BSEB Inter Business Studies cheat sheet

Management is goal-oriented, all-pervasive, multidimensional, continuous, composite, intangible and dynamic; it is both a science and an art, and a profession only partly.

Three dimensions: management of work, management of people, management of operations - each must be balanced for efficiency (doing things right, cost-focused) and effectiveness (doing the right things, goal-focused).

Levels: top (policy, strategy, board-level), middle (departmental plans, interpret policy), supervisory/operational (foremen, day-to-day execution, worker morale).

Functions: planning, organising, staffing, directing, controlling - planning and controlling are the twin ends; staffing and directing are people-centred.

Coordination is not a separate function but the essence of management, threaded through every function from the start.

Objectives: organisational (profit, growth, survival), social (employment, environment, community), personal (employee satisfaction, growth) - all three must be served.

Management as a science: systematic body of knowledge, principles based on observation and experimentation, but human behaviour limits exact prediction.

Management as a profession: has body of knowledge and code of conduct but no statutory restriction on entry, so it is a profession in part only.

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, esprit de corps.

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

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

Taylor's techniques: time study (standard time), motion study (eliminate unnecessary movements), method study, fatigue study, differential piece wage system.

Functional foremanship splits planning and execution: 4 planning bosses (route clerk, instruction card clerk, time and cost clerk, disciplinarian) and 4 production bosses (gang boss, speed boss, repair boss, inspector).

Fayol's scalar chain allows a 'gang plank' - direct communication between equals in different chains for speed, with superior approval.

Taylor's differential piece rate pays higher rate to workers above standard output and lower rate to those below, linking pay to productivity.

Esprit de corps = unity is strength; equity = kindliness and justice to employees; order = a place for everything and everything in its place.

Business environment = sum of external forces that affect performance; features: totality of external forces, specific and general forces, inter-relatedness, dynamic, uncertainty, relativity.

Dimensions: economic, social, technological, political, legal, and natural/physical - often summarised by scanning the general and specific environment.

Specific forces directly affect daily operations: customers, competitors, suppliers, financiers, marketing intermediaries. General forces affect all firms: economic, political, legal, social, technological.

Importance: helps identify opportunities and threats, gives early warning of change, assists in tapping useful resources, helps cope with rapid change, assists planning and policy.

SWOT analysis: internal strengths and weaknesses (controllable) matched with external opportunities and threats (environmental).

Economic environment components: interest rates, inflation, GDP growth, income distribution, fiscal and monetary policy, exchange rates.

Legal environment: legislation, court rulings, government regulations, statutory bodies - compliance is compulsory, not optional.

Technological environment: innovation, obsolescence, R&D spending, technology transfer - firms that ignore it lose competitive position.

Planning = deciding in advance what to do, how, when and by whom; it is primary, continuous, futuristic, mental, and goal-oriented.

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

Planning premises are assumptions about the future environment (internal and external) on which plans rest; forecasting is a key input.

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

Types of plans: standing plans (objectives, strategy, policy, procedure, rule, method) and single-use plans (programme, budget).

A policy is a general guide to decision-making; a rule is a specific, rigid statement of what must or must not be done; a procedure is a step sequence.

Strategy = comprehensive plan for achieving objectives and securing competitive advantage; it is long-term and integrates resources.

Budget is a statement of expected results in numerical terms - a single-use plan used for control as well as planning.

Organising = identifying and grouping activities, assigning duties, delegating authority, and creating coordination - it creates the organisational structure.

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

Formal organisation: deliberately designed, rules and procedures, chain of command, fixed roles; informal organisation arises from social interaction and is flexible.

Span of management: narrow span gives a tall structure with many levels; wide span gives a flat structure with fewer levels.

Delegation has three elements: authority (right to command), responsibility (obligation to do the assigned task), and accountability (answerability, which flows upward and cannot be delegated).

Centralisation concentrates decision authority at the top; decentralisation disperses it - decentralisation is a philosophy, delegation is a process.

Departmentalisation bases: function, product, territory, customer, process - chosen to fit strategy and coordination needs.

Informal organisation benefits: fast communication, social satisfaction, flexibility; drawbacks: rumour, resistance to change, role conflict.

Staffing = filling and keeping filled positions: manpower planning, recruitment, selection, placement, training, appraisal, promotion, compensation.

Recruitment is positive (attracting candidates); selection is negative (rejecting unsuitable candidates) - recruitment precedes selection.

Internal recruitment sources: transfer, promotion, internal notice; external sources: campus, agencies, advertisements, employment exchanges, recommendations, web portals.

Selection process: preliminary screening, application form, selection tests, employment interview, reference checks, selection decision, medical exam, job offer, contract of employment.

Training methods: on-the-job (apprenticeship, coaching, internship, job rotation) and off-the-job (classroom lectures, films, case study, vestibule training, computer modelling).

Training improves job skills for the present role; development prepares for future responsibilities - training is narrower in scope.

Performance appraisal compares actual performance with standards; methods include rating scales, checklist, forced distribution, critical incident, 360-degree feedback.

Compensation includes wages/salary, incentives, allowances, perquisites, and retirement benefits; job evaluation ranks jobs, not people.

Directing = instructing, guiding, supervising and motivating people towards objectives; features: initiates action, continuous, flows from top to bottom, human element.

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

Financial incentives: pay, allowance, bonus, commission, profit sharing, co-partnership; non-financial: status, career opportunity, job security, employee recognition, job enrichment.

Leadership styles: autocratic (decision without consultation), democratic (consults subordinates), laissez-faire (full freedom to group).

Communication process: sender, encoding, message, channel, receiver, decoding, feedback, noise; barriers are semantic, psychological, organisational, personal.

Formal communication flows: downward, upward, horizontal (lateral), diagonal; grapevine is informal and can be fast but inaccurate.

Supervision means overseeing subordinates at work; it is the element of directing closest to the operating level.

Motivation is internal; incentives are external stimuli - the two are linked but not identical.

Controlling = measuring actual performance against standards, finding deviations, and taking corrective action; it is backward-looking in measurement but forward-looking in correction.

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

Critical point control focuses on key result areas; management by exception attends only to significant deviations, saving managerial time.

Standards may be quantitative (cost, output, time, sales) or qualitative (employee morale, customer satisfaction, brand image).

Limitations: difficulty setting qualitative standards, resistance from employees, cost and time involved, and control may become rigid.

Planning and controlling are inseparable - planning provides the standards, controlling verifies whether plans succeeded; both are forward and backward looking.

Deviations may arise from internal causes (poor material, machinery breakdown, human error) or external causes (government policy, competition, fashion).

Corrective action may involve revising standards, changing plans, retraining staff, or redesigning processes - not only punishing employees.

Financial management deals with planning, acquiring, and utilising funds to maximise owner wealth; objectives are wealth maximisation (primary) and profit maximisation.

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

Capital structure = mix of debt and equity; debt is cheaper (interest is tax-deductible) but raises financial risk; equity dilutes control.

Fixed capital needs depend on nature of business, scale, technology, growth plans, and choice of technique; working capital needs depend on operating cycle and seasonality.

Working capital = current assets minus current liabilities; gross working capital is total current assets.

Capital budgeting techniques: payback period, average rate of return, net present value, internal rate of return, profitability index.

Dividend decisions: stable dividend policy, constant payout ratio, residual approach; factors include cash flow, growth opportunities, tax, and legal constraints.

Financial leverage = use of fixed-charge funds (debt) to magnify return to equity holders; higher leverage means higher financial risk.

Financial market = market for creation and exchange of financial assets; classified into money market (short-term, up to 1 year) and capital market (long-term).

Money market instruments: treasury bills, commercial paper, certificate of deposit, call money; capital market instruments: equity shares, debentures, bonds.

Primary market = new issues (IPO, FPO, rights issue, private placement); secondary market = existing securities traded on stock exchange.

Methods of floatation: offer through prospectus, offer for sale, private placement, rights issue, e-IPOs.

Stock exchange functions: liquidity, pricing of securities, safety of transactions, spreading equity cult, providing scope for speculation.

SEBI is the statutory regulator - protects investors, regulates intermediaries, promotes fair practices, and develops the market.

NSE and BSE are major Indian exchanges; demat accounts hold securities electronically; a depository (NSDL, CDSL) holds them.

A stock exchange does not set prices; prices are discovered by demand and supply in the secondary market.

Marketing = identifying and satisfying customer needs profitably; marketing mix = product, price, place, promotion (4Ps); for services add people, process, physical evidence.

Product levels: core benefit, basic product, expected product, augmented product, potential product; branding and labelling build identity and trust.

Product life cycle: introduction, growth, maturity, decline - pricing and promotion strategies change at each stage.

Pricing methods: cost-plus, marginal cost, target return, going-rate, sealed bid; factors include cost, demand, competition, government policy.

Channels of distribution: zero level (direct), one level (retailer), two level (wholesaler-retailer), three level (agent-wholesaler-retailer).

Promotion mix: advertising, sales promotion, personal selling, publicity/public relations; advertising is paid, impersonal, and mass-targeted.

Marketing vs selling: marketing starts with customer needs and ends with satisfaction; selling starts with the product and ends with exchange.

Branding gives identity and reduces search cost; packaging protects, identifies, and aids promotion.

Consumer = one who buys goods or hires services for consideration and includes any user (except for resale or commercial purpose); the definition covers online and offline purchases.

Consumer rights: safety, information, choice, hearing (representation), redressal, consumer education; the right to be informed covers price, quality, purity, quantity.

Consumer responsibilities: ask for quality, check labels, insist on cash memo, be honest, file complaints for genuine grievances.

Consumer Protection Act, 2019 established the Central Consumer Protection Authority (CCPA) and three-tier redressal: District, State, National Commissions.

Pecuniary jurisdiction under the 2019 Act: District Commission up to ₹50 lakh, State Commission above ₹50 lakh up to ₹2 crore, National Commission above ₹2 crore.

Reliefs available include replacement, removal of defect, refund, compensation for loss or injury, and discontinuation of unfair trade practices.

Unfair trade practices include false representation, misleading advertisements, and deceptive pricing; restrictive trade practice restricts competition.

A complaint must be filed within two years of the cause of action; it can be filed by the consumer, a registered consumer association, or the government.