CLASS 12 (MAY- ASSIGNMENT)

BUSINESS STUDIES

GENERAL INSTRUCTIONs: -

1st week of May – 14 Principle of management by Fayol and Taylor’s technique of scientific

management. (all notes related to it is in PPT go through and write down notes, explanation will be

given during online class)

2nd week of May-Revision of chapter 2, Refer it after completion of chapter and before online test.

-Chapter 3 Business Environment—Concept to different environment

dimensions (notes to be copied up to topic of concepts and different dimensions and

explanation will be given during online class)

3rd week of May-Impact of government policy to importance of Business Environment) and Project

explanation.

4th week-Solve all case studies, application-based question from given worksheet. (During online

class doubt will be clarified)

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FIRST WEEK

Chapter-2

PRINCIPLE OF MANAGEMENT

Go through below given Power point presentation for explanation of 14 principles of management by Henry Fayol and write all notes from ppt systematically in your notebook (Double click to open PPT).

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Taylor‟s Scientific Management

F.W.Taylor was born in 1856 in U.S.A(Philadelphia).He started his career as an apprentice in a small machine making shop in 1870 and rose to the position of Chief Engineer of Midavale Steel Works in 1884 at the age of 28.

1.Taylor laid down principle of scientific management for greater efficiency and effectiveness.

2.Taylor evolved the concept of „mental revolution‟.

FAYOL PRINCIPLE

OF MGT.NEW.pptx

3.Taylor laid down the technique of scientific management to put into practice.

Go through below given Power point presentation for explanation of techniques of scientific management and write systematically in notebook. These are the salient points and moreover description of the points shall be given in Online class.

SCIENTIFIC

TECHNIQUES.pptx

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SECOND WEEK ASSIGNMENT

Revision Notes CHAPTER – 2

Principles of Management

A principle is a fundamental statement of truth that provides guidance to thought and action.

Principles of Management

Principles of management are broad and general guidelines for managerial decision making and behavior (i.e. they guide the practice of management).

Nature of Principles of Management

The nature of principles of management can be described in the following points:

1. Universal applicability i.e. they can be applied in all types of organizations, business as well as non-business, small as well as large enterprises.

2. General Guidelines: They are general guidelines to action and decision making however they do not provide readymade solutions as the business environment is ever changing or dynamic.

3. Formed by practice and experimentation: They are developed after thorough research work on the basis of experiences of managers.

4. Flexible: Which can be adapted and modified by the practicing managers as per the demands of the situations as they are man-made principles.

5. Mainly Behavioural: Since the principles aim at influencing complex human behaviour they are behavioural in nature.

6. Cause and Effect relationship: They intend to establish relationship between cause & effect so that they can be used in similar situations.

7. Contingent: Their applicability depends upon the prevailing situation at a particular point of time. According to Terry, “Management principles are „capsules‟ of selected management wisdom to be used carefully and discretely”.

Significance of the Principles of Management

The significance of principles of management can be derived from their utility which can be understood from the following points:

1. Providing managers with useful insights into reality: Management principles guide managers to take right decision at right time by improving their knowledge, ability and understanding of various managerial situations and circumstances.

2. Optimum utilization of resources and effective administration: Management principles facilitate optimum use of resources by coordinating

the physical, financial and human resources. They also help in better administration by discouraging personal prejudices and adopting an objective approach.

3. Scientific decisions: Decisions based on management principles tend to be more realistic, balanced and free from personal bias.

4. Meeting the changing environmental requirements: Management principles provide an effective and dynamic leadership and help the organization to implement the changes.

5. Fulfilling social responsibility: Principles of management not only help in achieving organizational goals but also guide managers in performing social responsibilities. Example : “Equity” and “Fair” remuneration.

6. Management training, education and research: Management principles are helpful in identifying the areas in which existing and future managers should be trained. They also provide the basis for future research.

Fayol’s Principles of Management

About Henry Fayol: Henry Fayol (1841-1925) got degree in Mining Engineering and joined French Mining Company in 1860 as an Engineer. He rose to the position of Managing Director in 1988. When the company was on the verge of bankruptcy. He accepted the challenge and by using rich and broad administrative experience, he turned the fortune of the company. For his contributions, he is well known as the “Father of General Management”.

Principles of Management developed by Fayol

1. Division of work: Work is divided in small tasks/job and each work is done by a trained specialist which leads to greater efficiency, specialization, increased productivity and reduction of unnecessary wastage and movements.

2. Authority and Responsibility: Authority means power to take decisions and responsibility means obligation to complete the job assigned on time. Authority and responsibility should go hand in hand. Mere responsibility without authority, makes an executive less interested in discharging his duties. Similarly giving authority without assigning responsibility makes him arrogant and there is fear of misuse of power.

3. Discipline: t is the obedience to organizational rules by the subordinates. Discipline requires good supervisors at all levels, clear and fair agreements and judicious application of penalties.

4. Unity of Command: t implies that every worker should receive orders and instructions from one superior only, otherwise it will create confusion, conflict, disturbance and overlapping of activities.

5. Unity of Direction: Each group of activities having the same objective must have one head and one plan. This ensures unity of action and coordination.

Difference between Unity of Command and Unity of Direction

Basis Unity of Command Unity of Direction

1.Meaning

It means that a

subordinate should

receive orders and

instructions from one

boss only.

It advocates ‘one head, and

one plan ‘for a group of

activities having the same

objectives. The activities

should be directed towards the

common goals.

2.Scope

This principle is related

to the functioning of

personnel

This principle is related to the

functioning of a department or

the organization as a whole

3.Purpose

The main purpose of

unity of command is to

avoid confusion and fix

up the responsibility of

the employee.

The purpose of unity of

direction is to direct the efforts

of employees of one

department in achieving the

main objective of that

department.

4.Results

in

Systematic working and

improved efficiency by

removing confusion and

chaotic conditions

Co-ordination within a

particular department and

overall; by preventing

overlapping of various

activities.

7. Remuneration of Employees: The overall pay and compensation should be, fair to both employees and the organization. The wages should encourage the workers to work more and better.6. Subordination of Individual Interest to General Interest: The interest of an organization should take priority over the interest of any one individual employee.

8. Centralization and Decentralization: Centralization means concentration of decisions making authority in few hands at top level. Decentralization means evenly distribution of power at every level of management. Both should be balanced as no organization can be completely centralized or completely decentralized.

9. Scalar Chain: The formal lines of authority between superiors and subordinates from the highest to the lowest ranks is known as scalar chain. This chain should not be violated but in emergency employees at same level can contact through Gang Plank by informing their immediate superiors.

10. Order: A place for everything and everyone and everything and everyone should be in its designated place. People & material must be in suitable places at appropriate time for maximum efficiency.

11. Equity: The working environment of any organization should be free from all forms of discrimination (religion, language, caste, sex, belief or Basis Unity of Command Unity of Direction nationality) and principles of justice and fair play should be followed. No worker should be unduly favoured or punished.

12. Stability of Personnel: After being selected and appointed by rigorous procedure, the selected person should be kept at the post for a minimum period decided to show results.

13. Initiative: Workers should be encouraged to develop and carry out their plan for improvements. Initiative means taking the first step with self-motivation. It is thinking out and executing the plan.

14. Espirit De Corps: Management should promote team spirit, unity and harmony among employees. Management should promote a team work.

Taylor’s Scientific Management

Fredrick Winslow Taylor (1856-1915) was a person who within a very short duration (1878-1884) rose from ranks of an ordinary apprentice to chief engineer in Midvale Steel Company, U.S.A. Taylor conducted a number of experiments and came to conclusion that workers were producing much less than the targeted standard task. Also, both the parties – Management and workers are hostile towards each other. He gave a number of suggestions to solve this problem and correctly propounded the theory of scientific management to emphasize the use of scientific approach in managing an enterprise instead of hit and trial method. For his contributions, he is well known as the “Father of the Scientific Management”. Scientific Management attempts to eliminate wastes to ensure maximum production at minimum cost.

Principles of Scientific Management

(1) Science, not rule of Thumb: There should be scientific study and analysis of each element of a job in order to replace the old rule of thumb approach or hit and miss method. We should be constantly experimenting to develop new techniques which make the work much simpler, easier and quicker.

(2) Harmony, Not discord: It implies that there should be mental revolution on part of managers and workers in order to respect each other‟s role and eliminate any class conflict to realize organizational objectives.

(3) Cooperation not individualism: It is an extension of the Principle of Harmony not discord whereby constructive suggestions of workers should be adopted and they should not go on strike as both management and workers share responsibility and perform together.

(4) Development of each and every person to his or her greatest Efficiency and Prosperity: It implies development of competencies of all persons of an organization after their scientific selection and assigning work suited to their temperament and abilities. This will increase the productivity by utilizing the skills of the workers to the

fullest possible extent.

1. Functional Foreman-ship: Functional foreman-ship is a technique in which planning and execution are separated. There are eight types of specialized, professionals, four each under planning and execution who keep a watch on all workers to extract optimum performance.

Planning Incharges:

1. Route Clerk to specify the exact sequence and route of production.

2. Instruction card clerk is responsible for drafting instructions for the workers.

3. Time and cost clerk to prepare time and cost sheet for the job.

4. Shop Disciplinarian to ensure discipline and enforcement of rules and regulations among the workers.

Production Incharges:

1. Gang boss is responsible for keeping tools and machines ready for operation.

2. Speed boss is responsible for timely and accurate completion of job.

3. Repair boss to ensure proper working conditions of tools and machines.

4. Inspector to check quality of work.

2. Standardization and Simplification of work: Standardization refers to developing standards for every business activity whereas Simplification refers to eliminating superfluous varieties of product or service. It results in savings of cost of labour, machines and tools. It leads to fuller utilization of equipment and increase in turnover.

3. Method Study: The objective of method study is to find out one best way of doing the job to maximize efficiency in the use of materials, machinery, manpower and capital. (1) Which technique of scientific management is being violated here?

(Hint: Functional Foreman ship.) (2) Write one consequence of this violation.

4. Motion Study: It is the science of eliminating wastefulness resulting from using unnecessary, ill-directed and inefficient motions by workers and machines to identify best method of work.

5 Time study: It determines the standard time taken to perform a well-defined job. The objective of time study is to determine the number of workers to be employed, frame suitable incentive schemes & determine labour costs.

6. Fatigue study: Fatigue study seeks to determine time and frequency of rest intervals in completing a task. The rest interval will enable workers to regain their lost stamina thereby avoiding accidents, rejections and industrial sickness.

7. Differential piece wage system: This system links wages and productivity. The standard output per day is established and two piece rates are used: higher for those who achieve upto and more than standard output i.e. efficient workers and lower for inefficient and slow workers. Thus, efficient workers will be rewarded & inefficient will be motivated to improve their performance.

For example: Standard task is 10 units. Rates are: Rs 50 per unit for producing 10 units or more and Rs 40 per unit for producing less than 10 units Worker A produces 11 Units; he gets Rs 550 (11 units x 50 per unit)

Worker B produces 09 units; he gets Rs 360 (9 units x 40 per unit) This difference of Rs 190 will motivate B to perform better.

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Chapter 3

Business Environment (Notes)

CONCEPT AND IMPORTANCE OF BUSINESS ENVIROMENT

Business environment refer to all individuals, institutions and forces which are

external to a business and beyond its control.

Business environment may be defined as all those external conditions and forces

that affect the working of a business enterprise.

Features/ Characteristics/ Nature of Business Environment

1. All the External Forces: Business Environment includes all the forces, institutions and factors which directly or

indirectly affect the business organization.

2. Specific and General Forces: Business surroundings includes specific forces like investors, customers,

competitors, suppliers etc. Non-human or general forces are social legal technological, political etc. that have an effect on

the business indirectly.

3. Inter-relation: All the forces and factors of business environment are interrelated to each other. For Example:

With an increment of western culture in youth, the demand for fast food is increasing.

4. Uncertainty: It is very difficult to predict the changes in a business environment because it is changing very fast.

For Example: In the fashion industry, IT etc.

5. Dynamic: Business surroundings are very versatile and keep dynamical it’s not a static or rigid construct.

6. Complex: It is very difficult to understand the impact of business environment on the companies. Some time

change may be minor but it might have a large impact on the business. For Example, A change in government policy to increase the rate of tax by 2% may affect the income of business by a large amount.

7. Theory of relativity: The impact of business surroundings could dissent from company to company or country to country. for instance: once shopper organization printed the report of finding pesticides in cold-drinks, resultant in a

decrease in the sale of cold-drinks however on different|the opposite} hand multiplied the sale of juice and other drinks.

Dimension of Business Environment

It suggests that all the factors, forces, and establishments that have direct or indirect influence over the business

transactions. General surroundings are that the most vital dimension of business surroundings as a result of a

businessman cannot modify the parts of general surroundings. Rather he needs to modification his plans and policies in

step with the changes going down generally surroundings.

Major Components of general environment 1. Economic Environment

2. Social Environment

3. Political Environment

4. Legal Environment

5. Technological Environment

1. Economic Environment It consists of the value financial gain level at the national level and per-capita financial gain, profit earning rate, warning

and financial policy of presidency etc.

The economical surroundings factors have an immediate and direct impact on the businessman. The common factors that

facilitate influenced the Indian economic surroundings are :

a. Banking sector reform enables the banks to supply loans at a terribly nominal rate of interest and with minimum

formalities to be completed.

b. Recent changes in economic and financial policy of country have encouraged NRIs and foreign investors to

speculate in Indian corporations.

Some aspects of the economic environment are :

1. Role of private and public sector

2. Rate of growth of GDP and per-capita income

3. Rates of saving and investment

4. Balance of trade

5. Balance of payment

6. Transport and communication system

7. Money supply in the economy

8. International Dept.

2. Social Environment It consists the customs and traditions of the society in which business is existing it includes the standard of living, taste,

preferences and education level of the people living in the society. Some examples of social environment are:

1. The celebration of Diwali, Eid, Christmas etc. it increases the sales of sweets, greeting cards etc.

2. Health and fitness trend have created demand for diet food, diet drinks opening of yoga centres and gyms etc.

In India there are many social reforms taking place, which are:

1. The demand for reservation in the job for minority and women.

2. Demand for equal status of women in payment of wages and salaries.

3. Demand for automatic machines and luxury items in middle-class families.

4. The social movements to improve the education level of the girl child.

Some aspect of Social Environment 1. Quality of life.

2. Importance of the place of women and workforce.

3. Birth and death rate.

4. Education and Literacy rate.

5. Population.

6. Tradition, customs, and habit of people.

3. Political Environment It consists all the factors associated with government affairs like the style of government in power, the angle of

presidency towards totally different teams of society, policy changes enforced by the totally different government.

For Example: In 1977 once Janta Government came in power they created the policy of causing back all the foreign corporations, as a result, the Coca-Cola company had to shut its business and leave the country.

The common factors and forces that have influenced the Indian political surroundings are :

a. The govt. in Hyderabad is taking a decent interest in boosting IT trade as a result town is an additional

unremarkably called cyber city, Cyberabad rather than Hyderabad.

b. once the policy of relaxation and globalization by the govt. in 1991 the foreign company got a simple entry in the

Republic of India together with Coca-Cola.

Some aspects of Political Environment 1. Present political system.

2. Constitution of the country.

3. Government intervention in business.

4. The foreign policy of the government.

5. Profile of political leader.

4. Legal Environment It consists of the laws and numerous Legislation passed by the parliament. A businessman needs to perform his business

transactions within the framework of legal surroundings. The common legislation passed that has affected the business

transactions are Trade Mark Act, necessities goods Act, Weights and live Act etc. Followings are some common instances

of Indian legal surroundings.

1. After freeing of capital market businessman are collecting capital from the primary market. (share market)

2. Advertisement of the Alcoholic product is prohibited.

3. Various Laws and act.

4. Legal Policies associated with the licencing and foreign trade.

Some aspects of Legal Environment 1. Legal warning essential to be printed on the label.

2. Foreign exchange regulation and management act.

3. Legal Policies related to foreign trade.

5. Technological Environment It refers to changes taking place in the method of production, use of new equipment and machinery’s to improve the quality of the product the recent technological changes in the Indian market are :

1. Digital watches have reduced the business of traditional watches.

2. Colour T.V. technology has closed the business of black and white T.V.

3. Photocopies and Xerox machines have let to the closer of carbon paper business.

4. With a word processor, the use of typewriter has been reduced.

5. Pen drive and memory card have reduced the business of CDs and DVDs.

Some aspects of Technological Environment 1. Scientific improvements

2. Development in IT sector

3. Various innovation and inventions

4. Import and export of technology

5. Technological advances in computer 6. Online booking of tickets, products etc.

THIRD WEEK ASSIGMENT

Features of New Economic Policy

The features of New Economic Policy(1991). There are three major components or elements of the new economic policy.

1. Liberalization It refers to finish of license, quota and plenty of additional restrictions and management that were applied before 1991.

Followings are the most changes:

a. conclusion of license except in few.

b. No restriction on enlargement or contraction of endeavour.

c. Freedom in fixing the costs of products and services.

d. relaxation in import and export etc.

2. Privatization It refers to giving a greater role to the private sector and reducing the role of public sector following steps are taken in

this regard.

a. This investment of public sector which means the transfer of public sector enterprise to the private sector.

b. Board of industrial and financial reconstruction (BIFR) was set up to receive sick units of public sector enterprise

suffering from losses.

c. Transfer of ownership and management to the private sector.

3. Globalization It refers to the integration of assorted economies of the world. It includes following measures:

a. interchange Regulation Act (FERA) was replaced by interchange Management Act (FEMA). b. the conclusion of the

tariff.

c. Reduction distinguished Duty.

Impact of Change in Economic Policy on the Business

1. Increasing Competition: After the new economic policy Indian companies have to face all-around competition which

means competitions from the internal/local market and from the MNCs.

2. More Demanding Customers: Prior to economic policy there was a shortage of product in every sector and the

market was producer-oriented. But after new economic policy, the market became customer oriented.

3. Change in Technological Environment: To stand in global competition the companies need

to adopt the world-class technology. After this policy, the investment in research and development by the company have

increased.

4. Need for developing human resources: New market conditions require people (employees) with higher skill and

training. So Indian company felt the need to develop their human skill through training.

5. Market-Oriented: Earlier firms were following selling concept which means produce first and go to market but now

companies follow marketing concept i.e. Planning production on the basis of market research, need and want of

consumers.

6. Loss of Budgetary Support to the public sector: The public sector has to survive and grows by utilizing their resources efficiently otherwise these enterprises have to face disinvestment.

7. Export a matter of surviving: To earn more foreign exchange many Indian companies joined the export business and

got a lot of success. Companies increased their turnover by more than double through export like reliance company,

Videocon, MRF etc.

Importance of Business Environment

1. Enable the firm to identify opportunities and getting first mover advantage:

The businessman who is able to understand and scan the opportunities of business environment at an early stage can go

much ahead of their competitors.

For Example, oodles Nerolac Company got all the car painting contract of Maruti Company by importing car painting

technology after the deal between Maruti and Suzuki to be done.

2. Help the firm to identify the threads and early warning signals The businessman who is able to scan and understand the business environment on time get a warning signal to deal with

the constraints or the negative effects of the business environment.

For Example, the Maruti Company expected the entry of foreign car company as a warning signal and increased the

production by almost 3 times.

3. Helpful in tapping (using the resources) and assembling resources The businessman has to supply the goods according to the demand in the market they select resources according to

availability in environment and demand of output in the environment.

For Example: With the demand of the colour T.V. manufacturers collected resources necessary to manufacture these

colour T.V. rather than black and white T.V.

4. Help in adjust to the rapid changes Today changes have a great impact on business so it is essential to understand these changes as early as possible.

Business environment scanning helps the companies to scan and understand these changes.

For Example, he Ambani Brothers recognized that today’s surroundings demand fast selections in order that they shifted

from centralization to decentralization.

5. Assisting in planning and policy making The major ways or plans and policies within the organization are fashioned keeping in mind business surroundings.

Scanning of surroundings factors facilitate to find out the opportunities for business and methods is created to grab these

opportunities.

For Example, there’s a good scope for tourist business in our country, thus ITC cluster is creating changes in their strategy

for tourist.

6. Improvement in Performance With a continuous scan of business surroundings, corporations will simply improve their performance by creating changes

within the internal surroundings matching to external surroundings.

PROJECT EXPLANATION AND GENERAL GUIDELINES RELATED TO IT.

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FOURTH WEEK

LETS SOLVE ALL APPLICATION BASED QUESTIONS QUICKLY BY

MAKING OUR CONCEPTS CLEAR

PRINCIPLE OF MANAGEMENT(2)

Q1. Principles of Taylor and Fayol are mutually complementary. One believed that management should not

close its ears to constructive suggestions made by the employees, while the other suggested that a good

company should have an employee suggestion system whereby suggestions which result in substantial time or

cost reduction are rewarded.

Identify and explain the principles of Taylor and Fayol referred in the above case.

Q2. Anuj, the production manager of Gunjan Enterprises Ltd. Does not distribute work among the subordinates

according to their capabilities. Rather, he used favouritism to oblige some of the employees. Which principle of

management is violated in this case? What are the ill effects of violation?

Q3.A and B having the same qualifications joined a firm as computer operations. The manager of the firm is

giving a salary of Rs 20,000 p.m. to A and Rs 15,000p.m. to B. Is it justified?

BUSINESS ENVIROMENT (3)

APPLICATION BASED QUESTIONS: -

1.The sales of jewellers were affected adversely after demonetisation of currency notes of the denomination of

Rs 500 and Rs 1000 in November 2016.Identify the dimension of business environment.

2.Which sector of the Indian economy was given greater importance after independence?

3.Which policy of the government has moved India towards globalisation?

4.’Demand for reservation in jobs for minorities ‘refers to an example of key component of general

environment of business. Name the component.

5.Name the process under which the government of India lifted unnecessary control over the economy.

6.Which component of general environment of business prohibits advertisements of alcoholic beverages?

7.The past decayed has seen the rise of cyber café in both big and small cities What dimension of environment

is implicit in this case?

8.The Reserve Bank of India set the dead line for replacing all magnetic strips-based ATM cards into EMV cards

by the end of December 2018.EMV stands for Euro pay, mastercard and Visa from which the standards for a

chip enabled card emerged. The EMV card provides a higher level of security as compare to magnetic strip

cards which can be easily clone. The switching to secure system has been facilitated because of advances in

information technology (IT).

Identify the dimensions of environment involved in the RBI decision.

ANALYSIS AND EVALUTION BASED QUESTIONS

9.The R&D(research and development)division of Tata Motors is engaged in fuel efficient

vehicle in view of rising level of pollution and ever increasing prices of oil and petroleum

products.

(a)Which component of business environment is relevant in the above case?

(b)What values are referred to in the above case?

10.Modern paints company manufactures quality paints and enjoys a good market position.it

gets various resources like finance, materials, machine etc from its environment. However, it

has recently been observed that the company dumps toxic waste near the banks of a river

which has created health problem for the people and the animals. On the application of a Non-

Government Organisation (NGO), a local court has order to seal the manufacturing unit of the

company.

(a)State the importance of business environment highlighted in the above case.

(b)Identify any two dimensions of business environment quoting lines from the above case.

©State any two values overlooked by the company.