Assignment

S.D.C. Institute of Management Studies,

Kolar




Mohan Kumar Sahu
MBA 1
st
Sem.
2012-14
12WHCMA030
Managerial Communication
COMMUNICATION

Communication is the activity of conveying information through the
exchange of thoughts, messages, or information, as by speech, visuals,
signals, written, or behavior. It is the meaningful exchange of information
between two or more living creatures.

One definition of communication is any act by which one person gives to or
receives from another person information about that person's needs, desires,
perceptions, knowledge, or affective states. Communication may be
intentional or unintentional, may involve conventional or unconventional
signals, may take linguistic or non-linguistic forms, and may occur through
spoken or other modes.

People communicate with each other in a number of ways that depend upon
the message and its context in which it is being sent. Choice of
communication channel and your style of communicating also affects
communication. So, there are variety of types of communication
Types of communication based on the communication channels

Verbal Communication - Verbal communication refers to the form of
communication in which message is transmitted verbally; communication is
done by word of mouth and a piece of writing. Objective of every
communication is to have people understand what we are trying to convey
Nonverbal Communication - Nonverbal communication is the sending or
receiving of wordless messages. We can say that communication other than
oral and written, such as gesture, body language, posture, tone of
voice or facial expressions, is called nonverbal communication. Nonverbal
communication is all about the body language of speaker.
Types of Communication Based on Purpose and Style

Formal Communication

In formal communication, certain rules, conventions and principles are followed
while communicating message. Formal communication occurs in formal and
official style. Usually professional settings, corporate meetings, conferences
undergoes in formal pattern. In formal communication, use of slang and foul
language is avoided and correct pronunciation is required.

Informal Communication

Informal communication is done using channels that are in contrast with formal
communication channels. Its just a casual talk. It is established for societal
affiliations of members in an organization and face-to-face discussions In
informal communication use of slang words, foul language is not restricted.
Usually. informal communication is done orally and using gestures. In an
organization, it helps in finding out staff grievances as people express more
when talking informally. Informal communication helps in building
relationships.
Accounting for Managers
Final Account

Final account consist of Trading and P&L Account and Balance Sheet. Trading
account shows gross profit or loss, net profit or net loss is calculated from Profit
& Loss account and Balance Sheet is prepared to know the position of assets
and liabilities.

Trading Account
Profit & Loss Account
Balance Sheet


What is the difference between account and profit and loss account?

The main difference between trading account and profit and loss
account is that the gross profit or loss which is derived from the trading
account shows the trend of the business and the profit and loss account
reflects on the management of the business the final outcomes of the
concern. Trading account deals with the cost price of the goods. All the
expenses directly connected with the buying of goods are entered in it. It
is credited with the sale proceeds of the goods. Profit and loss account
deals with the expenses indirectly connected with the goods (expenses
with the selling of the goods.)
Trial Balance

It is a list of balance extracted from
the ledger accounts

It contains the balance of all accounts
real, nominal and personal.

It is prepared before the preparation
of trading and profit and loss account.

It does not contain the value of the
closing stock of goods.

Expenses due but not paid and
incomes due but not received do not
appear in the trial balance


Balance Sheet

It is a statement of assets and
liabilities.

It contains the balance of only those
accounts which represents assets and
liabilities.

It is prepared after the preparation
of trading and profit and loss account.

It contains the value of closing
stock, which appears on the assets
side.

Expenses due but not paid appear
on the liability side and income due
but not received appear on the asset
side of the balance sheet.
Financial statement analysis
Financial statement analysis is an analysis which highlights important relationships in
the financial statements. It focuses on evaluation of past operations as revealed by the
analysis of basic statements.

Purpose
Assessment of past performance and current position.
Prediction of net income and growth prospects.
Prediction of Bankruptcy and failure.
Loan decision by Financial Institutions and Banks.
Organizational Behavior
Organizational Behavior
Motivation
Motivation represents an unsatisfied need which creates a state of
tension or disequilibrium, causing the individual to move in a goal
directed pattern towards restoring a state of equilibrium by satisfying
the need. The following are the key elements of motivation:

Creative Freedom
Love to learn
Learn to failure

Maslow's Need Hierarchy Theory
Maslow's need hierarchy theory was developed by Maslow, which says that there are
actually five stages in every need of the human.

1. Basic needs - The basic amenities that an individual require for his livingness.
2. Security needs - Once he gets satisfied with his basic needs, he also looks for his
security.
3. Social needs - When he/she gets a secured life, they start looking for various social
aspects like interacting with people and they look for a society for them to be supported.
4. Self - esteem - The individuals seeks themselves to be respected and recognized in a
society.
5. Self - actualization - This is the final stage where the individual makes themselves
satisfied with all the needs and attains their objective of life.
Need Home Job
Self-actualization
education, religion,
hobbies, personal growth
training, advancement,
growth, creativity
Esteem
approval of family,
friends, community
recognition, high status,
responsibilities
Belongingness family, friends, clubs
teams, depts, coworkers,
clients, supervisors,
subordinates
Safety
freedom from war,
poison, violence
work safety, job security,
health insurance
Physiological food water sex Heat, air, base salary
Theories of Motivation

Instinct Theory of Motivation

Incentive Theory of Motivation

Drive Theory of Motivation

Arousal Theory of Motivation

Humanistic Theory of Motivation


Managerial Economics
Demand
Demand refers to the total or a given quantity of a commodity that is
purchased by a consumer in the market at a particular price at a particular
time. Demand is created by consumers and is dependent on the utility of a
product or service. A consumer wants to buy more at a lower prices and
wants to save his money income.

Types of Demand
Price Demand
Income Demand
Cross Demand

Individual Demand
The individual demand is the demand of one individual or firm. It represents the
quantity of a good that a single consumer would buy at a specific price point at a
specific point in time. While the term is somewhat vague, individual demand can be
represented by the point of view of one person, a single family, or a single
household.

Market Demand
Market demand provides the total quantity demanded by all consumers. In other
words, it represents the aggregate of all individual demands. There are two basic
types of market demand: primary and selective. Primary demand is the total demand
for all of the brands that represent a given product or service, such as all phones or
all high-end watches. Selective demand is the demand for one particular brand of
product or service, such as the iPhone or a Michele watch.
ECONOMIC ORDER QUANTITY

In a continuous review system, ordering too often (in quantities too small)
increases the annual cost of placing orders. Ordering too infrequently (in quantities
too large) increases the annual cost of holding inventory. The economic order
quantity (EOQ) is the quantity that minimizes the sum of these two costs. It is
based on the following assumptions:
The demand for the item is constant and known with certainty.
There are no upper or lower limits on the order quantity (lot size).
Stock outs are not permitted.
There are no quantity discounts.
Lead time and supply are known with certainty; lead time is constant.
Order quantities for individual items are made independently.

Manufacturers and service providers must manage dependent demand
items-that is, items that are required as components or inputs to a
product or service.
Degree of price elasticity of Demand

Perfectly Elastic Demand
Small changes in price leads to an infinite change in demand.

Perfectly Inelastic Demand
Whatever may be the change in price quantity demanded will remain perfectly constant.

Relative Elastic Demand
A slightly change in price leads to more than proportionate change in demand.

Relatively Inelastic Demand
A large change in price leads to less than proportionate change in demand.

Unitary Elastic Demand
A proportionate change in price will lead to equal proportionate change in demand.
Business Mathematics
&
Statistical Analysis
What is Sampling?
Sampling is simply the process of learning about the population on the basis of a sample
drawn from it. Thus, in the sampling technique instead of every unit of the universe only
a part of the universe is studied and the conclusions are drawn on that basis for the entire
universe. To make a systematic approach to sampling, we may present the sampling
methods.
Random Sampling or Probability Sampling
Simple Random Sampling
Stratified Random Sampling
Systematic Sampling
Cluster Sampling
Sequential Sampling
Multi-Stage Sampling
Sampling with Probability Proportional to size

Non-random, Non-Probability, or Judgment sampling
Quota Sampling
Convenience Sampling
On the spot Sampling
Hypothesis
Hypothesis is a tentative proposition formulated for empirical testing. It is
a provisional formulation; a tentative solution of the problem posed by the
researcher. A hypothesis is something more than a wild guess but less than
a well-established theory. In science, a hypothesis needs to go through a
lot of testing before it gets labeled a theory. In the non-scientific world,
the word is used a lot more loosely. A detective might have a hypothesis
about a crime, and a mother might have a hypothesis about who spilled
juice on the rug. Anyone who uses the word hypothesis is making a guess.
Types of Hypothesis :-

With reference to function
Descriptive Hypothesis
Relational Hypothesis
General Classification
Working Hypothesis
Null Hypothesis
Statistical Hypothesis
Level of abstraction
Common sense Hypothesis
Complex Hypothesis
Analytical Hypothesis
One-Tailed Test
A statistical test in which the critical area of a distribution is one-sided so that it is either
greater than or less than a certain value, but not both. If the sample that is being tested falls
into the one-sided critical area, the alternative hypothesis will be accepted instead of the
null hypothesis. The one-tailed test gets its name from testing the area under one of the
tails (sides) of a normal distribution, although the test can be used in other non-normal
distributions as well.

Two-Tailed Test
A statistical test in which the critical area of a distribution is two sided and tests whether a
sample is either greater than or less than a certain range of values. If the sample that is
being tested falls into either of the critical areas, the alternative hypothesis will be accepted
instead of the null hypothesis. The two-tailed test gets its name from testing the area under
both of the tails (sides) of a normal distribution, although the test can be used in other non-
normal distributions.
MIS (Management Information System)
Management information system is the discipline covering the application of people,
technologies, and procedures to solve business problems. Management information systems
are used to analyze other information system applied in operational activities in the
organization. It is the group of information management methods tried to the automation or
support of human decision making.
Types of operating systems:-
Single user operating system
Simple batch system
Multi-programmed system
Time sharing system
Parallel system
Distributed system
Real time system

Information Technology For
Business
Types and Terminology
The terms Management Information System (MIS), information system, Enterprise
Resource Planning(ERP), and information technology management are often confused.
Information systems and MIS are broader categories that include ERP. Information
technology management concerns the operation and organization of information
technology resources independent of their purpose.
Management information systems, produce fixed, regularly scheduled reports
based on data extracted and summarized from the firms underlying transaction
processing systems to middle and operational level managers to identify and
inform structured and semi-structured decision problems.
Decision Support Systems (DSS) are computer program applications used by
middle and higher management to compile information from a wide range of
sources to support problem solving and decision making.DSS is majorly used for
semi-structured and unstructured decision problems.

Executive Information Systems (EIS) is a reporting tool that provides quick
access to summarized reports coming from all company levels and departments
such as accounting, human resources and operations.
Marketing Information Systems are Management Information Systems designed
specifically for managing the marketing aspects of the business.
Office Automation Systems (OAS) support communication and productivity in
the enterprise by automating work flow and eliminating bottlenecks. OAS may be
implemented at any and all levels of management.
School Information Management Systems (SIMS) cover school administration,
and often including teaching and learning materials.
Enterprise Resource Planning facilitates the flow of information between all
business functions inside the boundaries of the organization and manage the
connections to outside stakeholders.
Business Perspective
What is SMEs?
Small and medium enterprises (SMEs) or small and medium-sized businesses (SMBs)
are companies whose personnel numbers fall below certain limits. The abbreviation "SME"
is used in the European Union and by international organizations such as the World Bank,
the United Nations and the World Trade Organization (WTO). Small enterprises outnumber
large companies by a wide margin and also employ many more people. SMEs are also said
to be responsible for driving innovation and competition in many economic sectors.
Enterprises engaged in the manufacture or production, processing or preservation of goods
as specified below:
(i) A micro enterprise is an enterprise where investment in plant and machinery does not
exceed Rs.10 lakh
(ii) A small enterprise is an enterprise where the investment in plant and machinery is more
than Rs. 25 lakh but does not exceed Rs. 5 crore and
(iii) A medium enterprise is an enterprise where the investment in plant and machinery is
more than Rs.5 crore but does not exceed Rs.10 crore.
Problems for SMEs
External and Internal Problems
Teething Problems
License Problems
Loan and Finance Problem
Location
Raw materials
Technology
Marketing
High Infant Mortality
Managerial Inefficiency
Faulty Planning
BIFR
The Board for Industrial and Financial Reconstruction (BIFR) is an
agency of the government of India, part of the Department of Financial
Services of the Ministry of Finance. Its objective is to determine sickness of
industrial companies and to assist in reviving those that may be viable and
shutting down the others.

Remedies
Restructuring the capital base of the company.
Inducting more capital to improve its resource position.
Merger and Amalgamation of the sick company with a healthy unit.
Providing soft loans to the company.
Rescheduling its loan.
Bringing about a change in its management.
Writing off the interest burden of the company.
Bringing about technological changes and modernization in the company.
Providing fiscal concessions like tax rebate, tax exemptions or tax reliefs to
it.
Structure and objectives

The Board has a Chairman and from two to fourteen other members, all to be
qualified as High Court judges or else to have at least fifteen years of relevant
professional experience. The Board only handles large or medium sized sick
industrial companies in which large amounts have been sunk. Under the Sick
Industrial Companies Act the Board of a sick industrial company is legally
obliged to report it to the BIFR, and the BIFR has the power to make whatever
inquiries are needed to determine if the company is in fact sick.

Among other objectives the act was to provide a way to revive sick industrial
companies and release public funds.

If a company is found to be sick, the BIFR
can give the company reasonable time to regain health (bring total assets above
total liabilities) or it can recommend other measures. The board can take other
actions including changes to management, amalgamation of the sick unit with a
healthy one, sale or financial reconstruction.

The BIFR was intended to bridge the legal gap between sickness and revival. It
would impose time schedules for revival related activities to be completed,
oversee their implementation and conduct periodic reviews of sick accounts.
Assignment

S.D.C. Institute of Management Studies, Kolar






Mohan Kumar Sahu
MBA 2
nd
Sem.
2012-14
12WHCMA030
Research Methodology
& Technical Writing
Research :
Research is the process of systematic and in depth in study or search for any particular
topic, Subject or area of investigation, backed by the collection, presentation and interpretation of
relevant details or data.

Research Methodology :
Research methodology is a systematic and logical study of issue or problem or
phenomenon through scientific method. According to clover and balsley, It is the process of
systematically obtaining accurate answer to significant pertinent questions by the use of scientific
method gathering and interpreting information.

Research Scope :
Research scope refers to the areas to which research can be extended to. It starts right
from identifying problem areas, establishing relationship between variables, aid in forecasting,
managerial functions, marketing analysis, strategy, innovation and design making.
Objectives of research

Description: Description is an exploratory phase undertaken using graphical representation
and statistical measures that are not inferential.

Explanation: Explanation involves prices hypotheses to be confronted and employs inferential
statistical tests.

Modeling: Modeling requires that the descriptive and explanatory phase brought sufficient
information and knowledge about the system, so to build a model.

Control: Control is an objective rarely set in psychological research as it brings important
ethical consideration.

Forecasting: Forecasting Helps in identifying and exploiting the potential opportunities that
may arise in feature
Types of research:

Policy research is basically research with policy implementations. Research which conducted for
the specific purpose of application or research with policy.

Fundamental Research are original and investigative studies of a basic nature. The topic or area
of investigation would be new.

Experimental research is based on experiments conducted in the laboratory. Hence it is also
known as laboratory research.

Survey research this kind of research finds favor with almost all the social science research.

Action research This type of research is conducted through direct action. A good example of
action research is a study of test marketing.
Problems faced in marketing research on scientific methods :

Investigator Involvement in the use of result: Since the investigator is anxious about the result as it
affects their career or unconsciously find the data that supports mass of their clients.

Imprecise Measuring devices : One of the features that distinguish the scientific method from
scientific activities is the emphasis laid on the accuracy of measurements of results.

Time pressure for result: Marketing research is subject to the pressure of time. Competition and
customer driven market forces the marketing managers to get just in time date.

Difficulty in using Experiments to test Hypothesis: Experimentation in a very valuable tool in
research because it helps in identifying causes of effects relationships more clarity than

Greater Complexity of subject: The most variant determinant of marketing activity is the reaction of
the people to a given stimuli.
Financial Management
WORKING CAPITAL MANAGEMENT: LONGTERM
INVESTMENT FUNCTION
Investment Function
Short Term Current Assets
Cash
Bank
Sundry Debtors
Inventory
B/Rs
Investment Function
Short Term Financial Assets (Securities)
Certificate Of Deposits
Commercial Papers
Treasury Bills
Mutual Funds

Capital Budgeting Investment Function
Fixed Assets

Tangibles
Land
Plant
Machinery
Buildings
Patents

Intangibles
Copyright
Patents
Licenses




Financial Assets(securities)

Equity
Preference shares
Debt Funds


Investment Function

Long Term Assets
Types Of Investment Functions
Investment Function
Long-term
1) Fixed Assets(Real assets)
A) Tangible Asset
B) Intangible Asset
2) Financial Assets

Short-term
1) Current Assets
2) Financial Assets



Long Term Investment Function
This Function Is Known As Capital Budgeting Decision
Long Term Investment Decision Making
Huge Funds Outlay
Time Period Is Longer
Generates Benefits For Future Period In Cash Flows
Select The Assets Whose Benefits Are More Than Outlay

Short Term Investment Function Of Fm
Investment Decision For Working Capital Management Of The Firm
Investment Funds In Current Assets
Duration Is Short Period
Necessary For Operating Of Day To Day Activities Of The Firm

Production & Operational
Management
Enterprise Resource Planning:

Concept:
Its an integrated cross-functional software that reengineers manufacturing, distribution, finance, HR,
& other basic business processes of a company to improve its efficiency, agility & profitability. ERP
is the technological backbone of e-business
An enterprise wide transaction framework with links into sales order processing, inventory
management & control production & distribution planning and finance.

Cross-functional enterprise system driven by an integrated suite of software modules that supports
the basic internal business processes of a company.

Integrated management of business as a whole; the view point of effective use of management
resources, to improve the efficiency of an enterprise.
Use:
ERP software packages are for:
Ideal for manufacturing industry.
All functions for planning & managing core businesses like sales management,
finance management, accounting & financial affairs.
Designed to model and automate many of the basic processes of the company, with goal of
integrated information across the company.
Eliminating complex, expensive links between computer systems.

Benefits of ERP for Business:
Integration across all business processes - To realize the full benefits of an ERP system it
should be fully integrated into all aspects of your business from the customer facing front end,
through planning and scheduling, to the production and distribution of the products you make.

Automation enhances productivity - By automating aspects of business
processes, ERP makes them more efficient, less prone to error, and faster. It also
frees up people from mundane tasks such as balancing data.
Increase overall performance - By integrating disparate business processes, ERP
ensures coherence and avoids duplication, discontinuity, and people working at
cross purposes, in different parts of the organization. The cumulative positive effect
when business processes integrate well is overall superior performance by the
organization.
Quality Reports and Performance Analysis - Analysis on ERP will enable you
to produce financial and boardroom quality reports, as well as to conduct analysis
on the performance of your organization.
Integrates across the entire supply chain - A best of breed ERP system should
extend beyond your organization and integrate with both your supplier and customer
systems to ensure full visibility and efficiency across your supply chain.
Importance of ERP are:
Business Integration
Flexibility
Better analysis and planning capabilities
Use of latest technology
Enterprise agility
Good decision support
ERP Systems & Its
Components
Human Resource
Management
Human Resource & Human Resource Development

A business unit needs material resources as well as human resource for the conduct of various
activities. Of all the "M"s in management (such as Materials, Machines, Methods and Money)
the most important "M" stands for Men i.e., manpower working in the organization. It is through
manpower/employees that all other ingredients of an enterprise-money, machines, materials,
marketing, etc., are managed. In brief, Human Resource (HR) constitutes the most important and
the most productive resource of an industrial / business unit.

Human Resource Development (HRD) means to develop available manpower through suitable
methods such as training, promotions, transfers and opportunities for career development. HRD
programs create a team of well-trained, efficient and capable managers and subordinates. Such
team constitutes an important asset of an enterprise.
Importance of Human Resource in Management
Human resource is most important resource in management and needs to be used efficiently. This
is because success, stability and growth of an organization depend on its ability in acquiring,
utilizing and developing the human resources for the benefit of the organization. In the final
analysis, it is the people (i.e. employees) who produce promising results and generate a climate
conductive to the growth and development of an organization. HR is a highly productive corporate
asset and the overall performance of companies and corporations depends upon the extent to
which it is effectively developed and utilized.

The function of management is to manage managers, workers and work". The importance of
manpower in business management is now universally accepted. Employees have a capacity to
grow and develop, if suitable opportunities are offered. They give positive response to monetary
and non-monetary incentives, training opportunities, favorable work environment and motivation.
Definitions of Human Resource Planning - HRP

1. The process of determining manpower requirements and the means for meeting those
requirements in order to carry an integrated plan at the organization.
2. Strategy for the acquisition, utilization, improvement and preservation of an enterprise's
human resources. It relates to establishing job specifications or the quantitative requirements
of jobs determining the number of personnel required and developing resources of manpower.

3.The ongoing process of systematic planning to achieve optimum use of an organization's
most valuable asset - its human resources. The objective of human resource (HR) planning is
to ensure the best fit between employees and jobs, while avoiding manpower shortages or
surpluses. The three key elements of the HR planning process are forecasting labor demand,
analyzing present labor supply, and balancing projected labor demand and supply.

Objectives of Manpower / HR Planning
To ensure optimum utilization of human resources currently employed in the Organization.
To determine the future manpower requirements of the Organization as per the need for
renovations, modernization, expansion and growth programs.
To determine the recruitment level.
To ensure that necessary human resources are available as and when required.
To assess future accommodation requirements.
To design the basis for management development programs so as to develop the required
talents among the employees selected.
Marketing Management
Market Segmentation
In Mass marketing, the seller engages in the mass production, mass distribution and mass
promotion of one product for all buyers.
The proliferation of advertising media and distribution channels is making it difficult to
practice one size fits all marketing.
Market segmentation is an effort to increase a companys precision marketing.
The process of dividing the market into different groups.
It allows the marketer to better respond to the needs of the consumer through different
marketing mixes.
A market segment consists of a large identifiable group within a market with similar wants,
purchasing power, geographical location, buying attitudes or buying habits.
Segmentation is an approach midway between mass marketing & individual marketing.
Each segment buyers are assumed to be quite similar in wants and needs

Bases for Consumer Market Segmentation
Market
Segmentation
Geographical
Regions, cities,
states, countries
Demographic
Age,
gender,
income,
occupation,
religion,
social class,
family size
Psychographic
Life style,
personality,
values,
beliefs
Behavioral
Occasions,
Benefits,
Usage rate,
Loyalty status
Levels of Market Segmentation

Segment marketing: Dividing the market into different segments on the basis of
homogenous need.
Niche marketing: More narrowly defined group, typically a small market whose needs
are not well served. Marketers effort to position their product or service in smaller
markets that have similar attributes and have been neglected by other marketer
Local marketing: Marketers offer customized products to suit the local markets.
Individual marketing: Extreme marketing in which marketers focus on individual
customers.
Mass marketing: the seller of the marketer of the product targets the mass market or
the entire consumer base.

Criteria for Market Segmentation
Identity: members of different segments can be readily identified by common
characteristics.
Accessibility: segments must be aware of the product & these products should available to
them at reasonable cost.
Responsiveness: segments must react to the changes in any elements of marketing mix.
Size: segment must be reasonably large enough to be profitable target.
Nature of Demand: refers to the different quantities demanded by various segment
Measurability: purpose is to measure the changing behavior pattern of consumers.

Quantitative Methods &
Operations Research
Quantitative Methods & Operations Research

Operational research:

operational research in British usage, is a discipline that deals with the application of advanced
analytical methods to help make better decisions. It is often considered to be a sub-field
of mathematics. The terms management science and decision science are sometimes used as
synonyms.

Linear programming Problem:

Linear programming (LP, or linear optimization) is a method to achieve the best outcome (such as
maximum profit or lowest cost) in mathematical model whose requirements are represented by linear
relationships. Linear programming is a special case of mathematical programming.
OR methods and techniques:

Computer simulation: allowing you to try out approaches and test ideas for
improvement.

Optimization: narrowing your choices to the very best when there are so many feasible
options that comparing them one by one is difficult.

Probability and statistics: helping you measure risk, mine data to find valuable
connections and insights in business analytics, test conclusions, and make reliable
forecasts.

Problem structuring: helpful when complex decisions are needed in situations with
many stakeholders and competing interests.

Phases of Operational Research:
The first phase is to identify the problem through the observation of its symptoms if it is not
obvious. Relevant questions to what the problem is about are asked to clear any doubts and the
objectives, limitations and requirements of the client are established.

In the second phase, formulation as a mathematical model would take place based on the problem
in the previous phase. The choice of the model is crucial to success so a lot of considerations need
to be made for the restrictions, limitations and assumptions to be put in place.

Model validation, the third phase of the project, involves running the algorithm for the model on
the computer. This is to ensure that the input data or computer program is free from errors and
correctly represents the model. It is also to check and ensure that the results from the algorithm
seem reasonable.


Scope of operations management:
Quantitative analysis of operational processes with respect to quality, timing and costs can only be
performed if tolerances, operation times, routings and failure rates are known. In most cases these
variables can only be known in stochastic terms. This type of analysis requires both statistical
analysis of real life data or data from laboratory experiments, but also application of mathematical
modeling techniques.

Operations management deals with organizations and people working in organizations. They take
part in transformation processes themselves, so designers of these processes have to take the
human possibilities and limitations into consideration.

The idea of optimal control and design of operational processes presupposes some criteria and
objectives for optimality. Cornerstone of these notions is the economic evaluation of control
policies and design choices. Economic research contributes to the development of qualitative and
quantitative models for design and control of operational processes and for risk management.

Legal Aspects of Business
Legal Aspects of Business

Contract: A contract is an agreement having a lawful object entered into voluntarily by two or
more parties, each of whom intends to create one or more legal obligations between them.

Offer and acceptance: In order for a contract to be formed, the parties must reach mutual assent.
This is typically reached through offer and an acceptance which does not vary the offer's terms,
which is known as the "mirror image rule". If a purported acceptance does vary the terms of an
offer, it is not an acceptance but a counteroffer and, therefore, simultaneously a rejection of the
original offer.

Illegal contracts: If based on an illegal purpose or contrary to public policy, a contract is void. In
the 1996 Canadian case of Royal Bank of Canada v. Newell a woman forged her husband's
signature, and her husband signed agreed to assume "all liability and responsibility" for the
forged checks. However, the agreement was unenforceable as it was intended to "stifle a criminal
prosecution", and the bank was forced to return the payments made by the husband.
Various classes of contract: The law relating to contracts in India is contained in Indian
Contract Act, 1872. The Act was passed by British India and is based on the principles of English
Common Law.
On the basis of validity:
1. Valid contract: An agreement which has all the essential elements of a contract is called a valid
contract. A valid contract can be enforced by law.
2. Void contract[Section : A void contract is a contract which ceases to be enforceable by law. A
contract when originally entered into may be valid and binding on the parties. It may subsequently
become void. There are many judgments which have stated that where any crime has been
converted into a "Source of Profit" or if any act to be done under any contract is opposed to
"Public Policy" under any contractthan that contract itself cannot be enforced under the law-
3. Voidable contract[Section 2(i)]: An agreement which is enforceable by law at the option of one
or more of the parties thereto, but not at the option of other or others, is a voidable contract. If the
essential element of free consent is missing in a contract, the law confers right on the aggrieved
party either to reject the contract or to accept it. However, the contract continues to be good and
enforceable unless it is repudiated by the aggrieved party.

No consideration No contract:

Natural love and affection :
An agreement made without consideration is valid if it is express in writing and registered
under the law and it is made on account of natural love and affection between parties standing
in a near relation to each other.

Example-1: An agreement entered into by a husband with his wife, during quarrel and
disagreement, whereby the husband promised to give some property to his wife. The
agreement is void because, under the circumstances ,there is no natural love and affection
between husband and wife.

Voluntary compensation :
A promise made without consideration is valid if it is a promise to compensate wholly or in a
part, a person who has already voluntarily done something for the promissory or something
which the promissory was legally bound to do.
Consumer Protection Act, 1986:

Consumer Protection Act, 1986 is an act of Parliament of India enacted in 1986 to protect interests
of consumers in India. It makes provision for the establishment of consumer councils and other
authorities for the settlement of consumers' disputes and for matters connected therewith.

Central Consumer Protection Council:
It is established by the Central Government which consists of the following members:
The Minister of Consumer Affairs Chairman, and
Such number of other official or non-official members representing such interests as may be
prescribed.
State Consumer Protection Council:
It is established by the State Government which consists of the following members:
The Minister in charge of consumer affairs in the State Government Chairman.
Such number of other official or non-official members representing such interests as may be
prescribed by the State Government.
Assignment

S.D.C. Institute of Management Studies, Kolar





Mohan Kumar Sahu
MBA 3
rd
Sem.
2012-14
12WHCMA030
Entrepreneurship and
New venture creation
Meaning and Function of Entrepreneur
Meaning -:
Entrepreneur is one who innovates, raises money, assembles inputs, undertakes, risks, bears
uncertainties and also performs the managerial functions of decision making and co-
ordination.

Functions -:
Risk assumption function -:
An entrepreneur act as a risk-bearing agent of production since he bears a greater
amount of uncertainties in business.
Managerial function -:
The entrepreneur performs the managerial functions like coordination, organization
and supervision. He performs all the managerial functions starting with planning and ending
with controlling.
Classification Of Entrepreneurs
Innovative entrepreneur -:
Innovative entrepreneur is the one who foresees potentially able and profitable opportunities
through innovation. His key function is innovation and he is highly motivated and talented.
Adoptive entrepreneur -:
Adoptive entrepreneur is the one who adopts the innovation already inaugurated by
innovating entrepreneurs. He imitates the techniques and technologies innovated by others.
Drone entrepreneur -:
Done entrepreneurs the one who blindly follows the traditional methods of production even
when it cause loss to him. He doesnt introduces any change under any circumstances.
Myths Of Entrepreneurship
The Risk Taking myth -:
Most successful entrepreneurs take wild, uncalculated risks in starting their companies. Risk
is an intrinsic part of any business venture.

The strategic vision myth -:
The successful entrepreneurs have a well-considered business plan and have researched and
developed their ideas before taking action.

The venture capital myth -:
Most successful entrepreneurs start their companies with millions in venture capital to
develop their idea, buy supplies and hire employees.


Mistakes of Entrepreneurship
Management mistakes -:
Poor management cause business failure. Lack of leadership ability, sound
judgment and knowledge make business unsuccessful.
Lack of experience
Small business managers need to have experience in the field that they want to
enter.
Failure to develop a strategic plan -:
Many small businesses neglect the process of strategic planning feel will only
benefit large companies.
Poor location -:
Poor business location selected with proper investigation.


Business Ethics and
Corporate
Governance
Meaning and Features of Business Ethics
Meaning -:
Applications of ethics to business. To be more specific, business ethics is the study of
good and evil, right and wrong, and just and unjust actions of businesses.

Features -:
For the long run existence and sustained profitability of the firm, business is required
to conduct itself ethically. Business needs to function as responsible corporate citizen of the
century.
To be considered ethical, business must draw its idea about what is desirable behavior
from the same source as anyone else. It should not try to evolve its own principles to justify
its actions.
Need of Business Ethics
Technology -:
The added capabilities or technology have created a new level of transparency and immediacy
to business communication . Now the conduct of businesses around the globe is more exposed
that it was never was before.
Competition -:
Rising completion brings with it added pressure to corners. Simultaneously, leaders are
looking for new ways to differentiate their companies and more them to a new level of
excellence.
Public Perception and the law -:
There is a perceived decline in social ethics that yields uncertainty. Managers are no longer
comfortable assuming that employees joining their companies posses the desired ethical
values.
Goals of Business Ethics
Honesty -:
Honesty is the basis of trust. If other feel that they can believe what a company says, they will
trust it, other factors being equal, people prefer doing business with a company they can trust.
Clarity -:
Distinguish fact from opinion is part of a larger goal of being clear and easy to understand.
Ethical business communication calls for being clearly understand.
Taking care with confidential information -:
Confidential information is a special class of information that requires special attention. Any
use of confidential information for personal gain is also clearly unethical.
Issues Of Business Ethics
Economic Issue -:
Business organizations were created as economic, entitles designed to provide goods and
services to societal members. The profit motive was established as the primary incentive for
entrepreneurship. The business organization was the basic economic unit in our society.
Ethical issues -:
Although economic and legal responsibilities embody ethical norms about fairness and
justice, ethical responsibilities embrace those activities and practices that are expected or
prohibited by society even though they are not codified into law.
Philanthropic Issues -:
`Philanthropy encompasses those corporate actions that are in response to societys
expectation that businesses be good corporate citizens. This includes actively engaging in acts
or programs to promote human welfare or goodwill.
Human Resource
Acquisition and
Development
Meaning & Objective Of Training
Meaning -:
The training as the organized procedure by which people learn knowledge and /or sill for
a definite purpose.
Objectives of Training
Prepare the employee to meet the changes -:
To prepare the employee, both new and old to meet the present as well as changing
requirements of the job and organization.
To provide basis knowledge and skills to new entrants -:
Training is very essence to provide the basic knowledge and skills to the new entrants.
To assist the employees -:
To assist the employees to function more effectively in their present position by making
them aware of the latest concepts.

86
Need For Training
To increase productivity -:
Instruction can help employees increase their level of performance on their present
assignment. Increased human performances often directly leads to increased operational
productivity and increased company profit.
To improve quality -:
Quality increases may be in relationship to a company service, or in references to the
adjustments in the event of sudden personnel alterations.
Personal growth -:
Employees on a personal basis gain individually from their exposure to educational
experiences. Again management development programmes seem to give participants a wider
awareness and enlarged skill and make enhanced personal growth possible.
87
Methods Of Training The Employees
On The Job Method -:
Experience -:
This method involves learning by experience has proved to be very efficient. To make this
approach, it should be supplemented with other methods of training
Apprenticeship Training -:
This method of training is meant to give the trainee sufficient knowledge and skill in those
trades and crafts in which a long period of training is required for gaining complete
proficiency.
Job Rotation -:
This method involves transferring a trainee from one job to another on a systematic
basis. If a trainee is rotated systematically from one job to another, the general background of
the trainee in the organization is broadened.
88
Off the Job training Method

Conferences -:
In this method,, managers and potential managers attend the conference
programmes in which they pool their ideas and experience with certain problems which are a
common subject of discussion.

Case Studies -:
In this method, instructor describes the actual situation or problems of a specific
concern and the participants are encouraged to take part in the objective discussion of the
problem.

Simulation -:
In simulation, the real situation of work environment in an organization is
presented in the training session.
89
Employee Relationship
and Management
Meaning And Function Of Trade Union
Meaning -:
The organization formed by the workers is order to resist employers exploitation
and protect and safeguard their interests is called trade union.
Function -:
Militant function -:
These functions include protecting the workers' interest, i.e., hike in wages, providing more
benefits, job security tec., through bargaining and direct action such as strikes, gheraos etc.
Social Functions -:
These functions include carrying out social service activities, discharging social
responsibilities through various sections of the society like educating the customers.
91
Type Of Trade Union
Paper Unions -:
Paper unions are those unions which are established to get a platform or a vice in a
political setting. Most trade unions which are registered in India are paper unions.
Ad Hoc Unions -:
These unions are established to secure some definite and immediate objective. Thee
unions are strike committees or action committees. This membership is of limited
duration.
Local Union -:
The term local union refers to a branch of big union or a small union of local
importance.
92
Problems Of Trade Union
Uneven Growth -:
Trade union activities are mostly concentrated in the large-scale industrial sector and that too,
with respect to manual labour only. The degree of unionization varies widely from Industry to
Industry. Hardly any trade union activity exists in small scale enterprise among domestic
servants and agricultural labor.
Small Size -:
Because of their small size, unions suffer from lack of adequate funds and find it difficult to
engage the services of experts to aid and advise members in times of need.
Problem of recognition -:
Employers are not obliged to recognize any union. The employers many a time have refused
recognition to trade unions either on the basis that unions consist of only a minority of
employees or that two or more unions existed.
93
Rights Of Recognized Trade Union
Immunity from-Civil Suits in certain cases -:
Section 18 of the trade union provides that no suit or legal cab be maintained in any civil
court against any registered trade union.
Enforceability of Agreement -:
Section 19 provides that an agreement between the members of a registered. Trade union in
restraint of trade shall not be void or voidable which means agreement made.
Separate fund for political purposes -:
A registered trade union may constitute a separate fund from contributions sepatetley levied
for or made to that fund from which payment may be made for the promotion of the civic and
political interest of its members.
94
Performance and
Compensation
Management
Meaning And Objectives Of Performance Appraisal
Meaning -:
Performance appraisal is a systematic, periodic and so far as humanly possible, an impartial
rating of any employees excellent in matters pertaining to his present job and to his
potentialities for a better job.

Objectives -:
Appraise the performance -:
It assists the supervisor to appraise the performance of his employs which is of immense use
to the management.
Placement of employees -:
It helps in the placement of employees proper and also in finding ou the misfits. Who may be
transferred to the right places.
96
6 Criteria For Assessing Performance
Quality -:
The degree to which the process or result of carrying out an activity approaches perfection
Quantity -:
The amount produced, expressed in monetary terms or number of units.
Time -:
The degree to which an activity was completed in a given time table.
Cost effectiveness -:
The degree to which are used efficiently.
Need for Supervision -:
The degree to which a job performer can carry out a job function without supervisory
assistance.
Training -:
Need for training for improving his skills and knowledge.
97
Traditional Methods Of Appraisal System
Ranking method -:
It is the oldest and the simplest method of performance appraisal. Under this method, all the
employees in a work group are ranked one against the other.
Man-to-man comparison -:
In this method, certain personal factors such as initiative, dependability, leadership, sincerity
etc. are selected for purpose of analysis. For each factor a scale is developed.
Grading -:
In this system of appraisal, certain categories of worth are identified in advance and the
persons who are appraised are placed in a particular grade depending upon their worth.
98
Modern Methods Of Performance Appraisal
Assessment centers -:
An assessment centre typically involves the use of methods like social events, tests and
exercise, assignments being given to a group of employees to assess their competencies to
take higher responsibilities in the future.
Human resource accounting method -:
Human resources are valuable assets for every organization. Human resource accounting
method tries to find the relative worth of these assets I the terms of money.
Management by Objectives -:
The essence of MBO is participative goal setting, choosing course of actions and decision
making. An important part of the MBO is the measurement and the comparison of the
employees actual performance with the standards set.
99
Business Marketing
Meaning And Objective Of Pricing Policy
Meaning -:
Pricing policies are the policies concerned with price of an item or product which are evolved
to adjust the base price of a product for different types of customers at different geographical
locations.

Objectives -:
Market Penetration -:
Market penetration may be a very important objective, particularly for new exporters. A firm
may attempt to penetrate the market with a low price.
Market Skimming -:
This is often the case with innovative products. The product is introduced with a high initial
price to skim the cream of the market. The price may be subsequently reduced to achieve
greater market penetration.
Forces Influencing Price Decision
Cost -:
By understanding the costs, marketers can judge profitability in advance.
Demand -:
Demand is a very important determinant of the pricing decision. Elasticity is measured and
price is decided based on the type of elasticity.
Government -:
Government interference such as control of prices, levying of taxes etc. will also add to the
prices of the product.
Type of Buyers -:
Different types of buyers have different motives and values. Pricing decision is based on
perceived value o the product in the minds of customers.
Pricing Strategies Of Industrial Marketers
Competitive Bidding -:
A large volume of business in the industrial market is decided through competitive bidding.
Generally, selling to government undertakings and public sector companies are done by
competitive bidding.
Pricing new products -:
There are two pricing strategies available for a new product that is in the introductory stage of
its life cycle. These are: (i) Skimming strategy (ii) Penetration Strategy.
Pricing across the product life-cycle -:Pricing strategies vary as the industrial product
moves through its economic life cycle. The concept of the product life cycle includes 4 stages
which a product undergoes; namely, introduction, growth, maturity and decline.
Kinds Of Pricing
Psychological pricing -:
Under the psychological pricing, the price has no real basis. The price sellers simply feel that
certain price s for certain products are psychologically appealing.
Monopoly Pricing -:
Under the monopoly condition, only the single producer sale the product in the market. Here a
seller has a fee hand in fixing the price.
Customers Pricing -:
When customers re fix the price, then it in called customers pricing. Customers are familiar
with the rates and market condition and expect a particular price to be charged for certain
products.
Service Marketing
Meaning And Characteristics Of Tourism
Meaning -:
Tourism is a temporary, short term movement of people, establishing relationship with other
and involves complex mixture of material and psychological elements.

Characteristics -:
The tourism industry is highly inflexible.
The service provided by the tourism industry is highly perishable.
The destination is fixed.
It requires large financial investment.
Tourism Marketing Mix
Product -:
Includes accommodation, restaurants, attraction, recreation, shopping and transportation.
Price -:
Transport charges, accommodation charges, communication charges and other allied charges.
Place -:
Includes information and communication, transportation, accommodation and food,
amusement shopping etc.
Promotion -:
Advertising, sales promotion, word of mouth communication, personal selling.
Impact of Tourism on Society
Economical impact -:
Business trips, exhibitions, seminars, conventions, workshops etc. benefit the local people
economically.
Educational Impact -:
People visiting different places leads to growth of knowledge, exchange of ideas and
information, builds religious and cultural tolerance.
Political Impact -:
Various elected representatives and party leaders visit other places to establish link for
economic and political growth and promote goodwill.
Social Impact -:
People visiting their relatives, friends, pleasure trips.
Nature of Tourism
The tourism industry is highly inflexible -:
The capacity of a hotel in terms of rooms, or seating capacity in a transport facility is fixed
and it is not possible to meet sudden demand during peak seasons.
Intangibility complicates the task of marketers -:
Tourism is a multi-segment industry in which the transportation and accommodation services
constitute a place of significances.
Large financial investment -:
Modern tourist establishment requires large financial investment both to start and to maintain
the services making it high risk service as the rate of return is critically important.