Samacheer Kalvi 12th Commerce Notes Chapter 1 Principles of Management

Tamilnadu Samacheer Kalvi 12th Commerce Notes Chapter 1 Principles of Management

→ Management is part and parcel of our day to day life.

→ It is goal oriented and it is an art of getting things done with and through others.

→ Management has now developed into a specialised body of management theory and philosophy.

→ Tools of management such as, accounting, business law, psychology, statistics, econometrics, data processing, etc., have enhanced the practical utility of the science of management.

→ Since 1951, many specialised schools of management offering master1 s degree in business management and administration.

→ “To manage is to forecast, to plan, to organise, to command, to co-ordinate and to control.” – Henry Fayol

→ “Management is a multipurpose organ that manages a business and manages manager, and manages worker and work.” – Peter F. Drucker

→ The art of management is fully reflected in the decision making capacity of a manager.

→ Judgment and imagination are essential even in a computerised economy. A computer cannot replace a manager in decision making.

→ “A professional manager is one who specialises in the work of planning, organising, leading and controlling the efforts of others and does so through systematic use of classified knowledge, a common vocabulary and principles and who subscribes to the standards of practice and code of ethics established by recognised body.” – Louis A. Allen.

→ The administration is ought to take business decisions while the management need to execute them to get things done with and through other functional staff working under them who are called employees of the same organization(s).

→ A process indicates the dynamic nature of management. It also implies that change is a constant reality of organisational life and management is the management of change.

→ There are twin purposes of the management process: (1) Maximum productivity or profitability and (2) Maximum human welfare and satisfaction.

→ Mr. Frederick Winslow Taylor (F.W. Taylor) brought about a scientific approach to managing the workforce after his experiments with the African and South American slaves employed in a coal field in England.

→ According to Taylor, even a small production activity like loading iron sheets into box cars can be scientifically planned.

→ There should be complete harmony between the workers and the management since if there is any conflict between the two, it will not be beneficial either for the workers or the management.

→ Workers should be considered as part of management and should be allowed to take part in decision making process of the management.

→ Workers should also resist from going on strike or making unnecessary demands from management.

→ The work assigned to each employee should suit his/her physical, mental and intellectual capabilities.

→ The Span of Management refers to the number of subordinates who can be managed efficiently by a superior.

→ With the wider span, there will be less hierarchical levels, and thus, the organizational structure would be flatter.

→ With the narrow span, the hierarchical levels increases, hence the organizational structure would be tall.

→ When the span is narrow, it requires more managers to be employed in the organization.

→ The benefit of using the wider span of management is that the number of managers gets reduced in the hierarchy, and thus, the expense in terms of remuneration is saved.

→ Also, the subordinates feel relaxed and develop their independent spirits in a free work environment, where the strict supervision is absent.

Samacheer Kalvi 12th Commerce Notes

Samacheer Kalvi 12th Commerce Notes Chapter 7 Stock Exchange

Tamilnadu Samacheer Kalvi 12th Commerce Notes Chapter 7 Stock Exchange Notes

→ Stock exchanges contribute in a huge measure to the growth and expansion of national business.

→ Stock exchanges and organized market provide a place for the investors to buy and sell securities freely.

→ Amsterdam Stock Exchange is considered as the oldest stock exchange in the world.

→ The first stock exchange in India was“The Native Shares and Stock Brokers Association”. It became The Bombay Stock Exchange subsequently.

→ Stock Exchange (also called Stock Market or Share Market) is one of the important constituents of Capital market. It is an organised market for purchase and sale of industrial and financial security.

→ London stock exchange (LSE) is the most popular stock exchange in the world. While Bombay stock exchange (BSE) is the oldest stock exchange in India.

→ According to Hastings, “Stock exchange or securities market comprises all the places where buyers and sellers of stocks and bonds or their representatives undertake transactions involving the sale of securities.”

→ Stock exchange is a market for existing securities.

→ The prices at which securities are bought and sold are recorded. .

→ Stock exchange is a market for purchasing and selling of corporate and govt, securities.

→ It deals with shares, debentures and bonds issued by the company.

→ A stock exchange is an association of persons or body of individuals which may be registered or unregistered.

→ It accelerates the economic development of the country. It encourages capital formation.

→ Stock exchange helps an investors to convert his shares into cash quickly.

→ It safeguards, investor’s interest and ensures fair dealing.

→ There are 24 stock exchanges in the country, with 21 of them being regional in nature.

→ New York stock exchange, London Stock exchange, Tokyo Stock exchange, Hong Kong Stock exchange, Bombay Stock exchange are stock exchanges at the world level.

→ Bull, Bear, Stag, Lame Duck are the types of speculators.

→ Commodity exchange is an exchange where commodities are traded.

→ National Stock Exchange, Stock Holding Corporation of India Limited, National Clearing and Depository System, Securities Trading Corporation of India, National Securities Depositary Limited are the recent development in stock exchange.

Samacheer Kalvi 12th Commerce Notes

Samacheer Kalvi 12th Commerce Notes Chapter 5 Capital Market

Tamilnadu Samacheer Kalvi 12th Commerce Notes Chapter 5 Capital Market Notes

→ The term capital market refers to the facilities and institutional arrangements through which long-term funds, both debt and equity are raised and invested.

→ An ideal capital market is one where finance is available at reasonable cost.

→ Capital market is a market where buyers and sellers engage in trade of financial securities like bonds, and stocks.

→ Like any market, the capital market is also composed of those who demand funds (borrowers) and those who supply funds (lenders).

→ According to Aran K. Datta, capital market may be defined as “a complex of institutions investment and practices with established links between the demand for and supply of different types of capital gains”.

→ The dealings in a capital market are done through the securities like shares, debentures, etc. The capital market is thus called securities market.

→ The price of the securities is determined based on the demand and supply prevailing in the capital market for securities.

→ The participants of the capital market include individuals, corporate sectors, Govt., banks and other financial institutions.

→ Capital market has its impact in the overall economy, wherever suppliers and users of capital get together and do business.

→ The capital market is divided into two i.e., primary market and secondary market.

→ Primary market is a market for new issues or new financial claims. Hence, it is also called New Issue Market.

→ There are three ways by which a company may raise capital in a primary market. They are:
(i) Public Issue, (ii) Rights Issue (iii) Private Placement

→ Secondary Market may be defined as the market for old securities, in the sense that securities which are previously issued in the primary market are traded here.

→ For a speedy economic development adequate capital formation is necessary.

→ A number of institutions of finance have been established to cater to the credit requirements of various segments of industry and needs.

→ The foreign exchange market abets the foreign exchange trading.

Samacheer Kalvi 12th Commerce Notes

Samacheer Kalvi 12th Commerce Notes Chapter 4 Introduction to Financial Markets

Tamilnadu Samacheer Kalvi 12th Commerce Notes Chapter 4 Introduction to Financial Markets Notes

→ Business firms need large funds to undertaken desired project.

→ Governments need funds to provide goods and services to the people.

→ Financial market facilitates business firms as well as governments to raise the needed funds by issuing and selling different instruments.

→ Financial market also helps investors to facilitate them to invest surplus funds and earn a return.

→ Government and the financial institutions can get financial assistance in terms of both short term finance and long term finance.

→ The Indian financial system can be broadly classified into organized sector and unorganized sector.

→ Organized sector consist of Regulators, Financial Institutions, Financial Markets and Financial Services.

→ The unorganized sector consists of Money Lenders, Indigenous Bankers, etc.

→ The financial system facilitates the flow of funds from the suppliers to the users.

→ A market wherein financial instruments such as financial claims, assets and securities are traded is known as a‘financial market’.

→ It is a market for creation and exchange of financial assets from household savers to business firms or financial institutions.

→ Financial market transactions may take place either at a specific place or location, e.g. stock exchange, or through other mechanisms such as telephone, telex, or other electronic media.

→ The financial market provides financial assistance to individuals, agricultural sectors, industrial sectors, service sectors, financial institutions like banks, insurance sectors, provident funds and the government as a whole.

→ Debt Market is the financial market for trading in Debt Instrument.

→ Equity Market is the financial market for trading in Equity Shares of Companies.

→ Money Market is the market for short term financial claim (usually one year or less). E.g. Treasury Bills, Commercial Paper, Certificates of Deposit.

→ Capital Market is the market for long term financial claim (more than a year) E.g. Shares, Debentures.

→ Primary Market includes all the institutions that are involved in the sale of securities for the first time by the issuers (companies).

→ Secondary Market is the market for securities that are already issued.

→ Cash/Spot Market is a market where the delivery of the financial instrument and payment of cash occurs immediately, i.e., settlement is completed immediately.

→ Forward or Futures Market is a market where the delivery of asset and payment of cash takes place at a pre-determined time frame in future.

→ Exchange Traded Market is a centralized organization (stock exchange) with standardized procedures.

→ Over-the-Counter Market is a decentralized market (outside the stock exchange) with customized procedures.

→ One market may come under more than one category.

→ The intermediary functions of a financial market include: Transfer of Resources, Enhancing Income, Productive Usage, Capital Formation, Price Determination, Sale Mechanism and Information.

→ The financial functions of a financial market include: providing the borrowers with funds, providing the lenders with earning assets, and providing liquidity in the market so as to facilitate trading of funds.

→ Financial assets can be classified into: (i) Marketable assets (ii) Non-marketable assets

→ Marketable assets are those which can be easily transferred from one person to another without much hindrance.

→ Non-marketable assets are the ones which cannot be transferred easily.

Samacheer Kalvi 12th Commerce Notes

Samacheer Kalvi 12th Commerce Notes Chapter 3 Management By Objectives (MBO) and Management By Exception (MBE)

Tamilnadu Samacheer Kalvi 12th Commerce Notes Chapter 3 Management By Objectives (MBO) and Management By Exception (MBE) Notes

→ Management By Objectives (MBO) is a management system in which each member of the organisation effectively participates and involves himself.

→ It creates self-control and motivates the manager into action before somebody tells him to do something.

→ Prof. Reddin defines MBO as, “the establishment of effective standards for managerial positions and the periodic conversion of those into measurable time bound objectives linked vertically and horizontally and with future planning”.

→’ An attempt is made by the management to integrate the goals of an organisation and individuals. This will lead to effective management.

→ MBO tries to combine the long run goals of organisation with short run goals.

→ The MBO process is characterised by the balance of objectives of the organisation and individual.

→ The definition of organisational objectives states why the business is started and exists.

→ Objectives for each section, department or division are framed on the basis of overall objectives of the organisation.

→ Key result areas are fixed on the basis of organisational objectives premises.

→ The objectives of each subordinate or individual are fixed.

→ Subordinates are induced to set standards themselves by giving an opportunity.

→ The objectives are framed on the basis of availability of resources.

→ The available resources should be properly allocated and utilized.

→ The superior and subordinates should hold meetings periodically in which they discuss the progress in the accomplishment of objectives.

→ The discussion is related with subordinates’ performance against the specified standards. The superior should take corrective action.

→ The problems faced by the subordinates should be identified and steps should be taken to tackle such problems.

→ Management By Exception (MBE) is a style of business management that focuses on identifying and handling cases that deviate from the norm.

→ General business exceptions are cases that deviate the normal behavior in a business process and need to be cared for in a unique manner, typically by human intervention.

→ With an insignificant or no deviation, no action is required and senior managers can concentrate on other matters. If actual performances deviates significantly, the issue needs to be passed to the senior managers, as an “exception has occurred”.

→ The top management executive should review the organisation’s objectives to frame the objectives according to the changing situation.

→ MBO emphasises only on short-term objectives and does not consider the long term objectives.

Samacheer Kalvi 12th Commerce Notes

Samacheer Kalvi 12th Commerce Notes Chapter 15 Recent Trends in Marketing

Tamilnadu Samacheer Kalvi 12th Commerce Notes Chapter 15 Recent Trends in Marketing Notes

→ Today’s customers are global and exhibit international characteristics. Because of developments of information technology, rapid means of transportation, liberalization, and mobility of people across the world, their buying habits are fast varying and so are the fortunes of various organisations.

→ All activities, which directly or indirectly facilitate that exchange of goods done through internet and other online environments is known as Electronic Commerce (EC) or simply as E-Commerce.

→ If all the business transactions are carried out through internet and other online tools, it is called E-business.

→ Electronic Marketing or E-Marketing is the process of marketing of products and services over internet and telecommunications networks.

→ E-tailing or electronic retailing refers to selling of goods and services through a shopping website (internet) or through virtual store to the ultimate consumer.

→ Green marketing is also known as environmental marketing which involves developing and promoting products and services which satisfy customers wants and needs for quality and performance.

→ Social marketing is the systematic application of marketing philosophy and techniques to achieve specific behavioural goals which ensure social good.

→ Rural marketing is a process of developing pricing, promoting and distributing rural specific goods and services with rural customers to satisfy their needs and wants.

→ Service marketing denotes the processing of selling service goods like telecommunication, banking, insurance, tourism, repairs etc.

→ Niche marketing is found by company, by identifying the need of customers which are not served or under served by the competitors.

→ Viral marketing is marketing technique that impels the users to pass on a marketing message to other users.

→ Guerrilla marketing represents an advertisement strategy to promote products/services on streets or other public places with monkey-like shopping malls, parks, beach, etc.

→ Referral marketing is the method of promoting products or services to new customers through referrals.

Samacheer Kalvi 12th Commerce Notes

Samacheer Kalvi 12th Commerce Notes Chapter 13 Concept of Market and Marketer

Tamilnadu Samacheer Kalvi 12th Commerce Notes Chapter 13 Concept of Market and Marketer Notes

→ The word market is derived from the Latin word ‘Marcatus ’ which means trade, commerce, merchandise, a place where business is transacted.

→ The meeting place of buyers and sellers in an area is called Market.

→ According to Pyle “Market includes both place and region in which buyers and sellers are in free competition with one another.”

(i) On the basis of Area:
(a) Family Market
(b) Local Market
(c) National Market
(d) International Market or World Market

(ii) On the Basis of Goods:
(a) Commodity Market:
(i) Produce Exchange Market
(ii) Manufactured Goods Market
(iii) Bullion Market

(b) Capital Market:

(i) Money Market
(ii) Foreign Exchange Market
(iii) The Stock Market

(iii) On the Basis of Economics:
(a) Perfect Market
(b) Imperfect Market

(iv) On the Basis of Transaction:
(a) Spot Market
(b) Future Market

(v) On the Basis of Regulation:
(a) Regulated Market
(b) Unregulated Market

(vi) On the Basis of Time:
(a) Very Short Period’Market
(b) Short Period Market
(c) Long Period Market

(vii) On the Basis of Volume of Business:
(a) Wholesale Market
(b) Retail Market

(viii) On the Basis of Importance:
(a) Primary Market
(b) Secondary Market
(c) Terminal Market

→ The marketer plays four roles: (i) Instigator (ii) Innovator (iii) Integrator (iv) Implementer

Samacheer Kalvi 12th Commerce Notes

Samacheer Kalvi 12th Commerce Notes Chapter 14 Marketing and Marketing Mix

Tamilnadu Samacheer Kalvi 12th Commerce Notes Chapter 14 Marketing and Marketing Mix Notes

→ Marketing is the performance of buying activities that facilitate to more flow of goods and services from producer to ultimate user.

→ The evolution of marketing is as old as the Himalayas. It is one of the oldest professions in the world.

→ The traditional objective of marketing had been to make the goods available at places where they are needed.

→ Evolution of Marketing may be of:
(i) Barter System (ii) Production Orientation (iii) Sales Orientation (iv) Marketing Orientation (v) Consumer Orientation (vi) Management Orientation

→ Functions of marketing are classified into three types:
(i) Functions of Exchange (ii) Functions of Physical Supply (iii) Facilitating Functions

→ Functions of exchange can be divided into: (i) Buying and assembling (ii) selling

→ Functions of Physical supply is divided into: (i) Transportation (ii) Storage and warehousing

→ Facilitating functions may be of: (i) Financing (ii) Risk Bearing (iii) Market information (iv) Standardization (v) Grading (vi) Branding (vii) Packing (viii) Pricing

→ “Marketing mix is a pack of four sets of variables namely product variable, price variable, promotion variable, and place variable”.

→ Price is the value of a product expressed in monetary terms.

→ An excellent product with competitive price cannot achieve a desired success and acceptance in market, unless and until its special features and benefits are conveyed effectively to the potential consumers.

Samacheer Kalvi 12th Commerce Notes

Samacheer Kalvi 11th Commerce Notes Chapter 2 Objectives of Business

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 2 Objectives of Business Notes

→Human activity is an activity performed by a human being to meet his/her needs.

→ Activities undertaken with the object of earning money are called economic activities. Activities undertaken to satisfy social and psychological needs are called non-economic activities.

→ All economic activities result in production, procurement, distribution and consumption of goods and services.

→ The end result of a non-economic activity is the mental, emotional or psychological satisfaction of the person doing the activity.

→ Professions are those occupations which involve rendering of personal services of a special and expert nature.

→ According to James Stephenson business refers to “Economic activities performed for earning profits.”

→ According to H. Haney, “Business may be defined as a human activity directed towards producing or acquiring wealth through buying and selling of goods”.

→ Business activities are classified on the basis of size, ownership and function.

→ An enterprise is said to be a private enterprise where it is owned, managed and controlled by persons other than Government.

→ An enterprise is said to be a public enterprise where it is owned, managed and controlled by Government or any of its agencies or both.

→ Industry includes all those business activities which are connected with raising, producing or processing of consumer goods.

→ Goods must be produced or procured in order to satisfy human wants.

→ Economic objectives of business refer to the objective of earning profit.

→ Social objectives are those objectives of business, which are desired to be achieved for the benefit of the society.

→ The organizational objectives denote those objectives an organization intends to accomplish during the course of its existence in the economy like expansion and modernization.

→ Human objectives refer to the objectives aimed at the well-being as well as fulfillment of expectations of employees.

Samacheer Kalvi 11th Commerce Notes

Samacheer Kalvi 11th Commerce Notes Chapter 1 Historical Background of Commerce in the Sub-Continent

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 1 Historical Background of Commerce in the Sub-Continent Notes

→ Commerce is part and parcel of human life.

→ The word ‘Vanigam’ has been widely used in Sangam literature like Purananuru and Thirukkural.

→ Trade in Sangam period was both internal and external but it was conducted by means of barter (pandamattru).

→ Trade was one of the major means of linking various regions in the medieval period.

→ Sangam work refers to great traders, their caravans, security force, markets, marts and guilds of such great traders.

→ The important trade routes of the silk and spices, blocked by the Ottoman Empire in 1453 with the fall of Constantinople and the Byzantine Empire, led to the search for a sea route across the Atlantic skirting Africa.

→ The Hebrew and Latin literature, archaeological remains in Aden, Alexandria, Java, Sumatra and even China add support1 to the fact of existence of trade network in the Pandiya country.

→ The place where the goods were sold was called ‘Angadi’ in their period. Day market was called as Nalangadi while the night market was called as Allangadi.

→ Port towns like Tondi, Korkai, Puhar and Muziri were always seen as busy with marts and markets with activities related to imports and exports.

→ Foreigners who transacted business were known as Yavanars.

→ Kaveripumpattinam was the chief port of the Kingdom of Cholas while Nagapattinam, Marakannam, Arikamedu, etc., were other small ports on east coast.

→ According to Kautilya, trade in Medieval India was centralized.

→ Kautilya gave importance for the State in relation to treasury, taxation, industry, commerce, agriculture and conservation of natural resources.

→ During Sultanate period, trade flourished due to the establishment of established currency system based on silver and copper.

→ India’s handicraft commanded a good foreign market.

→ Between early 1600 and mid-19th century, the British East India company led establishment and expansion of foreign trade allover Asia.

→ The barter system envisages mutual exchange of one’s goods to other without the intervention of money as a medium of exchange.

Samacheer Kalvi 11th Commerce Notes