SESSION 2023-24 VIII SEMESTER

KOE-083

ENTREPRENEURSHIP DEVELOPMENT

UNIT-3
Complete

SANJANA SINGH
ASSISTANT PROFESSOR
DEPARTMENT OF CIVIL ENGINEERING
 Content
Accountancy- Preparation of balance sheets
Assessment of economic viability,
 decision making,
expected costs,
Planning, Production control,
quality control, marketing, industrial relations
Sales and purchases, advertisement, wages and incentive,
Inventory control, preparation of financial reports
Accounts and stores studies
Previous Year Questions -unit 2
Write elements of Cost?
What do you mean by Accountancy?2 marks
What are the different functions of Production Planning and Control?10
What is Project Control? How can profit plan be used as a useful tool for project control?10
 What are different types of accounts? Explain how a balance sheet is prepared?10
What is accountancy? What is the purpose and requirement of accountancy in a small
business?10
Describe about the Preparation of balance sheets and assessment of Economic viability.10
Describe Planning and Production control in Entrepreneurship Development.10
 Accounting
Accounting can be defined as a process of reporting,
recording, interpreting and summarizing economic
data.

The American Institute of Certified Public Accountants (AICPA) had defined

accounting as the

 “art of recording, classifying, and summarizing in a significant manner and

in terms of money, transactions and events which are, in part at least, of
financial character, and interpreting the results thereof”.
 Accounting- Objective
The main objectives of accounting are:

To maintain a systematic record of business transactions

To ascertain profit and loss

To determine the financial position

To provide information to various users

To assist the management

 Accounting
System of accounting
There are following two systems of recording transactions in the books of accounts:
Double Entry System
Single Entry System
Double-entry system
The double entry system is based on the Dual Aspect Principle.
Every transaction has two aspects, ‘a Debit’ and ‘a credit’ of an equal amount.
This system of accounting recognizes and records both aspects of the transaction.
Single entry system
Under this system, both aspects are not recorded for all the transactions.
Either only one aspect is recorded or both the aspects are not recorded for all the
transactions.
Double Entry System
Every financial transaction affects at least two accounts.
Transaction: A business buys machinery for $5,000 in cash.
Account
Date Debit ($) Credit ($)
Title

Machinery
12-8-24 5,000
Account

Cash
12-8-24 5,000
Account
Single Entry System
Transaction
Date Amount ($) Type
Description
Cash received
2025-03-01 5,000 Income
from sales
Paid rent for
2025-03-05 (1,200) Expense
office
Purchased goods
2025-03-07 3,000 Liability
on credit
Cash paid to
2025-03-10 (2,000) Expense
supplier
 Terms of accounting
Debit (DR) vs. Credit (CR)

Both of the terms debit and credit have Latin roots. The term debit comes from the
word debitum, meaning "what is due," means something that is owed or expected to
be paid or received

and credit comes from creditum, defined as "something entrusted to another or a

loan."1 amount or value that is given to someone with the expectation that it will
either be returned or used responsibly.
Real Account: Debit what comes in and credit what goes out.
 Tangible real accounts are related to things that can be touched and felt physically. A few
examples of tangible real accounts are building, furniture, equipment, cash in hand, land,
machinery, stock, investments, etc.
Intangible real accounts are related to things that can’t be touched and felt physically. A
few examples of such real accounts are copyrights, intellectual property, customer data,
goodwill, patents, trademarks, broadcasting rights, logos.
Personal Account: Debit who receives and Credit who gives.
Natural personal accounts: All of God’s creations are included in these types of personal
accounts. Accounts that belong to individuals fall into this category e.g. Kumar’s A/c,
Adam’s A/c, Unreal Co. A/c, etc.
Artificial personal accounts: Personal accounts which are created artificially by law,
such as corporate bodies and institutions, are called artificial personal accounts. E.g. private
companies, LLCs, LLPs, clubs, schools, sole proprietors, public limited companies, one-
person companies, cooperative societies, etc.
Nominal Account: Debit all expenses & losses and Credit all

incomes & gains

Accounts which are related to expenses, losses, incomes or gains are called Nominal

accounts.

Example – Purchases, Sales, Salaries, Commission Received, Bad Debts,

Telephone Bills, etc.

Kind of Account Debit Credit
Asset Increase Decrease
Liability Decrease Increase
Income/ Revenue Decrease Increase
Expenses/ Cost/
Increase Decrease
Dividend
Equity/ Capital Decrease Increase
The company buys equipment worth $2,000 in cash.

Account Debit Credit

Equipment (Asset) $2,000
Cash (Asset) $2,000
Summary of Debit and Credit Rules:
Assets:
Debit increases assets, Credit decreases assets.
Liabilities: Debit decreases liabilities, Credit increases liabilities.
Equity: Debit decreases equity, Credit increases equity.
Revenue:
Debit decreases revenue, Credit increases revenue.
Expenses:
Debit increases expenses, Credit decreases expenses.
 Accounting- Process/ steps
(1) Identification: It is the process of identifying and analyzing business
transactions.
(2)Recording: For recording, we use ‘Journal’ or Subsidiary Books.
(3) Classification of transactions: Classification means segregation of transactions
on the basis of nature and posting them in a format known as Ledger Account.
(4) Summarization: It includes preparation of Trial Balance and Financial
Statements.
(5) Analysis & Interpretation: It includes an assessment of the financial reports
and making some meaningful conclusions.
(6) Communicating information to the users: It includes sharing the financial
reports and interprets results to the users of financial statements.
Accounting-types

1. Financial Accounting : Determining the financial results for the period and
the state of affairs on the last day the accounting period.

2. Cost Accounting : Information generation for Controlling operations with a

view to maximizing efficiency and profit.

3. Management Accounting :Accounting to assist management in planning

and decision making. Decision Accounting.
Accounting-terms
Recording of Transaction: As soon as a transaction happens it is at first recorded
in subsidiary book.
Journal: The transactions are recorded in Journal chronologically.
 Ledger: All journals are posted into ledger chronologically and in a classified
manner. (grouping ).
Trial Balance: After taking all the ledger account closing balances, a Trial Balance
is prepared at the end of the period for the preparations of financial statements.
Total debits = total credits.
 Adjustment Entries: All the adjustments entries are to be recorded properly and
adjusted accordingly before preparing financial statements.
Closing Entries: All the nominal accounts are to be closed by the transferring to
Trading Account and Profit and Loss Account.
 Financial Statements: Financial statement can now be easily prepared which will
exhibit the true financial position and operating results.
Cash Book:

Used to record all cash transactions—both receipts and payments.

Receipts side (debit side) records all cash receipts.

Payments side (credit side) records all cash payments.

Date Particulars Debit Credit

March 10 Customer ABC $1,500
ACCOUNTS FLOW
Journal

Ledger

Trial balance

Trading and profit and loss account

Balance Sheet
Journal
A journal is the book of original entry which records transactions as they
take place. Such an entry into the journal must contain a source document.

Maintaining a journal ensures all transactions are recorded and in one place, and
debit and credit for each transaction are linked properly.

A journal consists of the following sections:

Date − Transaction date based on when the transaction has taken place.
Particulars − Details of the transaction recorded
L.F. − Page number of the ledger where entry is posted.
Debit Amount − Debited amount as per transaction.
Credit Amount − Credit amount as per transaction
Journal- example

Date Details
01.5.2019 Business started with cash Rs.1,00,000

02.5.2019 Goods sold to for Rs.10,000

03.5.2019 Received a cheque of Rs.10,000 from Sachin
Journal- example-double entry
Journal
Debit Credit
Amount Amount
Date Particulars L.F Rs. Rs.
2019May.01 Cash A/c Dr.To Capital A/c 1,00,000 1,00,000
(Business started with cash)
May.02 Priya A/c Dr.To Sales A/c 10,000 10,000
(Goods sold to Sachin on credit)
May.03 Bank A/c Dr.To Sachin A/c 10,000 10,000
(Cheque received from Sachin)
Total c/f 1,20,000 1,20,000
BOOK-KEEPING
What Is a Cash Book?
A cash book is a financial journal that contains all cash receipts and
disbursements, including bank deposits and withdrawals.
This is the main area where businesses record any and all cash-related
information. Entries are normally divided into cash payments and receipts.
 All of these are posted in the company's general ledger.
If both side credit and debit is equal this means no cash
For cash we should have values in debit side (receipt side)
Petty cash book for small amount
Trail Balance
A trial balance is a bookkeeping worksheet in which the balances of
all ledgers are compiled into debit and credit account column totals that are
equal.
A company prepares a trial balance periodically, usually at the end of
every reporting period.
The general purpose of producing a trial balance is to ensure that the
entries in a company’s bookkeeping system are mathematically correct.
How to prepare Profit & Loss Statement?

Below is the process to prepare the Profit & Loss Statement:

Prepare ledger accounts: An account statement must be prepared for each ledger
from the journal book to determine the closing balance.
Create trial balance: Trial balance summarises all the ledger accounts. It lists
every ledger account with the closing balance posted from the individual ledger
accounts statement.
Preparing trading and profit & loss statement: All the ledger accounts with the
nature of the sales, purchase, indirect expenses, direct expense and income are
posted to the Profit & Loss Statement.
Trading account
Trading account is a statement which is prepared by a business firm.
It shows the gross profit of business activities during a specific period.
It is a part of the final accounts of the entity.
 The trading account gives details of total sales, total purchases and direct
expenses relating to purchase and sales.
 Trading account format for the year contains Particulars, Amount, Dr., Cr.,
Purchases, Sales, etc.
Opening stock details of raw material, semi-finished goods and finished goods.
Closing stock details of raw material, semi-finished goods, and finished goods.
Total purchases of goods fewer Purchase Returns.
Total sales of goods fewer Sales Returns.
All direct expenses related to purchases or sales or manufacturing of goods.
Trading Account Profit & Loss Account
Shows the cost of goods sold and gross Shows the net profit or loss for a specific
profit/loss for a specific period of time. period of time.
Includes all income and expenses related Includes all income and expenses of the
to the buying and selling of goods. company, including those not related to
trading activities.
Used to determine the efficiency of a Used to determine the overall financial
business in buying and selling goods. performance of a business.
Required for businesses engaged in Required for all types of businesses.
trading activities.
Prepared for a specific period of time, Prepared for a specific period of time,
such as a month or a year. such as a month or a year.
Profit and loss account
Profit and loss account shows the net profit and net loss of the business for the
accounting period.
Profit and loss account get initiated by entering the gross loss on the debit side or
gross profit on the credit side.
This value is obtained from the balance which is carried down from the Trading
account.
Debit –expanses , material , wages, fuel etc
Credit – incomes, sales etc
Difference- profit ( credit is more ), loss – debit is more
Balance Sheet

Statement That helps to Understand your business finances.

Provided information of companies resources and capital (financial health).

It is made for particular date quarterly of fiscal year or once in the end of

year after the preparation of trading and Profit and loss account.

Fiscal year – 1 April to 31 march

Vertical format is used – company act 2013

Balance Sheet
The objective of Preparing a Balance Sheet
It is important to understand why you should have a balance sheet, whether you
are a business owner or just establishing one.
Balance sheets can be used to:
Showcase your company’s current financial situation.
Keep a record of your debits and credits.
Assess the worth and status of all assets and liabilities.
Determine the amount of capital owing to the owner at the end of the
financial year.
Use as a reference if there is a need for a loan.
Understand the company’s liquidity pattern and profit/loss status.
Evaluate the business’s strengths and shortcomings and use them as a
guideline for developing policies and goals for the company.
Balance Sheet
Importance of the Balance Sheet

The balance sheet is a very important financial statement for many reasons. It can
be looked at on its own and in conjunction with other statements like the income
statement and cash flow statement to get a full picture of a company’s health.
Four important financial performance metrics include:

Liquidity – Comparing a company’s current assets to its current liabilities provides

a picture of liquidity. Current assets should be greater than current liabilities, so the
company can cover its short-term obligations.
Leverage – Looking at how a company is financed indicates how much leverage it
has, which in turn indicates how much financial risk the company is taking.
Comparing debt to equity and debt to total capital are common ways of assessing
leverage on the balance sheet.
Balance Sheet
Efficiency – By using the income statement in connection with the balance sheet,
it’s possible to assess how efficiently a company uses its assets.

For example, dividing revenue by the average total assets produces the Asset
Turnover Ratio to indicate how efficiently the company turns assets into revenue.
Additionally, the working capital cycle shows how well a company manages
its cash in the short term.

Rates of Return – The balance sheet can be used to evaluate how well a company
generates returns. For example, dividing net income by shareholders’ equity
produces Return on Equity (ROE), and dividing net income by total assets
produces Return on Assets (ROA), and dividing net income by debt plus equity results
in Return on Investment
Balance Sheet- components
5 main parts of a balance sheet
1. Current assets
Cash, as well as other assets you expect to turn into cash within the next 12
months. Examples of current assets include accounts receivable and inventory. Cash.
Cash Equivalents.
Stock or Inventory.
Accounts Receivable.
Marketable Securities.
Prepaid Expenses.
2. Fixed assets
Property or equipment the company owns and uses in its operations to generate
income. Fixed assets are purchased for long-term use (longer than one year). Their
value decreases over time because of wear and tear. This change is recorded as
depreciation on the income statement. Buildings, computer equipment, software, furniture,
land, machinery, and vehicles.
Balance Sheet-components
3. Current liabilities
Debts and other obligations to creditors that will be due within the next 12
months. Examples of current liabilities include accounts payable, credit card bills,
sales taxes collected, payroll liabilities and loan payments.

4. Long-term liabilities
Debts and other obligations to creditors that will not be due in the next 12
months. Examples of long-term liabilities include term loans and mortgages.

5. Shareholders’ equity
This is made up of common and preferred stock, paid-in capital as well
as retained earnings, meaning the accumulated company profits that have not
been distributed to shareholders
Balance Sheet- preperation
Preparation of the Balance Sheet
Company name……
Date ……
Rupee in …….
Step 1: Determine the balance sheet date and period

Step 2: Determine the Assets

To make this section more actionable, arrange them in order of liquidity. More
liquid assets, such as cash and accounts receivable, are prioritized, whereas illiquid
assets, such as inventories, are prioritized last. After you’ve listed your current
assets, you’ll need to mention your non-current (long-term) ones. Remember to list
non-monetary assets as well.
Balance Sheet- preparation
3. Determine Your Liabilities
Similarly, you must identify liabilities. Then, list current liabilities, which include
Accounts payable, Accrued costs, and Deferred income. After listing current liabilities,
you must include non-current liabilities, such as deferred revenue and long-term debt.
4. Determine Shareholders’ Equity
Determine your company’s retained earnings, working capital, and total shareholders’
equity. This computation may get more complex if it is publicly traded, depending on
the different forms of shares issued. This area of the balance sheet contains common line
items such as common stock, preferred stock, and so on.
5. Make the sum of Total Liabilities and Total Shareholders’ Equity and compare
it to Total Assets
To ensure the balance sheet is balanced, total assets must be compared to total liabilities
plus equity. To do so, sum the liabilities and shareholders’ equity together. You’ve done
the balance correctly if your liabilities + equity = assets. If not, you may need to go back
and evaluate your sheet.
Balance Sheet
What Is the Balance Sheet
Formula?
A balance sheet is calculated by
balancing a company's assets with its
liabilities and equity.

The formula is: Total assets = Total liabilities + Total equity.

Balance Sheet- sample – vertical format
Balance Sheet-limitation
Limitations of a Balance Sheet
A balance sheet is limited due its narrow scope of timing. Looking at a single
balance sheet by itself may make it difficult to extract whether a company is
performing well.

Different accounting systems and ways of dealing with depreciation and

inventories will also change the figures posted to a balance sheet. Because of this,
managers have some ability to game the numbers to look more favorable. Pay attention
to the balance sheet's footnotes in order to determine which systems are being used in
their accounting and to look out for red flags.

Last, a balance sheet is subject to several areas of professional judgement that

may materially impact the report.
 Elements of Cost
1. Material Cost
Direct Material
Direct materials are the raw materials that can be directly traced to the production
process and constitute a significant portion of the total cost. They are integral and
identifiable parts of the finished product.
Example:
In manufacturing wooden furniture, timber, nails, and glue are direct materials. The
cost of these materials is directly attributed to the finished table.
Indirect Material
Indirect materials are materials used in production but are not directly traceable to
the final product. They are necessary for the production process but do not become a
part of the finished product.
 Elements of Cost
2. Labour
Direct Labour
Direct labour refers to the workforce directly producing goods or delivering
services. Direct labour costs can be explicitly traced to specific products or services.
Example:
In an automobile assembly line, the workers assembling the cars are considered
direct labour. Their wages are direct costs associated with the production of each
vehicle.
Indirect Labour
Indirect labour entails the personnel who support the production process but are not
directly involved in producing goods or services. The salaries of maintenance staff,
supervisors, and quality control inspectors in the automobile assembly plant are
indirect labour costs.
 Elements of Cost
3. Expenses
1. Direct expenses (or chargeable expenses): The expenses (other than direct
material cost and direct labour cost) identifiable with and allocated to cost
centres or cost units.

2. Indirect expenses: Expenses that cannot be allocated but can be apportioned to

or absorbed by cost centres or cost units, such as rent, rates, taxes, insurance of
the factory building, factory lighting, repairs, and so forth.

4. Over head
The aggregated indirect material cost, indirect labour cost, and indirect
expenses are known as the indirect cost or Overhead
 Elements of Cost
Overhead , which can be classified into:

Factory overhead or works overhead: All the indirect costs incurred in

manufacturing operations: indirect materials, indirect labour, and all other indirect
expenses, such as wages, factory rent, factory rates, repairs, and so forth.
Office and administration overhead: All the indirect costs relating to the
direction, control, and administration of an undertaking, such as office rent and staff
salaries.
Selling and distribution overhead: All indirect costs incurred for promoting
sales, retaining customers, and delivering goods after their manufacture, such as
advertising, salesmen salaries, commission on sales, carriage on sales, and packing
charges.
 Economical Viability
Here are some key accounting methods and considerations used to assess
economical viability:
Financial Statements Analysis: Analyzing financial statements, including the
income statement, balance sheet, and cash flow statement, provides insights into the
financial performance and position of the venture.
Ratios such as profitability ratios (e.g., net profit margin),
Net Profit Margin = (Net Profit / Revenue) * 100%
liquidity ratios (e.g., current ratio),
Current Ratio = Current Assets / Current Liabilities
and solvency ratios (e.g., debt-to-equity ratio)
Debt-to-Equity Ratio = Total Debt / Total Equity

help evaluate economical viability from different perspectives.

 Economical Viability
Cost Accounting: Cost accounting involves tracking and analyzing the costs
associated with producing goods or services. Techniques such as job costing,
process costing, and activity-based costing help identify the cost structure of the
venture and assess profitability at various levels of production or service delivery.
Budgeting and Forecasting: Developing budgets and financial forecasts helps in
planning and evaluating the economical viability of a venture. By comparing actual
financial performance against budgeted or forecasted figures, management can
identify variances and take corrective actions to improve profitability and financial
sustainability.
Break-Even Analysis: Break-even analysis helps determine the level of sales or
revenue required for the venture to cover its fixed and variable costs and break even.
This analysis provides insights into the minimum level of activity needed for the
venture to be economically viable.
Economical Viability
Return on Investment (ROI): Calculating ROI helps assess the profitability of
investments made in the venture. ROI compares the returns generated from an investment
to the cost of the investment, providing a measure of efficiency and economical viability.
Return on Investment= (Net Profit/ Investment Cost)×100
Cost-Benefit Analysis: Cost-benefit analysis compares the costs of a project or
investment to the benefits it generates. By quantifying costs and benefits in monetary
terms, this analysis helps decision-makers evaluate the economical viability of various
options and choose the most cost-effective alternative.
Capital Budgeting: Capital budgeting techniques such as net present value (NPV),
internal rate of return (IRR), and payback period analysis help assess the economical
viability of long-term investments.
Risk Assessment: Accounting also plays a role in assessing and managing financial risks
that could affect the economical viability of the venture. Techniques such as sensitivity
analysis and scenario analysis help identify potential risks and their impact on financial
performance.
 Decision making

Decision-making is the process of selecting the best course of action from

multiple alternatives to achieve a desired outcome or goal.

It involves assessing various options, evaluating their potential

consequences, and choosing the most suitable option based on available

information, preferences, and constraints.

 Decision types
Strategic Decisions: Strategic decisions are high-level choices that shape the
overall direction and long-term objectives of the business. They typically involve
major resource allocation, market positioning, diversification, mergers and
acquisitions, and entry into new markets or industries.
Tactical Decisions: Tactical decisions are medium-term decisions that translate
strategic goals into specific actions and plans. They focus on optimizing operational
efficiency, improving processes, allocating resources within specific departments or
projects, and implementing short-to-medium-term initiatives.
 Decision types
Operational Decisions: Operational decisions are day-to-day decisions made to
manage routine tasks and activities within the organization. They address issues
related to production schedules, inventory management, staffing levels, customer
service, and other operational functions.
Programmed Decisions: Programmed decisions are routine decisions that are repetitive
and well-structured, allowing for standard procedures or guidelines to be applied. These
decisions are typically made in response to recurring situations and can be automated or
delegated to lower-level employees.
Non-programmed Decisions: Non-programmed decisions are unique, complex, and
unstructured decisions that arise in response to novel or exceptional circumstances. They
require creativity, critical thinking, and judgment to address unfamiliar challenges or
capitalize on emerging opportunities.
 Decision making- Elements
Identifying the Problem or Opportunity

Generating Alternatives

Evaluating Alternatives

Making a Decision

Implementing the Decision

Monitoring and Evaluating

 Decision making- Importance
1. Achieving Goals and Objectives: Decisions help individuals and organizations
move closer to their desired goals and objectives. By choosing the best course of
action among alternatives, decision-makers can direct resources and efforts toward
achieving specific outcomes.
2. Problem Solving: Decision-making is essential for addressing problems and
challenges that arise in personal, professional, and organizational contexts. Effective
decisions enable individuals and organizations to overcome obstacles, resolve
conflicts, and navigate uncertainties.
3. Resource Allocation: Decisions determine how resources such as time, money,
manpower, and materials are allocated and utilized. By making informed choices
about resource allocation, decision-makers can optimize efficiency, productivity,
and effectiveness.
 Decision making- Importance
4. Risk Management: Decision-making involves assessing risks and uncertainties
associated with different options and selecting the course of action that minimizes
potential negative consequences. Effective risk management helps mitigate losses,
capitalize on opportunities, and enhance resilience in the face of uncertainty.
5. Innovation and Growth: Decision-making drives innovation and fosters growth
by encouraging experimentation, exploration, and adaptation to changing
environments. Decisions to invest in research and development, pursue new
markets, or embrace disruptive technologies can lead to competitive advantage and
sustainable growth.
6. Enhancing Accountability: Decisions create accountability by clarifying
responsibilities, setting expectations, and establishing benchmarks for performance
evaluation. Clear decision-making processes promote transparency, accountability,
and integrity in personal, professional, and organizational contexts.
 Decision making- Importance
7. Building Confidence and Trust: Well-informed and transparent decision-
making builds confidence and trust among stakeholders, including employees,
customers, investors, and partners. Consistent and fair decision-making practices
foster positive relationships, loyalty, and credibility over time.
8. Adaptation to Change: In dynamic and complex environments, decision-making
enables individuals and organizations to adapt to change, seize opportunities, and
address emerging threats. Flexible and responsive decision-making processes
facilitate agility, resilience, and competitiveness in evolving markets and industries.
9. Personal and Professional Growth: Effective decision-making is a key
competency for personal and professional success. Developing decision-making
skills, such as critical thinking, problem-solving, and judgment, enhances individual
resilience, leadership effectiveness, and career advancement
Requirement of good decision making
Clarity of Objectives: Clearly define the goals and objectives that the decision
aims to achieve. Having a clear understanding of what needs to be accomplished
helps guide the decision-making process and ensures that choices are aligned with
desired outcomes.
Information Gathering: Gather relevant and reliable information to inform the
decision-making process. This may involve conducting research, collecting data,
seeking input from experts, and considering various perspectives and viewpoints.
Critical Thinking: Apply critical thinking skills to analyze information, evaluate
alternatives, and assess potential consequences. Think critically about assumptions,
biases, and uncertainties that may influence decision-making and seek to mitigate
their impact.
 Requirement of good decision making
Risk Assessment: Assess potential risks and uncertainties associated with each
alternative and consider their likelihood and potential impact. Identify strategies to
manage or mitigate risks and make informed decisions that balance potential
rewards with potential risks.
Creative Problem Solving: Be open to exploring innovative and creative
solutions to problems and challenges. Think outside the box, consider
unconventional approaches, and encourage brainstorming to generate a diverse
range of alternatives.
Decision Quality: Strive for decision quality by selecting the option that offers
the best balance of advantages and disadvantages, based on relevant criteria and
objectives. Consider factors such as feasibility, effectiveness, cost-benefit analysis,
and alignment with values and priorities.
 Requirement of good decision making
Consideration of Trade-offs: Recognize and evaluate trade-offs inherent in
decision-making, as no option is likely to be perfect or without drawbacks. Consider
the opportunity costs and implications of choosing one alternative over others.
Stakeholder Engagement: Involve relevant stakeholders in the decision-making
process to ensure that their perspectives, concerns, and interests are considered.
Foster collaboration, communication, and consensus-building to gain buy-in and
support for the decision.
Decision Implementation
Continuous Improvement: Reflect on the outcomes of decisions, learn from
successes and failures, and seek opportunities for continuous improvement. Adapt
and refine decision-making processes and strategies based on feedback, experience,
and evolving circumstances.
 Decision maker- Characteristics
1. Analytical Skills, identify patterns, and evaluate alternatives based on data and
evidence.
2. Critical Thinking: They engage in critical thinking, questioning assumptions,
challenging biases, and considering multiple perspectives to arrive at well-reasoned
decisions.
3. Problem-Solving Ability: Decision-makers excel at problem-solving, breaking
down complex issues into manageable components, and developing innovative
solutions to address challenges.
4. Judgment: They demonstrate sound judgment, weighing the potential risks and
benefits of each alternative and making decisions that align with organizational
goals and values.
5. Strategic Vision: Successful decision-makers have a strategic vision,
understanding the long-term implications of their choices and considering how
decisions fit within broader organizational objectives and priorities.
Decision maker- Characteristics
6. Adaptability: They are adaptable and flexible, able to adjust their decisions and
strategies in response to changing circumstances, new information, and unexpected
developments.
7. Emotional Intelligence: Effective decision-makers possess emotional intelligence,
understanding their own emotions and those of others, managing interpersonal
relationships effectively, and navigating complex social dynamics.
8. Communication Skills
9. Confidence: Decision-makers exhibit confidence in their abilities and judgments,
while also recognizing the importance of humility and being open to feedback and
input from others.
10. Ethical Integrity: Successful decision-makers uphold ethical standards and integrity
in their decision-making, considering the ethical implications of their choices and
acting with honesty, fairness, and transparency.
11. Resilience: They are resilient in the face of setbacks and failures, learning from
mistakes, adapting to challenges, and persevering in pursuit of goals and objectives.
Wrong Decision making- factor responsible
1. Lack of Market Research: Insufficient understanding of the target market, including
customer needs, preferences, and trends, can lead to incorrect product development or
marketing strategies.
2. Overconfidence: Entrepreneurs may overestimate their abilities or the potential
success of their ventures, leading to risky decisions without thorough evaluation of
potential challenges or market conditions.
3. Poor Financial Management: Inadequate financial planning, budgeting, or
monitoring can result in improper allocation of resources, cash flow problems, or
unsustainable growth strategies.
4. Ignoring Feedback: Failing to solicit or heed feedback from customers, employees,
mentors, or advisors can result in blind spots and prevent entrepreneurs from addressing
critical issues or making necessary adjustments.
5. Failure to Adapt: Inability or unwillingness to adapt to changing market conditions,
technological advancements, or competitive landscapes can lead to obsolescence or
missed opportunities.
Wrong Decision making- factor responsible
6. Ineffective Team Management: Issues related to team dynamics, communication
breakdowns, or poor leadership can hinder productivity, innovation, and overall
organizational performance.
7. Rapid Scaling: Premature scaling without proper infrastructure, systems, or
processes in place can strain resources, compromise quality, and jeopardize long-term
sustainability.
8. Ignoring Legal or Regulatory Requirements: Non-compliance with legal,
regulatory, or ethical standards can result in fines, lawsuits, reputational damage, or
even business closure.
9. Overemphasis on Short-term Gains: Pursuing short-term profits at the expense of
long-term sustainability, customer satisfaction, or stakeholder relationships can
undermine the overall success and viability of the venture.
10.External Factors: External factors such as economic downturns, industry
disruptions, or unforeseen events (e.g., natural disasters, pandemics) can pose
significant challenges and necessitate adaptive strategies.
Production planning and control
What to produce – Product planning and design

How to produce – Material process , tool and equipments planning

Where to produce – Facilities and capacity planning , location planning

When to produce –Production scheduling

Who will produce – Manpower planning

How much to produce – Quantity planning

Production planning and control
Production planning and control manages and schedules the allocation of
human resources, raw materials, work centres, machinery, and production
processes.
 Production planning and control are two strategies that work cohesively in
manufacturing.
 Planning involves what to produce, when to produce, how much to produce,
and more.
Production control ensures optimum performance from the production system
by using different control techniques for better throughput targets.
Production planning and control
Steps in production planning and control
1. Planning
2. Routing
3. Scheduling
4. Loading
5. Dispatching
6. Follow-up
Production planning and control
1. Planning
Planning determines what will be produced, by whom, and how. It formulates the
plan for labour, equipment, work centres, and material requirements needed for
production.
Product specifications from the engineering department may also be needed. The planning
step helps to keep a streamlined approach to the production process.

2. Routing
Routing determines the path raw materials flow within the factory. Using the sequence,
raw materials are transformed into finished goods.
Coordinating every production process and scheduling every step is important to measure
the production process duration. Routing shows the quantity and quality of materials
and resources needed. It also shows the operations used and the place of production.
Routing manages the “How”, “What”, “How much”, and “Where” of production. It
systematizes the process and optimizes resources for the best results.
Production planning and control
3. Scheduling
Scheduling emphasizes “when” the operation will be completed. It aims to make the
most of the time given for the completion of the operation.
As per Kimball and Kimball, the definition of scheduling is –
“The determination of the time that should be required to perform the entire series
as routed, making allowance for all factors concerned.”
Organizations use different types of schedules to manage the time element. These
include Master Schedule, Operation Schedule, Daily Schedule, and more.
4. Loading
Loading looks into the amount of work loaded against machines or workers. The
total time to perform new work is added to the work already scheduled for the machine
or workstation. If a machine or workstation has capacity available, more orders can make
up the under load. If there is a capacity overload, proactive measures can prevent
bottlenecks. Adding a shift, requesting overtime, bringing in operators from another
shop, or using a sub-contractor are possible options.
Production planning and control
5. Dispatching
Dispatching is the release of orders and their instructions. It follows the routing and
scheduling directions. This step ensures all items are in place for the employees to do
their jobs.
Here are the points that are part of “Dispatching”:
• Issue materials or fixtures that are important for production
• Issue orders or drawings for initiating the work
• Maintain the records from start to finish
• Start the control procedure
• Cascade the work from one process to another
6. Follow-up
Also known as expediting, follow-up locates fault or defects, bottlenecks, and
loopholes in the production process. In this step, the team measures the actual
performance from start until the end and then compares it with the expected
performance.
Production planning and control
7. Inspection
Similar to expediting or follow-up, inspection is an extra step performed to ensure
that all the planning and controlling approaches identified by the management are
consistently implemented and adhered to.
Regular or random inspections also help strengthen the reputation of businesses by
guaranteeing the quality of goods and services produced by the company.

8. Correction
Once the above-mentioned steps are performed and there are issues or areas for
improvement that were identified, this is the step where they can be modified.
Correction enables businesses to further enhance their production process and
implement planning and control techniques in a more efficient manner.
Production control
Production control monitors production and measures performance, providing
visibility and reporting.

If any corrective action is needed, it gets initiated with production control.

It includes different control techniques to achieve optimal levels of production

performance.
Optimize resources and the scheduling of resources to meet production demand
Ensure an efficient schedule
Have resources ready when needed
Keep inventory at optimal levels
Increase productivity of internal resources (people, work centres, machines, tooling, etc.)
Improve customer satisfaction
Ensure the right person gets assigned to specific processes
Coordinate with other departments (sales, customer service, purchasing, etc
Quality control- Method
1. Inspection
It is the common method of quality control purposes that are used in production as
well as in services.
There are three important aspects of inspection -
Product Inspection
Process inspection
Final -Inspection Analysis
Let's discuss these aspects.
i) Product Inspection
It is related to the final product that is ready to send into the market. Its main
purpose is to ensure whether the products that are ready to send are meeting the set
of quality standards. It ensures that the ready product is perfect and free from
defects.
Quality control
ii) Process Inspection
It is used to ensure that the raw material, equipment, and machines used in the
production are of prescribed quality. In short, it ensures the quality of raw
materials, machines, and equipment used for making the product. It is
beneficial to do process inspection as it saves the wastage of material by preventing
the process bottlenecks and also ensures the manufacturing of the quality product.

iii) Inspection Analysis

Conduct inspections and testing at various stages of the production process to verify
product quality and compliance with specifications. Inspections may include visual
inspections, dimensional measurements, and functional checks, while testing may
involve physical, chemical, or performance testing. Inspections and testing can be
performed using manual methods or automated inspection technologies.
Quality control
Method 2 – Statistical Control
The statistical quality control method uses various statistical methods or
techniques to check the quality of products. These quality control methods are
widely used across industries such as food, pharmaceutical and manufacturing
units. Statistical quality control methods can be done as part of the production
process or as a last-minute quality control check or even as part of the final quality
check.
Quality control is the best method to determine variations in products that are
caused due to reasons like raw material, consistency of product elements, processing
machines, techniques used and packaging applications. The statistical technique
helps to detect errors at an early stage so reworks can be minimized.
The two types of statistical quality control methods are acceptance sampling and
process control.
Quality control
a. Acceptance Sampling
As the name suggests, in acceptance sampling, a sample product is checked for
compliance with a predefined quality measurement to ascertain if it falls within the
acceptable quality variation limit. Such variations in the product can occur as a
result of unexpected or assignable causes.
With this quality control method, the number of defective products reaching the
market can be reduced significantly. Acceptance sampling can also be employed to
test the performance or efficiency of a product after it has been installed and to
compare it with accepted industry standards.
Quality control
b. Process Control
Another quality control method that falls under the statistical technique is process
control. All activities employed to check whether a particular process is reliable and
predictable and results in a consistent performance with the least amount of
variation are what process control is all about. This method of statistical analysis
can help to improve or control a process so as to achieve desired results.
This quality control technique is used across several industries like power
generation plants, chemical processing, food and beverage industry, paper
manufacturing and oil refining. The three types of process control methods are:
Batch process control – where exact quantities of particular raw materials are mixed for a
precise period in a particular manner to achieve a specific product.
Continuous process control – where variables remain the same throughout to produce the
product at the best economy, maximum flow rate and given composition.
Hybrid process control – that can include elements of both continuous and batch process
control.
Quality control- Steps
1.Establish Quality Standards
2.Develop Quality Control Plan
3.Supplier Quality Assurance
4.Training and Education
5.Process Control
6.Inspection and Testing
7.Non-Conformance Management(deviation)
8.Continuous Improvement
9.Customer Feedback and Satisfaction
10.Documentation and Record Keeping
Quality control- Cost
Prevention Costs:
Training and education
Process improvement
Quality planning
Supplier quality management
Design reviews.

Appraisal Costs:
Inspection and testing:
Quality audits
Equipment calibration
Supplier audits
Internal Failure Costs:
Rework and scrap
Machine downtime
Warranty claims
Lost productivity.
External Failure Costs:
Customer returns and replacements
Product recalls
Warranty repairs
Damage to reputation
Quality Standard
Quality standards play a crucial role in quality management, providing benchmarks
and guidelines for organizations to ensure that their products or services meet specified
quality requirements. These standards are developed and maintained by various
organizations and regulatory bodies, and compliance with these standards is often a
prerequisite for market acceptance and customer satisfaction. Here are some key quality
standards commonly used in quality management:
ISO 9000 Series:
The ISO 9000 series is a set of international standards developed by the International
Organization for Standardization (ISO) that provide guidelines for quality management
systems (QMS).
ISO/TS 16949:
ISO/TS 16949, now known as IATF 16949, is an international standard for quality
management systems in the automotive industry.
It emphasizes the development of a QMS focused on continuous improvement, defect
prevention, and reduction of variation and waste in the automotive supply chain.
Quality Standard
ISO 13485:
ISO 13485 is an international standard for quality management systems for medical
devices. It specifies requirements for organizations involved in the design, development,
production, installation, and servicing of medical devices to ensure compliance with
regulatory requirements and customer expectations.
AS9100:
AS9100 is a series of quality management system standards developed for the aerospace
industry. It encompasses the requirements of ISO 9001 but includes additional aerospace-
specific requirements related to safety, reliability, and regulatory compliance.
ISO 14001:
ISO 14001 is an international standard for environmental management systems (EMS).
While not directly focused on product quality, ISO 14001 helps organizations manage their
environmental impacts, which can indirectly affect product quality and customer
satisfaction.
Quality Standard
Six Sigma:
Six Sigma is a methodology for process improvement aimed at reducing defects
and variation in manufacturing and service processes.
While not a standard in the traditional sense, Six Sigma provides a structured
approach to quality management and is often implemented alongside quality
standards such as ISO 9001.

LEAN:
Lean manufacturing principles focus on eliminating waste and maximizing value
in production processes.
Lean methodologies, such as the Toyota Production System (TPS), complement
quality standards by emphasizing continuous improvement, customer focus, and
employee involvement.
Quality management
The principles are the basis of the ISO 9000 suite of quality
standards, including ISO 9001 and are as follows:
•Engagement of people
•Customer focus
•Leadership
•Process approach
•Improvement
•Evidence-based decision making
•Relationship management
Quality management
1. Engagement of People ( role of every resource )
ISO Management systems such as ISO 9001 are meant for everyone within the
organization that in one way or the other contributes affect processes within the
organization, not just for senior management.

Since this is the case, to fully benefit from your management systems, it is very
important to regularly and openly discuss issues and sharing knowledge and
experience with all necessary persons affecting your processes.

Everyone needs to understand their role in management systems implementation.

They need to feel valued for their contribution to a successful implementation. This
will demonstrate your organization’s commitment to improving quality.
Quality management
2. Customer focused
This principle requires organizations to focus on the actual need of their customers.
No organization can exist without customers, hence the needs of the customers has
to be prioritized.
A strong customer focus is an excellent way that an organization can demonstrate
their commitment to quality. One way to do is to gather customer feedback
(positive or negative). This can help spot areas in the business that may require
improvement; this may in turn help facilitate improved business performance even
further.
Aside from satisfying your customers, you should also consider the interests of other
stakeholders of the organization including the owners, employees, suppliers,
investors or the wider community. Their perspective can also help improve your
processes for better customer satisfaction.
Quality management
3. Leadership
This principle focuses on developing strong leadership. This involves having a clear
vision of the future of your organization. Effectively communicating this vision will
help ensure that your team are working towards same objectives of the organization,
hence giving your organization a shared sense of purpose, thereby improving the
morale of the employees.
Process Approach
Process-driven culture is based on the Plan Do Check Act (PDCA) principle of the
ISO 9001. It is an effective way of ensuring that you effectively plan resource
requirements and manage your processes and their interactions. No doubt many
processes are somewhat connected, made up of the input and resulting output.
Collectively managing these areas as a whole will help align operations for greater
efficiency, making it easier to achieve the objectives and identify areas for
improvement.
Quality management
Continuous Improvement
Continual improvement is a key to the implementation of ISO 9001 quality management
system standard. This should be captured in the organization’s core objective in order to
make the business stronger. Continuous improvement involves implementing processes for
identifying risks and opportunities, spotting and solving non-conformities, measuring and
monitoring on a consistent basis to enhance better performance.
Evidence-based decision making
The quality of decision made is a function of the accuracy and reliability of the data. This
cuts across finding the root cause of non-conformity. Ensure information is available to
those who need it and keep communication channels open.
Relationship management
The suppliers can be a source of competitive advantage but this requires a relationship
built on solid trust. Creating such lasting relationships with suppliers and other interested
parties would mean balancing short-term financial gains with long-term, mutually
beneficial strategies.
 Quality circle-Benefits
Benefits of Quality Circles
There are numerous benefits of Quality Circles:
Improved Quality: QC teams are dedicated to finding and fixing quality issues,
leading to better product or service quality.
Cost Reduction: Organizations can reduce waste and operational costs by
identifying and rectifying inefficiencies.
Enhanced Employee Morale: Involvement in QC activities boosts employee
morale, as they feel valued and engaged in making a difference.
Higher Productivity: As QC teams tackle process bottlenecks, productivity
increases, leading to more efficient operations.
Innovation: QC teams often come up with innovative solutions to longstanding
problems, driving organizational innovation.
Quality circle-Structure

Structure of a Quality Circle

Team Members: Comprising 6-12 employees from various levels

and departments of the organization.
Team Leader: Facilitates meetings, ensures discussions stay on track,
and acts as a liaison with management.
Meetings: Regularly scheduled meetings where team members
discuss and address quality issues.
Problem-Solving Tools: Quality Circles use various problem-solving
tools and techniques, such as the PDCA (Plan-Do-Check-Act) cycle
and fishbone diagrams.
Marketing
“Process by which companies create value for customers and build strong
customer relationships in order to capture value from customers in return.”

“Marketing is the activity, set of institutions, and processes for creating,

communicating, delivering, and exchanging offerings that have value for customers,
clients, partners, and society at large.”

proactive identification and exploitation of opportunities for acquiring and

retaining profitable customers through innovative approaches to risk
management, resource leveraging and value creation.”
Marketing- features
Marketing leads to exchange of products and services between buyers and sellers.
 For customers to buy a product:

Value of the product > Cost/price of the product

 Marketer should add to the value of the product so that

customers prefer it over competitors.
Marketing- features
Need : Essential requirements for survival and well-being. Identify and address consumer
needs through product development and marketing strategies.

Wants: Desires or preferences that go beyond basic needs. Create desire through branding,
advertising, and product differentiation to meet consumer wants and preferences.

Market offering refers to a complete offer for a product or service by specifying its
features:

o Shape
o Size
o Quality
o Taste
o Colour
It also specifies the given outlet or location at which such product or service is available.
Marketing Management

Choosing a target market

Creating demand for products and services and attracting more
customers
Creating, developing and communicating superior values for
customers.
Marketing- Procedure
1. Market Research:
Understand target audience
demographics, preferences,
and behavior.
2. Marketing Strategy:
Develop positioning and
differentiation strategies.

3. Product Development:
Ensure the product meets
consumer needs and
preferences.
Innovate based on market
feedback.
Marketing -types
Digital Marketing

Email Marketing

Account-based Marketing

Cause Marketing: Link your good or service to an issue or social cause to

resonate with your target audience.
Relationship Marketing

Undercover Marketing: A stealth approach, where consumers aren’t aware that

they’re being marketed to.
Word of Mouth
Transactional Marketing: Use coupons, discounts and events to facilitate sales
and attract your target audience through promotions.
Marketing- Procedure
4. Branding:
Create a strong brand identity.
Develop brand values and personality.
Establish brand positioning relative to competitors.
5. Distribution:
Select appropriate distribution channels.
Ensure availability and accessibility of the product/service.
6. Pricing:
Set pricing strategies based on market demand, competition, and perceived value.
7. Promotion:
Utilize various marketing channels such as digital, traditional, and experiential marketing.
Develop promotional campaigns to create awareness, interest, desire, and action (AIDA
model).
Implement customer relationship management (CRM) strategies to nurture customer
relationships.
Marketing
8. Packaging:

Protection and Preservation

Information Communication

Differentiation and Branding

Convenience and Functionality

Sustainability
Zomato’s “Accidental” Delivery Bag

Zomato once used a smart (and subtle) strategy where delivery agents

were seen carrying large, bright red bags with the brand name splashed

across them—even in places where no food was being delivered. The

idea? Just being seen created brand recall. It felt incidental, like, “Oh

wow, everyone’s ordering from Zomato.”

Marketing- Concepts
 The primary focus of business is on customer satisfaction. The following points
explain in brief the marketing concept:

o The organisation must clearly identify the target customer base and the market.
All its marketing efforts must be directed towards that particular market segment.

o It should work towards developing products and services which are according to
the needs of customers and should satisfy them.

o It must ensure that the product can satisfy the needs of customers better than
that done by competitors.

o The basic objective of all activities should be profit earning.

Marketing Mix

Marketing revolves around what’s called the four Ps:

Product
Price
Place
Promotion
Marketing- features
Need : Essential requirements for survival and well-being. Identify and address consumer
needs through product development and marketing strategies.

Wants: Desires or preferences that go beyond basic needs. Create desire through branding,
advertising, and product differentiation to meet consumer wants and preferences.

Market offering refers to a complete offer for a product or service by specifying its
features:

o Shape
o Size
o Quality
o Taste
o Colour 
It also specifies the given outlet or location at which such product or service is available.
Marketing- features
Marketing leads to exchange of products and services between buyers and sellers.
 For customers to buy a product:
Value of the product > Cost/price of the product
 Marketer should add to the value of the product so that customers prefer it over
competitors.
Following conditions should be satisfied for exchange to take place:

Presence of two or more parties, i.e. the buyer and the seller
Each party should offer something of value to the other
Effective communication should be there between the parties
Each party should deliver its own will in accepting or rejecting the offer, i.e.
exchange should be at will
Freedom to each party regarding whether to accept or reject the offer made by
the other
Marketing Management

Choosing a target market

Creating demand for products and services and attracting more

customers

Creating, developing and communicating superior values for

customers.
Marketing -types
Digital Marketing: The term digital marketing refers to an umbrella of activities such as content marketing, social
media marketing, SEO, and SEM. These digital marketing areas rely on data analysis and metrics to gauge success.
Paid Advertising: This is any advertising you pay for, such as print media or digital placement, which can include PPC
(pay per click).
Email Marketing: A component of digital marketing, email marketing, as the name suggests involves engaging
potential customers by sending emails at scale and doing A/B testing.
Account-based Marketing: Account-based marketing is a type of marketing strategy in which marketing and sales
departments jointly identify high-value accounts to launch personalized marketing efforts.
Cause Marketing: Link your good or service to an issue or social cause to resonate with your target audience.
Relationship Marketing: Build a relationship with your customer and enhance those existing relationships to build and
improve brand loyalty.
Undercover Marketing: A stealth approach, where consumers aren’t aware that they’re being marketed to.
Word of Mouth: One of the most important marketing strategies, but a hard one. That’s because it relies on people
giving positive impressions of your good or service, which builds sales and loyalty.
Internet Marketing: Create a content strategy to use the internet and other digital platforms to advertise your goods or
services.
Transactional Marketing: Use coupons, discounts and events to facilitate sales and attract your target audience
through promotions.
Diversity Marketing: When you have a wide range
 Marketing- Procedure

1. Market Research:
Understand target audience demographics, preferences, and behavior.
Analyze competitors and market trends.

2. Marketing Strategy:
Set clear objectives and goals.
Determine target market segments.
Develop positioning and differentiation strategies.

3. Product Development:
Ensure the product meets consumer needs and preferences.
Innovate based on market feedback.
Marketing- Procedure
4. Branding:
Create a strong brand identity.
Develop brand values and personality.
Establish brand positioning relative to competitors.
5. Distribution:
Select appropriate distribution channels.
Ensure availability and accessibility of the product/service.
6. Pricing:
Set pricing strategies based on market demand, competition, and perceived value.
7. Promotion:
Utilize various marketing channels such as digital, traditional, and experiential marketing.
Develop promotional campaigns to create awareness, interest, desire, and action (AIDA
model).
Implement customer relationship management (CRM) strategies to nurture customer
relationships.
Marketing
8. Packaging:
Protection and Preservation:
Ensure the product is protected from damage during storage, transportation, and handling.
Preserve product freshness and quality.
Information Communication:
Provide essential product information (ingredients, usage instructions, expiration dates, etc.).
Communicate brand identity, values, and positioning through visual elements (logo, colors, design).
Differentiation and Branding:
Use packaging design to differentiate the product from competitors.
Reinforce brand identity and recognition.
Convenience and Functionality:
Design packaging for ease of use and convenience for consumers.
Consider factors such as reseal ability, portion control, and storage.
Sustainability:
Implement environmentally friendly packaging materials and designs.
Communicate eco-friendly initiatives to consumers.
Advertising
Media Selection:
Choose appropriate advertising channels based on target audience preferences and behavior.
Consider digital channels (social media, search engines, websites), traditional media (TV, radio,
print), and outdoor advertising (billboards, transit ads).
Message Development:
Craft compelling and persuasive advertising messages.
Highlight key product benefits and unique selling propositions (USPs).
Creative Execution:
Develop visually appealing and engaging advertisements.
Ensure consistency with brand identity and values.
Campaign Management:
Plan and execute advertising campaigns effectively.
Monitor campaign performance and adjust strategies as needed.
Measurement and Evaluation:
Track advertising metrics such as reach, impressions, click-through rates, and conversions.
Evaluate ROI and effectiveness of advertising efforts.
Industrial relations
Industrial relations refer to the relationship and interactions between employers,
employees, and their representatives within the workplace or industry. It
encompasses various aspects of employment, including labour laws, collective
bargaining, dispute resolution, and employee rights. Here's an overview of key
components of industrial relations:
Labour Laws and Regulations:
Employer-Employee Relationship:
Collective Bargaining
Trade Unions and Employee Representation:
Dispute Resolution:
Employee Rights and Protections:
Labour Relations Policies and Practices:
.
Industrial relations

Industrial relations refer to the relationship and interactions between

employers, employees, and their representatives within the workplace or
industry.
Labour Laws and Regulations
Employer-Employee Relationship
Collective Bargaining
Trade Unions and Employee Representation
Dispute Resolution
Employee Rights and Protections:
Labour Relations Policies and Practices
Industrial relations
1. Labor Laws and Regulations:
Industrial relations are governed by labor laws and regulations that set standards
for employment conditions, wages, working hours, safety, and other aspects of
the employer-employee relationship.
These laws vary by country and jurisdiction and often aim to protect the rights
and interests of workers.

2. Employer-Employee Relationship:
Industrial relations involve managing the relationship between employers and
employees, including issues such as recruitment, hiring, training, performance
management, and termination.
Employers have responsibilities to provide fair wages, safe working conditions,
and opportunities for advancement, while employees are expected to perform
their duties effectively and abide by workplace policies.
Industrial relations
3. Collective Bargaining:
Collective bargaining refers to negotiations between employers and labor unions or
employee representatives to establish terms and conditions of employment, such as
wages, benefits, and working conditions.
Collective bargaining agreements, often called labor contracts, are legally binding
agreements that govern the relationship between employers and employees within a
particular workplace or industry.
4. Trade Unions and Employee Representation:
Trade unions play a crucial role in industrial relations by representing the interests
of workers and advocating for their rights.
Unionized workplaces typically have elected union representatives who negotiate
with management on behalf of employees, address grievances, and ensure
compliance with labor laws and collective agreements.
Salaries and Wages

What is Wages?

Wages refer to the payment made to a worker based on the

number of hours, days, or units of work done.

Usually given to blue-collar workers or laborers.

Time-based (hourly/daily) or piece-rate (per item made).

Salaries and Wages

What is Salary?

Salary is a fixed, regular payment given to an employee,

usually monthly, regardless of hours worked.

Common for white-collar jobs or office-based roles.

Includes a fixed amount, often with additional perks (like

HRA, medical).
Wages = “Work more, earn more.

”Salary = “Fixed pay, even if you take a Sunday off.”

Compensation = “The full reward for all your work, not

just the money.”
Fixed pay or fixed salary is a definite amount that a company offers to employees
in return for their service.
This salary is mentioned in an employee's salary slip and other allowances. Basic
pay, Dearness Allowance (DA), conveyance allowance, House Rent
Allowance (HRA) and other types of special allowances are a few examples of
fixed pay.

Variable pay is an incentive that an employee might receive upon fulfilling

certain conditions.
Failing to do so, the company might not provide the employee with the variable
pay. A good example of variable pay is performance-based incentives.
 Types of Incentives
Monetary Incentives

Performance Bonus
Profit Sharing
Sales Commission
Stock Options

Non-Monetary Incentives

Recognition Programs
Flexible Work Hours
Promotions
Career Development Opportunities
Strategic Importance of
Compensation
Attracts top talent
Retains skilled employees
Boosts motivation and
performance
Aligns employee efforts with
organizational goals
Salaries and Wages
TA – Travelling Allowance

TA is money given to an employee to cover travel expenses while doing official

work.
If a person travels to a nearby town to buy supplies, Ravi (the owner) gives her
₹500 for travel. That’s her TA.

2. DA – Dearness Allowance
DA is a cost-of-living adjustment allowance.

It helps employees deal with rising prices (inflation).

The tea maker, gets ₹5,000/month. To help him manage increasing prices of food
and transport, he gets an extra ₹1,000 as DA.
Gratuity is a lump sum amount paid by the employer to the
employee as a thank-you for long service — usually when you
leave the company after working for 5 or more years.

CTC
Cost-to-company (CTC) is the total amount an employer promises
to pay its employees for their service in one financial year.
A CTC comprises components like PF employer contributions,
insurance, gratuity, and other additional benefits.
Salaries and Wages

Benefit Purpose Taxability

TA (Transport Allowance) Covers commute to work Tax-free up to ₹1,600/month
DA (Dearness Allowance) Fights inflation Fully taxable
HRA (House Rent Partially tax-free (Sec
Rent support
Allowance) 10(13A))

LTA (Leave Travel

Travel within India Tax-free for 2 trips in 4 years
Allowance)
Medical Reimbursement For medical bills Tax-free if bills are submitted
Employer’s contribution tax-
Provident Fund (PF) Retirement savings
free up to 12%
"Stores" refers to the physical side — how materials and products are stored,

issued, and controlled in a warehouse or storage area.

Bin Cards – Manual or digital record for each item showing stock movement.

Material Requisition Note (MRN) – Used to request items from the store.

Goods Received Note (GRN) – Confirms receipt of items from suppliers.

Stock Register – Detailed record of inventory quantity and movement.

Stock Verification – Checking physical stock against records.

Issuing Materials – How goods are given out for production or use.
Purchase Order (PO) Document sent to supplier requesting goods

Goods Received Note (GRN) Confirms items were received from the supplier

Invoice/Bill Sent by supplier requesting payment

Credit Purchase Payment made later (on account)

Cash Purchase Payment made immediately

Purchase Return Returning goods back to the supplier

Objectives of Advertising
Informing: Introduce a new product or service.

Persuading: Convince customers to prefer a brand.

Reminding: Keep the product in the consumer's mind.

Reinforcing : Create and sustain a strong brand image. Remind

customers that they made the right choice

Importance of Advertising in Business

Helps businesses reach target markets

Boosts sales and revenue

Creates brand recognition and loyalty

Aids in market expansion

Supports product differentiation

The Advertising Process
Setting Objectives – What is the ad supposed to achieve?
Target Audience Identification – Whom are we talking to?
Message Development – What do we want to say?
Media Planning – Where will we say it?
Execution – Design, production, placement
Evaluation – Measure effectiveness (ROI, engagement, reach)
 Advertising Media Types
Medium Description Example

Print Media Newspapers, magazines Times of India, India Today

Broadcast Media TV, Radio Star Sports, FM Radio

Banners, hoardings, transit

Outdoor Media Metro ads, Bus ads
ads

Digital Media Social media, websites, email Instagram ads, Google Ads

Cinema/Theatre Ads before movies Product placements in films

Appeals Used in Advertising

Emotional Appeal – Fear, love, happiness (e.g.,

insurance ads)

Rational Appeal – Price, quality, features (e.g., laptops,

appliances)

Moral Appeal – Social messages (e.g., save water, drive

safe)
Tagline: “Kuch Meetha Ho Jaaye” (Let’s have something sweet).
Amitabh Bachchan was the brand ambassador.

📈 Impact:
Sales increased by 20% in one year.

Cadbury became a household brand for all age groups.

Brilliant example of emotional advertising + cultural relevance.

Fevicol – “The Ultimate Bond”

🎯 Objective:
Establish Fevicol as the strongest adhesive in the Indian market.

💡 Campaign Idea:
Use humor and exaggeration to showcase how Fevicol sticks forever.

📺 Execution:
Iconic ad of a crowded rural bus with a "Fevicol" sticker — packed with people,
but not breaking apart.
Catchphrase: “Fevicol ka jod hai, tootega nahi.”
📈 Impact:
Became a top-of-mind brand for adhesives.
Criticism of Advertising
Creates False Needs
– Promotes materialism by making people want what they don’t need.
E.g.: Luxury products = happiness.
Misleading Claims
– Exaggerates benefits or hides facts.
E.g.: Fairness creams, weight loss ads.
Targets Children Unfairly
– Influences young minds with toys, junk food, or emotional appeals.
E.g.: Cartoon ads for fast food.
Reinforces Stereotypes
– Promotes outdated gender roles or beauty standards.
E.g.: Women in all cleaning product ads.
Promotes Harmful Products
– Surrogate ads for alcohol, tobacco, etc.
E.g.: Soda brand actually promoting liquor.
Cost of advertising is passed on to consumers.
Inventory control is the process of managing and
overseeing the ordering, storage, and use of materials
or products a business uses in its operations.

It ensures that the right amount of inventory is available at the right

time and place — not too much, not too little.
Types of Inventory
Raw Materials – Basic inputs for production.

Work-in-Progress (WIP) – Items partially completed.

Finished Goods – Products ready for sale.

Maintenance, Repair, and Operations (MRO) – Supplies used in production but

not part of the final product.

Inventory Control Methods

FIFO (First In, First Out) – Oldest inventory is sold first.

LIFO (Last In, First Out) – Newest inventory is sold first.

JIT (Just in Time) – Inventory arrives exactly when needed, minimizing storage.

EOQ (Economic Order Quantity) – Formula to determine the ideal order quantity.

ABC Analysis – Categorizing inventory into A (most valuable), B, and C (least

valuable).
Stock Levels

Minimum Level – Lowest quantity before reorder is necessary.

Maximum Level – Highest quantity that should be in stock.

Reorder Point – When to reorder to avoid running out.

Lead Time – Time between placing and receiving an order.

Safety Stock – Extra inventory kept to avoid stock-outs.

Why Is This Important?
Ensures accurate stock and financial records

Prevents fraud or theft

Helps in audit readiness

Supports better decision-making and cost control