SUBJECT 1 BUSINESS POLICY & STRATEGIC MANAGEMENT

UNIT-I Business Policy – Definition, nature, Scope and purpose of Business policy; Concept
of Strategic Planning – Strategic Management: Nature, Scope, process and importance -
Strategic Decisions, Administrative and Operation decisions.
UNIT-II Developing: Vision, mission, goals and objectives, strategy, tactics/policies,
importance of corporate Mission statements – their contents and characteristics - some
examples – Johnson & Johnson’s credo, ‘HP way’ ‘Sony Spirit’ etc. Defining the concept of
strategy – corporate, business and functional level strategy; Intended, Deliberate, Realized,
Unrealized and Emergent strategies.
UNIT-III Strategy Formulation: Strategic tools for analysis and appraisal of External
Environment – SWOT analysis; and Structure - Conduct – Performance (S-C-P) analysis; -
Industry, competition and competitor analysis – Porter’s five forces model for analysing firm’s
opportunities and threats – concept of Hyper Competition
UNIT-IV Internal Organisational Analysis – Identification of strengths and weakness of a firm
- Resource Based Theory of the firm – Concept of resources, capabilities and competencies,
concept of core and distinctive competencies; strategic intent, stretch and leverage, competence
- based competition; Porter’s Value Chain Analysis for appraisal of firm’s resource capabilities
– Firm’s best Strategic fit.
UNIT-V Competitive advantage of firm – its Sources: Cost, Quality Innovation and customer
responsiveness etc., - Michel Porter’s Business level (or Generic) strategies for competitive
advantage: Cost leadership, Differentiation and Focus – Entry and Exit Barriers, Mobility Barriers
– Economies of scale, Learning or Experience Curve benefits.

UNIT-I Business Policy – Definition, nature, Scope and purpose of Business policy; Concept
of Strategic Planning – Strategic Management: Nature, Scope, process and importance -
Strategic Decisions, Administrative and Operation decisions.

Definition of business policy: A business policy is a formal set of guidelines that outlines the
rules, regulations, and processes that govern an organization's employees and decision-
making. Business policies help ensure that everyone in the organization is on the same page
about key aspects of the business.
 Nature of business policy:
It is an occupation where a person is engaged in manufacturing or buying and selling of goods
and services

Scope and purpose of Business policy:

The scope and purpose of business policy are to provide guidelines for the actions of an
organization and to ensure that all decisions are made in line with the company's goals and
objectives:
• Scope
Business policies apply to all departments and employees of the organization.
• Purpose
Business policies ensure that everyone in the company has a common understanding of how
the company should function. They also help to ensure that decisions are legally sound and
protect the business from lawsuits.
Business policies can cover a wide range of topics, including: Corporate governance, Ethical
standards, Employee behavior, Financial management, and Operational practices.
Business policies are developed by the company's top management and serve as the foundation
for the company's strategic planning and operational success. They help to improve
communication and coordination within the organization, provide guidance to employees, and
manage external factors and legal liabilities.

Concept of Strategic Planning: Strategic planning is a process that helps a company define its
direction and achieve its goals by aligning its actions with its vision.

Strategic planning is a business process that involves identifying trends and issues, setting
priorities, and allocating resources to support the company's vision. It's a broader process than
project planning, which focuses on individual tasks.

Strategic planning helps companies prepare proactively and address issues in a long-term
way. It also helps ensure that employees and stakeholders are working toward common goals.

• The strategic planning process typically involves:

• Reviewing and defining the company's mission and goals
• Conducting competitive assessments
• Identifying company goals and objectives
 • Breaking the company's vision into mid-term and long-term goals
• Creating an action plan and roadmap
• Benefits
Strategic planning can help companies:
• Focus energy and resources
• Strengthen operations
• Make objective decisions based on data and evidence
• Consider the broader impact of decisions on stakeholders.

Strategic Management: Strategic management is a process that helps organizations achieve their
goals and objectives by developing and implementing plans:
• Setting goals: Organizations set clear objectives to guide their actions.
• Creating a plan: Organizations create a strategic plan to serve as a roadmap for achieving their
goals.
• Implementing the plan: Organizations put their plans into action across the organization.
• Evaluating the plan: Organizations monitor progress and make adjustments to improve
performance.
• Adapting to change: Organizations continuously assess and adapt to changing circumstances.

Strategic management is important because it helps organizations: Stay ahead of competitors,

Optimize resource allocation, Improve performance, Ensure long-term sustainability, and Seize
opportunities.

Strategic management can be implemented at the organization-wide level, or at the department

or team level. Some tools used in strategic management include SWOT (strengths, weaknesses,
opportunities, and threats) analysis.

Nature, Scope, process and importance:

Nature of Strategic Management:

1. Comprehensive Approach: It involves considering the organization as a whole and aligning
all aspects of the organization towards a common purpose.
2. Long-term Perspective: It focuses on achieving long-term goals and sustainable competitive
advantage rather than short-term gains.
3. Dynamic Process: Strategic management is not a one-time event but an ongoing, dynamic
process that adapts to changes in the internal and external environment.
4. Involves Decision Making: It requires making crucial decisions about resource allocation,
competitive positioning, and organizational direction.
5. Incorporates Feedback and Evaluation: Continuous monitoring and evaluation of
performance are integral parts of strategic management to ensure that strategies are effective.
Scope of Strategic Management:
1. Environmental Analysis: This involves assessing the external factors that can affect an
organization, including industry trends, competition, regulatory changes, and economic
conditions.
2. Internal Analysis: This focuses on evaluating the organization’s strengths, weaknesses,
resources, and capabilities.
3. Formulation of Strategy: It encompasses the process of developing a clear and feasible
strategy based on the analysis of internal and external factors.
4. Implementation of Strategy: This involves executing the chosen strategy through the
allocation of resources, structuring of operations, and setting up mechanisms for monitoring
progress.
5. Evaluation and Control: Continuous assessment of performance against strategic goals to
identify any necessary adjustments or changes.
Importance of Strategic Management:
1. Provides Direction: It sets a clear path and purpose for the organization, ensuring that all
efforts are aligned with long-term goals.
2. Enhances Adaptability: It helps organizations proactively adapt to changing market
conditions, technology, and customer preferences.
3. Optimizes Resource Allocation: Strategic management ensures that resources are allocated
efficiently to areas that will have the most significant impact on achieving objectives.
4. Fosters Innovation and Creativity: It encourages a culture of innovation by constantly seeking new
and better ways to achieve organizational goals.
5. Improves Organizational Performance: Effective strategic management can lead to improved
financial performance, increased market share, and enhanced competitive advantage.
6. Facilitates Risk Management: It enables organizations to identify and mitigate risks by anticipating
potential challenges and developing contingency plans.

Strategic Decisions:
Strategic decisions is the decisions that look after the environment in which the operation of a
firm takes place, the total resources, and the people who developed the company. These decisions
have a good impact over years and decades, and even after the lifetime of a project.

Administrative and Operation decisions:

An administrative decision is a decision made by an organization's administration that has legal
consequences. Administrative decisions can be made in a variety of ways, including orally, and
can include: Payslips and Other individual decisions.
 Administrative decisions can have direct legal consequences, such as impacting employment
conditions or contracts. Staff members can only legally challenge final decisions.
Administrative decisions can be made by an administrator or a tribunal. Administrative decisions
are different from judicial decisions, which are made according to the judicial process.
Administrative review is a non-judicial dispute resolution mechanism. It can involve advisory
arbitration conducted by an independent third party

Operational decisions are the daily choices made by an organization's managers to run its
operations and activities. They are a vital part of any organization's daily functioning and can
have a direct impact on its performance.
Here are some characteristics of operational decisions:
• Repetitive: They are the most common type of decision made in business, and are often made
in high volume and frequency.
• Short-term: They focus on solving immediate and short-term problems.
• Impactful: They can directly impact an organization's efficiency, effectiveness, and quality of
daily operations.
• Constrained: They are often subject to internal and external constraints.
• Sub-decisions: They can often consist of many sub-decisions.
• Involve others: They can involve customers, suppliers, employees, and products.

UNIT-II Developing: Vision, mission, goals and objectives, strategy, tactics/policies,

importance of corporate Mission statements – their contents and characteristics - some
 examples – Johnson & Johnson’s credo, ‘HP way’ ‘Sony Spirit’ etc. Defining the concept of
strategy – corporate, business and functional level strategy; Intended, Deliberate, Realized,
Unrealized and Emergent strategies.

Vision & mission of corporate Mission statements:

• Vision statement
Describes the company's goals and aspirations, and what it needs to do to achieve its
mission. Vision statements are designed to be uplifting and inspiring, and can remain the same
even if the company's strategy changes.
• Mission statement
Defines the company's business, who it serves, what it does, and how it will achieve its
objectives. Mission statements are usually short, clear, and powerful, and are set in the present
tense.

Objectives of strategic cooperative mission statements :

The objectives of a corporate mission statement are to:

• Define your business purpose
A mission statement helps define your business's purpose and direction, and can serve as a
roadmap for achieving success.
• Guide your business strategy
A mission statement provides benchmarks to work toward and shows the public where you're
headed.
• Attract and retain customers, employees, leaders, partners or stakeholders
A mission statement helps you attract and retain people whose values align with yours.
• Clarify why an organization exists
A mission statement explains your company's goals and how it plans to achieve those goals.

Importance of corporate Mission statements

A corporate mission statement is important because it:
• Defines a company's purpose
A mission statement communicates what a company stands for and what it hopes to
accomplish. It's the "why" the company exists.
• Guides strategy
A mission statement establishes the tone for strategic decisions and ensures alignment with the
organization's goals. It guides the corporate strategy, which in turn guides the marketing
strategy and planning.
• Prioritizes tasks
A clear mission helps to prioritize tasks, focus energy, and maximize impact on target
 customers.
• Motivates employees
A good mission statement can motivate employees and help them stay focused. Mission-driven
employees are more likely to stay at a company longer and grow into high performers.
• Reassures investors
A mission statement can reassure investors of the company's future.
• Shapes a company's identity
A mission statement shapes a company's identity and defines its culture, goals, and values.
• Communicates with stakeholders
A mission statement communicates to customers, employees, and stakeholders what the
business stands for.
• Founds business decisions
A company's mission, values, and vision statements are the foundation on which all business
is conducted and decisions are made.

Policies of corporate Mission statements:

Here are some policies of corporate mission statements:
• Focus on what's important
A good mission statement should be brief, clear, and direct, and should avoid elaborate
language and generalizations.
• Align with core values
A mission statement should be directly aligned with the company's core values, which are the
principles that guide the company's actions.
• Consider the impact on customers
Consider how the company impacts customers, donors, investors, or the community.
• Define the scope of operations
A mission statement should identify the scope of the company's operations in product and
market terms.
• Be memorable
A mission statement should be written in simple, clear, and memorable language

Characterstics of cooperative business statement:

Cooperatives have several characteristics, including:

• Democratic structure
Cooperatives are democratic organizations where each member has one vote, regardless of how
much capital they contribute.
• Open and voluntary membership
Cooperatives are open to anyone who can use their services and is willing to accept the
 responsibilities of membership. Membership is voluntary and there is no discrimination based
on gender, race, social status, politics, or religion.
• Fair distribution of economic results
Cooperatives distribute economic results fairly based on the volume of operations made
through them.
• Principles
Cooperatives adhere to seven principles, including:
• Voluntary and open membership
• Democratic member control
• Economic participation of members
• Autonomy and independence
• Education, training, and information
• Cooperation among cooperatives
• Concern for community
concept of strategy:
The concept of strategy is a plan of action that involves using resources to achieve a goal. It's
a long-term plan that helps an organization gain a competitive advantage and meet the needs
of the market and stakeholders.
Here are some key aspects of strategy:
• Goal setting: Strategies involve setting goals and priorities.
• Resource allocation: Strategies involve using resources efficiently to achieve goals.
• Competitive advantage: Strategies aim to give an organization an advantage over its
competitors.
• Adaptability: Strategies can emerge as a pattern of activity as an organization adapts to its
environment.
• Well-aligned activities: Strategies involve a set of well-aligned activities, with each activity
being a tactic.
• Strategic thinking: Strategies involve strategic thinking and strategic planning

Corporate level strategy :

Corporate-level strategy is a series of decisions and plans that a company makes to manage its
business units and improve its overall performance. It's a long-term strategy that focuses on the
big picture, and is typically set by the board of directors and top management.

business and functional level strategy:

Business and functional level strategies are two of the three levels of strategy in an
organization, along with corporate level strategy:
• Business level strategy
Focuses on how a business competes in specific markets or industries. This strategy is
 concerned with leveraging unique strengths, carving out a competitive position, and delivering
value to customers.
• Functional level strategy
Focuses on maximizing efficiency and performance in specific areas of the business, such as
marketing, human resources, IT, and operations. This strategy involves detailed, short-term
operational plans for key functional areas.
Here are some other things to know about business and functional level strategies:
• Decision-making timeframes
Corporate-level strategy involves decisions that span several years to decades, while business-
level strategy concentrates on 3-5 year plans. Functional-level strategy targets optimizing
department functions within annual cycles.
• Strategy alignment
Strategy alignment is the process of ensuring that your corporate, business, and functional
strategies are consistent, coherent, and complementary.
• Practical application
Some practical applications of functional level strategy include setting functional goals,
allocating resources, and implementing performance metrics

Realized, Unrealized and Emergent strategies:

Realized, unrealized, and emergent strategies are all related to a company's strategic planning
and execution:
• Realized strategy
The result of a combination of deliberate and emergent strategies. Emergent strategy is the
primary factor in determining realized strategy.
• Unrealized strategy
An intended strategy that was abandoned or never implemented. This can happen for a number
of reasons, including poor planning, implementation failure, or a change in the environment.
• Emergent strategy
A strategy that emerges from the decisions made by managers as they interpret the intended
strategy and adapt to changing circumstances.

Intended, Deliberate stratageis:

Deliberate strategies are typically used by large, established businesses that have the data and
experience to plot out long-term solutions. They are often based on historical data and assume
stability.
 An intended strategy is a plan that an organization hopes to execute, while a deliberate strategy
is a part of that plan that is put into action.

UNIT-III Strategy Formulation: Strategic tools for analysis and appraisal of External
Environment – SWOT analysis; and Structure - Conduct – Performance (S-C-P) analysis; -
Industry, competition and competitor analysis – Porter’s five forces model for analysing firm’s
opportunities and threats – concept of Hyper Competition.

Strategic tools for analysis and appraisal of External Environment:

Here are some strategic tools that can be used to analyze and appraise a business's external
environment:
• PESTEL analysis
A technique that analyzes the political, economic, social, technological, legal, and
environmental factors that impact a business
• Porter's Five Forces
A framework for analyzing the competitive forces that shape an industry, such as potential
entrants, existing competitors, buyers, suppliers, and alternative products or services
• SWOT analysis
A tool that identifies a business's strengths, weaknesses, opportunities, and threats
• Four Corners Analysis
A tool that analyzes a competitor company by documenting their motivations, current strategy,
management assumptions, and capabilities
• BCG Matrix
A tool that assesses a company's market growth rate and market share of its products
• Value Chain Analysis
A tool that identifies the primary and support activities that add value to a product
• Scenario planning
A technique that builds plausible views of possible futures for a business
• Critical success factor analysis
A technique to identify the areas in which a business must succeed to achieve its objectives.
 Structure - Conduct – Performance (S-C-P) analysis:

The Structure-Conduct-Performance (SCP) model is a framework that analyzes how a market's

structure, the behavior of sellers, and market performance affect each other. The SCP model is
based on the idea that market structure determines firm conduct, which then determines
performance.
The SCP model is used to:
• Explain and forecast performance
The SCP model aims to explain and forecast how an industry and firm will perform based on
market structure and conduct.
• Provide theoretical justification for industry policy
The SCP model has been used to justify industry policy, such as competition policy.
• Answer empirical questions
SCP researchers were the first to answer questions such as how to measure industry
concentration and market performance, and how these measures change over time.
The SCP model considers the following factors:
• Market structure
The characteristics of market organization, such as the number of competitors, the
heterogeneity of products, and the cost of entry and exit
• Firm conduct
The actions taken by firms, such as price-taking, product differentiation, tacit collusion, and
exploitation of market power
• Firm performance
Indicators such as productive efficiency, allocative efficiency, and profitability
The SCP model was developed and deployed by Joe Bain, who is considered the "undisputed
father of modern Industrial Organization Economics"

Industry, competition and competitor analysis:

Industry and competitor analysis (ICA) is a process that helps businesses and investors
understand their industry and competitive landscape. It's a key part of strategic management
and helps companies develop effective competitive strategies.
Here are some things to consider when conducting an industry and competitor analysis:
• Identify competitors
 Determine who your competitors are, including direct, indirect, and replacement competitors:
• Direct competitors: Offer the same or similar products or services to the same target
market
• Indirect competitors: Offer different products or services but target the same market
segments
• Replacement competitors: Try to satisfy the same customer need as your products but
fall outside your business.

Industry and competitive analysis are vital tools for businesses and investors, offering a deeper
understanding of a company's position within its industry and the competitive landscape. This
analysis is generally approached in a structured manner, breaking down into specific steps to
ensure a holistic understanding.

Porter’s five forces model for analysing firm’s opportunities and threats:

Porter's Five Forces model is a tool used to identify and analyze an industry's competitive forces,
including a firm's opportunities and threats:
• Bargaining power of suppliers
Suppliers with more power can demand higher prices or unfavorable terms, which can negatively
impact a company's profitability.
• Threat of new entrants
New entrants can disrupt existing competitors by offering new products or services, entering the
market with lower prices, or utilizing innovative business models.
• Threat of substitutes
The existence of alternatives that can be easily accepted by users can limit the increased selling
price and profitability of existing products.
• Competitive rivalry
The number of competitors and their ability to undercut a brand can affect a company's power.
• Customer bargaining power
Customers can look for a company that could provide a better deal or lower prices of products.

concept of Hyper Competition:

Hypercompetition is a business strategy term that describes a competitive environment where
companies must constantly adapt and innovate to stay ahead of their rivals. It's characterized by:
• Rapid change: Market conditions change quickly and unpredictably.
• High risk: There's a high level of risk and uncertainty.
• Short-lived advantages: No action or advantage can be sustained for long.
• Aggressive competition: Competition is intense and aggressive.
• Pressure to innovate: Companies must constantly innovate to gain a competitive advantage.
• Disruptive tactics: Companies use tactics to disrupt the competitive advantage of leaders.
 The term was first coined by Richard D'Aveni and is a key feature of the digital economy. In
hypercompetitive markets, companies must work harder on marketing and bring new products
to market faster than ever before.

UNIT-IV Internal Organisational Analysis – Identification of strengths and weakness of a

firm - Resource Based Theory of the firm – Concept of resources, capabilities and competencies,
concept of core and distinctive competencies; strategic intent, stretch and leverage, competence
- based competition; Porter’s Value Chain Analysis for appraisal of firm’s resource capabilities
– Firm’s best Strategic fit.

Identification of strengths and weakness of a firm:

A firm's strengths and weaknesses can be identified through a SWOT analysis, which is a
strategic planning technique. SWOT stands for Strengths, Weaknesses, Opportunities, and
Threats.
Here are some ways to identify a firm's strengths and weaknesses:
• SWOT analysis
This analysis helps identify a firm's internal strengths and weaknesses, as well as external
opportunities and threats. It can help a firm understand how to improve and where to expand.
• Consult with others
A firm can consult with others, such as a peer advisory board, to identify strengths and
weaknesses.
• Monitor customer complaints
A firm can closely monitor customer complaints to identify strengths and weaknesses.
• Compare to competitors
A firm can compare its business to its competitors to identify strengths and weaknesses.
When developing a business strategy, it's important to consider both internal and external
factors.

Resource Based Theory of the firm:

The resource-based theory (RBT) of the firm is a strategic management framework that helps
companies identify and use their resources to gain a competitive advantage. The theory suggests
that a firm's resources should be valuable, rare, difficult to imitate, and nonsubstitutable.
Here are some key concepts of the resource-based theory:
• Competitive advantage
A firm's competitive advantage is what allows it to generate sales or margins, or retain more
customers than its competitors.
• Resources
Resources can be tangible, like a company's property, equipment, or cash, or intangible, like
employee skills, brand names, or customer loyalty.
• Capabilities
Capabilities are needed to manage and exploit resources to create value for customers and gain
an advantage over competitors.
• Organizational systems
A firm's organizational systems, processes, and structure can help it capture value from its
resources.
The RBT was developed in the 1980s and 1990s by a number of authors. Some criticisms of the
RBT include the idea that different resource configurations can create the same value for a firm,
and that the theory has limited prescriptive implications.

Concept of resources, capabilities and competencies:

Resources, capabilities, and competencies are concepts in business that describe a company's
assets, ability to use those assets, and how those abilities are integrated and coordinated:
• Resources
A company's assets, which can be tangible or intangible. Tangible resources include physical
assets like machinery, offices, and warehouses, while intangible resources include skills,
reputation, and brand names.
• Capabilities
A company's ability to use its resources to perform internal activities. Capabilities are developed
and enabled by deploying a company's resources.
• Competencies
A combination of a company's resources and capabilities that are integrated and coordinated to
achieve specific organizational objectives. Core competencies are a unique combination of a
 company's resources and experiences that are difficult to imitate.

concept of core and distinctive competencies:

Core competencies and distinctive competencies are both important for a company's success, but
they are different concepts:
• Core competencies
A company's core competencies are the things it does well and that are critical to its overall
performance. These are things that a company does that are common among its competitors. For
example, a marketing agency's ability to generate data-led campaign ideas is a core competency.
• Distinctive competencies
A company's distinctive competencies are unique characteristics that are difficult to imitate and
give the company a competitive advantage. These are things that a company does well that no
one else in the market is doing. For example, Apple's product design and technological
innovation is a distinctive competency.

strategic intent, stretch and leverage, competence - based competition:

Strategic intent, stretch, and leverage are concepts that are important for a company's long-term
success:
• Strategic intent
A company's strategic intent is its vision and goals, and it's a key part of the strategic management
process. It's a critical foundation for a company to achieve sustainable competitive
advantage. Strategic intent should be defined early and guide a company's day-to-day activities.
• Stretch
Stretch is the idea that a company's resources and capabilities may not be enough to achieve its
goals, so it needs to "stretch" them to meet the challenge. This stretch can create a gap between
the company's resources and its ambitions.
• Leverage
Once a company has created a stretch, it can use leverage to stretch its resources and meet its
ambitions.
• Competence-based competition
A company can use strategic intent, stretch, and leverage to build a competitive advantage. For
example, Coca-Cola's strategic intent is to make Coke accessible to every consumer in the world.
Some other strategies that companies can use to build a competitive advantage include:
• Creating corporate challenges: These challenges can help align employees and build new
capabilities.
• Establishing milestones and review mechanisms: These can help track progress and ensure
that desired behaviors are reinforced.
• Learning from outsiders: Companies can learn from both insiders and outsiders.
• Recycling core competencies: Companies can view core competencies as corporate resources,
not just the property of individual businesses.

Porter’s Value Chain Analysis for appraisal of firm’s resource capabilities – Firm’s best Strategic
fit:

Porter's value chain analysis is a model that can help a firm assess its resource capabilities and
determine its best strategic fit:
• What it is
A model that breaks down a firm into primary and support activities to identify which activities
contribute to a competitive advantage.
• How it's used
A strategic analysis tool that can help a firm:
• Understand the source of its competitive advantage
• Identify activities that add the most value
• Develop competitive strategies
• Diagnose areas for improvement
• How it works
The model breaks down a firm into five primary activities and four support activities:
• Primary activities: Inbound logistics, operations, outbound logistics, marketing and
sales, and service
• Support activities: Firm infrastructure, human resources management, and
procurement
• How to use it
The steps for using value chain analysis are:
o Map the value chain
o Analyze each activity
o Identify opportunities for improvement
o Develop strategic actions
o Implement and monitor changes

UNIT-V Competitive advantage of firm – its Sources: Cost, Quality Innovation and customer
responsiveness etc., - Michel Porter’s Business level (or Generic) strategies for competitive
advantage: Cost leadership, Differentiation and Focus – Entry and Exit Barriers, Mobility
Barriers – Economies of scale, Learning or Experience Curve benefits.

Competitive advantage of firm – its Sources: Cost, Quality Innovation and customer
responsiveness:
 A firm can gain a competitive advantage through cost, quality, innovation, and customer
responsiveness in several ways:
• Cost advantage
A firm can produce a product or service at a lower cost than its competitors. This can be
achieved by reducing costs in the value chain.
• Differentiation advantage
A firm can offer a product or service that is superior in quality, service, or features. This can
be achieved through product innovation, exceptional customer service, or a strong brand
image.
• Customer responsiveness
A firm can respond to customer inquiries or service requests in a timely manner. This can be
measured by how quickly customer inquiries and complaints are answered.

Competitive advantages are attributed to a variety of factors including cost structure, branding,
the quality of product offerings, the distribution network, intellectual property, and
customer service.

Michel Porter’s Business level (or Generic) strategies for competitive advantage:
ichael Porter's generic strategies for competitive advantage are cost leadership, differentiation,
and focus:
• Cost leadership
A strategy that aims to be the lowest-cost producer in an industry by reducing costs and offering
a comparable quality product or service at a lower price. This strategy can be achieved by
streamlining operations, reducing overhead costs, and leveraging economies of scale.
• Differentiation
A strategy that aims to be unique in an industry by emphasizing factors like design, quality,
brand, or customer service. This strategy can help a company command premium prices and
build customer loyalty.
• Focus
A strategy that involves targeting a specific market segment or niche and tailoring products,
services, or marketing efforts to meet that segment's unique needs. This strategy can be
achieved through either cost focus or differentiation focus

Porter wrote in 1980 that strategy targets either cost leadership, differentiation, or focus. These
are known as Porter's three generic strategies and can be applied to any size or form of business.
Porter claimed that a company must only choose one of the three or risk that the business would
waste precious resources.

Porter's competitive strategies outline three core paths to competitive advantage: cost
 leadership, differentiation, and focus, each offering a distinct route to market supremacy. Cost
Leadership: Cost leadership aims to make a firm the most cost-efficient producer, not at the
expense of quality.

Cost leadership, Differentiation and Focus – Entry and Exit Barriers:

Cost leadership, differentiation, and focus are three major competitive strategies that can help
a firm achieve profitability. A firm's ability to enter and exit an industry is limited by barriers
to entry and exit, respectively. Here's some information about these concepts:
• Cost leadership
A cost leadership strategy involves becoming the low-cost producer in an industry. This
strategy can create barriers to entry by making it difficult for new competitors to enter the
market. Cost leadership can be successful in price-sensitive sectors where companies can
leverage economies of scale to minimize costs.
• Differentiation
A differentiation strategy involves creating unique attributes or premium offerings to appeal to
customers who value quality. This strategy can be successful in markets where companies can
command premium prices.
• Focus
A focus strategy involves concentrating on a specific market segment.
• Barriers to entry
Barriers to entry are things that prevent a competitor from entering an industry. Industries with
strong barriers to entry may be profitable and have limited competition.
• Barriers to exit
Barriers to exit are things that prevent a competitor from leaving an industry. Industries with
strong barriers to exit may have more rivalry than industries that are easy to leave.

Mobility Barriers – Economies of scale, Learning or Experience Curve benefits:

Mobility barriers can help companies create a competitive advantage by preventing competitors
from entering a market or accessing resources. The benefits of economies of scale and the
experience curve can help companies achieve these goals:
• Economies of scale
These benefits include:
• Reduced costs: Companies can spread fixed costs over a larger number of units
produced, which can reduce unit costs.
• Increased profits: Companies can generate higher profits and a higher return on capital
investment.
• Larger business scale: Companies can become less vulnerable to external threats, which
can positively impact their share price and ability to raise new financing.
• Learning effect: Companies become more proficient in their processes as they produce
 more, which can lead to continuous improvement.
• Experience curve
This concept states that the cost of production decreases as a company's cumulative production
quantity increases. The experience curve looks at the broader picture than the learning curve,
which only takes into account labor costs. The experience curve considers marketing,
distribution, manufacturing, and more.
 SUBJECT 2. BUSINESS ETHICS & CORPORATE GOVERNANCE

Unit- I: Concept of Ethics: Meaning and definition of Ethics – Ethical Theories – Values –
Need for Ethics and Values – Indian Value System – Various approaches to Ethics.
Unit-II: Business Ethics: Concept, meaning and definition of Business Ethics – Ethical
corporate behavior – Ethical decision making – Conflicts in decision making from the legal
and moral points of view. Work Ethics: Nature and scope. Ethical dilemma. Ethics in functional
areas such as finance, marketing, HR, IT, etc.
Unit- III: Corporate Social Responsibility: Corporate Social Responsibility (CSR) &
significance of CSR in business. CSR principles and strategies for business organizations. Best
practices in CSR. Orienting management education towards ethical behavior.
UNIT- IV: Corporate Governance: Meaning and definition of corporate governance –
Corporate management structure for corporate governance – Boards of Directors –
Responsibilities of Boards of Directors – Legal requirements for Boards of Directors with
regard to Corporate Governance – Morale responsibilities of Boards of Directors.

UNIT- V: Corporate Governance in Global Scenario: Corporate governance requirements

in the ever changing global scenario. Global practices: Cadbury report – OECD Committee
recommendations. Desirable corporate governance in India – a Code. Summary of the SEBI
Committee –report of the Consultative Group of Directors of Banks / Financial Institutions –
Summary of Naresh Chandra Committee on Corporate Audit and Governance. Towards
developing a best corporate governance system in an organization.

Unit- I: Concept of Ethics: Meaning and definition of Ethics – Ethical Theories – Values – Need for
Ethics and Values – Indian Value System – Various approaches to Ethics

Meaning and definition of Ethics:

Ethics are a system of moral principles that guide people's behavior and decisions. They help people determine
what is right and wrong, and how to treat others with fairness and respect. Ethics are also known as moral
philosophy.
Ethics can be applied to a variety of situations, including:
• Personal life: Ethics can guide people to tell the truth, keep their promises, and help others in need.
• Business: Ethics can help people make decisions that contribute to the common good.
• Professional life: Ethics can govern the conduct of individuals and professions.
• Medical decisions: Ethics can help people make decisions about medical care for others who can't express
their own wishes.
 Ethical Theories: Ethical theories are philosophical systems that help explain and
define what is considered ethical and how to behave ethically:
• Purpose
Ethical theories provide a way to describe and prescribe what is considered "right" and
"wrong". They can also help guide decision-making by providing different perspectives on
ethical problems.
• Examples
Some examples of ethical theories include:
• Deontological ethics: Focuses on defining a system of rules that govern
behavior and define right and wrong regardless of the outcome
• Consequentialist ethics: Focuses on the outcomes of actions to determine
what is right and wrong
• Utilitarianism: Focuses on acting in a way that yields the greatest benefits for
the greatest number of people
• Decision-making
Ethical theories can help people make decisions by providing different decision-making
styles and rules. For example, some people might focus on predicting outcomes, while others
might focus on following their duties to others.
• Common goals
Decision makers often seek to achieve common goals, such as:
• Beneficence
• Least harm
• Respect for autonomy
• Justice

Need for Ethics and Values:

Ethics and values are important because they help people make ethical decisions,
live a fulfilling life, and contribute to society:
• Personal development
Ethics and values can help people develop a sense of purpose and meaning, and live a
balanced life.
• Professional development
Ethics and values can help people behave ethically, build confidence, and reinforce their
professional identity.
 • Business ethics
Business ethics can help prevent fraud, create a culture of transparency, and help people
assess and prevent fraud.
• Workplace ethics
Ethical leaders can build trust with their employees, which can strengthen their ability to lead
and influence their workforce.
• Social work
Integrity is important in social work because it helps social workers build trust with clients
and colleagues.
Some examples of values include:
• Honesty: Honesty is the foundation of integrity and can help establish credibility and
foster agreement.
• Gratitude: Gratitude is the willingness to express appreciation for what you have.

Indian Value System: India's value system is based on ancient scriptures and is
influenced by the country's diverse religions and traditions. Some of the most
important values in Indian culture include:
• Dharma: The concept of dharma emphasizes duty, righteousness, and moral order.
• Respect for elders: This is a deeply ingrained value in Indian culture.
• Hospitality: Indians are known for treating guests with respect and offering them the
best of what they have.
• Family cohesion: This is a deeply ingrained value in Indian culture.
• Ahimsa: This value promotes compassion and harmony.
• Education: Indians place a high value on education and it is not uncommon for
people to pursue higher education even if they do not come from wealthy families.
• The arts and literature: India has a rich tradition of music, dance, and art, and Indian
literature is also highly respected.

Various approaches to Ethics: There are many different approaches to ethics,

including:
• Virtue ethics
Focuses on developing virtuous character traits like honesty, courage, and
compassion. For example, a business leader might consider how their actions reflect
on their character and the values they want to uphold.
• Utilitarianism
 The moral rightness or wrongness of an action is determined by its
consequences. For example, an action is considered right if it promotes more
happiness for more people.
• Deontological ethics
An action is considered morally good because of some characteristic of the action
itself, not because of the product of the action. For example, some acts are morally
obligatory regardless of their consequences.
• The rights approach
Managers should determine specific responsibilities, help group members who are
facing issues, and check whether specific duties are required.
• Common good approach
While respecting and valuing the freedom of individuals to pursue their own goals,
the common-good approach also challenges us to recognize and further those goals
we share in common.
Other approaches to ethics include: normative ethics, descriptive ethics, meta-ethics,
justice theory, and social contracts theory
 Unit-II: Business Ethics: Concept, meaning and definition of Business
Ethics – Ethical corporate behavior – Ethical decision making – Conflicts in
decision making from the legal and moral points of view. Work Ethics:
Nature and scope. Ethical dilemma. Ethics in functional areas such as
finance, marketing, HR, IT, etc.

Concept, meaning and definition of Business Ethics:

Business ethics is a set of moral principles and values that guide the behavior
of individuals and organizations in the business world. It's also known as
corporate ethics.
Business ethics can be defined as:
• A code of conduct
A set of written and unwritten rules that establish what's right and wrong in a
business context
• A framework for decision-making
A way to determine what's ethical and what's not, and how to act accordingly
• A way to build trust
A way to establish trust between a business and its customers, employees, and
other stakeholders
Business ethics can cover a wide range of issues, including:
corporate governance, fair trade practices, environmental responsibility,
employee rights, consumer protection, insider trading, bribery, discrimination,
and social responsibility.
Business ethics can vary between companies due to differences in culture,
structure, and strategy. While the law usually sets the tone for business ethics,
it's generally not enough to just do the minimum.
Some benefits of business ethics include:
• A good reputation
• Better decision-making
• Business growth
• Better employer-employee relations
• Employee growth
• Avoidance of litigation costs
• Prevention of fraud
• Increased organizational competitiveness
• Better service to society

Ethical corporate behavior – Ethical decision making:

Ethical corporate behavior is based on values like fairness, respect,
responsibility, and trustworthiness. It's important for businesses to make
ethical decisions because they can build trust and ensure that all decisions are
good for the business.
Here are some tips for ethical decision making:
• Consider the options: Think about the different choices you have and how
you can achieve your business goals.
• Review relevant codes: Know the applicable laws and regulations, and
review relevant ethical codes.
• Identify the problem: State the problem and identify the potential issues
involved.
• Get the facts: Check the facts and identify relevant factors.
• Evaluate the options: Consider the moral ramifications of each option and
test them.
• Make a choice: Make a choice based on your values and standards.
• Reflect on the outcome: Implement your decision and reflect on the
outcome.
Some principles of ethical decision making include:
• Autonomy: Allow individuals to make their own choice.
• Justice: Treat people in accordance to their needs.
• Beneficence: Decisions should be based on one's maximum good.
• Nonmaleficence: Cause no harm.
• Fidelity: Remain faithful and loyal in the process.

Conflicts in decision making from the legal and moral points of view:
Conflicts in decision making from the legal and moral points of view can arise
when legal requirements and ethical standards contradict each other. This can
create tension between compliance and moral integrity, and force
professionals to choose between the two.
Here are some examples of conflicts in decision making from the legal and
moral points of view:
• Healthcare
 A law may require a physician to participate in a procedure that violates their
ethical code.
• Research integrity
A researcher may face a moral conflict when deciding whether to add a person
as an author to an article.
• Confidentiality
A health extension practitioner may face confidentiality conflicts.
• Loyalty
A worker may be torn between loyalty to a friend who is stealing from the
office and the duty to report the theft.
• Custody
A social worker may be unable to decide whether to move a child out of a
disrupted home because of concerns about the child's mother.

Work Ethics: Nature and scope:

Work ethics are the principles and values that guide behavior in the
workplace. Ethical dilemmas are situations where there's no clear ethical or
moral choice, and an action must be taken that violates an ethical principle.
Here are some examples of ethical dilemmas in the workplace:
• Conflicts of interest: When an employee takes advantage of a business
situation for personal gain
• Misleading advertising: When a product or service is represented in an
unethical way
• Personal goals: When an employee's desire to make more money leads them
to unethical sales practices
• Social factors: When an employee takes an extended break because their co-
workers do
• Situational opportunities: When an employee uses a phone for personal
calls.

Ethics in functional areas such as finance, marketing, HR, IT, etc:.

Ethics are important in many functional areas of a business, including finance,

marketing, human resources, and IT. Here are some examples of ethics in these
areas:
• Finance: Ethical leadership in finance involves making decisions that are fair, just,
and profitable, while also adhering to the organization's ethical standards and societal
norms. Financial ethics are a set of guidelines that help ensure the integrity of
financial professionals and the institutions they work for. Unethical behavior in
 finance can result in loss of trust and reputation, monetary penalties, and criminal
prosecution.
• Human resources: Ethics in human resources management include:
o Treating employees fairly and justly
o Ensuring equal opportunity
o Being open and consultative with employees about matters that affect them
o Ethical leaders in human resources should serve as role models, demonstrate
integrity, and promote moral values and practices
• Marketing: Marketing promotes the products developed by operations.
 Unit- III: Corporate Social Responsibility: Corporate Social Responsibility (CSR)
& significance of CSR in business. CSR principles and strategies for business
organizations. Best practices in CSR. Orienting management education towards
ethical behavior

Corporate Social Responsibility (CSR) & significance of CSR in business:

Corporate Social Responsibility (CSR) is a business concept that describes a
company's commitment to operating ethically and responsibly. It involves
considering the social, economic, and environmental impact of a company's business
processes, as well as human rights.
CSR is based on the idea that businesses have a greater duty to society than just
making profits and providing jobs. Socially responsible companies:
• Adopt policies that promote the well-being of society and the environment
• Lessen the negative impacts on society and the environment
• Consider the environmental and social impacts of their decisions
CSR can have many benefits for a business, including:
• Increased brand recognition
• Improved customer loyalty
• Boosted company reputation
• Bolstered public trust
• Accelerated capital growth
• Deepened competitive advantage
• Increased employee engagement
• Attracting investment opportunities and top talent
One aspect of CSR is philanthropic responsibility, which involves how a company
spends its resources to make the world a better place. This can include:
• Donating profits to charities or causes
• Only entering into transactions with suppliers or vendors that align with the company
philanthropically
• Supporting employee philanthropic endeavors
• Sponsoring fundraising events

CSR principles and strategies for business organizations:

Economic Responsibility:
• Economic contribution: job creation and fair pay.
• Ethical business practices: Compliance with the highest ethical standards in all
business relationships.
• Creating value for stakeholders: Ensuring that the business model benefits everyone
involved.
Best practices in CSR: Integrate Sustainability into Operations

One of the foundational pillars of social responsibility is sustainability. Evaluate and

enhance your business operations to minimize environmental impact. I could
involve adopting eco-friendly practices, reducing waste, or sourcing materials
responsibly.

Orienting management education towards ethical behavior: Here are some ways to
orient management education towards ethical behavior:
• Teach ethics as a subject
In addition to teaching ethics as a subject, management education can also focus on
cultivating ethical behavior, character, and decision-making.
• Model ethical behavior
Educational leaders should model the behavior they expect from others, consistently
demonstrating honesty and integrity in decision-making and actions.
• Apply ethical principles
Ethical behavior in management means operating according to fair and transparent
standards, and going above and beyond to ensure decisions are applied through an
ethical lens.
• Consider different approaches to ethics
Some approaches to ethics include virtue ethics, consequentialist ethics, and
deontological or duty-based ethics.
• Consider ethical principles in education
Some ethical principles in education include autonomy, prevent harm, do good,
justice, and fidelity.
 UNIT- IV: Corporate Governance: Meaning and definition of corporate
governance – Corporate management structure for corporate governance –
Boards of Directors – Responsibilities of Boards of Directors – Legal
requirements for Boards of Directors with regard to Corporate Governance –
Morale responsibilities of Boards of Directors.

Meaning and definition of corporate governance:

Corporate governance is the system of rules, practices, and processes that
control and direct a company. It's also known as the "management of an
organization's management".
The goal of corporate governance is to manage a business to maximize long-
term value while protecting the interests of all stakeholders. Stakeholders
include:
Shareholders, Management, Employees, Customers, Suppliers, Partners,
Investors, Governments, and Community interests.
Corporate governance involves:
• Overseeing strategy, performance, and culture
• Ensuring compliance with laws and ethical standards
• Making decisions in the interest of stakeholders
• Accepting the rights of shareholders as the true owners of the corporation
• Recognizing management's role as trustees on behalf of shareholders

Corporate management structure for corporate governance: A corporate

governance structure defines the roles and responsibilities of the different
parties in a corporation, and the rules and procedures for making
decisions. The main components of a corporate governance structure are:
• Shareholders: Provide capital and have a say in major decisions
• Board of directors: Oversees management, sets strategic direction, and
appoints senior management
• Officers and employees: Responsible for day-to-day operations and
implementing business strategies
• Audit committee: Ensures financial transparency, oversees financial
reporting, and monitors internal controls
• Senior management: Responsible for day-to-day operations and decision-
making processes
 Boards of Directors – Responsibilities of Boards of Directors:
A board of directors has many responsibilities, including:
• Overseeing and advising
Boards of directors ensure that a company operates in the interests of
shareholders and other stakeholders, and that it functions effectively.
• Ensuring legal compliance
Boards ensure that the company complies with local, state, and federal laws.
• Overseeing finances
Boards oversee the company's financial management, which includes
reviewing financial performance regularly.
• Attending board meetings
Board members meet to discuss important topics, such as strategic planning,
financial budgets, and project proposals.
• Governance
Nonprofit boards ensure compliance with laws and regulations, and oversee
the organization's mission. For-profit boards are accountable to shareholders
and make decisions that align with the company's financial interests.
• Management
Boards make decisions on behalf of shareholders, and oversee a company's
management decisions.

Legal requirements for Boards of Directors with regard to Corporate

Governance: he Board of Directors of a company has several legal
requirements related to corporate governance, including:
• Meeting frequency
The Board of Directors must meet at least four times a year, with no more
than 120 days between meetings.
• Composition
The Board of Directors must have a minimum of six and a maximum of 15
directors, with at least half of them being independent directors. At least one
of the independent directors must be a woman.
• Disclosures
Directors must make annual disclosures about their directorships, and any
changes must be reported. Independent directors must also make annual
disclosures about their independence.
• Compliance
The Board of Directors must ensure the company complies with all legal
 requirements. This includes reviewing the company's compliance with
regulatory and statutory requirements on a regular basis.
• Governance policies
The Board of Directors is responsible for implementing governance
policies. This includes overseeing business operations, measuring and
rewarding management performance, and ensuring the integrity of financial
accounting and reporting systems.
• Disclosure of directors
The company must disclose details of the appointed directors to the public
through statutory filing.

Morale responsibilities of Boards of Directors:

A board of directors has many moral responsibilities, including:
• Ethical leadership
Board members should act in a selfless manner, prioritizing the company and
team over their own personal goals. They should also encourage responsible
leadership and set high standards for ethical practices.
• Compliance with the law
Board members should ensure the company conducts business in a
transparent, fair, and integrity-based manner. They should also ensure the
company complies with all statutory requirements and respects the law.
• Oversight and accountability
Board members should ensure the company adheres to legal standards and
acts in accordance with its stated purposes. This involves overseeing the
company's financial performance, activities, and risk management.
• Confidentiality
Board members should maintain the confidentiality of any confidential
information about the company that comes to them, except when legally
mandated or authorized.
 UNIT- V: Corporate Governance in Global Scenario: Corporate
governance requirements in the ever changing global scenario. Global
practices: Cadbury report – OECD Committee recommendations. Desirable
corporate governance in India – a Code. Summary of the SEBI Committee –
report of the Consultative Group of Directors of Banks / Financial
Institutions – Summary of Naresh Chandra Committee on Corporate Audit
and Governance. Towards developing a best corporate governance system in
an organization.

Corporate governance requirements in the ever changing global scenario:

Corporate governance requirements are evolving in response to a number of
factors, including: Technological advances, Increasing demands for
sustainability and social responsibility, Growing emphasis on diversity and
inclusion, Regulatory actions, and Activism.
Here are some corporate governance requirements to consider:
• Transparency and accountability: Establish internal codes of conduct,
compliance programs, and financial reporting standards.
• Board composition: Consider a diverse board with members who have
international experience.
• Stakeholder engagement: Consider the interests of employees, customers,
and communities where the company operates.
• Environmental, social, and governance (ESG) metrics: Investors and
organizations are prioritizing non-financial factors over profits.
• Independent director elections: Some recommend that boards have at least
50 percent independent directors.
• Annual shareholder meetings: There is a shift toward hybrid in-person and
virtual annual shareholder meetings.
• Minority shareholder protections: Investors are emphasizing minority
shareholder protections.
• Global Corporate Governance Trends for 2023
10 Mar 2023 — The Financial Reporting Council has announced there will
be a consultation on changes to the AGRA Code in the first qua...
The Harvard Law School Forum on Corporate Governance
• The future of corporate governance | CGI
Stakeholder engagement is becoming increasingly important in corporate
governance. Companies must proactively engage with their st...
 . Cadbury report – OECD Committee recommendations: The Cadbury
Committee Report of 1992 made recommendations to improve corporate
governance in the UK, including recommendations that are relevant to the
OECD Corporate Governance Committee:
• Board structure
The report recommended that boards have at least three non-executive
directors, and that the roles of CEO and chairman be separate.
• Audit committees
The report recommended establishing audit committees to improve the
relationship between the auditor and the company, and to rotate audit
partners.
• Shareholder rights
The report emphasized shareholders' rights to hold boards accountable, and
encouraged institutional investors to exercise their voting rights.
• Transparency
The report recommended that boards be more transparent and accountable.
• Code of Best Practice
The report recommended that boards comply with a Code of Best Practice
regarding their structure, responsibilities, and relationship with shareholders
and auditors

Desirable corporate governance in India – a Code: Desirable Corporate

Governance: A Code is a voluntary code of best practices for corporate
governance in India that was released in 1998 by the Confederation of Indian
Industry (CII). The code was developed to promote transparency, protect
investor interests, and move the corporate sector toward international
disclosure standards.
The code included recommendations such as:
• Introducing independent directors for listed companies
• Limiting the number of directorships a person can hold in listed companies
• Requiring non-executive directors to meet certain competency requirements
• Limiting the commission payable to a managing director
• Requiring directors to actively participate in affairs for re-appointment
• Requiring an audit committee

Summary of the SEBI Committee –report of the Consultative Group of

Directors of Banks / Financial Institutions: The Consultative Group of
Directors of Banks and Financial Institutions was set up by the Reserve Bank
 of India (RBI) to review the role of boards of banks and financial
institutions. The group's recommendations include:
• Distinguishing responsibilities
The report emphasizes the responsibilities of boards and management in
establishing systems for good corporate governance.
• Protecting shareholder rights
The report highlights the rights of shareholders to demand corporate
governance.
• Benchmarking against international best practices
The group's recommendations were benchmarked against international best
practices from the Basel Committee on Banking Supervision and other
committees and advisory bodies.
• Addressing compensation practices
The group noted that compensation practices at financial institutions may
have contributed to the global financial crisis. The group recommended
regulating incentive structures for key management personnel to address this
issue

Summary of Naresh Chandra Committee on Corporate Audit and

Governance:
The Naresh Chandra Committee was established on January 21, 2002, by the
Department of Company Affairs (DCA), under the Ministry of Finance and
Corporate Affairs of the Union Government of India. This committee, led by
Mr. Naresh Chandra, was tasked with the responsibility of examining and
suggesting significant changes to the laws that govern the relationship
between auditors and their clients, as well as the role of independent
directors. The committee aimed to propose guidelines that could enhance
corporate governance in both theory and practice.
Aspiring IAS candidates can refer to this comprehensive List of Committees
and their purposes to boost their UPSC preparation. This article delves into
the details about the Naresh Chandra Committee which will be beneficial for
IAS Mains Polity and GS-II papers preparation.
About the Naresh Chandra Committee 2002
The Naresh Chandra Committee was set up by the Government of India. It
was a pivotal initiative aimed at revamping corporate governance standards
in the country. The committee was chaired by Naresh Chandra, an eminent
bureaucrat with a rich legacy in public service. It was tasked with examining
existing corporate governance norms and suggesting improvements to align
 with global best practices. The formation of this committee was a response
to a series of corporate scandals globally. These had shaken investor
confidence and highlighted the need for robust governance frameworks.
Formation of the Naresh Chandra Committee
The Naresh Chandra Committee was constituted in August 2002 by the
Ministry of Corporate Affairs (MCA). The primary trigger for its formation
was the increasing number of corporate scandals and failures both
internationally and within India. This underscored significant weaknesses in
corporate governance. The committee’s objective was to review the existing
corporate governance mechanisms, identify gaps, and propose measures to
enhance accountability, transparency, and investor protection in the
corporate sector.

Towards developing a best corporate governance system in an organization.:

To develop a best corporate governance system in an organization, you can
consider the following:
• Define roles and responsibilities: Establish clear lines of accountability for
the board, CEO, and other management. Create written mandates for the board
and committees, and separate the roles of the board chair and CEO.
• Monitor performance: Ensure that corporate decision making is consistent
with the organization's strategy and owners' expectations.
• Build a diverse board: Promote diversity of perspectives and broaden the
board's skillset.
• Strengthen risk oversight: Strengthen risk oversight and management.
• Promote ethics and compliance: Promote a culture of ethics and
compliance.
• Incorporate sustainability: Incorporate sustainability into the core strategy.
• Strengthen shareholder rights: Strengthen shareholder rights.
• Create a governance infrastructure: Create a working governance
infrastructure.
• Develop a board culture: Develop a board culture that helps it thrive.
• Conduct regular board evaluations: Conduct regular board evaluations.
 HRM SPECIALIZATION
BUS 3.4.HR (R22): INDUSTRIAL RELATIONS & LABOUR LAWS

Unit -I: Industrial Relations: Concept, Objectives & Importance, Evolution and growth of
Industrial Relations in India, Approaches to Industrial Relations, Factors influencing Industrial
Relations, Recent trends in Industrial Relations., Functions of Trade unions,, Problems of Trade
Unions, Recognition of Trade Unions,, Essentials for success of Trade Unions.
Unit –II: Collective Bargaining: Concept, Importance and Objectives of Collective
Bargaining, Process of Collective Bargaining, Prerequisites for success of Collective
Bargaining, Productivity Bargaining. Forms of Worker’s Participation in Management in India,
Evaluation of Worker’s Participation in Management, and Conditions for success of Worker’s
Participation in Management.
Unit –III: Grievances and Discipline: Causes of Grievances, Grievance procedure,
Machinery available for redressal of Grievances, Prerequisites of a Grievance procedure.
Discipline: Forms of Discipline, Causes of Indiscipline, Types of Punishments, Measures for
dealing with indiscipline.

Unit –IV: Industrial Disputes: Meaning, Nature and Scope of Industrial Dispute, Causes and
Consequences of Industrial Disputes, Prevention and settlement of Industrial Disputes in India,
Industrial Disputes act of 1947.
Unit -V: Labour Laws: Labour laws in Fundamental Rights- The Minimum Wages Act,
1948,The Payment of Wages Act, 1936,The Trade Unions Act, 1926,The Industrial Disputes
Act, 1947,The Factories Act, 1948,Labour laws and practices in India.

Unit -I: Industrial Relations: Concept, Objectives & Importance, Evolution and growth of Industrial
Relations in India, Approaches to Industrial Relations, Factors influencing Industrial Relations, Recent
trends in Industrial Relations., Functions of Trade unions,, Problems of Trade Unions, Recognition of
Trade Unions,, Essentials for success of Trade Unions

Concept, Objectives & Importance, Evolution and growth of Industrial Relations in India: Industrial
relations (IR) is a dynamic process that aims to improve the relationship between workers and
management, and to create a harmonious work environment. The objectives of IR include:
• Improving the economic status of workers
• Establishing industrial peace
• Protecting the interests of both workers and management
• Increasing productivity
• Establishing industrial democracy
• Securing the social, economic, and political interests of workers
• Creating a full employment situation
• Minimizing strikes and lockouts
IR in India has evolved in response to the country's planned economic development, social policies, and
industrial peace requirements. The government has implemented various measures to prevent and
resolve disputes, including:
• The Code of Discipline, which allows unions to claim recognition if they represent 25% of the total
workers in an industry
• The Maharashtra Act for Prevention of Unfair Labour Practices and Compulsory Recognition of Trade
Unions, 1971
• The Bombay Industrial Relations Act, which gives the appropriate authority the power to recognize a
representative union in a plant or industry
The nature of IR is a result of complex transactions between employers, employees, trade unions, and
the state. Changes in the socio-economic context of a country will inevitably lead to changes in the
nature of IR
.

Approaches to Industrial Relations, Factors influencing Industrial Relations, Recent trends in

Industrial Relations.: Here are some approaches to industrial relations, factors that influence industrial
relations, and recent trends in industrial relations:
• Approaches to industrial relations
The "contradictions perspective" and the "orderliness perspective" are two approaches to industrial
relations. Another approach focuses on voluntary negotiations between employers and employees to
settle disputes.
• Factors that influence industrial relations
These include:
• The attitude of management, employees, and unions
• The conditions of employment
• The existence of a grievance handling system
• The efficacy of rules
• The organizational culture
• Recent trends in industrial relations
These include:
• The shift towards remote and hybrid work models
• Disinvestments, which can change ownership and affect employment and trade unions
• Deregulation, which can reduce state regulations and affect pension provisions .

Functions of Trade unions,, Problems of Trade Unions, Recognition of Trade Unions,, Essentials
for success of Trade Unions : Trade unions have many functions, including:
• Collective bargaining: Trade unions negotiate with employers on behalf of their members to improve
working conditions, pay, benefits, and more. The goal is to reach a collective bargaining agreement (CBA)
 that sets the standard for employment terms.
• Providing services: Trade unions provide assistance and services to their members, such as legal and
financial advice.
• Industrial action: If negotiations fail, trade unions may resort to industrial action, such as strikes, as a last
resort.
• Political campaigning: Trade unions may participate in political campaigning.
• Improving public services: Trade unions may work to improve the quality of public services.
Trade unions face a number of challenges, including:
• Limited financial resources
• Lack of unity among labor unions
• Political ambitions of leadership
• Question of recognition of the unions
• Union dues being costly
• Unionization creating more bureaucracy within the company
Some essentials for a successful trade union include:
• Continuity: Trade unions should be permanent organizations that can plan long-term and negotiate
effectively with employers.
• Independence: Trade unions should be autonomous and have an independent decision-making process.
• Membership enrollment: Trade unions should encourage membership enrollment and highlight the benefits
of membership.
• Leadership development: Trade unions should develop leadership from within.
• Member education: Trade unions should improve members' education.

Unit –II: Collective Bargaining: Concept, Importance and Objectives of Collective

Bargaining, Process of Collective Bargaining, Prerequisites for success of Collective
Bargaining, Productivity Bargaining. Forms of Worker’s Participation in Management in India,
Evaluation of Worker’s Participation in Management, and Conditions for success of Worker’s
Participation in Management.

Concept, Importance and Objectives of Collective Bargaining : Collective bargaining is a voluntary

process where employees and employers negotiate mutually beneficial terms and conditions of
employment. It's important because it:
• Enhances employee rights
It's a fundamental right for employees to submit grievances and negotiate with their employers.
• Improves working conditions
Employees can negotiate for better pay, benefits, safety, and working conditions.
• Promotes fairness
It gives employees and employers equal bargaining power, so neither party can take advantage of the
other.
• Reduces disputes
 It helps employers and employees handle disputes by making compromises to reach a consensus.
• Enhances employee voice
It gives employees a platform to voice their grievances and be heard.
• Creates a stable work environment
It helps employers and employees develop a better understanding of each other's problems and
aspirations.
• Encourages employee satisfaction
Employees feel more satisfied when they understand that management listens to their needs.
• Fosters industrial democracy
It promotes industrial democracy and keeps government interventions at bay.

The main objectives of collective bargaining are to establish mutually beneficial employment terms and
conditions between employers and employees:
• Fair wages and working conditions: Collective bargaining is a key means to establish fair wages and
working conditions.
• Harmonious relations: Collective bargaining helps to foster and maintain cordial relations between the
employer and the employees.
• Protect interests: Collective bargaining protects the interests of both the employer and the employees.
• Avoid government intervention: Collective bargaining helps to keep government interventions at bay.
• Promote industrial democracy: Collective bargaining promotes industrial democracy.

Process of Collective Bargaining:

Collective bargaining is a negotiation process between a labor union and an employer to reach a written
agreement that governs the terms and conditions of employment. The process typically involves the
following steps:
• Preparation
The union and employer each select a team to represent them in negotiations. The teams analyze the
current agreement and identify areas for improvement. The union and employer also prepare by learning
the law, filing notices, and assessing the strengths and weaknesses of the current contract.
• Negotiations
The union and employer exchange proposals and counterproposals, and express the rationale behind
their proposals. The process usually involves multiple rounds of bargaining.
• Agreement
The union and employer reach a tentative agreement, which they then review with their respective
constituencies.
• Implementation
The agreement is implemented, and both parties can revise it during the term of the contract with the
agreement of both parties.
• Dispute resolution
If the union and employer cannot reach an agreement, they can use dispute settlement procedures such
as conciliation, mediation, or arbitration. They can also use legal tactics such as strikes or lockouts to
 pressure an agreement.

Prerequisites for success of Collective Bargaining :

Collective bargaining is a process that can be successful when all parties involved are positive,
respectful, and willing to make adjustments. Some prerequisites for successful collective bargaining
include:
• Positive attitudes
Both parties should have a positive attitude and be willing to make adjustments.
• Respect
Each party should respect the rights and responsibilities of the other party.
• Good faith
All parties should conduct negotiations in good faith, making an effort to reach an agreement and
avoiding unjustified delays.
• Common interests
It's important to identify areas of mutual interest between the parties.
• Communication
Regular communication and relationship-building activities can help foster a positive atmosphere for
negotiations.
• Legal framework
A strong legal framework is important for successful collective bargaining.
• Political environment
A favorable political environment where the government encourages collective bargaining can help
guarantee success.
• Freedom of association
The voluntary negotiation of collective agreements is a fundamental aspect of freedom of association

Forms of Worker’s Participation in Management in India:

Forms of participation vary from industry to industry, country to country and facility to facility within
the same industry. Thus, the following are the forms of worker’s participation.

The manager, workers and industrial relations experts interpret the term “workers’ participation
management” in different ways. Some managers interpret it as information sharing while others consider
it as joint consultation prior to decision making. However this is not all about it! The workers generally
think of it as joint decision-making. That means workers treat participation as equivalent to co-decision
in the spheres of management of the enterprise after all they want to really participate!
They regard it as an association of labour with management without the final authority or responsibility
in the general area of managerial functions. It means that the management shares in an appropriate
manner the decision-making power with the lower ranks of the organization.
 Evaluation of Worker’s Participation in Management, and Conditions for success of
Worker’s Participation in Management:

Workers' participation in management (WPM) can be successful if the following conditions

are met:
• Clear objectives: The objectives of WPM should be clear and well-defined.
• Mutual trust: There should be mutual trust and cooperation between workers and management.
• Open exchange of ideas: All parties should have an enlightened attitude and outlook that allows
for the free exchange of ideas.
• Willingness to delegate authority: Management should be willing to delegate authority.
• Responsibility: Workers should be capable and willing to shoulder responsibility.
• Strong trade unions: There should be a strong and unified union movement.
• Proper communication: There should be a smooth flow of communication and consultation
between the parties.
• Job security: Workers should have job security.
• Workers education: Workers should receive education.
• Top management support: Top management should provide support.
WPM is a form of open management where employees are encouraged to actively participate
in the decision-making process. Some types of WPM include:
• Delegative participation: Employees or teams are given specific decision-making powers.
• Associative participation: Managers and workers jointly take decisions, and management is
morally obligated to accept and implement the unanimous decisions of the employees.
• Collective bargaining: Collective agreements are negotiated to establish rules and conditions of
service in an establishment

Clear and closely formulated objectives, strong trade unionism, favourable attitude to
participative management, smooth flow of communication and consultation between the
parties, etc., are the prerequisites for effective workers' participation in management.
 Unit –III: Grievances and Discipline: Causes of Grievances, Grievance procedure, Machinery
available for redressal of Grievances, Prerequisites of a Grievance procedure. Discipline: Forms of
Discipline, Causes of Indiscipline, Types of Punishments, Measures for dealing with indiscipline.

Causes of Grievances, Grievance procedure:

The causes of grievances are listed below:

• Unequal wage distribution.
• Improper assignment of job responsibilities.
• Inadequate working conditions.
• Higher workload.
• An unsatisfactory performance assessment approach. ...
• Favouring nepotism culture.
• In settlement of arrears on time.
• Employee bullying and harassment.

A grievance procedure is a formal process that allows an employee to raise a complaint or problem with
their employer. The procedure typically includes the following steps:
• Informal discussion
The employee and their supervisor meet to discuss the issue and try to resolve it.
• Formal grievance
If the issue isn't resolved informally, the employee files a written grievance with their employer. The
grievance should include:
• A description of the grievance
• Any relevant evidence, such as a payslip or employment contract
• A request for what the employer should do about the grievance
• Investigation
The employer investigates the grievance to gather relevant information and evidence.
• Grievance hearing
The employee presents their case at a formal hearing, and the employer can ask questions.
• Decision and action
The employer makes a decision based on the investigation and hearing, and takes any necessary action.
• Appeal
If the employee is not satisfied with the decision, they can appeal it. The employee should write a letter
of appeal, explaining why they don't agree with the decision. The employer should arrange a further
meeting to discuss the appeal.
• Final decision
The employer makes a final decision after the appeal hearing.
Employers should:
• Follow a fair and full procedure for any grievance case
• Give everyone a chance to have their say before making a decision
• Take actions and make decisions as soon as they can
• Have a clear policy for grievances in their handbook
• Treat each case with the same level of respect

Machinery available for redressal of Grievances:

Here are some details about grievance redressal machinery in India:
• CPGRAMS: The Centralised Public Grievances Redress and Monitoring System is an online portal for
lodging grievances with public authorities. It's connected to all ministries and departments of the
Government of India and states. Citizens can track the status of their grievance using the unique
registration ID they provided when registering.
• Nodal agencies: The Department of Administrative Reforms and Public Grievances (DARPG) and the
Directorate of Public Grievances (DPG) are the two designated nodal agencies in the Union Government
that handle grievances.
• Time limit: The grievance should be settled within 60 days from the date of receipt.
• Appeal: If a citizen is not satisfied with the resolution, they can appeal. The status of the appeal can also
be tracked using the grievance registration number.
• Fees: There is no fee for filing grievances.
• Matters not taken up: Some issues that are not taken up for redress include RTI matters, court related
matters, religious matters, and suggestions.

Prerequisites of a Grievance procedure:

A grievance procedure should have the following prerequisites:

• Clear
The grievance procedure should be easy to understand and in writing.
• Fair
The procedure should be fair and encourage employees to raise concerns without fear of reprisal.
• Timely
The procedure should specify a time limit for when the employee will be notified of the outcome of their
complaint.
• Follow-up
The personnel department should periodically review the procedure and make changes to improve it.
• Investigation
For serious complaints, a formal investigation should be conducted. This can include interviews,
document collection, and other fact-finding methods.
• Communication
The procedure should specify who employees can take their grievance to first, and that they can be
accompanied by a colleague or trade union representative.
• Record keeping
The grievance committee should meet regularly and a record of proceedings should be sent to all parties.
A grievance procedure is a formal process that outlines how employees can raise complaints and how
the company will resolve them. It provides a fair and speedy way to deal with complaints, and can help
prevent minor disagreements from becoming more serious.
 Forms of Discipline, Causes of Indiscipline, Types of Punishments, Measures for dealing with
indiscipline :

Here are some forms of discipline, causes of indiscipline, types of punishments, and measures for
dealing with indiscipline:
• Forms of discipline
Discipline should ensure equal justice, respect for individual rights and dignity, and humanitarian treatment for
all.
• Causes of indiscipline
Some common causes of indiscipline include:
• Lack of proper leadership
• Violation of employee rights
• Absence of grievance settlement machinery
• Lack of proper rules and regulations
• Unfair management practices
• Varying disciplinary measures
• Inadequate attention to personnel problems
• Absence of a code of conduct
• Discrimination, such as favoritism in promotion or salary increase
• Types of punishments
Some types of punishments include:
• Capital punishment
• Life imprisonment
• Rigorous imprisonment
• Simple imprisonment
• Forfeiture of property
• Fine
• Measures for dealing with indiscipline
Discipline should be a means for the successful functioning of a school program
 Unit –IV: Industrial Disputes: Meaning, Nature and Scope of Industrial Dispute, Causes and
Consequences of Industrial Disputes, Prevention and settlement of Industrial Disputes in India,
Industrial Disputes act of 1947.

Meaning, Nature and Scope of Industrial Dispute:

Industrial disputes are conflicts of interest between workers and management, or between workers
themselves. The subject matter of the dispute can be related to any conditions of employment, such
as: wages, bonuses, promotions, working hours, and holidays.
The Industrial Dispute Act of 1947 is an important labor law in India that aims to address and resolve
industrial disputes. The act's main objectives include:
• Promoting collective bargaining
Encouraging employers and trade unions to bargain collectively to create a balanced power dynamic and reach
mutually acceptable agreements
• Preventing unfair labor practices
Recognizing and punishing unfair practices by employers, labor, and trade unions
• Ensuring industrial peace
Providing a legal framework to investigate and resolve industrial disputes
• Adjudicating industrial disputes
Providing a legal option for settling industrial disputes through a government-appointed legal authority
Some methods for settling industrial disputes include:
• Conciliation
A familiar method for settling disputes that involves investigating the dispute and inducing the parties to reach a
fair settlement
• Collective bargaining
A method that involves cooperation and mutual agreement between management, employees, and unions
Meaning of Industrial Dispute
Industrial dispute” means any dispute or difference between employers and employers ,or between employers
and workmen, or between workmen and workmen , which is connected with the employment or non-
employment or the terms of employment or with the conditions of labour , of any person; Definition of
Workman.

Causes and Consequences of Industrial Disputes :

Industrial disputes are caused by a variety of factors, including economic, political, social, and socio-
economic issues. They can lead to a number of consequences, including strikes, lockouts, and reduced
production.
Some common causes of industrial disputes include:
• Wages
When wages don't increase in proportion to inflation, workers may demand higher wages.
• Bonuses
Workers may demand a larger share of the company's profits.
• Working conditions
Workers may demand better working hours, safety measures, leave, and other benefits.
• Retrenchment
When modern machinery reduces the need for labor, management may try to reduce the workforce.
• Trade unions
Weak trade unions, rivalry between trade unions, and the influence of political parties can lead to conflicts.
• Government
The relationship with the central and state governments can lead to disputes.
• Collective bargaining
If workers aren't allowed to form trade unions or engage in collective bargaining, disputes can arise.

Prevention and settlement of Industrial Disputes in India:

The Industrial Disputes Act of 1947 provides for the prevention and settlement of industrial disputes in
India. The Act includes provisions for:
• Collective bargaining: Representatives of the workers and employers meet to settle differences over
wages, benefits, work rules, and more.
• Conciliation officers: The government appoints conciliation officers to mediate and promote the
settlement of disputes.
• Boards, courts, and tribunals: Disputes can be referred to boards, courts, and tribunals.
• Prohibition of strikes and lockouts: The Act prohibits strikes and lockouts.
• Penalties: There are penalties for contravening the provisions of the Act.
• Layoffs, retrenchment, and closure: The Act has provisions regarding the conditions for layoffs,
retrenchment, and closure of industry.
Industrial Disputes act of 1947:
The Industrial Disputes Act of 1947 is a law in India that regulates how industrial disputes between
employers and employees are resolved. The act's main objectives are to:
• Promote industrial peace and harmony
• Protect workers' rights
• Prevent unfair labor practices
• Establish works committees
• Prevent illegal strikes and lockouts
• Assist workers facing layoffs, reduction, or unfair dismissal
The act provides mechanisms for addressing grievances and maintaining order in industrial
establishments, including: conciliation, arbitration, and adjudication.
The act has been amended over the years to keep it relevant to the evolving employment and industrial
dynamics in India.
The act was implemented to provide for machinery and procedures for the investigation and settlement
of industrial disputes, applicable to all irrespective of size and sector. It even has provisions regarding
conditions for layoffs, retrenchment (reduction in the size of operations) and closure of industry.

Unit -V: Labour Laws: Labour laws in Fundamental Rights- The Minimum Wages Act,
1948,The Payment of Wages Act, 1936,The Trade Unions Act, 1926,The Industrial Disputes
Act, 1947,The Factories Act, 1948,Labour laws and practices in India.

Labour laws in Fundamental Rights :

Fundamental rights in labor law include:
• Freedom of association: The right to form trade unions and organize
• Right to collective bargaining: The right to bargain collectively
• Elimination of forced labor: The prohibition of all forms of forced or compulsory labor
• Elimination of child labor: The prohibition of child labor
• Elimination of discrimination: The prohibition of discrimination in employment and
occupation
• Safe and healthy working environment: The right to work in a safe and healthy environment
• Right to work: The right to work of one's choice
• Just and humane conditions of work: The right to work in just and humane conditions
• Social security: The right to social security
• Protection of wages: The right to the protection of wages
• Redress of grievances: The right to redress grievances
• Participation in management: The right to participate in the management of industries
• Living wage: The right to a living wage

The Minimum Wages Act, 1948:

The Minimum Wages Act, 1948 is a law that protects the interests of workers by ensuring that
they are paid a minimum wage for the work they do. The Act was created to prevent the
exploitation of workers who may be vulnerable due to illiteracy or lack of bargaining power.
Here are some key features of the Minimum Wages Act, 1948:
• Minimum wage
The Act sets minimum wages for skilled and unskilled workers. The minimum wage rate can
 be determined by hours, days, months, or other wage periods.
• Gender neutral
The Act applies equally to both male and female workers.
• Appropriate governments
The Central and State Governments are responsible for fixing, reviewing, and revising
minimum wages for employees in their respective jurisdictions.
• Advisory committees
The Act provides for the appointment of Advisory Committees and Advisory Boards to ensure
equal representation of employers and workers.

The Payment of Wages Act, 1936 :

The Payment of Wages Act, 1936 is a law that regulates the payment of wages to certain classes
of employees in India:
• Purpose: The act was enacted to ensure that wages are paid in a regular and authorized manner,
and to eliminate malpractices.
• Scope: The act applies to the whole of India, and is enforced by the Central Government in some
cases and the State Government in others.
• Responsibilities: Employers are responsible for paying wages to their employees.
• Wage periods: Wage periods must be fixed, and cannot exceed one month.
• Payment time: Wages must be paid promptly, and the time of payment depends on the size of
the establishment.
• Deductions: Deductions can only be made for authorized reasons, such as an employee's absence
from work.
• Definitions: Wages are defined as all remuneration that is payable upon fulfillment of the terms
of employment.

The Trade Unions Act, 1926:

The Trade Unions Act, 1926 is a law that allows for the registration of trade unions and
provides them with certain protections and privileges. The act's main objectives are
to: Regulate the relationship between workers and employers, Enable collective bargaining,
and Make the organization of labor lawful.
Here are some key aspects of the Trade Unions Act, 1926:
• Definition of a trade union: A trade union is a group of people who are united by mutual
understanding, cooperation, and confidence to protect their common interests. It can be a group
of workers or employers, and it can be temporary or permanent.
• Registration: Trade unions can be registered with the government.
• Protection and privileges: Registered trade unions are given certain protections and privileges.
• Membership: Anyone who is at least 15 years old can be a member of a registered trade union,
 unless the trade union's rules state otherwise.
• Inspection of books: Members and office-bearers of a registered trade union can inspect the
trade union's account books and membership list.
• Notices: All notices and communications to a registered trade union should be sent to its
registered office.
• Changes to address: If a trade union's head office address changes, the registrar must be notified
in writing within 14 days.

The Industrial Disputes Act, 1947 :

The Industrial Disputes Act, 1947 is a law that regulates the resolution of industrial disputes
between employers and employees in India. The act was enacted on March 11, 1947 and came
into force on April 1, 1947. It was replaced by the Industrial Relations Code, 2020.
The act's objectives include: Promoting industrial harmony, Protecting workers' rights,
Preventing unfair labor practices, Establishing works committees, and Maintaining a peaceful
work culture in the industry.
The act provides mechanisms for addressing grievances and maintaining order in industrial
establishments, including: conciliation, arbitration, and adjudication.
The act defines an industrial dispute as any dispute or difference between employers and
employees, or between workers, that is connected with employment, non-employment, or the
condition of labor.

The Factories Act, 1948: The Factories Act, 1948, is a law that establishes safety standards
and working conditions for factory workers. It applies to factories that produce goods such as
clothing, footwear, and textiles.
Here are some of the main aspects of the Factories Act, 1948:
• Working hours
Workers cannot work more than 48 hours per week, and daily working hours cannot exceed 9
hours.
• Rest periods
Workers must receive a rest period of at least 30 minutes after every 5 hours of work.
• Overtime
Workers are entitled to overtime pay at twice their regular wage rate for any hours worked
beyond the normal working hours.
• Women's employment
Women are not allowed to work between 7 PM and 6 AM, unless the state government grants
an exemption.
• Child labor
The Factories Act, 1948 prohibits the employment of children who have not completed 14 years
 of age.
• Health and safety
The Act lays down precautions and prevention measures to protect the health of the workers.
• Factory approval
Factories must be approved, licensed, and registered.
• Industrial examiners
Industrial examiners regularly visit industrial sites to monitor health and safety arrangements.
• Hazardous processes
Occupiers of factories involving hazardous processes must disclose information about dangers
and measures to overcome them.

Labour laws and practices in India: India has many labor laws and regulations that cover a
wide range of topics, including:
• Working hours
The maximum working hours are 12 hours per day and 48 hours per week. However,
regulations vary by state and industry, and whether the employee is classified as a workman.
• Wages
The Minimum Wages Act of 1948 sets minimum wages for different economic sectors. The
Payment of Wages Act of 1936 requires that employees are paid on time and without
unauthorized deductions.
• Social security
The Employees' Provident Fund Act of 1952 provides three major schemes: the Employees'
Provident Fund Scheme, the Employees' Deposit-Linked Insurance Scheme, and the Employee
Pension Scheme.
• Safety and health
The employer must pay compensation for accidents that occur during employment.
• Other laws
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act
of 2013, the Bonded Labor System (Abolition) Act of 1976, and the Child and Adolescent
Labour (Prohibition and Regulation) Act of 1986 are some other labor laws in India.
Labor laws in India are enacted by both the Central and State Governments. The Central
Government has sole responsibility for enforcing some laws, while others are enforced by both
the Central and State Governments. State governments also have their own minimum wage
schedules.
 HRM SPECIALIZATION

BUS 3.5.HR (R22): MANAGEMENT TRAINING & HRD

Unit-I: HRD objectives and philosophy – HRD Climate and process- HRD practices in India,
USA & Europe- Managing Joint Venture Business Organizations (JVs), Cross-Country
Cultural Issues, Awareness of Emigration Checks and Immigration Modalities of various
Countries
Unit-II: Observing and Assessing HRD needs, Planning and Designing HRD Needs, Action
from Global Perspective: Bringing Learning to life, Theory of experimental learning, Strategies
adopted to Design and develop performance support
Unit-III: Quality: Reviewing and Evaluating HRD, Organizational HRD Strategies-
Competencies / Expertise and certain Unique Skills of various Nationalities
Unit –IV: HRD managers in MNC- Training methods and application of T Group Training.
Linking of performance appraisal with training
Unit –V: Quality: Reviewing and Evaluating HRD, The future of HRD. Designing HRD
model-Global Restrictions on certain Countries by the hiring Country, etc...to be incorporated
in appropriate slots

Unit-I: HRD objectives and philosophy – HRD Climate and process- HRD practices in India,
USA & Europe- Managing Joint Venture Business Organizations (JVs), Cross-Country
Cultural Issues, Awareness of Emigration Checks and Immigration Modalities of various
Countries.

HRD objectives and philosophy:

Human Resource Development (HRD) aims to improve the performance of employees, create a
positive work environment, and help employees achieve their goals. Some of the objectives of HRD
include:
• Employee development: Preparing employees for current and future job requirements, developing their
creative abilities, and helping them prepare for higher-level jobs
• Work environment: Creating a positive work environment that encourages continuous learning and
development
• Goal alignment: Aligning the goals of employees with the objectives of the organization
• Career development: Providing opportunities for employees to develop their careers and grow
• Employee retention: Helping to retain talented employees by providing them with opportunities for
career development and growth
• Work quality: Fostering healthy competition and improving work quality
• Interpersonal relationships: Improving interpersonal relationships and work culture
• Organizational values: Binding together the organizational values and beliefs that contribute to
 organizational stability.

HRD Climate and process: Human Resource Development (HRD) climate is the overall environment
of an organization, and the HRD process is how an organization helps employees develop their skills
and knowledge.
Here are some key aspects of HRD climate and the HRD process:
• HRD climate
The overall feeling of an organization, which is conveyed by the physical layout, employee interactions,
and how the organization conducts itself externally. An effective HRD climate helps employees develop
their skills and contribute to organizational goals.
• HRD process
The plan an organization has to help employees develop their abilities, skills, and knowledge. This
process enhances the organization's efficiency.
• HRD instruments
These include performance appraisal, counseling, role analysis, potential development, training, reward
system, and job enrichment.
• HRD processes
These include role clarity, development planning, development climate, risk-taking, and dynamism in
employees.
• Organizational culture
The shared behavioral expectations and norms in a work environment.
• Organizational climate
The current state and experience of the work environment based on those cultural norms.

HRD practices in India, USA & Europe: Human resource development (HRD) practices differ
between India, the USA, and Europe due to cultural, legal, and economic differences. Some of the
differences include:
• Culture
In India, HRD is influenced by a hierarchical culture that emphasizes teamwork and respect for authority. In the
USA, HRD is more individualistic and focuses on employee empowerment.
• Recruitment
In India, recruitment is often a rigorous process with multiple rounds of interviews and assessments. In the
USA, recruitment is generally quicker and focuses on skills and qualifications.
• Diversity
In the Western world, diversity programs often focus on cross-cultural training. In India, diversity programs
often focus on sensitizing people to gender bias, LGBTQ, and people with disability.
• Maternity and paternity leave
In India, the Maternity Benefits (Amendment) Act, 2017 provides 26 weeks of paid leave for women for their
first two children. Foreign companies like Microsoft and IKEA have also included paternity leave clauses in
their company policies.
Other challenges in HRD practices include: Legal and compliance issues, Communication differences,
Performance management and evaluation, and Learning and development opportunities.

Managing Joint Venture Business Organizations (JVs): Managing a joint venture (JV) can be
challenging, but there are some best practices to help:
• Establish clear objectives
Both partners should have a clear understanding of the goals of the JV and how they align with the
corporate growth strategy of each company.
• Create a governance structure
Agree on key governance measures, such as decision-making, leadership structure, and risk
management. This structure should provide a clear path for decision-making and dispute resolution.
• Communicate regularly
Arrange regular meetings for key people involved in the JV and share information openly.
• Establish performance indicators
Set clear performance indicators to measure performance and identify potential problems early.
• Be flexible
Regularly review how things are working and be open to changing objectives.
• Resolve disputes positively
Approach disagreements positively and look for "win-win" solutions. Have agreed dispute resolution
procedures in place.
• Plan for exit or renewal
Consider how the JV will exit or be renewed.

JVs are strategic alliances between companies that share resources, risks, and profits to achieve a
common goal. However, managing a JV can be difficult because it involves dealing with different
cultures, regulations, and expectations.

Cross-Country Cultural Issues, Awareness of Emigration Checks and Immigration

Modalities of various Countries:

Cross-cultural issues can arise when people from different cultures interact, and can include:
 • Cultural filters
People tend to filter their thoughts and experiences through their own culture, which can lead to
misunderstandings. For example, some cultures consider direct eye contact rude, while others consider
it a sign of respect.
• Unwillingness to adapt
People may be reluctant to accept new things, fearing that it will change their culture or belief system.
• Language barriers
People from different cultures may find it difficult to communicate due to language barriers.
• Culture styles
Different cultures have different styles, such as individualistic cultures and interdependent cultures.
• Scheduling
Some cultures strictly adhere to schedules, while others treat them as suggestions.
• Religion
Religion can be a factor in both conflict and conflict resolution.
• Nepotism
What is considered acceptable in one country may be considered unacceptable in another. For
example, in some Asian countries, it is common to hire family members rather than external
candidates.
To address cross-cultural issues, it can be helpful to:
• Understand the cultural context of a conversation
• Be aware of unconscious barriers or subconscious biases
• Step out of your comfort zone and try new things
• Use common systems to facilitate the relationship

The Emigration Check Required (ECR) category in a passport indicates that the holder must obtain
emigration clearance from the Protector of Emigrants (PoE) before traveling abroad for employment in
certain countries:
• Purpose
The ECR category is intended to protect vulnerable workers from exploitation and ensure their welfare while
working overseas.
• Who is affected
The ECR category applies primarily to individuals with lower levels of formal education and those seeking
employment in countries with stringent labor laws.
• Who is exempt
Some categories of people are exempt from the ECR category, including:
 • Holders of diplomatic or official passports
• Gazetted government servants
• Income-tax payers
• Professional degree holders, such as doctors, engineers, chartered accountants, lecturers,
teachers, and scientists
• Spouses and dependent children of the above categories
• Persons holding class 10 or higher qualification
• What happens if you don't have an ECR stamp
If a person does not have an ECR stamp on their passport, then they hold a non-ECR (passport) or ECNR
passport.
Immigration is the movement of people from one country to another. The process of immigration can
vary by country and may include factors such as: Skills for required jobs, Age limitations, and Waiting
lists.
Some common types of migration include:
• Labor migration
In 2017, there were 164 million people involved in labor migration.
• Forced migration or displacement
In 2018, there were 70.8 million people involved in forced migration or displacement.
• Human trafficking and modern slavery
In 2016, there were 25 million people involved in human trafficking and modern slavery.
• Environmental migration
In 2018, there were 17.2 million people involved in environmental migration.
Here are some other facts about immigration:
• In 2020, there were 281 million international migrants worldwide.
• Most international migrants live in Asia and Europe (31% each), followed by Northern America (21%),
Africa (9%), Latin America and the Caribbean (5%), and Oceania (3%).
• India is the top origin of international migrants, with 18 million living abroad.
• Canada is considered one of the most welcoming countries for immigrants.
 Unit-II: Observing and Assessing HRD needs, Planning and Designing HRD Needs, Action
from Global Perspective: Bringing Learning to life, Theory of experimental learning, Strategies
adopted to Design and develop performance support

Observing and Assessing HRD needs: Here are some ways to assess HRD needs:
• Task analysis
Gather data about the organization's structure, goals, strategies, job roles, responsibilities, and workflow
processes.
• Data evaluation
Analyze HR records to determine if there are common errors, issues, or inconsistencies that the training can
address.
• Organizational analysis
Consider the organizational structure, culture, existing skills, and performance levels.
• Competency mapping
Competency-based human resource management (HRM) frameworks link individual performance to business
results.
• Performance analysis
The difference between actual and expected job performance indicates a need for training.
Planning and Designing HRD Needs:
Human resource development (HRD) is a process that involves identifying and addressing the training
and development needs of employees in an organization. The design phase of the HRD process
involves developing a program to address these needs. Here are some steps to consider when designing
an HRD program:
• Define objectives: Set performance criteria and objectives for the training.
• Develop a lesson plan: Create a plan that includes content, activities, media, and evaluation.
• Select training methods: Choose appropriate methods, such as classroom, e-learning, or simulations.
• Schedule and prepare: Schedule the program, prepare materials, and select trainers.
• Implement and evaluate: Put the program into action and evaluate its effectiveness.
Action from Global Perspective: Bringing Learning to life:

A global perspective is a way of seeing the world that helps people understand their identity and the
identities of others. It can also help people learn from others, discover new opportunities, and make a
difference in the world.
Here are some ways that global perspectives can be incorporated into learning:
• Explore diverse cultures
Students can gain appreciation for different worldviews, values, and ways of life by exploring diverse cultures
and global issues.
• Develop critical thinking and communication
Students can develop critical thinking and communication skills in the classroom.
• Encourage active participation
Students can be encouraged to actively participate in special projects that are led by enquiry-based learning.
• Integrate across subjects
Global perspectives can be integrated across subjects such as mathematics, English, geography, the arts, social
sciences, and technology.
• Develop empathy and action skills
Students can develop empathy and action skills that can help them understand and address complex global
issues.

Theory of experimental learning, Strategies adopted to Design and develop performance

support:

The theory of experiential learning is a constructivist learning theory that states that knowledge is
created by transforming experiences. The theory is based on a cycle of four stages:
• Concrete learning: The learner gains a new experience or interprets a past experience in a new way
• Reflective observation: The learner reflects on their experience and what it means
• Abstract conceptualization: The learner forms new ideas or adjusts their thinking based on the
experience
• Active experimentation: The learner applies the new ideas to the world around them
Here are some strategies for implementing experiential learning:
• Service learning: Combines instruction, reflection, and community service to teach civic responsibility
and strengthen communities
• Internships: Provide students with practical work experience in their field of study
• Field trips: Students gain firsthand knowledge outside of the classroom
• Public action projects: Students participate in public action projects
• Natural science course labs: Students participate in natural science course labs
• Community-based participatory research: Students participate in community-based participatory
research
• Domestic and international immersion experiences: Students participate in domestic and
international immersion experiences
Some core methods for implementing experiential learning include:
• Establishing a shared vision for a course
 • Providing modeling and mastery experiences
• Challenging and encouraging students intellectually
• Personalizing attention and feedback
• Creating experiential lessons
• Promoting pre-flection and reflection throughout the process
Here are some strategies for designing and developing performance support:
• Continuous feedback: Regular, targeted, and growth-oriented feedback helps employees improve and
keeps them aligned with the company's goals. It also helps build trust and identify problems early.
• Performance management plan: Create a detailed plan that includes performance goals, a performance
review system, and a communication plan.
• Collaborative system: Managers and employees work together to set expectations, identify goals, and
share performance reviews.
• Employee development plans: Create personalized plans for employee development.
• Recognition and rewards: Introduce programs to recognize and reward employees.
• Performance management software: Use software to help with performance management.
• Strategic performance management: This method balances large-scale targets with employee-
centricity to help employees maximize their potential.
• Simple guidelines and expectations: Make sure your plan has simple guidelines and expectations so
employees adopt and push your goals.

Unit-III: Quality: Reviewing and Evaluating HRD, Organizational HRD Strategies-

Competencies / Expertise and certain Unique Skills of various Nationalities

Reviewing and Evaluating HRD :

To evaluate and improve its effectiveness, HRD should set clear goals and regularly measure its performance
using key metrics like employee satisfaction and retention.

Organizational HRD Strategies- Competencies / Expertise and certain Unique Skills of

various Nationalities:

Some competencies and skills that are important for HR professionals include:

• Communication: HR professionals help employees understand rules and expectations.

• Strategic thinking: This involves analyzing complex situations, envisioning future possibilities, and making
decisions aligned with overarching goals.
 • Diversity and inclusion: Promoting diversity can lead to increased employee engagement and commitment.

• HR knowledge: HR professionals should be aware of employment trends and labor laws.

• Other competencies: These include:

o Interpersonal skills

o Relationship-building

o Adaptability skills

o Technological skill

o Critical thinking

o Analytical and reporting skills

o Organization

o Problem-solving

o Ethics and integrity

o Data analysis

o Compliance

o Negotiation

o Talent acquisition

o Business acumen

o Leadership

HRD, or Human Resource Development, is a systematic approach to identifying training and development needs for
employees. It involves providing employees with the skills, knowledge, and abilities to improve their performance and
productivity

Some skills that are important for working in a diverse environment include:

• Cultural awareness

This skill helps people appreciate, value, and treat others fairly. It can also help people promote diversity and inclusivity
in the workplace.

• Cultural competence

This skill involves understanding and appreciating different cultures, backgrounds, or perspectives.

• Adaptability and flexibility

These traits are important for fostering collaboration across diverse cultures.

• Effective communication

This skill goes beyond language proficiency. It includes:

• Understanding and adapting to different communication styles

• Respecting non-verbal cues

• Being sensitive to cultural nuances

Other aspects of diversity include:

• Religious and spiritual beliefs diversity

Accommodating employees from different religions can foster more compassion in the workplace.

• Financial returns

A 2020 study by McKinsey & Co. found that organizations that prioritize diversity and inclusion are 35 percent more likely
to have better financial returns.

• Cultural diversity

This is about appreciating that society is made up of many different groups with different interests, skills, talents, and
needs.

Unit –IV: HRD managers in MNC- Training methods and application of T Group Training.
Linking of performance appraisal with training

HRD managers in MNC : Human resource development (HRD) managers in multinational corporations (MNCs) have
many responsibilities, including:

• Employee relations

HR managers build a positive relationship with employees by creating a supportive environment that encourages open
communication and prompt resolution of grievances.

• Performance management

HR managers set performance standards and help employees develop skills to achieve them.

• Leadership

HR managers are effective leaders who guide employees to fulfill their potential, create solutions to problems, and guide
the workforce in the direction of company success.

• Communication skills

HR managers are the link between the business and the employee, representing both parties.

• Conflict resolution

HR managers must mediate disputes and foster a resolution that supports both the company's interests and employee
well-being.

• Onboarding and training

HR managers prepare and plan for onboarding, either creating the material themselves or overseeing the process.

Other responsibilities of HR managers include: Candidate recruitment, Shaping the organizational culture, Fostering
employee development, and Driving strategic objectives.

Training methods and application of T Group Training:

T Group Training, also known as sensitivity training, is a training method that uses group interaction and feedback to
improve interpersonal skills and self-awareness. Here are some details about T Group Training:

• Goal

T Group Training helps trainees understand themselves and others better, and improve group interactions and relations.

• Sessions

T Group Training sessions typically involve 10–15 trainees with no set agenda.

• Benefits

Trainees may learn about their emotions and weaknesses, how to behave more effectively, and how to confront
problems directly.

• Drawbacks

Trainers may create stressful situations that tear people apart, and changes may not last after trainees return to their
regular environment.

Other training methods include:

• On-the-job training

A new employee is placed under the supervision of a more experienced colleague who can demonstrate how to do the
job.

• Roleplaying

Trainees and trainers act out different potential work scenarios. This method is most effective for industries that involve
customer service or client interaction.

• Instructor-led training

Employees have the opportunity to ask questions that may not be answered in other training methods.

• Coaching

A one-on-one relationship between a coach and an employee where the coach offers regular feedback and personalized
guidance.

• Job shadowing

Employees follow and observe other professionals working in different job functions.

• Gamification

Incorporates game mechanics and elements to make learning more interactive and fun.

• Simulation

Practicing within a safe, low-risk environment that mirrors real life.

Linking of performance appraisal with training: Performance appraisals and training can be linked in a number of ways,
including:

• Identifying training needs

Performance appraisals can help identify an employee's strengths and areas for improvement, which can then be used to
tailor training programs.

• Setting performance goals

Performance appraisals can be used to set goals for employees, and these goals can then be linked to training needs.

• Analyzing performance data

Performance appraisals can provide data on employee performance, which can be used to identify trends and
patterns. This can help organizations anticipate future skill requirements and plan targeted training initiatives.

• Involving employees

Employees can be involved in the planning, implementation, and evaluation of training activities.

• Providing feedback

Performance appraisals can provide feedback to employees on the quality and level of their work.

• Using a performance learning management system

A performance learning management system (PLMS) can link learning and performance together in the same system.

Other ways to link training and performance include:

• Aligning training with organizational goals

• Using performance indicators

• Monitoring and evaluating the effectiveness of training

• Providing continuous support and reinforcement

• Encouraging a culture of continuous learning

• Linking training to career development paths

Unit –V: Quality: Reviewing and Evaluating HRD, The future of HRD. Designing HRD
model-Global Restrictions on certain Countries by the hiring Country, etc...to be incorporated
in appropriate slots

Reviewing and Evaluating HRD: To evaluate and improve its effectiveness, HRD should set clear goals and regularly
measure its performance using key metrics like employee satisfaction and retention.

The future of HRD: The future of Human Resource Development (HRD) is likely to be shaped by a number of factors,
including the evolution of technology, changing organizational roles, and the need for greater diversity and equity in the
workplace:

• Technology

Emerging technologies like AI, VR/AR, and blockchain are likely to transform HR practices, making them more efficient
and effective. However, it's important to consider the negative potential of these technologies and how to counter
them.

• Organizational roles

HRD is likely to become more integrated into the fabric of organizations, with learning and development promoted by
everyone with supervisory responsibility.

• Diversity and equity

HRD will likely lead to greater diversity and equity in the workplace.

• Globalization

Globalization is likely to have an impact on HRD, and HRD will need to adapt to the challenges of a rapidly globalizing
world.

• Automation

Many traditional HR tasks, such as recruitment, onboarding, performance management, and payroll, are increasingly
being automated.

Other factors that may shape the future of HRD include: economics and financial considerations, equality of opportunity,
the changing nature and organization of work, corporate social responsibility, and the spirituality and meaning of work.

Designing HRD model-Global Restrictions on certain Countries by the hiring Country,

etc...to be incorporated in appropriate slots:

The HRD Process as quoted by Faeq Hamad Abed Mahidy in his scholarly article on Research Gate, The HRD
process includes four steps: Assessment, Design, Implementation and Evaluation (ADIE).

Globalization in HR management facilitates cross-cultural workplace collaboration. Employees from different cultural
backgrounds learn from each other's experiences, approaches, and best practices. This exchange of knowledge and ideas
promotes cultural understanding and creates a collaborative work environment.

Designing an Effective HRD System

• Step 1: Assess Organizational Needs.

• Step 2: Define Objectives and Goals.

• Step 3: Tailor Learning Paths.

• Step 4: Incorporate Technology.

• Step 5: Develop Performance Management Strategies.

• Step 6: Promote Leadership Development.

• Step 7: Prioritize Career Development.

 HRM SPECIALIZATION

BUS 3.6. HR (R22): ORGANIZATIONAL CHANGE &

ORGANIZATIONAL DEVELOPMENT

Unit-I: organizational change: Definition and meaning, concept, types, process, nature, significance
of organizational change.
Unit –II: Theories of planned change or Strategic models of OC: - Lewin’s model - Lippitt, Watso,
and Westley’s model - Dalton’s model - Black, Mouton, Barnes, and Greiner’s model
Unit – III: Barriers to change projects: Lack of Clarity - Ineffective Change Communication -
Strategic Shortcoming - Change Resistant Culture - Lack of Organizational Buy-In - Change Fatigue
Lack of Governance - how do you overcome these barriers to change?
Unit –IV: Forces or need for change: External forces Internal forces Resistance to change:
Overcoming resistance to change: Impacts of Organizational Change
Unit –V: Organizational Development: Characteristics of OD: OD values: OD objectives and goals:
Pre-requirements of OD: OD processes: Phase in OD: stages of organizational development, OD
Interventions: Benefits of Organizational Development

Unit-I: organizational change: Definition and meaning, concept, types, process, nature, significance
of organizational change.
Definition and meaning, concept, types, process, nature, significance of organizational change:

Organizational change is when a company or business significantly alters its structure, culture, goals,
processes, or technology. It can be a result of internal planning or external factors, and can be sudden
or gradual.
Here are some key aspects of organizational change:
• Definition
Organizational change is a process where a company transforms itself internally or externally.
• Types
There are many types of organizational change, including planned, unplanned, transformational,
incremental, strategic, structural, operational, and technological.
• Impact
Organizational change can have a significant impact on the entire organization.
• Resistance
Employees may resist change in different ways, such as openly expressing dissatisfaction or silently
struggling to adapt.
• Management
Management needs to adopt new policies and adjust to the new differences in the organization.
• Significance
The significance of organizational change depends on the type of change, the extent of the
transformation, and how the change was implemented.

Unit –II: Theories of planned change or Strategic models of OC: - Lewin’s model - Lippitt, Watso,
and Westley’s model - Dalton’s model - Black, Mouton, Barnes, and Greiner’s model

Theories of planned change or Strategic models of OC: Theories of planned change and
strategic models of organizational change (OC) include:
• Lewin's Change Model: A three-step process of unfreezing, moving to a new behavior, and
refreezing
• The Action Research Model: A cyclical process of research, action, and assessment
• The Positive Model: Focuses on identifying an organization's strengths and best practices
• The Prosci ADKAR Change Management Model: Focuses on what people at all levels of an
organization need to do for change to be effective
• The Bridges Transition Model: Emphasizes the emotional transition people go through in the
course of experiencing and accepting a change
• The Kübler-Ross change curve: Also known as the five stages of grief, this model describes the
experience and process of dealing with loss
The planned change process typically includes:
• Recognizing the need for change
• Developing change goals
• Appointing a change agent
• Assessing the current climate
• Developing a change plan method for implementation
• Implementing the plan
• Evaluating the success of the plan
Strategic change is when organizations implement changes to their businesses to achieve
goals, boost competitive advantage, or respond to market opportunities or threats.

Lewin’s model - Lippitt, Watso, and Westley’s model - Dalton’s model - Black, Mouton,
Barnes, and Greiner’s model:

Lewin's model and the Lippitt, Watson, and Westley model are both theories of change that
are based on the idea that a change agent is needed to drive change:
• Lewin's model
 A three-stage model that illustrates how driving forces promote change while restraining
forces oppose it. The three stages are unfreezing, change, and refreezing. Lewin also
suggested using a force field analysis to assess the barriers and facilitators to change.
• Lippitt, Watson, and Westley model
A seven-step model that focuses on the role and responsibilities of the change agent. The
seven steps include:
• Increasing awareness of the need for change
• Developing a relationship between the change agent and the system
• Defining the change problem
• Setting goals and action plans
• Implementing the change
• Gaining staff acceptance
• Redefining the relationship between the change agent and the system
- Dalton’s model: Dalton proposed a new theory of the atom, known as Dalton's atomic
theory, which includes the tenets that all matter is composed of atoms, atoms of a given
element are identical in size and mass, atoms cannot be subdivided, created or destroyed,
atoms of different elements can combine in simple whole number ratios to ...

Black, Mouton, Barnes, and Greiner’s model:

Blake and Mouton (1964) classified the five methods in managing interpersonal conflicts
which is forcing, withdrawing, smoothing, compromising, and problem solving. In order to
minimize the conflicts at workplace, the most suitable conflicts resolution will be the best
techniques to face the situation.
Greiner's Growth Model is a framework that shows the different phases a company goes
through to achieve growth and the different types of crisis that may occur during those
milestones.

Unit – III: Barriers to change projects: Lack of Clarity - Ineffective Change Communication -
Strategic Shortcoming - Change Resistant Culture - Lack of Organizational Buy-In - Change Fatigue
Lack of Governance - how do you overcome these barriers to change?
Barriers to change projects :
There are many barriers to change projects, including:
• Resistance to change
Employees, stakeholders, middle management, and leadership can all resist change. Common
reasons include fear of the unknown and reluctance to let go of old ways of doing things.
• Lack of leadership support
Without the endorsement and involvement of top management, the project team may face
resistance, confusion, or indifference from other stakeholders.
• Poor change management
Poor change management can lead to confusion, frustration, and a lack of understanding
among employees.
• Poor clarity of vision
Poor clarity of vision is one of the most common barriers to change.
• Change fatigue
Change fatigue occurs when you have multiple projects running simultaneously, all at the
implementation stage.
• Political barriers
Political barriers can include resource limitations due to inadequate public funding, stringent
laws, and change resistance.
Lack of Clarity - Ineffective Change Communication:
Lack of clarity in change communication can lead to a number of issues, including:
• Confusion
Employees may not understand the goals, process, or benefits of the change, and may rely on
rumors or assumptions to fill in the gaps.
• Resistance
Employees may not understand or trust the change, which can lead to resistance.
• Delays
Employees may not know how to proceed with their tasks, which can lead to delays.
• Loss of trust
Employees may question the competence or commitment of leaders.
• Damaged relationships
Miscommunication between leadership, employees, and clients can damage relationships.
• Low morale
Poor communication can lead to low morale, which can manifest as uninspired work and a
lack of motivation.
Here are some strategies to improve communication and avoid the issues caused by lack of
clarity:
• Be clear: Use specific and concrete terms to convey your intentions clearly.
• Seek clarification: Ask for further explanation if a message is unclear.
• Actively listen: Repeat and paraphrase what you've understood to confirm your
comprehension.
• Provide context: Provide sufficient context to help the recipient understand the background,
purpose, and desired outcome.
• Use visual aids: Use charts, diagrams, or illustrations to supplement your message.
• Prioritize clear and open communication: Develop and implement a robust communication
strategy.
• Provide honest feedback: Actively listen and provide honest feedback.
• Foster a supportive work environment: Allow employees to communicate their concerns and
viewpoints.
Strategic Shortcoming - Change Resistant Culture:
A change-resistant culture can be a strategic shortcoming for an organization because it can
lead to:
• Failed change initiatives: According to a McKinsey & Company survey, 70% of change
initiatives fail due to employee resistance.
• Delayed implementation: Resistance can cause delays in implementing change.
• Reduced productivity: Resistance can lead to reduced productivity.
• Decreased employee morale: Resistance can lead to decreased employee morale.
• Increased costs: Resistance can lead to increased costs.
• Falling behind competitors: Lack of progress can cause an organization to fall behind its
competitors.
Some common causes of resistance to change include:
• Fear of the unknown
• Lack of understanding about the reasons behind the change
• Concerns about how the change will impact their roles
• Mistrust and lack of confidence
• Emotional responses
• Lack of training and help resources
• Fear of failure
• Poor communication
• Unrealistic timelines
• Existing organization culture and norms
Some strategies for overcoming resistance to change include:
• Communication and education
• Participation
• Support
• Agreement
• Co-opting
• Coercion
• Communicating early and often
• Listening to employees

Lack of Organizational Buy-In - Change Fatigue Lack of Governance - how do you overcome
these barriers to change?:
Here are some ways to overcome barriers to change in an organization:
• Establish a governance framework
Create a structure that provides oversight, accountability, and clarity for the change initiative.
• Communicate clearly and frequently
Share information with employees as soon as possible to build a bridge between management and
employees.
• Set up feedback loops
Create a process for employees to share how they are coping with the changes.
• Provide a clear vision and direction
Make sure everyone understands the goals and purpose of the changes, and what is expected of them.
• Prioritize employees
Plan the project from the perspective of employee adoption, and prioritize their interests and
incentives.
• Foster a culture of change acceptance
Create an environment where employees see change as an opportunity for improvement.
• Explain the reasoning behind change
Increase employee buy-in and commitment by explaining the reasoning behind the change.
• Provide resources
Provide employees, managers, and senior leaders with the resources to enact change successfully.

Unit –IV: Forces or need for change: External forces Internal forces Resistance to change:
Overcoming resistance to change: Impacts of Organizational Change

Forces or need for change: External forces Internal forces Resistance to change: Overcoming
resistance to change: Impacts of Organizational Change:

Here are some concepts related to forces for change, resistance to change, and the impacts of
organizational change:
• External forces
These are driving forces that shape change, such as:
• Technological advancements
• Market changes
 • Social and political pressures
• Customer preferences
• Regulations
• Competitor moves
• Supplier and sourcing instability
• Resistance to change
This is the reluctance of people to adapt to change. It can be overt or covert, and can range from
protests and strikes to implicit behavior.
• Impacts of organizational change
Organizational change can have both positive and negative impacts on employees and the
organization. Positive impacts include more efficient ways to work, increased revenue, and
opportunities for employees. Negative impacts include reduced morale, breakdowns in work
relationships, and absenteeism.
• Overcoming resistance to change
Organizations can overcome resistance to change by:
• Conducting exercises like a force field analysis to identify the forces at play
• Following popular change management models
• Having supportive leadership that is accessible, responsive, and proactive in addressing
concerns

Unit –V: Organizational Development: Characteristics of OD: OD values: OD objectives and goals:
Pre-requirements of OD: OD processes: Phase in OD: stages of organizational development, OD
Interventions: Benefits of Organizational Development

Organizational Development: Characteristics of OD: OD values: OD objectives and goals:

Organizational development (OD) is a systematic process to improve an organization's
effectiveness and health through change. Some characteristics and goals of OD include:
• Change management
A critical component of OD that involves identifying the need for change, assessing the current
environment, and planning and implementing strategies
• Continuous change
Interventions that help an organization make minor improvements on an ongoing basis. This can
include creating a culture of learning, developing an experimental growth model, or creating space for
innovation.
• Focus on organizational culture
OD recognizes the importance of organizational culture in shaping behavior and performance. It
involves emphasizing humanistic values to build a positive organizational culture.
• Team building
Designed to improve the capacity of the organization's members to work together in a harmonious
environment.
• Goals
Some goals of OD include:
• Improving employee satisfaction and performance
• Enhancing organizational effectiveness
• Facilitating change and adaptability
• Improving productivity and efficiency
• Creating a culture that embraces change and innovation
• Attracting and retaining top talent
• Improving communication
• 10 Characteristics of Organizational Development
11 Dec 2024 — By emphasizing humanistic values, OD helps build a positive organizational culture
that enhances employee satisfaction,

10characteristics
• 5 Phases of Organizational Development (Goals & Interventions)
5 Oct 2021 — Let's discuss some of the most significant goals for organizational development. *
Improve productivity and efficiency ...
Pre-requirements of OD: OD processes: Phase in OD:
The first phase of the organizational development (OD) process is called "entering and
contracting". This phase involves: Consulting OD practitioners, Scoping out a problem,
Identifying the organization's needs, Setting objectives for the OD intervention, and Agreeing
on the scope of work.
The OD process is a systematic and planned series of actions designed to improve an
organization's performance, health, and overall effectiveness. The process focuses on bringing
about higher performance and systematic problem solving through interactions between
individuals in the organization.
The OD process has three major components: Diagnosis, Action, and Effective program
management.
The five steps in the OD process are:
1. Identify the organization's needs
2. Decide on how to address those needs
3. Select your intervention
4. Implement the intervention
5. Evaluate the impact

stages of organizational development, OD Interventions: Benefits of Organizational

Development:

Organizational development (OD) is a continuous process that improves an organization's

effectiveness. It involves a series of interventions, including:
• Change management
Ensures a smooth transition to new ways of working by communicating the need for change,
addressing concerns, and providing support
• Performance management
Creates a culture where employees work hard to achieve desired performance levels through
techniques like performance appraisal, goal setting, and reward systems
• Diagnosis
Searches for performance gaps and leads to designing a problem-based intervention strategy
• Intervention
Can take the form of workshops, group discussions, written exercises, on-the-job activities, and
redesigning control systems
• Team building
Activities that help teams improve productivity, communication, performance, and employee
engagement
• Employee engagement
Involves employees in decision-making, seeking their input, and valuing their contributions
• Feedback
A consultant presents the acquired information to leaders in a simple, descriptive, relevant, and
comparative way
• Evaluation
Leadership evaluates the results of the process by collecting and assessing different metrics
Benefits of OD include:
• Fostering employee engagement
• Enhancing employees' sense of ownership and commitment to the organization
• Improving the organization's ability to adapt and thrive
 MARKETING SPECIALIZATION
BUS-3.4.M (R22): ADVERTISING & BRAND MANAGEMENT

Unit-I: Introduction: Meaning, Scope and objectives of Advertising- 5 Ms of Advertising –

The communication model: communication process, stages and challenges ; Socio- Cultural
and Ethical dimensions of Advertising –Recent trends in Advertising –Customer behavior and
advertising: segmentation, motivation analyses, and value proposition. Advertising Copy:
Meaning, essentials of Good Advertising Copy; Message Strategy – Copy writing for various
Media - Creativity in Advertising, copy in conventional media and Cyberspace.
Unit II: Advertising Media: Planning & Strategy – Types of Media – Electronic Media; Print
Media; Outdoor Media – Media Scheduling Decisions – Media Mix Decisions – An Overview
of Media Scenario in India
Unit III : Advertising Budgets & Agencies: Planning for Advertising Budgets – Methods of
Determining Advertising Budgets – Advertising Agencies – Media Companies and Supporting
Organizations – Advertising Effectiveness
Unit IV: Concept of Brand: Concept of value, brand and marketing metrics: Brand and Firm
– Brands and Consumers – Brand Identity – Brand Image – Protecting Brand – Brand
Perspectives – Brand Levels – Brand Evolution
Unit V: Brand Equity: Brand Loyalty – Brand Equity – Brand Personality – Building Brands
– Brand Extension Strategies – Brand Positioning – 3Cs of Positioning – Competitive
Positioning
 Unit-I: Introduction: Meaning, Scope and objectives of Advertising- 5 Ms of Advertising –
The communication model: communication process, stages and challenges ; Socio- Cultural and
Ethical dimensions of Advertising –Recent trends in Advertising –Customer behavior and
advertising: segmentation, motivation analyses, and value proposition. Advertising Copy:
Meaning, essentials of Good Advertising Copy; Message Strategy – Copy writing for various
Media - Creativity in Advertising, copy in conventional media and Cyberspace

Meaning, Scope and objectives of Advertising- 5 Ms of Advertising:

Advertising is a paid form of communication that aims to inform, persuade, or remind consumers
about products, services, or ideas. It can be used to:
• Inform: Create awareness of products, services, and ideas. This can include announcing new
products and programs, and educating people about their benefits.
• Persuade: Convince customers that a company's products or services are the best. This can
include altering perceptions and enhancing a company's image.
• Remind: Encourage repeat purchases.

Advertising can be used to generate revenue for companies, increase brand awareness, and
support the missions of organizations. It can be delivered through a variety of channels, including
traditional and digital media.
Some objectives of advertising include:
• Increasing sales
• Increasing market share
• Increasing return on investment
• Building brand awareness
• Creating positive attitudes
• Maintaining customer loyalty
The 5 M's of advertising are Mission, Money, Message, Media, and Measurement. These
elements can be used to create effective advertising strategies.

The 5 M's of advertising are a guide to successful advertising campaigns that help businesses
achieve marketing objectives:
• Mission: Define a clear purpose for the campaign
• Money: Allocate resources wisely
• Message: Craft a compelling message
• Media: Choose the right media channels
• Measurement: Evaluate progress
Advertising is a communication method that aims to influence a target audience's behavior. The
scope of advertising refers to the activities and functions involved in creating, delivering, and
measuring advertising messages. The scope of advertising is constantly evolving as new
technologies and media channels emerge.
Some objectives of advertising include:
• Informative: Create awareness of brands, products, services, and ideas
• Persuasive: Differentiate a brand and establish superiority over competitors

The communication model: communication process, stages and challenges:

The communication process involves several stages and challenges, including:

• Encoding
The sender transforms thoughts into a message using words, symbols, gestures, or tone of voice.
• Decoding
The receiver interprets the message to understand the ideas or information behind it. Effective
communication occurs when the receiver decodes the message as intended by the sender.
• Inconsistent communication channels
Different messages are best delivered through specific communication channels.
• Developing an idea
The sender clarifies what they're thinking about and how they want to express it.
• Choosing the right communication tools
The choice of communication tools is a matter of preference, but it's important to consider which
tools are best for the purpose.
One communication model is the Shannon and Weaver model, which focuses on telephone and
radio cables. This model identifies five communication elements: source, transmitter, channel,
decoder, noise, and receiver. It also proposes that static or background sounds may disrupt the
communication process.
Another communication model is the four-sides model, also known as the communication square
or four-ears model. This model distinguishes between four different levels of communication,
and suggests that every message has four sides and can be interpreted in different ways.

Socio- Cultural and Ethical dimensions of Advertising:

The socio-cultural and ethical dimensions of advertising include:
• Social norms: Advertising should follow social norms.
• Truth: Advertising should be truthful and not deceptive.
• Consumer privacy: Advertising should respect consumer privacy.
• Social responsibility: Advertising should contribute positively to society. This can include
supporting social causes, promoting environmentally friendly products, and avoiding practices
that harm vulnerable groups.
 • Manipulation: Advertising should avoid manipulative tactics that exploit consumers' emotions
or vulnerabilities. For example, using fear, guilt, or shame to convince people to buy a product
is not considered ethical.
• Targeting children: Advertising should consider its effects on children.
• Controversial products: Advertising should consider controversial products.
• Government regulations: Advertising must comply with government regulations to prevent
misleading information or anti-national content.
Ethical advertising protects consumers from false or misleading information and improves
society by promoting social responsibility and positive values.
• Advertising Social,Legal,Ethical & Economical Aspects | PPT
4 Sept 2009 — Legally, advertising must comply with government regulations. Ethically,
advertising needs to be truthful and consider ...

Recent trends in Advertising :

Here are some recent trends in advertising:

• Personalization: Customers expect personalized experiences across all touchpoints, including emails, social
media, and physical stores.
• Programmatic advertising: Uses AI to automatically buy and sell ad space in real-time.
• Social commerce: The integration of social media and e-commerce, allowing users to purchase products directly
from social media posts.
• Omnichannel marketing: Ensures customers have a positive experience on each channel.
• Sustainability and ethical marketing: Consumers are increasingly conscious of environmental and social
issues.
• User-generated content: Consumers are increasingly skeptical of traditional advertising, so authenticity and
user-generated content are key to building trust.
• Influencer marketing: A powerful tool for reaching niche audiences and building brand credibility.
• AI-generated content: Enables marketers to create content quickly and efficiently.
• Automated and personalized email marketing: Involves sending emails to consumers regularly, depending on
preset triggers or timetables

Customer behavior and advertising:

Advertising is a significant influence on consumer behavior, which is the study of how people buy products and services:
• Awareness
Advertising introduces consumers to products and services they may not otherwise know about.
• Information
Advertisements provide information about products, such as their features, benefits, and unique selling points.
• Emotional appeal
Advertisements can tap into consumers' emotions, such as feelings of happiness, fear, or sadness, to create a connection
that goes beyond rationality.
• Brand recall
Consistent exposure to advertisements can enhance brand recall, making consumers more likely to choose a brand they
remember from advertising.
• Social proof
Advertisements can use social cues, such as celebrities or popular products, to make consumers feel like they are part of a
group.
• Cognitive biases
Advertisements can use cognitive biases, such as framing the product in a positive light, using scarcity, or offering a
discount, to influence the consumer's decision-making process.
Advertisers can also use big data to target consumers based on their age, gender, job, socioeconomic status, and their
internet and social media history.
Segmentation, motivation analyses, and value proposition:

Crafting a value proposition aligned with segmentation and targeting involves a strategic approach: - Analyze market data
to identify segments of your audience based on demographics, behavior, and needs. - Select the most promising target
segments that align with your business goals.

Advertising Copy: Meaning, essentials of Good Advertising Copy:

Advertising copy is the written or spoken text in an advertisement that aims to grab the attention of a target audience and
prompt them to purchase a product or service. It can include the headline, subhead, dialogue, punch line, and company's
dictum.
Some essentials of good advertising copy include:
• Clear objective: The copy should have a clear objective.
• Compelling message: The copy should be compelling and deliver a clear message.
• Call to action: The copy should include a clear and prominent call to action (CTA) that tells the audience what to
do next.
• Evidence of benefits: The copy should provide evidence of tangible benefits and connect the product's benefits to
the customer's pain points.
• Credibility: The copy should be credible and reliable.
• Tone: The copy should have a clearly understood tone.
• Accessibility: The copy should be easily accessible across multiple marketing platforms.
• Realistic expectations: The copy should set realistic expectations.
• Customer mindset: The copy should be written with a customer's mindset.
Some common types of ad copy include informational, persuasive, reminder, and entertainment.

Message Strategy – Copy writing for various Media:

1. Know your audience.

2. Know your medium.
3. Know your purpose.
4. Know your voice.
5. Know your style.
6. Know your tools.
7. Here's what else to consider.

Copy writing for various Media - Creativity in Advertising, copy in conventional media
and Cyberspace:

Here's a concise overview of copywriting for various media:

Copywriting Essentials

1. Understand the audience: Know your target audience, their needs, and preferences.
2. Clear message: Communicate the key message effectively.
3. Engaging tone: Use a tone that resonates with the audience.

Conventional Media Copywriting

1. Print ads: Use compelling headlines, concise copy, and eye-catching visuals.
2. Radio ads: Focus on audio storytelling, clear messaging, and memorable jingles.
3. TV commercials: Combine engaging visuals, clear messaging, and emotive storytelling.

Digital Copywriting (Cyberspace)

1. Social media: Craft concise, engaging copy with relevant hashtags and visuals.
2. Email marketing: Personalize messages, use compelling subject lines, and clear CTAs.
3. Website content: Create scannable, informative content with clear CTAs.
4. Influencer marketing: Collaborate with influencers to create sponsored content.
Key Principles for Effective Copywriting

1. Attention: Grab attention with compelling headlines and visuals.

2. Interest: Generate interest with clear, concise messaging.
3. Desire: Create desire with emotive storytelling and benefits-focused copy.
4. Action: Encourage action with clear CTAs and minimal friction.

Best Practices for Copywriting

1. Know your brand voice: Consistency is key to building brand recognition.

2. Use storytelling techniques: Make your message more relatable and memorable.
3. Optimize for SEO: Use relevant keywords to improve search engine rankings.
4. Test and refine: Continuously test and refine your copy to improve performance.

Unit II: Advertising Media: Planning & Strategy – Types of Media – Electronic Media; Print
Media; Outdoor Media – Media Scheduling Decisions – Media Mix Decisions – An Overview
of Media Scenario in India

Planning & Strategy in media:

Here's a concise overview of planning and strategy in media:

Media Planning

1. Define objectives: Identify target audience, campaign goals, and key performance indicators (KPIs).
2. Conduct market research: Gather data on target audience, market trends, and competitor activity.
3. Select media channels: Choose channels that align with campaign objectives and target audience (e.g., TV, social
media, print).
4. Determine media mix: Allocate budget to each channel based on effectiveness and reach.
5. Create media schedule: Plan timing and frequency of media placements.

Media Strategy

1. Develop unique selling proposition (USP): Clearly define the unique benefit of the product or service.
2. Identify key messaging: Craft core messages that resonate with the target audience.
3. Choose media tactics: Select specific media tactics, such as influencer partnerships or sponsored content.
4. Plan for measurement and evaluation: Establish metrics to track campaign success and adjust strategy accordingly.

Key Considerations

1. Target audience insights: Understand audience demographics, interests, and behaviors.

2. Media channel effectiveness: Evaluate the strengths and weaknesses of each media channel.
3. Budget allocation: Optimize budget allocation across media channels.
4. Campaign timing: Consider the timing of the campaign and its potential impact on the target audience.

Tools and Techniques

1. Media planning software: Utilize tools like ComScore, Nielsen, or Kantar to analyze audience data and plan media
campaigns.
2. Data analytics: Leverage data analytics to track campaign performance and inform future media planning decisions.
3. Competitor analysis: Monitor competitor activity to identify opportunities and challenges in the market.

Types of Media – Electronic Media; Print Media; Outdoor Media:

Here are the types of media:

Electronic Media

1. Television: Broadcasts video and audio content to a wide audience.

2. Radio: Broadcasts audio content to a wide audience.
3. Internet: Online platforms, websites, social media, and email.
4. Mobile Media: Mobile phones, tablets, and other handheld devices.
5. Digital Signage: Electronic displays in public spaces, such as malls and airports.

Print Media

1. Newspapers: Daily or weekly publications with news, articles, and advertisements.

2. Magazines: Periodical publications with articles, stories, and advertisements.
3. Brochures: Small booklets or pamphlets with information about a product or service.
4. Posters: Visual advertisements or announcements printed on paper or cardboard.
5. Business Cards: Small cards with contact information and professional details.

Outdoor Media

1. Billboards: Large outdoor advertisements displayed on roadsides or in public spaces.

2. Hoarding: Large outdoor advertisements displayed on construction sites or in public spaces.
3. Transit Shelters: Advertisements displayed at bus stops or other public transportation shelters.
4. Mall Displays: Advertisements or product displays in shopping malls.
5. Event Marketing: Promotional activities at events, such as concerts, festivals, or trade shows.

Media Scheduling Decisions:

Here are key considerations for media scheduling decisions:

Continuity Scheduling
1. Continuous presence: Maintain a consistent presence throughout the campaign period.
2. Regular advertising: Advertise at regular intervals to keep the message top-of-mind.

Flighting Scheduling
1. Intermittent advertising: Advertise in bursts or "flights" with periods of no advertising in between.
2. Pulse scheduling: Alternate between high and low advertising intensity.

Burst Scheduling
1. High-intensity advertising: Advertise heavily for a short period to create buzz and awareness.

Pulsing Scheduling
1. Alternating intensity: Alternate between high and low advertising intensity to maintain awareness and interest.

Factors Influencing Scheduling Decisions

1. Budget: Allocate budget effectively across the campaign period.
2. Target audience: Consider the target audience's media consumption habits and preferences.
3. Message and creative: Ensure the message and creative are consistent and effective throughout the campaign.
4. Competitor activity: Monitor competitor activity and adjust scheduling accordingly.
5. Seasonality and events: Consider seasonal fluctuations and events that may impact advertising effectiveness.

Media Mix Decisions:

Here are key considerations for media mix decisions:

Media Mix Objectives

1. Reach: Maximize audience exposure to the message.

2. Frequency: Ensure repeated exposure to reinforce the message.
3. Impact: Create a lasting impression on the target audience.
Media Mix Options

1. Television: High reach, high impact, but expensive.

2. Digital Media: Targeted, measurable, and cost-effective.
3. Print Media: Tangible, credible, but declining reach.
4. Outdoor Media: High visibility, low cost, but limited targeting.
5. Radio: High reach, low cost, but limited visual impact.

Media Mix Strategies

1. Dominance: Focus on a single medium to maximize impact.

2. Reach and Frequency: Combine media to achieve optimal reach and frequency.
3. Synergy: Use multiple media to create a cohesive and amplifying message.

Factors Influencing Media Mix Decisions

1. Target Audience: Consider demographics, interests, and media habits.

2. Budget: Allocate resources effectively across media channels.
3. Message and Creative: Ensure consistency and effectiveness across media.
4. Competitor Activity: Monitor and adjust the media mix accordingly.
5. Seasonality and Events: Consider timely and relevant media opportunities.

An Overview of Media Scenario in India:

Here's an overview of the media scenario in India:
Traditional Media
1. Television: 197 million households with TV sets (BARC, 2022)
2. Print Media: 62,000+ registered newspapers, 1,000+ magazines (Registrar of Newspapers,
2022)
3. Radio: 386 private FM radio stations, 230+ All India Radio stations (TRAI, 2022)
Digital Media
1. Internet Users: 830 million+ (IAMAI, 2022)
2. Smartphone Users: 550 million+ (IAMAI, 2022)
3. Social Media Users: 450 million+ (Hootsuite, 2022)
4. Online News Platforms: 100+ online news websites, 50+ news apps (Google News, 2022)
Emerging Trends
1. Digital Transformation: Shift from traditional to digital media
2. Mobile-First Strategy: Focus on mobile devices for content consumption
3. Video Content: Growing demand for video content on digital platforms
4. Regional Language Content: Increasing demand for content in regional languages
5. Podcasting: Growing popularity of podcasts in India
Challenges
1. Fake News: Spread of misinformation on social media
2. Regulatory Framework: Need for clear regulations for digital media
3. Media Literacy: Need for education on media literacy and critical thinking
4. Monetization: Challenges in monetizing digital content in India
 Opportunities
1. Growing Digital Market: Increasing demand for digital content and services
2. Innovation: Opportunities for innovation in digital media, such as AI-powered content
creation
3. Regional Language Content: Opportunities for creating content in regional languages
4. Niche Audiences: Opportunities for targeting niche audiences with specialized content.

Unit III : Advertising Budgets & Agencies: Planning for Advertising Budgets – Methods of
Determining Advertising Budgets – Advertising Agencies – Media Companies and Supporting
Organizations – Advertising Effectiveness

Planning for Advertising Budgets::

Advertising Budget Planning

1. Define Objectives: Establish clear advertising goals, such as increasing sales or brand awareness.
2. Conduct Market Research: Gather data on target audience, market trends, and competitor activity.
3. Determine Budget Allocation: Allocate budget across media channels, such as TV, digital, print, and outdoor.
4. Set Budget Levels: Establish budget levels for each media channel based on objectives, research, and allocation.
5. Consider Budgeting Methods: Choose a budgeting method, such as percentage of sales, competitive parity, or objective
and task.

Budgeting Methods

1. Percentage of Sales: Allocate a percentage of sales revenue to advertising.

2. Competitive Parity: Match competitors' advertising budgets.
3. Objective and Task: Allocate budget based on specific advertising objectives and tasks.

Factors Influencing Budget Planning

1. Market Conditions: Consider economic, social, and cultural factors.

2. Competitor Activity: Monitor competitors' advertising strategies.
3. Target Audience: Understand audience demographics, interests, and media habits.
4. Media Costs: Consider media channel costs, such as ad rates and production costs.
5. Return on Investment (ROI): Evaluate advertising effectiveness and ROI.

Methods of Determining Advertising Budgets: 1. Percentage of Sales Method

Allocate a percentage of sales revenue to advertising.

2. Competitive Parity Method

Match competitors' advertising budgets.

3. Objective and Task Method

Allocate budget based on specific advertising objectives and tasks.

4. Return on Investment (ROI) Method

Evaluate advertising effectiveness and allocate budget based on ROI.

5. Affordable Method
Allocate budget based on what the company can afford.

6. Zero-Based Budgeting Method

Justify every dollar spent on advertising.

7. Payout Method
Allocate budget based on expected returns from advertising.

8. Marginal Analysis Method

Analyze the marginal return on investment for each advertising dollar.

Advertising Agencies:

1. Full-Service Agencies: Offer comprehensive services, including creative, media, and account management.
2. Specialized Agencies: Focus on specific areas, such as digital, social media, or experiential marketing.
3. Boutique Agencies: Small, specialized agencies that offer tailored services.
4. In-House Agencies: Companies' internal advertising departments.

Services Offered by Advertising Agencies

1. Creative Development: Conceptualization, copywriting, and design.

2. Media Planning and Buying: Media strategy, planning, and purchasing.
3. Account Management: Client relationships, strategy, and project management.
4. Digital Services: Website development, social media, and online advertising.
5. Research and Analytics: Market research, data analysis, and campaign evaluation.

Benefits of Working with Advertising Agencies

1. Expertise: Access to specialized knowledge and skills.

2. Objectivity: Fresh perspective and unbiased approach.
3. Resources: Access to advanced tools, technology, and talent.
4. Scalability: Ability to handle large or complex projects.
5. Innovation: Exposure to new ideas, trends, and best practices.

Media Companies and Supporting Organizations:

Media Companies

1. News Corporations: Companies that own and operate news channels, newspapers, and online news platforms.
2. Broadcasting Networks: Companies that operate television and radio networks, such as ABC, CBS, NBC, and FOX.
3. Cable and Satellite Providers: Companies that offer cable and satellite television services, such as Comcast and
DirecTV.
4. Digital Media Companies: Companies that operate online media platforms, such as Google, Facebook, and Netflix.

Supporting Organizations

1. Advertising Agencies: Companies that create and place advertisements on behalf of clients.
2. Public Relations Firms: Companies that help clients manage their public image and reputation.
3. Media Research Firms: Companies that provide data and analysis on media trends and consumer behavior.
4. Industry Associations: Organizations that represent the interests of media companies and professionals, such as the
National Association of Broadcasters (NAB) and the Interactive Advertising Bureau (IAB).
5. Media Regulators: Government agencies that oversee and regulate the media industry, such as the Federal
Communications Commission (FCC) in the United States.

Advertising Effectiveness: Measures of Advertising Effectiveness

1. Reach and Frequency: Measures the number of people exposed to an ad and how often they
see it.
2. Impressions: Measures the total number of times an ad is displayed.
 3. Click-Through Rate (CTR): Measures the percentage of users who click on an ad.
4. Conversion Rate: Measures the percentage of users who complete a desired action (e.g.,
make a purchase).
5. Return on Ad Spend (ROAS): Measures the revenue generated by an ad campaign compared
to its cost.

Factors Influencing Advertising Effectiveness

1. Target Audience: Understanding the demographics, interests, and behaviors of the target
audience.
2. Ad Creative: The quality and relevance of the ad's message, visuals, and overall creative
execution.
3. Media Channel: The choice of media channel (e.g., TV, social media, search) and its ability
to reach the target audience.
4. Ad Placement: The positioning of the ad within a media channel (e.g., homepage, sidebar).
5. Budget Allocation: The allocation of budget across different media channels and ad formats.

Methods for Evaluating Advertising Effectiveness

1. Surveys and Focus Groups: Gathering feedback from consumers to understand their attitudes
and behaviors.
2. Experiments and A/B Testing: Testing different ad creative, targeting, and media channels
to determine which performs best.
3. Data Analytics: Analyzing data on ad performance, such as impressions, clicks, and
conversions.
4. Market Research: Conducting research to understand market trends, consumer behavior, and
competitor activity.

Unit IV: Concept of Brand: Concept of value, brand and marketing metrics: Brand and Firm
– Brands and Consumers – Brand Identity – Brand Image – Protecting Brand – Brand
Perspectives – Brand Levels – Brand Evolution

Concept of value, brand and marketing metrics: Value

1. Perceived Value: The value customers perceive in a product or service.

2. Customer Value Proposition (CVP): A statement that clearly communicates the unique value a product or service offers
to customers.
3. Value Chain: A series of activities that create value for customers.

Brand

1. Brand Identity: The visual and verbal elements that define a brand, such as logos, colors, and tone of voice.
2. Brand Positioning: The process of creating a unique place for a brand in the minds of customers.
3. Brand Equity: The value of a brand, including its reputation, loyalty, and recognition.
Marketing Metrics

1. Customer Acquisition Cost (CAC): The cost of acquiring a new customer.

2. Customer Lifetime Value (CLV): The total value a customer brings to a business over their lifetime.
3. Return on Investment (ROI): The return on investment for a marketing campaign or activity.
4. Conversion Rate: The percentage of customers who complete a desired action, such as making a purchase.
5. Net Promoter Score (NPS): A measure of customer satisfaction and loyalty.

Brand and Firm – Brands and Consumers – Brand Identity – Brand Image – Protecting Brand
– Brand Perspectives – Brand Levels – Brand Evolution:
Brand and Firm

1. Brand: A unique identity that represents a product, service, or company.

2. Firm: A business organization that creates and manages brands.

Brands and Consumers

1. Brand Awareness: Consumers' ability to recognize and recall a brand.

2. Brand Association: Consumers' mental connections between a brand and its attributes.
3. Brand Loyalty: Consumers' repeat purchasing behavior and advocacy for a brand.

Brand Identity

1. Visual Identity: Logos, colors, typography, and imagery.

2. Tone of Voice: Language and communication style.
3. Brand Positioning: Unique place in the market and consumers' minds.

Brand Image

1. Perceived Quality: Consumers' perception of a brand's quality.

2. Brand Personality: Human-like traits associated with a brand.
3. Brand Reputation: Overall perception of a brand's character and values.

Protecting Brand

1. Trademarks: Legal protection for brand names, logos, and slogans.

2. Copyrights: Protection for original creative works.
3. Brand Guidelines: Rules for consistent brand usage.

Brand Perspectives

1. Brand Orientation: Focus on building strong brands.

2. Customer-Based Brand Equity: Focus on building brand equity through customer experiences.
3. Internal Branding: Focus on engaging employees with the brand.

Brand Levels

1. Corporate Brand: Overall company brand.

2. Product Brand: Specific product or service brand.
3. Sub-Brand: Smaller brand within a larger brand portfolio.

Brand Evolution

1. Brand Revitalization: Refreshing or repositioning an existing brand.

2. Brand Extension: Expanding a brand into new markets or product categories.
3. Brand Reinvention: Completely redefining a brand's identity and purpose.
 Unit V: Brand Equity: Brand Loyalty – Brand Equity – Brand Personality – Building Brands
– Brand Extension Strategies – Brand Positioning – 3Cs of Positioning – Competitive
Positioning
Brand Loyalty – Brand Equity – Brand Personality – Building Brands:

Brand Loyalty

1. Definition: Customers' repeat purchasing behavior and advocacy for a brand.

2. Types: Behavioral loyalty (repeat purchases) and attitudinal loyalty (emotional commitment).
3. Factors influencing loyalty: Quality, customer service, brand identity, and customer engagement.

Brand Equity

1. Definition: The value of a brand, including its reputation, loyalty, and recognition.
2. Types: Brand awareness, brand associations, perceived quality, and brand loyalty.
3. Factors influencing equity: Quality, customer service, marketing efforts, and competitor activity.

Brand Personality

1. Definition: Human-like traits associated with a brand, such as friendly, innovative, or luxurious.
2. Dimensions: Sincerity, excitement, competence, sophistication, and ruggedness.
3. Factors influencing personality: Brand identity, marketing efforts, customer interactions, and employee behavior.

Building Brands

1. Brand Positioning: Define a unique place in the market and consumers' minds.
2. Brand Identity: Develop a consistent visual and verbal identity.
3. Brand Messaging: Create a clear and compelling message.
4. Customer Engagement: Interact with customers through various channels.
5. Employee Advocacy: Encourage employees to become brand ambassadors.
6. Consistency: Maintain a consistent brand image and message across all touchpoints.
7. Measurement: Track brand performance using metrics such as brand awareness, equity, and loyalty.

Brand Extension Strategies:

Types of Brand Extension

1. Product Extension: Introducing new products under the same brand name.
2. Service Extension: Offering new services under the same brand name.
3. Geographic Extension: Expanding the brand to new geographic locations.
4. Line Extension: Introducing new products within the same product category.

Brand Extension Strategies

1. Vertical Extension: Extending the brand to higher or lower price points.

2. Horizontal Extension: Extending the brand to new product categories.
3. Lateral Extension: Extending the brand to new markets or industries.

Factors to Consider

1. Brand Fit: Ensuring the extension aligns with the brand's values and image.
2. Market Demand: Assessing demand for the new product or service.
3. Competitor Analysis: Evaluating competitors' strategies and market share.
4. Resource Allocation: Ensuring sufficient resources for the extension.

Benefits of Brand Extension

1. Increased Brand Awareness: Expanding the brand's reach and visibility.
2. Improved Brand Image: Enhancing the brand's reputation and credibility.
3. Increased Revenue: Generating new revenue streams through the extension.
4. Competitive Advantage: Differentiating the brand from competitors.

Brand Positioning – 3Cs of Positioning: Here's an overview of brand positioning and the 3Cs of positioning:

Brand Positioning

1. Definition: The process of creating a unique identity and image for a brand in the minds of consumers.
2. Objective: To differentiate the brand from competitors and create a lasting impression on consumers.
3. Key elements: Target audience, unique selling proposition (USP), brand personality, and brand messaging.

3Cs of Positioning

1. Category: Define the category or industry in which the brand operates.

2. Competitors: Identify key competitors and their positioning strategies.
3. Customer: Understand the target audience's needs, preferences, and behaviors.

Brand Positioning Strategies

1. Head-on positioning: Directly competing with a market leader.

2. Niche positioning: Focusing on a specific segment or niche.
3. Differentiation positioning: Creating a unique identity and image.
4. Repositioning: Changing the brand's existing position in the market.

Benefits of Effective Brand Positioning

1. Increased brand awareness: Creating a lasting impression on consumers.

2. Differentiation: Standing out from competitors.
3. Targeted marketing: Focusing on the most relevant audience.
4. Competitive advantage: Establishing a unique identity and image.

Competitive Positioning: Here's an overview of competitive positioning:

Definition: The process of creating a unique market position for a brand relative to its competitors.

Types of Competitive Positioning:

1. Head-on Positioning: Directly competing with a market leader.

2. Differentiation Positioning: Creating a unique identity and image.
3. Niche Positioning: Focusing on a specific segment or niche.
4. Repositioning: Changing the brand's existing position in the market.

Competitive Positioning Strategies:

1. Cost Leadership: Offering lower prices than competitors.

2. Differentiation: Creating unique products or services.
3. Focus: Targeting a specific market segment.
4. Value-based Positioning: Focusing on the value proposition.

Tools for Competitive Positioning:

1. Perceptual Mapping: Visualizing consumer perceptions of brands.
2. Competitor Profiling: Analyzing competitors' strengths and weaknesses.
3. SWOT Analysis: Identifying strengths, weaknesses, opportunities, and threats.

Benefits of Competitive Positioning:

1. Increased market share: By differentiating from competitors.

2. Improved brand awareness: By creating a unique identity.
3. Competitive advantage: By establishing a unique market position.
4. Increased customer loyalty: By offering unique value propositions.
 MARKETING SPECIALIZATION

BUS 3.5.M (R22): CUSTOMER RELATIONSHIP MANAGEMENT

Unit-I: Customer Relationship Management – Measurement – Qualitative Measurement

Methods – Quantitative Measurement Methods – Calculating Relationship Indices.
Unit-II: Customer Relationship Survey Design – Statistical Analysis of Customer Surveys –
Using Customer Relationship Survey Results.
Unit-III: Relationships in Marketing – Relationship Concepts – Relationship Drivers –
Lasting Relationships.
Unit-IV: Customer Partnership – Internal Partnerships – Supplier Partnerships – External
Partnership.
Unit-V: The Technological Revolution – Relationship Management – Changing Corporate
Cultures.

Unit-I: Customer Relationship Management – Measurement – Qualitative Measurement Methods –

Quantitative Measurement Methods – Calculating Relationship Indices

Customer Relationship Management: Definition: A strategic approach to managing interactions

with customers and prospects to build strong relationships and drive business growth.

Key Components:

1. Customer Data Management: Collecting, storing, and analyzing customer data.

2. Sales Force Automation: Automating sales processes and tracking sales performance.
3. Marketing Automation: Automating marketing campaigns and tracking customer engagement.
4. Customer Service and Support: Providing timely and effective customer support.

Benefits of CRM:

1. Improved Customer Insights: Better understanding of customer needs and preferences.

2. Enhanced Customer Experience: Personalized and timely interactions.
3. Increased Sales: Improved sales forecasting and upselling/cross-selling opportunities.
4. Reduced Costs: Streamlined processes and improved efficiency.

CRM Strategies:

1. Segmentation: Dividing customers into distinct groups based on demographics, behavior, or

preferences.
2. Personalization: Tailoring interactions and offers to individual customers.
3. Omnichannel Engagement: Providing seamless experiences across multiple channels.
4. Analytics and Reporting: Using data to measure performance and inform decision-making.

CRM Tools and Technologies:

1. Cloud-based CRM: Scalable and accessible CRM solutions.

2. Mobile CRM: Accessing CRM data and functionality on-the-go.
3. Social CRM: Integrating social media data and engagement into CRM.
4. AI-powered CRM: Using artificial intelligence to enhance customer insights and automation.
Measurement – Qualitative Measurement Methods – Quantitative Measurement Methods:

Measurement

1. Definition: The process of assigning numbers or values to variables to quantify and analyze
data.
2. Importance: Enables businesses to make informed decisions, evaluate performance, and
identify areas for improvement.

Qualitative Measurement Methods

1. Definition: Methods that gather non-numerical data to gain insights into attitudes, opinions,
and behaviors.
2. Examples:
1. Focus Groups: Group discussions to gather feedback and opinions.
2. In-Depth Interviews: One-on-one interviews to gather detailed information.
3. Content Analysis: Analyzing text, images, and videos to identify patterns and themes.
4. Observational Studies: Observing behavior in natural or controlled environments.

Quantitative Measurement Methods

1. Definition: Methods that gather numerical data to measure variables and analyze
relationships.
2. Examples:
1. Surveys: Structured questionnaires to gather data from a large sample.
2. Experiments: Controlled studies to test cause-and-effect relationships.
3. Regression Analysis: Statistical analysis to identify relationships between variables.
4. Customer Satisfaction Metrics: Measuring customer satisfaction through metrics like Net
Promoter Score (NPS) and Customer Satisfaction (CSAT).

Calculating Relationship Indices: 1. Customer Retention Rate

- Formula: (Number of customers retained / Total number of customers at the start of the period) x 100
- Interpretation: Measures the percentage of customers retained over a specific period.

2. Customer Acquisition Rate

- Formula: (Number of new customers acquired / Total number of customers at the end of the period) x
100
- Interpretation: Measures the percentage of new customers acquired over a specific period.

3. Customer Churn Rate

- Formula: (Number of customers lost / Total number of customers at the start of the period) x 100
- Interpretation: Measures the percentage of customers lost over a specific period.

4. Customer Lifetime Value (CLV)

- Formula: Average order value x Purchase frequency x Customer lifespan

- Interpretation: Measures the total value a customer brings to a business over their lifetime.

5. Net Promoter Score (NPS)

- Formula: % of promoters - % of detractors

- Interpretation: Measures customer satisfaction and loyalty, with higher scores indicating stronger
loyalty.
6. Customer Satisfaction (CSAT)

- Formula: (Number of satisfied customers / Total number of customers surveyed) x 100

- Interpretation: Measures the percentage of customers satisfied with a product or service.

7. First Response Time (FRT)

- Formula: Average time taken to respond to customer inquiries

- Interpretation: Measures the efficiency of customer support in responding to inquiries.

8. Resolution Rate

- Formula: (Number of resolved issues / Total number of issues reported) x 100

- Interpretation: Measures the effectiveness of customer support in resolving issues.

Unit-II: Customer Relationship Survey Design – Statistical Analysis of Customer Surveys –

Using Customer Relationship Survey Results.

Customer Relationship Survey Design: Types of Surveys

1. Satisfaction Surveys: Measure customer satisfaction with products or services.

2. Net Promoter Score (NPS) Surveys: Measure customer loyalty and satisfaction.
3. Customer Effort Score (CES) Surveys: Measure the ease of doing business with a
company.
4. Relationship Surveys: Measure the strength of the customer relationship.

Survey Design Best Practices

1. Clear Objectives: Define the survey's purpose and goals.

2. Concise Questions: Use simple, straightforward language.
3. Relevant Questions: Ask questions that align with the survey's objectives.
4. Multiple Response Options: Use scales, such as Likert or semantic differential.
5. Avoid Biased Questions: Ensure questions are neutral and unbiased.
6. Pilot Testing: Test the survey with a small group before launch.

Survey Question Types

1. Demographic Questions: Gather information about customers (e.g., age, location).

2. Attitudinal Questions: Measure customers' attitudes and opinions.
3. Behavioral Questions: Measure customers' behaviors and actions.
4. Open-Ended Questions: Allow customers to provide detailed feedback.

Survey Distribution Methods

1. Email Surveys: Send surveys via email.
2. Online Surveys: Host surveys on websites or social media.
3. Phone Surveys: Conduct surveys via phone calls.
4. In-Person Surveys: Conduct surveys in person.

Analyzing and Acting on Survey Results

1. Data Analysis: Analyze survey data to identify trends and insights.

2. Identify Areas for Improvement: Determine areas that require improvement.
3. Develop Action Plans: Create plans to address areas for improvement.
4. Monitor Progress: Track progress and adjust action plans as needed.

Statistical Analysis of Customer Surveys:

Types of Statistical Analysis

1. Descriptive Statistics: Summarize and describe survey data, including means, medians,
modes, and standard deviations.
2. Inferential Statistics: Draw conclusions about a population based on a sample of survey
data, including hypothesis testing and confidence intervals.
3. Correlation Analysis: Examine relationships between survey variables, including Pearson's
correlation coefficient.
4. Regression Analysis: Model relationships between survey variables, including linear and
logistic regression.

Statistical Methods for Survey Analysis

1. Factor Analysis: Identify underlying factors or dimensions in survey data.

2. Cluster Analysis: Group similar respondents or survey responses together.
3. Conjoint Analysis: Measure preferences for different product or service features.
4. Structural Equation Modeling (SEM): Examine relationships between survey variables and
latent constructs.

Common Statistical Tests for Survey Data

1. t-tests: Compare means between two groups.

2. ANOVA: Compare means among three or more groups.
3. Chi-squared tests: Examine associations between categorical variables.
4. Regression analysis: Model relationships between survey variables.

Software for Statistical Analysis of Customer Surveys

1. SPSS: A popular statistical software package.

2. R: A free, open-source statistical software package.
3. SAS: A powerful statistical software package.
4. Excel: A spreadsheet software package with built-in statistical functions.

Best Practices for Statistical Analysis of Customer Surveys

1. Ensure data quality: Check for missing or erroneous data.

2. Use appropriate statistical methods: Select methods that align with research questions and
data characteristics.
3. Interpret results correctly: Avoid misinterpreting statistical results or ignoring assumptions.
4. Communicate results effectively: Present findings in a clear, concise manner.

Using Customer Relationship Survey Results: Improving Customer Experience

1. Identify pain points: Address areas of dissatisfaction to improve overall experience.

2. Enhance customer touchpoints: Refine interactions across all channels.
3. Develop personalized experiences: Tailor interactions based on customer preferences.

Informing Business Decisions

1. Prioritize initiatives: Focus on areas that impact customer satisfaction and loyalty.
2. Resource allocation: Assign resources to address customer concerns.
3. Performance metrics: Establish key performance indicators (KPIs) to track progress.

Building Customer Loyalty

1. Recognize and reward loyalty: Implement loyalty programs or rewards.

2. Foster engagement: Encourage customer participation through feedback mechanisms.
3. Personalized communication: Address customers by name and tailor messaging.

Enhancing Employee Engagement

1. Share feedback with employees: Educate staff on customer concerns and suggestions.
2. Empower employees: Give staff the authority to address customer issues.
3. Recognize employee contributions: Reward employees for excellent customer service.

Monitoring Progress

1. Track KPIs: Regularly review metrics to assess progress.

2. Conduct follow-up surveys: Measure changes in customer satisfaction over time.
3. Adjust strategies: Refine approaches based on ongoing feedback and results
Unit-III: Relationships in Marketing – Relationship Concepts – Relationship Drivers –
Lasting Relationships.

Relationships in Marketing: Types of Relationships

1. Customer Relationships: Building strong bonds with customers to drive loyalty and retention.
2. Supplier Relationships: Collaborating with suppliers to ensure quality, reliability, and efficiency.
3. Partner Relationships: Forming strategic alliances with other businesses to achieve mutual goals.
4. Employee Relationships: Fostering positive relationships with employees to boost morale,
productivity, and retention.

Key Elements of Relationships

1. Trust: Establishing credibility and reliability with customers, suppliers, and partners.
2. Communication: Effective dialogue and feedback to ensure mutual understanding.
3. Emotional Connection: Creating an emotional bond with customers to drive loyalty and advocacy.
4. Value: Providing value to customers, suppliers, and partners through quality products, services, and
experiences.

Benefits of Strong Relationships

1. Increased Loyalty: Building long-term relationships with customers to drive retention and advocacy.
2. Improved Collaboration: Fostering strong relationships with suppliers and partners to drive
innovation and efficiency.
3. Enhanced Reputation: Building trust and credibility with stakeholders to enhance brand reputation.
4. Competitive Advantage: Differentiating through strong relationships to gain a competitive edge.

Relationship Marketing Strategies

1. Personalization: Tailoring interactions and experiences to individual customers.

2. Customer Engagement: Encouraging customer participation and feedback through various channels.
3. Loyalty Programs: Implementing programs to reward and retain loyal customers.
4. Partnerships and Collaborations: Forming strategic alliances with other businesses to achieve mutual
goals.

Relationship Concepts – Relationship Drivers – Lasting Relationships: Here are key

relationship concepts:

Types of Relationships

1. Transactional Relationships: Focus on exchanging goods or services for payment.

2. Relational Relationships: Emphasize building long-term connections and mutual benefits.

Key Relationship Concepts

1. Trust: Building credibility and reliability with customers, suppliers, and partners.
2. Commitment: Demonstrating dedication and loyalty to relationships.
3. Communication: Effective dialogue and feedback to ensure mutual understanding.
4. Emotional Connection: Creating an emotional bond with customers to drive loyalty and
advocacy.
5. Empathy: Understanding and sharing the feelings of customers, suppliers, and partners.
6. Reciprocity: Recognizing and rewarding mutual benefits and support.

Relationship Stages

1. Awareness: Initial recognition of a potential relationship.

2. Exploration: Gathering information and assessing potential benefits.
3. Establishment: Formalizing the relationship through agreements or contracts.
4. Maintenance: Ongoing efforts to sustain and strengthen the relationship.
5. Dissolution: Ending the relationship, either amicably or due to conflict.

Relationship Concepts

1. Trust: Building credibility and reliability with customers, suppliers, and partners.
2. Commitment: Demonstrating dedication and loyalty to relationships.
3. Communication: Effective dialogue and feedback to ensure mutual understanding.
4. Emotional Connection: Creating an emotional bond with customers to drive loyalty and
advocacy.

Relationship Drivers

1. Quality: Providing high-quality products, services, and experiences.

2. Value: Offering value to customers, suppliers, and partners through competitive pricing,
benefits, and services.
3. Convenience: Making interactions and transactions easy, efficient, and accessible.
4. Personalization: Tailoring interactions and experiences to individual customers.

Lasting Relationships

1. Long-term Focus: Prioritizing long-term relationships over short-term gains.

2. Mutual Benefits: Ensuring relationships are mutually beneficial and rewarding.
3. Adaptability: Being flexible and adaptable to changing customer needs and market
conditions.
4. Continuous Improvement: Regularly assessing and improving relationships through
feedback and evaluation.
Unit-IV: Customer Partnership – Internal Partnerships – Supplier Partnerships – External
Partnership
Customer Partnership:

Definition: A collaborative relationship between a business and its customers, focused on

mutual benefits and value creation.

Key Characteristics:

1. Collaboration: Working together to achieve common goals.

2. Trust: Building credibility and reliability through open communication.
3. Mutual Benefits: Sharing value and rewards.
4. Long-term Focus: Prioritizing long-term relationships over short-term gains.

Benefits of Customer Partnership:

1. Increased Loyalty: Building strong relationships drives customer retention.

2. Improved Customer Insights: Collaborative relationships provide valuable feedback.
3. Innovation: Partnering with customers can lead to new ideas and solutions.
4. Competitive Advantage: Unique partnerships differentiate businesses from competitors.

Customer Partnership Strategies:

1. Co-creation: Involving customers in product or service development.

2. Joint Planning: Collaborating on business planning and goal-setting.
3. Open Communication: Regularly sharing information and feedback.
4. Recognition and Rewards: Acknowledging and incentivizing customer contributions.

Internal Partnerships:

Here are key aspects of internal partnerships:

Definition
A collaborative relationship between different departments, teams, or functions within an
organization, focused on achieving common goals and objectives.

Key Characteristics

1. Collaboration: Working together across functional boundaries.

2. Communication: Open and transparent sharing of information.
3. Trust: Building credibility and reliability among team members.
4. Shared Goals: Aligning objectives and priorities across departments.

Benefits of Internal Partnerships

1. Improved Efficiency: Streamlining processes and reducing silos.

2. Enhanced Innovation: Combining expertise and perspectives to drive creativity.
3. Better Decision-Making: Leveraging diverse insights and knowledge.
4. Increased Employee Engagement: Fostering a sense of teamwork and shared purpose.

Internal Partnership Strategies

1. Cross-Functional Teams: Assembling teams with diverse skill sets and expertise.
2. Regular Communication: Scheduling regular meetings and updates.
3. Shared Goal-Setting: Aligning objectives and key performance indicators (KPIs).
4. Training and Development: Providing opportunities for skill-building and knowledge-
sharing.

External Partnership:

Here are key aspects of external partnerships:

Definition
A collaborative relationship between an organization and external entities, such as suppliers,
vendors, customers, or other businesses, to achieve mutual benefits and drive growth.

Types of External Partnerships

1. Strategic Partnerships: Collaborations that drive business growth and innovation.

2. Supplier Partnerships: Relationships with suppliers to ensure quality, reliability, and
efficiency.
3. Customer Partnerships: Collaborations with customers to drive loyalty and retention.
4. Joint Ventures: Partnerships that involve shared ownership and control.

Benefits of External Partnerships

1. Access to New Markets: Expanding reach and presence through partnerships.

2. Innovation and R&D: Collaborating on research and development to drive innovation.
3. Improved Efficiency: Streamlining processes and reducing costs through partnerships.
4. Enhanced Credibility: Building reputation and credibility through partnerships.

External Partnership Strategies

1. Partner Selection: Carefully selecting partners that align with business goals.
2. Clear Communication: Establishing open and transparent communication channels.
3. Shared Goal-Setting: Aligning objectives and key performance indicators (KPIs).
4. Regular Evaluation: Regularly assessing partnership performance and making adjustments.

Supplier Partnerships: Types of Supplier Partnerships

1. Transactional Partnerships: Focus on purchasing goods or services at competitive prices.

2. Collaborative Partnerships: Involve joint planning, shared resources, and mutual benefits.
3. Strategic Partnerships: Long-term collaborations that drive innovation, growth, and competitive
advantage.

Benefits of Supplier Partnerships

1. Improved Quality: Suppliers invest in quality improvement to meet partner expectations.

2. Increased Efficiency: Streamlined processes and reduced lead times.
3. Cost Savings: Negotiated prices, reduced inventory costs, and shared resources.
4. Innovation: Suppliers contribute to product development, improving innovation and
competitiveness.

Key Characteristics of Successful Supplier Partnerships

1. Trust: Built through open communication, reliability, and mutual respect.

2. Clear Communication: Regular updates, shared goals, and defined expectations.
3. Shared Goals: Aligning objectives to drive mutual benefits and growth.
4. Flexibility: Adapting to changes in demand, market conditions, or technology.

Best Practices for Managing Supplier Partnerships

1. Establish Clear Expectations: Define roles, responsibilities, and performance metrics.

2. Regularly Evaluate Performance: Monitor quality, delivery, and cost performance.
3. Foster Open Communication: Encourage feedback, share best practices, and address concerns.
4. Develop a Contingency Plan: Prepare for potential disruptions, such as supply chain disruptions or
quality issues.

Unit-V: The Technological Revolution – Relationship Management – Changing Corporate

Cultures.

The Technological Revolution: Defining the Technological Revolution

1. Rapid Advancements: Exponential growth in technological capabilities and innovations.

2. Digital Transformation: Shift from analog to digital technologies, transforming industries and
societies.
3. Interconnectedness: Global connectivity through the internet, mobile devices, and social media.

Key Technologies Driving the Revolution

1. Artificial Intelligence (AI): Machine learning, natural language processing, and robotics.
2. Internet of Things (IoT): Connecting physical devices to the internet, enabling data exchange and
automation.
3. Blockchain: Secure, decentralized, and transparent data management.
4. Cloud Computing: On-demand access to scalable computing resources and storage.

Impact on Business and Society

1. Digital Disruption: Transforming industries, business models, and customer experiences.

2. New Opportunities: Creating new markets, products, and services.
3. Job Market Shifts: Automation and AI-driven changes in employment landscapes.
4. Social and Ethical Implications: Concerns around data privacy, security, and bias.

Preparing for the Future

1. Upskilling and Reskilling: Adapting workforce capabilities to emerging technologies.

2. Investing in Research and Development: Staying ahead of the innovation curve.
3. Fostering Collaboration: Encouraging interdisciplinary and cross-industry partnerships.
4. Embracing Lifelong Learning: Cultivating a culture of continuous learning and adaptation.

Relationship Management: Types of Relationships

1. Customer Relationships: Building strong bonds with customers to drive loyalty and retention.
2. Supplier Relationships: Collaborating with suppliers to ensure quality, reliability, and efficiency.
3. Partner Relationships: Forming strategic alliances with other businesses to achieve mutual goals.
4. Employee Relationships: Fostering positive relationships with employees to boost morale,
productivity, and retention.

Key Elements of Relationship Management

1. Trust: Building credibility and reliability through open communication and consistent actions.
2. Communication: Regularly sharing information, feedback, and expectations.
3. Emotional Connection: Creating an emotional bond with customers, suppliers, and partners.
4. Value: Providing value to customers, suppliers, and partners through quality products, services, and
experiences.
Relationship Management Strategies

1. Personalization: Tailoring interactions and experiences to individual customers.

2. Regular Communication: Scheduling regular meetings, updates, and feedback sessions.
3. Conflict Resolution: Establishing processes for addressing and resolving conflicts.
4. Continuous Improvement: Regularly assessing and improving relationships through feedback and
evaluation.

Benefits of Effective Relationship Management

1. Increased Loyalty: Building strong relationships drives customer retention and loyalty.
2. Improved Collaboration: Fostering positive relationships with suppliers and partners enhances
collaboration and innovation.
3. Enhanced Reputation: Building trust and credibility with stakeholders enhances brand reputation.
4. Competitive Advantage: Unique relationships differentiate businesses from competitors.

Changing Corporate Cultures: Reasons for Changing Corporate Culture

1. Mergers and Acquisitions: Integrating different cultures after a merger or acquisition.

2. Shift in Business Strategy: Adapting culture to support a new business strategy or direction.
3. Poor Performance: Addressing a toxic or underperforming culture.
4. Changing Market Conditions: Responding to changes in the market, industry, or technology.

Steps to Change Corporate Culture

1. Define the Desired Culture: Clearly articulate the new culture and values.
2. Assess the Current Culture: Understand the existing culture through surveys, focus groups,
and observations.
3. Develop a Change Management Plan: Create a roadmap for implementing cultural changes.
4. Communicate the Change: Effectively communicate the reasons for the change and the
desired outcomes.
5. Lead by Example: Leaders and managers must model the new behaviors and values.
6. Provide Training and Development: Offer training and development programs to support the
new culture.
7. Monitor Progress: Regularly assess and evaluate the effectiveness of the cultural change.

Challenges of Changing Corporate Culture

1. Resistance to Change: Employees may resist changes to the existing culture.

2. Lack of Leadership Commitment: Leaders may not fully commit to the cultural change.
3. Insufficient Communication: Poor communication can lead to confusion and mistrust.
4. Cultural Inertia: The existing culture can be difficult to change due to its ingrained nature.
Best Practices for Changing Corporate Culture

1. Involve Employees: Engage employees in the change process to build ownership and
commitment.
2. Celebrate Successes: Recognize and celebrate successes along the way to reinforce the new
culture.
3. Be Patient: Changing culture takes time, so be patient and persistent.
4. Monitor and Adjust: Regularly assess the effectiveness of the cultural change and make
adjustments as needed.
 MARKETING SPECIALIZATION
BUS 3.6 M (R22): RETAIL MANAGEMENT

Unit - I: Meaning and scope of retail marketing –: Definition and scope - Evolution of retailing-
different types of retail stores – trends in retail marketing – product retailing vs. service retailing
– relationship marketing in retailing –Retail marketing Enviroment- retailing environmental
issues in India- Barnding Retail marketing.
Unit - II: Retailing operations: Retail store location & layout – location strategy – location
criteria – interior and exterior design layout – retail store Management planning – visual and
display methods in retailing – store maintenance – vendor relationship. product and
merchandise management-Retail purchasing and pricing: Purchase management: Merchandise
purchasing -
Unit - III: HR & Legal compliances in retailing – Application of Technology in retailing
industry-Retail organization structure – recruiting and selection of retail personnel – customer
psychology – Training needs of employees – legal process – license requirement – regulatory
compliances-Consumer behaviour in retail marketing-Pricing strategies in retailing: every day
pricing - competitive based pricing - price skimming - market-oriented pricing
Unit - IV: Supply chain management and IT application in retailing: Point of sale – back end
IT applications – retail database – basic concepts of SCM – planning and sourcing of supply
chain operations – EDI – ERP – logistics planning – major supply chain drivers – scope of
SCM – problems in SCM – role of SCM in retail industry – developing supply chain systems.
Unit - V: Retailing industry in global market- retailing industry- formats –issues and challenges
in Indian Retail market –- Indian organised retail market - FDI in Indian organized retail sector-
case studies relevant to fashion retail – footwear – hyper markets – food courts – departmental
stores – banking & finance.

Unit - I: Meaning and scope of retail marketing –: Definition and scope - Evolution of retailing-
different types of retail stores – trends in retail marketing – product retailing vs. service retailing
– relationship marketing in retailing –Retail marketing Enviroment- retailing environmental
issues in India- Barnding Retail marketing.

Definition and scope of retail marketing: Retail marketing is the process of promoting and selling
products or services to consumers through various channels to increase sales. It can be done in
physical or digital stores, or a combination of both.
The main goals of retail marketing are to: attract new customers, keep existing customers coming
back, and increase sales.
Retail marketing can include:
• Advertising: Using physical or digital advertising to promote products
• Promotions: Using promotions like flash sales or limited-edition products to create urgency and
sales
• Public relations: Using public relations to promote products
• Partnerships: Using partnerships to promote products
• Online marketing: Using online marketing to promote products
• After-sale services: Providing after-sale services like free home delivery, gift wrapping, or
installation
Some strategies that retailers use to influence consumer perception and purchasing decisions
include:
• Psychological pricing
Using charm prices (ending in 9), bundle offers, or limited-time promotions
• Display and demonstration
Displaying and demonstrating products in a way that affects buyers' decisions

Evolution of retailing- The Evolution of Retail: How Technology is Transforming the Industry.
Like many other industries, the retail industry has gone through a significant transformation in
recent years, largely driven by advances in technology and artificial intelligence (AI), as well as
shifting customer preferences and behaviors.

Different types of retail stores: There are many different types of retail stores, including:
• Department stores: Large stores that sell a variety of goods, such as clothing, electronics, and
home goods
• Supermarkets: Medium to large stores that sell primarily groceries and household goods
• Specialty stores: Stores that focus on a narrow product area, such as clothing, electrical goods,
or entertainment
• Convenience stores: Small to medium stores that sell a few products, such as snacks, drinks,
and ready-to-eat meals
• Discount stores: Stores that sell products at lower prices than traditional retail stores
• Online stores: Stores that sell goods and services directly to customers online through a website,
online marketplace, or social media channel
• Warehouse stores: Medium to large stores that stock goods directly from the manufacturer
• Big box stores: Large stores that supply a range of goods in multiple product categories
• Value retailers: Stores that offer lower prices to members due to bulk purchasing

• Trends in retail marketing: Omnichannel marketing

A multi-channel approach that creates a consistent customer experience across all devices and
channels.
• Augmented reality (AR)
AR is becoming more important as shoppers try to bridge the gap between online and physical
 shopping.
• Contactless and cashless payments
These payments streamline the transaction process, making purchasing faster and reducing
waiting times.
• Return process incentives
Returns are more than double what they were a few years ago, so return process incentives are
becoming a powerful customer engagement tool.
• AI and personalization
AI and chatbots are helping retailers provide 24/7 customer service and personalized
recommendations.
• Sustainability and ethical consumerism
More consumers are looking for eco-friendly and socially responsible products.
• Social commerce
Customers can make purchases directly on social media platforms.
• In-store experiences
Retailers are focusing on creating immersive and memorable in-store experiences, including
pop-up shops, interactive displays, and events.
Other retail marketing trends include:
• Hybrid shopping
• Frictionless delivery
• Retail media
• Inspiration-led purchase journeys
• Athleisure
• In-store efficiency
• Second-hand luxury and dupes

Product retailing vs. service retailing: The main difference between product retailing and
service retailing is that product retailing sells physical objects, while service retailing provides
value through intangible skills, expertise, and time.
Here are some other differences between product and service retailing:
• Tangibility
Products are tangible and can be seen, touched, and possessed by customers. Services are
intangible and are experienced or consumed rather than possessed.
• Standardization
Products are more standardized and repetitive, while services can be more personalized.
• Purchase type
Products are more frequently a one-off purchase, while a service can be recurring.
• Returns
A product can be returned, while a service has to be canceled (usually with notice).
• Marketing
Marketing techniques and costs vary when selling services versus selling products.
• Focus
Merchandise retailers focus on products and assortment, whereas service retailers focus on
customer experience.

Relationship marketing in retailing:

Relationship marketing in retailing" refers to a marketing strategy where a retailer focuses on
building long-term, mutually beneficial relationships with customers by prioritizing their
satisfaction, loyalty, and retention, rather than just making a single sale, leading to repeat
business and positive word-of-mouth recommendations through personalized interactions and
tailored offerings.
Key aspects of relationship marketing in retailing:
• Customer-centric approach:
Putting the customer at the center of all marketing decisions, understanding their needs and
preferences to provide relevant products and services.
• Loyalty programs:
Implementing reward systems to incentivize repeat purchases and encourage customers to stay
loyal to the brand.
• Personalized communication:
Engaging with customers through tailored messages based on their purchase history,
demographics, and preferences across multiple channels (email, SMS, social media).
• Customer feedback mechanisms:
Actively seeking customer feedback through surveys, reviews, and focus groups to
continuously improve products and services.
• Building trust and rapport:
Establishing a positive relationship with customers through excellent customer service,
consistent quality, and transparent communication.

Retail marketing Enviroment:

The retail marketing environment is the physical and digital space where products are sold to
consumers, and the external factors that influence a retailer's ability to do so:
• Physical space
The atmosphere, layout, and design of a retail store, including window displays, signage,
lighting, scent, and music
• Digital space
The design, layout, and user experience of a retailer's website, mobile app, and social media
channels
• External factors
The micro and macro environments that affect a retailer, including suppliers, intermediaries,
 customers, competitors, legal, social, economic, demographic, and technological forces
The retail environment is important for creating a positive customer experience, influencing
consumer behavior, and building brand loyalty. Here are some ways retailers can create a
memorable retail environment:
• Use atmospherics
Create a warm and appealing store environment by using comfortable seating, fireplaces, jazz
music, or modern art and bright lights
• Design spaces for different purposes
Use different spaces for different purposes, such as carpeted fitting rooms to create a sense of
homeliness
• Use music to influence behavior
Play music that relates to the target market, or change the tempo to influence customers to
move through the space at a quicker pace
• Use promotional campaigns
Use various marketing channels such as advertising, social media, email marketing, and
influencer collaborations to reach the target audience

Retailing environmental issues in India:

The retail sector is one of the most carbon-intensive industries in the world, contributing to
roughly 25% of global greenhouse gas emissions. The retail value chain, which can account
for up to 98% of a retailer's emissions, is responsible for most of these emissions.
Some environmental issues in the retail industry include:
• Natural resource extraction: The extraction of natural resources for production
• Water and energy use: The amount of water and energy used in production
• Pollution: The pollution caused by the production and use of products
• Transportation: The transportation of products
• Disposal: The disposal of products
Some ways retailers can address these issues include:
• Using biodegradable packaging to reduce plastic in the environment
• Meeting regulatory requirements, such as emissions criteria for engines or sales restrictions on
VOC levels in products
• Rethinking how they do business in the world, including product sourcing, emissions, packaging,
order fulfillment, transportation, and last mile delivery.
Barnding Retail marketing: Retail branding is a strategy that helps retailers build a strong
brand identity and establish a positive perception in the minds of consumers. The goal of retail
branding is to differentiate a retail brand from its competitors, build a strong emotional
connection with consumers, and foster long-term customer relationships.
Here are some elements of retail branding:
• Brand identity
 The visual aspects of a brand, such as its logo, colors, design, and packaging. A strong brand
identity is important for creating a recognizable and memorable brand.
• Customer experience
Creating a positive customer experience both in-store and online.
• Marketing strategies
These include advertising, promotions, public relations, customer experience management, and
digital marketing.
• Communication
Communicating a consistent message across all channels to build trust, loyalty, and recognition
with the target audience.

Unit - II: Retailing operations: Retail store location & layout – location strategy – location
criteria – interior and exterior design layout – retail store Management planning – visual and
display methods in retailing – store maintenance – vendor relationship. product and
merchandise management-Retail purchasing and pricing: Purchase management: Merchandise
purchasing -

Retailing operations: Retail operations are the daily activities, systems, and processes that allow
retail stores to function efficiently and effectively. The goal of retail operations is to improve the
customer shopping experience while reducing the retailer's costs.
Retail operations include:
• Store layout: The design of both online and physical stores
• Inventory management: Maintaining inventory levels and ensuring products are available to
customers
• Customer service: Providing excellent customer service and ensuring customer service
standards are met
• Order fulfillment: Fulfilling customer orders
• Cash operations: Managing cash operations
• Supply chain management: Managing the supply chain and logistics
• Promotions and pricing: Developing pricing strategies and promotions
• Employee management: Managing staff, including scheduling shifts
• Accounting and returns: Handling accounting and returns
Retail store location & layout: When choosing a retail store location, you can consider things
like:
• Target audience: Who your customers are and where they shop
• Competition: What other businesses are in the area
• Accessibility and visibility: How easy it is for customers to find your store
• Proximity to complementary businesses: Whether there are other businesses that can help your
customers
• Physical space: The size and shape of the space you're considering
When designing a retail store layout, you can consider things like:
• Customer flow: How customers will move through the store
• Product display: How much product to display and how to arrange it
• Fixtures and fittings: How much space to leave for fixtures and fittings
• Signage: How to provide signage to help customers navigate the store
• Layout type: Whether to use a free-flow, angular, or diagonal layout
Here are some different types of retail store layouts:
• Angular layout
Uses curved walls and round shapes, and a mix of shelf and rack sizes to highlight premium
products. This layout is common in smaller stores and is good for high-end retailers.
• Diagonal layout
Shelves are arranged at an angle, which can help guide customers to the checkout counter. This
layout is good for stores with limited space, but it can be distracting and make it hard to find
products.
• Free-flow layout
There is no set path through the store, allowing customers to shop freely. This layout is good
for specialty retailers because it's easy to change and update.

Location strategy – location criteria – interior and exterior design layout:

Location Strategy

1. Proximity to Customers: Locate near target audience for convenience and accessibility.
2. Accessibility and Visibility: Choose a location with high foot traffic and visibility.
3. Competition: Analyze competitors' locations and avoid saturated areas.
4. Cost and Budget: Consider rent, utilities, and maintenance costs.

Location Criteria

1. Demographics: Align location with target audience's demographics, lifestyle, and

preferences.
2. Foot Traffic and Visibility: Assess pedestrian and vehicle traffic, as well as visibility from
surrounding areas.
3. Accessibility and Parking: Ensure easy access and sufficient parking for customers and
employees.
4. Zoning and Regulations: Comply with local zoning laws, permits, and regulations.

Interior Design Layout

 1. Functional Zones: Create separate areas for different activities, such as sales, customer
service, and storage.
2. Customer Flow: Design a logical and efficient customer flow to enhance the shopping
experience.
3. Product Display: Showcase products in an attractive and accessible manner.
4. Ambiance and Atmosphere: Create a welcoming atmosphere through lighting, colors, and
music.

Exterior Design Layout

1. Facade and Signage: Design an attractive and visible facade, including signage that reflects
the brand's identity.
2. Entrance and Accessibility: Ensure a welcoming and accessible entrance for customers.
3. Landscaping and Outdoor Spaces: Create inviting outdoor spaces, including landscaping and
seating areas.
4. Parking and Drop-off: Provide convenient parking and drop-off areas for customers.

Retail store Management planning: Retail store management planning involves developing
strategies to meet customer demand and maximize ROI. Some key elements of retail store
management planning include:
Market analysis
Helps identify threats and opportunities, and a company's strengths and weaknesses.
Goal setting
SMART goals should be set, and short-term improvements should be made while thinking long-
term.
Inventory management
Involves overseeing the flow of goods from suppliers to customers, including order processing,
stock tracking, and replenishment planning.
Assortment planning
Outlines what products will be sold in what locations and channels.
Strategic planning
Involves determining a strategic position, prioritizing objectives, developing a plan, executing
and managing the plan, and reviewing and revising the plan.
Store management also involves working with employees, suppliers, and customers. A retail
store manager is responsible for hiring and training staff, managing and motivating employees,
meeting sales goals, and ensuring customer satisfaction.

Visual and display methods in retailing: Here are some visual and display methods used in
 retail:
• Window displays
The first impression of a store, window displays can reflect the brand's identity and values. They
can also promote special sales and offers.
• Signage
Clear, attractive, and consistent signs can help customers navigate the store and learn about
products, prices, and promotions.
• Mannequins
Mannequins can be used in window displays and throughout the store to show how clothes fit.
• Seasonal displays
Seasonal displays can tell stories during events like Christmas, Valentine's Day, or summer
holidays. For example, a store might create a beach theme during summer or showcase winter
products when it gets colder.
• Lighting
Lighting can be used strategically to highlight merchandise and draw customers' attention.
• Interactive displays
Creative, interactive displays can increase referrals to a store and drive traffic to a store's website
or social media accounts.
Some tips for visual merchandising include: Knowing the ideal customer, Creating an inviting
environment, and Keeping up with trends.

Store maintenance – vendor relationship: Vendor relationship management (VRM) is a

strategic approach that organizations use to manage their interactions with suppliers or
vendors. VRM can help businesses:
• Improve operational efficiency
• Save costs
• Increase customer satisfaction
• Leverage vendor strengths
• Achieve strategic objectives
• Create strategic partnerships
• Negotiate favorable shipping costs
Here are some best practices for VRM:
• Communication: Schedule regular meetings or calls with vendors to discuss progress, address
concerns, and share information.
• Transparency and respect: Be transparent and respectful in negotiations.
• Performance review: Implement performance review processes.
• Predictable purchasing: Develop predictable purchasing practices.
• Payment terms: Adhere to reasonable payment terms.
• Long-term contracts: Strive for long-term contracts.
 Product and merchandise management: Product and merchandise management is a business
process that involves ensuring the right products are available at the right time, in the right
quantities, and at the right price. It includes the following activities:
• Sourcing and purchasing: Getting the right products to sell
• Pricing: Setting the right price for the products
• Presenting: Arranging the products in a way that attracts customers
• Selling: Selling the products to customers
Merchandise management also involves analyzing consumer preferences and using that
information to determine what products to stock and how to arrange them. The goal is to meet
consumer demand and optimize profit margins.
Some key components of merchandise management include: inventory control, assortment
planning, visual merchandising, and retail marketing strategies.
A merchandise management system (MMS) can help retailers track the performance of their
merchandise, identify good and poor sellers, and make timely decisions.

Retail purchasing and pricing: etail pricing is the price at which a product is sold to the end
customer. It is the sum of the manufacturing cost and all the costs that retailers incur.
Here are some retail pricing strategies:

•
Dynamic pricing
Prices are adjusted in real-time based on demand, competition, or time of day. This strategy is
effective in fast-paced retail environments.

•
Psychological pricing
Prices are set to influence consumer behavior. For example, retailers may set prices just below a
round number or use odd-numbered prices to make the price seem more attractive.

•
Penetration pricing
A new product or service is offered at a lower price to attract customers. The idea is to get
customers ready to pay the full price after the promotional phase.
• Competitive pricing
Prices are set based on what the competition charges. Retailers may set their prices a bit lower
than competitors to attract customers.

Purchase management: Merchandise purchasing : Merchandise purchasing is a part of the

process of buying goods from manufacturers or wholesalers to sell to customers. It's part of the
larger process of merchandise planning, which involves selecting, managing, purchasing,
displaying, and pricing products.
Here are some aspects of merchandise purchasing:
• Purchase requisition
A document that requests the purchase of goods or services from a team leader or executive
stakeholder. It should include the quantity, price, date, and department that requires the
purchase.
• Blanket purchase order
An agreement between a buyer and vendor to exchange goods for payment, but with the
specifics still to be confirmed.
• Negotiation
The retailer evaluates the merchandise and negotiates with the vendor for price, terms, and
conditions.
• Merchandise classification
Once the merchandise is ready to sell, the company classifies it as inventory.
Other aspects of merchandise planning include:
• Assortment planning: Planning how much product to buy to meet customer demand.
• Vendor relationships: Establishing relationships with vendors.
• Handling in stores: Handling merchandise in stores.
• Reordering: Reordering merchandise.
• Pricing and displaying inventory: Pricing and displaying inventory.
• Monitoring stock levels: Monitoring stock levels.
• Processing returns: Processing returns.
 Unit - III: HR & Legal compliances in retailing – Application of Technology in retailing
industry-Retail organization structure – recruiting and selection of retail personnel – customer
psychology – Training needs of employees – legal process – license requirement – regulatory
compliances-Consumer behaviour in retail marketing-Pricing strategies in retailing: every day
pricing - competitive based pricing - price skimming - market-oriented pricing

HR & Legal compliances in retailing: Human Resources (HR) and legal compliance are
important in the retail industry to ensure that a company follows all relevant laws and
regulations. HR and legal compliance can help a company avoid penalties, fines, and damage to
its reputation. They can also help a company build a good reputation, foster employee
engagement, and shape organizational culture.
Here are some HR and legal compliance considerations for the retail industry:
• Labor laws
HR is responsible for ensuring that the company complies with all relevant labor laws, including
those around wages, working hours, health and safety, discrimination, and harassment.
• Employee information
It's important to keep employee information secure, organized, and accessible across store
locations and countries.
• Policies
HR should write company policies, add them to the employee handbook, and ensure that
employees follow them.
• State-specific laws
Each state in India has its own set of regulations for HR compliance, including the Shops and
Establishments Act.
• Government rules
Some government rules for retail pricing include horizontal and vertical price fixing, price
discrimination, minimum price levels, unit pricing, and price advertising.
HR compliance can be complex because employment laws and regulations are constantly
changing. HR teams need to keep up with these changes and translate legal requirements into
enforceable company policies.

Application of Technology in retailing industry: Technology has transformed the retail industry
in many ways, including:
• Customer experience
Technology can help retailers improve customer satisfaction and engagement through
personalized experiences, in-store analytics, and mobile apps:
• In-store analytics: Retailers can use heat maps and foot traffic data to optimize store
layouts and product placement.
 • Mobile apps: Retailers can use apps to send push notifications, encourage repeat
purchases, and make it easy for customers to access rewards.
• Augmented reality (AR): AR can help customers visualize products in a real-world
context, which can help them make informed purchasing decisions.
• Inventory management
Technology can help retailers automate and facilitate inventory control, reduce inventory costs,
and improve forecasting.
• Operational efficiency
Technology can help retailers streamline operations, optimize stock and storage, and keep track
of accounts.
• Logistics and delivery
Technology can help retailers streamline logistics to minimize delays and maximize cost-
effectiveness.
• Surveillance and security
Technology can help retailers implement surveillance and security systems that use cameras and
sensors to detect and record people's movement.
• Online operations
Technology can help retailers conduct their operations online, eliminating the need for cashiers.
Other technologies used in retail include:
• Quick response (QR) codes
• Electronic price tags
• Digital advertising displays
• Self-checkout systems
• Personal selling assistants
• Smart kiosks

Retail organization structure: The organizational structure of a retail business is typically

hierarchical and focuses on three areas: centralized operations, store operations, and regional
operations. The structure typically includes:
• Sales staff: The frontline staff who interact with customers and carry out transactions
• Supervisors: Staff who manage sales staff
• Store managers: Staff who manage the store
• Area managers: Staff who manage areas
• Executive management: The top-level management

The organizational structure of a retail business can vary depending on the type of retailer, such
 as a single-store retailer, national chain, or diversified retailer. For example, a single-store
retailer may have a smaller organizational structure, with the owner performing both CEO and
manager duties.
Some other types of organizational structures include:
• Matrix structure: Groups individuals by two operational dimensions, such as function and
product
• Divisional structure: Groups employees into segments based on products or services
When choosing an organizational structure, senior leaders should consider the business's goals,
industry, and culture.

Recruiting and selection of retail personnel: Retail recruiters are responsible for screening
resumes and applications to shortlist candidates who match the job requirements. This involves
assessing qualifications, relevant experience, and evaluating whether candidates possess the
essential customer-centric skills that are critical in the retail industry.

Customer psychology: Understanding Customer Behavior

1. Motivations: Identify what drives customers' purchasing decisions, such as needs, wants, and
emotions.
2. Perceptions: Recognize how customers perceive your brand, products, and services.
3. Attitudes: Understand customers' attitudes towards your brand and competitors.

Influencing Customer Behavior

1. Emotional Connections: Create emotional bonds with customers through storytelling,

empathy, and shared values.
2. Social Proof: Leverage customer testimonials, reviews, and ratings to build trust and
credibility.
3. Scarcity and Urgency: Use limited-time offers, exclusive deals, and scarcity messaging to
encourage purchases.
4. Reciprocity: Offer value, such as free trials, demos, or consultations, to build relationships
and encourage loyalty.

Customer Decision-Making Process

1. Awareness: Create awareness of your brand, products, and services.

2. Consideration: Provide information and support to help customers evaluate options.
3. Preference: Build preference through emotional connections, social proof, and unique value
propositions.
4. Purchase: Make the purchasing process convenient, secure, and enjoyable.
 5. Retention: Foster loyalty and retention through excellent customer service, support, and
engagement.

Understanding Customer Personality

1. Personality Traits: Identify customers' personality traits, such as introversion, extroversion,

and risk tolerance.
2. Values and Interests: Understand customers' values, interests, and lifestyle to create
personalized experiences.
3. Behavioral Patterns: Analyze customers' behavioral patterns, such as purchasing habits and
engagement metrics.

Applying Customer Psychology

1. Segmentation: Segment customers based on demographics, behavior, and preferences.

2. Personalization: Create personalized experiences through targeted marketing, content, and
offers.
3. User Experience (UX): Design intuitive, user-friendly, and engaging experiences.
4. Customer Journey Mapping: Map the customer journey to identify pain points, opportunities,
and moments of delight.

Training needs of employees – legal process – license requirement: Training Needs of

Employees:

1. Onboarding: Provide new employees with essential knowledge, skills, and company culture.
2. Compliance Training: Ensure employees understand laws, regulations, and company policies.
3. Soft Skills: Develop employees' communication, teamwork, and problem-solving skills.
4. Technical Skills: Enhance employees' job-specific skills and knowledge.
5. Leadership Development: Train managers and leaders to develop strategic thinking, decision-
making, and coaching skills.

Legal Process

1. Contract Law: Understand employment contracts, non-disclosure agreements, and other

business contracts.
2. Employment Law: Familiarize yourself with laws related to hiring, firing, discrimination, and
harassment.
3. Intellectual Property Law: Protect company intellectual property, such as trademarks, patents,
and copyrights.
4. Compliance with Regulations: Ensure adherence to industry-specific regulations, such as
HIPAA or GDPR.

License Requirements

1. Business Licenses: Obtain necessary licenses to operate a business, such as sales tax permits
or zoning permits.
2. Professional Licenses: Ensure employees possess required licenses or certifications for their
profession, such as medical or law licenses.
3. Industry-Specific Licenses: Comply with industry-specific licensing requirements, such as
food service permits or construction licenses.
4. Software and Technology Licenses: Ensure proper licensing for software, hardware, and other
technology used in the business.

Consumer behaviour in retail marketing: Types of Consumer Behavior

1. Complex Buying Behavior: High-involvement purchases, such as luxury items or electronics.

2. Dissonance-Reducing Buying Behavior: Purchases that reduce cognitive dissonance, such as
buying a familiar brand.
3. Habitual Buying Behavior: Routine, low-involvement purchases, such as groceries.
4. Variety-Seeking Buying Behavior: Purchases driven by a desire for novelty or change.

Factors Influencing Consumer Behavior

1. Cultural Factors: Cultural background, values, and norms.

2. Social Factors: Social status, reference groups, and family influences.
3. Personal Factors: Age, income, occupation, and lifestyle.
4. Psychological Factors: Motivation, perception, learning, and attitudes.

Retail Marketing Strategies

1. Segmentation: Divide the market into distinct groups based on demographics, behavior, or
preferences.
2. Targeting: Select specific segments to target with marketing efforts.
3. Positioning: Create a unique image or identity for the retailer or product.
4. Store Atmosphere: Create an engaging and memorable in-store experience.

Digital Influences on Consumer Behavior

1. Online Reviews: Influence purchasing decisions through positive or negative reviews.

2. Social Media: Shape consumer attitudes and behaviors through social media interactions.
3. Influencer Marketing: Partner with influencers to promote products or services.
4. E-commerce: Provide a seamless online shopping experience.

Retail Technology and Consumer Behavior

1. Mobile Payments: Convenient and secure payment options.

2. Artificial Intelligence (AI): Personalized recommendations and customer service.
3. Virtual Reality (VR) and Augmented Reality (AR): Immersive shopping experiences.
4. Loyalty Programs: Reward customers for repeat purchases and loyalty.

Pricing strategies in retailing: every day pricing - competitive based pricing - price
skimming - market-oriented pricing:

Everyday Low Pricing (EDLP)

1. Consistent Pricing: Maintain low prices every day, eliminating the need for frequent
promotions.
2. Reduced Price Fluctuations: Minimize price changes to avoid confusing customers.
3. Increased Customer Loyalty: Foster loyalty through predictable pricing.

Competitive-Based Pricing

1. Market Research: Monitor competitors' prices to stay competitive.

2. Price Matching: Match or beat competitors' prices to attract price-sensitive customers.
3. Price Leadership: Set prices that influence the market and competitors.

Price Skimming

1. High Initial Price: Set a high price for a new product to maximize profits.
2. Targeting Early Adopters: Attract customers willing to pay a premium for innovative
products.
3. Gradual Price Reduction: Lower prices as competition increases or demand decreases.

Market-Oriented Pricing
1. Customer Value: Set prices based on the perceived value of the product or service.
2. Demand Elasticity: Adjust prices according to demand fluctuations.
3. Target Profit Margin: Balance prices with desired profit margins.

These pricing strategies can be combined or adapted to suit specific retail environments,
customer segments, and market conditions

Unit - IV: Supply chain management and IT application in retailing: Point of sale – back end
IT applications – retail database – basic concepts of SCM – planning and sourcing of supply
chain operations – EDI – ERP – logistics planning – major supply chain drivers – scope of
SCM – problems in SCM – role of SCM in retail industry – developing supply chain systems.

Supply chain management and IT application in retailing:

Here are key aspects of supply chain management and IT applications in retailing:

Supply Chain Management in Retailing

1. Supply Chain Visibility: Real-time tracking and monitoring of inventory, shipments, and
deliveries.
2. Inventory Management: Optimizing inventory levels, reducing stockouts, and minimizing
overstocking.
3. Demand Forecasting: Analyzing sales data and market trends to predict future demand.
4. Supplier Management: Building strong relationships with suppliers, negotiating prices, and
ensuring quality.
5. Logistics and Transportation: Managing the movement of goods from suppliers to stores.

IT Applications in Retailing

1. Enterprise Resource Planning (ERP): Integrating business functions, such as finance, HR,
and supply chain management.
2. Supply Chain Management Software: Automating supply chain processes, such as inventory
management and order fulfillment.
3. Radio Frequency Identification (RFID): Tracking inventory and shipments using RFID tags.
4. Electronic Data Interchange (EDI): Exchanging business documents, such as purchase orders
and invoices, electronically.
5. Cloud Computing: Storing and processing data in the cloud to improve scalability and
flexibility.
Benefits of IT Applications in Retail Supply Chain Management

1. Improved Efficiency: Automating processes and reducing manual errors.

2. Increased Visibility: Real-time tracking and monitoring of inventory and shipments.
3. Better Decision-Making: Analyzing data and making informed decisions.
4. Enhanced Customer Experience: Improving order fulfillment and delivery times.
5. Cost Savings: Reducing inventory costs, transportation costs, and labor costs.

Point of sale – back end IT applications:

Point of Sale (POS)

1. Hardware Components: Terminal, scanner, printer, and card reader.

2. Software Components: Operating system, application software, and database management.
3. POS Functions: Sales processing, inventory management, customer management, and
reporting.
4. Mobile POS: Using mobile devices, such as tablets or smartphones, as POS terminals.

Back-End IT Applications

1. Enterprise Resource Planning (ERP): Integrating business functions, such as finance, HR,
and supply chain management.
2. Inventory Management System (IMS): Managing inventory levels, tracking stock
movements, and optimizing stock levels.
3. Customer Relationship Management (CRM): Managing customer interactions, tracking
customer behavior, and analyzing customer data.
4. Supply Chain Management (SCM): Managing the flow of goods, services, and information
from raw materials to end customers.

Integration of POS and Back-End IT Applications

1. Real-Time Data Synchronization: Integrating POS data with back-end systems for real-time
inventory updates and customer information.
2. Automated Reporting: Generating reports on sales, inventory, and customer behavior from
integrated POS and back-end data.
3. Streamlined Operations: Improving efficiency and reducing errors by automating tasks and
integrating systems.
4. Enhanced Customer Experience: Providing personalized service and targeted marketing
through integrated customer data.
Basic concepts of SCM:

Here are the basic concepts of Supply Chain Management (SCM):

Definition: SCM is the coordination and management of activities, resources, and partners
involved in producing and delivering products or services from raw materials to end customers.

Key Components:

1. Supply Chain: Network of organizations, people, activities, and resources involved in

producing and delivering products or services.
2. Supply Chain Partners: Suppliers, manufacturers, distributors, retailers, and logistics
providers.
3. Supply Chain Activities: Sourcing, production, inventory management, transportation, and
delivery.

SCM Objectives:

1. Cost Reduction: Minimizing costs while maintaining quality and service levels.
2. Improved Quality: Ensuring products or services meet customer requirements and
expectations.
3. Increased Efficiency: Streamlining processes and reducing lead times.
4. Enhanced Customer Satisfaction: Providing products or services that meet customer needs and
expectations.

SCM Processes:

1. Supply Chain Planning: Forecasting demand, planning production, and allocating resources.
2. Sourcing and Procurement: Selecting and acquiring raw materials, goods, or services.
3. Production and Manufacturing: Transforming raw materials into finished products.
4. Inventory Management: Managing inventory levels, tracking stock movements, and
optimizing stock levels.
5. Transportation and Logistics: Moving products or services from one location to another.
6. Delivery and Fulfillment: Delivering products or services to customers.

SCM Benefits:

1. Improved Collaboration: Enhancing communication and cooperation among supply chain

partners.
2. Increased Visibility: Providing real-time visibility into supply chain operations.
3. Better Decision-Making: Enabling data-driven decision-making through analytics and
reporting.
4. Reduced Risk: Mitigating risks associated with supply chain disruptions, quality issues, and
regulatory non-compliance.

Planning and sourcing of supply chain operations – EDI – ERP: Planning and Sourcing of
Supply Chain Operations

Planning

1. Demand Forecasting: Predicting future demand to inform production and inventory decisions.
2. Supply Chain Optimization: Analyzing and optimizing supply chain operations to minimize
costs and maximize efficiency.
3. Capacity Planning: Determining the resources and capacity needed to meet demand.

Sourcing

1. Supplier Selection: Evaluating and selecting suppliers based on factors such as quality, cost,
and reliability.
2. Contract Management: Negotiating and managing contracts with suppliers.
3. Spend Analysis: Analyzing procurement data to identify opportunities for cost savings.

Electronic Data Interchange (EDI)

1. Definition: The electronic exchange of business documents, such as purchase orders and
invoices, between organizations.
2. Benefits: Improved efficiency, reduced errors, and enhanced supply chain visibility.
3. EDI Standards: Following industry standards, such as ANSI X12 or EDIFACT, to ensure
compatibility and interoperability.

Enterprise Resource Planning (ERP)

1. Definition: A software system that integrates and manages all aspects of an organization's
operations, including financials, human resources, and supply chain management.
2. Benefits: Improved efficiency, enhanced visibility, and better decision-making.
3. ERP Modules: Including modules for financial management, human capital management,
supply chain management, and customer relationship management.
Integration of EDI and ERP

1. Automated Data Exchange: Integrating EDI with ERP to automate the exchange of business
documents and data.
2. Improved Efficiency: Reducing manual data entry and improving data accuracy.
3. Enhanced Visibility: Providing real-time visibility into supply chain operations and financial
performance.

Logistics planning – major supply chain drivers: Logistics Planning

1. Definition: The process of designing and managing the flow of goods, services, and
information from raw materials to end customers.
2. Objectives: Reduce costs, improve customer service, and increase efficiency.
3. Key Activities: Transportation planning, warehousing, inventory management, and freight
forwarding.

Major Supply Chain Drivers

1. Transportation: Managing the movement of goods from one location to another.

2. Inventory: Managing the storage and tracking of goods.
3. Warehousing: Managing the storage and handling of goods.
4. Information: Managing the flow of information across the supply chain.
5. Sourcing: Managing the procurement of goods and services.
6. Production Planning: Managing the production process to meet customer demand.
7. Demand Forecasting: Predicting future customer demand.

Logistics Planning Strategies

1. Just-In-Time (JIT): Producing and delivering goods just in time to meet customer demand.
2. Third-Party Logistics (3PL): Outsourcing logistics operations to a third-party provider.
3. Fourth-Party Logistics (4PL): Outsourcing logistics operations to a fourth-party provider who
manages multiple 3PL providers.

Benefits of Effective Logistics Planning

1. Reduced Costs: Minimizing transportation, inventory, and warehousing costs.

2. Improved Customer Service: Providing fast and reliable delivery of goods.
3. Increased Efficiency: Streamlining logistics operations to reduce waste and improve
productivity.

Scope of SCM – problems in SCM – role of SCM in retail industry: Scope of SCM

1. Designing and Planning: Designing supply chain networks, planning production and
inventory, and managing logistics.
2. Sourcing and Procurement: Sourcing raw materials, procuring goods and services, and
managing supplier relationships.
3. Production and Manufacturing: Managing production planning, scheduling, and control.
4. Logistics and Distribution: Managing transportation, warehousing, and delivery of goods.
5. Returns and Reverse Logistics: Managing returns, repairs, and recycling of products.

Problems in SCM

1. Supply Chain Disruptions: Managing risks and disruptions in the supply chain, such as natural
disasters or supplier insolvency.
2. Inventory Management: Managing inventory levels, minimizing stockouts, and reducing
overstocking.
3. Transportation and Logistics: Managing transportation costs, reducing lead times, and
improving delivery reliability.
4. Supplier Management: Managing supplier relationships, ensuring quality and reliability, and
negotiating prices.
5. Visibility and Transparency: Providing real-time visibility into supply chain operations and
ensuring transparency across the supply chain.

Role of SCM in Retail Industry

1. Improving Customer Satisfaction: Providing fast and reliable delivery of goods, improving
product availability, and enhancing customer experience.
2. Reducing Costs: Minimizing transportation, inventory, and logistics costs, and improving
supply chain efficiency.
3. Increasing Efficiency: Streamlining supply chain operations, reducing lead times, and
improving delivery reliability.
4. Enhancing Competitiveness: Providing a competitive advantage through effective supply
chain management, improving product quality, and enhancing customer service.
5. Supporting Omni-Channel Retailing: Managing inventory, logistics, and delivery across
multiple channels, including online, offline, and mobile.

Developing supply chain systems: Here are key aspects of developing supply chain systems:
Steps to Develop Supply Chain Systems

1. Define Supply Chain Strategy: Align supply chain strategy with business objectives and goals.
2. Analyze Current State: Assess current supply chain processes, infrastructure, and technology.
3. Design Future State: Design a future-state supply chain that meets business objectives and
goals.
4. Develop Business Requirements: Define business requirements for supply chain systems,
including functional and technical requirements.
5. Select Supply Chain Software: Evaluate and select supply chain software that meets business
requirements.
6. Implement Supply Chain Systems: Implement supply chain systems, including configuration,
testing, and training.
7. Test and Validate: Test and validate supply chain systems to ensure they meet business
requirements.
8. Deploy and Maintain: Deploy and maintain supply chain systems, including ongoing support
and maintenance.

Key Components of Supply Chain Systems

1. Supply Chain Planning: Systems for demand planning, supply planning, and inventory
optimization.
2. Supply Chain Execution: Systems for managing logistics, transportation, and warehousing.
3. Supply Chain Visibility: Systems for tracking and tracing inventory, shipments, and orders.
4. Supply Chain Analytics: Systems for analyzing supply chain data and providing insights for
improvement.

Technologies Used in Supply Chain Systems

1. Cloud Computing: Cloud-based supply chain systems for scalability and flexibility.
2. Artificial Intelligence (AI): AI-powered supply chain systems for predictive analytics and
automation.
3. Internet of Things (IoT): IoT sensors and devices for real-time supply chain visibility.
4. Blockchain: Blockchain technology for secure and transparent supply chain transactions.
5. Machine Learning (ML): ML algorithms for supply chain optimization and prediction.

Unit - V: Retailing industry in global market- retailing industry- formats –issues and challenges
in Indian Retail market –- Indian organised retail market - FDI in Indian organized retail sector-
 case studies relevant to fashion retail – footwear – hyper markets – food courts – departmental
stores – banking & finance.

Retailing industry in global market: Here are key aspects of the retailing industry in the global
market:

Global Retailing Industry Trends

1. E-commerce Growth: Rapid growth of e-commerce, with online sales expected to reach $6.5
trillion by 2023.
2. Omnichannel Retailing: Integration of online and offline channels to provide seamless
customer experience.
3. Sustainability and Social Responsibility: Increasing focus on sustainable practices, social
responsibility, and environmental concerns.
4. Personalization and Customer Experience: Use of data analytics and AI to provide
personalized customer experiences.

Global Retailing Industry Segments

1. Food and Grocery Retailing: Largest segment, accounting for over 50% of global retail sales.
2. Fashion and Apparel Retailing: Fast-growing segment, driven by online sales and social media
influence.
3. Electronics Retailing: Growing segment, driven by demand for smartphones, laptops, and
other electronic devices.
4. Home Improvement Retailing: Growing segment, driven by increasing demand for home
renovation and decoration.

Global Retailing Industry Leaders

1. Walmart: World's largest retailer, with over $500 billion in annual sales.
2. Amazon: World's largest e-commerce company, with over $200 billion in annual sales.
3. Carrefour: French multinational retailer, with operations in over 30 countries.
4. Tesco: British multinational retailer, with operations in over 10 countries.

Challenges in Global Retailing

1. Intense Competition: Increasing competition from online retailers and changing consumer
behavior.
2. Supply Chain Complexity: Managing complex global supply chains and ensuring timely
 delivery.
3. Changing Consumer Behavior: Adapting to changing consumer preferences, such as
sustainability and social responsibility.
4. Economic Uncertainty: Managing economic uncertainty, including trade wars and currency
fluctuations.

Retailing industry- formats –issues and challenges in Indian Retail market: Retailing
Industry Formats:

1. Traditional Retailing: Small, family-owned stores, such as kirana shops and street vendors.
2. Organized Retailing: Modern retail formats, such as supermarkets, hypermarkets, and
department stores.
3. E-tailing: Online retailing, including e-commerce websites and mobile apps.
4. Malls and Multiplexes: Large shopping centers with multiple stores, restaurants, and
entertainment options.

Issues and Challenges in Indian Retail Market

1. Competition from Unorganized Sector: Traditional retailers and street vendors compete with
organized retailers.
2. Infrastructure Challenges: Inadequate infrastructure, such as roads, logistics, and storage
facilities.
3. Regulatory Framework: Complex regulatory environment, including laws and regulations
governing retail trade.
4. Supply Chain Management: Managing supply chains, including procurement, inventory
management, and logistics.
5. Changing Consumer Behavior: Adapting to changing consumer preferences, such as online
shopping and demand for experiential retail.
6. High Operating Costs: High costs, including rent, labor, and inventory costs.
7. Limited Access to Finance: Limited access to finance for small and medium-sized retailers.
8. Quality and Safety Concerns: Ensuring quality and safety of products, particularly in the
food and grocery segment.

Opportunities in Indian Retail Market

1. Growing Middle Class: Increasing disposable income and growing middle class.
2. Rising Demand for Organized Retail: Growing demand for modern retail formats.
3. E-commerce Growth: Rapid growth of e-commerce in India.
4. Government Initiatives: Government initiatives, such as the National Retail Policy, to support the
retail sector.
 Indian organised retail market - FDI in Indian organized retail sector: The Indian organized
retail market has witnessed significant growth in recent years, driven by factors like changing
consumer behavior, increasing disposable incomes, and favorable government policies.
Foreign Direct Investment (FDI) has played a crucial role in this growth.

FDI Policy in Indian Organized Retail

The Indian government has allowed 100% FDI in Single Brand Retail Trading (SBRT) under
the automatic route, enabling foreign companies to set up their own retail stores in India ¹.
However, for Multi-Brand Retail Trading (MBRT), FDI is limited to 51% and requires
government approval.

Impact of FDI on Indian Organized Retail

FDI in Indian organized retail has brought in international best practices, improved supply
chain management, and enhanced customer experience. It has also created new job
opportunities and stimulated economic growth. However, some critics argue that FDI in retail
could lead to the displacement of small, local retailers and impact the domestic industry.

Key Players in Indian Organized Retail

Some prominent international retailers operating in India include:

- Amazon
- Walmart
- Carrefour
- Shopper Stop

These players have partnered with local companies or invested in Indian retail ventures,
contributing to the growth of the organized retail sector.

Overall, FDI has been a significant catalyst for the growth of Indian organized retail, bringing in new
investments, technologies, and management practices.

Case studies relevant to fashion retail – footwear – hyper markets – food courts –
departmental stores – banking & finance:

Fashion Retail
1. Zara's Fast Fashion Supply Chain: Analyze how Zara's agile supply chain enables the
company to quickly respond to changing fashion trends.
2. H&M's Sustainability Initiatives: Examine H&M's efforts to reduce environmental impact
and improve social responsibility in its supply chain.

Footwear

1. Nike's Global Supply Chain Management: Study how Nike manages its global supply chain
to ensure timely delivery of high-quality products.
2. Adidas' Speedfactory Initiative: Investigate how Adidas' Speedfactory concept enables rapid
production and customization of athletic footwear.

Hypermarkets

1. Carrefour's Hypermarket Strategy: Analyze Carrefour's approach to creating a one-stop

shopping experience for customers.
2. Tesco's Hypermarket Format: Examine Tesco's successful hypermarket format and its
impact on the retail industry.

Food Courts

1. Food Court Strategy at Westfield Malls: Study how Westfield malls create engaging food
court experiences that drive customer traffic and sales.
2. The Impact of Food Courts on Mall Performance: Investigate the effect of food courts on
mall foot traffic, sales, and customer satisfaction.

Departmental Stores

1. Macy's Omnichannel Retailing Strategy: Analyze Macy's efforts to integrate online and
offline channels to provide a seamless shopping experience.
2. Harrods' Luxury Retailing Strategy: Examine Harrods' approach to creating a luxurious
shopping experience that justifies high prices.

Banking & Finance

1. Digital Transformation at DBS Bank: Study how DBS Bank leveraged digital technologies
to improve customer experience, reduce costs, and increase efficiency.
2. Mobile Banking Strategy at Bank of America: Analyze Bank of America's approach to
mobile banking, including its mobile app and digital wallet offerings.
 FINANCE SPECIALIZATION

BUS 3.4.F (R22): SECURITY ANALYSIS & PORTFOLIO

MANAGEMENT

UNIT-I: Investment: Meaning, Investment vs. Speculation - Characteristics of Investment –

Investment Process – Securities Market: Issue of Securities: Initial Public Offer (IPO) – Right
Issue - Bonus Issue – Private Placement – Listing – Trading – Settlement.
UNIT-II: Valuation of Securities: Basic Concepts: Return, Risk, Intrinsic value – Valuation
of fixed income Securities: Debentures and Bonds: Current Yield, Yield To Maturity (YTM),
Yield to Call (YTC), Bond Duration – Valuation of Equity: Constant Rupee Dividend model –
Constant Growth Model – Multiple Growth Model – Price –Earnings (P/E) Approach -
Components of risk – Measurement of Risk: Variance, Standard Deviation, Security Beta.
UNIT-III: Approaches to Security Analysis: Fundamental Analysis: Economy, Industry
and Company Analysis – Technical Analysis: Dow Theory - Elliot wave – Moving Average,
Exponential Average, Oscillators, Rate of Change (ROC), Relative Strength Index (RSI),
Moving Average Convergence Divergence (MACD) –Breadth of the Market – Momentum.
UNIT-IV: Portfolio Analysis and Selection: Portfolio Return and Portfolio Risk - Modern
Portfolio Theory: Markowitz Theory – William Sharpe’s Single Index Model – Capital Asset
Pricing Model (CAPM) – Arbitrage Pricing Theory (APT) – Efficient Market Hypothesis
Unit-V: Portfolio Evaluation & Revision: Methods of Portfolio Evaluation – Sharpe’s,
Treynor’s and Jensen’s measures of portfolio performance evaluation - Fama’s decomposition
of portfolio return – Portfolio Revision: Need, Constraints, Strategies.

UNIT-I: Investment: Meaning, Investment vs. Speculation - Characteristics of Investment –

Investment Process – Securities Market: Issue of Securities: Initial Public Offer (IPO) – Right
Issue - Bonus Issue – Private Placement – Listing – Trading – Settlement.

Meaning, Investment vs. Speculation: Investment

Investment refers to the act of allocating money or resources into assets that have a reasonable
expectation of generating returns, such as:

- Stocks or bonds
- Real estate
- Mutual funds
- Businesses

Investments are typically made with a long-term perspective, and the investor expects to earn
 returns through dividends, interest, or capital appreciation.

Speculation

Speculation, on the other hand, involves betting on the price movement of an asset, often with a short-
term focus. Speculators seek to profit from fluctuations in market prices, rather than from the underlying
value of the asset.

Characteristics of Investment – Investment Process: Characteristics of Investment

1. Return: Expectation of earning returns in the form of dividends, interest, or capital

appreciation.
2. Risk: Involves some level of risk, such as market risk, credit risk, or liquidity risk.
3. Time horizon: Typically involves a long-term perspective, ranging from several months to
several years.
4. Capital outlay: Requires an initial investment of money or resources.
5. Ownership: Investor acquires ownership or a claim on the asset or security.
6. Liquidity: Ability to convert the investment into cash or other assets.
7. Diversification: Spreading investments across different asset classes to minimize risk.

Investment Process

1. Financial Goal Setting: Define investment objectives, risk tolerance, and time horizon.
2. Risk Assessment: Evaluate personal risk tolerance and assess potential risks associated with
investments.
3. Asset Allocation: Determine the optimal mix of asset classes, such as stocks, bonds, and real
estate.
4. Investment Selection: Choose specific investments within each asset class, such as individual
stocks or mutual funds.
5. Portfolio Construction: Assemble the selected investments into a diversified portfolio.
6. Portfolio Monitoring: Regularly review and rebalance the portfolio to ensure it remains
aligned with investment objectives.
7. Tax Planning: Consider tax implications of investments and aim to minimize tax liabilities.
8. Estate Planning: Consider how investments will be distributed upon death or incapacitation.

Securities Market: Issue of Securities: Initial Public Offer (IPO) – Right Issue - Bonus Issue –
Private Placement – Listing – Trading – Settlement:

Securities Market
The securities market is a platform where securities such as stocks, bonds, and debentures are
issued, bought, and sold. It provides a mechanism for companies to raise capital and for
investors to participate in the growth and profits of companies.

Issue of Securities

Companies issue securities to raise capital for various purposes such as expansion,
modernization, and repayment of debt. There are several ways to issue securities:

1. Initial Public Offer (IPO)

An IPO is the first public issue of securities by a company. It allows the company to raise
capital from the public and list its shares on a stock exchange.

2. Right Issue

A right issue is an issue of securities to existing shareholders, who have the right to subscribe
to the new issue.

3. Bonus Issue

A bonus issue is an issue of free securities to existing shareholders, usually from the company's
reserves.

4. Private Placement

Private placement is an issue of securities to a select group of investors, usually institutional

investors.

Listing

Listing refers to the process of getting securities listed on a stock exchange. This allows the
securities to be traded on the exchange.

Trading

Trading refers to the buying and selling of securities on a stock exchange. Trading can be done
through various channels such as brokers, online trading platforms, and mobile apps.
 Settlement

Settlement refers to the process of transferring securities and funds after a trade is executed.
This is usually done through a clearinghouse or a settlement agency.

Types of Settlement

1. T+2 Settlement: Settlement is done two days after the trade date.
2. T+1 Settlement: Settlement is done one day after the trade date.
3. Real-Time Settlement: Settlement is done in real-time, as soon as the trade is executed.

In summary, the securities market provides a platform for companies to raise capital and for investors
to participate in the growth and profits of companies. The issue of securities can be done through various
methods such as IPO, right issue, bonus issue, and private placement. Listing, trading, and settlement
are important processes that facilitate the buying and selling of securities.

UNIT-II: Valuation of Securities: Basic Concepts: Return, Risk, Intrinsic value – Valuation of fixed
income Securities: Debentures and Bonds: Current Yield, Yield To Maturity (YTM), Yield to Call
(YTC), Bond Duration – Valuation of Equity: Constant Rupee Dividend model – Constant Growth
Model – Multiple Growth Model – Price –Earnings (P/E) Approach - Components of risk –
Measurement of Risk: Variance, Standard Deviation, Security Beta

Basic Concepts: Return, Risk, Intrinsic value: Here are the basic concepts of return, risk, and
intrinsic value:

Return

Return refers to the gain or profit earned on an investment over a specific period. It can be
expressed in various forms, including:

1. Dividend Yield: The ratio of dividend per share to the market price per share.
2. Capital Gains Yield: The appreciation in the value of an investment over time.
3. Total Return: The combination of dividend yield and capital gains yield.

Risk

Risk refers to the uncertainty or possibility of loss associated with an investment. Types of risk
include:
 1. Market Risk: The risk of losses due to market fluctuations.
2. Credit Risk: The risk of default by the borrower.
3. Liquidity Risk: The risk of being unable to sell an investment quickly.
4. Operational Risk: The risk of losses due to internal processes or systems.

Intrinsic Value

Intrinsic value refers to the true or estimated value of an investment based on its underlying
fundamentals, such as:

1. Financial Statements: Income statement, balance sheet, and cash flow statement.
2. Management Quality: The ability of the management team to execute the business strategy.
3. Industry Trends: The outlook for the industry in which the company operates.
4. Competitive Advantage: The unique advantages that set the company apart from its
competitors.

Investors use various methods to estimate intrinsic value, including:

1. Discounted Cash Flow (DCF) Analysis: Estimating the present value of future cash flows.
2. Comparable Company Analysis: Comparing the company's valuation multiples to those of
similar companies.
3. Asset-Based Valuation: Estimating the value of the company's assets.

Valuation of fixed income Securities: Debentures and Bonds: Types of Fixed Income
Securities

1. Debentures: Long-term debt securities issued by companies to raise capital.

2. Bonds: Long-term debt securities issued by companies or governments to raise capital.

Valuation of Fixed Income Securities

The valuation of fixed income securities involves calculating their present value based on their
future cash flows.

Key Components

1. Face Value (FV): The principal amount of the security.

2. Coupon Rate: The interest rate paid periodically to the investor.
3. Market Interest Rate: The current interest rate prevailing in the market.
4. Time to Maturity: The remaining time until the security matures.

Valuation Formulas

1. Present Value of a Bond:

PV = Σ (CFt / (1 + r)^t)

Where:
PV = Present Value
CFt = Cash Flow at time t
r = Market Interest Rate
t = Time to Maturity

1. Yield to Maturity (YTM):

YTM = (CF1 + (CF2 - CF1) / (1 + r)) / PV

Where:
YTM = Yield to Maturity
CF1 = First Cash Flow
CF2 = Second Cash Flow
r = Market Interest Rate
PV = Present Value

Types of Yields

1. Coupon Yield: The interest rate paid periodically to the investor.

2. Current Yield: The annual interest payment divided by the current market price.
3. Yield to Maturity (YTM): The total return an investor can expect to earn from a bond if held
to maturity.

Factors Affecting Valuation

1. Interest Rate Changes: Changes in market interest rates affect the present value of fixed
income securities.
2. Credit Rating: A change in the credit rating of the issuer can affect the valuation of the
security.
3. Time to Maturity: The longer the time to maturity, the more sensitive the security is to
 interest rate changes.
4. Market Liquidity: The ease with which a security can be bought or sold affects its valuation.

Current Yield, Yield To Maturity (YTM), Yield to Call (YTC), Bond Duration – Valuation of
Equity:

Here's a detailed explanation of each concept:

Current Yield

- Definition: The annual interest payment divided by the current market price of the bond.
- Formula: Current Yield = Annual Interest Payment / Current Market Price
- Importance: Helps investors understand the return they can expect from a bond in terms of its
annual interest payment.

Yield to Maturity (YTM)

- Definition: The total return an investor can expect to earn from a bond if held to maturity.
- Formula: YTM = (CF1 + (CF2 - CF1) / (1 + r)) / PV
- Importance: Helps investors evaluate the potential return of a bond and compare it with other
investment opportunities.

Yield to Call (YTC)

- Definition: The return an investor can expect to earn from a bond if it is called before maturity.
- Formula: YTC = (CF1 + (Call Price - CF1) / (1 + r)) / PV
- Importance: Helps investors understand the potential return of a bond if it is called before
maturity.

Bond Duration

- Definition: A measure of a bond's sensitivity to interest rate changes.

- Formula: Duration = Σ (t * CFt / (1 + r)^t) / PV
- Importance: Helps investors understand how changes in interest rates will affect the value of
their bond holdings.

In summary, these concepts are essential for investors to understand the return and risk characteristics
of bonds and informed investment decisions.
 Constant Rupee Dividend model – Constant Growth Model – Multiple Growth Model:
Constant Rupee Dividend Model

1. Assumptions: Dividend payout remains constant, and the cost of equity capital is also
constant.
2. Formula: P = D / k
1. P = Current market price of the share
2. D = Constant dividend payout
3. k = Cost of equity capital
3. Limitation: Unrealistic assumption of constant dividend payout.

Constant Growth Model

1. Assumptions: Dividend payout grows at a constant rate, and the cost of equity capital is also
constant.
2. Formula: P = D / (k - g)
1. P = Current market price of the share
2. D = Current dividend payout
3. k = Cost of equity capital
4. g = Constant growth rate
3. Limitation: Unrealistic assumption of constant growth rate.

Multiple Growth Model

1. Assumptions: Dividend payout grows at different rates during different periods.

2. Formula: P = Σ (Dt / (1 + k)^t)
1. P = Current market price of the share
2. Dt = Dividend payout at time t
3. k = Cost of equity capital
4. t = Time period
3. Advantage: More realistic assumption of varying growth rates.

These models are used to estimate the intrinsic value of a share, which can be compared with its market
price to determine if it's overvalued or undervalued.

Price –Earnings (P/E) Approach - Components of risk – Measurement of Risk: Variance,

Standard Deviation, Security Beta:
 Price-Earnings (P/E) Approach

1. Definition: A valuation method that compares a company's current share price to its earnings
per share (EPS).
2. Formula: P/E Ratio = Current Share Price / EPS
3. Interpretation: A higher P/E ratio indicates that investors have higher expectations for the
company's future growth.

Components of Risk

1. Business Risk: Uncertainty related to a company's operations and profitability.

2. Financial Risk: Uncertainty related to a company's financial leverage and debt.
3. Market Risk: Uncertainty related to market-wide factors, such as interest rates and economic
conditions.
4. Liquidity Risk: Uncertainty related to a company's ability to meet its short-term financial
obligations.

Measurement of Risk

1. Variance: A measure of the dispersion of returns around the mean.

- Formula: Variance = Σ(xi - μ)² / (n - 1)
2. Standard Deviation: The square root of variance, representing the volatility of returns.
- Formula: Standard Deviation = √Variance
3. Security Beta: A measure of systematic risk, representing the sensitivity of a security's
returns to market returns.
- Formula: Beta = Cov(Ri, Rm) / σ²m

These concepts are essential in finance and investing, as they help investors understand the value and
risk of different investment opportunities.
UNIT-III: Approaches to Security Analysis: Fundamental Analysis: Economy, Industry and
Company Analysis – Technical Analysis: Dow Theory - Elliot wave – Moving Average, Exponential
Average, Oscillators, Rate of Change (ROC), Relative Strength Index (RSI), Moving Average
Convergence Divergence (MACD) –Breadth of the Market – Momentum

Economy, Industry and Company Analysis: Economy Analysis

1. GDP Growth Rate: Understanding the overall growth rate of the economy.
2. Inflation Rate: Analyzing the rate of price increases in the economy.
3. Interest Rates: Understanding the impact of interest rates on borrowing and spending.
4. Fiscal Policy: Analyzing government spending and taxation policies.
5. Monetary Policy: Understanding the role of central banks in controlling money supply.

Industry Analysis

1. Industry Life Cycle: Understanding the stage of the industry's life cycle (growth, maturity,
decline).
2. Competitive Structure: Analyzing the number of firms, barriers to entry, and competition.
3. Industry Trends: Identifying key trends, such as technological advancements or changes in
consumer behavior.
4. Regulatory Environment: Understanding government regulations and their impact on the
industry.
5. Industry Outlook: Forecasting future growth prospects and challenges.

Company Analysis

1. Financial Performance: Analyzing revenue, profitability, and cash flow.

2. Management Team: Evaluating the experience and track record of the management team.
3. Competitive Advantage: Identifying unique strengths, such as patents, brand recognition, or
cost advantages.
4. Market Position: Understanding the company's market share and competitive position.
5. Growth Prospects: Evaluating the company's potential for future growth and expansion.

These three levels of analysis are essential for investors, analysts, and business professionals to
understand the complex relationships between the economy, industry, and individual companies.
Dow Theory:
The Dow Theory is a financial theory developed by Charles Dow, founder of the Wall Street
Journal, in the late 19th and early 20th centuries. The theory is based on the idea that the stock
market is a reflection of the overall economy and that certain patterns and trends can be used
to predict future market movements.

Key Principles of the Dow Theory:

1. The Market Discounts Everything: The market reflects all available information, making it
impossible to consistently achieve returns in excess of the market's average.
2. The Three Main Movements: The market experiences three types of movements:
- Primary Trends: Long-term trends that last for several years.
- Secondary Trends: Intermediate trends that last for several weeks or months.
- Minor Trends: Short-term trends that last for a few days or weeks.
3. The Averages Must Confirm Each Other: The Dow Jones Industrial Average (DJIA) and the
Dow Jones Transportation Average (DJTA) must move in the same direction to confirm a trend.
4. Volume Follows the Trend: Trading volume should increase when the market is moving in
the direction of the primary trend.
5. A Trend Is Reversed Only When a Clear Reversal Signal Is Given: A trend reversal is
confirmed only when a clear signal is given, such as a break below a support level or a move
above a resistance level.

Application of the Dow Theory:

1. Identifying Trends: Use the DJIA and DJTA to identify primary, secondary, and minor
trends.
2. Confirming Trends: Look for confirmation from volume and other indicators, such as
moving averages.
3. Reversing Trends: Wait for clear reversal signals before changing your investment strategy.

The Dow Theory remains a widely followed and respected investment approach, offering valuable
insights into market trends and investor behavior.

Elliot wave – Moving Average, Exponential Average, Oscillators, Rate of Change (ROC), Relative
Strength Index (RSI), Moving Average Convergence Divergence (MACD) –Breadth of the Market
– Momentum:

Elliot Wave

1. Definition: A technical analysis theory that predicts price movements based on crowd
psychology and wave patterns.
2. Key Principles: Waves are classified into impulse waves (trend) and corrective waves
(counter-trend).
3. Wave Patterns: Five-wave impulse pattern and three-wave corrective pattern.

Moving Averages

1. Definition: A technical indicator that smooths out price data to identify trends.
2. Types: Simple Moving Average (SMA) and Exponential Moving Average (EMA).
3. Usage: Identify trends, provide support and resistance levels.

Oscillators

1. Definition: Technical indicators that fluctuate between two extremes to identify overbought
and oversold conditions.
2. Types: Relative Strength Index (RSI), Stochastic Oscillator, and MACD.
3. Usage: Identify potential reversals, overbought and oversold conditions.

Rate of Change (ROC)

1. Definition: A technical indicator that measures the percentage change in price over a given
period.
2. Usage: Identify trends, measure momentum, and detect potential reversals.

Relative Strength Index (RSI)

1. Definition: A technical indicator that measures the magnitude of recent price changes to
determine overbought and oversold conditions.
2. Usage: Identify potential reversals, overbought and oversold conditions.

Moving Average Convergence Divergence (MACD)

1. Definition: A technical indicator that combines two moving averages to identify trends and
potential reversals.
2. Usage: Identify trends, detect potential reversals, and measure momentum.

Breadth of the Market

1. Definition: A measure of the number of stocks participating in a market trend.

 2. Indicators: Advance-Decline Line, New Highs-New Lows, and Breadth Ratio.
3. Usage: Confirm trends, identify potential reversals.

Momentum

1. Definition: The rate of change in price or volume over a given period.

2. Indicators: Rate of Change (ROC), Momentum Index, and Price Momentum.
3. Usage: Identify trends, measure strength, and detect potential reversals.

UNIT-IV: Portfolio Analysis and Selection: Portfolio Return and Portfolio Risk - Modern
Portfolio Theory: Markowitz Theory – William Sharpe’s Single Index Model – Capital Asset
Pricing Model (CAPM) – Arbitrage Pricing Theory (APT) – Efficient Market Hypothesis

Portfolio Return and Portfolio Risk - Modern Portfolio Theory: Here's an overview of
portfolio return and risk, as well as Modern Portfolio Theory:

Portfolio Return

1. Definition: The total return of a portfolio, calculated as the weighted average of the returns
of individual assets.
2. Formula: Portfolio Return = Σ (wi * ri)
1. wi: Weight of asset i in the portfolio
2. ri: Return of asset i
3. Types of Returns: Expected return, actual return, and required return.

Portfolio Risk

1. Definition: The uncertainty or volatility of a portfolio's returns.

2. Types of Risk: Systematic risk (market risk) and unsystematic risk (specific risk).
3. Measures of Risk: Standard deviation, variance, and beta.

Modern Portfolio Theory (MPT)

1. Definition: A framework for constructing and managing portfolios to maximize returns for
a given level of risk.
2. Key Concepts:
1. Diversification: Spreading investments across different asset classes to reduce risk.
 2. Efficient Frontier: A graphical representation of the optimal portfolio combinations that
offer the highest expected return for a given level of risk.
3. Capital Asset Pricing Model (CAPM): A model that describes the relationship between
risk and expected return.
3. MPT Assumptions:
1. Rational Investors: Investors act rationally and make informed decisions.
2. Efficient Markets: Markets are efficient, and prices reflect all available information.
3. Normal Distribution: Returns are normally distributed.

Portfolio Optimization

1. Definition: The process of constructing a portfolio that maximizes returns for a given level
of risk.
2. Techniques: Mean-variance optimization, Black-Litterman model, and resampling.

Benefits of MPT

1. Improved Risk Management: MPT helps investors manage risk by diversifying their
portfolios.
2. Increased Returns: MPT can help investors achieve higher returns for a given level of risk.
3. More Efficient Portfolios: MPT enables investors to construct more efficient portfolios that optimize
the trade-off between risk and return.

Markowitz Theory – Markowitz Theory, also known as Modern Portfolio Theory (MPT), is a
framework for constructing and managing portfolios to maximize returns for a given level of
risk. Developed by Harry Markowitz in the 1950s, the theory is based on the idea that investors
can optimize their portfolios by diversifying across different asset classes and managing risk.

Key Concepts:

1. Diversification: Spreading investments across different asset classes to reduce risk.

2. Efficient Frontier: A graphical representation of the optimal portfolio combinations that offer
the highest expected return for a given level of risk.
3. Portfolio Optimization: The process of constructing a portfolio that maximizes returns for a
given level of risk.
4. Risk-Return Tradeoff: The idea that investors must balance their desire for returns with their
tolerance for risk.

Assumptions:
 1. Rational Investors: Investors act rationally and make informed decisions.
2. Efficient Markets: Markets are efficient, and prices reflect all available information.
3. Normal Distribution: Returns are normally distributed.

Markowitz Model:

1. Expected Return: The expected return of a portfolio is a weighted average of the expected
returns of the individual assets.
2. Variance: The variance of a portfolio is a measure of its risk.
3. Covariance: The covariance between two assets measures the extent to which their returns
are correlated.

Implications:

1. Diversification Reduces Risk: Spreading investments across different asset classes can
reduce risk.
2. Optimal Portfolio: The optimal portfolio is the one that maximizes returns for a given level
of risk.
3. Risk-Return Tradeoff: Investors must balance their desire for returns with their tolerance for
risk.

Limitations:

1. Assumptions: The theory relies on assumptions about investor behavior and market
efficiency.
2. Simplifications: The theory simplifies complex real-world scenarios.
3. Estimation Errors: Est imation errors can occur when calculating expected and variances.

William Sharpe’s Single Index Model: William Sharpe's Single Index Model (SIM) is a
financial model that describes the relationship between a stock's return and the overall market
return. Developed by William Sharpe in the 1960s, the model is a simplification of the
Markowitz Modern Portfolio Theory.

Key Components:

1. Market Return (Rm): The return on the overall market, represented by a market index such
as the S&P 500.
2. Stock Return (Ri): The return on a specific stock.
3. Beta (β): A measure of the stock's systematic risk, representing the sensitivity of the stock's
return to the market return.
 4. Risk-Free Rate (Rf): The return on a risk-free asset, such as a U.S. Treasury bond.

Model Equation:

Ri = Rf + β(Rm - Rf) + ε

Interpretation:

1. Beta (β): A beta of 1 indicates that the stock's return is perfectly correlated with the market
return. A beta greater than 1 indicates higher systematic risk, while a beta less than 1 indicates
lower systematic risk.
2. Systematic Risk: The portion of a stock's risk that cannot be diversified away, represented
by the beta.
3. Unsystematic Risk: The portion of a stock's risk that can be diversified away, represented by
the error term (ε).

Assumptions:

1. Linear Relationship: The relationship between the stock's return and the market return is
linear.
2. Constant Beta: The beta remains constant over time.
3. Normal Distribution: Returns are normally distributed.

Implications:

1. Risk-Return Tradeoff: Investors can expect higher returns for taking on higher systematic
risk.
2. Diversification: Diversification can reduce unsystematic risk, but not systematic risk.
3. Portfolio Management: The model provides a framework for portfolio managers to evaluate
and manage risk.

Limitations:

1. Simplifications: The model simplifies complex real-world scenarios.

2. Assumptions: The model relies on assumptions about the relationship between stock returns
and market returns.
3. Estimation Errors: Estimation errors can occur when calculating beta and other model parameters.
Capital Asset Pricing Model (CAPM): The Capital Asset Pricing Model (CAPM) is a financial
model that describes the relationship between the expected return of an investment and its
systematic risk. Developed by William Sharpe, John Lintner, and Jan Mossin in the 1960s,
CAPM is a widely used framework for estimating the expected return of a stock or a portfolio.

Key Components:

1. Expected Return (E(R)): The expected return of an investment.

2. Risk-Free Rate (Rf): The return on a risk-free asset, such as a U.S. Treasury bond.
3. Market Return (Rm): The return on the overall market, represented by a market index such
as the S&P 500.
4. Beta (β): A measure of the investment's systematic risk, representing the sensitivity of the
investment's return to the market return.

CAPM Equation:

E(R) = Rf + β(Rm - Rf)

Interpretation:

1. Risk-Free Rate (Rf): The minimum return an investor can expect from an investment.
2. Market Risk Premium (Rm - Rf): The excess return an investor can expect from investing in
the market.
3. Beta (β): A beta of 1 indicates that the investment's return is perfectly correlated with the
market return. A beta greater than 1 indicates higher systematic risk, while a beta less than 1
indicates lower systematic risk.

Assumptions:

1. Rational Investors: Investors act rationally and make informed decisions.

2. Efficient Markets: Markets are efficient, and prices reflect all available information.
3. Normal Distribution: Returns are normally distributed.

Implications:

1. Risk-Return Tradeoff: Investors can expect higher returns for taking on higher systematic
risk.
2. Diversification: Diversification can reduce unsystematic risk, but not systematic risk.
 3. Portfolio Management: CAPM provides a framework for portfolio managers to evaluate and
manage risk.

Limitations:

1. Simplifications: CAPM simplifies complex real-world scenarios.

2. Assumptions: CAPM relies on assumptions about investor behavior and market efficiency.
3. Estimation Errors: Estimation errors can occur when calculating beta and other model parameters.

Arbitrage Pricing Theory (APT): Arbitrage Pricing Theory (APT) is a financial model that
describes the relationship between the expected return of an investment and its sensitivity to
various macroeconomic factors. Developed by Stephen Ross in 1976, APT is an alternative to
the Capital Asset Pricing Model (CAPM) and provides a more general framework for
estimating expected returns.

Key Components:

1. Expected Return (E(R)): The expected return of an investment.

2. Risk-Free Rate (Rf): The return on a risk-free asset, such as a U.S. Treasury bond.
3. Macro-Economic Factors (F): A set of macro-economic factors that affect the investment's
return, such as inflation, GDP growth, and interest rates.
4. Factor Loadings (β): A measure of the investment's sensitivity to each macro-economic
factor.

APT Equation:

E(R) = Rf + Σ βi * Fi

Interpretation:

1. Risk-Free Rate (Rf): The minimum return an investor can expect from an investment.
2. Macro-Economic Factors (F): Each factor represents a source of systematic risk that affects
the investment's return.
3. Factor Loadings (β): A beta of 0 indicates that the investment is not sensitive to the
corresponding macro-economic factor.

Assumptions:

1. Arbitrage-Free Markets: Markets are free of arbitrage opportunities, meaning that investors
cannot earn risk-free profits.
 2. Linear Relationship: The relationship between the investment's return and the macro-
economic factors is linear.

Implications:

1. Multi-Factor Model: APT provides a framework for estimating expected returns using
multiple macro-economic factors.
2. Flexibility: APT allows for the inclusion of various macro-economic factors, making it a
more flexible model than CAPM.
3. Portfolio Management: APT provides a framework for portfolio managers to evaluate and
manage risk using multiple macro-economic factors.

Limitations:

1. Complexity: APT can be more complex to implement than CAPM, as it requires the
estimation of multiple factor loadings.
2. Factor Selection: The selection of macro-economic factors can be subjective and may affect
the accuracy of the model.
3. Estimation Errors: Estimation errors can occur when calculating factor loadings and other model
parameters.

Efficient Market Hypothesis: The Efficient Market Hypothesis (EMH) is a financial theory that
states that financial markets are informationally efficient, meaning that prices reflect all
available information at any given time.

Types of Efficient Markets

1. Weak Form Efficiency

- Historical price and return data are reflected in current market prices.
- Technical analysis is unlikely to be successful.

2. Semi-Strong Form Efficiency

- All publicly available information is reflected in current market prices.

- Fundamental analysis is unlikely to be successful.

3. Strong Form Efficiency

 - All information, public or private, is reflected in current market prices.
- Even insider information is unlikely to be profitable.

Implications of EMH

1. Random Walk: Stock prices follow a random walk, making it impossible to predict future
prices.
2. No Free Lunch: It is impossible to consistently achieve returns in excess of the market's
average.
3. Diversification: Diversification is the best way to manage risk, as it is impossible to
consistently pick winning stocks.
4. Index Funds: Index funds, which track the market as a whole, are likely to outperform
actively managed funds.

Criticisms and Limitations of EMH

1. Behavioral Finance: EMH assumes that investors act rationally, but behavioral finance
shows that investors often act irrationally.
2. Market Bubbles: EMH cannot explain market bubbles, where prices deviate from
fundamental values.
3. Asymmetric Information: EMH assumes that all investors have access to the same
information, but in reality, some investors may have access to better information.
4. High-Frequency Trading: EMH assumes that markets are efficient, but high-frequency trading can
create inefficiencies.

Unit-V: Portfolio Evaluation & Revision: Methods of Portfolio Evaluation – Sharpe’s, Treynor’s and
Jensen’s measures of portfolio performance evaluation - Fama’s decomposition of portfolio return –
Portfolio Revision: Need, Constraints, Strategies

Methods of Portfolio Evaluation: Traditional Methods

1. Return-Based Evaluation: Measures portfolio return over a specific period.

2. Risk-Return Analysis: Evaluates portfolio return relative to its risk level.
3. Sharpe Ratio: Measures excess return per unit of risk.

Risk-Adjusted Performance Measures

1. Treynor Ratio: Measures excess return per unit of systematic risk.

2. Sortino Ratio: Measures excess return per unit of downside risk.
3. Information Ratio: Measures portfolio return relative to its benchmark.
 Non-Traditional Methods

1. Value-at-Risk (VaR): Estimates potential loss in portfolio value.

2. Expected Shortfall (ES): Measures potential loss in extreme scenarios.
3. Stress Testing: Evaluates portfolio performance under hypothetical scenarios.

Qualitative Methods

1. Peer Group Comparison: Compares portfolio performance to similar portfolios.

2. Style Analysis: Evaluates portfolio's investment style and manager's skill.
3. Performance Attribution: Analyzes sources of portfolio return.

Regulatory and Compliance Measures

1. Regulatory Capital Requirements: Ensures portfolio meets regulatory capital requirements.

2. Compliance with Investment Guidelines: Verifies portfolio adherence to investment
guidelines and restrictions.

These methods provide a comprehensive framework for evaluating portfolio performance, risk, and
compliance.

Sharpe’s, Treynor’s and Jensen’s measures of portfolio performance evaluation: Sharpe's

Measure

1. Definition: Sharpe Ratio measures the excess return of a portfolio over the risk-free rate,
relative to its volatility.
2. Formula: Sharpe Ratio = (Rp - Rf) / σp
- Rp = Portfolio return
- Rf = Risk-free rate
- σp = Portfolio volatility
3. Interpretation: A higher Sharpe Ratio indicates better portfolio performance.

Treynor's Measure

1. Definition: Treynor Ratio measures the excess return of a portfolio over the risk-free rate,
relative to its systematic risk (beta).
2. Formula: Treynor Ratio = (Rp - Rf) / βp
- Rp = Portfolio return
 - Rf = Risk-free rate
- βp = Portfolio beta
3. Interpretation: A higher Treynor Ratio indicates better portfolio performance.

Jensen's Measure (Jensen's Alpha)

1. Definition: Jensen's Alpha measures the excess return of a portfolio over its expected return,
based on its beta and the market return.
2. Formula: Jensen's Alpha = Rp - (Rf + βp * (Rm - Rf))
- Rp = Portfolio return
- Rf = Risk-free rate
- βp = Portfolio beta
- Rm = Market return
3. Interpretation: A positive Jensen's Alpha indicates that the portfolio has outperformed its
expected return.

These measures provide a comprehensive framework for evaluating portfolio performance, risk, and
manager skill.

Fama’s decomposition of portfolio return: Components of Fama's Decomposition

1. Risk-Free Return (Rf): The return earned from a risk-free investment, such as a U.S. Treasury
bond.
2. Market Risk Premium (Rm - Rf): The excess return earned from investing in the market,
above the risk-free rate.
3. Beta (β): A measure of the portfolio's systematic risk, representing its sensitivity to market
movements.
4. Residual Return (ε): The portion of the portfolio's return not explained by the market return
or beta.

Fama's Decomposition Equation

Rp = Rf + β(Rm - Rf) + ε

Interpretation

1. Risk-Free Return: The minimum return an investor can expect from a portfolio.
2. Market Risk Premium: The excess return earned from taking on market risk.
3. Beta: A measure of the portfolio's systematic risk.
 4. Residual Return: A measure of the portfolio manager's skill or luck.

Benefits

1. Improved Understanding: Fama's decomposition helps investors understand the sources of a

portfolio's return.
2. Better Performance Evaluation: By isolating the residual return, investors can evaluate a
portfolio manager's skill more accurately.
3. Risk Management: Fama's decomposition helps investors manage risk by identifying the sources of
portfolio risk.

Portfolio Revision: Need, Constraints, Strategies: Need for Portfolio Revision

1. Changes in Investment Objectives: Shifts in investor goals, risk tolerance, or time horizon.
2. Changes in Market Conditions: Changes in interest rates, inflation, or market sentiment.
3. Changes in Portfolio Composition: Changes in asset allocation, sector weights, or individual
securities.
4. Taxation and Regulatory Requirements: Changes in tax laws or regulatory requirements.

Constraints on Portfolio Revision

1. Transaction Costs: Costs associated with buying and selling securities.

2. Tax Implications: Tax consequences of selling securities, such as capital gains tax.
3. Risk Tolerance: Investor's willingness to take on risk.
4. Time Horizon: Investor's time frame for achieving investment objectives.
5. Regulatory Requirements: Compliance with regulatory requirements, such as diversification
rules.

Strategies for Portfolio Revision

1. Rebalancing: Periodically reviewing and adjusting the portfolio to maintain target asset
allocation.
2. Tax-Loss Harvesting: Selling securities that have declined in value to realize losses and
offset gains.
3. Tax-Gain Harvesting: Selling securities that have appreciated in value to realize gains and
rebalance the portfolio.
4. Dollar-Cost Averaging: Investing a fixed amount of money at regular intervals, regardless
of market conditions.
5. Portfolio Optimization: Using quantitative models to optimize portfolio composition and
minimize risk.
 Best Practices

1. Regular Portfolio Reviews: Regularly reviewing the portfolio to ensure it remains aligned
with investment objectives.
2. Tax-Efficient Investing: Considering tax implications when making investment decisions.
3. Risk Management: Managing risk through diversification, hedging, and other strategies.
4. Disciplined Investing: Sticking to a long-term investment plan and avoiding emotional decisions.
 BUS 3.5.F (R22): INTERNATIONAL FINANCIAL MANAGEMENT
Financial management

UNIT–I: Finance function in an International Context. Additional dimensions

in achieving the wealth maximization goal – Scope & relevance to different
business entities - Understanding foreign currency risk and exposure – Nature
and types of Exposures
UNIT–II: Foreign Exchange Markets: Nature, Functions, Transactions,
Participants, Exchange rates, Exchange rate Arithmetic. - Fundamental parity
relations – Purchasing Power Parity, Covered and Uncovered Interest Rate
Parity – their influence on determining the exchange rates.
UNIT–III: A brief exposition of significant theories of Exchange Rate
determination, Forecasting of Exchange Rates - International Capital Markets,
Sources of International Finance, Debt and Equity markets.
UNIT–IV: Export Finance in India, Forfeiting, Role of EXIM Bank -
International Capital Structure and Cost of Capital.
UNIT–V: International Capital Budgeting. Key Issues, Calculating of Cashflows, Adjusted Present value
approach - International Cash Management, techniques, Centralised Vs Decentralised.

UNIT–I: Finance function in an International Context. Additional dimensions

in achieving the wealth maximization goal – Scope & relevance to different
business entities - Understanding foreign currency risk and exposure – Nature
and types of Exposures

Finance function in an International Context: International Finance deals with the

management of finances in a global business. It explains how to trade in international markets
and how to exchange foreign currency, and earn profit through such activities. In fact,
international Finance is an important part of financial economics.

Additional dimensions in achieving the wealth maximization goal: Wealth maximization is a goal that
aims to increase the value of a company or individual's net worth. Some additional dimensions to
achieve this goal include:
• Understanding your financial position: This is the foundation of any wealth maximization
strategy.
• Investment planning: Wealth accumulation is more than just saving money.
• Risk management: Managing risks is an important part of wealth maximization.
 • Tax planning: Tax planning is an important part of wealth maximization.
• Retirement planning: Retirement planning is an important part of wealth maximization.
• Estate planning: Estate planning is an important part of wealth maximization.
Other factors that can affect wealth maximization include: investment opportunities, risk tolerance,
inflation, and government policies.
Wealth maximization focuses on increasing the market value of a company's shares and enhancing
shareholders' long-term wealth. It emphasizes sustainable growth, cash flows, and considers the
timing and risk of returns.

Scope & relevance to different business entities: A business's scope is the definition of its products
or services, target markets, and strategic direction. A well-defined scope can help a business in many
ways, including:

• Identifying opportunities: A business can use its expertise to expand into new markets or
product lines.

• Allocating resources: A business can identify which areas need more investment or
resources.

• Communicating with stakeholders: A business can clearly explain its direction and objectives
to stakeholders, such as employees, customers, investors, and partners.

• Facilitating decision-making: A business can align its operations and decision-making.

Understanding foreign currency risk and exposure: Foreign exchange risk is the chance that a
company will lose money on international trade because of currency fluctuations. Also known as
currency risk, FX risk and exchange rate risk, it describes the possibility that an investment's value
may decrease due to changes in the relative value of the involved currencies.

Nature and types of Exposures: There are multiple matches for nature and
types of exposures, including environmental exposure, nature exposure, and
economic exposure:
• Environmental exposure
This can include exposure to harmful substances like radon, cigarette smoke, and UV
radiation from the sun. It can also include exposure to contaminated food or water, or
absorbing harmful chemicals through the skin.
• Nature exposure
This is defined as direct physical or sensory contact with the natural environment. It can
include activities like gardening or sitting in a natural environment. Nature exposure can
improve mental wellbeing, attention, and mood, and reduce stress.
• Economic exposure
This is the degree to which a business's overall value is impacted by foreign exchange. It
can also be called operating exposure. Economic exposure can affect a company's
market share, competitive position, and future cash flows.
• Transaction exposure
This is the level of uncertainty a company faces due to currency fluctuations when
involved in international trade. It is short-term to medium-term in nature.
• Translation exposure
This is the effect of currency fluctuations on a company's consolidated financial
statements, particularly when it has foreign subsidiaries. It is medium-term to long-term
in nature.

UNIT–II: Foreign Exchange Markets: Nature, Functions, Transactions,

Participants, Exchange rates, Exchange rate Arithmetic. - Fundamental parity
relations – Purchasing Power Parity, Covered and Uncovered Interest Rate
Parity – their influence on determining the exchange rates.

Foreign Exchange Markets: Foreign exchange market is a network for the trading of foreign
currencies, including interactions of the traders and regulations of how, where and when they close
deals.

Nature, Functions, Transactions, Participants, Exchange rates, Exchange rate Arithmetic: Here's
some information about exchange rates, exchange rate systems, and the foreign exchange market:

• Exchange rates

The value of one currency in relation to another. Exchange rates are important for determining trade
and capital flow dynamics.

• Exchange rate systems

The way a country manages its currency in the foreign exchange market. The main types of exchange
rate systems are:

• Fixed exchange rate: The exchange rate between a country's currency and another
country's currency is fixed, with little fluctuation.

• Floating exchange rate: The value of a currency is determined by supply and demand
in the foreign exchange market, with no upper or lower limit on fluctuations. Central
banks may intervene to stabilize extreme fluctuations.

• Foreign exchange market

A market where one currency can be converted into another. Participants in the foreign exchange
market can buy, sell, exchange, and speculate on currency pairs. Participants include banks,
commercial companies, central banks, investment management firms, hedge funds, and investors.

• Foreign exchange transactions

An agreement between a buyer and a seller to deliver a specific amount of one currency at a
specified rate for another currency.

• Foreign exchange market functions

The foreign exchange market also provides short-term loans to people and businesses who need to
buy things from other countries.

Fundamental parity relations: Fundamental parity relations are the relationships between two or
more economies that indicate they are in equilibrium. These relations can be represented in a
graph. Some examples of fundamental parity relations include:

• Interest rate parity (IRP)

The relationship between interest rates and currency exchange rates. IRP states that the returns from
investing in different currencies should be the same, regardless of their interest rates.

• Real interest rate parity

The relationship between expected real interest rates and expected adjustments in the real exchange
rate. This relationship is generally strong over longer terms and among emerging market countries.

• Covered interest rate parity

When this holds, the forward exchange rate is an unbiased predictor of the future spot rate.

Parity relations are important because they provide a benchmark for forecasts. However, they are
often inaccurate because they ignore the uncertainty and risk associated with future interest rates,
inflation rates, and exchange rates.

Purchasing Power Parity : Purchasing power parity (PPP) is a way to compare the prices of goods
and services in different countries by adjusting for differences in price levels:

• Definition

PPPs are currency conversion rates that equalize the purchasing power of different currencies.

• How it's calculated

PPPs are calculated by comparing the prices of the same goods and services in different countries'
national currencies.

Covered and Uncovered Interest Rate Parity: Covered interest rate parity (CIP) and uncovered
interest rate parity (UIP) are two forms of interest rate parity, which are economic conditions that
describe the relationship between the forward exchange rate and the future spot exchange rate:

• Covered interest rate parity

Uses forward contracts to cover exchange rate risk. This means that the investor can agree on a
future exchange rate today.

• Uncovered interest rate parity

Involves forecasting rates and not covering exposure to foreign exchange risk. This means that the
investor uses an estimation of the expected future rate instead of the actual forward rate.

When both covered and uncovered interest rate parity hold, the forward rate is an unbiased
predictor of the future spot rate. Economists have found empirical evidence that covered interest
rate parity generally holds, but not with precision.

Their influence on determining the exchange rates:

Other factors that influence exchange rates include:

• Market speculation
• Global economic conditions
• Foreign investment flows
• Political stability
• Inflation rates
• Economic indicators
• Trade balance

UNIT–III: A brief exposition of significant theories of Exchange Rate

determination, Forecasting of Exchange Rates - International Capital Markets,
Sources of International Finance, Debt and Equity markets.

A brief exposition of significant theories of Exchange Rate determination:

Here are some theories of exchange rate determination:

• Purchasing Power Parity (PPP)

This theory links the exchange rate of a country to its price levels. The exchange rate tends to reach a
point where the purchasing power of the two currencies is equal. For example, if prices in India
double, the value of the rupee will be halved.

• Interest Rate Parity (IRP)

This theory links the exchange rate to the interest rate.

• Demand and supply

The exchange rate is determined by the interaction of demand and supply in the foreign exchange
market. For example, the exchange rate between the rupee and the British pound depends on the
demand for the British pound and its availability in India.
 • Fixed exchange rate

The exchange rate between two countries' currencies is fixed, with very little fluctuation.

• Floating exchange rate

The exchange rate is determined by the supply and demand in the foreign exchange market, and
there are no upper or lower limits on fluctuations.

Other factors that can influence exchange rates include inflation rate and interest rate.

Forecasting of Exchange Rates: Exchange rate forecasting is a complex task that involves a
combination of methods, including fundamental analysis, technical analysis, and other factors:

• Fundamental analysis: Examines economic factors that reflect the intrinsic value of a
currency, such as GDP, inflation, interest rates, and unemployment rates

• Technical analysis: Analyzes statistical changes in exchange rates over time to identify
patterns and predict future events

• Purchasing power parity (PPP): Based on the theory that identical goods should have
identical prices across countries, even after accounting for exchange rates and shipping

• Market-based approaches: Consider market expectations and sentiment to predict future

currency fluctuations

• Relative economic strength: Compares the economies of different countries to forecast

exchange rates

• ARIMA (Autoregressive Integrated Moving Average) models: Use past values to predict
future values

• Reserve bank announcements: Many countries make regular announcements through their
reserve banks

• Government stability: Elections, policy changes, and coups can have major impacts on
currencies

• Imports and exports: The balance of imports to exports in international trade is a strong
indicator of growth

• Economic reports: Savvy forex traders maintain a calendar of significant government reports
such as GDP, inflation rates, and employment trends

International Capital Markets: International capital markets are a global platform where
companies, governments, and individuals can trade securities, borrow, and invest across national
boundaries. They are characterized by intense competition for market share, which has led to the
development of new financial instruments and services.

Some benefits of international capital markets include:

• Higher returns and cheaper borrowing costs

Companies and governments can access new sources of funds and tap into foreign markets.

• Diversifying risk

Individuals, companies, and governments can access more opportunities in different countries to
borrow or invest, which can reduce risk.

The International Capital Market Association (ICMA) is a not-for-profit global trade association that
provides industry-driven standards and recommendations for participants in the cross-border debt
capital markets. ICMA was founded in February 1969 in Zürich and has offices in Zurich, London,
Paris, Brussels, and Hong Kong.

Sources of International Finance: Global Commercial Banks all over the international market
provide loans in the foreign currency to the companies. These banks are very crucial in financing the
non-trade international operations. They facilitate international trading to occur smoothly.

Debt and Equity markets: Debt and equity markets are two different types of investments that have
different characteristics, risks, returns, and structures:

• Debt market

Involves lending money to a company or government in exchange for a fixed interest rate. Debt
investments are generally considered lower risk than equity investments, and are more suitable for
risk-averse investors. Debt markets aim to generate income and preserve capital.

• Equity market

Involves buying shares of a company, which gives the buyer a partial ownership in the
company. Equity investments are generally considered higher risk than debt investments, but also
have the potential for higher returns. Equity markets aim to increase capital.

UNIT–IV: Export Finance in India, Forfeiting, Role of EXIM Bank -

International Capital Structure and Cost of Capital.

Export Finance in India:

Export finance is a type of trade finance that provides working capital for international trade. It helps
businesses cover immediate expenses, mitigate financial risk, and provide competitive payment
terms. Export finance can be obtained from a variety of institutions, including:

• Export-Import Bank of India (EXIM): The main financial institution coordinating export
import finance in India.

• Developmental banks: Such as ICICI and IDBI.

• National Small Industries Corporation: A source of export financing.

 • Export Credit Guarantee Corporation: A source of export financing.

• State Finance Corporations: A source of export financing.

• Commercial banks: Under the guidelines of the Reserve Bank of India.

Export finance can help businesses in a number of ways, including:

• Cash flow

Export finance can help businesses enhance their cash flow and use account receivables as a
financial boost.

• Working capital

Export finance can help businesses with their working capital requirements.

• Overseas investment

Export finance can help businesses with their overseas investment requirements.

• Supply chain

Export finance can help businesses streamline their supply chain efficiency.

The Reserve Bank of India (RBI) first introduced export financing in 1967. The scheme is intended to
provide exporters with short-term working capital finance at internationally comparable interest
rates.

Forfeiting: Forfaiting is a financial transaction that allows a business to sell its

receivables to a forfaiter, which is a specialized finance firm or bank
department, in exchange for cash. This practice is often used by exporters to
convert their credit sales into cash immediately. Forfaiting can help businesses
mitigate risks associated with international trade, such as currency fluctuations,
political instability, and credit risk

Role of EXIM Bank - International Capital Structure and Cost of Capital: The functions of EXIM Bank
are as follows; Financial export and import of services and goods from the country as exim trade. It
helps in financing the export as well as import of machines. It also helps to refinance the bank
services as well as other institutions for foreign financing trade or exim trade.

The cost of capital is the minimum rate of return an investment project must generate to cover its
financing costs. The international cost of capital is a framework that helps with cross-border
valuations and pricing risk across countries.

Here are some related concepts:

• Capital structure
A company's capital structure is the mix of debt, equity, and preferred stock used to finance the
business. The optimal capital structure is the mix that minimizes the cost of capital while maximizing
the company's market value.

• Cost of equity

The cost of equity is the rate of return a company must pay to equity investors. It's calculated using
the Capital Asset Pricing Model (CAPM), which considers the riskiness of the investment relative to
the current market.

UNIT–V: International Capital Budgeting. Key Issues, Calculating of

Cashflows, Adjusted Present value approach - International Cash Management,
techniques, Centralised Vs Decentralised.

International Capital Budgeting: The motive of international capital budgeting is to assess this
profitability by considering quantifiable factors like greater expected variation in expected cashflows,
tax shields and differentiated financial structure of the underlying investment which may greatly vary
from the parent company and its other cross- ..

The adjusted present value (APV) approach is a method for calculating the value of a company or
project by taking into account the effects of debt financing. The APV approach is useful for
companies with a fixed debt schedule, or for companies that are highly leveraged, financially
distressed, or have dynamic capital structures.

Here are the steps for calculating APV:

1. 1. Prepare forecasted cash flows

Estimate the future cash flows for the investment, either for the life of the investment or for a
specific period of time.

2. 2. Determine the terminal value

Identify the perpetual cash flows at the end of the forecasted period.

3. 3. Discount cash flows and terminal value

Use an appropriate discount rate to calculate the present value of the cash flows and terminal value.

4. 4. Evaluate the net side effects

Calculate the side effects of using debt, such as the interest tax shield, which is the tax savings from
deducting interest payments on debt.

5. 5. Summarize the present values

Add the present value of the unlevered firm to the present value of the net effects of debt to get the
APV.
International Cash Management, techniques: Some techniques for international cash management
include:

• Cash flow forecasting

Create a forecast of anticipated cash inflows and outflows over a set period. This helps businesses
plan for cash needs, identify potential shortfalls, and make budgeting decisions.

• Liquidity management

Netting and cash pooling are two core liquidity management techniques. Netting reduces the
transfer of funds between companies by settling them to a net amount.

• Working capital management

Control the components of working capital, which are trade receivables, trade payables, and
inventories. This ensures the company has sufficient liquidity.

• Cash flow optimization

Balance cash inflows and outflows through financial forecasting and precise planning. This is essential
for uninterrupted business operations.

• Risk management

Use treasury management services to identify and mitigate financial risks. This protects organizations
from volatile market conditions and unforeseen events.

Cash management is important for a company's financial stability. It helps companies make
calculated financial decisions and effectively use available funds.

Centralised Vs Decentralised: Centralized and decentralized are two different approaches to

organizational control and decision-making:

• Centralized

In a centralized organization, decision-making power is concentrated at the top of the hierarchy. This
structure can lead to efficiency, coordination, and uniformity. However, it can also stifle innovation and
agility, and make the organization less responsive to external pressures.

• Decentralized

In a decentralized organization, decision-making power is distributed across multiple individuals or

teams. This structure can lead to flexibility, innovation, and local autonomy. However, it can also lead to
a lack of coordination and consistency.

Some advantages of centralized organizations include: Clear chain of command, Focused vision,
Reduced costs, Quick implementation, and Improved quality of work.

Some advantages of decentralized organizations include: increased innovation and opportunities,

improved customer satisfaction, enhanced overall performance, cross-collaboration, and more
professional development opportunities.
Some say that the best approach is to combine the strengths of both centralized and decentralized
organizations. This can allow top leadership to maintain strategic oversight while empowering teams to
adapt and execute locally.
 BUS 3.6.F (R22): BASICS OF TAXATION

Financial management

UNIT-I: Basic concept of Taxation; Background, distinction between

Capital and Revenue Receipts and Expenditure. Treatment of agricultural
income. Residential Status and incidence of tax.
UNIT-II: Heads of Income; Salaries- income from house property, Income
and Gain from business or profession, capital gains, income from other
sources.
UNIT III: Clubbing up of income - Aggregation of Income and set off and
carry forward of losses, deductions from gross total income, Rebates and
Relief’s and Rates of Taxes and computation of total income and tax liability.
UNIT IV: Assessment of Individuals, HUF, Firms & Association of Persons.
UNIT V: Basic concept of Taxation; Assessment procedure, refunds,
penalties and appeals and revisions. Tax Administration; Income Tax
Authorities Provisions concerning procedure for Filing returns, signatures,
E-Filing, Assessment, Reassessment and settlement of causes, Special
procedure for Assessment of search cases, E – Commerce Transactions,
Liability in special cases, Collection and recovery of tax.

UNIT-I: Basic concept of Taxation; Background, distinction between

Capital and Revenue Receipts and Expenditure. Treatment of agricultural
income. Residential Status and incidence of tax.

Basic concept of Taxation: It is levied on the annual income or the profit

made. It is paid directly to the government. If your income is above the
exemption limit, you have to pay income tax. If your age is below 60 years,
the tax exemption limit is ₹2.5 lakh, and for senior citizens, it is ₹3 lakh.

Distinction between Capital and Revenue Receipts and Expenditure:

Capital receipts and expenditures are used for long-term investments, while
revenue receipts and expenditures are used for day-to-day expenses:
• Capital receipts
These are funds received from the sale of long-term assets, investments, or
borrowings. They are used to acquire or improve long-term assets, such as
property or equipment. Capital receipts are shown on the liabilities side of
 the balance sheet.
• Revenue receipts
These are funds received from the normal operations of a business, such as
sales or services. They are used to cover the day-to-day expenses of the
business. Revenue receipts are shown at the credit side of the balance sheet.
• Capital expenditures
These are non-recurring expenditures that are incurred to get long-term
benefits, such as the construction or acquisition of fixed assets. Capital
expenditures can have a long-term impact on a company's financial
statements and profitability.
• Revenue expenditures
These are recurring expenditures that are incurred during the course of a
business's operations, such as rent, salaries, and wages. Revenue
expenditures typically affect a company's profitability and cash flow in the
short term

Treatment of agricultural income:

According to the Income Tax Act, income from agriculture is excluded from
income tax and does not count towards the total amount of income used to
determine the tax due. Section 10(1) exempts agricultural income from
taxation

Residential Status and incidence of tax:

Residential status plays a crucial role in determining the incidence of tax.
Here's a breakdown:

Types of Residential Status

1. Resident: An individual who has been residing in a country for a specified

period, usually 183 days or more in a financial year.
2. Non-Resident: An individual who does not meet the residency criteria.
3. Resident but Not Ordinarily Resident (RNOR): An individual who is a
resident but has not been residing in the country for a specified period
(usually 2 years or more).
4. Not Ordinarily Resident (NOR): An individual who is not a resident and
has not been residing in the country for a specified period.
Incidence of Tax

1. Resident: Taxed on global income, including income earned outside the

country.
2. Non-Resident: Taxed only on income earned within the country.
3. RNOR: Taxed on global income, but with some exemptions.
4. NOR: Taxed only on income earned within the country, with some
exemptions.

Tax Implications

1. Tax Residency: Determines which country has the right to tax an

individual's income.
2. Double Taxation: Occurs when an individual is taxed on the same income
in two countries.
3. Tax Credits: Available to individuals who have paid taxes in another
country.
4. Tax Planning: Important for individuals with complex residential status to
minimize tax liability.

UNIT-II: Heads of Income; Salaries- income from house property, Income

and Gain from business or profession, capital gains, income from other
sources.

Heads of Income: Heads of Income are categories under which income is

classified for tax purposes. The following are the main Heads of Income:

Heads of Income

1. Salaries: Income earned from employment, including wages, bonuses, and

allowances.
2. Income from House Property: Rental income earned from letting out a
house or property.
3. Profits and Gains of Business or Profession: Income earned from carrying
on a business or profession, including profits and gains.
4. Capital Gains: Income earned from the sale of capital assets, such as
shares, property, or investments.
5. Income from Other Sources: Income that does not fall under any of the
above heads, such as interest, dividends, and royalties.

Importance of Heads of Income

1. Tax Calculation: Heads of Income help in calculating tax liability.

2. Tax Deductions: Certain deductions are allowed under specific Heads of
Income.
3. Tax Exemptions: Certain incomes are exempt from tax under specific
Heads of Income.
4. Record Keeping: Heads of Income help in maintaining accurate records
of income and expenses.
Salaries- income from house property: Salaries

1. Definition: Income earned from employment, including wages, bonuses,

and allowances.
2. Components: Basic salary, dearness allowance, house rent allowance,
conveyance allowance, and other allowances.
3. Taxation: Taxed under the head "Salaries" in the income tax return.
4. Deductions: Eligible for deductions like standard deduction, house rent
allowance, and conveyance allowance.

Income from House Property

1. Definition: Rental income earned from letting out a house or property.

2. Components: Gross rent, municipal taxes, and other expenses.
3. Taxation: Taxed under the head "Income from House Property" in the
income tax return.
4. Deductions: Eligible for deductions like municipal taxes, interest on home
loan, and standard deduction.

Key Differences

1. Source: Salaries are earned from employment, while income from house
property is earned from renting out a property.
2. Tax Calculation: Salaries are taxed based on the income tax slab, while
income from house property is taxed based on the annual value of the
property.
3. Deductions: Salaries have different deductions available compared to
income from house property.

Income and Gain from business or profession: Here's an overview of

Income and Gain from Business or Profession:

Definition

Income and Gain from Business or Profession refers to the profits and gains
earned from carrying on a business or profession.

Types of Business Income

1. Manufacturing and Trading: Income from manufacturing and trading

goods.
2. Service Industry: Income from providing services, such as consulting,
healthcare, and hospitality.
3. Professionals: Income earned by professionals, such as doctors, lawyers,
and architects.

Allowable Deductions

1. Rent and Utilities: Rent and utility expenses for business premises.
2. Salaries and Wages: Salaries and wages paid to employees.
3. Travel and Conveyance: Travel and conveyance expenses for business
purposes.
4. Depreciation: Depreciation on business assets, such as equipment and
vehicles.
5. Interest on Business Loans: Interest paid on loans taken for business
purposes.

Taxation

1. Tax Rates: Tax rates applicable to business income vary based on the tax
slab.
2. Tax Audit: Businesses with turnover exceeding a certain limit are required
to undergo a tax audit.

capital gains, income from other sources: Here's an overview of Capital

Gains and Income from Other Sources:

Capital Gains

1. Definition: Profit earned from the sale of a capital asset, such as shares,
property, or investments.
2. Types of Capital Gains:
1. Short-Term Capital Gains: Gains from assets held for less than 3 years
(12 months for shares).
2. Long-Term Capital Gains: Gains from assets held for 3 years or more
(12 months for shares).
3. Taxation:
1. Short-Term Capital Gains: Taxed as ordinary income.
2. Long-Term Capital Gains: Taxed at a lower rate, often with indexation
benefits.
4. Exemptions:
1. Exemption from Long-Term Capital Gains: Available for certain assets,
such as residential property, if the gains are reinvested in another eligible
asset.

Income from Other Sources

1. Definition: Income that does not fall under any other head of income, such
as salaries, business income, or capital gains.
2. Examples:
1. Interest Income: Interest earned from deposits, bonds, or other
investments.
2. Dividend Income: Dividends received from shares or mutual funds.
3. Royalty Income: Income earned from intellectual property, such as
patents or copyrights.
4. Rent from Sub-Letting: Rent earned from sub-letting a property.
3. Taxation: Taxed as ordinary income, with deductions available for
expenses related to earning the income.
4. Exemptions: Certain types of income, such as interest income from tax-
free bonds, may be exempt from tax.

UNIT III: Clubbing up of income - Aggregation of Income and set off and
carry forward of losses, deductions from gross total income, Rebates and
Relief’s and Rates of Taxes and computation of total income and tax liability.

Clubbing up of income : Clubbing of income refers to the process of

combining the income of different individuals or entities for tax purposes.
This is done to prevent tax evasion and ensure that individuals do not avoid
paying taxes by transferring income to others.

Types of Clubbing of Income

1. Clubbing of Spouse's Income: Income earned by a spouse may be clubbed

with the income of the other spouse, unless the spouse earning the income is
assessed to tax separately.
2. Clubbing of Minor's Income: Income earned by a minor child may be
clubbed with the income of the parent, unless the minor is assessed to tax
separately.
3. Clubbing of Income of Association of Persons (AOP) or Body of
Individuals (BOI): Income earned by an AOP or BOI may be clubbed with
the income of its members.
Provisions for Clubbing of Income

1. Section 64 of the Income-tax Act: Deals with the clubbing of income of

spouses, minor children, and AOPs/BOIs.
2. Section 65 of the Income-tax Act: Deals with the clubbing of income of
partners in a partnership firm.

Implications of Clubbing of Income

1. Increased Tax Liability: Clubbing of income can result in a higher tax

liability for the individual or entity whose income is being clubbed.
2. Loss of Tax Benefits: Clubbing of income can result in the loss of tax
benefits, such as deductions and exemptions, that would have been available
to the individual or entity whose income is being clubbed.

Exceptions to Clubbing of Income

1. Income earned by a minor child from manual work: Not clubbed with the
income of the parent.
2. Income earned by a spouse from a business or profession: Not clubbed
with the income of the other spouse, if the spouse earning the income is
assessed to tax separately.

Aggregation of Income and set off and carry forward of losses: Here's an
overview of Aggregation of Income, Set Off of Losses, and Carry Forward
of Losses:

Aggregation of Income

1. Definition: Aggregation of income refers to the process of combining all

the incomes of an individual or entity from various sources to calculate the
total income.
2. Sources of Income: Includes income from salaries, business or profession,
capital gains, income from other sources, and income from house property.
3. Aggregation Process: Involves adding up all the incomes from different
sources, allowing for deductions and exemptions, and calculating the total
income.

Set Off of Losses

1. Definition: Set off of losses refers to the process of adjusting losses from
one source of income against profits from another source of income.
2. Types of Losses: Includes business losses, capital losses, and losses from
house property.
3. Set Off Process: Involves adjusting the losses against the profits from
other sources of income, subject to certain conditions and limitations.

Carry Forward of Losses

1. Definition: Carry forward of losses refers to the process of carrying

forward unadjusted losses from one financial year to the next financial year.
2. Types of Losses: Includes business losses, capital losses, and losses from
house property.
3. Carry Forward Process: Involves carrying forward the unadjusted losses
to the next financial year, subject to certain conditions and limitations.

Key Provisions

1. Section 70 of the Income-tax Act: Deals with the set off of losses from
one source of income against profits from another source of income.
2. Section 71 of the Income-tax Act: Deals with the carry forward of losses
from one financial year to the next financial year.
3. Section 72 of the Income-tax Act: Deals with the carry forward and set off
of business losses.

Important Points
1. Losses can be set off against profits: From other sources of income, subject
to certain conditions and limitations.
2. Unadjusted losses can be carried forward: To the next financial year,
subject to certain conditions and limitations.
3. Carry forward of losses is subject to certain conditions: Such as the
continuity of business, change in shareholding, and amalgamation or
demerger of companies.

Deductions from gross total income: Here are the deductions from Gross
Total Income:

Deductions under Chapter VI-A

1. Section 80C: Deduction for investment in specified instruments, such as:

- Life insurance premium
- Provident fund contribution
- Equity-linked savings scheme (ELSS)
- National Savings Certificate (NSC)
2. Section 80D: Deduction for medical insurance premium
3. Section 80E: Deduction for interest on education loan
4. Section 80G: Deduction for donations to specified charitable institutions
5. Section 80TTA: Deduction for interest on savings account

Other Deductions

1. Section 24: Deduction for interest on housing loan

2. Section 57: Deduction for expenses related to income from other sources
3. Section 80RRB: Deduction for royalty income from patents
4. Section 80U: Deduction for disability

Limits and Conditions

1. Aggregate limit: The aggregate deduction under Chapter VI-A is limited
to ₹1,50,000 (for FY 2022-23)
2. Lock-in period: Certain investments, such as ELSS, have a lock-in period
for availing deduction
3. Eligibility: Deductions are subject to eligibility criteria, such as age,
income level, and type of investment

Note: The deductions and limits mentioned above are subject to change and
may not be comprehensive. It's essential to consult the Income-tax Act ,
1961, and relevant notifications for accurate

Rebates and Relief’s and Rates of Taxes and computation of total

income and tax liability:

Rebates and Reliefs

1. Rebate under Section 87A: A rebate of up to ₹12,500 is available for

individuals with a taxable income of up to ₹5,00,000.
2. Relief under Section 89: Relief is available for individuals who have
received arrears of salary or pension.

Rates of Taxes

1. Income Tax Slabs: The income tax slabs for FY 2022-23 are as follows:
- 0%: Up to ₹2,50,000
- 5%: ₹2,50,001 to ₹5,00,000
- 10%: ₹5,00,001 to ₹7,50,000
- 15%: ₹7,50,001 to ₹10,00,000
- 20%: ₹10,00,001 to ₹12,50,000
- 25%: ₹12,50,001 to ₹15,00,000
- 30%: Above ₹15,00,000
2. Surcharge: A surcharge of 10% to 37% is applicable on taxable income
above ₹50,00,000.
3. Cess: A cess of 4% is applicable on the total tax liability.

Computation of Total Income and Tax Liability

1. Gross Total Income: The total income from all sources, including salaries,
business or profession, capital gains, and income from other sources.
2. Deductions: Deductions under Chapter VI-A, such as Section 80C,
Section 80D, and Section 80E.
3. Taxable Income: The gross total income minus deductions.
4. Tax Liability: The tax liability is calculated based on the taxable income
and the applicable tax rates.
5. Rebates and Reliefs: Rebates and reliefs, such as the rebate under Section
87A, are applied to the tax liability.

Note: The rates and slabs mentioned above are subject to change and may
not be comprehensive. It's essential to consult the Income-tax Act, 1961, and
relevant notifications for accurate information.

UNIT IV: Assessment of Individuals, HUF, Firms & Association of Persons

Assessment of Individuals: Assessment of Individuals refers to the process

of determining the tax liability of an individual taxpayer. Here's an overview:

Types of Assessments

1. Self-Assessment: Taxpayers calculate and pay their own taxes.

2. Regular Assessment: Tax authorities assess the taxpayer's income and tax
liability.
3. Best Judgment Assessment: Tax authorities assess the taxpayer's income
and tax liability based on available information.

Steps in Assessment of Individuals

1. Filing of Return: Taxpayer files their income tax return.
2. Verification: Tax authorities verify the return for accuracy and
completeness.
3. Assessment: Tax authorities assess the taxpayer's income and tax liability.
4. Demand Notice: Tax authorities issue a demand notice for any additional
tax due.
5. Payment of Tax: Taxpayer pays the tax due.

Forms and Documents

1. Form 16: Certificate of tax deducted at source.

2. Form 16A: Certificate of tax deducted at source for non-salary income.
3. Form ITR-1: Income tax return form for individuals.
4. Form ITR-2: Income tax return form for individuals with income from
business or profession.

Tax Authorities

1. Assessing Officer: Responsible for assessing the taxpayer's income and

tax liability.
2. Commissioner of Income Tax: Supervises the assessment process.
3. Income Tax Appellate Tribunal: Hears appeals against assessment orders.

Time Limit for Assessment

1. Normal Assessment: Within 12 months from the end of the financial year.
2. Re-Assessment: Within 6 months from the end of the financial year.

Penalties and Fines

1. Late Filing Fee: For late filing of income tax return.

2. Interest on Tax Due: For delayed payment of tax.
3. Penalty for Concealment: For concealing income or providing inaccurate
information.

HUF, Firms & Association of Persons: Here's an overview of HUF, Firms,

and Association of Persons (AOP) for tax purposes:

HUF (Hindu Undivided Family)

1. Definition: A HUF is a family unit that consists of a common ancestor and

all his lineal descendants.
2. Tax Status: A HUF is taxed as a separate entity from its members.
3. Income: Income earned by the HUF is taxed in the hands of the HUF.
4. Deductions: Deductions available to a HUF are similar to those available to
individuals.

Firms

1. Definition: A firm is a business organization that is owned and controlled

by two or more individuals.
2. Tax Status: A firm is taxed as a separate entity from its partners.
3. Income: Income earned by the firm is taxed in the hands of the firm.
4. Deductions: Deductions available to a firm are similar to those available to
businesses.

Association of Persons (AOP)

1. Definition: An AOP is a group of individuals who come together for a

common purpose, such as to carry on a business or to earn income.
2. Tax Status: An AOP is taxed as a separate entity from its members.
3. Income: Income earned by the AOP is taxed in the hands of the AOP.
4. Deductions: Deductions available to an AOP are similar to those available
to businesses.
Taxation of HUF, Firms, and AOP

1. Tax Rates: The tax rates applicable to HUF, firms, and AOP are the same
as those applicable to businesses.
2. Tax Audit: HUF, firms, and AOP are required to undergo a tax audit if their
turnover exceeds a certain limit.
3. Tax Return: HUF, firms, and AOP are required to file a tax return if their
income exceeds a certain limit.

UNIT V: Basic concept of Taxation; Assessment procedure, refunds,

penalties and appeals and revisions. Tax Administration; Income Tax
Authorities Provisions concerning procedure for Filing returns, signatures,
E-Filing, Assessment, Reassessment and settlement of causes, Special
procedure for Assessment of search cases, E – Commerce Transactions,
Liability in special cases, Collection and recovery of tax.

Basic concept of Taxation: Here are the basic concepts of taxation:

Principles of Taxation

1. Canons of Taxation: Adam Smith's principles of taxation, which include

equity, certainty, convenience, and economy.
2. Taxability: The ability of a government to impose taxes on its citizens.
3. Tax Base: The income, property, or transaction that is subject to taxation.

Types of Taxes

1. Direct Taxes: Taxes levied directly on individuals or businesses, such as

income tax, wealth tax, and property tax.
2. Indirect Taxes: Taxes levied on goods and services, such as sales tax,
value-added tax (VAT), and excise tax.
Tax Structure

1. Progressive Taxation: A tax system in which higher income earners are

taxed at a higher rate.
2. Proportional Taxation: A tax system in which all income earners are taxed
at the same rate.
3. Regressive Taxation: A tax system in which lower income earners are
taxed at a higher rate.

Tax Administration

1. Tax Laws: The laws that govern taxation, such as the Income-tax Act.
2. Tax Authorities: The government agencies responsible for administering
taxes, such as the Income Tax Department.
3. Tax Returns: The forms used to report income and pay taxes.

Tax Planning

1. Tax Avoidance: The use of legal methods to minimize tax liability.

2. Tax Evasion: The use of illegal methods to avoid paying taxes.
3. Tax Compliance: The act of following tax laws and regulations.

Assessment procedure, refunds, penalties and appeals and revisions:

Assessment Procedure

1. Filing of Return: Taxpayer files their income tax return.

2. Verification: Tax authorities verify the return for accuracy and
completeness.
3. Assessment: Tax authorities assess the taxpayer's income and tax liability.
4. Demand Notice: Tax authorities issue a demand notice for any additional
tax due.
5. Payment of Tax: Taxpayer pays the tax due.
Refunds

1. Refund Due: If the taxpayer has paid more tax than their liability, they are
eligible for a refund.
2. Refund Claim: Taxpayer files a refund claim with the tax authorities.
3. Refund Processing: Tax authorities process the refund claim and issue a
refund.

Penalties

1. Late Filing Fee: Penalty for late filing of income tax return.
2. Interest on Tax Due: Interest on delayed payment of tax.
3. Penalty for Concealment: Penalty for concealing income or providing
inaccurate information.

Appeals

1. First Appeal: Taxpayer can appeal to the Commissioner of Income Tax

(Appeals) against an assessment order.
2. Second Appeal: Taxpayer can appeal to the Income Tax Appellate
Tribunal (ITAT) against the order of the Commissioner of Income Tax
(Appeals).
3. Third Appeal: Taxpayer can appeal to the High Court against the order of
the ITAT.

Revisions

1. Revision by Commissioner: Commissioner of Income Tax can revise an

assessment order if it is found to be erroneous.
2. Revision by Tax Authorities: Tax authorities can revise an assessment
order if new information becomes available.
3. Revision by Taxpayer: Taxpayer can request a revision of an assessment
order if they believe it is incorrect.

Tax Administration: Here's an overview of Tax Administration:

Tax Authorities

1. Central Board of Direct Taxes (CBDT): The apex body responsible for
administering direct taxes in India.
2. Central Board of Indirect Taxes and Customs (CBIC): The apex body
responsible for administering indirect taxes and customs in India.
3. Income Tax Department: Responsible for administering income tax,
wealth tax, and other direct taxes.
4. Goods and Services Tax (GST) Council: Responsible for administering
GST.

Tax Laws

1. Income-tax Act, 1961: The primary law governing income tax in India.
2. Goods and Services Tax (GST) Act, 2017: The primary law governing
GST in India.
3. Customs Act, 1962: The primary law governing customs in India.

Tax Procedures

1. Tax Registration: Taxpayers must register with the tax authorities to

obtain a unique identification number.
2. Tax Returns: Taxpayers must file tax returns to report their income and
pay taxes.
3. Tax Payments: Taxpayers must pay taxes on time to avoid penalties and
interest.
4. Tax Audits: Tax authorities may conduct audits to ensure taxpayers are
complying with tax laws.
Taxpayer Services

1. Taxpayer Assistance Centers: Tax authorities provide assistance centers

to help taxpayers with tax-related queries.
2. Online Tax Filing: Taxpayers can file tax returns online through the tax
authority's website.
3. Taxpayer Education: Tax authorities provide education and outreach
programs to help taxpayers understand tax laws and procedures.

Income Tax Authorities Provisions concerning procedure for Filing

returns, signatures, E-Filing, Assessment, Reassessment and settlement
of causes, Special procedure for Assessment of search cases, E –
Commerce Transactions, Liability in special cases, Collection and
recovery of tax:
Income Tax Authorities

1. Central Board of Direct Taxes (CBDT): The apex body responsible for
administering direct taxes in India.
2. Director General of Income Tax (DGIT): Responsible for supervising the
work of Chief Commissioners and Commissioners of Income Tax.
3. Chief Commissioner of Income Tax (CCIT): Responsible for
administering income tax in a region.
4. Commissioner of Income Tax (CIT): Responsible for administering
income tax in a region.
5. Assessing Officer (AO): Responsible for assessing the income tax liability
of taxpayers.

Procedure for Filing Returns

1. Form and Manner of Return: Taxpayers must file returns in the prescribed
form and manner.
2. Due Date for Filing Returns: Taxpayers must file returns by the due date,
which is typically July 31st for individuals.
3. Signature: Returns must be signed by the taxpayer or their authorized
representative.
4. E-Filing: Taxpayers can file returns electronically through the income tax
department's website.

Assessment

1. Scrutiny Assessment: The Assessing Officer scrutinizes the return to

ensure accuracy and completeness.
2. Regular Assessment: The Assessing Officer makes a regular assessment
of the taxpayer's income tax liability.
3. Reassessment: The Assessing Officer can reassess the taxpayer's income
tax liability if new information becomes available.

Reassessment and Settlement of Cases

1. Reopening of Assessment: The Assessing Officer can reopen an

assessment if new information becomes available.
2. Settlement Commission: Taxpayers can approach the Settlement
Commission to settle their tax liability.
3. Advance Ruling: Taxpayers can obtain an advance ruling from the
Authority for Advance Rulings (AAR) on their tax liability.

Special Procedure for Assessment of Search Cases

1. Search and Seizure: The income tax department can conduct searches and
seizures to gather evidence of tax evasion.
2. Special Assessment: The Assessing Officer can make a special assessment
of the taxpayer's income tax liability in search cases.

E-Commerce Transactions

1. Tax Deduction at Source (TDS): E-commerce operators must deduct TDS

on payments made to sellers.
2. Tax Collection at Source (TCS): E-commerce operators must collect TCS
on sales made through their platform.

Liability in Special Cases

1. Liability of Representatives: Representatives of a taxpayer, such as

executors or administrators, can be held liable for the taxpayer's tax liability.
2. Liability of Successors: Successors of a taxpayer, such as heirs or
assignees, can be held liable for the taxpayer's tax liability.

Collection and Recovery of Tax

1. Tax Demand: The Assessing Officer can issue a tax demand to the
taxpayer if they fail to pay their tax liability.
2. Recovery of Tax: The income tax department can recover tax through
various modes, such as attachment of assets or arrest of the taxpayer.
 BUSINESS ANALYTICS SPECIALIZATION
BUS 3.4.BA (R22): INTRODUCTION TO BUSINESS
ANALYTICS TOOLS

Unit I: What is Business Analytics?- How Business Analytics Works -

Components of Business Analytics - 1. Data Aggregation 2. Data Mining 3.
Association & Sequence Identification 4. Text Mining 5. Forecasting 6.
Predictive Analytics 7. Optimization 8. Data Visualisation- Types of
Business Analytics: 1. Descriptive Analysis 2. Diagnostic Analysis 3.
Predictive Analysis 4. Prescriptive Analysis
Unit-II: Automated Data Analysis: SPSS Applications – Tabulation and
Cross Tabulation of Data: Univariate, Bivariate Data Analysis and Tests of
Hypothesis.
Unit-III: Multivariate Analysis: Advanced Techniques for Data Analysis:
ANOVA, Discriminate Analysis, Factor Analysis, Conjoint Analysis,
Multidimensional Scaling and Clustering Techniques, Report Writing.
Unit-IV: Business Analytics: Evolution - Business Analytics as Solution for
Business Challenges - Master Data Management: Data Warehousing and
kinds of Architecture – Data Extraction – Transformation and Up-loading of
Data – Data Mining – Meta Data – Data Marts – Concept of Creating Data
Marts – Data Integration – Concept of OLTP and OLAP.
Unit-V: Business Analytics tools: 1. Excel 2. SAS 3. Microsoft Power BI 4. Tableau
5. Qlik
Sense 6. Splunk 7. Micro Strategy 8. Sisense 9. Board 10. Domo.
Benefits/Importance of Business Analytics, Uses/Application of Business
Analytics
 Unit I: What is Business Analytics?- How Business Analytics Works -
Components of Business Analytics - 1. Data Aggregation 2. Data Mining 3.
Association & Sequence Identification 4. Text Mining 5. Forecasting 6.
Predictive Analytics 7. Optimization 8. Data Visualisation- Types of
Business Analytics: 1. Descriptive Analysis 2. Diagnostic Analysis 3.
Predictive Analysis 4. Prescriptive Analysis

What is Business Analytics?- How Business Analytics Works -

Components of Business Analytics:

Business analytics is the process of using data to improve business

decisions. It involves:
• Data collection
Gathering relevant business data from surveys, interviews, focus groups, and
more
• Data organization
Organizing, filtering, and storing data in a centralized location
• Data analysis
Using statistical analysis, predictive modeling, and data mining to identify
patterns, trends, and correlations
• Data visualization
Developing data visualizations to present findings and shape business
decisions
• Making decisions
Using insights from the data to make informed decisions that are backed by
evidence
Business analytics can help businesses:
• Uncover hidden opportunities
• Mitigate risks
• Learn from the past
• Predict future events
• Improve operations
• Solve business problems
• Monitor business fundamentals
• Identify new growth opportunities
• Better serve customers
Some components of business analytics include: Data sources, Extract and
load tools, Cloud data warehouse, Transformation tools, and Experience and
analytics layer.
 To do well in business analytics, you need to balance your technical
background with strong communication skills.

Data Aggregation 2. Data Mining 3. Association & Sequence Identification

4. Text Mining 5. Forecasting 6. Predictive Analytics 7. Optimization 8. Data
Visualisation-:

Data aggregation is a process that involves gathering and presenting data in a summarized
format to achieve specific business goals. Here are some other data-related topics:
• Data mining
A process that involves understanding data, preparing it, modeling it, evaluating it, and
implementing it in production. Some common data mining techniques include decision trees,
regression, clustering, classification, association rule mining, and neural networks.
• Data integration
A process that involves merging data from multiple sources into a single dataset. This
involves mapping data fields, resolving conflicts in data structure or format, and merging the
data based on common identifiers or keys.
• Anomaly detection
A process that involves finding outliers in a data set. Outliers are data objects that stand out
amongst other objects in the data set and do not conform to the normal behavior in a data set.
• Text mining
A process that involves deriving high-quality information from text. This involves
automatically extracting information from different written resources, such as websites,
books, emails, reviews, and articles.
• Data visualization
A practice that involves designing and creating easy-to-communicate and easy-to-understand
graphic or visual representations of a large amount of complex data and information.

Types of Business Analytics: 1. Descriptive Analysis 2. Diagnostic

Analysis 3. Predictive Analysis 4. Prescriptive Analysis: The four main
types of business analytics are:
• Descriptive analytics
Summarizes and describes past events to understand patterns, trends, and key
features. It's the most commonly used type of analytics and is the foundation of data
insights.
• Diagnostic analytics
Examines past performance to find causes and determine root causes. It's also known
as root cause analysis.
• Predictive analytics
Uses historical data and models to forecast future events. It's used to identify risks and
opportunities.
• Prescriptive analytics
Recommends specific actions based on data analysis. It's a valuable tool for data-
driven decision-making.
 Unit-II: Automated Data Analysis: SPSS Applications – Tabulation and
Cross Tabulation of Data: Univariate, Bivariate Data Analysis and Tests of
Hypothesis.

Automated Data Analysis: Automated data analysis is the use of computer systems to collect, process,
analyze, and visualize data without human intervention. It can be used to automate parts of a data
pipeline or the entire pipeline.
Automated data analysis can be faster, more accurate, and scalable than traditional data analysis. It
can also help businesses gain insights that might not be available otherwise.
Here are some examples of automated data analysis:
• Data collection: Creating a library of information to evaluate
• Business intelligence: Creating business intelligence metrics
• Dashboards: Tracking relevant information on one screen
• Machine-learning models: Creating statistical models for tracking changes in business
operations

SPSS Applications – Tabulation and Cross Tabulation of Data: To tabulate and cross-tabulate data in
SPSS, you can do the following:
1. Open the SPSS file
2. Select Analyze > Descriptive Statistics > Crosstabs
3. In the dialogue box, select the variables you want to use in the Rows and Columns boxes
4. Click OK
5. To calculate percentages, click Analyze, then Descriptive Statistics, then Crosstabs, then Cells
6. Under Percentage, select all three options:
o Row %
o Column %
o Total %:
Cross-tabulation is a simple way to group variables and summarize data. It can help eliminate
confusion and error when interpreting data, especially for small data sets. For example, an economist
might use cross-tabulation to determine if there is a relationship between gender and knowledge of a
particular economic concept.

Univariate, Bivariate Data Analysis and Tests of Hypothesis:.

Here's an overview of Univariate, Bivariate Data Analysis, and Tests of Hypothesis:

Univariate Data Analysis

1. Measures of Central Tendency: Mean, Median, Mode

2. Measures of Dispersion: Range, Variance, Standard Deviation
3. Skewness and Kurtosis: Measures of shape and tail of the distribution
4. Data Visualization: Histograms, Box Plots, Scatter Plots

Bivariate Data Analysis

1. Correlation Analysis: Measures the strength and direction of the relationship between two
variables (e.g., Pearson's r)
2. Regression Analysis: Models the relationship between two variables (e.g., Simple Linear
Regression)
3. Contingency Table Analysis: Analyzes the relationship between two categorical variables
(e.g., Chi-Square Test)

Tests of Hypothesis

1. Null and Alternative Hypotheses: Statements about the population parameter

2. Test Statistics and P-Values: Measures of the evidence against the null hypothesis
3. Type I and Type II Errors: Errors in rejecting or failing to reject the null hypothesis
4. Common Statistical Tests: Z-Test, T-Test, ANOVA, Chi-Square Test

Common Statistical Tests

1. Z-Test: Compares a sample mean to a known population mean

2. T -Test: Compares two means or a sample mean to a known population mean
3. ANOVA: Compares means across three or more groups
4. Chi-Square Test: Tests for independence between two categorical variables

Unit-III: Multivariate Analysis: Advanced Techniques for Data Analysis: ANOVA, Discriminate
Analysis, Factor Analysis, Conjoint Analysis, Multidimensional Scaling and Clustering Techniques,
Report Writing

Multivariate Analysis: Advanced Techniques for Data Analysis: Here's an overview of Multivariate
Analysis: Advanced Techniques for Data Analysis:

Types of Multivariate Analysis

1. Multiple Regression Analysis: Analyzes the relationship between multiple independent variables
and a single dependent variable.
2. Discriminant Analysis: Classifies observations into predefined categories based on multiple
variables.
3. Factor Analysis: Reduces the dimensionality of a dataset by identifying underlying factors.
4. Cluster Analysis: Groups similar observations into clusters.
5. Multidimensional Scaling (MDS): Visualizes the relationships between multiple variables.

Techniques

1. Principal Component Analysis (PCA): Reduces the dimensionality of a dataset by identifying

orthogonal components.
2. Canonical Correlation Analysis (CCA): Analyzes the relationship between multiple independent
variables and multiple dependent variables.
3. Multivariate Analysis of Variance (MANOVA): Compares means across multiple groups for
multiple dependent variables.
4. Conjoint Analysis: Measures the value of different attributes of a product or service.
5. Structural Equation Modeling (SEM): Analyzes the relationships between multiple variables and
latent constructs.

Applications

1. Market Research: Analyzes customer preferences and behavior.

2. Social Sciences: Analyzes relationships between variables in social sciences research.
3. Medical Research: Analyzes relationships between variables in medical research.
4. Finance: Analyzes relationships between variables in financial markets.
5. Engineering: Analyzes relationships between variables in engineering systems.

ANOVA (Analysis of Variance)

1. Definition: A statistical technique to compare means across three or more groups.

2. Types: One-way ANOVA, Two-way ANOVA, Repeated Measures ANOVA.
3. Assumptions: Normality, Homogeneity of Variance, Independence.
4. Applications: Comparing means across different groups, identifying significant
differences.

Discriminate Analysis

1. Definition: A statistical technique to classify observations into predefined categories based

on multiple variables.
2. Types: Linear Discriminate Analysis (LDA), Quadratic Discriminate Analysis (QDA).
3. Assumptions: Normality, Homogeneity of Variance, Independence.
4. Applications: Credit scoring, medical diagnosis, customer segmentation.

Factor Analysis

1. Definition: A statistical technique to reduce the dimensionality of a dataset by identifying

underlying factors.
2. Types: Exploratory Factor Analysis (EFA), Confirmatory Factor Analysis (CFA).
3. Assumptions: Normality, Linearity, Independence.
4. Applications: Identifying underlying constructs, reducing data dimensionality.

Conjoint Analysis

1. Definition: A statistical technique to measure the value of different attributes of a product

or service.
2. Types: Full Profile Conjoint, Choice-Based Conjoint.
3. Assumptions: Rationality, Consistency, Independence.
4. Applications: Product development, pricing, market segmentation.

Multidimensional Scaling (MDS)

1. Definition: A statistical technique to visualize the relationships between multiple variables.

2. Types: Metric MDS, Non-Metric MDS.
3. Assumptions: Interval or Ratio Data, Independence.
4. Applications: Market research, social network analysis, data visualization.

Clustering Techniques

1. Definition: A statistical technique to group similar observations into clusters.

2. Types: Hierarchical Clustering, K-Means Clustering.
3. Assumptions: Interval or Ratio Data, Independence.
4. Applications: Customer segmentation, gene expression analysis, image segmentation.

Report Writing
1. Purpose: To communicate research findings, results, and conclusions.
2. Structure: Introduction, Methodology, Results, Discussion, Conclusion.
3. Content: Clear and concise writing, proper headings and subheadings, tables and figures.
4. Style: Formal tone, proper citations and references.

Unit-IV: Business Analytics: Evolution - Business Analytics as Solution for Business Challenges -
Master Data Management: Data Warehousing and kinds of Architecture – Data Extraction –
Transformation and Up-loading of Data – Data Mining – Meta Data – Data Marts – Concept of
Creating Data Marts – Data Integration – Concept of OLTP and OLAP

Business Analytics: Evolution - Business Analytics as Solution for Business Challenges: Evolution of
Business Analytics

1. Descriptive Analytics (1960s-1980s): Focus on reporting and descriptive statistics to summarize

historical data.
2. Diagnostic Analytics (1990s-2000s): Focus on analyzing data to identify patterns and relationships.
3. Predictive Analytics (2000s-present): Focus on using statistical models and machine learning
algorithms to forecast future events.
4. Prescriptive Analytics (present): Focus on providing recommendations for optimal decision-
making.

Business Analytics as a Solution for Business Challenges

1. Data-Driven Decision-Making: Business analytics provides insights to support informed decision-

making.
2. Improved Operational Efficiency: Analytics helps optimize business processes, reducing costs and
improving productivity.
3. Enhanced Customer Experience: Analytics enables businesses to better understand customer
behavior and preferences.
4. Competitive Advantage: Businesses that leverage analytics effectively can gain a competitive edge
in their markets.
5. Risk Management: Analytics helps identify and mitigate potential risks, reducing the likelihood of
adverse events.

Key Business Analytics Techniques

1. Regression Analysis: Modeling relationships between variables to predict outcomes.

2. Decision Trees: Visualizing decision-making processes to identify optimal outcomes.
3. Cluster Analysis: Grouping similar data points to identify patterns and trends.
4. Neural Networks: Using machine learning algorithms to model complex relationships.
5. Text Analytics: Analyzing unstructured data, such as text and social media posts.

Benefits of Business Analytics

1. Improved Revenue: Analytics-driven insights can lead to increased revenue and profitability.
2. Cost Savings: Optimizing business processes and reducing waste can lead to significant cost
savings.
3. Enhanced Customer Satisfaction: Analytics enables businesses to better understand and meet
customer needs.
4. Competitive Advantage: Businesses that leverage analytics effectively can gain a sustainable
competitive edge.
5. Better Decision-Making: Analytics provides insights to support informed decision-making,
reducing the risk of adverse outcomes.
Master Data Management: Data Warehousing and kinds of Architecture: Master Data Management
(MDM)

1. Definition: MDM is a comprehensive approach to managing an organization's critical data assets.

2. Goals: Ensure data accuracy, consistency, and reliability across the enterprise.
3. Key Components: Data governance, data quality, data integration, and data analytics.

Data Warehousing

1. Definition: A data warehouse is a centralized repository that stores data from various sources.
2. Purpose: Support business intelligence, reporting, and analytics.
3. Key Characteristics: Integrated, time-variant, and non-volatile.

Kinds of Architecture

1. Data Warehouse Architecture

1. Single-Tier Architecture: A simple architecture with a single repository.

2. Two-Tier Architecture: Separates the data warehouse into two tiers: storage and access.
3. Three-Tier Architecture: Includes a presentation layer, application layer, and data layer.

2. Data Mart Architecture

1. Dependent Data Mart: A subset of the data warehouse, containing a specific set of data.
2. Independent Data Mart: A standalone repository, not dependent on the data warehouse.

3. Big Data Architecture

1. Hadoop Architecture: An open-source framework for storing and processing large datasets.
2. NoSQL Architecture: A non-relational database architecture, designed for handling large amounts
of unstructured data.

4. Cloud Architecture

1. Public Cloud: A cloud computing environment, open to the general public.

2. Private Cloud: A cloud computing environment, restricted to a single organization.
3. Hybrid Cloud: A cloud computing environment, combining public and private cloud services.

Data Extraction – Transformation and Up-loading of Data: Data Extraction

1. Definition: The process of retrieving data from various sources, such as databases, files, and
applications.
2. Methods: SQL queries, API calls, file imports, and manual data entry.
3. Sources: Relational databases, NoSQL databases, cloud storage, and external data providers.

Data Transformation

1. Definition: The process of converting extracted data into a standardized format for analysis and
reporting.
2. Types: Data cleaning, data aggregation, data merging, and data formatting.
3. Techniques: Data mapping, data validation, and data quality checks.

Data Loading
1. Definition: The process of loading transformed data into a target system, such as a data warehouse
or a database.
2. Methods: Bulk loading, incremental loading, and real-time loading.
3. Targets: Relational databases, NoSQL databases, data warehouses, and cloud storage.

ETL Tools

1. Informatica PowerCenter: A comprehensive ETL tool for data integration and data quality.
2. Microsoft SQL Server Integration Services (SSIS): A popular ETL tool for data integration and
data transformation.
3. Talend: An open-source ETL tool for data integration and data quality.
4. Apache NiFi: An open-source data integration tool for data extraction, transformation, and loading.

Best Practices

1. Data Quality: Ensure data accuracy, completeness, and consistency throughout the ETL process.
2. Data Security: Protect sensitive data during extraction, transformation, and loading.
3. Data Governance: Establish policies and procedures for data management and data quality.
4. Automation: Automate ETL processes to improve efficiency and reduce errors.

– Data Mining – Meta Data – Data Marts – Concept of Creating Data Marts – Data Integration:
Here's an overview of the topics:

Data Mining

1. Definition: The process of discovering patterns, relationships, and insights from large datasets.
2. Types: Predictive mining, descriptive mining, and prescriptive mining.
3. Techniques: Decision trees, clustering, regression, and neural networks.
4. Applications: Customer segmentation, fraud detection, and market basket analysis.

Meta Data

1. Definition: Data that provides information about other data, such as its structure, format, and
content.
2. Types: Structural metadata, descriptive metadata, and administrative metadata.
3. Importance: Improves data discovery, retrieval, and management.
4. Applications: Data warehousing, data governance, and data integration.

Data Marts

1. Definition: A subset of a data warehouse that contains a specific set of data, usually for a specific
business area or department.
2. Purpose: Provides fast and easy access to data for business intelligence and reporting.
3. Types: Dependent data mart, independent data mart, and hybrid data mart.
4. Benefits: Improved query performance, reduced data complexity, and enhanced business decision-
making.

Concept of Creating Data Marts

1. Identify Business Requirements: Determine the business needs and goals of the data mart.
2. Define Data Scope: Identify the specific data required for the data mart.
3. Design Data Model: Create a data model that meets the business requirements.
4. Populate Data: Load the data into the data mart.
5. Maintain and Update: Regularly update and maintain the data mart to ensure data freshness and
accuracy.
Data Integration

1. Definition: The process of combining data from multiple sources into a unified view.
2. Types: ETL (Extract, Transform, Load), ELT (Extract, Load, Transform), and real-time data
integration.
3. Techniques: Data mapping, data transformation, and data quality management.
4. Tools: Informatica, Microsoft SSIS, Talend, and Apache NiFi.
5. Benefits: Improved data consistency, reduced data redundancy, and enhanced business decision-
making.

Concept of OLTP and OLAP : Here's an overview of the concepts of OLTP and OLAP:

OLTP (Online Transactional Processing)

1. Definition: OLTP is a type of database system designed to handle high-volume transactions, such
as insert, update, and delete operations.
2. Characteristics: Fast query processing, high concurrency, and ACID (Atomicity, Consistency,
Isolation, Durability) compliance.
3. Examples: Banking systems, e-commerce platforms, and inventory management systems.
4. Key Features: Normalized database schema, indexing, and transaction logging.

OLAP (Online Analytical Processing)

1. Definition: OLAP is a type of database system designed to support business intelligence and data
analysis, enabling fast and efficient querying and analysis of data.
2. Characteristics: Fast query processing, multidimensional data analysis, and drill-down capabilities.
3. Examples: Business intelligence systems, data warehouses, and data marts.
4. Key Features: Denormalized database schema, data aggregation, and data summarization.

Key differences between OLTP and OLAP:

1. Purpose: OLTP is designed for transactional processing, while OLAP is designed for analytical
processing.
2. Data structure: OLTP uses normalized databases, while OLAP uses denormalized databases.
3. Query patterns: OLTP handles short, simple queries, while OLAP handles complex, analytical
queries.
4. Data volume: OLTP handles high-volume transactions, while OLAP handles large volumes of data
for analysis.

Unit-V: Business Analytics tools: 1. Excel 2. SAS 3. Microsoft Power BI 4. Tableau

5. Qlik
Sense 6. Splunk 7. Micro Strategy 8. Sisense 9. Board 10. Domo.
Benefits/Importance of Business Analytics, Uses/Application of Business
Analytics

Here's an overview of the Business Analytics tools and their benefits/importance:

Business Analytics Tools

1. Excel: A spreadsheet software for data analysis and visualization.

2. SAS: A comprehensive analytics platform for data management, reporting, and predictive
analytics.
3. Microsoft Power BI: A business analytics service for data visualization and business
intelligence.
4. Tableau: A data visualization tool for connecting to various data sources and creating
interactive dashboards.
5. Qlik Sense: A business intelligence platform for data analysis and visualization.
6. Splunk: A software platform for machine data analysis and visualization.
7. Micro Strategy: A business intelligence platform for data analysis and visualization.
8. Sisense: A business intelligence platform for data analysis and visualization.
9. Board: A business intelligence platform for data analysis and visualization.
10. Domo: A cloud-based business management platform for data integration and
visualization.

Benefits/Importance of Business Analytics

1. Improved Decision-Making: Business analytics provides insights that enable informed

decision-making.
2. Increased Efficiency: Automation and optimization of business processes through
analytics.
3. Enhanced Customer Experience: Personalized customer experiences through data-driven
insights.
4. Competitive Advantage: Businesses that leverage analytics effectively can gain a
competitive edge.
5. Risk Management: Analytics helps identify and mitigate potential risks.

Uses/Application of Business Analytics

1. Predictive Maintenance: Predicting equipment failures and scheduling maintenance.

2. Customer Segmentation: Identifying and targeting specific customer groups.
3. Supply Chain Optimization: Optimizing supply chain operations through data analysis.
4. Financial Forecasting: Predicting future financial performance through analytics.
5. Marketing Automation: Automating marketing processes through data-driven insights.
6. HR Analytics: Analyzing HR data to improve employee engagement and retention.
7. Healthcare Analytics: Analyzing healthcare data to improve patient outcomes and reduce
costs.
8. Retail Analytics: Analyzing retail data to improve customer experience and increase sales.
 BUSINESS ANALYTICS SPECIALIZATION

BUS 3.5.BA (R22): DATA VISUALIZATION & PREDICTIVE

ANALYSIS

Unit-I: Data visualization- Definition- key purposes - Types of data

visualizations: Tables- Pie charts and stacked bar charts- Line charts and area
charts- Histograms- Scatter plots- Heat maps- Tree maps; Advantages and
disadvantages of data visualization- importance of Data visualization and big
data- Data visualization examples. Most Popular Open Source Visualization
Libraries: D3.Js- Echarts- Vega- Deck.gl- Data visualization best practices.
Unit- II: Tools and software of data visualization: Best Data Visualization
Tools:Tableau - Looker -Zoho Analytics - Sisense - IBM Cognos Analytics
- Qlik Sense – Domo - Microsoft Power BIMN - Klipfolio - SAP Analytics
Cloud - Yellowfin – Whatagraph.
Unit-III: Predictive Analysis: Definition – Uses of Predictive Analysis -
Types of Predictive Analysis Models: Linear Regression - Random Forests
- Neural Networks - Predictive Analysis Tools: Rapid Miner Studio –
KNIME - IBM Predictive Analytics - SAP Predictive Analytics; Predictive
Analysis Examples: Financial Markets - Supply Chains
Unit-IV: Predictive Analysis Structure - Classification Algorithms - Predictive Analytics
Techniques - Algorithms in Predictive Analysis: Linear Regression - Logistic Regression -
Neural Network - Decision Trees - Naive Bayes; Applications of Predictive Analysis: Fraud
Detection - Health Care - Customer Targeting - Sales Forecasting - Assessing Risk -
Predictive Analytics vs Statistics - Predictive Analytics vs Data Mining

Unit-V: Predictive Forecasting – Forecasting - Predictive Forecasting - Key

Features of Predictive Forecasting - Forecasting vs Predictive Forecasting -
Predictive Forecasting vs Predictive Analytics - Top Predictive Forecasting
Tools: IBM Watson Studio - Power BI *
RapidMiner Studio – SAS - Use of Predictive Forecasting Tools: Demand
Prediction - Inventory Management - Identifying Growth Drivers -
Workforce Planning - Benefits of Predictive Forecasting.

Unit-I: Data visualization- Definition- key purposes - Types of data

visualizations: Tables- Pie charts and stacked bar charts- Line charts and area
charts- Histograms- Scatter plots- Heat maps- Tree maps; Advantages and
disadvantages of data visualization- importance of Data visualization and big
data- Data visualization examples. Most Popular Open Source Visualization
Libraries: D3.Js- Echarts- Vega- Deck.gl- Data visualization best practices

Here's an overview of data visualization:

Definition and Key Purposes

- Definition: Data visualization is the process of creating graphical

representations of data to better understand and communicate insights.
- Key Purposes:
1. To communicate complex data insights effectively
2. To facilitate data exploration and discovery
3. To support decision-making

Types of Data Visualizations

1. Tables: Used to display detailed data in a structured format

2. Pie Charts and Stacked Bar Charts: Used to show proportional
relationships between categories
3. Line Charts and Area Charts: Used to display trends and patterns over
time
4. Histograms: Used to show the distribution of continuous data
5. Scatter Plots: Used to visualize relationships between two continuous
variables
6. Heat Maps: Used to display relationships between two categorical
variables
7. Tree Maps: Used to display hierarchical data

Advantages and Disadvantages of Data Visualization

Advantages:
1. Improved understanding: Data visualization helps to communicate
complex data insights effectively
2. Faster decision-making: Data visualization facilitates data exploration
and discovery, supporting decision-making
3. Enhanced engagement: Data visualization can make data more engaging
and accessible to a wider audience

Disadvantages:

1. Misinterpretation: Data visualization can be misinterpreted if not

designed carefully
2. Information overload: Data visualization can be overwhelming if too
much data is displayed
3. Technical requirements: Data visualization requires technical expertise
and specialized tools

Importance of Data Visualization and Big Data

1. Big data insights: Data visualization helps to uncover insights from large
and complex datasets
2. Communicating complexity: Data visualization facilitates the
communication of complex data insights to non-technical stakeholders
3. Supporting decision-making: Data visualization supports decision-
making by providing actionable insights

Data Visualization Examples

1. Interactive dashboards: Used to display real-time data and support

decision-making
2. Storytelling with data: Used to communicate complex data insights
through narrative
3. Infographics: Used to display information in a visually engaging format
 Most Popular Open Source Visualization Libraries

1. D3.js: A JavaScript library for producing dynamic, interactive data

visualizations
2. ECharts: A comprehensive charting library for data visualization
3. Vega: A high-level visualization grammar for creating interactive data
visualizations
4. (link unavailable): A WebGL-based library for creating large-scale,
interactive data visualizations
5. Plotly: A popular library for creating interactive, web-based data
visualizations

Data Visualization Best Practices

1. Keep it simple: Avoid clutter and focus on communicating key insights

2. Use color effectively: Use color to draw attention and highlight important
information
3. Choose the right visualization: Select a visualization that effectively
communicates the data insights
4. Label and annotate: Provide clear labels and annotations to facilitate
understanding
5. Test and refine: Test the visualization with stakeholders and refine as needed

Unit- II: Tools and software of data visualization: Best Data Visualization Tools:Tableau -
Looker -Zoho Analytics - Sisense - IBM Cognos Analytics - Qlik Sense – Domo - Microsoft
Power BIMN - Klipfolio - SAP Analytics Cloud - Yellowfin – Whatagraph.

usiness Intelligence and Data Visualization Platforms

1. Tableau: A leading data visualization platform for creating interactive

dashboards.
2. Looker: A cloud-based business intelligence platform for data analysis
and visualization.
3. Qlik Sense: A business intelligence platform for data visualization and
analytics.
4. Sisense: A cloud-based business intelligence platform for data analysis
and visualization.
5. IBM Cognos Analytics: A business intelligence platform for data analysis
and visualization.

Cloud-Based Data Visualization Tools

1. Zoho Analytics: A cloud-based business intelligence platform for data

analysis and visualization.
2. Domo: A cloud-based business management platform for data integration
and visualization.
3. Klipfolio: A cloud-based dashboard platform for data visualization and
monitoring.
4. SAP Analytics Cloud: A cloud-based business intelligence platform for
data analysis and visualization.

Specialized Data Visualization Tools

1. Microsoft Power BI: A business analytics service for data visualization

and business intelligence.
2. Yellowfin: A business intelligence platform for data analysis and
visualization.
3. Whatagraph: A reporting and analytics platform for data visualization and
insights.

Key Features to Consider

1. Data Connectivity: Ability to connect to various data sources.

2. Data Visualization: Variety of visualization options and customization
capabilities.
3. Interactivity: Ability to interact with visualizations and drill down into
data.
 4. Collaboration: Ability to share visualizations and collaborate with others.
5. Security: Robust security features to protect sensitive data.
6. Scalability: Ability to handle large datasets and scale with growing needs.

Unit-III: Predictive Analysis: Definition – Uses of Predictive Analysis -

Types of Predictive Analysis Models: Linear Regression - Random Forests
- Neural Networks - Predictive Analysis Tools: Rapid Miner Studio –
KNIME - IBM Predictive Analytics - SAP Predictive Analytics; Predictive
Analysis Examples: Financial Markets - Supply Chains

Definition

Predictive analysis is a statistical technique used to predict future events or

behaviors based on historical data and statistical models.

Uses of Predictive Analysis

1. Risk Assessment: Identifying potential risks and opportunities.

2. Customer Behavior: Predicting customer behavior, such as churn or
purchase likelihood.
3. Financial Forecasting: Predicting financial outcomes, such as revenue or
stock prices.
4. Operational Optimization: Optimizing business processes, such as supply
chain management.

Types of Predictive Analysis Models

1. Linear Regression: A statistical model that predicts a continuous outcome

variable.
2. Random Forests: An ensemble learning method that combines multiple
decision trees.
3. Neural Networks: A machine learning model inspired by the human
brain.
 4. Decision Trees: A tree-like model that predicts an outcome based on a
series of decisions.

Predictive Analysis Tools

1. RapidMiner Studio: A data science platform for predictive analytics.

2. KNIME: An open-source data analytics platform.
3. IBM Predictive Analytics: A predictive analytics platform for business
users.
4. SAP Predictive Analytics: A predictive analytics platform for businesses.

Predictive Analysis Examples

1. Financial Markets: Predicting stock prices, credit risk, or portfolio

performance.
2. Supply Chains: Predicting demand, optimizing inventory, or identifying
potential disruptions.
3. Customer Relationship Management: Predicting customer churn,
purchase likelihood, or response to marketing campaigns.
4. Healthcare: Predicting patient outcomes, disease diagnosis, or treatment effectiveness.

Unit-IV: Predictive Analysis Structure - Classification Algorithms - Predictive Analytics

Techniques - Algorithms in Predictive Analysis: Linear Regression - Logistic Regression -
Neural Network - Decision Trees - Naive Bayes; Applications of Predictive Analysis: Fraud
Detection - Health Care - Customer Targeting - Sales Forecasting - Assessing Risk -
Predictive Analytics vs Statistics - Predictive Analytics vs Data Mining

Predictive Analysis Structure

1. Problem Definition: Define the problem or opportunity.

2. Data Collection: Gather relevant data.
3. Data Preparation: Clean, transform, and format data.
4. Model Development: Select and train a predictive model.
5. Model Evaluation: Evaluate the model's performance.
6. Deployment: Deploy the model in a production environment.
7. Monitoring and Maintenance: Monitor and maintain the model.

Classification Algorithms

1. Logistic Regression: A statistical model for binary classification.

2. Decision Trees: A tree-like model for classification and regression.
3. Random Forests: An ensemble learning method for classification and
regression.
4. Support Vector Machines (SVMs): A machine learning model for
classification and regression.
5. Neural Networks: A machine learning model inspired by the human
brain.

Predictive Analytics Techniques

1. Regression Analysis: A statistical method for predicting continuous

outcomes.
2. Time Series Analysis: A statistical method for forecasting future values.
3. Cluster Analysis: A statistical method for grouping similar data points.
4. Text Analytics: A method for extracting insights from unstructured text
data.
5. Machine Learning: A subset of artificial intelligence that enables
machines to learn from data.

Algorithms in Predictive Analysis

1. Linear Regression: A statistical model for predicting continuous

outcomes.
2. Logistic Regression: A statistical model for binary classification.
3. Neural Networks: A machine learning model inspired by the human
 brain.
4. Decision Trees: A tree-like model for classification and regression.
5. Naive Bayes: A probabilistic model for classification.

Applications of Predictive Analysis

1. Fraud Detection: Identifying potential fraudulent transactions.

2. Healthcare: Predicting patient outcomes, disease diagnosis, or treatment
effectiveness.
3. Customer Targeting: Identifying high-value customers or predicting
customer churn.
4. Sales Forecasting: Predicting future sales or revenue.
5. Assessing Risk: Identifying potential risks or opportunities.

Predictive Analytics vs Statistics

1. Focus: Predictive analytics focuses on predicting future outcomes, while

statistics focuses on understanding historical data.
2. Methods: Predictive analytics uses machine learning and data mining
techniques, while statistics uses traditional statistical methods.

Predictive Analytics vs Data Mining

1. Focus: Predictive analytics focuses on predicting future outcomes, while

data mining focuses on discovering patterns and relationships in data.
2. Methods: Predictive analytics uses machine learning and statistical techniques, while data
mining uses database querying and data visualization techniques.
 BUSINESS ANALYTICS SPECIALIZATION

BIG DATA ANALYTICS

Unit-I: Big data analytics: - Definition- key features of a big data analytics
solution types, History and Evolution of Big Data Analytics - How does Big
Data Analytics work? advantages of big data analytics, and its industrial
applications Values of Big Data Analytics
- Uses of Big Data analytics across different industries
Unit-II: Tools used in big data analytics: Hadoop –Spark - Data integration
software - Stream analytics tools- Distributed storage - Predictive analytics
hardware and software - Data mining tools - NoSQL databases - Data
warehouses.- Big data is characterized by 5 V’s: Variability, veracity,
Variety, Velocity, and Volume
Unit-III: Big Data skills: Analytics - Data Visualization - Knowledge of
Business Domains and Big Data tools - Programming- Problem-solving -
Structured Query Language (SQL) - Data Mining - Technical skills -
Knowledge of Public and Hybrid clouds - Working experience -
Responsibilities of Big Data professionals - challenges
Unit-IV: Big Data Applications: Government - Social Media Analytics –
Technology - Fraud detection -Call Center Analytics – Banking - Agriculture
– Marketing - Smart Phones – Telecom – Healthcare- Role of Big Data:
Unit-V: Application of Big Data to Indian Banking System - Challenges
faced by Banks - Risk Management - Fraud Detection - Customer
Satisfaction - Business Optimisation- Regulating Big Data - United States
-European Union – India
.

Unit-V: Application of Big Data to Indian Banking System - Challenges

faced by Banks - Risk Management - Fraud Detection - Customer
Satisfaction - Business Optimisation- Regulating Big Data - United States
-European Union – India

Here's an overview of the application of Big Data to the Indian Banking

System:

Application of Big Data to Indian Banking System

1. Risk Management: Big Data analytics helps banks to identify potential

risks and opportunities, enabling proactive risk management.
2. Fraud Detection: Big Data analytics enables banks to detect and prevent
fraudulent activities, reducing financial losses.
3. Customer Satisfaction: Big Data analytics helps banks to understand
customer behavior, preferences, and needs, enabling personalized services.
4. Business Optimization: Big Data analytics enables banks to optimize
business processes, improve operational efficiency, and reduce costs.
5. Compliance and Regulatory Reporting: Big Data analytics helps banks to
comply with regulatory requirements and submit accurate reports.

Challenges Faced by Banks

1. Data Quality and Integration: Banks face challenges in integrating data

from various sources and ensuring data quality.
2. Data Security and Privacy: Banks must ensure the security and privacy of
sensitive customer data.
3. Regulatory Compliance: Banks must comply with evolving regulatory
requirements and guidelines.
4. Infrastructure and Technology: Banks require significant investments in
infrastructure and technology to support Big Data analytics.
5. Talent and Skills: Banks face challenges in finding and retaining skilled
professionals with expertise in Big Data analytics.

Regulating Big Data

United States

1. General Data Protection Regulation (GDPR): Not applicable, but US

companies must comply with GDPR for EU customers.
2. Health Insurance Portability and Accountability Act (HIPAA): Regulates
healthcare data.
3. Gramm-Leach-Bliley Act (GLBA): Regulates financial institutions.

European Union

1. General Data Protection Regulation (GDPR): Regulates personal data

protection.
2. Payment Services Directive (PSD2): Regulates payment services and data
sharing.

India

1. Information Technology Act, 2000: Regulates electronic data and

cybersecurity.
2. Reserve Bank of India (RBI) Guidelines: Regulates banking and financial
institutions.
3. Personal Data Protection Bill, 2019: Proposed regulation for personal data
protection.

Key Takeaways

1. Big Data analytics has the potential to transform the Indian banking
system.
2. Banks face challenges in implementing Big Data analytics, including data
quality, security, and regulatory compliance.
3. Regulating Big Data is crucial to ensure data protection and privacy.
4. Banks must invest in infrastructure, technology, and talent to support Big
Data analytics Collaboration between banks, regulators, and technology
providers is essential to harness the benefits of Big Data analytics.

Unit-IV: Big Data Applications: Government - Social Media Analytics –

Technology - Fraud detection -Call Center Analytics – Banking - Agriculture
– Marketing - Smart Phones – Telecom – Healthcare- Role of Big Data

Here's an overview of Big Data applications across various industries:

Government

1. Public Safety: Analyzing crime patterns and emergency response times.

2. Economic Development: Tracking economic indicators and identifying
growth opportunities.
3. Healthcare: Analyzing public health trends and optimizing resource
allocation.
Social Media Analytics

1. Sentiment Analysis: Analyzing public opinion and sentiment on social

media.
2. Influencer Identification: Identifying influential individuals and
organizations on social media.
3. Campaign Optimization: Optimizing social media campaigns based on
analytics insights.

Technology

1. Product Development: Analyzing customer feedback and behavior to

inform product development.
2. Quality Assurance: Identifying and resolving software issues through data
analysis.
3. Customer Support: Providing personalized customer support through
data-driven insights.

Fraud Detection

1. Transaction Monitoring: Analyzing transaction data to detect suspicious

activity.
2. Identity Verification: Verifying identities through data analysis to prevent
fraud.
3. Predictive Modeling: Building predictive models to identify potential
fraud risks.

Call Center Analytics

1. Call Pattern Analysis: Analyzing call patterns to optimize call center

operations.
2. Customer Satisfaction: Analyzing customer feedback to improve
customer satisfaction.
3. Agent Performance: Evaluating agent performance through data analysis.

Banking
1. Risk Management: Analyzing customer data to identify potential risks.
2. Customer Segmentation: Segmenting customers based on behavior and
demographics.
3. Personalized Marketing: Providing personalized marketing offers based
on customer data.

Agriculture

1. Crop Yield Optimization: Analyzing weather and soil data to optimize

crop yields.
2. Precision Farming: Using data analysis to optimize farming practices.
3. Supply Chain Optimization: Optimizing supply chains through data
analysis.

Marketing

1. Customer Segmentation: Segmenting customers based on behavior and

demographics.
2. Personalized Marketing: Providing personalized marketing offers based
on customer data.
3. Campaign Optimization: Optimizing marketing campaigns based on
analytics insights.

Smart Phones

1. Usage Pattern Analysis: Analyzing usage patterns to optimize app

development.
2. Location-Based Services: Providing location-based services through data
analysis.
3. Personalized Recommendations: Providing personalized
recommendations based on user data.

Telecom

1. Network Optimization: Optimizing network performance through data

analysis.
2. Customer Churn Prediction: Predicting customer churn through data
analysis.
3. Personalized Services: Providing personalized services based on customer
data.

Healthcare

1. Patient Outcome Analysis: Analyzing patient outcomes to improve

healthcare quality.
2. Disease Diagnosis: Using data analysis to diagnose diseases more
accurately.
3. Personalized Medicine: Providing personalized treatment plans based on
patient data.

Role of Big Data

1. Improved Decision-Making: Big Data enables organizations to make data-

driven decisions.
2. Increased Efficiency: Big Data helps organizations optimize processes and
reduce costs.
3. Enhanced Customer Experience: Big Data enables organizations to
provide personalized customer experiences.
4. Competitive Advantage: Big Data provides organizations with a
competitive advantage through data-driven insights.

Unit-I: Big data analytics: - Definition- key features of a big data analytics
solution types, History and Evolution of Big Data Analytics - How does Big
Data Analytics work? advantages of big data analytics, and its industrial
applications Values of Big Data Analytics

Definition

Big Data Analytics is the process of examining large and complex data sets
to uncover hidden patterns, correlations, and insights.

Key Features of a Big Data Analytics Solution

1. Scalability: Ability to handle large volumes of data.

2. Flexibility: Ability to handle various data formats and sources.
3. Speed: Ability to process data in real-time or near real-time.
4. Advanced Analytics: Ability to perform advanced analytics such as
predictive analytics and machine learning.

Types of Big Data Analytics

1. Descriptive Analytics: Analyzing historical data to understand what

happened.
2. Diagnostic Analytics: Analyzing data to understand why something
happened.
3. Predictive Analytics: Analyzing data to predict what will happen.
4. Prescriptive Analytics: Analyzing data to recommend actions.

History and Evolution of Big Data Analytics

1. Early 2000s: Big Data Analytics emerged as a response to the growing

amount of data being generated.
2. 2010s: Big Data Analytics became more mainstream with the advent of
Hadoop and other Big Data technologies.
3. Present day: Big Data Analytics continues to evolve with the advent of new
technologies such as AI, machine learning, and cloud computing.

How Does Big Data Analytics Work?

1. Data Ingestion: Collecting data from various sources.

2. Data Processing: Processing data using various analytics techniques.
3. Data Analysis: Analyzing data to uncover insights.
4. Data Visualization: Visualizing data to communicate insights.

Advantages of Big Data Analytics

1. Improved Decision-Making: Big Data Analytics enables organizations to

make data-driven decisions.
2. Increased Efficiency: Big Data Analytics helps organizations optimize
processes and reduce costs.
3. Enhanced Customer Experience: Big Data Analytics enables organizations
to provide personalized customer experiences.
4. Competitive Advantage: Big Data Analytics provides organizations with a
competitive advantage through data-driven insights.
Industrial Applications of Big Data Analytics

1. Healthcare: Big Data Analytics is used in healthcare to improve patient

outcomes and reduce costs.
2. Finance: Big Data Analytics is used in finance to detect fraud and improve
risk management.
3. Retail: Big Data Analytics is used in retail to improve customer experience
and optimize supply chains.
4. Manufacturing: Big Data Analytics is used in manufacturing to improve
product quality and reduce costs.

Values of Big Data Analytics

1. Improved Operational Efficiency: Big Data Analytics helps organizations

optimize processes and reduce costs.
2. Enhanced Customer Experience: Big Data Analytics enables organizations
to provide personalized customer experiences.
3. Increased Revenue: Big Data Analytics helps organizations identify new
revenue streams and improve existing ones.
4. Competitive Advantage: Big Data Analytics provides organizations with a
competitive advantage through data-driven insights.

Unit-II: Tools used in big data analytics: Hadoop –Spark - Data integration
software - Stream analytics tools- Distributed storage - Predictive analytics
hardware and software - Data mining tools - NoSQL databases - Data
warehouses.- Big data is characterized by 5 V’s: Variability, veracity,
Variety, Velocity, and Volume
ools Used in Big Data Analytics

1. Hadoop: An open-source framework for storing and processing large

datasets.
2. Spark: An open-source data processing engine for large-scale data sets.
3. Data Integration Software: Tools like Informatica, Talend, and Microsoft
SSIS for integrating data from various sources.
4. Stream Analytics Tools: Tools like Apache Storm, Apache Flink, and
Google Cloud Dataflow for real-time data processing.
5. Distributed Storage: Systems like HDFS (Hadoop Distributed File
System), Ceph, and Gluster for storing large datasets.
6. Predictive Analytics Hardware and Software: Tools like SAS, R, and
Python libraries like scikit-learn and TensorFlow for predictive modeling.
7. Data Mining Tools: Tools like Weka, Orange, and R for discovering
patterns and relationships in data.
8. NoSQL Databases: Databases like MongoDB, Cassandra, and Couchbase
for storing and retrieving large amounts of unstructured or semi-structured
data.
9. Data Warehouses: Centralized repositories like Amazon Redshift, Google
BigQuery, and Microsoft Azure Synapse Analytics for storing and analyzing
large datasets.

The 5 V's of Big Data

1. Volume: The vast amount of data generated from various sources.

2. Velocity: The speed at which data is generated and processed.
3. Variety: The diversity of data formats, structures, and sources.
4. Veracity: The accuracy, quality, and reliability of data.
5. Variability: The inconsistency and unpredictability of data.

These 5 V's characterize the complexity and challenges of working with big
data, and highlight the need for specialized tools and techniques to manage
and analyze large datasets.

Unit-III: Big Data skills: Analytics - Data Visualization - Knowledge of

Business Domains and Big Data tools - Programming- Problem-solving -
Structured Query Language (SQL) - Data Mining - Technical skills -
Knowledge of Public and Hybrid clouds - Working experience -
Responsibilities of Big Data professionals - challenges

Core Skills

1. Analytics: Understanding statistical concepts, data modeling, and data

analysis.
2. Data Visualization: Ability to present complex data insights in a clear and
concise manner.
3. Knowledge of Business Domains: Understanding of industry-specific
challenges and opportunities.
4. Big Data Tools: Familiarity with tools like Hadoop, Spark, NoSQL
databases, and cloud-based platforms.
5. Programming: Proficiency in languages like Java, Python, R, and SQL.

Technical Skills

1. Structured Query Language (SQL): Ability to write efficient SQL queries.

2. Data Mining: Knowledge of data mining techniques and algorithms.
3. Machine Learning: Understanding of machine learning concepts and
algorithms.
4. Cloud Computing: Familiarity with public and hybrid cloud platforms like
AWS, Azure, and Google Cloud.
5. Data Warehousing: Knowledge of data warehousing concepts and ETL
processes.

Soft Skills

1. Problem-solving: Ability to analyze complex problems and develop

effective solutions.
2. Communication: Effective communication of technical ideas to non-
technical stakeholders.
3. Collaboration: Ability to work with cross-functional teams.
4. Adaptability: Willingness to learn new technologies and adapt to changing
requirements.

Responsibilities of Big Data Professionals

1. Data Analysis: Analyzing large datasets to identify trends and insights.

2. Data Visualization: Creating reports and dashboards to present data
insights.
3. Data Mining: Developing predictive models and machine learning
algorithms.
4. Data Architecture: Designing and implementing data architectures.
5. Data Governance: Ensuring data quality, security, and compliance.

Challenges

1. Data Quality: Ensuring accuracy, completeness, and consistency of data.

2. Data Security: Protecting sensitive data from unauthorized access.
3. Scalability: Handling large volumes of data and scaling solutions.
4. Complexity: Managing complex data architectures and technologies.
5. Talent Gap: Finding skilled professionals with expertise in Big Data
technologies.