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 2 Functions of Management

Tamilnadu Samacheer Kalvi 12th Commerce Notes Chapter 2 Functions of Management Notes

→ Managerial functions are time specific, institution specific and country specific.

→ It is 24 hours non stop process for attaining the objectives again and again for reaching the highest level.

→ Functions of management can be classified into two catogories: A) Main functions and B) Subsidiary functions.

→ Planning, Organising, Staffing, Directing, Motivating, Controlling and Co-ordination are the main functions of management.

→ Planning is a constructive reviewing of future needs so that present actions can be adjusted in view of the established goal.

→ Organising is the process of establishing harmonious relationship among the members of an organisation and the creation of network of relationship among them.

→ Staffing function comprises the activities of selection and placement of competent personnel.

→ Directing denotes motivating, leading, guiding and communicating with subordinates on an ongoing basis in order to accomplish pre-set goals.

→ Controlling is performed to evaluate the performance of employees and deciding increments and promotion decisions.

→ It is the control function which facilitates synchronization of actual performance with predetermined standards.

→ Co-ordination is the synchronization (or unification or integration) of the actions of all individuals, working in the enterprise in different capacities; so as to lead to the most successful attainment of the common objectives.

→ The difficulty of co-ordination is increased with the increasing size of the organisation.

→ Motivation includes increasing the speed of performance of a work and developing a willingness on the part of workers.

→ Innovation, Representation, Decision-making, and Communication are the subsidiary functions of management.

→ Innovation refers to the preparation of personnel and organisation to face the changes made in the business world.

→ A manager has to act as representative of a company.

→ Decision-making helps in the smooth functioning of an organisation.

→ Communication is the transmission of human thoughts, views or opinions from one person to another person. It helps the regulation of job and coordinates the activities.

Samacheer Kalvi 12th Commerce Notes

Samacheer Kalvi 11th Commerce Notes

Tamilnadu Samacheer Kalvi 11th Commerce Notes

Unit 1 Fundamentals of Business

Unit 2 Forms of Business Organisation

Unit 3 Service Business – I

Unit 4 Service Business – II

Unit 5 Service Business – II

Unit 6 Business Finance

Unit 7 Trade

Unit 8 International Business

Unit 9 The Indian Contract Act

Unit 10 Direct and Indirect Taxes

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

Tamilnadu Samacheer Kalvi 12th Commerce Notes

Unit 1 Management Process

Unit 2 Financial Markets – I

Unit 3 Financial Markets – II

Unit 4 Human Resource Management

Unit 5 Elements of Marketing

Unit 6 Consumer Protection

Unit 7 Business Environment

Unit 8 The Sale of Goods Act, 1930 and The Negotiable Instruments Act, 1881

Unit 9 Entrepreneurship Development

Unit 10 Company Law and Secretarial Practice