Assam ASSEB Higher Secondary Business Studies cheat sheet

Management is goal-oriented, all-pervasive, multidimensional (work, people, operations), continuous, dynamic, and a group activity - not a single act.

Coordination is the essence of management and is present in all three levels; it is not a separate function but the thread running through planning, organising, staffing, directing and controlling.

Three levels: top (policy and strategy, board and CEO), middle (departmental, interpret policy), supervisory (foremen, day-to-day execution).

Three management functions: planning, organising, staffing, directing, controlling are the five functions; efficiency means doing things at least cost, effectiveness means doing the right things.

Management as a science: systematised body of knowledge, principles based on observation; as an art: personalised application; as a profession: partly - no compulsory licence, but code of conduct exists.

Objectives are multiple: economic (profit, survival, growth) and social (community welfare, employment, environment).

Management is a profession-like discipline but not a full profession because entry is not restricted by law and no statutory code governs all managers.

Significance: helps achieve group goals, increases efficiency, creates a dynamic organisation, helps society meet challenges.

Fayol's 14 principles include division of work, authority and responsibility, discipline, unity of command, unity of direction, subordination of individual interest, remuneration, centralisation, scalar chain, order, equity, stability of tenure, initiative, and esprit de corps.

Taylor's scientific management principles: science not rule of thumb, harmony not discord, cooperation not individualism, development of each person to greatest efficiency.

Taylor's techniques: time study, motion study, method study, fatigue study, differential piece wage system, standardisation, and functional foremanship (8 bosses).

Unity of command = one boss per employee; unity of direction = one head and one plan per group with the same objective. These are distinct.

Scalar chain is the formal line of authority from top to bottom; gang plank is a shortcut allowing same-level managers to communicate directly in emergencies.

Esprit de corps means union is strength; it opposes divide-and-rule among employees.

Taylor's differential piece rate pays higher rate to workers who meet standard output and lower rate to those who do not.

Fayol's principle of centralisation and decentralisation is a matter of degree, not an absolute choice.

Technique vs principle: principles are general guidelines; techniques are specific methods such as time study.

Business environment = sum of internal and external factors; external environment has micro (immediate) and macro (general) components.

Micro environment: suppliers, customers, competitors, market intermediaries, public, financiers.

Macro environment: political, economic, social, technological, legal, and environmental (PESTLE) forces.

Features: totality of external forces, specific and general forces, interrelatedness, dynamic nature, uncertainty, relativity.

Importance: helps identify opportunities and threats, tap useful resources, cope with rapid change, assist in planning, and build public image.

Internal environment factors include value system, mission/objectives, management structure, human resources, and brand equity.

Liberalisation, privatisation and globalisation (LPG, 1991) are the key features of the changing Indian business environment.

Legal environment includes legislation, court rulings, and government regulations that constrain business conduct.

Environmental scanning is the systematic monitoring of the environment to detect opportunities and threats.

Planning is deciding in advance what to do, how to do it, when to do it, and who is to do it; it bridges the gap between where we are and where we want to go.

Features: primary function, pervasive, continuous, forward-looking, mental exercise, involves choice among alternatives.

Limitations: leads to rigidity, may not work in a dynamic environment, reduces creativity, involves huge cost, and is time-consuming.

Steps: setting objectives, developing premises, identifying alternatives, evaluating alternatives, selecting an alternative, implementing the plan, follow-up.

Single-use plans: programmes and budgets; standing plans: objectives, strategies, policies, procedures, rules, methods.

Strategy is a comprehensive plan for accomplishing objectives; policy is a general statement guiding decision-making; rule is a specific, rigid statement with no discretion.

Planning premises are assumptions about the future on which plans are based; forecasting is a key input.

Planning reduces uncertainty but cannot eliminate it; it is not a guarantee of success.

Organising = identifying and grouping activities, assigning duties, delegating authority, and coordinating relationships.

Process: division of work, departmentalisation, assignment of duties, establishing reporting relationships.

Organisation structure: functional (grouped by function, suitable for single-product firms) and divisional (grouped by product/territory, suitable for multi-product firms).

Formal organisation is deliberately designed, follows rules and authority; informal organisation arises spontaneously from social interaction and has its own norms.

Delegation has three elements: authority, responsibility, and accountability; authority can be delegated, responsibility can be assigned, accountability cannot be delegated.

Decentralisation is the systematic dispersal of decision-making authority to lower levels; it is an extension of delegation.

Span of management (span of control) is the number of subordinates a manager can effectively supervise; narrow span creates tall structures, wide span creates flat structures.

Authority flows downward; responsibility flows upward; accountability flows upward.

Staffing = right person for the right job; it includes recruitment, selection, placement, training, and development.

Recruitment is positive (attracting candidates), selection is negative (rejecting unsuitable candidates).

Internal sources: promotions, transfers. External sources: direct recruitment, casual callers, advertisement, employment exchange, campus recruitment, consultants, web publishing.

Selection process: preliminary screening, selection tests, employment interview, reference and background checks, selection decision, medical examination, job offer, contract of employment.

Training is job-oriented and short-term; development is career-oriented and long-term.

Methods of training: on-the-job (apprenticeship, coaching, internship, vestibule, job rotation) and off-the-job (classroom, conferences, films, case study, vestibule).

Induction or orientation familiarises a new employee with the organisation, colleagues, and rules.

Performance appraisal evaluates an employee's performance against standards; it feeds promotion, transfer, and training decisions.

Job analysis has two parts: job description (what the job involves) and job specification (what the person must have).

Directing includes supervision, motivation, leadership, and communication; it initiates action, integrates efforts, and provides leadership.

Maslow's hierarchy: physiological, safety, social, esteem, self-actualisation - lower needs must be reasonably met before higher ones motivate.

Financial incentives: pay, allowances, bonus, profit sharing, co-partnership, retirement benefits. Non-financial: status, recognition, job security, employee participation, autonomy.

Leadership styles: autocratic (centralised), democratic (participative), laissez-faire (free rein).

Communication is the exchange of information; the process is sender, encoding, message, channel, decoding, receiver, feedback, noise.

Barriers to communication: semantic, psychological, organisational, personal; physical noise is also a barrier.

Supervision is the element of directing that ensures subordinates work as instructed; it is done by supervisors at the operational level.

Grapevine is informal communication; it is fast but can distort information.

Grievance handling is part of directing; it requires a formal procedure and prompt redressal.

Controlling = ensuring activities conform to plans; it is both backward-looking (evaluating past) and forward-looking (correcting future).

Steps: setting performance standards, measuring actual performance, comparing actual with standards, analysing deviations, taking corrective action.

Critical point control: focus attention on key result areas where deviation matters most.

Management by exception: only significant deviations are brought to management's attention.

Types of control: feed-forward (preventive), concurrent (real-time), feedback (post-action).

Deviation = actual − standard; if deviation exceeds the acceptable range (tolerance limit), corrective action is triggered.

Controlling and planning are interdependent: planning is the basis of control, and control provides inputs for future planning.

Control cannot be exercised over the external environment; it is limited to internal activities.

Budgetary control, ratio analysis, break-even analysis, and audits are common control techniques.

Financial management deals with procurement of funds and their effective utilisation; objective is wealth maximisation, with profit maximisation as the traditional goal.

Three decisions: investment (capital budgeting and working capital), financing (debt-equity mix), and dividend decisions.

Capital structure = mix of debt and equity; debt is cheaper but increases financial risk; equity is safer but dilutes control.

Fixed capital = long-term assets; working capital = current assets minus current liabilities.

Trading on equity: using debt to increase return on equity when return on investment exceeds the cost of debt.

Capital budgeting techniques: payback period, net present value (NPV), internal rate of return (IRR), profitability index.

NPV = sum of discounted future cash flows − initial investment; accept if NPV > 0.

Dividend decision: dividend payout vs retention; factors include cash flow, growth opportunities, taxes, and shareholder preference.

Financial leverage = debt / equity; higher leverage magnifies both returns and risk.

Financial market = a market for the creation and exchange of financial assets; it has money market (short-term) and capital market (long-term).

Money market instruments: treasury bills, commercial paper, certificates of deposit, call money.

Capital market: primary market (new issues) and secondary market (stock exchange trading).

Primary market methods: public issue (IPO/FPO), rights issue, private placement, offer for sale.

SEBI is the regulator of the Indian securities market; its functions are protective, regulatory, and developmental.

Stock exchange functions: providing liquidity, pricing of securities, spreading information, and investor protection.

NSE and BSE are the major Indian stock exchanges; NIFTY and SENSEX are their benchmark indices.

Depository services: dematerialisation of shares, electronic transfer, and settlement via NSDL and CDSL.

OTCEI is an over-the-counter exchange for small and medium companies.

Marketing = identifying customer needs and satisfying them profitably; it has a customer orientation, not merely selling.

Marketing mix (4Ps): product, price, place, promotion.

Product = bundle of utilities; levels: core, actual, augmented. Classification: consumer and industrial goods.

Product life cycle: introduction, growth, maturity, decline; strategies differ at each stage.

Branding, labelling, and packaging are components of product decisions.

Pricing factors: cost, competition, demand, objectives, government regulation.

Channels of distribution: direct (zero level) and indirect (one, two, three levels).

Promotion mix: advertising, sales promotion, personal selling, publicity/public relations.

Advertising is paid, non-personal, and sponsored; publicity is unpaid and non-sponsored.

Marketing vs selling: selling focuses on the product and volume; marketing focuses on the customer and satisfaction.

Consumer Protection Act, 2019 replaced the 1986 Act and provides for consumer councils and authorities.

Consumer rights: right to safety, information, choice, be heard, seek redressal, consumer education, and (under 2019 Act) protection against unfair trade practices.

Consumer responsibilities: ask for a bill, check ISI/Agmark marks, read labels, be aware of rights, and complain promptly.

Three-tier redressal: District Commission, State Commission, National Commission - jurisdiction based on value of goods/services.

2019 Act introduced the Central Consumer Protection Authority (CCPA) with investigative and penal powers.

Product liability under the 2019 Act: manufacturer, product service provider, and product seller can be held liable.

Unfair trade practices and misleading advertisements are actionable; e-commerce transactions are also covered.

Consumer can file a complaint within two years of the cause of action.

Standard marks: ISI (BIS) for industrial goods, Agmark for agricultural products, FSSAI for food, Hallmark for gold.