Download to read offline
Class 12th BSt. summary.pdf
- 1. vishalnandan57@gmail.com Mob:7300424145 Objectives 1.Organisational objectives: •Survival Characteristics •Goaloriented •Pervasive •Multidimensional •Continuous process •Group activity •Dynamic function •Intangible force Elements •Process: it involves a series of inter-related functions •Effectiveness: concerned with doing the right task and achieving goals on time •Efficiency: means doing the right task correctly and minimum cost 2.Social Objectives: •Protection of environment •Employment opportunities for weaker sections •Basic amenities for community •Quality products at fair prices •Avoidance of unfair practice 3.Personnel objectives: •Financial needs •Social needs •Higher level needs •Healthy working conditions •Growth Functions •Planning •Organising •Staffing •Directing •Controlling Levels •Top level management(includes board of directors, chairman , etc) •Middle level management (includes heads of different functional departments) •Operational level(Includes supervisors ,foreman , superintendent , etc) Nature Management as a science •Systematized body of knowledge •Principles based on observation and experiment •Universal validity •Profit Management as a science •Existence of theoretical knowledge •Personalized application •Based on practice and creativity Management as a profession •Well defined body of knowledge •Restricted entry •Professional association •Ethical code of conduct •Service motive Importance •Helps in achieving personal objective •Increases efficiency •Creates a dynamic organisation •Helps in achieving personal objective •Helps in development of society 12th CBSE Business studies Chapter-1 Nature and significance of management
- 2. vishalnandan57@gmail.com Mob:7300424145 Business studies Chapter-1 12thCBSE Coordination Functions •Integrates group efforts •Ensures unity of action •Continuous process •Pervasive Function •Responsibility of all managers •Deliberate function Importance •Growth in size •Functional differentiation •Specialization Nature and significance of management
- 3. vishalnandan57@gmail.com Mob:7300424145 Business studies Chapter-2 12thCBSE Meaning Significance Principles of management Fayol’s principles •Management vs pure science •Principles vs Techniques •Principles vs values •Pervasive •General guidelines •Flexible •Practice and experiments •Cause and effect •Behavioral in nature •Contingent •Insight into reality •Optimum utilisation •Scientific decisions •Meeting requirement •Effective administration •Social responsibility •Training ,education and research •History •Contribution •Principles •Division of work •Authority and responsibility •Discipline •Unity of command •Unity of directions •Subordination of individual interest to general interest •Remuneration of persons •Centralisation and decentralisation •Principle of scalar chain •Principle of equity •Principle of order •Stability of tenure of personnel •Initiative •Esprit de corps Scientific management by F.W. Taylor •History •Contribution •Meaning •Advantages •Modern techniques Scientific principles •Science not rule of thumb •Harmony not discord •Cooperation not individualism •Development of workers to their greatest efficiency and prosperity Scientific techniques •Functional foremanship •Standardisation and simplification of work •Work study •Differential piece wage system •Mental revolution Comparison between Taylor and Fayol •Point of difference •Relevance Features
- 4. vishalnandan57@gmail.com Mob:7300424145 12th CBSE Businessstudies Chapter-3 Business environment •Sum total of all external forces •Includes both specific and general forces •Different elements are inter-related •Dynamic in nature •Uncertain •Complex •Relative concept Features Importance •Enables the firm to identify opportunities and getting first mover advantage •Help the firm to identify threats and early warning signals •Helps in tapping useful resources •Helps in coping with rapid changes •Helps in assisting in planning and policy formation •Helps in improving performance Dimensions •General environment • economic environment •Social environment •Technological environment •Political environment •Legal environment •Specific environment: includes customers, owners and investors, supplier, creditor, employee , etc New industrial policy •liberalisation (removal of unnecessary controls and restrictions on business) •Privatisation(giving greater role to private sector in nation building process) •Globalisation(integrating various economies of the world to create a cohesive global economy Features of new trade policy •Delicensing •Decrease in role of public sector •Disinvestment •Liberalisation of foreign capital •Liberal policy for technical collaboration •Setting up of foreign investment promotion board •De- reservation under samll-scale industries Demonetisation (act of removing a currency unit of its status as legal tender) Features •Viewed as tax administration measure •Indicated that tax evasion will no longer be tolerated •Channelized savings into the formal financial system •Aims to create a less-cash economy Impact of economic reforms on business •Increase competition •More demanding customers •Rapidly changing technological environment •Necsssity for change •Need for developing human resource •Market orientation •Loss of budgetary support Managerial response to changes in business environment •Diversification •Joint venture with MNCs •Acquisition and merges •Use of modern technology •Brand building •Customer orientation •Higher level of compensation
- 5. vishalnandan57@gmail.com Mob:7300424145 Business studies Chapter-4 Features •Focuseson achieving Organisational objective •Primary function of management •Pervasive •Continuous •Futuristic •Involves decision making •Mental exercise 12th CBSE Importance •Provides directions •Reduces the risks of uncertainty •Reduces overlapping and wasteful activities •Facilitates decision making •Establishes standards for controlling limitations •Leads to rigidity •May not work in a dynamic environment •Reduces creativity •Involves huge costs •Time consuming process •Does not guarantee success External limitations •Natural calamities •Changes in government policies •Strategies of competitors •Technological changes •Changes in fashion , tastes , etc Process •Setting objectives •Developing premises •Identifying alternatives courses of action •Selecting an alternative •Implement the plan •Follow up action Types of plans •Single use plans:(designed to achieve a particular goal) i)Program ii)budget •Standing plans:(designed for activities that occur regularly over a period of time) i)Policies ii)Method iii)Procedure iv)rules •Neither single use nor standing plans: i) Objectives ii) strategy Planning Planning
- 6. vishalnandan57@gmail.com Mob:7300424145 12th CBSE Businessstudies Chapter-5 Organising Steps •Identification and division of work •Departmentation •Assignment of duties •Establishing reporting relationships Importance •Benefits of specialisation •Charity in working relationships •Optimum utilisation of resources •Adaption to change •Effective administration •Development of personnel •Expansion and growth Types of organisation structures Functional structure (grouping of jobs of similar nature under one department) Advantages ; •Functional specialisation •Effective control and coordination •Improves efficiency •Avoids duplication of functions •Ease in training •Proper attention Disadvantages •Functional empire •Difficulty in coordination between different departments •Inflexibility •Difficult to hold accountable Divisional structure (grouping of jobs related to one department) Advantages •Product specialisation •Greater accountability •Flexibility •Expansion and growth Disadvantages •Departmental conflicts •Costly •Ignore organisational interest
- 7. vishalnandan57@gmail.com Mob:7300424145 Features •Clearly definedreporting relationships •Created to achieve organisational objective •Coordinates efforts to various departments •Intentionally created •Places more emphasis on work Advantages •Fixation of responsibility •Clarity of duties •Unity of command •Helpful in achieving objectives •Provides stability Formal organisation Informal organisation Feature •Originates from formal organisation •Standards of behavior evolve from group norms •Follows independent channels of communication •Emerges spontaneously •No definite structure Advantages •Faster communication •Fulfill social needs • Helps in achieving organisational objectives Disadvantages •Spread of rumors •Resistance to change •Pressure of group norms 12th CBSE Business studies Chapter-5 Delegation of authority Elements •Authority •Responsibility •accountability Importance •Effective management •Employee development •motivation of employee •Facilitation of growth •Basis of management hierarchy •Better coordination Centralisation (concentration of decision making power at top level) Decentralisation(systematic delegation of authority through all levels) Importance •Develops initiative among subordinates •Develops managerial talent for future •Quick decision making •relief to top-level •Facilitates growth •Better control Organising Disadvantages •Delay in action •Ignores human element •Lack of initiative
- 8. vishalnandan57@gmail.com Mob:7300424145 Business studies Chapter-6 Importanceof staffing Staffing 12th CBSE •Filing jobs with competent personnel •Better performance •Survival and growth •Optimum utilisation of human resources •Improves job satisfaction Staffing and human resource management Specialised activities by human resource personnel •Recruitment •Analysing jobs , collecting information about jobs to prepare job description •Selection •Developing compensation and incentive plans •Placement and orientation •Training and development of employees •Performance appraisal •Maintaining labour relations •Handling grievances and complaints •Providing for social security and welfare of employees •Defending company in law suits and avoiding legal complications Steps of Staffing •Estimating the manpower requirements •Recruitment •Selection •Placement and orientation •Training and development •Performance appraisal •Promotion and carrier planning • Compensation Main components of staffing Recruitment Selection Training and development
- 9. vishalnandan57@gmail.com Mob:7300424145 Recruitment •Sources ofrecruitment (i) Internal sources • Promotion • Transfer # Merits • Motivates the employees • Simple process • Tool of training • Avoids over and under staffing • Economical # Demerits • Prevents induction of fresh talent • Employees may become lethargic •Not suitable for new firm •Lack of competition •Low productivity (ii) External sources •Direct recruitment •Casual callers •Advertisement •Employment exchange •Placement agencies and management consultants •Campus recruitment •Recommendation of employees •Labour contractors •Advertising on television •Web publishing Merits •Qualified personnel •Wider choice •Fresh talent •Competitive spirit Demerits •Dissatisfaction among existing staff •Lengthy process •Costly process Selection Steps •Preliminary screening •Selection tests •Employment interview •Reference and background check •Selection decision •Medical examinitation •Job offer •Contract of employment Training and development Benefits to organisation •Systematic learning •Increased productivity •Prepare future managers •Boost morale of employees •Better response to fast changing environment Benefits to employees •Career growth •Increased earnings •Safety to employees •High morale Business studies Chapter-6 Staffing 12th CBSE Methods of training On-the job training method: •Induction training •Apprenticeship •Internship training Off-the job training method: •Vestibule training
- 10. vishalnandan57@gmail.com Mob:7300424145 Business studies Chapter-7 Featuresof directing •Initiate action •Pervasive •Continuous process •Flows from top to bottom Importance of directing •Initiate action •Integrate group activity •Means of motivation •Directing facilitates changes •Provide stability and balance in the organisation Elements of directing •Supervision •Motivation •Leadership •communication Motivation •Unsatisfied needs •Tension •Drive •Search behavior •Satisfied need •Reduction of tension •Internal feeling •Produces goal directed behavior •Can be either positive or negative •Complex process •Basic physiological needs •Safety needs •Social needs •Esteem needs •Self-actualisation needs Financial incentives •Pay and allowances •Productivity linked wage incentives •Bonus •profit sharing •Co-partnership •Retirement benefits •perquisites Non financial incentives •Status •Organisation climate •Carrier advancement opportunity •Job enrichment •Employee recognition programmes •Job security • Employee participation •Employee empowerment Features Process Maslow’s need hierarchy theory Leadership (process of influencing behavior of people towards achievement of goals) Leadership styles •Autocratic style of leadership •Democratic style of leadership •Laissez faire style of leadership Communication (process of exchange of ideas. Views, etc. between people) •Elements •Sender •Message •Encoding •Media •Decoding •Receiver •Feedback •Noise 12th CBSE Directing
- 11. vishalnandan57@gmail.com Mob:7300424145 Business studies Chapter-7 12thCBSE Directing Communication Formal communication Informal communication Types •Vertical communication (downward and upward) •Horizontal communication •Diagonal communication Networks •Single chain network •Wheel network •Circular network •Free flow network •Inverted v network Networks •Single strand •Gossip •Probability network •Cluster Barriers to communication Semantic barriers •Badly expressed message •Symbols with different meanings •Faulty translations •Unclarified assumptions •Technical jargon •Body language and gesture •decoding Physiological barriers •Premature evaluation •Lack of attention •Loss by transaction and poor retention •Distrust Organisational barriers •Organisational policy •Rules and regulations •Status •Complexity •In organisation structure •Organisational facilities Personal barrier •Fear of challenge to authority •Lack of confidence of superior on his subordinates •Unwillingness to communicate •Lack of proper incentives Measures to improve communication effectiveness •Clarify ideas before communication •Communicate according to needs of receiver •Consult others before communicating •Be aware of languages ,tone and content of message •Convey things to help and value to listeners •Ensure proper feedback •Communicate for present as well as future •Follow up communications •Be a good listener
- 12. vishalnandan57@gmail.com Mob:7300424145 Business studies Chapter-8 Meaning Definition Scope Nature Goal-oriented Pervasive Backwardas well as forward looking Continuous Importance Achieving goals Accuracy of standards Efficient use of resources Improving employee’s motivation Order and discipline Facilitates coordination Planning and controlling Nature and concept Independent and interlinked Backward and forward looking Prescriptive/ Evaluating Controlling process Setting-up standards Measuring performance Compare performance Analysing deviations Taking corrective measures Feedback Deviation Negative positive Controlling 12th CBSE
- 13. vishalnandan57@gmail.com Mob:7300424145 12th CBSE Businessstudies Chapter-9 Role of financial management •Determining size as well as composition of fixed assets •Determining quantum of current assets •Deciding proportion of log term and short term financing •Fixing ratio between long term financing into debt and equity •Influence on all items in profit and loss account Objective of financial management (wealth maximisation) Types of financial decisions •Profit maximisation •Maintenance of liquidity •Proper utilisation of resources •Meetings on financial commitments with creditors Investment Or capital budgeting decision Factors affecting capital budgeting decision •Cash flows of the project •Rate of return •Investment criteria Importance of capital budgeting decisions •Long term growth and effects and effects •Large amount of funds involved •Risk involved •Irreversible decisions Financing decision Factors affecting financing decision •Cost •Risk •Floating costs •Cash flow position •Fixed operating costs •Control considerations •State of capital markets Dividend decision Factors affecting dividend decision •Amount of earning •Stability of earning •Stability of dividends •Growth opportunities •Cash flow position •Shareholder’s preferences •Taxation policy •Stock market reaction •Access to capital market •Legal constraints •Contractual constraints Financial management
- 14. vishalnandan57@gmail.com Mob:7300424145 Business studies Chapter-9 Financialplanning •Helps to prepare for future •Helps in avoiding business shocks and surprises •Helps in achieving coordination between various functions •Prevents duplication of efforts and gaps in planning •Provides a link between investment and financing decisions •Makes evaluation of actual performance easier Capital structure (proportion of debt and equity used or financing business operations) Factors affecting choice of capital structure •Cash flow position •Interest coverage ratio •Debt service coverage ratio •Return on investment •Cost of debt •Tax rate •Cost of equity •Floatation costs •Risk consideration •Flexibility •Control •Regulatory framework •Stock market condition •Capital of other companies •To ensure availability of funds whenever required •To ensure unnecessarily •Finance is not raised Importance Objectives Working capital (capital required for holding current assets) Factors affecting working capital requirements •Nature of business •Scale of operations •Business cycle •Seasonal factors •Production cycle •Credit allowed • Credit availed Types of working capital •Gross working capital •Net working capital Fixed capital (money invested in fixed assets) Factors affecting fixed capital requirements •Nature of business •Scale of operations •Choice of technique •Technology up-gradation •Growth prospects •Diversification •Financing alternatives •Level of collaboration 12th CBSE Financial management •Availability of raw material •Operating efficiency •Growth prospects •Level of competition •Inflation
- 15. vishalnandan57@gmail.com Mob:7300424145 Business studies Chapter-10 Functions •Mobilisesavings and channelise them into most productive uses •Facilitate price discovery •Provide liquidity to financial assets •Reduce the costs of transactions Types Money market Capital market Instruments •Treasury bill •Commercial paper •Call money •Certificate of deposit •Commercial bill Components Methods of flotation •Offer through prospectus •Offer for sale •Private placement •Rights issue •E-IPOs Secondary market or stock exchange Functions •Providing liquidity and marketability to existing securities •Pricing of securities •Safety of transaction •Contribution to economic growth •Spreading of equity cult •Providing scope for speculation Trading procedure on a stock exchange: •Selection of a broker •Opening demat account with depository •Placing the order •Issue of contract note •Delivery of shares or making payment •Settlement cycle •Payout-day working •Delivery of shares in demat form Features •Link between savers and investment opportunities •Deals in long terms investment •Utilises intermediaries •Determinant of capital formation •Government rules and regulations Securities and exchange board of India (SEBI) Objectives of SEBI •To regulate stock exchanges •To protect investors and to guide and educate them •To prevent trading malpractices •To regulate and develop a code of conduct for intermediaries Functions of SEBI •Regulatory functions •Development functions •Protective functions 12th CBSE Primary market Financial markets
- 16. vishalnandan57@gmail.com Mob:7300424145 Business studies Chapter-11 Featuresof marketing •Need and want •Creating a market offering •Customer value •Exchange mechanism Marketing management philosophies •Production concept •Product concept •Selling concept •Marketing concept •Societal marketing concept Functions of marketing •Gathering and analyzing market information •Marketing planning •Product designing and development •Standardisation and grading •Branding •Customer support services •Pricing of product •Promotion •Physical distribution •Transportation •Storage or warehousing •Packaging and labelling Elements of marketing mix Product mix •Branding •Packaging •Labeling Price mix Factoring affecting price determination •Product cost •Utility and demand of the product •Extent of competition in the market •Government and legal regulations •Pricing objectives •Marketing methods used Place mix Channels of distribution •Direct channel •Indirect channels One level channel Two level channel Three level channel Physical movement of goods •Order processing •Transportation •Warehousing •Inventory control Promotion mix Advertisement Sales promotion Personal selling Public relation Features •Reach •choice •Legitimacy •Expressiveness •Economy •Enhancing customer satisfaction and confidence •News •Speeches •Events •Written materials •Public service activities 12th CBSE Marketing Management
- 17. vishalnandan57@gmail.com Mob:7300424145 Business studies Chapter-12 12thCBSE Importance of Consumer Protection From Consumers point of view From Businessman’s point of view •Consumer ignorance •Unorganised consumers •Widespread exploitation of consumers •Long term interest of business •Business uses society’s resources •Social responsibility •Moral justification •Government intervention Consumer protection Act, 1986 (enacted to protect and promote the interest of consumers) Features •It has granted certain rights to consumers •It also provides safeguard to consumers against any type of exploitation •It has provided three-tier redressal machinery to provide remedy to consumers Consumer rights •Right to safety •Right to be informed •Right to choose •Right to be heard •Right to seek redressal •Right to consumer education Consumer responsibilities •Consumer should have knowledge about market •Consumer must be quality conscious •Use the products safety •Consumer must refer labels carefully •Insist on cash memo •Consumer must be honest •Consumer must file a complaint • Form consumer organisation •Consumer must respect the environment •Assert yourself to ensure that you get a fair deal Complaint can be filed by •Any consumer •Any registered consumer’s association •The central government or any state government •One or more consumers on behalf of numerous consumers •A legal heir or representative of a deceased consumer Three-tier redressal agencies •District forum •State commission •National commission Consumer Protection