DU Business Studies Unit (Ga Unit) cheat sheet

Business environment has two layers: internal (owners, employees, culture, resources) and external (micro: customers, suppliers, competitors, intermediaries, public; macro: political, economic, social, technological, legal, environmental).

PESTLE analysis scans six macro forces: Political, Economic, Social, Technological, Legal, Environmental; each factor is classified as opportunity or threat before strategy is set.

SWOT pairs internal Strengths and Weaknesses with external Opportunities and Threats; strengths/weaknesses are controllable, opportunities/threats are not.

Entrepreneur is a person who organises land, labour and capital, bears risk, and earns profit as residual income; profit is the reward for uncertainty-bearing.

Schumpeter: entrepreneurship is creative destruction driven by new combinations - new goods, new methods, new markets, new sources of supply, new organisation forms.

Stages of a venture: idea generation, feasibility analysis, business plan, arrangement of finance and resources, launch, growth, maturity or exit.

Small-scale enterprise classification in India historically uses investment in plant and machinery plus turnover ceilings; MSME categories are micro, small and medium.

Business environment is dynamic, uncertain, complex and relative; firms adapt through forecasting, flexibility and environmental scanning.

Management functions: planning, organising, staffing, directing, coordinating and controlling; controlling compares actual performance with standards and corrects deviation.

Taylor's scientific management: time study, motion study, differential piece-rate wages, functional foremanship, standardisation; aim is maximum prosperity for employer and employee.

Fayol's 14 principles include division of work, authority and responsibility, unity of command, unity of direction, scalar chain, equity, order, initiative and esprit de corps.

Unity of command means one subordinate receives orders from one superior only; unity of direction means one head and one plan per group of activities.

Span of control is the number of subordinates reporting to one manager; a narrow span creates a tall structure, a wide span a flat structure.

Line organisation gives direct vertical authority; line-and-staff adds advisory specialists; functional organisation groups by specialised function and may violate unity of command.

Delegation transfers authority and responsibility but accountability remains with the delegator; authority can be delegated, responsibility for results cannot.

Maslow's need hierarchy: physiological, safety, social, esteem, self-actualisation, satisfied in order; Herzberg separates hygiene factors from motivators.

McGregor's Theory X assumes workers dislike work and need coercion; Theory Y assumes workers seek responsibility and self-direction.

Marketing mix (4P): Product, Price, Place, Promotion; services extend to 7P by adding People, Process and Physical evidence.

Product life cycle stages: introduction, growth, maturity, decline; pricing and promotion strategy differ at each stage, and maturity usually carries the highest competition.

Pricing methods: cost-plus (price = cost + markup), penetration (low launch price to build share), skimming (high launch price to recover R&D), value-based and competitive pricing.

Market segmentation divides a heterogeneous market by geographic, demographic, psychographic and behavioural bases; effective segments are measurable, accessible, substantial and actionable.

Positioning is the place a brand occupies in the target customer's mind relative to competitors; STP order is Segmentation, Targeting, Positioning.

Distribution channel levels: zero level (producer to consumer), one level (retailer), two levels (wholesaler, retailer); longer channels raise cost but widen reach.

Promotion mix: advertising, personal selling, sales promotion, publicity/public relations and direct marketing; personal selling suits high-value, technical or negotiated purchases.

Selling focuses on the product and volume; marketing focuses on customer needs and satisfaction, with selling as one element of the mix.

AIDA model of buyer response: Attention, Interest, Desire, Action; adoption process: awareness, interest, evaluation, trial, adoption.

Accounting equation: Assets = Liabilities + Capital (Owner's Equity); every transaction keeps this equation balanced.

Double-entry rule: debit the receiver and credit the giver; debit increases assets and expenses, credit increases liabilities, capital and income.

Golden rules: debit what comes in, credit what goes out (real accounts); debit expenses/losses, credit incomes/gains (nominal accounts).

Trial balance lists debit and credit balances; equality of totals proves arithmetical accuracy only, not absence of errors of principle or omission.

Balance sheet shows financial position on a date (assets, liabilities, equity); profit and loss account shows performance over a period (revenues less expenses).

Working capital = current assets − current liabilities; current ratio = current assets ÷ current liabilities; quick ratio excludes stock and prepaid expenses.

Gross profit = sales − cost of goods sold; net profit = gross profit + other income − indirect expenses; cost of goods sold = opening stock + purchases − closing stock.

Depreciation allocates the cost of a fixed asset over its useful life; straight-line method charges an equal amount each year, written-down value charges a fixed percentage on the reducing balance.

Break-even quantity = fixed cost ÷ (selling price per unit − variable cost per unit); contribution per unit is price minus variable cost.

Law of demand: other things equal, quantity demanded rises as price falls; a demand curve slopes downward, and a movement along it is caused only by price.

Price elasticity of demand = percentage change in quantity demanded ÷ percentage change in price; demand is elastic when the value exceeds 1, inelastic when below 1.

Law of variable proportions: as more of a variable input is added to fixed inputs, marginal product first rises, then falls, then becomes negative.

Fixed costs do not vary with output in the short run; variable costs do; total cost = fixed cost + variable cost; marginal cost = change in total cost ÷ change in output.

Market structures: perfect competition (many sellers, homogeneous product, price taker), monopoly (single seller, price maker), monopolistic competition (differentiated products), oligopoly (few sellers).

Simple interest = P × R × T ÷ 100; compound amount = P(1 + R/100)^n; compound interest = amount − principal.

Percentage change = (new value − old value) ÷ old value × 100; successive percentage changes of a% and b% equal a + b + ab/100.

Average = sum of observations ÷ number of observations; for grouped data, mean = Σfx ÷ Σf.

Ratio and proportion: if a : b = c : d then ad = bc; partnership profits are shared in the ratio of capital × time.

Communication process elements: sender, encoding, message, channel, receiver, decoding, feedback and noise; feedback closes the loop and confirms understanding.

Formal communication follows the chain of command (downward, upward, horizontal); informal communication (grapevine) spreads fast but is less reliable.

Barriers to communication: semantic (jargon, ambiguity), physical (noise, distance), psychological (prejudice, distrust), organisational (status, filtering) and personal.

7 Cs of effective communication: clear, concise, concrete, correct, coherent, complete and courteous.

A business letter contains heading, reference, date, inside address, salutation, subject, body, complimentary close, signature and enclosures.

Memo is internal, brief and impersonal; notice announces information to many; agenda lists items for a meeting; minutes are the official record of decisions taken.

Report structure: title, terms of reference, procedure, findings, conclusions and recommendations; it is factual and objective.

Listening is an active skill involving attention, interpretation and response; it differs from hearing, which is merely physiological reception.

HRM functions: human resource planning, recruitment, selection, placement, training and development, performance appraisal, compensation, and employee welfare and separation.

Recruitment attracts candidates (internal promotions, transfers; external advertisements, employment exchanges, campus, referrals); selection rejects unsuitable candidates through tests and interviews.

Training develops skills for the present job; development prepares employees for future responsibilities; both follow a needs assessment.

Performance appraisal methods include ranking, paired comparison, graphic rating scale, critical incident, checklist and 360-degree feedback.

Job analysis produces job description (duties, responsibilities) and job specification (qualifications, skills required); job evaluation ranks the worth of jobs for pay.

Industrial dispute causes: wages, working conditions, retrenchment, indiscipline and recognition of union; machinery includes works committee, conciliation, arbitration and adjudication.

Collective bargaining is negotiation between employer and workers' representatives over terms of employment; a settlement is binding on the parties.

Trade union objectives: protect wages and job security, improve working conditions, and represent members; strikes and lockouts are forms of industrial action.

Worker participation in management includes works committees, joint management councils and suggestion schemes, intended to reduce disputes and raise morale.

A valid contract requires offer, acceptance, lawful consideration, capacity of parties, free consent, lawful object and, where required, legal formalities; a contract without consideration is generally void.

Offer plus unconditional acceptance creates an agreement; an agreement enforceable by law is a contract.

Void agreement is not enforceable from the start; voidable contract is enforceable at the option of the aggrieved party (for example, consent by coercion or misrepresentation).

Essentials of a valid company: incorporation, separate legal entity, perpetual succession, common seal (optional in many regimes), limited liability and transferability of shares.

Memorandum of Association governs the company's external relations and contains name, registered office, objects and liability clauses; Articles of Association are internal rules.

Sale vs agreement to sell: in a sale, ownership passes immediately; in an agreement to sell, ownership passes on a future date or condition.

Consumer rights include safety, information, choice, being heard, redressal and consumer education; unfair trade practices and defective goods are actionable.

Negotiable instruments: promissory note (unconditional promise to pay), bill of exchange (unconditional order to pay) and cheque (bill drawn on a banker payable on demand).

Competition law prohibits anti-competitive agreements, abuse of dominant position and combinations that cause appreciable adverse effect on competition.