CUET 2022

CLUE WORDS BUSINESS STUDIES

BUSINESS STUDIES DOMAIN
Clue / key words in the case study Underlying concept

Intangible force / PROCESS Management

Achieving target (in Time) Effectiveness

Reducing cost Efficiency

Quality of management/ Binding Force Coordination

Essence of management/ Synchronisation Coordination

Clue / key words in the case study Underlying concept
Two side of a Coin Efficiency and
effectiveness
“Successful organizations do not achieve Management
their goals by chance but by following a
deliberate process‟

Department heads/ divisional heads Middle level

Implicit and inherent in all functions / level Coordination
of management/ Minimum of conflict
Replace I with We :Feature of Management Group Activity
LEVEL OF MANGEMENT/ DESIGNATION

superintendent Lower/ operational

Plant superintendent Middle

To Achieve end result/ Doing the right task Effectiveness

Human resources are the most important People

assets of an Organisation. Dimension
The objectives aim at Prosperity Organisational
objective
Opening new Branch adding More line of Growth
Product, increasing scale of Operation
An efficient Manager is the one who brings Management helps in
maximum prosperity for employer as well as achieving personal
employees objectives
Change in Organisation, Change in goal, Dynamic
Change in Technology match to environemnt
Restricted entry/ exam barrier/ service motive profession

When ever any blame game or confusion or Absence of

chaos between departments due to Coordination
Minimum Conflicts, Time sequence of efforts coordination
Extension of the principle of the division of Functional Formanship
work and specialisation
Specialisation Division of work

Prosperity of Workers and managers Harmony

Less conflict, Profit sharing
Initiative, manager work side by side with Co operation not
workers, No strickes, extension of harmony individualisam
Interchangibility of Manufactured parts Standardisation
Eleminating Unwanted Varieties & Sizes Simplification
Different Quality basis Grading
One best method Principle: science not
rule of thumb
Technique: method
study
Encouraging suggestions from employees Fayol : principle of
initiative
Taylor: cooperation not
individualism
Incentive bonus plan/ Strongest Motivator Differential piece wages
system
One head one plan/ Reduce Overlapping Unit of direction
Replace “I” with “we” Esprit de crops
Dual subordination should be avoided Unity of command

Limitation of a function of management Planning

Change in the outlook of management and Mental Revolution

workers towards each other

Framework within which managerial and Organisational

operative tasks are performed Structure

Occupational specialization Functional structure

Sharing work and authority by a superior Delegation of authority
with his subordinates

Authority/ belief in subordinates/ Decentralisation

systematic dispersal of authority to all levels

Concentration of authority at top level Centralisation

Number of subordinates that can be Span of mangement
effectively managed by a superior

Narrow / Tall and Flat/ wide Structutre

Ranking order of job position Hierarchy

Honour each other commitment, Follow Discipline
Rules, Judicious Application of Penalities

Line of Authority Hierarchy for Scalar chain

communication/ report to immediate boss
Every decision scientificall, Use of science in Science not rule of
each and every element of Management thumb

Blind flollowers of plan Reduce creativity

DELEGATION VS. DECENTRALISATION FUNCTIONAL VS.

DIVISIONAL
LEGAL ENVIRONEMNT
• It includes various laws passed by the government, administrative
orders issued by government authorities, court judgments as well
as decisions rendered by the central, state or local governments.
• The legal environment includes various laws like Companies Act
2013, Consumer Protection Act 1986, Policies relating to licensing
& approvals, Policies related to foreign trade etc.
• Example: Labour laws followed by companies help them to keep away
from penalties.
COURT ORDER PASS
Political Environment

It means that the actions were taken by the government, which

potentially affect the routine activities of any business or company
on a domestic or at the global level.
After winning Election>>>>>>

The success of business and industry depends upon the

government’s attitude towards the business and industry, Stability
of Government, Peace in the country.

Example: Political stability and central government’s attitudes

towards business, industry and employment, has attracted many
national and international business entrepreneurs to invest in India.
Economical
• The economic environment consists of an economic system,
economic policies and economic conditions prevailing in a
country.
• Interest Rates, Taxes, Inflation, Stock Market Indices, Value of
Rupee, Personal Disposable Income, Unemployment rate etc.
are the factors which affect the economic environment.
• Example: A rise in the disposable income of people due to a
decrease in tax rates in a country creates more demand for
products.
Marketing Philiosophies

Element of Marketing mix

Element of Product/ Promotion Mix

Packaging – Silent sales man
Carrier of Information – Labelling
S.N Clue words in the case study Underlying
o concept

Marketing through emphasis on low cost of Production

production / affordability / availability concept
Marketing through emphasis on good quality Product concept
of product/ profit maximisation
Marketing through emphasis on aggressive Selling concept
advertising and sales promotion
Marketing through emphasis on making an Marketing
effort to find wants of people and fill them concept
Marketing through emphasis on adopting Societal marketing
environment friendly techniques/ ecological concept
S. Clue words in the case study Underlying
No concept

Images/ goodwill of business/ eyes of public Public relation

Set of controllable factors/ variables Elements of
marketing mix
Short term sales increase Sales promotion

Personal form of communication Personal selling

Don’t close sale/ open relationship
S.N Clue words in the case study Underlying
o concept

Crucial element Price

Paid from of non personal form of Advertising
communication
Part of brand name which can be uttered Brand name

Part of brand name which is unutterable Brand mark

Registered brand name Trade mark

Clue words in the case study Underlying concept
Decision that relates to fund requirement both in Financial planning
terms of the quantum as well as the timing
Decision affecting growth, financial risk and Capital budgeting
profitability of a business decisions
New issue market/ first hand securities Primary market
Market for existing securities/ second hand Secondary market
Bridge financing/ writing off flotation cost Commercial paper
Clue words in the case study Underlying concept
Holding securities in electronic form Dematerialisation
Marketing through emphasis on low cost of Production concept
production/ affordability / avilabiltiy
Marketing through emphasis on good quality of Product concept
product
Marketing through emphasis on aggressive Selling concept
advertising and sales promotion
Vertical movement of employees along the Promotion
organization structure
Clue words in the case study Underlying concept
Horizontal movement of employees along the Transfer
organization structure
Familiarising new employees with organization Orientation/induction
training
Training to use sophisticated/ Hi-tech machines Vestibule training
Training under master worker Apprenticeship
training
Training through collaboration between educational Internship training
institute and business organization
Clue words in the case study Underlying concept
Executive function Directing
Overseeing employees Supervision
Stimulating employees Motivation
Influencing employees Leadership
Backward looking function Controlling/ planning
Clue words in the case study Underlying concept
Grapevine Informal communication
Blue print of financial activities Financial planning
Key result area’s Critical point control
If you try to control everything you may end Management by exception
up controlling nothing should be adopted
Decision affecting liquidity and profitability of Short term investment
a business decision/ working capital
decision
Decision affecting financial risk and Capital structure decision
profitability
Staffing
Clue words in the case study Underlying concept
Function which makes sure your assets walk out Staffing
and come back next day happily and satisfied
Human element Directing and staffing
Inducing people to apply for job/ flood of response Recruitment
positive process.
Choosing prospective candidate/negative process Selection
Improving skills to improve performance of job/ Training
related to work performed by an individual/ update
knowledge and competency of employees
Clue words in the case study Underlying concept
Overall growth of an employees/ include all round Development
growth and not restricted to job performance
Training under guidance/ uniform period of training Apprenticeship
suitable for plumbers, electricians, iron workers, etc programme
Directing
Supervision
• Instructing the employees
• Guiding the employees
• Linking pin between workers and middle level.
Motivation (will to work)
• Creating will to do the work
• When employees loose interest in job then this element is used
• Improve initiative level of employees
• Induce people to perform best
• Psychological process
• Arise need and desire in people
Incentives
i) Recognition
a) Congratulating employees
b) Display on notice board or newsletter
c) Giving award, trophy or certificate
d) Reward for good suggestion
e) Giving mementos, trophies, etc
ii) Copartnership/stock option: Giving shares at lower than market price
iii) status: Giving a special rank or position in the organisation
Leadership
• Influencing the behaviour of others
• Maintain good interpersonal relationship
• Influence employees to voluntarily perform, working with cooperation
and coordination.
Leadership style
• Autocratic/authoritative-Dictator
No suggestion taken, placing order only
• democratic-
Taking suggestion from employees
Two way
Keep initiative level of employee high
• Free rein-
Complete freedom to employees
No interference of superior in taking decision by subordinates
Controlling
Controlling
• Ensure work as per plan
• Compel events to confirm to plan
• Actual output not as per target due to lack of controlling
• Comparison between actual performance with planned performance
• Critical point control: giving more attention to activities and
departments which are more importance and critical whereas non-
critical areas can be ignored.
• Management by exception: ignoring the deviations within a
permissible limit. A manager who try to control everything my end up
controlling nothing.
Financial management
Investment decision
• Opening a new branch
• Buying a fixed assets plant, machine, office building, etc
Financing decision and capital structure
• Deciding the source of capital
• Issue of share or debenture or loan to have additional capital
• Change in ratio of debt and equity capital
Dividend decision
• Appropriate allocation of project
• Distribution of residual/left over point
Financial planning
• Ensure availability of funds whenever required
• To make sure right amount of capital is available at the right time
Capital structure
• Ratio of debt and equity in total capital
• Issue of additional equity shares to raise more funds will effects capital
structure
• Issue of additional debentures or taking more loans will effect the
capital structure.
Fixed capital requirement
• Amount invested in buying fixed assets
• Total investment in fixed capital
• Business like manufacturing industries require more fixed capital than
business involved in providing services.
Working capital requirement
• Amount invested for one financial year
• Total value of current assets represent gross working capital
• Difference between value of current assets and current liabilities
represent net working capital
• Amount invested in inventory, cash, receivables, debtors, bank, etc
Financial market
Function of financial market
• Moving saving of household to corporate sector.
• Demand and supply of financial market fix the price
• By selling securities in financial market any time investors can convert
their investment in cash
• Financial market provide ready information so no money is spent by
investment to collection information.
Money market
• Market for short term
• Market for working capital
• Instruments to money market are called near money
Instrument of money market
Teasury bill
i) Issued by RBI
ii) Zero coupon bond
iii) Safest investment
Call money
• Shortest duration
• Interbank money
• Used to maintain cash reserve ratio
Commercial paper
• Unsecured promissory note
• Used for
a) Working capital requirement
b) Seasonal needs
c) Bridge financing (for floatation cost)
Commercial bill: suitable for credit buying and selling
Capital market
• Market for long term
• Market for fixed capital
Primary market
• New issue market
• Directly contribute for capital formation
Method of floatation in primary market
• Offer through prospectus: direct-appeal to investor
• Offer for sale:
a) Company sell to intermediary at a fixed price
b) Intermediary sell to investor at a higher price
• Private placement : securities are allotted to institutional investors and
selected individual
• Right issue : issue of share to existing shareholders
• E-ipo : selling through online system of stock exchange.
Secondary market
• Stock exchange
• Market for second hand securities
• Indirectly contribute for capital formation
SEBI : overall controller of capital market
Function of SEBI
• Protective : to protect the interest of investor
• Development : to promote and develop activities in stock exchange
and to bring more business
• Regulatory : to frame rules, regulations, code of conduct to regulate
the stock market
Consumer protection
Consumer rights
1. Right to safety :- Supply of safe goods. It is violated when consumer
suffers injury or sickness after consuming the product, supply of
adulterated product, expired product, etc.
2. Right to information:- Seller or manufacture must give complete
information regarding the content or use of product. Is violated
when complete information is not given to consumer or wrong
information is given to consumer about the product.
3. Right to choice :- consumer must be allowed to select the product
independently with his choice, violated when salesmen or marketeer
insist the consumer to buy a particular brand only
4. Right to be Heard: Consumer has the right to file a complaint. It is violated
when marketeer makes no arrangement of filing complaint and refuse to
accept complaint of consumer. The right is followed when marketeer gives
toll free number to file a complaint. Set a special counter for filling of
complaint
5. Right to seek redressal:- Consumer has the right to get compensation for
the damage he suffered due to wrong product/ service.
It include:
a) Exchange of product/service
b) Repair of product/ service
c) Paying compensation
d) Withdrawal of goods from market
Note:- main difference between right to be heard and redressal is that right
to be heard is concerned regarding filling of complaint and redressal focus
on next step. i.e. result of complaint compensation
6. Right to consumer education:- consumer has right to be informed about
provisions of consumer protection act i.e. what are his rights. Generally
NGO, government educate consumer by giving advertisement in TV,
magazine, newspaper, etc. conduct seminars conference, etc.
Note:- difference between right to information and right to consumer
education is right to information informs about the product its contents,
use, etc. whereas right to consumer education informs consumer about the
right.
In right to information, information is given by manufacturing, supplier,
marketeer whereas right to education, information is given by government,
NGO, etc
Thank you