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UNIT 1

• Management is to Forecast, Plan, Organize, Command, Co-ordinate, and Control.
• Characteristics
  • Continuous and never-ending process
  • Getting things done through people
  • Result-oriented
  • Multi-disciplinary
  • A group and not an individual activity
  • Follows established principles or rules
  • Aided but not replaced by computer
  • Situational in nature
  • not necessarily owner
  • Both an Art and Science
  • All-pervasive (global)
  • Intangible
  • Uses professional approach in work
  • Dynamic
• Administration - process of running the business. Implementing rules and policies.
• Functions of Management
  • Planning - organizing goals. What's and How's. foresee problems.
  • Organizing - allocating resources, authorities and activities.
  • Staffing - finding and training right people for the job
  • Directing - leading, influencing, motivating employes.
  • Controlling - monitoring performance and taking corrective actions.
• Role of Manager (Mitzberg)

• McGregor's Theory X and Y of Management
  • X
    • Employees inherently dislike work and avoid responsibility.
    • Authoritarian style with close supervision and strict control.
    • Can result in low morale, reduced creativity, and higher turnover.
  • Y
    • Employees view work as natural and are motivated by intrinsic rewards.
    • Participative style that encourages autonomy and shared decision-making.
    • Enhances job satisfaction, creativity, and builds a positive organizational culture.
  • Z
    • Employee is loyal and committed to company for lifetime.
    • Fosters sense of stability and belongingness.
    • Shares sense of purpose leads to increased productivity.
• Scientific Principles of Management by F.W.Taylor
  • Replace old practices with scientific methods for task efficiency. Micro-scale.
  • Too inflexible and doesn't focus on people's motivation and work satisfaction.
  • Techniques - systematic examination to enhance efficiency.
    • Method Study: Finding the 'one best way' to do a job.
    • Motion Study: Eliminating wasteful movements.
    • Time Study: Determining standard time for a task.
    • Fatigue Study: Determining frequency/duration of rest intervals.
    • Differential Piece Wage System: Paying efficient workers more.
  • Principles
    • Scientific Study of Tasks: analyze process to determine most-efficient method.
    • Standardization: Develop standard procedures and tools for consistency.
    • Right personnel selection: centralized selection and training.
    • Specialization: functional foremen for specific tasks.
    • Mental Revolution: fostering collaborative mindset between workers and managers.
• Fayol's 14 Principle of Management
  • Division of Work: Specialization improves efficiency.
  • Authority and Responsibility: Managers must have power and accountability.
  • Discipline: Maintaining order through adherence to rules.
  • Unity of Command: Employees should receive orders from only one supervisor.
  • Unity of Direction: Directed towards a single goal.
  • Subordination of Individual Interests: collective interest over personal.
  • Remuneration: Fair compensation motivates employees.
  • Centralization/Decentralization: Balance of decision-making power based on organizational needs.
  • Scalar Chain: Clear chain of command from top management to the lowest level.
  • Order: Systematic arrangement of resources and personnel.
  • Equity: Fair treatment of all employees.
  • Stability of Tenure: Minimizing turnovers support organizational performance.
  • Initiative: Encouraging employee creativity and involvement.
  • Esprit de Corps: Promoting team spirit to build unity and loyalty.
• Complementarity of Taylor & Fayol: Taylor focused on shop-floor/task efficiency (worker level), while Fayol focused on general principles of managing the overall organization (managerial level). They are complementary: Taylor's efficiency supports Fayol's effectiveness; Fayol's structure helps implement Taylor's methods.
• Herzberg Two Factor Motivation (Motivation-Hygiene) Theory
  • Motivating Factors (satisfiers) - presence can lead to motivation
    • Achievement, Recognition, Responsibility, Advancement, Growth, The work itself.
  • Hygiene Factors (dis-satisfiers) - absence can lead to job dissatisfaction
    • Company policies, Supervision, Relationships with supervisors and peers, Work conditions, Salary and benefits, Job security.
• Maslow's Need Hierarchy Theory

• Hawthrone Experiment - productivity increases when workers receive special privileges and attention from supervisors. Workplace culture plays a significant role.
• Organizational Structure - outlines roles, responsibilities and relationships.

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UNIT 2

• The business environment is the sum of internal and external factors that influence an organization’s performance and decision-making.
• Understanding business environment helps managers
  • Understand external forces
  • Adapt to change
  • Competitive advantage
  • Risk Mitigation
  • Strategic Decision-making
  • Avoid legal issues
  • Manage stakeholders
• Economic forces that affect business
  • Demand force - total income, taxes, savings.
  • Competitive force - price cutting, advertisement, product differentiation, marketing.
• Types of Business Environment:
  1. Internal Environment:
     • Factors within the organization.
     • Components:
       • Organizational Culture: Values, beliefs, and behaviors.
       • Management Structure: Hierarchical setup and communication channels.
       • Resources: Availability of human, financial, and physical assets.
  2. External Environment:
     • Factors outside the organization, further divided into:
     • Micro Environment: (direct affect)
       • Components:
         • Customers: Their needs and buying behavior.
         • Suppliers: Their reliability and quality of inputs.
         • Competitors: Their strategies affecting market positioning.
     • Macro Environment: PESTLE analysis is a strategic tool used to analyze the macro-environmental factors that can impact an organization.
       • Political Factors: Impact of government policies, stability, and regulations.
       • Economic Factors: Economic trends and conditions.
       • Social Factors: Societal trends, demographics, and cultural shifts.
       • Technological Factors: Influence of technology on operations and market trends.
       • Legal Factors: Legal and regulatory environment.
       • Environmental Factors: Ecological and sustainability concerns.
• SWOT Analysis strategic planning technique used to analyze an organization
  • Strengths: Internal attributes and resources that provide a competitive advantage
  • Weaknesses: Internal limitations that hinder performance
  • Opportunities: External conditions that the organization can leverage for growth
  • Threats: External challenges that could impact success

• Corporate Social Responsibility (CSR)
  • contribute positive to society
    • Environmental responsibility - minimize pollution, eco-friendly safe products.
    • Philanthropy - donate to charities.
    • Ethical labour - fair wages and conditions.
    • Community engagement - support locals.
    • Corporate Governance - uphold ethical standards, transparency and accountable.
    • Business ethics - honesty, trust, respect, fairness in deals.
    • Customers - nice servicing, cause-related marketing.
  • Benefits - Enhance reputation, positive relationships with stakeholders, potential competitive advantage, improved financial performance and productivity.
• Porter's Five Forces Model - Framework that weighs economic might of an industry.
  1. Competitive Rivalry: firms consider competition of market and quality of product, before entering an industry.
  2. Threat of New Entrants: can eat into market shares and affect profitability.
  3. Bargaining Power of Suppliers: more suppliers with quality products, makes easy to gain discounts and increase profits.
  4. Bargaining Power of Customers: fewer buyers than supplier leads to low profits.
  5. Threat of Substitute Products: cheaper substitutes reduce profits.

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UNIT 3

• Financial Management - effective utilization of capital funds with goal of maximizing shareholder wealth.
• Functions of FM
  • Planning and Control
  • Raising Funds
  • Selection of Fixed assets
  • Management of Working capital
  • Handling other financial events
  • Acts as intermediary
• Three Financial Decision
  1. Investment - decisions regarding optimal allocation of funds.
     1. Capital Budgeting: long-term.
     2. Working Capital: day-to-day (current assets and liabilities)
  2. Financing - optimal mix of sources of raising funds
     1. Capital structure decisions: ideal proportions of equity and debt that maximizes firm's value while maintaining acceptable risk level.
     2. Cost of Capital: comparing cost of various sources of finance based on byaj.
  3. Dividend Decisions - optimal payout ratio. i.e. between
     • profits distributed as dividends
     • portion retained for reinvestment
     • bonuses, interim, etc.
• Objectives of Financial Management
  1. Profit Maximization
     • Increasing total accounting profit availability to shareholders.
     • Easy to calculate profits.
     • Emphasizes on short-term, ignores risk and uncertainty, timing of returns. Requires immediate resources.
  2. Shareholder wealth Maximization
     • Increasing market value of common stock.
     • Emphasizes on long-term. Reduces risk and uncertainty. Focus timing of returns.
     • Offers no clear relationship between financial decisions and stock price. Ambiguous.
• Capital Budgeting - long-term investments
  1. On the basis of firm's existence:
     • replacement and modernization decision
     • expansion
     • diversification
  2. On the basis of decision situation:
     • Mutually exclusive decisions - one or other
     • accept-reject decisions - independent
     • contingent decision - dependent
• Working Capital Decisions
  • Current assets (cash, inventories, account receivables) and liabilities (accounts payables, short-term loans). Short-term. Low risk.
• Net Present Value (NPV)

$$NPV = \frac{\text{Present value of Future Cash Inflows}}{\text{Present value of Costs}}$$

• Internal Rate of Return (IRR) - discount rate that makes NPV of all cash flows zero.

$$0 = NPV = \sum_{t=1}^T\frac{C_t}{(1 + IRR)^t} - C_0$$

• Debt Capital
  • Borrowing of funds for fixed tenure.
  • Liability for company
  • Short-term
  • Debt financier is a creditor for organization
  • 3 types: term loan, debentures, bonds.
  • Low-risk investment
  • Lender get interest with principle amount
  • Either secured or unsecured.
• Equity Capital
  • Funds raised by company in exchange for ownership rights for investors.
  • Asset for company
  • Longer-term
  • Shareholders are owner of company
  • Two types: Equity shares, preference shares.
  • High-risk investment
  • Shareholders get dividend/profits on their shares.
  • Unsecured
• Factors affecting working capital
  • Policy on Credit: easy credit -> long-term accounts receivables
  • Tightening lending rules can lower investments
  • Fast-expanding companies increase investments in account receivables and inventories
  • Working capital decreases as revenue declines
  • Overestimation of production requirements, increases WC.
  • Just-in-time systems have reduced inventory
  • Seasonality increases inventory.
• Stock Market - financial market where creation and exchange of financial assets such as shares and debentures takes place.
• Functions of financial market
  • Acts as economic barometer.
  • Transfer of savings and alternatives for investment.
  • Establishes the price.
  • Facilitates liquidity.
  • Reduced cost of transaction.
  • Awareness about equity.

• Key Financial Instruments traded in stock market
  • Equity shares of stocks - ownership on assets
  • Bonds or debentures - unsecured debt
  • Derivatives - future and option contracts
  • Exchanges Traded Funds (ETFs) - basket of securities like stocks and bonds.
  • Mutual funds - investment vehicles that pool money to invest in portfolio of securities.
  • Government Securities - gov. debt instruments like treasury bills, bonds.
  • Corporate Commercial papers - short-term unsecured debt instrument by company.
• Types of Market and financial instruments
  • Money Market - exchange short-term funds to solve their liquidity needs.
    • Call/Notice money - funds provided by bank for very short period
    • Treasury bills
    • Commercial bills
    • Commercial paper
  • Capital Market - trading long-term debt or equity-backed securities.
    • Primary market - IPOs and FPOs
    • Secondary market - stocks, bonds, derivatives, debentures, etc.
      • Over-the-counter (OTC) markets
      • Exchange-traded markets

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UNIT 4

• Marketing is the process of discovering and translating consumer needs and wants into products and services, creating demand for these products and services and then in turn expanding this demand.
• Functions of Marketing Manager
  1. Gathering and Analyzing market information.
  2. Marketing Planning
  3. Product designing and development
  4. Standardization and Grading
  5. Packaging and Labelling
  6. Branding
  7. Customer support services
  8. Pricing of product
  9. Promotion
  10. Physical distribution
  11. Transportation
  12. Storage or warehousing
• Marketing Mix (4/7 P's) - set of variables that help firm in making strategic decisions to influence wants of consumers.
  1. Product - actual product/service
  2. Price
  3. Place - distribution
  4. Promotion - All activities that makes customer buy product
  5. People - having right people
  6. Processes - services
  7. Physical Evidence - validation of product/service
• Sales vs Marketing

• Customer Lifetime Value (CLV) - total amount of money customer is expected to spend on product over duration of their relationship. Measurement steps
  1. Customer Expenditures
  2. Purchase Frequency
  3. Purchase volume
  4. Costs
  5. Time Frames
  6. Average Customer Value

$$CLV = \text{average sales} \times \text{annual visits} \times \text{years}$$

• New Product Development (NPD) - task taken by company to introduce new products in market. Helps maintain relevance in market, sustain competitiveness, expands portfolio, new customers, capitalizes on trends, innovation, leading to increases revenue generation.
  1. Idea Generation
  2. Idea Screening
  3. Concept Development and Testing
  4. Marketing Strategies Development
  5. Business Analysis
  6. Product Development
  7. Test Marketing
  8. Commercialization
• Unethical Issues in Marketing
  1. Making false, exaggerated or unverified claims.
  2. Distortion of facts to mislead or confuse potential buyers.
  3. Concealing dark sides or side effects of product
  4. Bad-mouthing rival product
  5. Using women as sex symbol for advertising
  6. Using fear tactics
  7. Plagiarism of marketing messages
  8. Exploitation
  9. Demeaning references to races, age, sex or religion
  10. Spamming

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UNIT 5

• DIKW Pyramid
  • Data - Raw, unprocessed facts collected from various sources.
  • Information - when data is processed and organized in a meaningful way.
  • Knowledge - understanding gains from information through analysis.
  • Wisdom - ability to apply knowledge and experience to make decisions.
• Knowledge Management (KM) - Creation, distribution and exploitation of knowledge to create and retain greater value of business. Helps create and deliver innovative products, enhance relationships with shareholders and improve work process.
  1. Leverage organizational knowledge
  2. Retaining organizational memory
  3. Foster innovation and collaboration
  4. Improving operational efficiency
  5. Enhance decision-making
  • Driving Forces
    1. Globalization and increases competition
    2. Rapid technological advancements
    3. Workforce mobility and knowledge retention
    4. Regulatory compliance and risk management
  • Issues
    1. Cultural and organizational barriers
    2. Technological integration and interoperability
    3. Knowledge security and intellectual property protection
    4. Knowledge measurement and valuation

• SECI Model explains how knowledge is created, shared, and utilized within an organization.
  1. Socialization (tacit to tacit) - experience, observation, interactions.
  2. Externalization (tacit to explicit) - tacit information is articulated into documentation.
  3. Combination (explicit to explicit) - processing different forms of explicit knowledge.
  4. Internalization (explicit to tacit) - learning, practicing and experience via training.
• Tacit KM Challenges
  1. Articulation
  2. Context Dependance
  3. Personalization
  4. Transfer Mechanism
  5. Retention and Loss
• E-governance - use of ICT to improve ability of government to address needs of society.
  1. Improved service delivery and citizen-centric approach. e-Seva.
  2. Enhancing accountability and transparency. Jan Mitra.
  3. Bridging Rural-Urban Divide. Gyandoot.
  4. Enabling Participatory governance. Nai Disha.
  5. Improving Administrative Efficiency. RajSWIFT.
  6. Sectoral Applications. Automatic Vehicle Tracking in Delhi.
• Cashless Economy - cash flow is non-existent and all transactions occur electronically. Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT) and Real-Time Gross Settlement (RTGS).
• Advantages
  • Cost savings
  • Efficient data transfer
  • Time saving
  • Efficient funds
• Challenges
  • Infrastructure
  • Financial literacy
  • Security concerns
  • Inclusion
• Government Initiatives
  • Digital India (2015)
  • UPI (Unified Payment Interface)
  • BHIM (Bharat Interface of Money) App