion means placing an employee on a higher post which involved greater responsibility, higher status, higher pay and perks, higher satisfaction. Some people merely think that promotion only means increase in pay scale, but it is not so. Pay scale increases even in the same cadre. This is called salary increment. Promotion means higher responsibilities. It may or may not increase salary of the employee.
Sometimes salary of the employee also increases with the promotion and sometimes not. However, it is a general practice to allow salary increase to the promoted employee.
Definition of Promotion:
“A promotion involves a change from one job to another that is better in terms of status and responsibilities.” -Edwin B. Flippo
“A promotion is the transfer of an employee to a job that pays more money or that enjoys some better status.” -Scott and Spriegal
Advantages of Seniority Based Promotion
Promotions are preferred on seniority basis by the trade unions on the basis of following features :
- The seniority process is simple. To measure the ability standards is difficult.
- All employees are assured promotion. They feel happy that promotion will automatically come in their way when it is due.
- The process of promotion by seniority is very economical. The management has to spend nothing on such a process. Otherwise in deciding the ability the management might have to conduct a test/examination.
- This promotion policy is conducive for both labor management relations.
- Senior employees remain satisfied, frustration transaction level is not present among them. They are assured promotion at their turn.
- Seniority’ system provides an optimum utilization of the existing work force.
Demerits of Seniority Based Promotion
The system of promotion by seniority suffers from the following demerits :
- Continuous promotion on seniority basis may upset the working strength of the organisation. Merit has nothing to do in this process and there may be a number of inefficient employees in higher posts. .
- Junior but highly meritorious employees get frustrated with this promotion process.
- Overall productivity of the employees may not be as high as required. In terms of energy, a senior or old employee may be much behind that of a young employee. When the promotions are offered only on the basis of seniority, average productivity may not be good.
- In present scenario, technology is changing very fast. It is not very easy for the senior employees to put themselves in the main stream of technology. In such a case, it becomes necessary to induce fresh blood in the form of young and talented employees.
- The merit of an individual is not appreciated. He is not given due recognition. Frustration level becomes high and young and meritorious employees leave the organisation. Therefore, rate of employee turnover is very high under such system of promotion in an organisation.
In the context of staff remuneration, explain Halsey Plan and Rowan Plan of incentive wage payment with the help of appropriate examples. 
Halsey Premium Plan-This method was developed by F. A. Halsey.
In this method, a standard time is fixed for completion of a job. A worker who completes his work in a time less than the standard time, is paid at hourly rate for the actual time spent on the work plus a bonus for the time saved. The bonus is calculated on a certain percentage for the total time saved by the worker. The worker who does not complete his job within the stipulated standard time is not penalized but is guaranteed minimum wages.
Illustration : Standard time for producing 25 units of an item is fixed at 10 hours. A worker takes 8 hours to produce 25 units of that item. Bonus is given at 50%. Calculate the wages to be paid to that worker for 8 hours if the rate of wages is Rs. 10 per hour.
Under Halsey Premium Plan
Bonus = Time saved × Rate per hour
Bonus = 50% of (time save × Rate per hour)
Time saved = 10 – 8 = 2
= 1/2 × 2 × 10
= Rs. 10
Wages for 8 hours = 8 × 10 = Rs. 80
Total wages for 8 hours = Rs 80 + Rs 10 = Rs 90
Features of Halsey Premium Plan:-
The following are the features of Halsey Premium Plan :
- Standard time of production is pre-determined.
- The efficient workers who complete the work in lesser time are entitled to get bonus. They get bonus for the save time.
- Standard rate of wages is also determined.
- The rate of hour may be 1/3 or 1/2 of the standard rate of wages.
- There is no provision of penalty for the workers who do not complete the work within the standard time.
Merits of Halsey Premium Plan — The following are the merits of Halsey Premium Plan :
- Every worker is entitled to get minimum wages.
- Efficient workers are encouraged to do more and more work to earn bonus.
- This system is suitable both for employer and workers.
- This system helps in proper and maximum utilization of time.
- This system is easy and convenient to use.
- Workers are fully satisfied.
Demerits of Halsey Premium Plan — This system suffers from the following demerits :
- The method of payment of wages is not scientific. It is based upon prejudice.
- Due to minimum guarantee of wages, workers become ignorant.
- It depends on the workers whether to do more work or not.
- The efficient workers do not get full benefit of the saved time. This does not encourage them.
Rowan Premium Plan:
This system of incentive wages w as introduced by James Rowan. Standard rate and time is determined in the same manner as in the Halsey Premium Plan.
The workers who finish their job within standard time get the wages at the standard rate. The workers who complete their work in less than standard time are given some bonus also in addition to standard rate.
The bonus in this method is calculated as follows :
Standard time for doing a work is fixed at 10 hours. A worker takes 8 hours to finish it. Rate of wages is Rs. 10 per hour. Calculate total wages earned by the worker.
Standard Time= 10 hours
Actual Time = 8 hours
Time saved = 10 — 8 = 2 hours
Rate per hour = Rs. 10
Actual wages for 8 hours = 10 × 8 = Rs. 80
Total wages of the worker = Rs. 80 + Rs. 16 = Rs. 96
(a) Discuss the importance of feedback in communication. 
(b) What is meant by face to face communication ? 
(c) Explain any five advantages and five disadvantages of face to face communication. 
(a) Feedback—After receiving the message, the receiver derives the meaning from the message and responds to the sender. The return flow of communication is called Feedback.
The process of communication is successful when the sender receives the feedback from the receiver.
Feedback helps the sender to know whether the message communicated to the receiver has been understood by the receiver properly. Feedback depends upon the type of communication.
In case of oral communication or face-to-face the communication feedback is immediately available and the sender can judge the effectiveness of his message communicated to the receiver immediately .
In case of written communication, the feedback is not immediately available to the sender. The receiver may take time in sending response to the sender. Moreover, the sender cannot see the face expressions of the receiver.
(b) Face-to-face communication is the most common form of communication. It is an interaction between two persons. In such communication, one participant plays the role of speaker and the other of listener interchangeably. This form of communication takes place everywhere; individuals in office, business deals, common persons. Face-to-face communication is prompt and the communication can be made clear to the listener.
(c) Advantages of face to face communication
Prompt communication – This communication takes place between two persons and is very prompt since both the listeners and receivers are listening and responding to each other.
Effectiveness – This communication is very effective. If the listener has any doubt, he can get clarification from the speaker at the spot. The solution of the problem can be obtained immediately.
Flexibility – Face to face communication is flexible. The speaker can adjust his message according to place, time. He can explain his message and modify or withdraw the comments.
Immediate Feedback – Immediate feedback and suggestions are available interchangeably to the listener and speaker. The speaker can make the judgement about the effect of communication on the listener.
Secrecy – This communication takes place between two persons, secrecy can be maintained by the persons.
Disadvantages of face to face communication
No Record – This communication takes place between two persons orally. There is no record of such communication.
Legal Validity – This communication suffers from lack of legal validity. Court of law does, not accept this communication as a proof of evidence.
Poor Retention – A listener may not retain the message in his memory for long. The impact of the message is lost after a passage of time.
Responsibility – No responsibility can be fixed on the part of speaker or listener as there is no record available for such communication.
Not Suitable for Lengthy Communication – It is not suitable for lengthy messages. Lengthy explanations are difficult to explain to the listener.
(a) What is an agenda ? Why is it an essential part of notice? 
(b) Explain any five ways in which the sense of a meeting can be ascertained. 
(a) Agenda means a list of issues, plans, mattress, etc. to be considered at a meeting. It is a part of formal notice for a meeting. Without an agenda a notice is treated to be invalid and proposed meeting becomes invalid. Agenda is drafted before meeting.
(b) One of the most important duties of the chairman of a meeting is to ensure that the sense of the meeting is properly and accurately ascertained. It is the duty of the chairman to ascertain the sense of the meeting. Sense of the meeting can be ascertained:
- by conducting the first instance, voting by show of hands.
- by poll, if it is demanded or ordered by him of his own motion.
- Every member or a proxy is given opportunity of exercising the right of voting.
(a) Discuss the procedure for handling the outgoing mail in a big business concern. 
(b) Mention any four mechanical aids associated with the above procedure. 
(a) Outgoing mail means letters which are sent from the office to other departments or persons. Outgoing letters follow the procedure mentioned below :
(A) Drafting of Letters : Drafting is a very important aspect of handling the outgoing mail. An outgoing letter reflects the nature and type of the office. An outgoing letter in itself is an advertisement of the institution. Therefore, it is very important to draft the letter carefully.
Drafting of letters is done after carefully studying the letters to which the reply is to be sent. Drafting of . such letters which are to be sent first time on a particular subject, should be very proper.
While drafting the letters, the following points should be taken proper care of:
- Language of the letters should be clear and humble. Difficult words or confusing words should not be used in the letters.
- Subject matter should be very clear so that it can indicate in a simple line what the letter wants to say.
- Letters should not be unnecessary long. In case of responding letters, it should be noted that necessary contents should not be left out.
- In case of official letters, personal matters should be avoided.
- The draft of the letters (if required) should be got approved from the higher authorities.
(B) Typing of Letters: Once the draft of the letter is approved, it is given to the typist or stenographer for typing the letter. The typist types the letter. While typing the letter(s), the following points should be taken care of:
(i) Typing mistakes should be avoided in the letters. If there is any mistake in the typed word, the wrong word should be erased with the typing eraser or white correcting fluid should be applied on the wrong word and then the correct word should be typed on it. Today in computerised environment in the offices, it is very easy to rectify’ the spelling mistakes in the documents.
(ii) The number of duplicate/carbon copies of the letters should be taken as directed by the drafting official.
(iii) The letters should be typed with proper date; address and alignment of lines and paragraphs.
(iv) Good paper should be used for typing the letter.
(v) Ink of the ribbon of the typewriter should be good so that the main copy of the letter should appear very attractive.
If possible for the office, it should purchase a computer which can be very helpful in typing the letters. A computer is helpful in typing due to its following features :
(i) Multiple copies of the letter can be printed by a single command on the printer installed with the computer.
(ii) There are various word-processing programmes available on the computer which provide facility of:
- Spell checker to remove the typing mistakes. Grammatical improvement is also possible in these programs.
- Paragraph alignment (right, left, centre or justify alignment) can be done in the letters.
- Line spacing in the paragraphs can be done.
- Formatting of letters is possible. Formatting includes highlighting of word/text, italicising and underlining of text or words or selected lines. Size of the characters (called font size) can be increased or decreased as per requirement of the letter.
- Even objects and pictures can be inserted in the documents being typed on the computer.
- The keyboard of a computer is just similar to the key-board of type writer. There is no difficulty for learning the keys of the key-board for a typist.
- The letter or document can be saved on the hard-disk (storage medium) of the computer for future use. In case of need the same letter or document can be retrieved again.
(C) Filing of Letters : After typing of letters, the drafter of the letter reads it and matches with the drafted letter. If there is any mistake in the letter, he erases it with the typing eraser or correcting fluid and marks the proper character or word. Then he puts (files) the letter in the proper file. He puts his initials on the letter and in case the letter is to be dealt at his own end, he puts full signatures on the letter in his official capacity. In case the letter is to be signed by the higher authority, he puts his initials and sends the file to the higher authority or employer.
(D) Signatures on the Letter: After filing the letters, the concerned file is sent to the higher authority for his signatures on the letter. If the contents of the letter are found in order, the higher authority puts full signatures on the letter.
(E) Entering Letters in Register: After the above process the letters are sent to the dispatch clerk who enters the letters in the dispatch register.
There may be different dispatch registers for :
- Ordinary letters.
- Registered letters.
- Courier letters.
The letters are entered in the register according to the format of dispatch register. If the letter is being sent through ordinary post, it is entered in the ordinary dispatch register by mentioning the date of dispatch, subject matter, etc. Postage stamps consumed on the letter are also entered in the register. The dispatch serial number is mentioned both on the main letter (to be sent) and office copy. This dispatch number is mentioned at the place of Reference Number of the letter.
(F) Dispatch Procedure: After entering the letters in the respective dispatch registers, these letters are dealt very carefully.
Ordinary letters are kept separate after entry and the address of the destination is mentioned on the envelope. The letter is inserted inside the envelope and properly sealed. Proper postage stamps are applied on the envelope according to the weight of envelope.
Presently the charges of ordinary mail are as under :
Envelope up to first 20 grams Rs. 5
Next 20 grams and parts thereof Rs. 5
This means that a letter of 21 gms of weight will bear Rs. 10/- postage stamps.
All the ordinary letters are affixed proper stamps and handed over to the dispatch peon for putting them in the letter box.
Registered letters are also entered in the dispatch register and postage stamps affixed on them are mentioned in the dispatch register. All the registered letters are separately handed over to the dispatch peon to get them registered from the post office. Post office issues separate receipts for all registered letters. The peon brings these receipts from the post office and these receipts are.pasted in the dispatch register as a proof of sending the letters through registered post.
Courier letters are also separated by the dispatch clerk. Courier letters are those letters which have to be reached in a short time to the destination. The letters are handed over to the courier service office or they are picked by courier boys from the office itself. Courier boy issues receipts for courier letters. These receipts are preserved by the dispatch clerk.
(b) Mechanical Aids : Various types of mechanical aids are used in the mail room. These aids are described below :
Stapling Machines: Staplers are used in the mail room to sealing (closing) the envelops.
Letter Typing Machines: With the help of typing machine letters (bunch of letters) can be tied together. Letters are kept inside the machine and a thin wire passes around the letters and ties them.
Franklin Machine: Franklin machine is issued by the post office. The postal authorities put a certain value in it (as requested by the office). This machine puts the stamp on the envelope. The value put (entered) in the machine goes on decreasing as more and more stamps are affixed on the envelopes. At one stage the value inserted in the machine is exhausted and the office has to again request the post office to issue a certain limit.
Dating Machines: Dating machines are used to put the dates on the letters. When there is number of letters, these dating machines are very helpful on putting the dates on these letters.
Weighing Machines: A weighing machine is used to ascertain the weight of letters. Post Office charges the postal rates according to the weight of letters. After ascertaining the weight of letters, postage stamps are affixed accordingly.
Serial Numbering Machines: These machines are used to put serial numbers on the letters, despatch register and office copy of the letter. Respective serial numbers can be given on respective places. After putting a serial number as many number of times, the next serial number automatically changes.
Addressograph: It is another mechanical device which is used to print address of the addressees on envelopes and wrappers. This device is very useful in cases where the number of letters are sent regularly. Names and address of the persons are embossed on metallic stencils. The different stencils of addressees are placed in the machine. The machine automatically selects the stencil and prints the address of person on the envelope.
(a) What are memos ? State two situations in which they can be used effectively. 
(b) What are circulars ? Give any two situations in which they are effective. 
(c) On behalf of a multinational corporation, draft an interview letter for the post of a management trainee. 
(a) Meaning — Memorandum in short is known as Memo. Memorandum means a note to assist memory.
Purpose — Memo is used for internal communication between managers and subordinates. It is not used outside the organisation. Memo is used-
- to issue instructions to the staff members.
- to give / seek suggestions from the employees.
- to communicate policy matters and changes to the staff members.
- to seek explanation from an employee to explain his conduct.
- to intimate grant of permission to do something.
- to intimate grant of permission to withhold something.
(b) A circular letter is one which is sent out to many people at the same time used both within organization and for sending out information from organizations. The letter may be prepared once only and then duplicated. With modem technology, however, it is more likely that each letter could be personalized to look like an original also called an open letter.
Situations that need Circulars: Situations that need circulars introduce a new product/service, opening of new branch, change of address, seasonal discounts, increase in price, etc. obtaining an agency, change in constitution of the firm.