Category: 2nd PUC

Karnataka 2nd PUC Business Studies Notes Chapter 11 Marketing

→ Market: Market is place where buyers and sellers meet to effect purchase and sales

→ Definition of Market: Market is an area or atmosphere for a potential exchange. Marketing: It is human activity directed at satisfying the needs and wants through exchange process.

→ Definition of Marketing: Marketing is that phases of business activity through which human wants are satisfied by the exchange of goods and services.

→ Functions of marketing:

• Gathering and analyzing market information
• Market planning
• Product designing & Development
• Standardization and grading
• Packing & labeling
• Branding
• Customer Support Service
• pricing
• Promotion
• Channelizing distribution
• Transport
• Warehouse.

→ Element of Marketing Mix: Product, Price, Promotion, Physical distribution

→ Product: A product is bundle of utilities consisting of various product features and accompanying services.

→ Element of product Mix:

• Branding,
• Grading,
• Packing & packaging,
• Label & labeling,
• Guarantee,
• Warranty,
• After Sales Services/Customer service

→ Price: Price is a value of product expressed in terms of money

→ Factors affecting pricing decisions: The factors affecting pricing decisions can be classified into two categories as under:

→ Internal Factors: These are controllable factors which exist within the company’s environment. They are Business Objectives, Cost of the product, & Quality of the product.

→ Business Objectives: The pricing decision should always be in accordance with the business objectives like growth an expansion and customer satisfaction.

→ Cost of the product: This is the most important factor that determines the pricing decision. The price = Cost + profit. Thus the price for the product or service should cover the entire cost to the manufacturer as well as reasonable profits.

→ Quality of the product: High quality products give rise to higher cost and demands for higher price. But low quality products give rise to low cost and reduces the price.

→ External Factors: These are the uncontrollable factors which exist outside the company’s environment. They are Elasticity of demand, Pricing policy of competitors etc.

→ Elasticity of demand: A product that has inelastic demand, higher price may be fixed for that product. But if the demand for the product is elastic the price of the product must be kept flexible.

→ Pricing policy of competitors: The number of competitors and pricing strategies also will have a bearing on the pricing decisions of a concern.

→ Distribution Channels: A lengthy distribution channel demands for higher price. On the other hand a shorter distribution channel reduces the price of the product.

→ Place: It stands for making arrangement for the smooth flow of goods and services from producer to consumers.

→ Channels of distribution

• Direct selling
• indirect selling

→ Promotion: it is the process of marketing communication involving information, persuasion and influence.

→ Elements of promotion:

• Advertising
• Publicity
• Personal selling or Sales promotion

Advertising:

→ Any paid from of non personal presentation & promotion of ideas, goods or services by an identified sponsor.

→ Objectives of Advertising:

• To create demand
• To extend market
• To retain demand
• To assist salesman
• To overcome competition
• To warn public about imitation
• To educate customers
• To create reputation

→ Functions / advantages of Advertising:

• Steady demand: Advertising helps to maintain steady and regular demand for the product or service of a concern.
• Increase in Sales: Constant advertising helps to increase the sales volume for both producers and traders.
• Economies of production: Advertising leads to creation of more demand which in turn leads to large scale production and thereby reducing cost per unit of the product or service.
• Convenience: Advertising helps the consumers in making their purchases more convenient and comfortable, as their time and efforts are reduced in shopping.
• Education of consumers: Advertising educates the consumers by giving them details about the new products that can satisfy their needs.
• Better Standard of Living: Advertising helps the people to improve their living standards by persuading them to purchase newer and better quality products.
• Employment: Advertising creates more employment opportunities directly in the advertising industry as well as indirectly in other industries.

→ Disadvantages of Advertising:

• Less effective: It is less effective medium of promotion as there is no face to face interaction between the seller and customer.
• Lack of feedback: It is difficult to ascertain the effectiveness of advertising, as there is no immediate feedback from the customers to the producer or seller.
• Rigid: Advertisement copy once prepared cannot be changed easily to suit each individual. It gives only a general appeal.
• Confusion among customers: Too many advertisements on a similar type of products, making similar claims may result in confusion among customers in choosing the right product.
• Additional cost: Advertising expenses are included in the total cost of the product which increases the cost of the product that is recovered from the customers.
• Misleading: Customers are cheated by misleading advertisements. Claims made in advertisements seem to be untrue when product is purchased and put to use practically.

→ Advertisement copy: The advertising message is known as advertisement copy. Advertisement copy is taken as the life or the physical form to the idea of advertisement.

A good advertisement copy must possess the following characteristics:

→ Attention Value: Every advertisement copy should be designed with a high degree of attraction of the viewers. Use of catchy slogans, colorful picture, design borders etc in the ad copy will attract the attention of the viewers, towards product or service.

→ Memorizing value: The advertisement copy should be such that it should last for long in the minds of people. For example the advertisement for. “Washing powder Nirma” is remembered even today.

→ Suggestive value: The ad copy should highlight the need and necessity of the product/ service. For example, “Boost is the secret of my energy.” Suggests that boost is a healthy drink and gives good energy throughout the day.

→ Educational value: The ad copy should educate the customers by giving useful information about the usage of the product. For eg. advertisement for “Iodex” in TV gives the various purpose for which it can be used and how to use it.

→ Sentimental Value: Human behavior is affected by sentiments! Hence the ad copy should be prepared in such a way that it does not cause any damage to their sentiments.

→ Simplicity: The ad copy should be simple to understand and convincing to the people. Vague and confusing texts in advertisements should be avoided.

→ Publicity: publicity is used to promote different brands, product, persons, places, ideas & activities.

→ Salesmanship: It is the ability to persuade the people to buy or services at a profit to the seller & benefit to the buyer.

Qualities of salesmanship:

→ Good personality: Good personality of the salesman attracts the consumer & helps to create favorable impression in the minds of the customer.

→ Good health: He should have sound health. The good health increases the efficiency of a salesman.

→ Enthusiasm: He should have enthusiasm or interest in the work, otherwise he cannot discharge his duties successfully.

→ Sound education: he should have good knowledge of different languages so that he can talk to the customer in their languages.

→ Intelligence: he should have a strong memory power to understand & remember the nature of different types of customers.

→ Activeness: he should be active. He should not hesitate to work hard.

→ Training: A salesman should have proper training in salesmanship.

→ Courtesy: he should be counteous in his behavior. He should not lose his temper while dealing with the customer.

→ Honesty: he should be honest, sincere & co-opertive. he should be dependable. He should not make false representations.

→ Loyalty: he should be loyal to his employer. He should not damage the reputation of his employer.

→ Sales promotion: it refers to all those activities designed to boost the sales of a product or service.

→ Objectives of sales promotion: To introduce new product or service, To attract new customers, To induce existing customers to buy more, To help the firm to remain competitive, To increase sales in off-seasons, To create goodwill

→ Methods of sales promotion: Rebate, Discount, Refund, Product Combination, Quantity gift, Instant draw & Assigned gift, Lucky draw, Usable benefits, Full finance, Samples, Contest, Sweepstakes & Games.

2nd PUC Business Studies Notes

Karnataka 2nd PUC Business Studies Notes Chapter 10 Financial Markets

→ Financial Market: it is a market which deals with various financial instruments & financial services

→ Money market: it is a market for borrowing & lending of short-term funds with high liquidity.

→ Money market instruments:

• Treasury bills.
• Call money.
• Certificate of deposits.
• Commercial papers.
• Commercial bills

→ Treasury bills: It is an instrument of short term borrowing by the Government of India maturing in less than one year.

→ Call Money: It is a method by which banks faced with temporary shortage of cash, will borrow short term finance from other banks.

→ Certificate of Deposit: These are short term, unsecured negotiable instrument in bearer from issued by the commercial banks.

→ Commercial Paper: Commercial paper is a short term unsecured promissory note, negotiable & transferable with a fixed maturity period issued by the companies.

→ Commercial Bills: commercial bills are short terms, negotiable & self liquidating money market instrument with low risk.

→ Capital Market: it is a market for medium & long terms funds.

→ Feature:

• Deals with long term & medium term funds.
• makes arrangements of large amount of funds
• deals in longterm instruments such as stock, shares, debentures, bonds & securities of the government
• consists of financial institution such as banks financial enterprises, brokers, merchant banks etc.

→ Components of capital market: Primary market & Secondary market.

→ Primary Market: It also known as New Issue Market. It mobilizes the funds from the investors by the directly issuing securities.

→ Secondary Market: It is a market for the purchase & sale of second hand or existing securities.

→ Stock exchange: it is a secondary market for securities, that means, the securities which are already issued in the primary market, are traded in this market.

→ Definition: Stock exchanges are organized auction markets where buyers & sellers come together through their brokers to effective transactions in securities admitted to listing on the exchange.

→ Functions:

• Ready & continuous market for securities.
• Provides liquidity
• Mobilization of savings.
• Capital formation
• Ensures safety of funds.
• Evaluation of securities.
• Price stability.
• Controls company management.
• Capital mobility.
• Public finance.
• Facilities speculation.
• Acts as an economic barometer.

→ Trading procedure:

• selection of a broker,
• opening Demat Account,
• Placing the order,
• Executing the order,
• Settlement

Securities and Exchange Board of India

Objectives:

• Development of securities market,
• Protection of Interest of Investment
• Regulation of capital market

→ Functions:

• Regulating the business in stock exchanges & any other securities market
• Registering & regulating the working of mutual funds
• Promoting & regulation self-regulatory’ organization
• Prohibiting insider trading in securities.
• Regulating substantial acquisition of shares & take-over of companies.
• Conducting enquiries & audit of stock exchange.
• Levying fees & other changes for carrying out its functions.
• Conducting research for the above purposes.
• Promoting investors education & training of intermediaries of securities market.
• Registering & regulating the working of capital market intermediaries.

→ Relevant terms in stock exchange:

• NSEI (National Stock Exchange India)
• NASDAQ (National Association of Securities Dealers Automate Quotation)
• Dow Jones Industrial Average.
• Bulls
• Bears
• Lame duck Stag
• Spot Delivery
• Forward deliver
• BSE SENSEX
• NSE NIFTY
• Blue Chips.

2nd PUC Business Studies Notes

Karnataka 2nd PUC Business Studies Notes Chapter 9 Financial Management

→ Finance: Finance is the basic requirement of every business and it is considered as one of the important factor of production.

→ Financial management: It means effective and efficient management of money. It is concerned with planning & controlling of firms’ financial resources.

→ Definition: Financial Management is concerned with the efficient use of an important economic resource, namely, capital funds.

→ Importance:

1. Estimating capital requirement.
2. Capital budgeting.
3. Working capital marketing.
4. Appraisal of financial performance & financial control.
5. Making financial decision
6. Making dividend policy decision.
7. Solution to financial problem
8. Communication of financial performance

1. Estimating capital requirement: Financial Management makes the estimation of both short term & long term financial needs to make the smooth running of a business.

• Short Term Financial Needs: Refers to the financial requirement for a period within one year.or financial required to meet day today expense.
• Long Term Financial Needs: Refers to the financial requirements for a period exceeding one year.

2. Capital budgeting: It refers to the long term funds. Capital can be raised in two ways either by debts or Equity. Capital budgeting decides the composition of debt & equity in the long term finance of an organization.

3. Working capital marketing: Excess of current assets over current liabilities represents the working capital of an organization. To ensure the smooth working of an organization it should have sufficient working capital to meet the day to day needs.

4. Appraisal of financial performance & financial control: Financial Management provides various financials tools such as Ration analysis, Budgeting, Variance analysis. It helps the management to control the financial activities of the organization.

5. Making financial decision: Financial Management is concerned with financial decisions relates to the composition of assets. Capital & Investment. Sound financial decisions are made depending on risk & return.

6. Solution to financial problem: A good financial management helps the top management by providing financial information and also solutions to various financial problems.

7. Communication of financial performance: It is used to measure profitability & liquidity of the business. The various stakeholders who are keen about the financial performance of the organization are Share holders, Creditors, Investors, Economists. Employees and Government.

→ Objectives of financial management:
1. Profit maximization: Profit can be maximized with proper utilization of organizations resource. The company should earn sufficient profit to meet its expenses, expansion & modification.

2. Wealth maximization: It means the maximization of the market value of shares. The market value of shares is related to three financial decision, viz., investment decision, financial decision, & Dividend decision.

3. Proper estimation of total requirement: It is very important o know the financial requirement to start & run the business. Estimating of financial requirement is done after considering factors such as scale of operation, technology, man power requirements etc.

4. Obtaining funds at minimum cost: The required fund can be mobilized through many sources. such as shares, debentures, Bank loan etc. The finance manager must decide about difference & the balance between owned finance & borrowed finance. He must obtain the funds at minimum cost.

5. Proper utilization of finance: Finance must invest in profitable project and care should be taken to ensure that finance is not wasted due to investment in unprofitable project, blocking of finance in inventories & long period of credit.

6. Maintaining proper cash flow: An organization must have proper cash flow to pay its day- to-day expenses such as purchase of raw material, payment of wages & salaries, rent, electricity bills etc. Healthy Cash flow improves organizational success.

7. Risk minimization: Financial management tries to minimize the risk through creation of reserves to meet unforeseen contingencies. A portion of profits are always kept aside as reserve in order to utilize it for future growth and development.

8. Proper co-ordination: Financial Management works in combination with other areas like production, marketing, personnel etc. thus proper co-ordination with other departments is an important objective of financial management to achieve the organizational goals.

9. Financial control: Finance management should always plan the source of procuring funds & also the applications of funds. Deviation between the planned & actual inflow & outflow of funds should be studied; analyzed & corrective actions should be taken immediately.

10. Creation of goodwill: Financial management should try to create good will for the organization. Financial Management ensures good corporate governance. It will help to create confidence in the minds of the stake holders regarding the financial activities of the organization.

Financial decisions:

→ Financial decisions are concerned with how to raise the funds for business activities from various sources. The Financial Management decisions can be broadly classified into:

1. Investment decisions
2. Financing decision
3. The dividend decision

→ Investment decisions: These decisions are concerned with how firm’s funds are invested in different assets either long term or short term.

→ Financing decisions: These decisions are concerned with how to raise the funds for business activities from various sources. (Debt or Equity).

→ Dividend decisions: These decisions are concerned with the apportionment of the firm’s profit.

Financial planning:

→ It is concern with the preparation of a financial blue print of an organization’s for future operations.

→ Importance of financial planning:

• Tool to face uncertainties.
• Ensures liquidity.
• Ensures adequate funds.
• Rational utilization of funds.
• Elimination of waste.
• Economy.
• Better financial control.

→ The Capital requirement of the business organization can be classified under two heads:

1. Fixed Capital
2. Working Capital

→ Fixed capital: It refers to the amount invested in acquisition of fixed assets.

→ Features of fixed capital:

• Concerned with long-term funds.
• Involves large amount of funds.
• Used to acquire fixed assets.
• Raised with the help of long-term source of funds.
• Involves high risk.
• Involves future prospects of the business.

→ Factors affecting fixed capital requirement:

• Nature of business.
• Scale of operation.
• Growth & Expansion prospects.
• Choice of technique of production.
• Method of fixed asset acquisition.
• Diversification.
• Amount of promotion expenses.
• Level of collaboration

→ Working capital: It refers to investments in current assets such as stock of materials, work- in-progress, finished goods, account receivables etc..

→ Factors affecting working capital:

• Nature of business.
• Scale of operation.
• Growth & Expansion.
• Business cycle.
• Seasonal factors.
• Credit policy.
• Price level changed.
• Level of competition.
• Production cycle.
• Profit level.
• Operating efficiency.
• Dividend policy.

→ Features of working Capital:

• Concerned with short-term funds.
• Index of the solvency of the concern.
• Provides liquidity to the business.
• Involves lesser risk.

2nd PUC Business Studies Notes

Karnataka 2nd PUC Business Studies Notes Chapter 8 Controlling

→ Control: It is the power or authority to direct or order to confirm the standard performance.

→ Controlling: It is the continuous process of evaluating actual performance with standard performance of an individual, group or department.

→ Definitions: Controlling is the measuring & correcting of activities of subordinates to ensure that events conform according to the plan.

→ Importance:

• Controlling help for execution of plans
• Controlling improves employee’s efficiency
• Improve organizational efficiency & effectiveness
• Controlling is a basis for future action
• Controlling facilitates coordination
• Delegation of Authority
• Controlling simplifies supervision
• Controlling is responsible for ultimate performance.

→ Controlling Process: It involves

• Standard setting
• measurement of performance
• Comparison and locating deviations
• Analyzing causes of deviation
• Corrective action
• Attainment of standards.

→ Setting standards: Different types of standards are used for measuring the performance of different individuals. Standards may be of two types’ qualitative standard and quantitative standard.

→ Quantitative Standards: It includes Quantity, Quality, Cost, Time & etc.

→ Qualitative Standards: It includes Employee morale, consumer satisfaction, Brand leadership etc.

→ The standards for control should satisfy the following requirement:

• It should be simple & easily understandable
• It should be flexible not rigid
• It should be in accordance with the people responsible to achieve them.
• It should be consistent with the overall objective of firm.

→ Measurement of Actual performance: Once these standards are fixed for desired performance the next step is to measure the actual performance. Measurement of performance should be clear, simple, rational, relevant, and understandable without complaints and interpretation.

→ Comparing the actual performance with standards: It involves two steps

• Finding out the extent of deviations
• Identifying the causes of such deviations
• While comparing the actual performance with the standards the deviations are revealed. Once the deviations are noticed and causes for the same are determined corrective measures are adopted.

→ Analyzing the deviations: Deviations means variations from the standards. Every deviation is analyzed to find out why it has occurred and who is responsible for the same. Deviations may be Negative, Positive or Zero.

• Negative Deviations: If actual performance is less than standard that leads to negative deviations.
• Zero Deviations: If actual performance is equal to the standard that leads to Zero deviations.
• Positive Deviations: If actual performance is more than standard that leads to Positive deviations.

→ Taking corrective actions: After finding what has gone wrong, where and why, management will initiate corrective action. The remedial actions may involve:

• Review and revision of goals or standards,
• Change in the assignment of tasks
• Provisions for additional resources or new facilities
• Improvement in the selection and training of worker or reform in the technique of direction.

2nd PUC Business Studies Notes

Karnataka 2nd PUC Business Studies Notes Chapter 7 Directing

→ Meaning: Directing is a continuous process through which mangers interact with the employees of the enterprise.

→ Definition: Direction is telling people what to do and seeing that they do it to the best of their ability. It includes making assignments, explaining procedures seeing that mistakes are corrected.

→ Importance:

• Action Oriented
• Integration of efforts
• Efficient use of resources
• Essential element
• Efficiency
• Flexibility
• Clarity
• Discipline
• Coordination
• Creation of leaders.

→ Elements of Directions: Delegation, Supervision, Leadership, Motivation, Communication & Coordination.

→ Delegation: It involves issuing order by the supervisor to the subordinates Supervision: It ensures the work to be performed as per the plans and contributes for achieving organizational goals.

→ Leadership: It is the process of influencing the subordinates to work willingly and enthusiastically for achieving the goals of an organization.

→ Motivation: it creates in men the desire & sense of belongingness to work for the organization

→ Communication: Through communication manager issues guidelines to the subordinates as to what they should do and how they should do it.

→ Co ordination: It implies proper integration of activities of various members involved in achieving organizational goals.

→ Supervision: Supervision refers to the difference & immediate guidance & control of subordinates in performance of their tasks.

→ Importance of supervision : Issue of orders instructions, planning & organizing the work, Vital link between workers & management, Motivating subordinates, Feed back to workers, proper assignment of work, Maintain discipline.

→ Motivation: It is derived from a Latin word ‘movere’ which means ‘to move’ or to ‘energize’ or to ‘activate’. Motivation helps in converting the ability to work in to willingness to work.

→ Definition: Motivation is a general term applying class of drives, needs, wishes, & similar forces

→ Leadership: It is the one of responsibilities of a supervisor is to provide proper & effective leadership to his subordinates.

→ Definition: A leader is one who guides & directs other people. He must give their efforts a direction & purpose

→ Types of leadership:

• Autocratic leadership,
• Democratic leadership,
• Laissez faire leadership,
• Bureaucratic leadership.

→ Autocratic leadership: It is style of leadership where the leader runs the whole show ‘ by himself. He doesn’t delegate authority and wants his subordinates to according to his order.

→ Democratic leadership: This type of leadership is also known as participative leadership. Here the leaders take the suggestion and opinions from his subordinate and allow them to participate in decision making and in its implementation.

→ Laissez faire leadership: Here the leader allow his subordinates to take their own decisions for them self A complete freedom is given to staff to determine the goals, make decisions and problems on their own.

→ Bureaucratic leadership: Here the leader goes by the rules of the book. Everything is done in accordance with the procedure or policy.

→ Qualities of a successful leader: A good leader is one who sets vision goals & motivates people & obtains their commitment to achieve their goals & realize the vision.

→ Some of qualities of a successful leader are: Honesty, Ability to delegate, communication, confidence, willingness to take risk, positive-attitude, creativity, Initiative, Passion, Courage, Emotional Stability, Art of management, Generosity, Ability to listen.

→ Honesty: A leader should be honest & his honesty will make his sub-ordinates follow him
Ability to delegate: one who has the ability to delegate the authority & responsibility to his sub-ordinates so that they also participate in effective management.

→ Communication: A leader should be good at communicating ideas, decision, orders etc only then he can persuade, inform, stimulate & direct his sub-ordinates.

→ Confidence: Leader should be self confident & be able to create confidence in his subordinates. Willingness to take risk: Leader should be willing to take calculated risk & should be ready for any unexpected happenings.

→ Positive attitude: Leader should have a positive outlook towards achieving the goals & also instill the same in his sub-ordinates

→ Creativity: A leader should think beyond the existing possibilities. New ideas may bring best results.

→ Initiative: Leader should lead by initiating action & not by delegating & waiting for things to happens.

→ Passion: Great leader is passionate about his work & he passes on this trait to subordinates too.

→ Courage: Leader should always be bold to accept challenges & new responsibilities. This in turn makes the subordinates more courageous.

→ Emotional Stability: leader should think intellectually & not sentimentally or emotionally.

→ Art of management: A leader should have art of understanding & managing the subordinates.

→ Generosity: Leader should be generous in praising the good work & deeds of his subordinates.

→ Ability to listen: Leader should be a good listener. He should not only listen to the directions given by his superiors but also listen to subordinates.

→ Communication: It is the art of transmitting information, ideas, & attitudes from one person to another.

→ Definition: Communication is an exchange of facts, ideas, opinions or emotions by two or more person.

→ Importance of communication: Co-ordination, Smooth working, Effective Decision making, Managerial Efficiency, co-ordination, Effective Leadership, Increases Productivity, Morale Building.

→ Two types of communication: Formal & informal communication

→ Formal Communication: Person in the organization communications using formal channels of the organization structure along the lines of authority established by the management.

→ Informal Communication: It is also called as informal commijnication. It is less official and rule driven. In grapevine communication employees communicates orally under causal situations.

→ Barriers to effective communication: Communication is complete & perfect when the receiver understands the message in same sense.

→ Following are the barriers to Effective communication:

1. Physical barriers,
2. semantic barriers,
3. organization barriers,
4. psychological barriers.

1. Physical barriers: The working environment such as sound of machines and equipments, distance, noise creates physical barriers in communication.

2. Semantic barriers: The use of difficult words and multiple meaning words or use of different language, figures and symbol creates semantic barriers.

3. Organization barriers: This arises from goals, regulations, structure and culture of an organization.

4. Psychological barriers: these are barriers to effective communication created due to lack of interest in the people perception, filtering, distrust for which communication is meant

→ How to overcome the barriers of communication: Clarity of ideas, Communication according to the need of the receiver, Consult other before communication, Beware of language tone & content of message, Convey things of helps & value to the listener, Ensure proper feedback, Consistency of Message, Follow up Communication, Be a good Listener.

2nd PUC Business Studies Notes

Karnataka 2nd PUC Business Studies Notes Chapter 6 Staffing

→ Meaning: Staffing is the process through which competent employees are selected, trained, developed, rewarded and integrated tow ards the achievement of business goals.

→ Definition: According to Theo Haimann “Staffing is a function which is concerned with the placement, growth & development of all those members of the organization, whose function is to get the things done through others.

→ Importance:

• Right people for right jobs
• effective use of resources
• Increase productivity & profitability
• Job satisfaction.

→ Staffing process:

• Man Power planning
• Recruitment
• Selection
• Placement Sc Orientation
• Training & Development
• Performance appraisal
• Promotion & carrier planning
• Compensation.

→ Man Power Planning: It refers to the process of estimating the man power requirement of an organization.

→ Recruitment: Recruitment is the process of searching candidates for employment.

→ Sources of recruitment: Internal Source & External Source.

→ Internal Sources: Promotions & Transfer.

→ Promotions: It is upward movement of an employee from one job to the higher one within the organization. It Increases salary, status & responsibilities.

→ Transfer: It means lateral movement of employee in the same grade from one job to another without any changes in his status.

→ External Sources: Direct Recruitment, Casual callers, Advertisement, Employment Exchange, Placement Agencies, & Campus recruitment.

→ Direct recruitment: It refers to the recruitment in which application for vacancies are presented on bulletin board outside the factory or at the gate.

→ Casual Callers: They are also called as unsolicited application. Here many qualified persons apply for employment to the reputed companies on their own initiative.

→ Advertisement: Employment advertisement refers to the details about the company, job specification given in the news paper, journals, bulletins etc. which brings response from the suitable candidates.

→ Employment Exchange: Those who are in search of employment get themselves registered with the government agencies which help them in finding jobs are called employment exchanges.

→ Placement agencies: In urban area a number of private organizations have started functioning as employment exchanges. These agencies are called as placement agencies.

→ Campus recruitment: Selection of suitable candidates from the universities, Colleges and institutes are popularly known campus recruitment.

→ Selection Process: It is procedure of matching organizational requirement with the skills & qualification of the people.

→ Steps in Selection Process: Preliminary screening, Selection Tests, Interview, Reference & Background checks, Selection & Decisions, Medical Examination, Job Offer & Contract of employment.

→ Placement: It means assigning jobs to the selected candidates.

→ Orientation: It means introducing the selected employee to the other employees and familiarizing him with the rules & regulation of the organization

→ Training: Training is the organized procedure in which people learn knowledge & skill for definite purpose.

→ Development: It refers to the process of not only building up the skills and abilities for a specific purpose to undertake more difficult & challenging tasks.

→ Importance of training: The theoretical knowledge can be gained in educational institutions, but for the practical knowledge training is required. Training is necessary to make workers alert & Active.

→ Methods of training: On Job Training & Off Job Training.

→ Types of On Job Training: Apprenticeship, Coaching, Internship Training, Job Rotation.

→ Apprenticeship: It is the formalized method of training with on job work under supervision. Coaching: In this method the trainee is placed under a particular supervisor who functions as a coach in training the employee.

→ Internship Training: It is system of on the job training that allows learner to gauge their interested in their chosen professional area.

→ Job Rotation: It is method of training which serves the purpose of employees development through the provision of diversified training.

→ Types of Off job Training: Class room lecture, Case Study, Vestibule Training, Computer Modeling.

→ Class Room Lecture: Under this method trainees are called to the room like that of class to give training in the form of lecture.

→ Case study: It is written description of an actual situation in the past in the same organization. Trainees are supported to analyze and give their conclusion.

→ Vestibule training: This method of training is used mostly to train technical staff and office employees who deals with the tools, equipments and machines.

→ Computer Modeling: It is the technique of representing the real world by a computer program or software.

→ Performance appraisal: It is the systematic evolution of the individual with respect to his performance on the job.

→ Compensation: The wages or salary which a worker gets for his service is also called as compensation.

2nd PUC Business Studies Notes

Karnataka 2nd PUC Business Studies Notes Chapter 5 Organising

→ Meaning: Organizing is the process of identifying, grouping the work to be performed, delegating authority & responsibility, establishing a relationship & purpose for the people to work most efficiently together to achieve the objectives.

→ Definition: To organize a business is to provide it with everything useful to its functioning – raw materials, machines, tools, capital and personnel.

→ Importance: Effective administration, Optimum Utilization of resources; Clarity in work relationship, Benefit of Specialization, Expansion & Growth, Development of personals, Adoption to the change.

→ Organising Process: It involves 4 stages

1. Identification & Division of work
2. Departmentalization
3. Assignment of duties
4. Establishment of reporting relationship.

→ Organization Structure: It is system which defines the frame work with in which the managerial and operating functions are performed in an enterprise.

→ Types of organizational structure: Functional structure & Divisional Structure. Functional structure: Grouping the jobs based on similar nature and organizing them different departments is known as functional structure.

→ Divisional Structure: Grouping the activities on the basis of product is known as divisional Structure.

→ Formal Organization: Formal organization is one which has a system of well defined Positions, Authority, responsibility, Policies, Principles etc.

→ Informal Organization: Informal organization refers to the relationship between the people in the organization based on the personal attitude, prejudices, likes & dislikes etc.

→ Delegation: Delegation is the process of transferring authority from a superior to his subordinate.

→ Elements of delegation: Authority, Responsibility, & Accountability.

→ Authority: It is the power to command employees and instruct them to perform a job.

→ Responsibility: It is the obligation of a subordinate to perform the assigned duty.

→ Accountability: It means being answerable for the final results.

→ Importance of delegation: Delegation of authority is necessary for the smooth functioning of a business. Effective management can lead to

• effective management
• Employee development
• Better coordination
• Quick decision making
• Basis for management Hierarchy
• Facilitate Growth.

→ Centralization of Authority: It refers to the concentration of authority of decision making by top level managers is called centralization.

→ Decentralization of authority: It refers to the transfer of authority to take decisions to the lower levels of organization.

→ Importance of Decentralization:

• Reduces work load,
• Quick Decision Making
• Relief to top facilitates growth
• Facilitates growth.
• Development of executives.

2nd PUC Business Studies Notes

Karnataka 2nd PUC Business Studies Notes Chapter 4 Planning

→ It is the first function to be performed in the process of management.

→ It is a base for all other functions of management.

→ It is an intellectual process.

→ It is a continuous and never ending process

→ It concentrates on setting objectives and determines future course of action.

→ Importance: It provides direction, reduce the risk of uncertainty, reduce overlapping and wasteful activities, provide innovative ideas, facilitate decision making, and establish standards for controlling.

→ Limitation of planning: It leads to rigidity, may not work in dynamic environment, and reduce creativity, involves huge costs and time consuming, it never guarantee the success.

→ Steps in planning: Setting objectives, Developing premises, Identification of alternative course . of action, Evaluating alternative courses, Selecting an alternative, Implementing the plan, Follow up action.

→ Types of Plans:

• Objectives,
• Strategies,
• Polices,
• Procedure,
• Methods,
• Rules,
• Programmes,
• Budgets.

(a) Objectives: Objectives lay down guidelines for the activities and serves as a bench mark for measuring the performance of the organization.

(b) Strategies: Strategies are the specific programmes of action for achieving the objectives of the organization by employing the resources efficiently and economically. Examples of strategies: Strike iron while it is hot Divide and rule, Time is a great healer.

(c) Policies: They are the general statements which serve as guideline in the decision making process. An established policy helps to resolve the problems and issues easily.

(d) Procedures: They are the plans prescribing the exact time sequence for the work to be done. Procedures are the guidelines to action and they are suited to the works which are repetitive in nature.

(e) Methods: The prescribed way or the manner of doing each planned task to achieve the
goals is known as method.

(f) Rules: Every organization likes to operate in an orderly way. Rules are the established principles for carrying out the activities in a systematic manner.

(g) Programme: A programme is a precise plan laying down the operations to be carried out to complete a given task within a specified period of time.

(h) Budgets: Budget is a statement of expected results expressed in numerical terms. Budget is also considered as a controlling device. Preparing a budget involves forecasting and estimation.

2nd PUC Business Studies Notes

Karnataka 2nd PUC Business Studies Notes Chapter 3 Business Environment

→ The soft-drinks giants, Pepsico and Coca-Cola, suffered a decline in sales of colas in India in the beginning of the year 2006 after an environmental group, Centre for Science and Environment (CSE) claimed to have found pesticides in their drinks upto 50 times the permissible health limits.

→ These companies issued a number of press statements and conducted many publicity compaigns in India claiming that their beverages were perfectly safe. The Union Health Ministry’s expert committee also observes that Coke and Pepsi were safe. CSE, in turn, criticised the expert committees findings and said that 11 of Coke and Pepsi drinks contained average pesticide levels that were 24 times higher than the limits agreed by the Indian government.

→ Despite health ministry’s clean chit to colas, several States continue to ban or restrict Coke and Pepsi. However, the pesticide controversy adversely affected the sales of both Coke and Pespi as consumers started watching their diet more closely. Organic food products suddenly became popular as the healthier option.

→ By definition, organic means fruits, vegetables, foodgrains and processed products that have been produced with no pesticide or inorganic fertilisers. Meanwhile the soft drinks giants have been continuously advertising and trying to convince the consumers about the safety of their products.

2nd PUC Business Studies Notes

Karnataka 2nd PUC Business Studies Notes Chapter 2 Principles of Management

→ Principles are some truth about some phenomenon, that provide guidelines for decision making & action.
→ Meaning of Principles of Management: These are the guiding rules of laws for management action.

→ Features: Universal application. General guidelines, formed by practice and experimentation, Flexible, Behavioral nature, cause & effect relationship, contingents.

→ Fayol’s 14 principles of management:

1. Division of work
2. Authority & Responsibility
3. Discipline
4. Unity of command
5. Unity of Direction
6. Subordination of individual interest to general interest
7. Remuneration of Employees
8. Centralization & Decentralization
9. Scalar principle
10. Order
11. Equity
12. Stability of Personnel
13. Initiative
14. Esprit de corps.

→ Division of work: Divide any work into small jobs and should be performed by specialist so that the quality of production will improve.

→ Authority & Responsibility: There should be a balance between the two. Excess of authority may lead to misuse of power. Responsibility without authority may lead to slaveries.

→ Discipline: One should be obedience towards the rules and regulation of the organization

→ Unity of command: There should be one boss for every, individual employee to avoid dual subordination & confusion.

→ Unity of Direction: Each group should be lead by one leader only. It ensures unity of action and coordination.

→ Subordination of individual interest to general interest: Individual interest of the worker should not disturb the organization’s interest. Priority is given to group interest.

→ Remuneration of Employees: Remuneration should be good and equitable. Good remuneration ensures good relationship between workers and management.

→ Centralization & Decentralization: Centralization means making the power in the hands of one or few. Decision making powers among more persons are called decentralization.

→ Scalar principle: Formal line of authority from highest to the lowest ranks are known as scalar chain.

→ Gang Plank: The scalar principle should be followed by all managers as well as subordinates. This scalar chain can be violated only in case of emergency to facilitate rapid and easy communication without delay. This is called Gang plank.

→ Order: People and materials must be in the suitable place at appropriate time for maximum efficiency.

→ Equity: Kindness and Justice in the behavior of manager towards the employees or workers.

→ Stability of Personnel: Employee turnover should be minimized to maintain organizational efficiency.

→ Initiative: It refers to the steps taken by the employees towards their self motivation.

→ Esprit de corps: It is nothing but the spirit of cooperation. Worker should work in team and develop a sense of oneness and should have mutual confidence and understanding.

→ Scientific Management: Refers to the use of scientific and standardized tools, methods and trained workers in all organizational activities to achieve the organizational goal with minimum cost and wastage.

→ Principles of Scientific Management: It is a science, but not rule of thumb, It is a Harmony not discord, Runs on cooperation not on individualism, Development of efficiency and prosperity, Optimum production.

2nd PUC Business Studies Notes