Summary of all chapter of business studies for class 12th students

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Objectives
1.Organisational objectives:
•Survival
Characteristics
•Goal oriented
•Pervasive
•Multidimensional
•Continuous process
•Group activity
•Dynamic function
•Intangible force
Elements
•Process: it involves a series
of inter-related functions
•Effectiveness: concerned
with doing the right task and
achieving goals on time
•Efficiency: means doing the
right task correctly and
minimum cost
2.Social Objectives:
•Protection of environment
•Employment opportunities for weaker sections
•Basic amenities for community
•Quality products at fair prices
•Avoidance of unfair practice
3.Personnel objectives:
•Financial needs
•Social needs
•Higher level needs
•Healthy working
conditions
•Growth
Functions
•Planning
•Organising
•Staffing
•Directing
•Controlling
Levels
•Top level
management(includes
board of directors,
chairman , etc)
•Middle level management
(includes heads of different
functional departments)
•Operational level(Includes
supervisors ,foreman ,
superintendent , etc)
Nature
Management as a science
•Systematized body of
knowledge
•Principles based on
observation and experiment
•Universal validity
•Profit
Management as a science
•Existence of theoretical
knowledge
•Personalized application
•Based on practice and
creativity
Management as a
profession
•Well defined body of
knowledge
•Restricted entry
•Professional
association
•Ethical code of
conduct
•Service motive
Importance
•Helps in achieving personal
objective
•Increases efficiency
•Creates a dynamic
organisation
•Helps in achieving personal
objective
•Helps in development of
society
12th CBSE
Business studies
Chapter-1
Nature and significance of management

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Business studies
Chapter-1
12th CBSE
Coordination
Functions
•Integrates group efforts
•Ensures unity of action
•Continuous process
•Pervasive Function
•Responsibility of all
managers
•Deliberate function
Importance
•Growth in size
•Functional
differentiation
•Specialization
Nature and significance of management

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Business studies
Chapter-2
12th CBSE
Meaning Significance
Principles of management
Fayol’s principles
•Management
vs pure science
•Principles vs
Techniques
•Principles vs
values
•Pervasive
•General guidelines
•Flexible
•Practice and
experiments
•Cause and effect
•Behavioral in nature
•Contingent
•Insight into reality
•Optimum utilisation
•Scientific decisions
•Meeting requirement
•Effective
administration
•Social responsibility
•Training ,education
and research
•History
•Contribution
•Principles
•Division of work
•Authority and responsibility
•Discipline
•Unity of command
•Unity of directions
•Subordination of individual interest to
general interest
•Remuneration of persons
•Centralisation and decentralisation
•Principle of scalar chain
•Principle of equity
•Principle of order
•Stability of tenure of personnel
•Initiative
•Esprit de corps
Scientific management
by F.W. Taylor
•History
•Contribution
•Meaning
•Advantages
•Modern techniques
Scientific principles
•Science not rule of thumb
•Harmony not discord
•Cooperation not individualism
•Development of workers to their greatest efficiency and
prosperity
Scientific techniques
•Functional foremanship
•Standardisation and
simplification of work
•Work study
•Differential piece wage
system
•Mental revolution
Comparison
between
Taylor and Fayol
•Point of difference
•Relevance
Features

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12th CBSE
Business studies
Chapter-3
Business environment
•Sum total of all external
forces
•Includes both specific and
general forces
•Different elements are
inter-related
•Dynamic in nature
•Uncertain
•Complex
•Relative concept
Features Importance
•Enables the firm to identify
opportunities and getting first
mover advantage
•Help the firm to identify threats
and early warning signals
•Helps in tapping useful resources
•Helps in coping with rapid changes
•Helps in assisting in planning and
policy formation
•Helps in improving performance
Dimensions
•General environment
• economic environment
•Social environment
•Technological environment
•Political environment
•Legal environment
•Specific environment: includes
customers, owners and
investors, supplier, creditor,
employee , etc
New industrial policy
•liberalisation (removal of
unnecessary controls and
restrictions on business)
•Privatisation(giving greater role
to private sector in nation
building process)
•Globalisation(integrating
various economies of the world
to create a cohesive global
economy
Features of new trade policy
•Delicensing
•Decrease in role of public sector
•Disinvestment
•Liberalisation of foreign capital
•Liberal policy for technical
collaboration
•Setting up of foreign investment
promotion board
•De- reservation under samll-scale
industries
Demonetisation (act of
removing a currency unit
of its status as legal tender)
Features
•Viewed as tax administration
measure
•Indicated that tax evasion will
no longer be tolerated
•Channelized savings into the
formal financial system
•Aims to create a less-cash
economy
Impact of economic
reforms on business
•Increase competition
•More demanding
customers
•Rapidly changing
technological environment
•Necsssity for change
•Need for developing
human resource
•Market orientation
•Loss of budgetary support
Managerial response to
changes in business
environment
•Diversification
•Joint venture with MNCs
•Acquisition and merges
•Use of modern technology
•Brand building
•Customer orientation
•Higher level of compensation

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Business studies
Chapter-4
Features
•Focuses on achieving
Organisational objective
•Primary function of
management
•Pervasive
•Continuous
•Futuristic
•Involves decision making
•Mental exercise
12th CBSE
Importance
•Provides directions
•Reduces the risks of uncertainty
•Reduces overlapping and wasteful
activities
•Facilitates decision making
•Establishes standards for
controlling
limitations
•Leads to rigidity
•May not work in a dynamic
environment
•Reduces creativity
•Involves huge costs
•Time consuming process
•Does not guarantee success
External limitations
•Natural calamities
•Changes in government policies
•Strategies of competitors
•Technological changes
•Changes in fashion , tastes , etc
Process
•Setting objectives
•Developing premises
•Identifying alternatives courses
of action
•Selecting an alternative
•Implement the plan
•Follow up action
Types of plans
•Single use plans:(designed to
achieve a particular goal)
i)Program ii)budget
•Standing plans:(designed for
activities that occur regularly over
a period of time)
i)Policies
ii)Method
iii)Procedure iv)rules
•Neither single use nor standing
plans:
i) Objectives ii)
strategy
Planning
Planning

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12th CBSE
Business studies
Chapter-5
Organising
Steps
•Identification and
division of work
•Departmentation
•Assignment of duties
•Establishing reporting
relationships
Importance
•Benefits of specialisation
•Charity in working relationships
•Optimum utilisation of resources
•Adaption to change
•Effective administration
•Development of personnel
•Expansion and growth
Types of organisation structures
Functional structure (grouping of jobs
of similar nature under one
department)
Advantages ;
•Functional specialisation
•Effective control and coordination
•Improves efficiency
•Avoids duplication of functions
•Ease in training
•Proper attention
Disadvantages
•Functional empire
•Difficulty in coordination between
different departments
•Inflexibility
•Difficult to hold accountable
Divisional structure (grouping of
jobs related to one department)
Advantages
•Product specialisation
•Greater accountability
•Flexibility
•Expansion and growth
Disadvantages
•Departmental conflicts
•Costly
•Ignore organisational interest

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Features
•Clearly defined reporting relationships
•Created to achieve organisational objective
•Coordinates efforts to various departments
•Intentionally created
•Places more emphasis on work
Advantages
•Fixation of responsibility
•Clarity of duties
•Unity of command
•Helpful in achieving objectives
•Provides stability
Formal organisation Informal organisation
Feature
•Originates from formal organisation
•Standards of behavior evolve from group norms
•Follows independent channels of communication
•Emerges spontaneously
•No definite structure
Advantages
•Faster communication
•Fulfill social needs
• Helps in achieving organisational objectives
Disadvantages
•Spread of rumors
•Resistance to change
•Pressure of group norms
12th CBSE
Business studies
Chapter-5
Delegation of authority
Elements
•Authority
•Responsibility
•accountability
Importance
•Effective management
•Employee development
•motivation of employee
•Facilitation of growth
•Basis of management hierarchy
•Better coordination
Centralisation (concentration
of decision making power at
top level)
Decentralisation(systematic
delegation of authority
through all levels)
Importance
•Develops initiative among subordinates
•Develops managerial talent for future
•Quick decision making
•relief to top-level
•Facilitates growth
•Better control
Organising
Disadvantages
•Delay in action
•Ignores human
element
•Lack of initiative

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Business studies
Chapter-6
Importance of staffing
Staffing
12th CBSE
•Filing jobs with competent
personnel
•Better performance
•Survival and growth
•Optimum utilisation of human
resources
•Improves job satisfaction
Staffing and human resource management
Specialised activities by human resource
personnel
•Recruitment
•Analysing jobs , collecting information about
jobs to prepare job description
•Selection
•Developing compensation and incentive plans
•Placement and orientation
•Training and development of
employees
•Performance appraisal
•Maintaining labour relations
•Handling grievances and
complaints
•Providing for social security and
welfare of employees
•Defending company in law suits
and avoiding legal complications
Steps of Staffing
•Estimating the manpower
requirements
•Recruitment
•Selection
•Placement and orientation
•Training and development
•Performance appraisal
•Promotion and carrier
planning
• Compensation
Main
components of
staffing
Recruitment
Selection
Training and
development

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Recruitment
•Sources of recruitment
(i) Internal sources
• Promotion
• Transfer
# Merits
• Motivates the employees
• Simple process
• Tool of training
• Avoids over and under
staffing
• Economical
# Demerits
• Prevents induction of fresh
talent
• Employees may become
lethargic
•Not suitable for new firm
•Lack of competition
•Low productivity
(ii) External sources
•Direct recruitment
•Casual callers
•Advertisement
•Employment exchange
•Placement agencies and
management consultants
•Campus recruitment
•Recommendation of
employees
•Labour contractors
•Advertising on television
•Web publishing
Merits
•Qualified personnel
•Wider choice
•Fresh talent
•Competitive spirit
Demerits
•Dissatisfaction
among existing staff
•Lengthy process
•Costly process
Selection
Steps
•Preliminary screening
•Selection tests
•Employment interview
•Reference and background check
•Selection decision
•Medical examinitation
•Job offer
•Contract of employment
Training and
development
Benefits to organisation
•Systematic learning
•Increased productivity
•Prepare future managers
•Boost morale of employees
•Better response to fast changing environment
Benefits to employees
•Career growth
•Increased earnings
•Safety to employees
•High morale
Business studies
Chapter-6
Staffing
12th CBSE
Methods of training
On-the job training
method:
•Induction training
•Apprenticeship
•Internship training
Off-the job training
method:
•Vestibule training

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Business studies
Chapter-7
Features of directing
•Initiate action
•Pervasive
•Continuous process
•Flows from top to bottom
Importance of directing
•Initiate action
•Integrate group activity
•Means of motivation
•Directing facilitates changes
•Provide stability and balance
in the organisation
Elements of directing
•Supervision
•Motivation
•Leadership
•communication
Motivation
•Unsatisfied needs
•Tension
•Drive
•Search behavior
•Satisfied need
•Reduction of tension
•Internal feeling
•Produces goal
directed behavior
•Can be either positive
or negative
•Complex process
•Basic physiological needs
•Safety needs
•Social needs
•Esteem needs
•Self-actualisation needs
Financial incentives
•Pay and allowances
•Productivity linked wage incentives
•Bonus
•profit sharing
•Co-partnership
•Retirement benefits
•perquisites
Non financial incentives
•Status
•Organisation climate
•Carrier advancement opportunity
•Job enrichment
•Employee recognition programmes
•Job security
• Employee participation
•Employee empowerment
Features
Process
Maslow’s need hierarchy theory
Leadership (process of
influencing behavior of people
towards achievement of goals)
Leadership styles
•Autocratic style of leadership
•Democratic style of leadership
•Laissez faire style of leadership
Communication (process of
exchange of ideas. Views, etc.
between people)
•Elements
•Sender
•Message
•Encoding
•Media
•Decoding
•Receiver
•Feedback
•Noise
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Directing

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Business studies
Chapter-7
12th CBSE
Directing
Communication
Formal communication Informal communication
Types
•Vertical communication
(downward and upward)
•Horizontal
communication
•Diagonal communication
Networks
•Single chain network
•Wheel network
•Circular network
•Free flow network
•Inverted v network
Networks
•Single strand
•Gossip
•Probability network
•Cluster
Barriers to communication
Semantic barriers
•Badly expressed message
•Symbols with different meanings
•Faulty translations
•Unclarified assumptions
•Technical jargon
•Body language and gesture
•decoding
Physiological barriers
•Premature evaluation
•Lack of attention
•Loss by transaction and
poor retention
•Distrust
Organisational barriers
•Organisational policy
•Rules and regulations
•Status
•Complexity
•In organisation structure
•Organisational facilities
Personal barrier
•Fear of challenge to authority
•Lack of confidence of superior
on his subordinates
•Unwillingness to
communicate
•Lack of proper incentives
Measures to improve communication effectiveness
•Clarify ideas before communication
•Communicate according to needs of receiver
•Consult others before communicating
•Be aware of languages ,tone and content of message
•Convey things to help and value to listeners
•Ensure proper feedback
•Communicate for present as well as future
•Follow up communications
•Be a good listener

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Business studies
Chapter-8
Meaning
Definition
Scope
Nature
Goal-oriented
Pervasive
Backward as well
as forward
looking
Continuous
Importance
Achieving goals
Accuracy of
standards
Efficient use of
resources
Improving
employee’s
motivation
Order and discipline
Facilitates
coordination
Planning and
controlling
Nature and concept
Independent and
interlinked
Backward and
forward looking
Prescriptive/
Evaluating
Controlling
process
Setting-up
standards
Measuring
performance
Compare
performance
Analysing
deviations
Taking corrective
measures
Feedback
Deviation
Negative
positive
Controlling
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12th CBSE
Business studies
Chapter-9
Role of financial management
•Determining size as well as composition
of fixed assets
•Determining quantum of current assets
•Deciding proportion of log term and
short term financing
•Fixing ratio between long term financing
into debt and equity
•Influence on all items in profit and loss
account
Objective of financial
management (wealth
maximisation)
Types of financial decisions
•Profit maximisation
•Maintenance of liquidity
•Proper utilisation of resources
•Meetings on financial
commitments with creditors
Investment Or capital
budgeting decision
Factors affecting capital budgeting decision
•Cash flows of the project
•Rate of return
•Investment criteria
Importance of capital budgeting decisions
•Long term growth and effects and effects
•Large amount of funds involved
•Risk involved
•Irreversible decisions
Financing decision
Factors affecting financing decision
•Cost
•Risk
•Floating costs
•Cash flow position
•Fixed operating costs
•Control considerations
•State of capital markets
Dividend decision
Factors affecting dividend decision
•Amount of earning
•Stability of earning
•Stability of dividends
•Growth opportunities
•Cash flow position
•Shareholder’s preferences
•Taxation policy
•Stock market reaction
•Access to capital market
•Legal constraints
•Contractual constraints
Financial management

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Business studies
Chapter-9
Financial planning
•Helps to prepare for future
•Helps in avoiding business shocks and surprises
•Helps in achieving coordination between various
functions
•Prevents duplication of efforts and gaps in planning
•Provides a link between investment and financing
decisions
•Makes evaluation of actual performance easier
Capital structure (proportion
of debt and equity used or
financing business operations)
Factors affecting choice of capital structure
•Cash flow position
•Interest coverage ratio
•Debt service coverage ratio
•Return on investment
•Cost of debt
•Tax rate
•Cost of equity
•Floatation costs
•Risk consideration
•Flexibility
•Control
•Regulatory framework
•Stock market condition
•Capital of other
companies
•To ensure availability of
funds whenever required
•To ensure unnecessarily
•Finance is not raised
Importance
Objectives
Working capital (capital required for holding current assets)
Factors affecting working capital requirements
•Nature of business
•Scale of operations
•Business cycle
•Seasonal factors
•Production cycle
•Credit allowed
• Credit availed
Types of working
capital
•Gross working capital
•Net working capital
Fixed capital (money
invested in fixed assets)
Factors affecting fixed capital requirements
•Nature of business
•Scale of operations
•Choice of technique
•Technology up-gradation
•Growth prospects
•Diversification
•Financing alternatives
•Level of collaboration
12th CBSE
Financial management
•Availability of raw
material
•Operating efficiency
•Growth prospects
•Level of competition
•Inflation

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Business studies
Chapter-10
Functions
•Mobilise savings and
channelise them into most
productive uses
•Facilitate price discovery
•Provide liquidity to financial
assets
•Reduce the costs of
transactions
Types
Money market Capital market
Instruments
•Treasury bill
•Commercial paper
•Call money
•Certificate of
deposit
•Commercial bill
Components
Methods of
flotation
•Offer through
prospectus
•Offer for sale
•Private placement
•Rights issue
•E-IPOs
Secondary market or stock exchange
Functions
•Providing liquidity
and marketability to
existing securities
•Pricing of securities
•Safety of transaction
•Contribution to
economic growth
•Spreading of equity
cult
•Providing scope for
speculation
Trading procedure on a stock
exchange:
•Selection of a broker
•Opening demat account with
depository
•Placing the order
•Issue of contract note
•Delivery of shares or making
payment
•Settlement cycle
•Payout-day working
•Delivery of shares in demat form
Features
•Link between savers and
investment opportunities
•Deals in long terms investment
•Utilises intermediaries
•Determinant of capital
formation
•Government rules and
regulations
Securities and exchange board of India (SEBI)
Objectives of SEBI
•To regulate stock exchanges
•To protect investors and to
guide and educate them
•To prevent trading
malpractices
•To regulate and develop a
code of conduct for
intermediaries
Functions of SEBI
•Regulatory functions
•Development functions
•Protective functions
12th CBSE
Primary market
Financial markets

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Business studies
Chapter-11
Features of marketing
•Need and want
•Creating a market
offering
•Customer value
•Exchange mechanism
Marketing management
philosophies
•Production concept
•Product concept
•Selling concept
•Marketing concept
•Societal marketing concept
Functions of marketing
•Gathering and analyzing market
information
•Marketing planning
•Product designing and development
•Standardisation and grading
•Branding
•Customer support services
•Pricing of product
•Promotion
•Physical distribution
•Transportation
•Storage or
warehousing
•Packaging and labelling
Elements of marketing mix
Product mix
•Branding
•Packaging
•Labeling
Price mix
Factoring affecting price
determination
•Product cost
•Utility and demand of the
product
•Extent of competition in the
market
•Government and legal
regulations
•Pricing objectives
•Marketing methods used
Place mix
Channels of distribution
•Direct channel
•Indirect channels
One level channel
Two level channel
Three level channel
Physical movement of goods
•Order processing
•Transportation
•Warehousing
•Inventory control
Promotion mix
Advertisement
Sales promotion
Personal selling
Public relation
Features
•Reach
•choice
•Legitimacy
•Expressiveness
•Economy
•Enhancing customer
satisfaction and confidence
•News
•Speeches
•Events
•Written
materials
•Public service
activities
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Marketing Management

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Business studies
Chapter-12
12th CBSE
Importance of Consumer Protection
From Consumers
point of view
From Businessman’s
point of view
•Consumer ignorance
•Unorganised consumers
•Widespread
exploitation of
consumers
•Long term interest of business
•Business uses society’s resources
•Social responsibility
•Moral justification
•Government intervention
Consumer protection Act, 1986 (enacted to
protect and promote the interest of consumers)
Features
•It has granted certain rights to consumers
•It also provides safeguard to consumers against any type of
exploitation
•It has provided three-tier redressal machinery to provide
remedy to consumers
Consumer rights
•Right to safety
•Right to be informed
•Right to choose
•Right to be heard
•Right to seek redressal
•Right to consumer
education
Consumer responsibilities
•Consumer should have knowledge about market
•Consumer must be quality conscious
•Use the products safety
•Consumer must refer labels carefully
•Insist on cash memo
•Consumer must be honest
•Consumer must file a complaint
• Form consumer organisation
•Consumer must respect the environment
•Assert yourself to ensure that you get a fair deal
Complaint can be filed by
•Any consumer
•Any registered consumer’s association
•The central government or any state
government
•One or more consumers on behalf of
numerous consumers
•A legal heir or representative of a
deceased consumer
Three-tier redressal agencies
•District forum
•State commission
•National commission
Consumer Protection