Class 12 Business Studies About Byjus.com B usiness Studies Class 12 Notes. Byjus.com’s presents wonderful Study Material of B usiness Studies Class 12so that your study becomes more practical and interesting. We make study a fun-filled activity when we relate theoretical part of Business Studies with your general life as whatever we study comes from our experiences of life. Syllabus and exam pattern of CBSE is always kept in mind whenever we create content for you. Questions from NCERT book are also being solved to help students. Our content enables you in not only understanding each and every topic but also tells you how to apply that.

1. Business Studies Class 12 Notes
2. Class 12 Hseb Notes Of Business Studies
3. Notes Of Business Studies Class 12

It helps you to understand every bit of Business Studies so that you come out with flying colours not only in CBSE Exam but in all walks of life. Speciality of our Business Studies Study Material (1) Language of the Content Wholesome coverage has been done of all the topics in a lucid manner so that learning the content becomes easy. (2) Flowcharts and Diagrams Flow charts and diagrams have been used to make concepts interesting and easy, wherever it was possible. (3) Hosts of Examples Lots of examples are shown to make students understand all the concepts in an easy manner.

(4) Case Studies & HOTS Lots of case studies have been included so that students get enough practice of answering these types of questions in the exam. Also HOTS (High Order Thinking Skills Questions) are given on each topic to make the concepts more clear. (5) Conceptual, Reasoning and Evaluation based Questions Exam pattern includes various types of questions like Concept based questions, value based questions and questions which require reasoning, all of them are focused in our study material. (6) Numerical Part Numerical part of Capital Structure has been explained wonderfully and Solved as well as Unsolved questions have been included so that students can practice at the optimum level.

(7) Fast Track Revision After every chapter Fast Track Revision is given which will help students to revise the whole chapter in minimal time. (8) Past Years’ Examination Questions Past years’ examination questions are also given after every chapter so that students can gain confidence that whatever they are studying from our study material is more than sufficient for answering the questions asked in the exam. Click on the links to get the required Business Studies notes for your preparation.

CHAPTER 1 NATURE AND SINGFICANCE OF MANAGEMENT Que. Define the term ‘Management’. Management is used to mean the group of persons who manage the organisation. It is needed every time and in every activity.

It is not only confined to business organisations but also in organisations such as government, religious, charitable bodies etc.- Traditional definition: According to the traditional view “Management is getting things done through others”. This is incomplete as it treats the employees as mere means to achieve the goals of the organisation. Needs and demands of the employees of the organisation are overlooked. Modern definition: According to the modern view “Management is creating the internal environment of an organization where employees working together in groups can perform efficiently towards the achievement of the goals. On this basis Management is goal oriented and involves creating an internal atmosphere so that group goals can be achieved. “A successful enterprise has to achieve its goals effectively and efficiently.” Explain.

Management has been defined as a process of getting things done with the aim of achieving goals effectively and efficiently Being effective or doing work effectively basically means finishing the given task. Effectiveness in management is concerned with doing the right task, completing activities and achieving goals.

In other words, it is concerned with the end result. But it is not enough to just complete the tasks. Completing task efficiently is also important. Efficiency means doing the task correctly and with minimum cost. There is a kind of cost-benefit analysis involved and the relationship between inputs and outputs. If by using less resources more benefits are derived then efficiency has increased. Efficiency is also increased when for the same benefit or outputs, fewer resources are used and less costs are incurred.

Management is concerned with the efficient use of the available resources, because they reduce costs and ultimately lead to higher profits. For management, it is important to be both effective and efficient.

Effectiveness and efficiency are two sides of the same coin. Usually high efficiency is associated with high effectiveness which is the aim of all managers.

But undue emphasis on high efficiency without being effective is also not desirable. Explain the characteristics/features of Management.

Key characteristics of management are given below: - (i) Management is a goal-oriented process: An organisation has a set of basic goals which are the basic reason for its existence. These should be simple and clearly stated. Different organisations have different goals. Commonly managerial success is measured by the extent to which the objectives are achieved (ii) Management is all pervasive: Management is relevant for all types of organization whether economic, social or political. A petrol pump needs to be managed as much as a hospital or a school. What managers do in India, the USA, Germany or Japan is the same. (iii) Management is multidimen-sional: Management is a complex activity that has three main dimensions.

These are: (a) Management of work: All organisations exist for the performance of some work. In a factory, a product is manufactured, in a garment store a customer’s need is satisfied and in a hospital a patient is treated. Management translates this work in terms of goals to be achieved and assigns the means to achieve it. (b) Management of people: Human resources are an organisation’s greatest asset. Managing people has two dimensions (i) it implies dealing with employees as individuals with diverse needs and behavior; (ii) it also means dealing with individuals as a group of people.

The task of management is to make people work towards achieving the organisation’s goals, by making their strengths effective and their weaknesses irrelevant. (c) Management of operations: Every organisation has some basic product or service to provide in order to survive. This requires a production process which has the flow of input material and the technology for transfor-ming this input into the desired output for consumption. This is interlinked with both the management of work and the management of people. (iv) Management is a continuous process: The process of management is a series of continuous, composite, but separate functions (planning, organising, directing, staffing and controlling).

These functions are simultaneously performed by all managers all the time. (v) Management is a group activity: An organisation is a collection of diverse individuals with different needs. Every member of the group has a different purpose for joining the organization. Management implies group of persons working in association for the achievement of common objectives. The result of group efforts affects all the person of the group.

(vi) Management is a dynamic function: Management is a dynamic function and has to adapt itself to the changing environment. An organisation interacts with its external environment which consists of various social, economic and political factors.

In order to be successful, an organisation must change itself and its goals according to the needs of the environment. (vii) Management is an intangible force: - Management cannot be seen. One may not see with the naked eye the functioning of management, but its presence can be felt through orderliness, enthusiastic employees, and adequate work output. Quite often, the identity of management is brought in focus by its absence or by the presence of its direct opposite, mismanagement. What are the objectives of the Management?

Management Objectives can be classified into three major categories: Organisational, Social and Individual. A brief description about each objective is given below. (i) Organisational Objectives: Management should be basically concerned with utilizing human and material resources available to an enterprise for deriving best results. This leads to reduction in costs and maximum prosperity for the organization by generating high profits. Organisational objectives must take care of the interests of all the stakeholders in a fair and just manner. The main organizational objectives are survival, profit and growth. Survival: The basic objectives of any business is survival.

In order to survive, an organisation must earn enough revenues to cover costs. Profit: Mere survival is not enough for business. Management has to ensure that the organisation makes a profit.

Profit provides a vital incentive for the continued successful operation of the enterprise. Growth: A business needs to add to its prospects in the long run, for this it is important for the business to grow. An organization can grow and expand only if it moves in the predetermined direction. An effective management helps in achieving the objectives but also proves the way for growth and expansion (ii) Social objectives: - Social objectives deal with the commitment of an organization toward society.

Such objectives may be pertaining to health, safety, labour practices, and price regulation. Further, they include activities intended to further social and physical improvement of the community and to contribute to desirable civic activities. It should be noted that most business houses in achieving their primary goals also contribute to their respective communities by creating needed economic wealth, employment and financial support to the community. (iii) Personal objectives:- Individual objectives are pertinent to the employees of the organization. Each employee joins an organization to satisfy his needs by working in the firm.

These objectives might include competitive salary, personal growth and development, peer recognition and societal recognition. In the absence of satisfaction of personal objectives, employees may lose interest in the work and the performance of the organizational objectives may suffer.

What is the importance of Management in modern business? Management is very much needed for the survival of the business. Without proper management resources will remain resources and shall never become production.

Management is important for the following reasons 1. Helps in achieving group goals: Management is a group activity. It co-ordinates the efforts of organizational members so as to achieve the predetermined objectives of the organization. Management increases efficiency: The aim of a manager is to reduce costs and increase productivity through better planning, organising, directing, staffing and controlling the activities of the organisation. Management creates a dynamic organisation: All organisations have to function in an environment which is constantly changing. It is generally seen that individuals in an organisation resist change.

Management helps people adapt to these changes so that the organisation is able to maintain its competitive edge. Management helps in achieving personal objectives: A manager motivates and leads his team in such a manner that individual members are able to achieve personal goals while contributing to the overall organisational objective. Management helps in the development of society: An organisation has multiple objectives to serve the purpose of the different groups that constitute it. It helps to provide good quality products and services, creates employment opportunities, adopts new technology for the greater good of the people and leads the path towards growth and development. Management is both a science and an art.

Some authors describe management as an art because management relates to practical application knowledge and skill as per the needs of a given situation. On the other hand there are authors who regard management as science because management represents a body of well-tested principles, which can be universally applied. Management as a Science and Management as an art are discussed below Management as a science: - Science is a systematized body of knowledge pertaining to a specific field of study and contains general facts that explain a phenomenon. It establishes the cause and effect relationship between two or more factors and have certain principles governing the relationship. These principles are developed through the scientific methods of observation of events and verification through testing. The principles are absolute facts having universal application. As such science is characterized by for main features.

(i) Existence of systematized body of knowledge. (ii) Use of scientific methods of observation. (iii) Principle based on experiments. (iv) Universal validity of principles. On examination we find that while management has some of these features and it does not have others. For instance management is systematized body knowledge. Also principles of management are arrived on the observation and repeated experimentation in various types of organizations.

But the methods of observation followed by management are not cent percent objective because the subjects are human being whose behaviour cannot be predicted. The Management principles are flexible and can be used in different situations with modification. So these principles do not have universal applicability. Thus management may be called an inexact science as is the case with other social sciences. Management as an art Art is concerned with the application of knowledge and skills.

Desired results are achieved through the application of skill. Thus an art has the following characteristics.: (1) It signifies practical knowledge. (2) It signifies personal skills in particular fields of human activity.

(3) It helps in achieving desired/ predetermined results. (4) It is creative in nature. Management is also an art since it involves application of knowledge and personal skills to achieve desired results. Every manager has to apply certain knowledge and skills while dealing with the people to achieve the desired results.

As an art management calls for a combination of abilities, skills and judgment and a continuous practice of management concepts and principles. Management: Both science and an art Management is combination of an organized body of knowledge and skilful application of this knowledge. Effective performance of various management functions necessarily needs an adequate basis of knowledge and a scientific approach. Thus, management is both a science and an art.

It is a science because it uses certain principles. It is an art because it requires continuous practice and personal skills. From the above discussion it is clear that management is both a science and an art. Management is a profession.

A profession means an occupation for which specialized skills are required. In a profession entry is restricted by examination or education. But these skills are not meant for self-satisfaction but are used for the large interests of the society.

A profession has the following characteristics: 1. Well defined body of knowledge. Restricted entry. Professional association. Ethical Code of conduct. Service Motive Management can be referred as a profession if it fulfills the above mentioned features:- 1.

Well defined body of knowledge: Every profession has a specialized body of knowledge relevant to the area of specialization and it can be imported through formal methods of instructions or education. Management fulfills these criteria. The principle and theories of management have been developed for the existing and potential managers. Restricted entry: Entry in a profession is subject to qualifying prescribed exams and acquired practice through training and apprenticeship. However there are no restrictions on a person to become a manager anyone can become a manager irrespective of ducation. Therefore this criterion is not fulfilled by the management. Professional association: For every profession a representative association is there to lay down the code of conduct and membership rules.

Management also has association such as All India Management Association, National Institution of Personnel Management etc. However the membership to these associations is not essential for the managers therefore this criterion is partly fulfilled by the management.

Ethical Code of conduct: Members of a profession have to abide by code of conduct which contains rules and regulations relating to the profession any member violating the code can be punished and the membership can be cancelled. The All India Management Association has also framed code of conduct for the managers but there is no legal backing for this code. Therefore management does not fulfill this criterion. Service motive: The basic motive of a profession is to serve their client’s interests by rendering dedicated and committed service. The basic purpose of management is to help the organisation achieve its stated goal.

This may be profit maximisation for a business enterprise. However, profit maximisation is not the sole objective of the management. Therefore, if an organisation has a good management team that is efficient and effective it automatically serves society by providing good quality products at reasonable prices.

Conclusion: On the basis of above discussion we find that management fulfills some of the features of profession. Therefore it can be regarded as profession. But not full fledged professions like legal or medical profession. But the recent trends show that it is moving in that direction. Explain different levels of management? A series of managerial position from top to bottom is called levels of management.

Level of management determines the amount of authority and status enjoyed by any manager. The levels of management can be classified into three parts. (i) Top level Management (ii) Middle level management (iii) Supervisory level or operating management TOP MANAGEMENT Top management consists of managers at the highest level in the management chain of command. This includes Board of Directors, Chief executive and the departmental heads.

Business Studies Class 12 Notes

Functions of top level Management / Activities Performed by top level Management (i) Establishing overall long term goals and ways of attaining them. (ii) Maintaining liaison with the outside world (iii) Laying down overall policies (iv) Providing direction and leadership to the organization as a whole. MIDDLE MANAGEMENT Middle level management consist of departmental managers, branch managers like purchase managers, production managers, personnel manager, finance manager marketing manager etc. Function of the middle level management / Activities performed by the middle level management.

(i) To link the top and supervisory levels of management. (ii) To transmit orders decisions and instructions down ward. (iii) To carry the problems & suggestions upward. (iv) To inspire lower level managers towards better performance. (v) To co-ordinate various units and divisions SUPERVISORY OR OPERATIONAL MANAGEMENT Supervisory / operative / lower management consist of first line supervisors. They generally have such designations as superintendent, section officer, foreman etc.

Following are the important functions of lower management. (i) Planning day today activities.

(ii) Arranging machinery & tools etc. (iii) Arraigning jobs and tasks to subordinate (iv) Supervision of the work of labour. (v) Reporting the problems faced and suggestions made by workers to the middle level management. What are different functions of management? Following are the functions of Management (1) Planning: - It is deciding in advance what to do, how to do when to do and who is to do.

It bridges the gap between where we are to and where we want to go. It makes it possible for things to occur which would otherwise not happen. Planning is needed for all functions and at all level of management though its extent varies with the delegated authority or position. (2) Organising: - It refers to the process of bringing together physical financial & human resources & establishing productive relations among them for the achievement of predetermined goals. It is concerned with building a structure of various inter-related parts. The main aim of Organising is to enable the people to relate to each other to work together for a common purpose.

(3) Staffing: - The staffing may be defined as the managerial function of hiring and developing the required personnel to fill in various positions in the organization. This function involves determination of the size and categories of required personnel. It is also concerned with employing the right people and developing their skills thorough training.

The staffing function focuses on improving the competence and performance of the employees in the organization. (4) Directing: - It is the function of managements concerned with instructing, guiding, supervising, motivating & leading the subordinates to contribute to the best of their of their abilities for the achievement of organizational objectives. It is a continuous function of the management. (5) Controlling: -Controlling is the process of verifying actual performance is in conformity with planned performance & taking corrective action where necessary. It provides that performance of work is in accordance with the organizational plans policies & programmes. It enables managers to detect deviations in performance if any rectify them and to prevent their repetition in future. Define coordination.

Co-ordination as a function of management refers to the task of integrating the activities of separate units of on organization to accomplish the goals efficiently. The purpose of coordination is to ensure that the goals of units and subunits are pursued in harmony with each other keeping in view the goals of the organization as a whole. Co- ordination is the essence of management. The work given to different departments units and individual must be coordinated by all managers at various levels as a regular function. Without proper co-ordination there is likely to be duplications or over lapping and even chaos in the organization co-ordination in required in performing every function of management as follows. (a) In planning co-ordination is required (i) Between objectives and available resources and (ii) Among different functional managers.

(b) In organizing co-ordination is required. (i) Between resources of an organization and activities to be performed. (ii) Among authority responsibility and accountability.

(c) In staffing co-ordination is required (i) Between skills of workers and jobs assigned to them. (ii) Between training and technology of production. (d) In directing co-ordination is required (i) Among orders, instructions, guidelines, suggestions etc.

(ii) Between superior and subordinates (iii) Between efficiency and motivation (e) In controlling co-ordination is required (i) Between standards fixed and actual performances (ii)Between correction of deviation and achievement of objectives. It is clear from the above discussion that Co-ordination is regarded as the essence of management rather than separate function of management. Explain the nature of coordination. Coordination is the process of achieving unity of action among independent activities. This would be better achieved if the nature of coordination is understood clearly as discussed below: - Nature of Coordination The definitions given above highlight the following features of coordination: (i) Coordination integrates group efforts: Coordination integrates unrelated or diverse interests into purposeful work activity. It gives a common objective to group effort to ensure that performance is done as per planning. (ii) Coordination ensures unity of action: The purpose of coordination is to secure unity of action in the achievement of a common purpose.

It acts as the binding force between departments and ensures that all action is aimed at achieving the goals of the organization. (iii) Coordination is a continuous process: It is not a one time process but a continuous process. It starts with the establishment of business and runs up to its closure.

Class 12 Hseb Notes Of Business Studies

Maintaining coordination among various activities of business is the essential task of managers. This should happen continuously (iv) Coordination is an all pervasive function: Coordination is required at all levels of management due to the interdependent nature of activities of various departments. It integrates the efforts of different departments and different levels. (v) Coordination is the responsibility of all managers: Coordination is the function of every manager in the organisation.

Top level managers need to coordinate with their subordinates to ensure that the overall policies for the organisation are duly carried out. Middle level management coordinates with both the top level and first line managers.

Operational level management (vi) Coordination is a deliberate function: A manager has to coordinate the efforts of different people in a deliberate manner. Even where members of a department willingly cooperate and work, coordination gives a direction to that willing spirit.

Notes Of Business Studies Class 12

Cooperation in the absence of coordination may lead to wasted effort and coordination without cooperation may lead to dissatisfaction among employees.