Prof. Dr. Prem R. PantProf. Dr. Deepak Shakya
L. P. PandeyDhruba Subedi
Rajan Bikram Thapa
Approved by Government of Nepal, Ministry of Education, Science & Technology, Curriculum Development Centre, Bhaktapur, as an Additional Material from 2078 to 2080
Business Studies-IIGRADE XII
BUSINESSSTUDIES-II
GRADE XII
BUSINESSSTUDIES-II
GRADE XII
Edition: 2021
Copyright © 2021, by the Buddha Publications. All rights reserved. Printed in the Nepal. Except as permitted under the Nepal Copyright Act of 2059, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher.
Authors:Prof. Dr. Prem R. Pant 9851013663 Prof. Dr. Deepak Shakya 9855023085L.P. Pandey 9840050354 Dhruba Subedi 9851084481Rajan Bikram Thapa 9851071063
Publishers: Buddha Publications Pvt. Ltd. Anamnagar, Kathmandu - 29, Nepal Tel. 00977-1- 5705165, 5705210, 5705177 e-mail: [email protected] www.buddhapublication.com
Design by: Jagadish Baskota
Price: Rs.411.00
ISBN: 978-9937-30-393-4
Printed in Nepal
Business Studies-II
BUSINESSSTUDIES-II
GRADE XII
The nature and scope of business organizations have been changing at an ever-accelerating pace. As a result of these changes taking place in business activities, the need and importance of teaching the subject of Business Studies- II at the secondary school levels have increased tremendously. The importance of this subject is bound to increase further in the years to come. After going through the available books on the subject, we felt that there is a need of a textbook incorporating the most recent concepts in organization and office management. This book has been written to meet that need and, specifically, it has been designed to serve as an introductory textbook for the secondary school level students. It meets the curriculum requirements prescribed for this level by the Curriculum Development Centre.
Keeping in view the objectives and curriculum requirements stated above, the entire subject-matter of the book has been divided into 11 chapters. Chapters 1 is devoted to the study of nature of management. This chapter provides the basice concept of management, funtions of management and level of management. Chapter 2 is concerned about classical management perspective. Chapter 3 provides the basic knowledge of planing in the business. Chapter 4 is concerned about decision making in the organazation. Chapter 5 is concerned about the organazation and chapter 6 concentrates on ledership in the business. Chapter 7 deals with the controlling activities in the business. Chapter 8 and 9 deals with the other management funtions and contemporary issue of management. Chapter 10 is concerned with the preperation of difference type of business letters and Chaper 11 deals with the preparation of business plan.
We have tried to make the book very simple and interesting. Its style is friendly and warm. It is well illustrated, well-spaced, and with adequate summaries. A careful use of study aids (such as, learning objectives, figures, tables, pictures and review questions) has been made for the purpose. The layout has been designed to make it more accessible and easy for students.
• There are boxes with crucial information and detailed step-by-step checklists throughout the chapters.
• In order to inspire students’ imagination, many real-life photographs with content-driven captions are presented throughout the chapters. These photographs reinforce and expand the materials covered.
• All chapters contain one or more box features called “Things to Remember” (TTR). Each box-feature summarizes the important definition and concept that justifies extra attention of students.
• A list of references has been provided at the end of the book with a view to give the students necessary information about the several materials used and available on the subject.
• At the end of each chapter are review questions that can be used to assist the learning process.
PrefaceBUSINESS
STUDIES-IIGRADE XII
This book is the product of a team work. The path towards this venture commenced in June 2006 in Kathmandu. We agreed to join hands to undertake this venture. We were fortunate enough to get the encouragement and feedback from a number of teachers and experts. Hence we are encouraged to publish the Fourteenth edition of the book. We are grateful to them for their inspiration.
We would like to thank the team at Buddha Publications Pvt. Ltd., particularly Mr. Nabaraj Bajgain, Managing Director who conceived the concept of publishing this book in this format and helped throughout the process of its publication. Their professionalism and dedication have made this work possible. We acknowledge with deep appreciation their cooperation and support for bringing out this book in a nice form within minimum time. Mr. Jagadish Baskota, another dear person on Buddha publication unit, has assumed the major responsibility for word processing and designing chapter materials. He worked closely with us in the preparation of information profiles and manuscripts. He deserves special thanks for his excellent and meticulous work.
Comments and suggestions from teachers and students using this text are welcomed at any time by the authors.
Authors
Syllabus
Business Studies (Grade 12)
S.N. Content Area Elaboration of Contents Working hours
1 Nature ofManagement
1.1 Management: meaning and essentials1.2 Management as science, art and profession1.3 Key management functions: planning, organizing, leading
and controlling1.4 Levels of management
12
2 ClassicalManagementPerspective
2.1 Scientific management: principles and limitations2.2 Administrative management: principles and limitations
8
3 Planning andDecision Making
3.1 Planning: Concept and rationale3.1 Process of planning3.2 Benifits and pitfalls of planning3.3 Types of plans3.4 Decision making: meaning and importance3.5 Types of managerial decisions3.6 Decision making conditions: certainty, risk and
uncertainty3.7 Decision making process
15
4 Organizing 4.1 Organizing: concept and principles4.2 Organizing process4.3 Departmentalization: meanings and bases4.4 Types of organizational structure: simple, functional,
divisional, matrix and committee 4.5 Drivers of organizing: authority, responsibility and
accountability4.6 Centralization and decentralization4.7 Arguments for and against centralization and
Decentralization4.8 Guidelines for effective delegation of authority4.9 Challenges for effective delegation of authority4.10 Differences between delegation and decentralization of
authority
25
5 Leading 5.1 Leading: meaning and importance5.2 Role of manager as a leader5.3 Leadership qualities5.4 Leadership styles: autocratic, democratic and laisses faire
8
BUSINESSSTUDIES-II
GRADE XII
S.N. Content Area Elaboration of Contents Working hours
6 Controlling 6.1 Controlling: meaning and importance6.2 Process of control: Pre-control, concurrent control and
post-control6.3 Essentials of effective control
6
7 OtherManagementFunctions
7.1 Motivation: meaning and importance7.2 Techniques of motivation7.3 Theories of motivation:
• Maslow’s Theory of Hierarchy of Needs• Herzberg’s Dual Factors Theory
7.4 Supervision: meaning and role7.5 Factors influencing supervision7.6 Communication: meaning and importance7.7 Essentials of effective communication7.8 Types of communication: horizontal, vertical and diagonal7.9 Barriers to effective communication
22
8 ContemporaryIssues onManagement
8.1 Conflict management: meaning, sources and level8.2 Talent management: meaning and importance8.3 Quality management: meaning and components8.4 Supply chain management: meaning and importance8.5 Family business management: nature, roles
16
9 Business LetterWriting
9.1 Business letter: meaning and uses9.2 Structure of business letters9.3 Qualities of business letters9.4 Drafting of business letters: enquiry, order, confirmation,
complaint and job application letter
15
10 Business Plan 9.5 Introduction to business plan9.6 Significance of business plan9.7 Contents of business plan9.8 Formulation of business plan
8
ContentsBUSINESS
STUDIES-IIGRADE XII
CHAPTER 1
Nature of Management
Concept of Management 2Characteristics of Management 5Management: A Science or an Art or a Profession 6
Management as a Science 7Management as an Art 7Management as a Profession 8
Management and Administration 10Functions of Management 12Level of Management 17
Top Level Management 17Middle Level Management 18Lower Level Management 18Very Short Answer Questions 20Short Answer Questions 21Long Answer Questions 21
CHAPTER 2
Classical Management Perspective
Concept 23What is Classical Management? 23Management Thoughts 23Concept of Scientific Management 24Principles of Scientific Management 26Contributions of F.W. Taylor 27Advantages of Scientific Management 29
A. Advantages to the Businessman 29B. Advantages to the Workers 30C. Advantages to the Society 30
Limitations and Criticism of Scientific Management 31Criticism from Workers' Perspective 31Criticism from Employer's Perspective 32Criticism from Psychologist's Perspective 33
Fayol's Principles of Administrative Management 34Principles of Administrative Management 36Advantages of Fayol's Administrative Management 39
Limitations of Fayol's Administrative Management 40Comparison between Taylor's and Fayol's Principles 42
Very Short Answer Questions 44
Short Answer Questions 44Long Answer Questions 45
CHAPTER 3
Planning
Concept 47Definitions 47Characteristics of Planning 48Types of Planning 50Planning Process 51Need for Planning 54Benefits of Planning 57Limitations/ Pitfalls of Planning 59
Very Short Answer Questions 62Short Answer Questions 62Long Answer Questions 62
CHAPTER 4
Decision Making
Introduction 64Meaning 64Definitions 65Features of Decision Making 65Importance of Decision Making 66Steps or Process of Decision Making 67Conditions for Decision Making 70
Certainty 70Risk 71Uncertainty 71
Types of Managerial Decisions 72Very Short Answer Questions 75Short Answer Questions 75Long Answer Questions 75
CHAPTER 5
Organizing
Concept 77Definitions 77
A. Organisation, in Static Sense, as a Structure 77
B. Organisation, in Dynamic Sense, as a Process 78Principles of Organisation 79Importance of Organisation 82Organising Process 84
Steps in Organising Process 84Organisational Structure 85
Types of Organisational Structure 86Simple Organisational Structure 86Line Organisational Structure 87Types of Line Organisation 87
Advantages of Line Organisation 89Disadvantages of Line Organisation 89
Line and Staff Organisation Structure 91Advantages of Line and Staff Organisation 92Disadvantages of Line and Staff Organisation 92
Functional Organisation Structure 93Advantages of Functional Organisation 95Disadvantages of Functional Organisation 95
Divisional organization structure 96Advantages of divisional structure 97Disadvantages of divisional structure 97
Matrix organization structure 98Advantages of Matrix Organization Structure 99Disadvantages of Matrix Organization Structure 100
Committee Organizational Structure 101Advantages of Committee Organizational Structure: 102Weakness of Committee Form of Organization 103
Departmentalization 104Meaning 104Definitions 105Importance 105
Bases/ Methods of Departmentation 106Drivers of organizing 109
Authority 109Meaning and Definition 109Characteristics of Authority 110Sources of Authority 111Differences between Authority and Power 112
Responsibility 112Meaning and Definitions 112Differences between Authority and Responsibility 113
Accountability 114Meaning and Definitions 114Definitions 115Features of Accountability 115
Delegation of Authority 115
Definitions 116Features of Delegation of Authority 117
Principles of Delegation of Authority 118Process of Delegation of Authority 119Importance of Delegation of Authority 120Guidelines for effective delegation of authority 122Challenges for Effective Delegation of Authority 122Centralization of Authority 124Factors Determining Centralization of Authority 124
Advantages of Centralization 125Disadvantages of Centralization 126
Decentralisation of Authority 128Meaning 128Definitions 128Factors Affecting Decentralisation of Authority 129Need and Importance of Decentralisation 131Disadvantages of Decentralisation 131Differences between Delegation and Decentralisation of authority 132
Questions 133Very Short Answer Questions 133 Short Answer Questions 134Long Answer Questions 134Project Activities 134
CHAPTER 6
Leadership
Concept 136Definitions 136Characteristics of Leadership 137Importance of Leadership 138Leadership Qualities 139
Personal Traits 139Managerial Traits 140
Roles/ Functions of a Managerial Leader 141A. Setting and Achieving Organisational Goals 141B. Planning Operations of the Organisation 142C. Performing as a Symbolic Figure for the Group
143Leadership Styles 143
Autocratic or Authoritarian Leadership 145Main Features 145
Advantages 146Disadvantages 146Democratic Leadership 146Main Features 147Advantages of Democratic Leadership 147Disadvantages of Democratic Leadership 148
Laissez-Faire Leadership 149Characteristics of Laissez-Faire Leadership 149Advantages of Laissez-Fair Leadership 149Disadvantages of Laissez-Faire Leadership 149
Very Short Answer Questions 150Short Answer Questions 151Long Answer Questions 151
CHAPTER 7
Controlling
Concept 153Definition 153Features of Control 154Purposes of Control 155Importance of Control 155Relationship between Planning and Control 157
Types of Control 159Controlling Process 161
Essentials of Effective Control 163Very Short Answer Questions 165Short Answer Questions 165Long Answer Questions 165
CHAPTER 8
Other Management Functions
Introduction 167Motivation 167Characteristics of Motivation 168Process of Motivation 170Importance of Motivation 171Techniques of Motivation 172Positive and Negative Motivation 174
Positive Motivation 174Negative Motivation 174
Theories of Motivation 175Maslow's Need Hierarchy Theory 175Herzberg’s Dual Factors Theory 177Supervision 179Definition 179Role of Supervisor 180Functions of a Supervisor 181Importance of Supervision 182Factors Influencing Supervision 183Communication 185Process of Communication 186Importance of Communication 188Essentials of an Effective Communication 189
Clarity of Information: 189
Adequacy of Message: 189Consistency of Message 189Feedback: 190Understanding the Receiver: 190 Medium of communication: 190Language: 190
Barriers to Effective Communication 190Types of Communication 192Principles of Communication 193
Very Short Answer Questions 195Short Answer Questions 195Long Answer Questions 196Project Activities 196
CHAPTER 9
Contemporary Issues...
Conflict Management 198Meaning and Definition 198Views and Approaches to Conflict 199Characteristics of Conflict 200
Types or Level of Conflict 201Sources or Causes or Reasons of Conflict 202Techniques of Conflict Management 203Conflict Management Process 204
Talent Management 205Meaning and Definition 205Importance of Talent Management 207Attract top talent 207
Employee motivation 207Continuous coverage of critical roles 207Increase employee performance 207Engaged employees 208Improve business performance 208Higher client satisfaction 208
Quality Management 208Principles of Quality Management 209
Customer Focus 209Leadership 210Engagement of People 210Process Approach 210Continuous Improvement 210Evidence-based Decision Making 210Relationship Management 211
Benefits of Quality Management 211Components of Quality Management 211
Quality planning 212Quality control 212Quality assurance 213Quality improvement 213
Supply Chain Management 214Components of supply chain management 214
Planning 215Information 215Source 215Inventory 215Production 216Location 216Transportation 216Return of goods 216
Importance of Supply chain management 216Boost Customer Service 217Reduce Operating Costs 217Helps to fulfil Space Gap 217Helps to fulfil Time Gaps 217Increases Profitability: 218Supports for Economic Growth 218Improves Standard of Living 218Job Creation 218
Family Business Management 218Characteristics/ Nature of Family Business 219
Advantages of family businesses 220Disadvantages of Family Business 221
Role of Family Business 221Very Short Answer Questions 223Short Answer Questions 223Long Answer Questions 224Project Activities 224
CHAPTER 10
Business Letter
Concept 226Meaning and Definition 226Uses of a Business Letter 227Essentials or qualities of a Good Business Letter 227Parts or Structure of a Letter 229
Drafting a Business letter 232Theoretical Questions 238
Very Short Answer Questions: 238Short Answer Questions 239Long Answer Questions 239
CHAPTER 11
Business Plan
Meaning and Definitions 241Significance of Business Plan 242Contents of a Business Plan 244
Title Page 244Executive Summary 244Industry Overview 244Market Analysis and Competition 244Sales and Marketing Plan 245Management Plan 245Operating Plan 245Financial Plan 245Appendices and Exhibits 246
Business Plan Template 246Formulating a Business Plan 248
EXECUTIVE SUMMARY 248Theoretical Questions 265
Very Short Answer Questions: 265Short Answer Questions 265Long Answer Questions 265Project Activities 265
