Class 12 Business Studies Notes

The syllabus moves in a deliberate order. It opens with management itself and with the principles of Taylor and Fayol that founded it, then reads the environment in which the business works, and then walks through the five functions of the manager one by one. It closes with the money side of the business, the financial management and the markets, and with the last mile, the marketing and the protection of the consumer.

• Chapter 1, nature and significance of management: management as getting the things done through people, the characteristics of management, the five functions, the three levels, and the debate on the science, the art and the profession.
• Chapter 2, principles of management: the scientific management of Taylor with the work study of the four kinds, and the fourteen principles of Fayol, and the comparison of the two.
• Chapter 3, business environment: the meaning, the importance and the dimensions of the environment, the economic environment, and the understanding of the movement of money through the demonstration of 2016.
• Chapter 4, planning: the meaning, the importance and the limitations of the planning, the qualities of a good plan, and the steps of the planning as it is applied to a real decision.
• Chapter 5, organising: the process of the organising, the functional and the divisional structure, the formal and the informal organisation, and the delegation and the decentralisation with their elements.
• Chapter 6, staffing: the meaning and the importance, the process of the staffing, the internal and the external sources of the recruitment, the steps of the selection, and the on the job and the off the job training.
• Chapter 7, directing: the concept and the importance, the principles, and the four elements, the supervision, the motivation with the need hierarchy of Maslow and the financial and the non-financial incentives, the autocratic and the democratic leadership, and the communication with its channels and barriers.
• Chapter 8, controlling: the meaning and the importance, the relationship of the controlling with the planning, and the process with the standards, the measurement, the comparison and the corrective action.
• Chapter 9, financial management: the meaning and the role of the financial management, the financial planning, the capital structure, and the three decisions of the investment, the financing and the dividend.
• Chapter 10, financial markets: the meaning and the functions of the financial market, the capital market and the money market, the primary and the secondary market, and the SEBI with its objectives and functions.
• Chapter 11, marketing management: the meaning and the functions of the marketing management, the marketing mix of the product, the price, the place and the promotion, and the branding, the labelling, the pricing, the channels of the distribution and the promotion tools.
• Chapter 12, consumer protection: the meaning and the importance, the six rights of the consumer, the responsibilities, the ways in which a consumer is exploited, and the consumer courts and the redressal of the complaint.

The Class 12 paper is built out of a small number of question types, and each chapter reserves a stock of the questions that are asked again and again. Once the type of the question is recognised, the format of the answer follows automatically, and the chapter becomes a list of the answers to prepare rather than a text to read.

• The definition question, which asks for the meaning of a term such as the management, the planning, the organising, the delegation, the marketing and the controlling, and the answer should give the definition and then a sentence of explanation, because the definition alone rarely carries the full mark.
• The process question, which asks for the steps in the order, such as the process of the planning, the process of the organising, the process of the recruitment, the process of the selection and the steps of the marketing management, and the marks follow the order, so the steps must be written as a numbered chain and not as a jumble.
• The difference question, which asks for the distinction between two things, such as the delegation and the decentralisation, the formal and the informal organisation, the internal and the external recruitment, the autocratic and the democratic leadership, the capital and the money market, and the marketing and the selling, and the answer must be two parallel columns followed by a concluding sentence.
• The merits and the demerits question, which asks for the advantages and the disadvantages of an instrument or a practice, such as the debentures, the shares, the advertising, the personal selling and the non-financial incentives, and the merits and the demerits must be written in pairs, because the pair is awarded as a unit.

A comparison in this class is not two separate lists. It is a single table in which every line of the first column has a line opposite to it in the second, followed by a concluding sentence. The examiner awards the format before the content, so the two columns must be visibly parallel.

• Write the headings at the top and the points under each in the same order, and begin each point with the same word where possible, so that the difference is visible at the start of the line and not buried at its end.
• The comparisons most often asked in this class are the management and the administration, Taylor and Fayol, the principle and the technique, the delegation and the decentralisation, the formal and the informal organisation, the internal and the external recruitment, the autocratic and the democratic leadership, the capital and the money market, the primary and the secondary market, the marketing and the selling, and the advertising and the personal selling.
• For example, in the delegation and the decentralisation, begin with delegation is a process and decentralisation is the outcome, delegation is an act and decentralisation is a state, delegation may be reversed and the decentralisation is a deliberate spread of the authority, and delegation is necessary for the decentralisation but the reverse is not true.
• A five-mark comparison is three pairs of points plus a concluding sentence that states which is used in which situation and why, and the concluding sentence is a separate mark that is almost always left out.

Some terms in the syllabus are examined in almost every paper, and they give a disproportionate share of the marks for a very little time spent. If only ten definitions are revised before the examination, these are the ten.

• Management: the process of the getting the things done, effectively and efficiently, by and through other persons.
• The characteristics of management: the goal oriented, the continuous, the three dimensional, the multi disciplinary, the dynamic, the intangible, and the both a science and an art.
• Taylor on Fayol: the bottom order gives the operative efficiency and the top order gives the administrative efficiency, and that single sentence opens the comparison.
• Planning: deciding in advance what to do and how to do it, and it is the function that is the base of the other four.
• Delegation: the transfer of the authority, the responsibility and the accountability, and the three elements must always be named together.
• Decentralisation: the systematic delegation of the authority to the lowest levels, and it follows the delegation as the state follows the act.
• Maslow need hierarchy: the five needs from the physiological through the safety, the social and the esteem to the self actualisation.
• The marketing mix: the product, the price, the place and the promotion, and the four Ps are the whole of the marketing chapter.
• The capital structure: debt and equity, and the financial management decides the ratio of the two that minimises the cost and the risk.
• The consumer rights: the right to safety, the information, the choice, the representation, the redressal and the education.

The marks lost in this paper are lost to a small number of avoidable errors, and every one of them is a habit that a week of practice can remove. The list below is the list that appears in the examiner reports year after year.

• Do not write the planning is the end of the mistake and the control is the beginning, because the two functions are the two halves of the same seam, and the two phrases of the planning and the controlling are the favourite mark of the paper.
• Do not confuse the delegation with the decentralisation. The delegation is the process and the decentralisation is the outcome, and a single act of the delegation does not make the organisation decentralised.
• Do not write the directing has three elements, because it has four, the supervision, the motivation, the leadership and the communication, and the fourth is the one most often missed.
• Do not confuse the financial incentive with the non-financial incentive. A financial incentive is paid in the money, and the promotion, the job enrichment and the recognition are the non-financial ones.
• Do not call the product concept the selling concept. The product concept believes that the buyer prefers the quality while the selling concept pushes the sale by the persuasion, and the two are opposite poles of the marketing philosophy.
• Do not leave the concluding sentence out of a comparison, because the conclusion is a separate mark and it is the only mark that shows the examiner the difference was understood and not memorised.
• Do not write the functions of the consumer protection council in the place of the rights of the consumer, because the two are asked separately and the confusion is the most common error in the last chapter of the paper.

There is a method of revision that works for this syllabus because the chapters are uniform in their construction. Every chapter names a few terms, defines them, gives a process, and offers its comparisons, and the revision consists of writing out the skeleton rather than reading the prose.

• For each chapter write the headings as they appear in the syllabus, and beneath each one the terms that the chapter defines, so the whole chapter fits on a single sheet of paper.
• Under each term write the single test that separates it from its neighbour, such as the delegation is the process and the decentralisation is the outcome, the money market is the short term and the capital market is the long term, and the empowerment is the direction.
• Under each process write the steps in a numbered chain, because the process questions are awarded on the order, and the chain of five or six steps is the answer to a five-mark question.
• Under each comparison write the two columns and the concluding sentence, and do not write the conclusion only when you are asked for it, because the conclusion belongs to the comparison itself.
• Then close the chapter and write the definitions from memory, and check them against the page, because the writing is the revision and the reading is only the first pass.
• Finish by attempting three previous year questions on each chapter, and the number of the marks lost to the format rather than to the content is usually the first thing the practice reveals.