VIVA VOCE

For BBA (Management) Viva

Department of Management Studies

Faculty of Business Studies
Jagannath University.

Prepared by
Azim Uddin Khan
8th Batch
Department of Management Studies
Jagannath University.
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 4 Year
th

Subject-wise Short Note-

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 Management Thoughts
 Contributions of Management in Ancient civilizations:
(i) Sumerians : (3000 B.C.-2200 B.C.)
– Used written rules and regulations for governance,
– Managerial control practice,
– System of writing and recording data.
(ii) Egyptians : (3000 B.C.- 1000 B.C.)
– Used management practices to construct pyramids,
– Structures,
– Writings,
– Government.
(iii) Babylonians : (2700 B.C.- 500 B.C.)
– Used extensive set of laws and policies for governance,
– Wages system,
– Control,
– Responsibility.
(iv) Greeks : (1000 B.C.- 200 B.C.)
– Used different governing systems for cities and states,
– Principles of Management,
– Art of Management.
(v) Romans : (800 B.C.- 500 A.D.)
– Used organized structure for communication and control,
– Empire organization,
– Farm Management.
(vi) Chinese : (1500 B.C. - 1200 A.D.)
– Used extensive organization structure for government agencies and the arts,
– Use of staff,
– Planning,
– Directing.
(vii) Venetians : (500 A.D. - 1500 A.D)
– Used organization design and planning concepts to control the seas.

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 Management School
(I) Classical Management School:
 Principles of Scientific Management –
Scientific Management: Concerned with improving the performance of individual workers.
Contributor: Frederick W. Taylor.
Advoctors: Frank Gilbreth, Lillian Gilbreth, Henry Gantt, Gerrington Emerson,
Morris Cooke, Hugo Munsterberg.
Biography of Taylor:
– (1856-1915) United States
– Mechanical engineer
– Director of a famous firm
– First Management consultant
– Father of Scientific Management & efficiency movement
– Father of Industrial engineering
Famous Books:
– Shop Management (1903)
– The Principles of Scientific Management (1911)
– Those book presented to the "American Society of Mechanical Engineers" (ASME)
Four Principles of Scientific Management by Taylor:
i) Replace rule-of-thumb work methods with methods based on a scientific study of the
tasks.
ii) Scientifically select, train, and develop each employee rather than passively leaving
them to train themselves.
iii) Provide "Detailed instruction and supervision of each worker in the performance of
that worker's discrete task"
iv) Divide work nearly equally between managers and workers, so that the managers apply
scientific management principles to planning the work and the workers actually
perform the tasks.
Taylor's influence Countries:
United States, France, Canada, Switzerland, USSR.
Criticism:
Henry Mintzberg, Harry Braverman.
(ii) Modern Administration Management:
Administration Management: Focuses on managing the total organization.
Contributor: Henri Fayol.
Advocators: Lyndall Urwick, Max Weber, Chester Barnard.
Biography of Fayol:
– (1841-1925) France
– Engineer and Director
– Founder of Modern Management Method
– Father of principles of management
Book:
– (Administration Industrielle et Generale)
General and Industrial Administration (1916)
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  Major Contributions:
Functions of management
– To forecast and plan
– To organize
– To command or direct
– To coordinate
– To control
Principles of management
1) Division of labor 8) Centralization
2) Authority 9) Scalar chain
3) Discipline 10) Order
4) Unity of command 11) Equity
5) Unity of Direction 12) Stability of tenure of personnel
6) Subordination 13) Initiative
7) Remuneration 14) Esprit de corps.
Organizational Activities
– Technical
– Commercial
– Financial
– Security
– Accounting
– Managerial

(iii) Behavioral Management School

Behavioral Management : Behavioral Management is a process that guides people to

change their actions within a specific context. Empasizes individual attitudes and behaviors
and group processes.

Human relations movement: Argued that workers respond primarily to the social context of
the workplace.
 Hawthorne Experiments:
By Elton Mayo (Duration: 1924-1933)
Biography of Elton Mayo:
– (1880-1949) Australia
– Psychologist, Industrial researcher, organizational theorist.
– Professor of industrial management at Harvard Business School
– Experiment at Western Electric Company, Chicago.

Four Parts of Hawthorne Experiment:

– Illumination Experiment
– Relay Assembly Test Room Experiment
– Interviewing Programme
– Bank Wiring Test Room Experiment
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Implications of the Hawthorne Studies
- Small group - Novelty of the situations
- Types of supervision - Interest in the experiment
- Earnings - Attension received in the test room.

 Maslow's Hierarchy of Needs:

Biography of Abraham Maslow-
– (1908-1970) United States
– Psychologist
– Studied at Corhell University, Columbia University
– Book: Motivation and Personality (1954)
Contributions:
– Physiological needs
– Safety needs
– Love and belonging
– Esteem
– Self Actualization

 Theory X and Theory Y

- By Douglas McGregor
Biography of Douglas McGregor:
– (1906-1964) United States
– Professor at The MIT Sloan School of Management
– Studied at Harvard University
– Book: The Human side of enterprise f(1960)

Contribution of Theory X and Theory Y:

Theory X:
Employees avoid work, Dislike to take responsibility, Unambigous, Inherently lazy
Not happy with their job, Narrow span of control, Desire security above everything
Threat of funishment must exist
Theory Y:
Can be ambitious, Self motivated, Exercise self control,
Enjoy their mental and physical work duties, Work is as natural as play.

(iv) Quantitative school of management

Quantitative approach to management: The quantitative approach to management

involves the use quantitative techniques such as statistics, information models, computer
simulations to improve decision making.
 Applies quantitative technique to management
 During WWII and solve the military problems
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Three branches :
– Management science
– Operation Management
– Management information system
Management science : Focus is specifically on the development of mathematical model.
Some science Application :
-Mathematical forecasting - Information theory
- Inventory modeling - Inventory Control
- Queuing theory - Linear programming
- Quantitative Techniques - Probability theory
- Decision Theory - Queuing theory
- Experimental design - Replacement theory
- Game theory - Sampling theory.

(v) System Approach to Management

 System: A system is an interrelated set of elements functioning as a whole.
 Close system: A system that does not interact with or affected by its environment.
 Open system: A system that interact with or affected by its environment.
 Sub system: A system within another system.
 Synergy: Two or more sub systems working together to produce more.
 Entropy: A normal process leading to system decline.

(vi) Contingency Management School

 Theory Z:
- By William G. Bill Ouchi.
Biography of Bill Ouch:
– Born 1943
– American
– Professor & Author
– Studied at Stamford University and University of Chicago.
Contributions:
– Analysis about Japanese and American organization.
– Length of employment
– Mode of decision making
– Locations of responsibility
– Speed of evaluation and promotion
– Mechanism of control
– Specialization of Career path
– Nature of concern of the employee.
3 approaches control in an organization management:
– Market control
– Bureaucratic control
– Clan control
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 (vii) Contemporary Management

 Management By Objectives (MBO)

-By Peter Ferdinad Drucker
Biography of Peter Drucker:
– (1909-2005)
– American management consultant,educator and author
– The founder of modern management
Contributions
6 major contributions-
– Nature of management
– Management function
– Organizational structure
– Federalism
– Management by objective
– Organizational change.
Mgt by objectives
1) Establish an objective before you begin
2) Collect and organize all of the pertinent facts
3) Identify the problem and its causes
4) Work out a solution and some options
5) Screen options through some decision criteria
6) Establish some security action
7) Gain acceptance of the decision
8) Implement the decision
9) Measure the results

 William Edward deming

– 1990-1993(American)
– Engineer,statistician,professor,author,lecturer and management consultant
– Work for japan after world war 2
Contributions:
Deming philosophy synopsis
(i)When people and organizations focus primarily on quality defined by the following ratio
Quality = results of work efforts\total cost
Quality tends to increase and cost fall over time
(ii) However when people and organization focus primarily on cost tends to rise and
qualities declines over time
Demings system of profound knowledge
1) Appreciation of a system
2) Knowledge of variation
3) Theory of knowledge
4) Theory of psychology
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 Demings 14 points of TQM
1) Constancy of purpose
2) New philosophy
3) Cease dependence on mass inspection
4) End lower tenderds contracts
5) Improve every process
6) Institute training
7) Institute leadership of people
8) Drive out fear
9) Break down barriers
10) Eliminate exhortations
11) Eliminate arbitrary numerical target
12) Permit price of workmanship
13) Encourage education
14) Top management commitment & action

Strategic management
 Company strategy: A company strategy is its action plan for outperforming its
competitors and achieving superior profitability. Strategy means the achievement of
objectives. That is answering how.
 Strategic approaches:
- Low cost provider (Efficiency),
- Differentiating features (Effectiveness)
- Lower prices for differentiated goods (Best cost provider)
- Better servicing a niche market’s need (Efficiency/effectiveness)
 Winning strategy test: Fit test > Competitive Advantage test > Performance test.
 Good Management = Good Strategy + Good Strategy Execution
 Competitive advantage: A company achieves a competitive advantage when it
provides buyers with superior value compared to rival sellers or offers the same value at
a lower cost to the firm.
 Sustainable Competitive advantage: The competitive advantage is sustainable if it
persists despite the best efforts of competitors to match or surpass this advantage.
 Deliberate strategy: A company’s deliberate strategy consists of proactive strategy
elements that are both planned and realized as planned.
 Emergent strategy: A company’s emergent strategy consists of reactive strategy
elements that emerge elements that emerge as changing conditions warrant.
 Strategic Management: Strategic Management is the management of an organization’s
resources to achieve its goals and objectives. Strategic involves setting objectives
analysis the competitive environment.
 Functional Strategy: Functional strategy is a strategy for unit within a business. Such
as – Marketing Strategy, Financial Strategy etc.
 Strategic Vision: It describes management’s aspiration for the future (where we are
going) and delineates the company strategic course and long term direction.
 Mission Statement: It describes the enterprise’s present business and purpose “Who
we are, What we do, and Why we are here”
 Strategic plan: A company’s Strategic plan lays out its future direction, performance
targets, and strategy.

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 Objectives: Objectives are an organization’s performance targets the specific result
management wants to achieve.
 Functions or process of strategy:
- Developing a strategic vision, a mission statement, and a set of core values
- Setting Objectives
- Crafting a strategy
- Executing the chosen strategy
- Monitoring developments, evaluating performance, and initiating corrective
adjustments.
 Two types of Objectives: i) Financial Objectives ii) Strategic Objectives
 Financial Objectives: Financial Objectives communicates top management’s goals for
financial performance and focused internally on the firm’s operations and activities.
 Strategic Objectives: Are the firm’s goals related to marketing standing and
competitive position and focused externally on competition vis-à-vis the firm’s rivals.
 Strategic Intent: A company exhibits strategic intent when it relentlessly pursues an
ambitious strategic objective, concentrating the full force of its resources and
competitive actions on achieving that objectives.
 Balanced Scorecard: A balanced scorecard is a widely used method for combining the
use of both strategic and financial objectives, tracking their achievement and giving
management a more complete and balanced view of how well an organization is
performing.
 Business strategy: Business strategy is strategy at the single business level concerning
how to improve the performance or gain a competitive advantage in a particular line of
business.
 A Strategic Plan: A strategic Vision + Objectives + Strategy
 Corporate Strategy: Corporate strategy is strategy at the multi-business level,
concerning how to improve company performance or gain competitive advance by
managing a set of business simultaneously.
 Span of Control/Supervision: Span of control/Supervision is the term how used more
commonly in business management, particularly HRM. It refers to the number of
subordinates a supervisor has.
 Span of Management: It means the number of people managed efficiently by a single
officer in an organization.
 Rules : Authoritative statement of what to do or not to do in specific situation, issued
by an appropriate person or body. It clarifies demarcates, or interprets a law or policy.
 Policy: A course or principle of action adopted or proposal by an organization or
individual.
 Budget: Budget is a quantitative expression of a plan for a defined period of time. It
may include planned sales volumes and revenues resources quantities, cost and
expenses, assets, liability and cash flows.
 Zero based budgeting: Zero-based budgeting (ZBB) is a method of budgeting in
which all expenses must be justified for each new period. Zero-based budgeting starts
from a "zero base," and every function within an organization is analyzed for its needs
and costs. Budgets are then built around what is needed for the upcoming period,
regardless of whether the budget is higher or lower than the previous one.

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 Macro Environment (PESTEL):
- Political factors - Technological factors
- Economic conditions - Environmental factors
- Socio cultural forces - Legal factors
 Task environment (Internal):
- Competitors - Suppliers - Substitute products
- Customers/buyers - Distributors

 Porter’s five competitive forces model:

i) Rival seller
ii) New entrants
iii) Substitute product
iv) Supplier bargaining power
v) Customer bargaining power
 Macro environment: The macro environment encompasses the broad environment
context in which a company’s industry is situated.
 Driving forces: Driving forces are the major underlying causes of change in industry
and competitive conditions.
 Strategic group: A strategic group is a cluster of industry rivals that have similar
competitive approaches and market positions.
 Strategic group mapping: It is a technique for displaying the different market of
competitive positions that rival firms occupy in the industry.
 Industry’s key success factors: Industry’s key success factors are the strategy
elements, product and service attributes, operational approaches, resources, and
competitive capabilities that are essential to surviving and thriving in the industry.
 SWOT analysis:
- Internal strengths - Market opportunities
- Internal weaknesses - External threats.
 Leader: Influence people behavior, attitude without reliant forces. The person who
capable to influence the other behaviors.
 Capability or Competence : Capability or Competence is an activity that a firm has
learned to perform with proficiency a capacity. Competence is athe capacity of a firm to
perform. Some internal activity competently.
 Core Competence: Core Competence is a proficiently performed internal activity that
is central to a firm's strategy and competitiveness.
 Distinctive competence: Distinctive competence is a competitively valuable activity
that a firm performs better that's its rivals.
 Resource: Resource is a competitive asset that is owned or controlled by a company.
 Resource bundle: Resource bundle is a linked and closely integrated set of competitive
assets centered around one or more cross functional capabilities.
 Dynamic capability: Dynamic capability is an ongoing capacity of a company to
modify its existing resources and capabilities or create new ones.
 Strengths: A company's strengths represents its competitive assets.

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 Weaknesses: A company's weaknesses are short coming that constitute competitive
liabilities.
 Benchmarking: Benchmarking is a potent tool for improving a company's own internal
activities that is based on learning how other companies perform thaem and borrowing
their 'best practices'.
 Company's value chain: A company's value chain identifies the primary activities and
related support activities that create customer value.
 Primary activities: Supply chain mgtOperationDistributionSales &
MarketingService.
 Support Activities: Product R&DHRMGeneral Administration.
 SWOT analysis: SWOT analysis is a simple but powerful tool for sizing up a
company's strengths and weaknesses, its market opportunities and the external threats to
its future well-being.
 Low cost provider's: A low cost provider's basis for competitive advantage is lower
overall costs than competitors.
 Low cost leaders: A low cost leaders, who have the lowest industry costs, are
exceptionally good at finding ways to drive costs out of their businesses and still
provide a product or service that buyers find acceptable.
 Cost driver: Cost driver is a factor that has a strong influence on a company's costs.
 Broad differentiation strategy: The essence of a broad differentiation strategy is to
offer unique product attributes that a wide range of buyers find appealing and worth
paying for.
 Uniqueness driver: A uniqueness driver is a factor than can have a strong
differentiating effect.
 Focused low-cost: Focused low-cost concentrating on a narrow price-sensitive buyer
segment and on costs to offer a lower priced product.
 Focused differentiation: Focused differentiation concentrating on a narrow buyer
segment by meeting specific tastes and requirements of niche members.
 Best-cost provider strategies: Best-cost provider strategies are a hybrid of low-cost
provider and differentiation strategies than aim at providing desired quality / features /
performance / service attributes while beating rivals on prices.
 Blue-ocean strategy: A blue-ocean strategy offers growth in revenues and profits by
discovering or inventing new industry segments than create altogether new demand.
 Scope of the firm: Scope of the firm refers to the range of activities which the firm
performs internally the breadth of its product and service offerings, the extent of its
geographic market presence and its mix of business.
 Horizontal scope: Horizontal scope is the range of product and service segments that a
firm serves within its focal market.
 Vertical scope: Vertical scope is the extent to which a firm internal activities
encompass one, some, many or all of the activities that make up an industry's entire
value chain system, ranging from raw-material production to final sales and service
activities.

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 Vertically intrated firm: A vertically intrated firm is one that performs value chain
activities along more than one stage of an industry's value chain system.
 Backward integration: Backward integration involves entry into activities previously
performed by suppliears or other enterprises positioned along earlier stages of the
industry value chain system.
 Forward integration: Forward integration involves entry into value chain system
activities closer to the end user.
 Outsourcing: Outsourcing involves contracting out certain value chain activities to
outside vendors.
 Strategic Alliance: A strategic Alliance is a formal agreement between two or more
separate companies in which they agree to work cooperatively toward some common
objective.
 Joint venture: A joint venture is a partnership involving the establishment of an
independent corporate entity that the partners own and control jointly, sharing in its
revenues and expenses .
 Merger: Merger is the combining of two or more firms into a single corporate entity
that often takes on a new name.
 Acquisition: Acquisition is a combination in which one firm, the acquirer, purchases
and absorbs the operations of another firm, the aquired.
 Politicla risks: Politicla risks stem from instability or weakness in national,
governments and hostility to foreign business.
 Economic risks: Economic risks stem from the stability of a country's monetary
system, economic and regulatory policies, and the lack of property rights protections .
 Greenfield venture: A greenfield venture is a subsidiary business that is established by
setting up the entire operation from the ground up.
 International strategy: An international strategy is a strategy for competing in two or
more countries simultaneously.
 Multidomesti strategy: A multidomesti strategy is one in which a company varies its
product offereing and competitive approach from country to country in an effort to be
responsive to differing buyer preferences and market conditions. It is a 'think-local, act-
local' type international strategies.
 Global strategy: A global strategy is one in which a company employs the same basis
competitive approach in all countries where it operates, sells much the same products
everywhere, strives to build global brand, and cordinates its action worldwide with
strong headquarters control. It represents a 'think-global, act-global' approach.
 Transnational strategy: A transnational strategy is a 'think-global, act-local' approach
that incorporates elements of both multidomestic and global strategies.
 Profit sanctuaries: Profit sanctuaries are country markets that provide a company with
substantial profits becuase of strong or protected market postion.
 Cross-market subsidization: supporting competitive offernsives in one market with
resources and profits diverted from operations in another market can be a powerful
competitive weapon.
 Corporate social responsibility (CSR): CSR refers to business practices involving
initiatives that benefit society. A business's CSR can encompass a wide variety of tactics,
from giving away a portion of a company's proceeds to charity, to implementing
"greener" business operations.
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 Organizational structure: Organizational structure defines how the formal and
informal activities such as task allocation, coordination and supervision are directed
toward the achievement of organizational aims. It can also be considered as the viewing
glass or perspective through which individuals see their organization and its
environment.
 Simple Structure: A simple organizational structure is the default operating system
used by most small businesses because it centralizes decision-making with the owner.
Unlike other organizational structures, the simple, or flat, structure doesn't have formal
departments and layers of management.
 Functional structure: Functional structure is one of the most common organizational
structures. Under this structure, the organization groups employees according to a
specialized or similar set of roles or tasks.
 Multidivisional structure: Multidivisional Structure is a corporate structure with
multiple operating divisions in which every division represents profit or business centers.
The corporate officers at the top of this structure delegate both daily operations and
business unit strategy to the division managers.
 Matrix structure: A matrix type of organizational structure combines the traditional
departments seen in functional structures with project teams.
 Network structure: A network organizational structure refers to a system of delegating
and coordinating tasks among a number of partner companies or business entities with a
common goal of producing a specific product.
 Business Process Reengineering involves the radical redesign of core business
processes to achieve dramatic improvements in productivity, cycle times and quality.
 Emerging industries: Emerging industries can be defined as the establishment of an
entirely new industrial value chain, or the radical reconfiguration of an existing one,
driven by a disruptive idea (or convergence of ideas), leading to turning these
ideas/opportunities into new products/services with higher added value.
 Mature industry: A mature industry is an industry which has passed both the emerging
and the growth phases of industry growth. Earnings and sales grow slower in mature
industries than in growth and emerging industries.
 Stagnant or Declining Industry: An industry which experiences negative growth, or
remains stagnant due to decline in demand of one or more of its products for varied
reasons.
 High Velocity Market: High velocity markets are defined as markets in which existing
knowledge and resources are less useful than the ability to quickly create new situation-
specific knowledge.
 Fragmented industry: A fragmented industry is one that has no major players. The
businesses tend to be small, and business practices vary widely because individual
owners use individual methods.
 Industry Leader: a company that is considered the most effective in its industry, for
example, because it sells more products, makes more profit, or has a better known brand
than its competitors
 Runner up firms: A runner up company is a company that stands at second position in
the industry in terms of market share. Runner up firms acquires weaker market positions
than the industry leaders.

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 Offensive Strategy: A type of corporate strategy that consists of actively trying to
pursue changes within the industry. Companies that are managed as offensive
competitive generally invest heavily in technology and Research and Development
(R&D) in an effort to stay ahead of the competition.
 Defensive Strategy: Defensive strategies are management tools that can be used to fend
off an attack from a potential competitor. Think of it as a battleground: You have to
protect your share of the market in order to keep your customers happy and your profits
stable.
 Strategic options: Strategic options are creative alternative action-oriented responses to
the external situation that an organization (or group of organizations) faces. Strategic
options take advantage of facts and actors, trends, opportunities and threat of the outside
world.
 Harvest Strategy: A harvest strategy is a business plan for reducing or altogether
eliminating investment in a particular product, brand or line of business due to a
company's management determining the required expense to attempt to boost sales any
further would not be justified by likely future revenues from the product or brand line.
 Liquidation Strategy: The Liquidation Strategy is the most unpleasant strategy adopted
by the organization that includes selling off its assets and the final closure or winding up
of the business operations.
 Diversification: Diversification is a corporate strategy to enter into a new market or
industry which the business is not currently in, whilst also creating a new product for
that new market.
 Corporate Strategy: Corporate Strategy is the direction an organization takes with the
objective of achieving business success in the long term.
 Strategic fit: Strategic fit expresses the degree to which an organization is matching its
resources and capabilities with the opportunities in the external environment.
 Economies of scope: Economies of scope is a term that refers to the reduction of per-
unit costs through the production of a wider variety of goods or services.
 Economies of scale: Economies of scale is a term that refers to the reduction of per-unit
costs through an increase in production volume. This idea is also referred to as
diminishing marginal cost.
 Crafting Strategy: Better captures the process of strategy development, and how
strategies get made.
 Outsourcing: Outsourcing is a practice used by different companies to reduce costs by
transferring portions of work to outside suppliers rather than completing it internally.
Outsourcing is an effective cost-saving strategy when used properly.
 Best practice: A best practice is a technique or methodology that, through experience
and research, has proven to reliably lead to a desired result.
 Benchmarking: A benchmark is a standard against which the performance of a security,
mutual fund or investment manager can be measured. Generally, broad market and
market-segment stock and bond indexes are used for this purpose.
 Strategic Alliance: A strategic alliance (also see strategic partnership) is an agreement
between two or more parties to pursue a set of agreed upon objectives needed while
remaining independent organizations.
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 Risk: Risk is the potential of gaining or losing something of value.
 Hazard: A hazard is a situation that poses a level of threat to life, health, property, or
environment.
 Bridge financing: Bridge financing is an interim financing option used by companies and
other entities to solidify their short-term position until a long-term financing option can
be arranged.
 Capital: Capital refers to financial assets or the financial value of assets, such as cash and
funds held in deposit accounts, as well as the tangible machinery and production
equipment used in environments such as factories and other manufacturing facilities.
 Profitability: Profitability is the ability of a business to earn a profit.
 Skill: A skill is the ability to carry out a task with pre-determined results often within a
given amount of time, energy, or both.
 Decision: A choice made between alternative courses of action in a situation of
uncertainty.
 Planning (also called forethought) is the process of thinking about and organizing the
activities required to achieve a desired goal.
 Recruitment: The process of finding and hiring the best-qualified candidate (from within
or outside of an organization) for a job opening, in a timely and cost effective manner.
 Or, Recruitment refers to the overall process of attracting, selecting and appointing
suitable candidates for jobs (either permanent or temporary) within an organization.
 Job Specification: Job specification is a statement of the essential components of a job
class including a summary of the work to be performed, primary duties and
responsibilities, and the minimum qualifications and requirements necessary to perform
the essential functions of the job.
 Job description: Job description is a list that a person might use for general tasks, or
functions, and responsibilities of a position.
 Human resources: Human resources are the people who make up the workforce of an
organization, business sector, or economy.
 Human Resource Management (HRM): HRM is the term used to describe formal
systems devised for the management of people within an organization.
 Environment: The sum total of all surroundings of a living organism, including natural
forces and other living things, which provide conditions for development and growth as
well as of danger and damage.
 Job rotation: Job rotation is a technique used by employers that would use this method
on their employees to rotate their assigned jobs throughout their employment.
 Organizational Chart: An organizational chart is a diagram that shows the structure of
an organization and the relationships and relative ranks of its parts and positions/jobs.
 Procedure: A fixed, step-by-step sequence of activities or course of action (with definite
start and end points) that must be followed in the same order to correctly perform a task.
 Regulation: Regulation is an abstract concept of management of complex systems
according to a set of rules and trends.
 Quality: Quality is the standard of something as measured against other things of a
similar kind; the degree of excellence of something.

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 Others:
 Leader: A person or thing that holds a dominant or superior position within its field, and
is able to exercise a high degree of control or influence over others.
 Margin: Margin is the difference between a product or service's selling price and its cost
of production or to the ratio between a company's revenues and expenses.
 Leadership: Leadership is the ability of a company's management to set and achieve
challenging goals, take swift and decisive action, outperform the competition, and inspire
others to perform well.
 Motivation: Internal and external factors that stimulate desire and energy in people to be
continually interested and committed to a job, role or subject, or to make an effort to
attain a goal.
 Power: the capacity or ability to direct or influence the behaviour of others or the course
of events.
 Authority: the power or right to give orders, make decisions, and enforce obedience.
 Perception: the ability to see, hear, or become aware of something through the senses.
 Belief: an acceptance that something exists or is true, especially one without proof.
 Markup: the amount added to the cost price of goods to cover overheads and profit.
Markup is the difference between the cost of a good or service and its selling price.
 Profit Margin: the amount by which revenue from sales exceeds costs in a business.
 Marginal costs: Marginal costs are variable costs consisting of labor and material costs,
plus an estimated portion of fixed costs (such as administration overheads and selling
expenses).
 Market Share: the portion of a market controlled by a particular company or product.
 Cost driver: A cost driver is the unit of an activity that causes the change in activity's
cost. cost driver is any factor which causes a change in the cost of an activity.
 Product line: A product line is a group of related products under a single brand sold by
the same company. Companies sell multiple product lines under their various brands.
 Contingency Approach: The contingency approach is a management theory that
suggests the most appropriate style of management is dependent on the context of the
situation and that adopting a single, rigid style is inefficient in the long term.
 Demand: Demand is an economic principle that describes a consumer's desire and
willingness to pay a price for a specific good or service.
 Sales promotion: Sales promotion is the process of persuading a potential customer to
buy the product.
 Brand: A brand (or marque for car model) is a name, term, design, symbol, or other
feature that distinguishes one seller's product from those of others.
 Niche Market: A niche market is the subset of the market on which a specific product is
focused. The market niche defines as the product features aimed at satisfying specific
market needs, as well as the price range, production quality and the demographics that is
intended to impact.
 Mean: The mean is the average of the numbers: a calculated "central" value of a set of
numbers.

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 Median: The median is the value separating the higher half of a data sample, a
population,
 Mode: The mode is the number that occurs most often within a set of numbers.
 Range: The range is the difference between the highest and lowest values within a set of
numbers.
 Value Chain: the process or activities by which a company adds value to an article,
including production, marketing, and the provision of after-sales service.
 Monopoly: A monopoly is a market containing a single firm that has or is close to total
control of the sector.
 Duopoly: A duopoly is a situation in which two companies own all or nearly all of the
market for a given product or service.

Project Management
 Project: Project is a sequence, unique, complex and connectivity that having one purpose
or goal and that must be achieved within specific time must have specific project.
 Vision: An aspirational description of what an organization would like to achieve or
accomplish in the mid-term or long-term future.
 Mission or Mission Statement: A written declaration of an organization's core purpose
and focus that normally remains unchanged over time.
 Goal: An observable and measurable end result having one or more objectives to be
achieved within a more or less fixed timeframe.
 Objective: Objective is a specific result that a person or system aims to achieve within a
time frame and with available resources.
 Accounting: Accounting is an information system that identify, classify, recording,
summarize, analyze, interpret and communicate the economic event.
 Finance: Finance is the part the economics that is goal of maximizing the profit or
wealth.
 Economics: Economics is the scientific study of the ownership, use, and exchange of
scarce resources - often shortened to the science of scarcity.
 Economic events: Economic events reflected in the financial statements must be both
relevant to the financial condition of a company and objectively measurable in monetary
terms.
 Contract Law: Body of law that governs oral and written agreements associated with
exchange of goods and services, money, and properties.
 Wealth maximization: Wealth maximization is the concept of increasing the value of a
business in order to increase the value of the shares held by stockholders.
 Profit maximization: Profit maximization is the short run or long run process by which a
firm determines the price and output level that returns the greatest profit.
 Inflation: A sustained, rapid increase in prices, as measured by some broad index (such
as Consumer Price Index) over months or years, and mirrored in the correspondingly
decreasing purchasing power of the currency.

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 Investment: Investment is the commitment of money or capital to purchase financial
instruments or other assets in order to gain profitable returns in the form of interest,
income, or appreciation of the value of the instrument.
 Time Value of Money (TVM): The time value of money is the idea that money available
at the present time is worth more than the same amount in the future due to its potential
earning capacity.
 Annuity: An annuity is a powerful financial planning tool that when used for the right
purpose, and in the right situation, can provide tremendous value to the annuity buyer.
 Capital budgeting or investment appraisal: Capital budgeting is the planning process
used to determine whether an organization's long term investments such as new
machinery, replacement of machinery, new plants, new products, and research
development projects are worth the funding of cash through the firm's capitalization
structure (debt, equity or retained earnings).
 Investment Decision: The investment decision relates to the decision made by the
investors or the top level management with respect to the amount of funds to be deployed
in the investment opportunities.
 Net present value (NPV): NPV is defined as an investment measure that tells an investor
whether the investment is achieving a target yield at a given initial investment. Net
Present Value (NPV) is the difference between the present value of cash inflows and the
present value of cash outflows.
 Profitability index (PI): PI is an investment appraisal technique calculated by dividing
the present value of future cash flows of a project by the initial investment required for
the project.
 Internal rate of return (IRR): IRR is the interest rate at which the net present value of
all the cash flows (both positive and negative) from a project or investment equal zero.
 Discounted payback period (DPBP): DPBP is a capital budgeting procedure used to
determine the profitability of a project. A discounted payback period gives the number of
years it takes to break even from undertaking the initial expenditure, by discounting
future cash flows and recognizing the time value of money.
 Demand forecasting: Demand forecasting is predicting future demand for the product. In
other words, it refers to the prediction of probable demand for a product or a service on
the basis of the past events and prevailing trends in the present.
 Standard Deviation: Standard deviation is a measure of the dispersion of a set of data
from its mean. It means the distance between mean and other data.
 Shadow Price: Opportunity cost of an activity or project to a society, computed where
the actual price is not known or, if known, does not reflect the real sacrifice made.
 Learning: Learning is permanent change of behavior. Actually it's measurable and
relatively permanent change in behavior through experience, instruction, or study.

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 Total Quality Management
 Quality: Quality is traditionally considered as the conformance of a product or service to
its specifications, features and performance. Actually quality is what the customer says.
 Garvin identified eight dimensions or categories of quality:
 Performance: Performance refers to the primary characteristics of a product. Actually
what it give you.
 Features: Features refer to those secondary characteristics of a product that supplement
the product basic functioning.
 Reliability: Reliability refers to the probability of a product's malfunctioning or failing
within a specified period of time.
 Conformance: It is the degree to which a product's design and operating characteristics
meet pre-established standards.
 Durability: Durability is a measure of product life.
 Service ability: It refers to the speed and ease of repair of a product. Availability of
spare parts, provision of service center etc. are the signs of good service ability.
 Aesthetics: Aesthetics refers to how a product looks, feels, sounds, tastes, or smells.
 Perceived quality: Perceived quality refers to perceptions of quality by users.
 Total Quality Management: Total quality management is a management philosophy of
continuous quality improvement along with cost reduction in an environment of
participative management through self-directed team development and employee
empowerment, and quality-supportive culture where trained human resources would
focus on monitoring process variations by using necessary tools and technique for
gaining competitive advantage through customer satisfaction. It is a top-down process,
and a means to an end, not an end in itself.
 Or, Total quality management is a management philosophy of continuous quality
improvement, maximizing customer satisfaction at the lowest possible cost, participative
management through employee empowerment and quality culture focus on monitoring
process variations by using necessary tools and technique for gaining competitive
advantage.
 Participative Management paves the way for the employees to actively and directly
take part in decision making.
 Cost of quality: Cost of quality in the context of TQM refers to the total cost in
achieving quality of product or service.
 Zero defects: The concept of zero defect was coined by Philip Crosby who viewed that
the ultimate goal of a TQM system should be reduction of variation in the production of
products and services to absolute zero.
 Just-in-time (JIT): JIT is producing only what is needed, when it is needed, and in the
quality that is needed.
 Benchmarking: Benchmarking is a process of comparing operations and performance
with other successful organizations or high performers.
 Reengineering: Reengineering is a systematic and complete analysis of work processes
and the design of better ones for one’s own organization.
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 Kaizen Approach: The Japanese word Kaizen means continuous improvement activities
and is often considered in the limited context of shop-floor improvement activities or on-
site issues.
 Walter Shewhart contributes PDCA cycle: Plan, Do, Check and Act.
 Deming's 14 points of TQM
1) Constancy of purpose 8) Drive out fear
2) New philosophy 9) Break down barriers
3) Cease dependence on mass inspection 10) Eliminate exhortations
4) End lower tenders contracts 11) Eliminate arbitrary numerical target
5) Improve every process 12) Permit price of workmanship
6) Institute training 13) Encourage education
7) Institute leadership of people 14) Top management commitment & action

 Juran Trilogy: Quality planning, quality control, quality improvement.

 Pareto principle: The Pareto principle (also known as the 80/20 rule, the law of the vital
few, or the principle of factor sparsity) states that, for many events, roughly 80% of the
effects come from 20% of the causes.
 Top management commitment: Direct participation by the highest level executives in a
specific and critically important aspect or program of an organization. Actually top
management commitment is a commitment of all types of organization resources,
including the executives' own time, to the improvement of business processes.
 Organizational leadership: Organizational leadership is a dual focused management
approach that works towards what is best for individuals and what is best for a group as a
whole simultaneously. It is also an attitude and a work ethic that empowers an individual
in any role to lead from the top, middle, or bottom of an organization.
 Autocratic leadership: Autocratic leadership, also known as authoritarian leadership, is
a leadership style characterized by individual control over all decisions and little input
from group members. Autocratic leaders typically make choices based on their ideas and
judgments and rarely accept advice from followers
 Bureaucratic leadership: Bureaucratic leadership is one of the oldest forms of
leadership. It dates back to the first world rulers, including Genghis Khan and Julius
Caesar. In order to govern huge territories, these leaders were forced to create rules,
regulations and hierarchies that were easily replicable.
 Democratic leadership: Democratic leadership, also known as participative leadership,
is a type of leadership style in which members of the group take a more participative role
in the decision-making process. Everyone is given the opportunity to participate, ideas
are exchanged freely, and discussion is encouraged.
 Supportive leadership: Supportive leadership is one of the leadership styles found in
path-goal theory. A supportive leader attempts to reduce employee stress and frustration
in the workplace. It treats group member as equal.
 Collegial leader: Collegial leader shares power and authority equally among a group of
colleagues. A collegial style is characterized by an atmosphere where you and your
personnel all work together as a team to solve problems.

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  Laissez-faire leadership: Laissez-faire leadership, also known as delegative leadership,
is a type of leadership style in which leaders are hands-off and allow group members to
make the decisions. Researchers have found that this is generally the leadership style that
leads to the lowest productivity among group members.
 Visionary leader: A visionary may dream wonderful visions of the future and articulate
them with great inspiration. A visionary leader is effective in manifesting his or her
vision because s/he creates specific, achievable goals, initiates action and enlists the
participation of others.
 Charismatic leadership: Charismatic leadership is the process of encouraging certain
behaviors in others via force of personality, persuasion and eloquent communication.
Charismatic leaders inspire their followers to do things or to do things better; this is done
by conjuring up enthusiasm in others for a stated vision or goal.
 Transactional leadership: Transactional leadership, also known as managerial
leadership, focuses on supervision, organization, and performance; transactional
leadership is a style of leadership in which leaders promote compliance by followers
through both rewards and punishments.
 Transformational leadership: Transformational leadership is a style of leadership
where a leader works with subordinates to identify needed change, creating a vision to
guide the change through inspiration, and executing the change in tandem with
committed members of a group.

Research Methodology
 Research: Research can be defined as something that people undertake in order to find
out things in a systematic way, thereby increasing their knowledge.
 Business research: Business research is a field of practical study in which a company
obtains data and analyzes it in order to better manage the company.
 Features of research are controlled, rigorous, systematic, purposive, valid and verifiable.
 Pure research: Pure research, which is also known as basic or fundamental research, is
conducted without a specific goal in mind, whereas applied research is carried out with
the goal of solving a problem or answering a specific question.
 Applied research: Applied research is used to solve a specific, practical problem of an
individual or group. This type of research is used in a wide number of fields, including
medicine, education, agriculture and technology.
 Problem Oriented Research: Problem Oriented Research is done by industry apex body
for sorting out problems faced by all the companies.
 Problem Solving: Problem solving is the type of research that is done by an individual
company for the problem faced by it.
 Descriptive research: Descriptive research is a study designed to depict the participants
in an accurate way. The three main ways to collect this information are: Observational,
defined as a method of viewing and recording the participants.
 Correlational Research: A correlation is simply defined as a relationship between two
variables.

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 Explanatory research: Explanatory research is defined as an attempt to connect ideas to
understand cause and effect, meaning researchers want to explain what is going on.
 Exploratory Research: Exploratory research is research conducted for a problem that
has not been clearly defined.
 Quantitative research: Quantitative research is a formal, objective, systematic process in
which numerical data are used to obtain information about the world.
 Qualitative Research: Qualitative research is primarily exploratory research. It is used to
gain an understanding of underlying reasons, opinions, and motivations.
 Data: Data are the raw facts, record measures of certain phenomena which are necessary
to provide.
 Information: Information is the facts in a form suitable for managers to base decisions
on.
 Survey: A research technique in which information (primary data) is gathered from a
sample of people to make generalizations.
 Problem definition: The indication of a specific business decision area that will be
clarified by answering some research questions.
 Types of variables: Categorical, Continuous, Dependent, And Independent.
 Survey: A research technique in which information (primary data) is gathered from a
sample of people to make generalizations.
 Primary Data: Data gathered and assembled specifically for the project at hand.
 Sample: Subset of a larger population.
 Sampling: Statistical method of obtaining representative data or observations from a
group (lot, batch, population, or universe). Actually sampling refers to the rules and
procedure by which some elements of the population are included in the sample.
 Target Population: The group about which the researcher wisher to draw conclusions
and make generalizations.
 Random Sampling: Selecting a sample from a larger target population where each
respondent is chosen entirely by chance and each member of the population has a known,
but possibly non-equal, chance of being included in the sample.
 Respondent: The person who provides information (primary data) by answering a
questionnaire or an interviewer's questions.
 Questionnaire: A list of structured questions designed by the researchers for the purpose
of codifying and analyzing the respondents' answers scientifically.
 Errors in surveys: i) Random sampling error
ii) Systematic error (Respondent error & Administrative error)
 Measurement is the assignment of a number to a characteristic of an object or event,
which can be compared with other objects or events.
 Scaling: A scale is basically a continuous spectrum or series of categories and has been
defined as any series of items that are arranged progressively according to value or
magnitude, into which an item can be placed according to its quantification.
 Census: A census is the procedure of systematically acquiring and recording information
about the members of a given population. Its investigation of all individual elements that
make up a population.

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 Report: Report is a detailed description of what has been done and how it has been done
with respect to a particular area or topic.
 Data editing is defined as the process involving the review and adjustment of collected
survey data.
 Coding Data is an analytical process in which data, in both quantitative form (such as
questionnaires results) or qualitative (such as interview transcripts) is categorized to
facilitate analysis. Coding means the transformation of data into a form understandable by
computer software.

Supply chain management

 Supply chain management (SCM), the management of the flow of goods and services,
involves the movement and storage of raw materials, of work-in-process inventory, and of
finished goods from point of origin to point of consumption.
 Logistics is the general management of how resources are acquired, stored and
transported to their final destination.
 Transportation: The process of shipping or moving an item from point A to point B.
Any device used to move an item from one location to another.
 Warehousing: A warehouse is a commercial building for storage of goods. Warehouses
are used by manufacturers, importers, exporters, wholesalers, transport businesses,
customs, etc.
 Value Added Service: Value Added Service are the customized services of the
transportation and ware housing services.
 Third-party logistics service provider: Third-party logistics in logistics and supply
chain management is a company's use of third party businesses to outsource elements of
the company's distribution and fulfillment services.
 Fourth-party logistics service provider: Arrangement in which a firm contracts out
(outsources) its logistical operations to two or more specialist firms (the third party
logistics) and hires another specialist firm (the fourth party) to coordinate the activities of
the third parties.
 Cash to cash conversion: The time required to convert raw material or inventory
purchases into sales revenue is referred to as cash to cash conversion.
 Dwell time minimization: Reduction of the time that an asset sits idle to the time
required to satisfy is designated supply chain mission.
 Cash Spin: Aims to reduce the overall assets.
 The "6F's" of going digital:
- Fact based mgt. - Fast return on investment
- Flexible - Fungible
- Focus on cash - Frugal
 Echelon inventory : Echelon inventory is defined as the inventory between a stage in the
supply chain and the final customer.
 Material requirements planning (MRP) is a production planning, scheduling, and
inventory control system used to manage manufacturing processes. Most MRP systems
are software-based, but it is possible to conduct MRP by hand as well.
 Supply chain information system: It can be defined as information systems that
automate the flow of information between a firm and its suppliers to optimize the
planning, sourcing, manufacturing and delivery of products and services.

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 Economic order quantity (EOQ): Economic order quantity is the order quantity of
inventory that minimizes the total cost of inventory management.
 Inventory control or stock control : Inventory control can be broadly defined as "the
activity of checking a shop’s stock". Actually coordination and supervision of the supply,
storage, distribution, and recording of materials to maintain quantities adequate for
current needs without excessive oversupply or loss.
 Postponement : Postponement is a business strategy which maximizes possible benefit
and minimizes risk by delaying further investment into a product or service until the last
possible moment.

International Business
 Globalization: Globalization is the process of growing interdependence among countries.
 Collectivism is the moral stance, political philosophy, ideology, or social outlook that
emphasizes the group and its interests. Collectivism is the opposite of individualism.
 Individualism is the moral stance, political philosophy, ideology, or social outlook that
emphasizes the moral worth of the individual.
 Socialism is a range of economic and social systems characterized by social ownership
and democratic control of the means of production; as well as the political ideologies,
theories, and movements that aim to establish them.
 Communism is the social, political, and economic ideology and movement whose
ultimate goal is the establishment of the communist society.
 Totalitarianism is a political system in which the state recognizes no limits to its
authority and strives to regulate every aspect of public and private life wherever feasible,
without any respect for human rights.
 Economic system is a system of production, resource allocation, and distribution of
goods and services within a society or a given geographic area.
 Market economy is an economic system where decisions regarding investment,
production, and distribution are based on the interplay of supply and demand.
 Command economy is a system where the government, rather than the free market,
determines what goods should be produced, how much should be produced and the price
at which the goods are offered for sale.
 Mixed economic system is an economic system that features characteristics of both
capitalism and socialism.
 Culture refers to the cumulative deposit of knowledge, experience, beliefs, values,
attitudes, meanings, hierarchies, religion, notions of time, roles, spatial relations, concepts
of the universe, and material objects and possessions acquired by a group of people in the
course of generations through individual and group striving.
 Ethics or moral philosophy is a branch of philosophy that involves systematizing,
defending, and recommending concepts of right and wrong conduct.
 Business ethics is the study of proper business policies and practices regarding
potentially controversial issues, such as corporate governance, insider trading, bribery,
discrimination, corporate social responsibility and fiduciary responsibilities.
 Trade is a basic economic concept involving the buying and selling of goods and
services, with compensation paid by a buyer to a seller, or the exchange of goods or
services between parties.
 A network that allows trade is called a market.
 International trade is the exchange of goods and services between countries.
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 Product Life Cycle: The product life cycle describes the period of time over which an
item is developed, brought to market and eventually removed from the market.
 International monetary systems are sets of internationally agreed rules, conventions and
supporting institutions, that facilitate international trade, cross border investment and
generally the reallocation of capital between nation states.
 Balance of Payment Systems: A statement that summarizes an economy’s transactions
with the rest of the world for a specified time period.
 The balance of payments, also known as balance of international payments,
encompasses all transactions between a country’s residents and its nonresidents involving
goods, services and income; financial claims on and liabilities to the rest of the world; and
transfers such as gifts.
 International business comprises all commercial transactions (private and governmental,
sales, investments, logistics, and transportation) that take place between two or more
regions, countries and nations beyond their political boundaries.
 Global business is defined as corporate or economic activity that takes place across
different countries.
 Domestic business is a company that operates only within the borders of a single
country.
 Foreign exchange is a commodity that consists of currencies issued by countries other
than one's own.
 Spot market: Foreign exchange transaction that are consummated immediately.
 Forward market: Foreign exchange transactions that are to occur sometimes in the
future.
 Currency option is a contract that grants the buyer the right, but not the obligation, to
buy or sell a specified currency at a specified exchange rate on or before a specified date.
 Call option is an agreement that gives an investor the right, but not the obligation, to buy
a stock, bond, commodity or other instrument at a specified price within a specific time
period.
 Put option is an option contract giving the owner the right, but not the obligation, to sell
a specified amount of an underlying security at a specified price within a specified time.
 Arbitrage is the simultaneous purchase and sale of an asset to profit from a difference in
the price.
 Free trade is the economic policy of not discriminating against imports from and exports
to foreign jurisdictions.
 Fair trade is a social movement whose stated goal is to help producers in developing
countries achieve better trading conditions and to promote sustainability.
 Tariff: A tax imposed on imported goods and services. Tariffs are used to restrict trade,
as they increase the price of imported goods and services, making them more expensive
to consumers.
 Quota is a government-imposed trade restriction that limits the number, or monetary
value, of goods that can be imported or exported during a particular time period.
 Foreign direct investment (FDI) is an investment made by a company or individual in
one country in business interests in another country, in the form of either establishing
business operations or acquiring business assets in the other country, such as ownership
or controlling interest in a foreign company.

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 E-Commerce
 E-commerce is a transaction of buying or selling online.
 M-Commerce, also referred as Mobile commerce, is the use of wireless handheld devices
such as cellular phones and laptops to conduct commercial transactions online.
 E-business (electronic business) is the conduct of business processes on the Internet.
 Digital divide is an economic and social inequality with regard to access to, use of, or
impact of information and communication technologies (ICT).
 Digital divide gap refers how many people use and how many does not use.
 Digital marketing is an umbrella term for the marketing of products or services using
digital technologies, mainly on the Internet, but also including mobile phones, display
advertising, and any other digital medium.
 Digital goods or e-goods are intangible goods that exist in digital form.
 E-Banking: A method of banking in which the customer conducts transactions
electronically via the Internet.
 Denial-of-service (DoS) attack is a security event that occurs when an attacker takes
action that prevents legitimate users from accessing targeted computer systems, devices
or other network resources.
 Distributed denial-of-service (DDoS) attack is one in which a multitude of
compromised systems attack a single target, thereby causing denial of service for users of
the targeted system.
 Encryption is the process of encoding messages or information in such a way that only
authorized parties can access it.
 Digital envelope is a secure electronic data container that is used to protect a message
through encryption and data authentication. A digital envelope allows users to encrypt
data with the speed of secret key encryption and the convenience and security of public
key encryption.
 Digital Wallet: A system that securely stores users' payment information and passwords
for numerous payment methods and websites.
 Digital cash (eCash) is a system of purchasing cash credits in relatively small amounts,
storing the credits in your computer, and then spending them when making electronic
purchases over the Internet.

Cost & Managerial Accounting

 Accounting is the systematic and comprehensive recording of financial transactions
pertaining to a business, and it also refers to the process of summarizing, analyzing and
reporting these transactions to oversight agencies and tax collection entities.
 Financial accounting is the process of recording, summarizing and reporting the myriad
of transactions resulting from business operations over a period of time.
 Managerial accounting is the process of identifying, measuring, analyzing, interpreting
and communicating information for the pursuit of an organization's goals.

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 Cost accounting is a type of accounting process that aims to capture a company's costs of
production by assessing the input costs of each step of production as well as fixed costs
such as depreciation of capital equipment.
 Cost: In accounting, cost is defined as the cash amount (or the cash equivalent) given up
for an asset.
 Expense consists of the economic costs a business incurs through its operations to earn
revenue.
 Variable cost is a corporate expense that varies with production output.
 Fixed cost is a cost that does not change with an increase or decrease in the amount of
goods or services produced or sold.
 Committed or Discretionary cost is a cost that is not essential for the operation of a
home or a business. For example, a business may allow employees to charge certain meal
and entertainment costs to the company to promote goodwill with employees.
 Opportunity cost refers to a benefit that a person could have received, but gave up, to
take another course of action.
 Sunk cost is a cost that has already been incurred and thus cannot be recovered.
 Relevant cost is a managerial accounting term that describes past or sunk costs that are
not used to make current business decisions.
 Imputed cost or Notional Cost is a cost that is incurred by virtue of using an asset
instead of investing it or undertaking an alternative course of action.
 Out-of-pocket cost refers to costs that individuals pay out of their own cash reserves.
 Shut down cost is the cost which occurs of closing the business.
 Activity-based costing (ABC) is an accounting method that identifies the activities that a
firm performs and then assigns indirect costs to products.
 Activity cost pool is a set of costs which are incurred when certain operations are
performed within the organization.
 Activity cost driver is a factor that influences or contributes to the expense of certain
business operations.
 Contribution margin is a cost accounting concept that allows a company to determine
the profitability of individual products.
 Break-even analysis entails the calculation and examination of the margin of safety for
an entity based on the revenues collected and associated costs.
 Margin of safety is a principle of investing in which an investor only purchases securities
when the market price is significantly below its intrinsic value.
 budgeting is an estimation of the revenue and expenses over a specified future period of
time and is compiled and re-evaluated on a periodic basis.
 Budgetary control refers to how well managers utilize budgets to monitor and control
costs and operations in a given accounting period.

Industrial Relations
 Industrial relations is a multidisciplinary field that studies the employment relationship.
Industrial relations is increasingly being called employment relations or employee
relations because of the importance of non-industrial employment relationships; this
move is sometimes seen as further broadening of the human resource management trend.
 Conflict: Friction or opposition resulting from actual or perceived differences or
incompatibilities.

Page # 28
 Theory is a contemplative and rational type of abstract or generalizing thinking, or the
results of such thinking.
 Model: Graphical, mathematical (symbolic), physical, or verbal representation or
simplified version of a concept, phenomenon, relationship, structure, system, or an aspect
of the real world.
 Trade Union: An organization whose membership consists of workers and union leaders,
united to protect and promote their common interests.
 Collective bargaining is the process of negotiating the terms of employment between an
employer and a group of workers.
 Collective bargaining Agent: Union recognized as the exclusive representative of all or
a certain section of workers of a firm.
 Grievance: A grievance is any dissatisfaction or feeling of injustice having connection
with one’s employment situation which is brought to the attention of management.
 Industrial Conflict or dispute is a conflict between an employer and its employees.
Such disputes can occur for any reason and may result in strikes, picketing and other
forms of protest.

Page # 29
 3 Year
rd

Subject-wise Short Note-

Page # 30
 Operations Management (OM)
 What is OM? : Operations Management is the management of the conversion process, which
converts land, labor, capital and management of inputs into desired output of goods and services.
Actually Operations Management is the study of decision making in the operations function.
 Steps/Stages/Activities of OM:
Selecting→Designing→Operating→Controlling→Updating.

 Main Functions of OM: Desing & Developing Capital Equipment Site Selection Financial
Layout Work design & Measurement Purchasing/Materials Mgt. Inventory Mgt. Quality
Control.
 Two types of Productivity Measures : i) Direct productivity measures ii) Indirect productivity
measures
 Product Design: Product Design is the first step immediately after accepting the concept of a
product. Product design has direct bearing on plant layout and in-process materials flow.
 Service Design: Service design is the activity of planning and organizing people, infrastructure,
communication and material components of a service in order to improve its quality and the
interaction between service provider and customers.
 Steps/Stages of New Product Development: New product strategy development → Ideal
generation → Screening & evaluation → Business analysis → development → Testing→
Commercialization
 What are the approaches of make or buy decision: i) Simple cost analysis ii) Economic
analysis iii) Break even analysis
 Break Even Analysis: The point at which is the sales revenue & the total cost are equal.
 Total Cost = Fixed cost + Variable cost
 Process Management: Process Management is the selection of the inputs, operations, work
flows, and methods that transform inputs into outputs.
 What are the Major process decisions?: Process choice →Vertical integration →Resource
flexibility →Customer involvement →Capital intensity.
 What is Process choice? : Process choice is a process decision that determines whether resources
are organized around products or processes.
 Five Process choice Type : Project→Job→Batch→Line→Continuous process
 Job enlargement: Job enlargement is the horizontal expansion of a job, increasing the range of
tasks at the same level.
 Job Enrichment: Job Enrichment is a vertical expansion of job duties; workers have greater
control and responsibility for an entire process, not just a specific skill or operation.
 Job Rotation: Job rotation is a system whereby workers exchange job periodically, thus getting
more diverse experience in task assignment.
 Process Reengineering: Rethinking and radical redesign of processes to improve performance.
 Inventory: Inventory is the physical stock of goods, which is kept in reserve for a certain period
of time for smooth and efficiency running of future affairs of an organization.
 Inventory Control: The technique of maintaining stock keeping items at desired levels, whether
they be raw materials, work in process, or finished products.
 Planning: Planning is the future course of action.
 Scheduling: Scheduling is the allocation of resources applying the limiting factors of time and
cost to perform a collection of tasks.
 Forecasting: Forecasting is an estimate of an event which will happen in future.

Page # 31
 Human Resource Management
 Human Resource : Human Resource are the labour force, driving force.
 Management : Management is the process of planning, organizing, motivating and
controlling that help to make decision to achieve the goal effectively and efficiency.
 Efficiency: Minimum cost maximum output or return or doing the thing with minimum
cost but maximum return.
 Effectively: Doing the thing properly or timely.
 Human Resource Management (HRM): HRM refers to the application of management
principles to management of people in an organization.
 Basic Functions of HRM : i) Acquisition ii) Training & Development iii) Motivation iv)
Maintenance or Controlling.
 Job: Job is an activity, often regular and often performed in exchange for payment.
 Job Analysis: Job analysis is a process to identify and determine in detail the particular
job duties and requirements and the relative importance of these duties for a given job.
 Job Description: Job description is a list that a person might use for general tasks, duties
or functions and responsibilities of a position.
 Job Specification: Job specification is a statement of the essential components of a job
class including minimum qualifications and requirements functions of the job.
 Job Evaluation: Job evaluation is a systematic way of determining fixed up minimum
worth or payment of the job.
 Employee Turnover: Leaving one organization to another organization within certain
period.
 Job design: Job design is the arrangement and rearrangement of duties and
responsibilities for a specific position.
 Job rotation: Job rotation refers to moving employees from one job to another job.
 Job enlargement: Job enlargement refers to the horizontal expansion of the number of
different tasks performed by an employee in a single job.
 Job enrichment: Job Enrichment is a vertical expansion of job duties; workers have
greater control and responsibility
 Job engineering:
 Recruitment: Recruitment refers to the process of receipt of applications from job
seekers.
 Selection: Selection is the process of picking individuals with requisite qualifications and
competence to fill jobs in the organization.
 Approaches of Staffing: Ethnocentric→Polycentric→Regiocentric→Geocentric
 Ethnocentric: Ethnocentric is the approach which all the key position being filled by the
Parent Country Nation (PCN).
 Polycentric: Polycentric is the approach which all the key position being filled by the
Parent Country Nation (PCN) and Host Country Nation (HCN).
 Regiocentric: Regiocentric is the approach which all the key position being filled by
operation country, such as Third Country Nation (TCN).
 Geocentric: Geocentric is the approach which all the key position being filled by most
qualified candidate but no matter which country candidate live.
 Human Resource Planning (HRP): HRP is the process of planning about the human
resource.

Page # 32
 Human Resource Information System (HRIS): A HRIS is a systematic procedure for
collecting, storing, maintaining, retrieving and validating data needed by an organization
about its human resources.
 Socialization: Socialization is a continuous process of maintain organizational rules.
Specially maintain acquitted newly appointed employee.
 Performance Appraisal: Performance Appraisal is a formal process to measure someone
performance how he or she is performing or doing.
 Career: Career is occupational position for the lifetime.
 Career Planning: Career Planning is the process of deciding what you want to achieve in
short time and long time future comparing you with the current position what you are at
the moment.
 Career Strategy: Career Strategy is the process of location plan to achieve short term
and long term career objectives.
 Management Development Program: It is scientific training process for executive to
enrich their knowledge and skills so as to make them competent to manage their
organization effective.
 Succession Planning: Succession planning is ensuring that organization has the right
kinds of people.
 Succession Management: Succession Management is a process ensuring that fulls of
skill employee are trainee and available to meet the strategy of organizational objective.
 Placement: Placement is the process of allocation of human resources or assign or
reassignment of an employee to a new or different job position.
 Promotion: Promotion is the advantage of an employee to a better job, better interns of
greater responsibilities more prestige or better skills specially increased rate of salary.
 Termination: Termination is firing from the job.
 Orientation: Orientation is designed to provide new hires with the information they need
to function comfortably and efficiency in the organization.
 Training & Development: T&D refer to the imparting of specific skills, abilities and
knowledge to an employee.
 Training provided to the new employee and Developing provided to the existing
employee.
 Mission: Mission is a short written statement that is making to acquire the target short
time (1 to 5 years). A mission sets out the purpose of an organization.
 Vision: A vision enables an organization to move forward with clarity. It links the
business' specific objectives and targets with the core values that govern how the business
will operate in order to meet those targets.
 Goal: An observable and measurable end result having one or more objectives to be
achieved within a more or less fixed timeframe. Goals are part of the planning process.
They describe what a company expects to accomplish over a specific period of time.
 Objectives: A specific result that a person or system aims to achieve within a time frame
and with available resources. In general, objectives are more specific and easier to
measure than goals. Objectives are basic tools that underlie all planning and strategic
activities.
 Strategy : A method or plan chosen to bring about a desired future, such as achievement
of a goal or solution to a problem. The art and science of planning and marshalling
resources for their most efficient and effective use.

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 Structure: Structure is construction or framework of identifiable elements (components,
entities, factors, members, parts, steps etc.) which gives form and stability, and resists
stresses and strains.
 Policy: According to Management- The set of basic principles and associated guidelines,
formulated and enforced by the governing body of an organization, to direct and limit its
actions in pursuit of long-term goals.
 Procedure: A fixed, step-by-step sequence of activities or course of action (with definite
start and end points) that must be followed in the same order to correctly perform a task.
Repetitive procedures are called routines.
 Project: Planned set of interrelated tasks to be executed over a fixed period and within
certain cost and other limitations.
 Program: A plan of action aimed at accomplishing a clear business objective, with
details on what work is to be done, by whom, when, and what means or resources will be
used.
 Model: Model is a representation of a system that allows for investigation of the
properties of the system and in some cases, prediction of future outcomes. Models are
often used in quantities analysis and technical analysis and sometimes also used in
fundamental analysis.
 Framework: A framework is a real or conceptual structure intended to serve as a support
or guide for the building of something that expands the structure into something useful.
 Process: A process is a series of steps and decisions involved in the way work is
completed. We may not realize it, but processes are everywhere and in every aspect of
our leisure and work.
 Rules: Authoritative statement of what to do or not to do in a specific situation, issued by
an appropriate person or body. It clarifies, demarcates, or interprets a law or policy.
 Principles: Principles are fundamental, norms, rules or values that represent what is
desirable and positive for a person, group, organization or community and help in the
determine rightfulness or wrongfulness of its action.
 Ethics: Ethics is moral principles that govern a person behavior or conducing activity.
 Values: Important and lasting belief or ideal shared by the members of culture about what
is good or bad and desirable or undesirable.
 Norms: Norms is the standard of proper or acceptable behavior .the norm an average
level of development or achievement.
 Believe: To accept of regard something as true or to accept the truth what is said by
someone.
 Task: task is an activity that needs to be accomplished within a defined period of time or
by a deadline to work towards work-related goals.
 Element: Fundamental constituent part or principle. One of the unique and basic types of
matter which alone or in combination make up all natural and synthetic substances.
 Duty: Duty means ethical, legal or moral accountability owed always or for a certain
period, especially to someone who has a corresponding right to demand satisfaction of an
obligation.
 Responsibility: A duty or obligation to satisfactorily perform or complete a task
(assigned by someone, or created by one's own promise or circumstances) that one must
fulfill, and which has a consequent penalty for failure.
 Job: A group of homogeneous tasks related by similarity of functions. When performed
by an employee in an exchange for pay, a job consists of duties, responsibilities, and tasks

Page # 34
 (performance elements) that are defined and specific, and can be accomplished,
quantified, measured, and rated.
 Job Families: Job families are grouping of job related by common vacations or
profession.
 Position: Position is how a person or things is placed or opinion or where a person or
thing is located in relation to others.
 Occupations: Actual physical possession or use of dwelling or piece of land occupation
exists only where it is recognizable.
 Career: A career is an individual journey through learning work and others aspect of life
or the progress and action taken by a person throughout lifetime.
 Equal Employment Opportunity (EEO): it is an important concept for employers'
employee and job applicants. EEO is an employment practice where employers do not
engage in employment activities that are prohibited by law.
 Equality: Equality is ensuring individual or groups of individual are treated fairly and
equally and no less favorably, specific to their needs, including areas of race, gender,
disability religion or belief, sexual orientation and age.
 Equity: Fairness and impartiality towards all concerned based on the principles of
evenhanded dealing .Equity is essential for ensuring that extent and costs of funds goods
and services are fairly divided among their recipients.
 Window envelope: An envelope with a transparent panel, through which the address on
the enclosure can be seen.
 Blind box advertisement: blind box advertisement is a type of advertisement that
individual who placed the ad and typically only includes a phone number or a post office
box number.
 Type A behavior : type A describes individuals as ambitious , rigidly organized , highly
status , conscious , sensitive , impatient ,take on more than they can handle , want other
people to get to the point ,anxious , proactive and concerned with time management .
 Type B behavior: type B describes contrast to those of type A. They work steadily and
enjoy achievement.
 Glass ceiling: glass ceiling is an invisible but real barrier through which the next stage or
level of achievement can be seen, but cannot be reached by a section of qualified and
deserving employees.
 Golden Parachute: It is an agreement between a company and an employee specifying
that they employee will receive certain significant benefits if employment is terminated.
 Annual Confidential Report (ACR): A secret document which must not be shown to
other people.
 Flexi time: Non-traditional work scheduling practices which allows full time employee to
choose their starting and quitting time within certain limits. Flexi time periods usually
precede or follow a core time during which all employees must be present.

Page # 35
 Marketing Management
 Marketing: Marketing is about identifying and meeting human and social needs.
 Marketing Management: Marketing Management is the art and science of choosing
target markets and getting, keeping and growing customers through creating, delivering
and communicating superior customer value.
 Marketer: Someone who seeks a response from another party, called the prospect.
 What is marketed?: Goods, Services, Events, Experience, Persons, Place, Properties,
Organization, Information, Ideas.
 Marketplace: Marketplace is physical, such as a store you shop in.
 Marketspace: Marketspace is digital, as when you shop on the internet.
 Metamarket: Metamarket is to describe a cluster of complementary products and
services closely related in the minds of consumers, but spread across a diverse set of
industries.
 Needs: Basic human requirements.
 Wants: Directed at specific objects.
 Demand: Backed by ability to pay.
 Segmentation : Divided of the market
 Target market: Choosing the best Segment.
 Positiong: Feedback from the customer market.
 Offering: Value proposition made tangible.
 Brand: Offering from a known source.
 Value: Tangible benefits, intangible benefits & cost.
 Satisfaction: Product’s perceived performance.
 Marketing channel: Communicating, distribution and service channel.
 Marketing Philosophy/Ideas/Realistic: Production, Product, Selling & Marketing
Concepts.
 Production Concept: Oldest concept, products are available, inexpensive and mass
distribution.
 Product Concept: Products are most qualify performance and innovative features.
 Selling Concept: Must undertake and aggressive selling and promotion effort
(Proactive).
 Marketing Concept: Not to find right customers for your products, but to find right
products for your customers (Reactive).
 Holistic marketing Concept: It acknowledges that everything matters in marketing.
 Value chain: Value chain is a tool for identifying way to create more customer value.
 Marketing Plan: Marketing plan is the central instrument for directing the marketing
efforts.
 Levels of a Marketing Plan: i) Strategic ii) Tactical.
 Porter’s Generic Strategies: Overall cost leadership→Differentiation→Focus
 Harvard’s Michael Porter Nine strategically activities: i) Primary(5) ii) Support(4)
 Fad: Unpredictable, short lived, and without social, economic & political significance.
 Trend: More predictable and durable than a fad.
 Megatrend: Large social, economic & political change in longer.
 Marketing Research: Is the systematic design, collection, analysis and reporting of data
finding relevant to a specific marketing situation facing the company.
 Marketing Research firms: Syndicated service→Custom→Specialty line.
Page # 36
 Customer Perceived Value (CPV): Is the difference between the prospective customer’s
evaluation of all the benefits and all the costs of an offering and the perceived
alternatives.
 Loyalty: A commitment to re-buy or re-patronize a preferred products or services.
 Satisfaction: A person’s feelings of pleasure or disappointment that result from
comparing a product’s perceived performance to expectations.
 Profitable Customer: Profitable customer is one that over time yields a revenue stream
that exceeds by acceptable amount the company’s costs stream for attracting, selling and
servicing that customer.
 Customer relationship Management: Is the process of carefully managing detailed
information about individual customer and all customer “touch points” to maximize
customer loyalty.
 Touch point: any occasion on which a customer encounters the brand and product.
 Customer Funnel: Identifies the percentage of the potential target market at each stage
in the decision process, from merely aware to highly loyal.
 Consumer Behavior: Consumer behavior is the study of how individuals groups and
organization select, buy, use and dispose of goods, services, ideas or experiences to
satisfy their needs and wants.
 Culture: Culture is the fundamental determinant of a person’s want and behaviors
acquired through socialization processes with family and other key institutions.
 Market Segment: Consists of a group of customers who share a similar set of needs and
wants.
 Customerization: It combines operationally driven mass customization with customized
marketing in a way that empowers consumers to design the product and service offering
of their choice.
 Activity based cost (ABC): Accounting procedures that can quantify the true
profitability of different activities by identifying their actual costs.
 Brand: Brand is a name, term, sign, symbol or design or combination of them, which is
identified the products and services.
 Business Database: Complete information about business customers’ past purchase, past
volumes, prices and profits.
 Customer Database: Collecting customer comprehensive information for the purpose of
marketing.
 Club membership program: The membership program open to everyone for buying
product limited price.
 Data mining: the extracting of useful information about individuals, trend and segments
form the mass of data.
 Data warehouse: A collection of current data captured, organized and stored in a
company contact center.
 E-business: The use of electronic means and platforms to conduct a company’s business.
 E-commerce: A company or site offers to transact or facilitate the selling of products and
services online.

Page # 37
 Small & Medium Enterprise Management
 Small Business: According to Small business Act 1953, A small business is one that is
independently owned and operated and is not dominant in its field of operation.
 Small and Medium Enterprise:
(i) A business which has not more than 100 employees and capital not more than tk. 10
crore is called Small business.

(ii) A business which has more than 100 & less than 250 employees and capital is 1 crore
to 30 crore is called Medium business.

 Franchising: A marketing system whereby an individual owner conducts business

according to the terms and conditions set by the franchiser.
 Franchise: An agreement.
 Franchiser: Owns the franchise name.
 Franchisee: An independent business person.
 Micro Industry Enterprise (Service & Trading: Employeebelow 10 Capital5 lac)
(Manufacturing: Employee10-24 Capital5 lac–50 lac)

 Small Industry Enterprise (Service & Trading:Employee10-25Capital5 lac–1 cr)

(Manufacturing: Employee25-99 Capital50 lac–10 cr.)

 Medium Industry Enterprise:(Service&Trading:Employee50-100Cptl1cr.–15cr)

(Manufacturing: Employee100-250 Capital10cr.–30cr.)

 Venture Capital: It is private funding used to support risky new business and speculative
ventures usually with high growth potential.
 Business Angels: A business angels is an affluent individual who provides capital for a
business start up.
 SME Foundation: Established in 12-11-2006 under Ministry of Commerce. Playing its
role in helping the SME entrepreneurs.
 SME Cell: Established in 3003 under Ministry of Industries (MoI). Responsible for
developing new policies and strategies for promotion, expansion and sustainable
development.
 Tax Holiday: A temporary period, during which time the govt. removes certain taxes on
certain items, in order to encourage the consumption or purchase of these items.
Dhaka & Chittagong Division :. 2 year-100%, 2 year -50%, 1 year-25% [Tax holiday facility)

Others Division : 3 year-100%, 3 year -50%, 1 year-25% [Tax holiday facility)

 Business Plan: A document that sets out the basic idea underlying a business and related
startup considerations.
 Middle Missing: Small & Medium Enterprise always stay in critical position, that’s why
they cannot get capital loan from large financial organization as well as micro finance
institution, at the point of view SME called the Middle Missing.

Page # 38
 Bank Management
 Bank: Bank is an institution engaged in financial business that receives money to
preserve and pay back on demand. It is such an institution that preserves the unused or
surplus money of the people and allow loan in different way.
 Commercial Bank: Generally the bank which receipts money from the people and grant
loan in various field of business for the purpose of earning profit is called commercial
bank.
 Central Bank: Central Bank is the main governor control bank in a country. It maintains
and controls the financial affairs of a country.
 Banking: Any work or function of bank namely collections of deposit, lending loan,
different service providing, money transfer, bank order etc. are known as banking.
 Branch Banking: Branch Banking refers to a system of banking where a large bank
having a head office operates through a network of branches throughout the country and
aboard.
 Unit Banking: Banking operation under unit banking system are conducted by a single
office or a unit of the bank.
 USA is the home of unit banking.
 Chain Banking: Chain banking a common phenomenon under unit banking system is in
fact an offshoot of unit banking and relates to the ownership pattern of the banks.
 Holding Company Banking: Holding company banking also called group banking
actually refers to two or more unit banks which are held as subsidiaries by a holding
company.
 Deposit Banking: Deposit banking is actually deposit taking from the members of the
public.
 Investment Banking: Investment banks are the specialized institutions engaged in
providing assistant to the commercial organizations and companies in raising their long
term capital through the sale of shares, stocks, and bonds in the open market.
 Mixed Banking: Commercial banking and Investment banking combined together is
generally referred to as Mixed Banking.
 Clearing House: Clearing House is an organization of the banks which settles inter-bank
liabilities due to transfer of deposits by the customers from one bank to another.
 Narrow Money: Currency outside banks plus Demand deposit.
 Broad Money: Narrow money plus Time deposit.
 Margin: Margin is the difference between the value of the securities and amount upto
which a borrower is allowed to draw.
 Charging Securities: Charging Securities means creation of charge over the securities
against which loans and advances are granted.
 Charge: Charge means a right to make the security available for sale in order to adjust
the loan.
 Two types of charge: i) Fixed charge, ii) Floating charge.
 Modes of Charging Securities: i) Lien, ii) Hypothecation, iii) Pledge, iv) Mortgage.
 Account: An account is a summarized form of a group of transactions or a particular
class of transactions.

Page # 39
 Annual General Meeting (AGM): This is a statutory meeting of the shareholders of a
public limited company as required by Memorandum and Articles of Association usually
after the annual completion of final accounts of a company.
 Balance of Payments: Balance of import and export of goods and services between one
country and the rest of the world.
 Balance of Trade: Balance or difference between import and export of goods and
commodities excepting services.
 Bank Holiday: Working day declared to be the holiday for the banks by the Central
Bank.
 Banker’s Lien: A right of the banker to retain property of the dbtor/customer in
settlement of a debt.
 Bank Money: Deposits of the banks are called bank money.
 Bank Notes: Bank notes are promissory notes issued by a bank and payable to bearer on
demand.
 Bankrupt: A person unable to pay his debts as they fall due may be declared bankrupt by
a court on application either by the creditor or the debtor himself as per the insolvency
act.
 Budget: A budget is a financial document expressed in terms of money.
 Capital Budget: Budget involving acquisition or sale of capital items like plant and
machinery, land and buildings, electrical equipments, furniture and fittings and computer
etc.
 Capital Market: Capital Market consists of various sources of long term capital needed
both for creation of companies and for the development and expansion of existing ones.
 Cheque: A cheque is a bill of exchange drawn on a specified banker and not expressed to
be payable otherwise than on demand.
 Deposit: Money/cash of the account holders kept in the accounts of the banks. It is
withdrawable by cheques.
 Equity: It is the shareholders total interest in the company. Equity represent shareholders
capital and reserves.
 Inflation: Decrease in the purchasing power of money reflected through rise in price of
the goods and commodities in the open market.
 Money: Anything which is generally acceptable as a means of settling debt is called
money.
 Money Market: Money Market consists of financial institutions, banks and even
government which deal in short term loan.
 Paid up Capital: Called up capital actually paid by the shareholders is called paid up
capital.
 Profit: Excess of revenue over expenses.
 Profitability Ratio: This ratio gives an idea about the profitability of business.
 Promissory Note: An instrument in writing (not being a bank note or a currency note)
containing an unconditional undertaking.
 Real Income: Money income in terms of purchasing power.
 Reserved Capital: Reserved capital is that portion of the authorized capital which, by
resolution, is kept uncalled until the liquidation of the company.

Page # 40
 Reserve Money: It comprises aggregate of currency in issue and balances of the banks
with Bangladesh Bank.
 Statutory Liquidity Ratio\(SLR): Liquidity which is required to be maintained by the
scheduled bank.
 Demand Deposit: Deposits of the bank liquid in nature and repayable on demand.
 Time Deposit: The entire balance of fixed deposits of the banks is treated as time
deposits.
 Trade Credit: Trade credit arises out of credit purchase and sale.
 Venture Capital: There are many businesses which involve very high risks.
 Wages: Remuneration paid to the workmen of a factory for the labor put usually during a
week.
 Warranty: A type of guarantee given by the sellers undertaking to provide after sales
services free of cost for a fixed period within a contract incase the sold goods/machineries
give trouble.
 Loan: Loan is a debt provided by an entity (organization or individual) to another entity
at an interest rate and evidenced by a note which specifies, among other things, the
principal amount, interest rate and date of repayment.
 Lender: A person or organization that makes a loan or grant a loan.
 Borrower: A person that has applied, met specific requirements and received a monetary
loan from a lender.

Management Science
 Management Science: Management science is the application of scientific methods,
techniques and tools to problems involving the operation of system so as to provide those
in control of the operation with optimum solution to the problems.
 Queue: Ordinarily the line that forms in front of service facilities is called a queue or
wailing line.
 Queue length: Queue length is the numbers of customers waiting in the queue at any
time.
 Queue Discipline: Queue Discipline relates to the order of serving customers.
 Feasible solution: Feasible solutions are all these possible solutions, which can be
worked upon under given constraints.
 Optimum Solution: Optimum Solution is the best of the feasible solutions.
 Initial Solution: Initial solution is the first feasible solution.
 Linear programming: Linear programming is a mathematical method of optimizing a
linear objective function subject to a set of linear constraints.
 Pay off: Pay off is the gain or loss of a player.
 Player: Player is an agent who makes decision in a game.
 Matrix: A rectangular array of number arranged into rows and column is called a Matrix.
 Saddle Point: The pay off which is lowest in its row and highest in its column is called
saddle point.
 Strategy: Strategy is the way of achieving the goal.
 Mixed strategy: When a player does not adopt a single strategy all the time, but would
play different strategies each certain time.
 Zero sum game: A zero sum game is one in which the sum of the payments to all
competitors is zero for every possible outcome of the game.

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 Organizational Behavior
 Management Functions: PlanningOrganizingLeadingControlling.
 Mintzberg’s Managerial 10 Roles: Interpersonal(3)Informational(3)Decisonal(4)
 Katz’s Essential Management Skills: TechnicalHumanConceptual.
 Luthans’ study of Management Activities: Traditional Management  Communication
 Human Resource Management  Networking.
 Organization Behavior: A field of study that investigates the impact that individuals,
groups and structure have on behavior with organization, for the purpose of applying such
knowledge toward improving an organization’s effectiveness.
 Ability: An individual’s capacity to perform the various tasks in a job.[i) Intellectual
ability & ii) Physical ability]
 Intellectual ability: The abilities needed to perform mental activities.
 Physical Abilities: The capacity to do tasks demanding stamina, dexterity, strength and
similar characteristics.
 Biographical characteristics: Objective and easily obtained personal characteristics.(Age,
gender, race, tenure, religion, sexual orientation, gender identity)
 Learning: Any relatively permanent charge in behavior that occurs as a result of
experience.
 Shaping Behavior: Systematically reinforcing each successive step that moves an
individual closer to the desired response.
 Behavior Modification: the application of reinforcement concepts to individuals in the
work setting.
 Reinforcement: The consequences of behavior which can increase or decrease the
likelihood of behavior repetition.
 Attitudes: Evaluative statement or judgments concerning objects, people or events.
 Job Satisfaction: A positive feeling about the job resulting from an evaluation of its
characteristics.
 Job Involvement: Degree of psychological identification with the job where perceived
performance is important to self worth.
 Organization Commitment: Identifying with a particular organization and its goals,
while wishing to maintain membership in the organization.
 Employee Engagement: The degree of involvement with, satisfaction with, and
enthusiasm for the job.
 Job Performance: Satisfied workers are more productive and more productive workers
are more satisfied.
 Organization Citizenship Behavior: Satisfaction influences OCB through perceptions
fairness.
 Customer Satisfaction: Satisfied front line employees increase customer satisfaction and
loyalty.
 Absenteeism: Satisfied employees are moderately less likely to miss work.
 Turnover: Satisfied employees are less likely to quit.
 Workplace Deviance: Dissatisfied workers are more likely to unionize, abuse
substances, steal, be tardy and withdraw.
 Personality: The sum total of ways in which an individual reacts and interacts with
others, the measurable traits a person exhibits.
 Machiavellianism: A pragmatic, emotionally distant power player who believe that ends
justify the means.
 Narcissism: An arrogant, entitled, self important person who need excessive admiration.
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 Type A Personality: Aggressively involved in a chronic, incessant struggle to achieve
more in less time.
 Type B Personality: Opposite of Type A Personality.
 Values: Basic convictions on how to conduct yourself or how to live your life that is
personally or socially preferable “How To” live life properly.
 Perception: A process by which individuals organize and interpret their sensory
impressions in order to give meaning to their environment. People’s behavior is based on
their perception of what reality is, not on reality itself.
 Halo Effect: Drawing a general impression about an individual on the basis of a single
characteristics.
 Contrast Effect: Evaluation of a person’s characteristics that are affected by
comparisons with other people recently encountered who rank higher or lower on the
same characteristics.
 Profiling: A form of stereotyping in which members of a group are singled out for
intense scrutiny based on a single, often racial, trait.
 Organizational Culture: A system of shared meaning held by members that
distinguishes from other organization. Actually a common perception held by the
organization’s members; a system of shared meaning.
 Group: Two or more individuals interacting and interdependent, who have come together
to achieve particular objectives.
 Formal Group: Defined by the organization’s structure with designated work
assignments establishing tasks.
 Informal Group: Alliances that are neither formally structure nor organizationally
determined.
 Five stage of group development:
 FormingStormingNormingPerformingAdjourning.
 Group Properties/Performance: RolesNormsStatusSizeCohesiveness.
 Norms: Acceptable standards of behavior within a group that are shared by the group’s
members.
 Work Group: A group that interacts primarily to share information and to make
decisions to help each group member perform within his or her area of reasonability.
 Work Team: Generates positive synergy through coordinated effort. The individual
efforts result in a performance that is greater than the sum of the individual inputs.
 Types of Team: Problem solvingSelf-managed workCross-FunctionalVirtual
team.

Entrepreneurship Development
 Entrepreneurship Development: Entrepreneurship is the dynamic process of creating
incremental wealth.
 Entrepreneur: Entrepreneur is an innovator of new combination in the field of
production.
 Intrapreneurship: Intrapreneur is an entrepreneurial persona employed by a corporation
and encourages to be innovative and creative.
 Business Plan: Plan is a blueprint for future course of action. The business plan is a
written document that describes all the relevant internals and external elements involved
in starting a new venture.

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 Management Information Systems
 Input: Captures raw data from organization or external environment.
 Processing: Converts raw data into meaningful form.
 Output: Transfers processed information to people or activities that use it.
 Feedback: Output returned to appropriate members of organization to help evaluate or
correct input stage.
 Management Information Systems: Combination of computer science, management
science, operation research and practical orientation with behavioral issues.
 Business Process: Business processes refer to the manner in which work is organized,
coordinated and focused to produce a valuable products or services.
 Systems supporting decision making: TPSMISDSSESS.
 Transaction Processing Systems: A computerized system that performs and records the
daily routine transactions necessary to conduct business.
 Management Information systems: MIS is the study of information systems in business
and management. Specific category of information systems serving middle management.
 Organization: An organization is a stable, formal social structure that takes resources
from the environment and processes them to produce outputs.
 Value web: Is a collection of independent firms that use information technology to
coordinate their value chain to produce a product for a market collectively.
 Core competency: Is an activity for which a firm is a world class leader.
 Business ecosystem: Business ecosystem is another term for coupled but interdependent
networks of supplier, distributors, outsourcing firms, transportation service firms.
 Ethics: Ethics can be defined as a set of moral principles or values.
 Cookies: Cookies are tiny files deposited on a computer hard drive when a user visits
certain website. Cookies identify the visitor’s web Brower software and track visit to web
site.
 Web Bug: Web Bugs are tiny graphics files embedded in e-mail messages and web pages
that designed to monitor who is reading the e-mail message or web page and transit that
information to another computer.
 Spyware: Spyware can secretly install itself on an internet user’s computer by piggy
backing on larger applications.
 Bit: A bit represents the smallest unit of date computer can handle.
 Byte: A group of bits called a byte.
 Field: A grouping of characters into a word, a group of worlds, or a complete number
(such as a person’s name or age) is called a field.
 Record: A group of related fields comprises a record.
 File: A group of records of the same type is called a file.
 Database: A group of related files makes up database.
 Entity: An entity is a person, place, thing or event on which we store and maintain
information.
 Attribute: Each characteristic or quality describing a particular entity is called an
attribute.
 Data base management Systems: DBMS is software that permits an organization to
centralize data, manage them efficiently, and provide access to the stored data by
application program.

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 Data definition: DBMS capability that specifies the structure and content of the
database.
 Data dictionary: An automated or manual tool for storing and organizing information
about the data maintained in a database.
 Data manipulation language: A language associated with a database management
system that end users and programmers use to manipulate data in the database.
 E-Commerce: Digitally enabled commercial transaction between and among
organization and individuals, primarily over internet.
 Digital goods: Goods that can be delivered over network.
 Three major e-commerce: B2CB2BC2C
 M-Commerce: use of handheld wireless devices for purchasing goods and services form
any location.

Macroeconomics
 Economics: Economics is the study of the allocation of scarce resources to meet
unlimited human wants.
 Market Economy: A market economy is an economy in which decisions regarding
investment, production & distribution are based an supply & demand, and price of goods
& services are determine in a free price system.
 Macroeconomics: Macroeconomics is the study of the whole economy. It is concerned
with the aggregate performance of the entire economic system.
 Macroeconomics main determinant is “Income” for price.(Tools: Aggregate demand &
supply)
 Macroeconomics Objectives: i) High & stable level of employment, ii) Relatively stable
price level, iii) Satisfactory balance of payment position, iv) High rate of economic
growth, v) More equal distribution of income and wealth.
 Tools/Instruments of Macroeconomics: Fiscal policyMonetary policyExchange
rate policyIncomes policyInternational economic policy.
 Circular flow: A continuous flow of production, income and expenditure is known as
circular flow of income.
 Forms of Circular flow: i) Real flow & ii) Money flow.
 Real Flow: The flow of factor services from household to firms and corresponding flow
of goods and services from firms to households is known to be as real flow.
 Money flow: Money flow of income refers to a monetary payment from firms to
households for their factor services and in return monetary payments from households to
firms against their goods and services.
 Leakage: Withdraw of any component from economy. Actually outflow of money.
(Saving=S, Tax Payment=T and Import=M)
 Injection: Inflow of money. (Investment=I, Government spending=G and Export=X)
 Total Saving : Private Saving + Public Saving
 Gross Domestic Product: All produce or income of a year of a country with their border.
 Gross National Product: All produce or income of a year of country citizen.
 Net National Income: GNP – Depreciation.
 Nominal GDP: It measures the value of output of final goods and services using current
taka prices. Actually it measures the value of current market price.
 Real GDP: It measures from the base year market price.

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 Y=2+4x: (Where Y=Dependent, 2=Autonomous, 4=Co-efficient, x=Independent)
 Trade Balance/Balance of Trade: Export is equal to Import.
 Trade Surplus: Export is more than Import.
 Trade Deficit: Export is less than Import.
 National Income Accounting: is the methodology used in measuring the total output and
income of the economy.
 GDP calculate approaches: ExpenditureIncomeOutput/Value added approach
 Expenditure Approach: A method of computing GDP that measures the total amount
spent on all final goods and services during a given period.
 Income Approach: Income approach to calculating the GDP recognizes that the total
expenditures on the economy’s output in any given year must equal the total income
generated by the production of that same output.
 Output/Value added approach: The method the contribution of each enterprise to the
generation of flow of goods and services is measured.
 Paradox of Thrift: The Paradox of thrift is “paradoxical” because it contradicts the
widely held belief that “a penny saved is a penny earned”.
 Aggregate Expenditure: AE is defined as the current value of all the finished goods and
services in the economy.
 Aggregate Output: The total quantity of goods and services produced (or supplied) in an
economy in a given period.
 Aggregate Income: The total income received by all factors of production in a given
period.
 Autonomous Expenditure: The components of aggregate expenditure that do not change
when real GDP changes.
 Induced Expenditure: The components of aggregate expenditure that change when real
GDP changes.
 Consumption function: Consumption function shows the relationship between
consumption and income.
 Aggregate Consumption function: Aggregate Consumption function shows the level of
aggregate consumption at each level of aggregate income.
 Consumption function : C=a+by
 Marginal Propensity to consume (MPC): the slope of the consumption function (b) is
called the Marginal Propensity to consume. It is the fraction of a change in income that is
consumed or spent.
 Aggregate Saving: Aggregate saving is the part of aggregate income that is not
consumed. Where, S=Y-C.
 Marginal Propensity to Saving (MPS): Marginal Propensity to Saving (MPS) is the
fraction of a change in income that is saved.
 MPC+MPS=1
 45 Line: 45 Line is drawn from the origin point (0,0) where consumption is equal to
income and saving is zero.
 Plan Investment: The amount which consists of the investment made by business firms
with deliberate plan.
 Actual Investment: The amount which consists of all of firms’ investment.
 Government purchase: Purchase of goods and services by the government.
 Net Taxes (T): Net Taxes are equal to the tax payments made to the government by firms
& household minus transfer payments made to households by the government.

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 Disponsable Income (Yd): The income which is consider after net taxes. (Yd= Y –T)
 Disequilibrium: If output (y) exceeds planned aggregate expenditure (C+I+G), there will
be an unplanned increase in inventories-actual investment will exceed planned
investment.
 Multiplier: Exogenous variable is fixed when other variable changed that is Multiplier.
 Tax Multiplier: The ration of change in the equilibrium level of output to a change in
taxes.
 Balance Budget Multiplier: The balanced budget multiplier is the ration of change in the
equilibrium level of output to a change in government spending.
 Fiscal Policy: Fiscal policy is the deliberate manipulation of government purchases,
transfer payments, taxes, & borrowing in order to influence macroeconomic variables
such as employment, the price level & the level of GDP.
 Inflation: It occurs when there is too much money in circulation, lending to an overall
rise in prices.
 Recession: It occurs when there is not enough money in circulation, lending to a decline
in productivity and higher unemployment.
 Aggregate Supply: Aggregate supply is the total supply of goods and service in an
economy.
 Equilibrium Price Level: The price level at which the aggregate demand & aggregate
supply curves intersect each other.
 Goods Market: The market in which goods and services are exchanged and the
equilibrium level of aggregate output(Y) is determined.
 Money Market: The market in which financial instruments are exchanged and the
equilibrium level of the interest rate (r) is determined.
 IS Curve: IS curve is the negative relationship between equilibrium level of Income (Y)
and interest (r) rate in Goods Market.
 LM Curve: LM curve shows positive relationship between income (Y) and equilibrium
level of interest rate (r) in the Money Market.
 Money: Money is uniform value of goods and services.
 Types of Money: Commodity Money, Representative Money, Fiat Money, Coinage
Money, Paper Money, Commercial bank Money, Electronic or Digital Money.
 Money Demand: Money demand is the amount of assets that people are willing to hold
as money (instead of illiquid assets).
 Motives behind holding Money: TransactionSpeculativePrecautionary Motive.
 Interest Rate (r): Interest rate is related to the quantity of money.
 Change of Interest rate: If Interest rate increase then money demand decrease and
Interest rate decrease then money demand increase.
 Narrow Money: Currency notes & coins with publics + Demand deposit.
 Broad Money: Narrow Money + Time Deposit.
 Demand Pull: An inflation that starts because aggregate demand increase in called
Demand pull inflation.
 Cost Push: An inflation that is kicked of by an increase in cost is called Cost push
inflation.

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 More Information
 Accounting: Accounting is an information system that identifies, records &
communicates the economic events of an organization to the interested users.
 Financial Accounting: The field of accounting that provides economic and financial
information for investor, creditors, and other external users.
 Cost Accounting: Cost accounting basically deals with the cost related information to
calculate the per unit cost of product or services.
 Management Accounting: The field of accounting that provides internal reports to
help users to make decisions about their companies.
 Finance Management: Financial Management refers to the proper management of
finance functions of an enterprise and organization.
 Financial Management involve: Financial planning, organization, coordination and
control & reporting.
 Cash: Cash refers to coins, currency, cheques, drafts and deposits in banks. And Cash
also include near cash assets such as marketable securities and time deposits in banks.
Actually Cash is the most liquid current assets.
 Portfolio: Portfolio is a group of finance assets such as shares, stocks, bonds, debt
instrument, mutual funds, cash equivalents etc. [Divert risk but not eliminate]
 Audit: Systematic examination and verification of a firm’s financial statement.
 Risk: Risk is the potential of losing something value.
 Probability: Probability is a tool for understanding social phenomena. It has become
the basis for statistical applications in both social and decision-making research.
 Sampling: Sampling is defined as the total process involving in collection of sample
from a target population for a particular study.
 Society: Society is the complex of organized association and institution with a
community.
 Community: Community is “a social group with some degree of “we feeling” and
living in a given area”
 Institution: Institutions may be described as recognized and established usages
governing the relations between individuals and groups.
 Culture: Culture is the body of thoughts and knowledge, both theoretical and practical,
when only man can possess. Culture is the complex of whole which includes
knowledge, belief, art, morals, law, custom and any other capabilities.
 Association: An association is a group of people organized for the achievement of a
particular interest or interests.
 Insurance : Insurance is a co-operative device to spread the loss caused by a particular
risk over a number of person, who are exposed to it and who agree to insure themselves
against the risk.
 Management: A set of activities (including planning and decision making, organizing,
leading and controlling) directed at an organization resources (human, financial,
physical and information) with the aim of achieving organizational goals in an efficient
and effective manner.
 Manager: Someone whose primary responsibility is to carry out the management
process.
 The Management Process: Planning and decision making, organizing, leading and
controlling.
 Motivation: The set of forces that cause people to behave in certain ways. The goal of
managers is to maximize desired behaviors and minimize undesirable behaviors.

Page # 48
 2 Year
nd

Subject-wise Short Note-

Page # 49
 Financial Management:
 Finance Management: Financial Management refers to the proper management of
finance functions of an enterprise and organization.
 Financial Management involve: Financial planning, organization, coordination and
control & reporting.
 Fundamental Financial Management Decisions: Investment decisions, financing
decisions & dividend decisions.
 Working Capital: Working capital refers to that part of the firm’s capital, which is
required for financing short-term or current assets, such as- Cash, Marketable securities,
Debtors and Inventories.
 Concept of working capital: Gross Concept & Net concept.
 Operating Cycle: Trading concern: ↔Cash↔Raw Materials↔Work in
process↔Finished goods↔Accounts receivable↔.
 Working Capital Management: The management of current assets, current liabilities
and inter-relationship between them is termed as working capital management.
 Principles of WC Management: i) Principle of the risk variation, ii) Principle of equity
position, iii) Principle of cost of capital, iv) Principle of maturity payment.
 Working Capital Investment Policies: i) Relaxed Current Asset Investment (high), ii)
Moderate Current Asset Investment (medium), iii) Restricted Current Asset Investment
(low)
 Working Capital Financing Policies: i) Conservative Approach (high), ii) Matching
Approach (medium), iii) Aggressive Approach (low)
 Cash: Cash refers to coins, currency, cheques, drafts and deposits in banks. And Cash
also include near cash assets such as marketable securities and time deposits in banks.
Actually Cash is the most liquid current assets.
 Motives or desires for holding cash: i) Transaction motive, ii) precautionary motive, iii)
speculative motive, iv) compensation motive.
 Cash Management: Cash management refers to a broad area of finance involving the
collection, handling and usage short term investment of cash.
 Strategy for cash Management:
Accelerating cash inflows: collection, collection float, earlier billing, lockbox and
concentration banking.
Decelerating cash outflows: Playing the float, Control disbursement (PTD, PDD, ZBA)
Remote and controlled disbursing.
 Inventory : Inventory may be defined as “stock of goods that is held for future use”
 Types of Inventory: Raw material, Work in process, finished goods.
 Valuation: Valuation is process that links risk & return to determine the worth (intrinsic
value) of an asset.
 Intrinsic Value (IV): The intrinsic value of a share is the present value of all the future
benefits expected to be received from that share at an appropriate discount rate.
 Market Price: Market price of a share is reflection of its intrinsic value.
 IV & MP : Decision:
Buy : MP  IV [Underpriced]
Sell : MP  IV [Overpriced]
 Share Valuation Model:
# One year holding period # Multiple year holding period
# Constant growth model # Multiple growth model

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 Nominal Yield/Coupon Rate: The nominal rate of interest fixed & printed on the bond
certificate.
 Current yield: It relates the annual interest receivable on a bond to its current market
price.
When a bond is selling at premium: Current Yield (CY)  Coupon Rate (CR)
When a bond is selling at discount: Current Yield (CY)  Coupon Rate (CR)
 Spot Interest Rate: It is the annual rate of return on a bond that has only one cash inflow
to the investor.
 Capital Structure: Capital Structure refers to the way in which a corporation finances it
assets through some combination of equity, debt or hybrid securities.
 Capital Structure Decision: It refers to the proper selection of composition of fixed
capital, both debt and equity for achieving the financial goal.
 Capital Structure decision: tools
- EBIT-EPS analysis - Ratio analysis - Comparative analysis
- ROI-ROE analysis - Cash flow analysis
 Dividend: The term dividend refers to that part of profits of a company which is
distributed by the company among its shareholders.
 Retained Earnings: It is that part of profits of a company which is not distributed by the
company among its shareholders.
 Cash Dividend: Dividend paid in the term of cash is known as cash dividends.
 Stock Dividend: In this form of dividends, the firm issues additional shares of its own
stock to the stockholders in proportion to the number of shares held in lieu of cash
dividends.
 Stock Split: A stock split is a change in the number of outstanding shares of stock
achieved through a proportional reduction of increase in the par value of the stock.
 Scrip Dividend: Scrip dividend means payment of dividend in scrip of promissory notes.
 Bond Dividend: Scrip and bond dividend are the same except that they differ in terms of
maturity.
 Property Dividend: In property dividend the company pays dividends in the form of
assets other than cash.
 Share Buyback (Repurchase): When companies have sufficient liquid assets they resort
to share buyback or share repurchase.
 Types of Dividend Policies:
 Regular Dividend Policy: Payment of dividend at the usual rate is termed as regular
dividend.
 Stable Dividend Policy: The term ‘stability of dividends’ means consistency or lack of
variability in the stream of dividend payments.
 Constant dividend per share: Payment of fixed dividend per share irrespective of the
level of earnings year after year.
 Constant payout ratio: It means payment of a fixed percentage of net earning as
dividends every year.
 Low-regular plus extra Dividend: Some companies follow a policy of paying constant
low dividend per share plus an extra dividend in the years of high profits.
 Irregular Dividend Policy: Some companies follow irregular dividend payments on
account for uncertainty of earnings, unsuccessful business operation and lack of liquid
resources.
 No Dividend Policy: A company may follow a policy of paying no dividends presently
because of its unfavorable working capital position or on account of requirements of
funds for future expansion and growth.

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 Residual Dividend Policy: Under the residual approach, dividends are paid out of profits
after making provision for money required to meet upcoming capital expenditure
commitment.
 Dividend Payment procedure: i) Declaration date, ii) Record date, iii) Ex-dividend
date, iv) payment date.
 Theory of Dividend: i) Walters Model, ii) Gordon Model, iii) Modigliani and Miller
(MM) Model, iv) Residual Model, v) Dividend Discount Model, vi) Lintner Model.
 Portfolio: Portfolio is a group of finance assets such as shares, stocks, bonds, debt
instrument, mutual funds, cash equivalents etc. [Divert risk but not eliminate]
 Portfolio Construction: The process of blending together the broad assets classes so as
to obtain optimum return with minimum risk called portfolio construction.
 Portfolio Management: Portfolio Management is the process of combining securities in
a portfolio tailored to the investor’s preferences and need, monitoring that portfolio and
evaluating its performance.
 Phases of Portfolio Management: Security AnalysisPortfolio AnalysisPortfolio
SelectionPortfolio RevisionPortfolio Evaluation.
 Coefficient of Variation (CV) : CV is a measure of relative dispersion that is useful in
comparing the risk of assets with differing expected return.
 Covariance (COV) : Covariance is the statistical measure that indicates the interactive
risks of a security relative to others in a portfolio.
 Correlation Coefficient : Correlation coefficient is the standardized value of COV.
 Portfolio Analysis: The range of possible portfolios by combining individual securities is
established. It analyzes the specific risk and return.
 Portfolio Return: The expected return of a portfolio of assets is simply the weighted
average of the return of the individual securities in the portfolio.
 Variance-Covariance Matrix: It shows the covariance between each of the securities in
the portfolio.
 Risk in Security Market: i) Systematic Risk, ii) Unsystematic Risk.
 Portfolio Revision: After selecting the optimal portfolio, investor is required to monitor
it constantly to ensure that the portfolio remains optimal with passage of time.
 Portfolio Evaluation: It involves the regular analysis and assessment of portfolio
performance in term of risk and returns over a period of time.
 Capital Asset Pricing Model: It relates the required rate of return for any security with
the risk for that security as measured by beta.
 Security Market Line (SML) : SML is the graphical representation of CAPM. It
provides the relationship between the expected return & risk of a security or portfolio and
measured by beta.
 Capital Market Line (CML) : It shows the risk return relationship for all efficient
portfolios. The line is mixed the market portfolio with risk free asset.
 Financial Statement: Financial Statements are the output of accounting system.
 Liquidity Ratio: It measures the adequacy of current and liquid assets and help evaluate
the ability of the business to pay its short-term debts.
 Profitability Ratio: Profitability ratios measure the efficiency of management in the
employment of business resources to earn profits.
 Activity Ratio: It measures the efficiency of a firm or company in generating revenues
by converting its production into cash or sales.
 Solvency Ratio: It measures the ability of a business to survive for a long period of time.

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 Auditing
 Audit: Systematic examination and verification of a firm’s financial statement.
 Auditing : Auditing is a process by which a professional, competent and independent
person accumulates and evaluates the quantifiable information related to a economic
entity for the purpose determining and reporting on the degree of correspondents between
the quantifiable and the establish criteria.
 Types of Audit: i) Financial audits, ii) Operational audits, iii) Compliance Audit, iv)
Information Technology.
 Financial Audit: A financial audit is conducted to provide an opinion whether financial
statements are stated in accordance with specified criteria.
 Operational Audit: It is a systematic review of effectiveness, efficiency and economy of
operation.
 Types of Auditors: i) Internal Auditors, ii) External Auditors, iii) Government Auditors,
iv) Forensic Auditors.
 Auditor personal qualities: i) Communication skills, ii) Tactfulness, iii) Flexibility, iv)
Persistence, v) Objectivity, vi) Integrity.
 Investigation: Investigation is the act of details examination of activities so as to achieve
certain objectives.
 Materiality: Materiality is a concept or convention within auditing relating to the
significance of an amount, transaction or discrepancy.
 Risk: Risk is the potential of losing something value.
 Audit Risk: The risk that the auditor expresses on in appropriate audit opinion when the
financial statement are materially misstated.
 Inherent Risk: Inherent Risk is the risk of a material misstatement in the financial
statements arising due to error or omission as a result of factors other than the failure of
controls.
 Control Risk: Control risk is the risk of a material misstatement in the financial
statement arising due to absence or failure in the operation of relevant controls of the
entity.
 Detection Risk: Detection risk is the risk that the auditor fail to detect a material
misstatement in the financial statements.
 Management Assertions: i) Existence or occurrence, ii) Completeness, iii) Valuation or
allocation, iii) Rights and obligation, 5) Presentation and disclosure.
 Structure of Financial Statement Audit: TransactionAccounting SystemFinancial
Report.
 Audit Evidence Decisions: i) Audit procedures to use, ii) Sample size, iii) Items to
select, iv) Timing.
 Types of Audit Evidence: i) Physical examination, ii) Confirmations, iii)
Documentation, iv) Analytical Procedures, v) Inquiries of the client, vi) Reperformance,
vii) Observation.
 Auditor Responsibility: i) Material vs immaterial misstatement, ii) Errors vs fraud, iii)
Reasonable assurance, iv) Professional skepticism.
 Errors and fraud: Both are potential source of material misstatement. An error is an
unintentional misstatement and fraud is an intentional misstatement of financial
statement.
 Professional Skepticism: Professional Skepticism requires that an audit be designed to
provide reasonable assurance of detecting both material errors and fraud in the financial
statements.
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 Bangladesh Studies
 Gross Domestic Product (GDP) : GDP is defined as “an aggregate measure of
production equal to the sum of the gross values added of all resident, institutional units
engaged in production (plus any taxes, and minus any subsidies, on products no included
in the value of their outputs).
 Per Capita Income: Per Capita Income also known as income per person, is the mean
income of the people in an economic unit such as a country or city. It is calculated by
taking a measure of all sources of income in the aggregate (Such as GDP or Gross
National Income) and dividing it by the total population.
 Macro-economics: Macro-economics is a branch of economics dealing with the
performance, structure, behavior and decision making of a economy as a whole, rather
than individual markets.
 Components of Macro-economics: Growth, Savings and Investment.
 Bangladesh economics structure or sectors: Primary, Secondary & Tertiary Sector.
 Globalization: Globalization is an integrated mix-up of all single and mutually related
participation; they are in touch of proper management of sharing information, benefits,
assets and other integration.
 Communication: Communication is the exchange or information that is mutually
understood.
[Postal, E-Business, Phone, Television, Radio, Fax, Telex, Telegram, Cinema etc]

 Transport: Transport refers to the activity that facilitates physical movement of goods as
well as individuals from one place to another.
 Transport system in Bangladesh:
- Land Transport: Road, Railway, Pipeline, Ropeway transport.
- Water Transport: Inland water transport, Ocean Transport.
- Air Transport.

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 Advanced Business Statistics
 Probability: Probability is a tool for understanding social phenomena. It has become the
basis for statistical applications in both social and decision-making research.
 Event: One or more outcomes of a random experiment constitute an event.
 Two types of event: Simple event & Compound event
 Venn diagram: It is also used to show the relationship between sample space and events.
 Permutation: Some elements is such an arrangement in where every object is
considered as different and distinguishable with their placement.
 Combination: Some elements is such an arrangement in where group of object is
considered as different and distinguishable with their placement.
 Quality: Quality is the ability of a firm to meet or exceed the expectations of the
customer.
 Quality Control: The quality control is an activity, which assures that goods or services
conform to specified standards.
 Process Control: It consists of a set of actions used for controlling the manufacturing
process.
 Product Control: It is concerned with classification of raw materials, semi-finished
goods into acceptable or rejectable items.
 Control Charts: Control Charts are used to control in process quality.
 Acceptance Sampling: Acceptance Sampling plan are aimed to control the quality of
incoming raw materials, semi finished products and finished products.
 Mean chart: A chart used to measure the mean.
 Range chart: A chart used to monitor process variability.
 P-Chart: P-Chart used for controlling the proportion of defective products or service
generated by the process.
 C-Chart: C-chart used for controlling the number of defects when more then one defect
can be present in a product or service.
 Hypothesis: Any statement about any phenomenon is termed as hypothesis.
 Statistical hypothesis: Statistical hypothesis is a statement about population
characteristics that can be tested on the basis of sample data.
 Null hypothesis: Null hypothesis is the hypothesis which is tested for possible rejection
under the assumption that it is true.
 Alternative hypothesis: The hypothesis, which is true if the null hypothesis is false is
called Alternative hypothesis.
 Simple hypothesis: The hypothesis, which is completely specifies all the parameter of
the related population, is called Simple hypothesis.
 Composite hypothesis: The hypothesis, which is not completely specifies the parameter
of the related population, is called Composite hypothesis.
 One tailed and two tailed test: A one tailed test is a test, which is concerned about
possible deviation of the value of the parameter in only one direction from the specified
value while two tailed test is both direction from the specified value.
 Critical Value: the value of the sample statistic that separates acceptance region and
rejection region is called critical value.
 Sample: A sample is a representative part of a population.
 Sampling: Sampling is defined as the total process involving in collection of sample
from a target population for a particular study.
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 Business and Society
 Society: Society is the complex of organized association and institution with a
community.
 Community: Community is “a social group with some degree of “we feeling” and living
in a given area”
 Association: An association is a group of people organized for the achievement of a
particular interest or interests.
 Institution: Institutions may be described as recognized and established usages
governing the relations between individuals and groups.
 Social system: A social system is a set of persons or group who into with one another, the
set is conceived of as a social unit distinct from the particular persons compose it.
 Culture: Culture is the body of thoughts and knowledge, both theoretical and practical,
when only man can possess. Culture is the complex of whole which includes knowledge,
belief, art, morals, law, custom and any other capabilities.
 Culture Growth: Culture diffusion, Invention, Discovery.
 Elements of Culture: Cognitive element, beliefs, values and norms, signs etc.
 Social System: The basic operation of a system is that it receives inputs from its
environment, processes these in some way, and the release outputs to the environment.
 Pluralistic Society: Pluralistic societies are those that contain a diverse group of religious
cultures and traditions.
 Commitment: Commitment is the individual’s feelings of identification with and
attachment to the organization
 Degrees of Commitment-
Reluctance: Reluctance implies that one accepts a job or a situation, though he/she
does not like.
Resignation: Resignation is a degree of commitment that means that one accepts the
job/situation in as much as there is no alternative.
Commitment: Commitment is the middle ground of the scale. It means that one
accepts the situation as something desirable.
Devotion: Devotion connotes a higher degree of commitment
Consecration: Consecration refers to a more perfect type of devotion.

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 Insurance & Risk Management

 Insurance: Insurance is a co-operative device to spread the loss caused by a particular

risk over a number of people, who are exposed to it and who agree to insure themselves
against the risk.
 Insured and Insurer: Insured is the person or entity who is covered by the insurance
policy. The insurer is the entity (insurance company) that pays to, or on behalf, of the
insured for a covered loss. That which is covered by the policy is set forth in the
insurance policy
 Function of Insurance:
Primary Function: Insurance provide certainty, Insurance provides protection, Risk-
sharing.
Secondary Function: Prevention of loss, Provides capital, Improves efficiency.
 Principles of insurance: i) Principles of Co-operation, ii) Principles and theory of
probability.
 Kinds of insurance:
 Business point of view: i) life insurance, ii) general insurance, iii) social insurance.
 Risk point of view: i) Property Insurance: Marine insurance, Fire insurance,
Miscellaneous insurance. ii) Liability insurance, iii) other forms.
 Types of insurance organization: i) Self insurance, ii) Individual Insurer, iii)
Partnership, iv) Joint Stock Companies, v) Mutual insurance, vi) co-operative.
 Contract of insurance involves principles/Nature: i) Insurable interest, ii) Utmost good
faith, iii) Indemnity, iv) Subrogation, v) Warranties, vi) Proximate cause, vii) Assignment
and nomination, viii) Return of premium.
 Essential elements for valid contract: i) agreement, ii) legal consideration, iii)
competent to make contract, iv) free consent, v) legal object.
 Policy: Insurance policy is a contract between the insurer and the insured, known as the
policyholder, which determines the claims which the insurer is legally required to pay.
 Term of insurance policy: i) straight Term insurance, ii) Renewable term policy, iii)
convertible term policies.
 Insurance Policies:
- Duration of policy: i) Whole life policies, ii) Limited payment whole life policies,
iii) convertible whole life policies.
- Methods of premium payment: i) Single premium policy, ii) Level premium policy.
- Participation in profit: i) Without profit or non-participating policies,
ii) with profit policies.
- Number of lives covered: i) Single life policies, ii) Multiple life policies.
- Method of payment claim amount: Lum sum policies, ii) Installment or annuity
policies.
- Non-conventional policies:

 Classes of insurance risk: i) Uninsurable risk, ii) Insurable risk, iii) Super-standard risk
 Factors affecting risk: age, build, physical condition, personal history, occupation,
resident, habits.

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 Advanced Financial Accounting

 Accounting: Accounting is an information system that identifies records &

communicates the economic events of an organization to the interested users.
 External Users: stockholders, creditors, regulators etc.
 Internal Users: Management.
 Accounting Branch: i) Financial Accounting, ii) Cost Accounting, iii) Management
Accounting.
 Financial Accounting: The field of accounting that provides economic and financial
information for investor, creditors, and other external users.
 Cost Accounting: Cost accounting basically deals with the cost related information to
calculate the per unit cost of product or services.
 Management Accounting: The field of accounting that provides internal reports to help
users to make decisions about their companies.
 Plant Assets: Plant assets include land, land improvements, buildings, and equipment
(machinery, furniture, tools).
 Natural Resources: Natural Resources consist of standing timber and underground
deposits of oil, gas and minerals.
 Intangible Assets: Intangible assets are rights, privileges and competitive advantages that
do not possess physical substance. Such as- Patents, Copyrights, Franchises or licenses,
trademarks or trade name, goodwill etc.

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 1 Year
st

Subject-wise Short Note-

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 Principles of Management
 Management: A set of activities (including planning and decision making, organizing,
leading and controlling) directed at an organization resources (human, financial, physical
and information) with the aim of achieving organizational goals in an efficient and
effective manner.
 Manager: Someone whose primary responsibility is to carry out the management
process.
 The Management Process: Planning and decision making, organizing, leading and
controlling.
 Planning: Setting an organization's goals and deciding how best to achieve them.
 Decision Making: Part of the planning process that involves selecting a course of action
from a set of alternatives.
 Organizing: Determining how activities and resources are to be grouped.
 Leading: The set of processes used to get members of the organization to work together
to further the interest of the organization.
 Controlling: Monitoring organizational progress toward goal attainment.
 Kinds of manager:
 Level of Management: Top managers, Middle managers & First line managers,
 Areas of Management: Marketing, Finance, Operation, Human resources,
Administration & Other.
 Managerial Roles: Interpersonal, Informational, And Decisional.
 Managerial Skills: Technical, Interpersonal, Conceptual, Diagnostic, Communication,
Decision making, Time management.
 Steps in Scientific Management:
- Develop a science for each element of the job to replace old rule of thumb methods.
- Scientifically select employees and the train them to do the job as described in step 1.
- Supervise employees to make sure they follow the prescribed methods for performing
their jobs.
- Continue to plan the work, but use workers to get the work done.
 Organizational Environment:
 Internal: Owners, Board of directors, Employees, Physical environment, Culture.
 External: (Task & General)
 Task: Competitors, Customers, suppliers, Strategic partners, Regulators.
 General: Technological, Economical, Socio-cultural, Political, International.
 Decision Making: The act of choosing one alternative from among a set of alternatives.
 Types of Decisions: Programmed Decisions, & Non programmed Decisions
 Forms of Group Decision Making:
- Interacting group or team
- Delphi groups
- Nominal groups
 Organizing: Deciding how to best group organizational activities and resources.
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 Departmentalization:
Rationale for Departmentalization Location Departmentalization
Product Departmentalization Other Forms of Departmentalization
Customer Departmentalization
 Motivation: The set of forces that cause people to behave in certain ways. The goal of
managers is to maximize desired behaviors and minimize undesirable behaviors.
 Maslow’s Hierarchy of Needs:
Physiological—basic survival and biological function.
Security—a safe physical and emotional environment.
Belongingness—love and affection.
Esteem—positive self-image/self-respect and recognition and respect from others.
Self-actualization—realizing one’s potential for personal growth and development.
 The ERG Theory:
Needs are grouped into three overlapping categories:
Existence needs—physiological and security needs.
Relatedness needs—belongingness and esteem by others.
Growth needs—self-esteem and self-actualization.
 Team: A group of workers who function as a unit, often with little or no supervision, to
carry out work-related tasks, functions, and activities.
 Management By Objectives (MBO) Process:
- Setting Objectives:
- Developing Action Plans.
- Periodic Review Or Monitoring the Progress:
- Performance Appraisal:
 Henry Fayol’s 14 Principles of Management:
Division of Work:
Authority:
Discipline:
Unity of Command:
Unity of Direction:
Subordination of individual interest:
Remuneration:
Centralization (Or Decentralization):
Scalar chain (Line of Authority) :
Order:
Equity:
Stability of Tenure of Personnel:
Initiative:
Esprit de Corps:

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 Principles of Accounting
 Accounting: Accounting is an information system that identifies, records, and
communicates the economics events of an organization to interested users.
 The activities of Accounting Process:
Identification Recoding (Book keeping) Communication
 Accounting User:
Internal User: Marketing Manager, Production Supervisor, Finance Directors, Company
Officers etc.
External User: Investor, Owners, Creditors, Taxing authorities, Regulatory agencies,
Customer etc.
 GAAP = Generally Accepted Accounting Principles.
 Accounting Two Main Assumptions:
- Monetary Unit Assumption
- Economic Entity Assumption
 Financial Statement:
- Income Statement
- Owner's Equity Statement
- Balance Sheet
- Statement of Cash flows
 The basic Accounting equation is:
Assets = Liabilities + Owner's Equity
 The Expanded accounting equation is:
Assets = Liabilities + Owner's Capital -Owner's Drawing + Revenues - Expenses.
 The Account: An account is an individual accounting record of increases and decreases
in a specific asset, liability, or owner’s equity item.
 Three Basic steps in recording process:
- Analyze each transaction for its effects on the accounts.
- Enter the transaction information in a journal,
- Transfer the journal information to the appropriate account in the ledger.
 Journal: Companies initially record transactions in chronological order.
 Journalizing: Entering transaction data in the journal is known as journalizing.
 The Ledger: The entire group of accounts maintained by a company is the ledger.
 Posting: Transferring journal entries to the ledger accounts is called posting.
 Trial Balance: A trial balance is a list of accounts and their balances at a given time.
 Types of Adjusting Entries:
- Deferrals: Prepaid Expenses & Unearned Revenues
- Accruals: Accrued Expenses & Accrued Revenues
 Three Cash flow methods:
- FIFO
- LIFO
- Average cost
- FIFO = First in first out
- LIFO = Last in first our
- FOB = Free on board
 FOB Shipping Point:
Goods delivered to shipping point by seller. Buyer pays freight costs from shipping point
to destination.
 FOB Destination: Goods delivered to destination by seller. Seller pays freight costs
 Accounting Information Systems: A system that collects and processes transaction data,
and communicates financial information to decision makers.
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 Business Communication
 Business communication: Business communication is a term that can be defined as the
contact between the people in an organization for the intention of carrying out the
business activities.
 Mass communication: Mass communication is a process of transmitting messages
quickly to a large number of scattered audiences of different characteristics by using
various intermediary channels like radio, television, newspapers, cinema slide etc.
 Media of Mass Communication:
Print media
Audio media
Audio – visual media
Printed & visual media
Traditional media
 Classification of Reports:
Formal Reports and Informal Reports
Information Reports
Analytical Reports
Recommendation Reports
 Anatomy of a Report:
Cover Page
Title Page
Letter of Transmittal
Table of Contents
List of Illustrations
Executive Summary
Report Body
 Business Letter: A business letter is a letter written in formal language, usually used
when writing from one business organization to another, or for correspondence between
such organizations and their customers, clients and other external parties.
 Types of Business Letters:
Letter of Transmittal
Letter of Thanking
Letter of Complaint
Response to a Letter of Complaint
Letter of Request
Response to a Letter of Request

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 Principles of Finance
 Finance: Finance can be defined as the art & science of managing money.
 Goals of Finance: Profit maximization & Wealth maximization.
 Profit maximization: Profit maximization means maximizing the profit of the firms.
 Wealth maximization: Wealth maximization means maximizing the net present value
(or wealth) of course of action to shareholders.
 Short term sources financing: Short term sources financing is that form of financing
which includes borrowing or lending of funds for a short period of time.
 Short-term sources of financing:
 Spontaneous financing: (Trade credit, advance payment & accrued expenses)
 Money market: (Commercial Paper & Banker's Acceptance)
 Bank loan: (Loans and advances, cash credit, overdraft & Discounting of bills)
 Long term sources financing: Long term sources financing is that form of financing
which includes borrowing or lending of funds for a long period of time.
 Long-term sources of financing:
 Internal Sources: (Owners Capital, Retained Earnings, Provident Funds, Sales of
Unused Fixed Asset, Bad Debt provision)
 External sources (Non Institutional sources: (Common stock, preferred stock,
Bond/Debenture, Warrants, Convertible Security, Money market lender)
 Time value of money: Time value of Money is the value of a unit of money at different
time intervals.
 Techniques of TVM: Present & Future value techniques.
 Patterns of cash flow: Single amount, Annuity & Mixed stream
 Annuity: Annuity ordinary & annuity due.
 Risk: Risk can be defined as the chance that some unfavorable events will occur.
 Two types of Risk of Return: Expected & Realized Return.
 Cost of Capital: Cost of capital is the rate of return that a firm must earn on the project in
which it invest to maintain the market value of its stock.
 Capital Budgeting: Capital Budgeting is the process of identifying, analyzing &
selecting investment projects whose returns are expected to extend beyond one year.

Principles of Marketing
 Marketing: Marketing is managing profitable customer relationships.
 Market: The set of all actual and potential buyers of a product or service.
 Needs: States of felt deprivation.
 Wants: The form human needs take as shaped by culture and individual personality.
 Demands: Human wants that are backed by buying power.

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= Good Luck =
:D

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