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WE ARE PROVIDING CASE STUDY ANSWERS ASSIGNMENT SOLUTIONS, PROJECT REPORTS AND THESIS ISBM / IIBMS / IIBM / ISMS / KSBM / NIPM SMU / SYMBIOSIS / XAVIER / NIRM / PSBM ISM / IGNOU / IICT / ISBS / LPU / ISM&RC MBA - EMBA - BMS - GDM - MIS - MIB DMS - DBM - PGDM - DBM - DBA www.mbacasestudyanswers.com www.casestudies.co.in [email protected] ARAVIND 09901366442 - 09902787224

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Page 1: ISBM / IIBMS / IIBM / ISMS / KSBM / NIPM SMU / SYMBIOSIS / XAVIER / NIRM / PSBM ISM / IGNOU / IICT / ISBS / LPU / ISM&RC MBA - EMBA - BMS - GDM - MIS - MIB DMS - DBM - PGDM - DBM -

WE ARE PROVIDING CASE STUDY ANSWERSASSIGNMENT SOLUTIONS, PROJECT REPORTS

AND THESIS

ISBM / IIBMS / IIBM / ISMS / KSBM / NIPM

SMU / SYMBIOSIS / XAVIER / NIRM / PSBM

ISM / IGNOU / IICT / ISBS / LPU / ISM&RC

MBA - EMBA - BMS - GDM - MIS - MIB DMS - DBM - PGDM - DBM - DBA

www.mbacasestudyanswers.comwww.casestudies.co.in

[email protected]

ARAVIND 09901366442 - 09902787224

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SUBJECTS

A B C

ACCOUNTING MANAGEMENTAUDIT MANAGEMENTADVERTISING ADVERTISING MANAGEMENTAUTOMOBILE MANAGEMENTASSET MANAGEMENTAVIATION MANAGEMENTAGRICULTURE MANAGEMENTARCHITECTURAL MANAGEMENTAIR TRANSPORT MANAGEMENT

BANKING MANAGEMENTBPO MANAGEMENTBANKING & FINANCIAL SERVICES MANAGEMENT BUSINESS MARKETINGBUSINESS ETHICSBUSINESS COMMUNICATIONBUSINESS LOGISTICS BIO TECHNOLOGY MANAGEMENTBUSINESS ADMINISTRATIONBUSINESS MANAGEMENTBUSINESS ENVIRONMENTBUSINESS PLANNINGBUSINESS STRATEGYBOI-TECHNOLOGY MANAGEMENT

CORPORATE LAWCONSUMER BEHAVIORCORPORATE FINANCECOST MANAGEMENT & ACCOUNTANCYCORPORATE & FINANCE MANAGEMENTCORPORATE GOVERANCECOMMUNICATION MANAGEMENTCLINICAL PHARMACOLGYCLINICAL RESEARCHCUSTOMER RELATIONSHIP MANAGEMENTCONSTRUCTION MANAGEMENTCUSTOMER CARE MANAGEMENTCALL CENTRE MANAGEMENTCO – OPERATIVE MANAGEMENTCONSUMER MANAGEMENTCORPORATE FINANCE MANAGEMENTCHARTERED FINANCE MANAGEMENT

D E F

DAIRY MANAGEMENTDISTRIBUTION LOGISTIC MANAGEMENTDATABASE MANAGEMENTDEVELOPMENT STRATEGY

E-BUSINESS SYSTEME-COMMERCEENERGY MANAGEMENTEQUITY RESEARCH MANAGEMENTENTREPRENEUR MANAGEMENTEVENT MANAGEMENTENTREPRENEURSHIP MANAGEMENTEXPORT IMPORT MANAGEMENTEXPORT MANAGEMENT

FINANCEFINACE MANAGEMENTFINACIAL & COST ACCOUNTINGFINANCIAL ACCOUNTANCYFINANCIAL INSTITUTIONSFASHION MANAGEMENTFOREIGN EXCHANGE MANAGEMENT

G H I

GENERAL MANAGEMENTGLOBAL MARKETING MANAGEMENT

H R MANAGEMENTHUMAN RESOURCE MANAGEMENTHOSPITAL MANAGEMENTHEALTHCARE MANAGEMENTHOSPITALITY MANAGEMENTHOTEL MANAGEMENTHOLISTIC MANAGEMENTHOSPITAL ADMINISTRATIONHARDWARE MANAGEMENT

INTERNATIONAL FINACEINTERNATIONAL FINACE MANAGEMENTINTERNATIONAL HR MANAGEMENTINTERNATIONAL BUSINESSINFORMATION TECHNOLOGYINDUSTRIAL MANAGEMENTINVESTMENT MANAGEMENTINVESTMENT ANALYSIS MANAGEMENTINDUSTRIAL MARKETINGINDUSTRIAL RELATIONSINFORMATION MANAGEMENTINDUSTRIAL SAFETY MANAGEMENTINTERNATIONAL BUSINESS MANAGEMENTINVENTORY MANAGEMENTINDUSTRIAL RELATION LABOUR LAWIT FOR MANAGEMENTINFRASTRUCTURE MANAGEMENT

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INTELLECTUAL PROPERTY RIGHTSINTERIOR MANAGEMENT

L M N

LOGISTICSLOGISTIC MANAGEMENTLOGISTIC ENGINEERING

MARKETINGMARKETING MANAGEMENTMASS COMMUNICATIONMEDIA MANAGEMENTMUTUAL FUND MANAGEMENTMARKET RISK MANAGEMENTMARKETING FINANCE MANAGEMENTMATERIAL MANAGEMENTMANAGEMENT INFORMATION SYSTEMMANAGEMENT OF SALES FORCEMANAGERIAL ECONOMICSMANUFACTURING PLANNING & CONTROLMASS COMMUNICATION MANAGEMENTMERGERS & ACQUISITIONSMARKET RISK MANAGEMENT

NETWORKINGNETWORK MANAGEMENTNETWORKING MANAGEMENT

O P Q

OPERAIONSOPERATIONS MANAGEMENTORGANIZATION BEHAVIOROPERATING SYSTEMOPERATION RESEARCH

PRINCIPLE & PRACTICE OF MANAGEMENTPERSONNEL MANAGEMENTPROJECT MANAGEMENTPRODUCTION & OPERTION MANAGEMENTPROFFESSIONAL COMMUNICATIONPURCHASING MANAGEMENTPETROLEUM MANAGEMENTPORTPOLIO MANAGEMENTPHARMACOLOGY MANAGEMENTPUBLIC RELATIONSHIP MANAGEMENTPUBLIC ADMINISTRATION

QUANTITATIVE METODSQUATITATIVE TECHNIQUES IN MANAGEMENTQUANTITATIVE MANAGEMENT

R S T

RESEARCH METHODOLOGYRETAIL MANAGEMENTRISK & SAFETY MANAGEMENTRISK & INSURANCE MANAGEMENTRURAL MANAGEMENT

SALES & DISTRIBUTION MANAGEMENTSIX SIGMA MANAGEMENTSIX SIGMA GREEN BELT MANAGEMENTSIX SIGMA BLACK BELT MANAGEMENTSTATICAL QUALITY CONTROLSUPPLY CHAIN MANAGEMENTSTORE MANAGEMENTSOFTWARE PROJECT MANAGEMENTSHIPPING MANAGEMENTSOFTWARE MANAGEMENTSAP CONSUTANCY MANAGEMENTSALES MANAGEMENT

TELECOM MANAGEMENTTOTAL QUALITY MANAGEMENTTREASURY MANAGEMENTTOTAL SUPPLY MANAGEMENTTRAVEL & TOURISM TRAINING & DEVELOPINGTAKE OVER AQUISATION TAXATION MANAGEMENTTEXTILE MANAGEMENT

Business Communication

Multiple choice:1. __________is an essential function of Business Organizations:a. Informationb. Communicationc. Power

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d. None of the above2. Physiological Barriers of listening are:a. Hearing impairmentb. Physical conditionsc. Prejudicesd. All of the above3. Which presentation tend to make you speak more quickly than usual:a. Electronicb. Oralc. Both „a‟ and „b‟d. None of the above4. What is the main function of Business Communication:a. Sincerityb. Positive languagec. Persuasiond. Ethical standard5. The responsibilities of the office manager in a firm that produces electronics spares is:a. Everything in the office runs efficientlyb. Furniture and other equipment in the office is adequatec. Processing all the incoming official mail and responding to somed. All of the above6. Labov‟s Storytelling Model based on:a. Communication through speechb. Language learningc. Group Discussionsd. None of the above7. Diagonal Communication is basically the:a. Communication across boundariesb. Communication between the CEO and the managersc. Communication through body languaged. Communication within a department8. How to make Oral Communication Effective?a. By Clarityb. By Brevityc. By Right wordsd. All of the above9. Direct Eye contact of more than 10 seconds can create:a. Discomfort & Anxietyb. Emotional relationship between listeners and speakersc. Excitementd. None of the above10. Encoding means:a. Transmissionb. Perceptionc. Ideationd. None of the abovePart Two:1. Define 7C‟s of effective communication.2. Explain „Space Language‟.3. Differentiate between good listeners and bad listeners.4. List the different types of business report.5. Define „Kinesics‟.

Business CommunicationCaselet 1Mr. and Mrs. Sharma went to Woodlands Apparel to buy a shirt. Mr. Sharma did not read the

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price tag on the piece selected by him. At the counter, while making the payment he asked forthe price. Rs. 950 was the answer.Meanwhile, Mrs. Sharma, who was still shopping came back and joined her husband. She wasglad that he had selected a nice black shirt for himself. She pointed out that there was a 25%discount on that item. The counter person nodded in agreement.Mr. Sharma was thrilled to hear that “It means the price of this shirt is just Rs. 712. That‟sfantastic”, said Mr. Sharma.He decided to buy one more shirt in blue color.In no time, he returned with the second shirt and asked them to be packed. When he received thecash memo for payment, he was astonished to find that he had to pay Rs. 1,900 and Rs. 1,424.Mr. Sharma could hardly reconcile himself to the fact that the counter person had quoted thediscounted price which was Rs. 950. The original price printed on the price tag was Rs. 1,266.Questions1. What should Mr. Sharma have done to avoid the misunderstanding?2. Discuss the main features involved in this case.Caselet 2I don‟t want to speak to you. Connect me to your boss in the US,” hissed the American on thephone. The young girl at a Bangalore call centre tried to be as polite as she could. At another callcentre, another day, another young girl had a Londoner unleashing himself on her, “Young lady,do you know that because of you Indians we are losing jobs?”The outsourcing backlash is getting ugly. Handling irate callers is the new brief for the youngmen and women taking calls at these outsourced job centres. Supervisors tell them to be „cool‟.Avinash Vashistha, managing partner of NEOIT, a leading US-based consultancy firm says,“Companies involved in outsourcing both in the US and India are already getting a lot of hatemail against outsourcing and it is hardly surprising that some people should behave like this onthe telephone.” Vashistha says Indian call centre‟s should train their operators how to handlesuch calls. Indeed, the furor raised by the Western media over job losses because of outsourcingExamination Paper of Business Communicationhas made ordinary citizens there sensitive to the fact that their calls are being taken not fromtheir midst, but in countries such as India and the Philippines.The angry outbursts the operators face border on the racist and sexist, says the manager of a callcentre in Hyderabad. But operators and senior executives of call centres refuse to go on recordfor fear of kicking up a controversy that might result in their companies‟ losing clients overseas.“It‟s happening often enough and so let‟s face it,” says a senior executive of a Gurgaon callcentre, adding, “This doesn‟t have any impact on business.”Questions1. Suppose you are working as an operator in a call centre in India and receiving callsfrom Americans and Londoners. How would you handle such calls?2. Do you agree with the view such abusive happenings on the telephone do not have any impact on business?1. What do you by Communication Barriers? How and why do they occur? What can be done to overcome the Barriers to Communication?2. Define and explain the term Negotiation and also briefly explain the phases of Negotiation.

Corporate Governance Professional

1. Corporate Governance is-

a) About ethical conduct in business b) Direct or indirect concerns in the organization c) A manufacturing system d) None of the above

2. The term corporate governance is derived from the-

a) Greek word b) English word

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c) French word d) Latin word

3. The definition “Corporate Governance is the system by which business directed and controlled” is given by-

a) SEBI committee b) OECD committee c) Cadbury committee d) All of the above

4. Internal control is implemented by the-

a) Board of directors b) Audit committee c) Management d) All of the above

5. OECD stands for__________________

6. Which of the following have the power to hire fire and compensate the top management?

a) Board of directors b) Audit committee c) Shareholders d) Management

7. CII stands for ____________________

8. The managers are expected to act in the interest of-

a) Audit committee b) Stakeholders c) Employees d) Customers

9. To endorse the organization strategy, develop directional policy, appoint, supervise and remunerate senior executives and to ensure accountability of the organization to its owners and authorities is the responsibility of

a) CEO b) Manager c) Top management d) Board of directors

10. SEBI stands for_________________

11. The role of corporate governance is-

a) To ensure the efficient use of resources b) It increases the shareholders value c) Reduce the procurement and inventory cost d) All of the above

12. Which of the following is not the issue of corporate governance?

a) Internal control

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b) Compensation of CEO and other directors c) Management of risk d) Rights of corporation

13. The annual report should not include-

a) How decision are taken by the board b) The name of the chairman, CEO and other directors c) Ability to hire management d) The number of meeting

14. _____________________ is equal to the market price of his holding in shares.

a) Stakeholders wealth b) Ethical conduct c) Shareholder’s wealth Corporate Governance Professional

15. The key element of good corporate governance principle include-

a) Honesty b) Mutual respect c) Performance orientation d) All of the above

16. SOX stands for_____________________

17. The commonly accepted principle of corporate governance are-

a) Protection of shareholders right b) Role and responsibilities of board c) Interest of other stakeholders d) All of the above

18. CII developed code of corporate governance in_____________________

a) 1997 b) 1996 c) 1994 d) 1878

19. The property right is views simply as ____________________

a) Planning right b) Control right c) Both a&b d) None

20. In which type of model the supervisory board is elected by shareholders and labor unions

a) Japanese model b) Anglo American model c) German model d) The Indian perspective

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21. Which of the following come under the five principles of ethical power for organization?

a) Purpose b) Pride c) Patience d) All of the above

22. Which of the following are the theories of corporate governance?

a) Shareholders theory vs. stakeholders theory b) Stewardship theory c) Property right theory d) All of the above Corporate Governance Professional

23. The stewardship theory is-

a) Control oriented b) Involvement oriented c) Both a&b d) None of these

24. ____________________ include government nominees and representatives of financial institutions

a) Board of directors b) Creditors, suppliers c) Nominee directors d) Chief executive officer

25. The ____________________ oversees internal control and disclosure controls and procedures for financial reporting.

a) Nominating committee b) Audit committee c) Board committee d) Higgs committee

26. MDAR stands for_______________

27. Liaison committee designed to make a link between two groups or committees.

a) True b) False

28. Cadbury committee established in______________

a) 1999 b) 1995 c) 1992 d) 2002

29. How many recommendation is made by CII code-

a) 17 b) 18

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c) 16 d) 19

30. Kumar mangalam committee is appointed by the-

a) CII b) SEBI c) Government d) None

31. The remuneration of the non-executive directors should be decided by the-

Corporate Governance Professional

a) Board of directors b) Top management c) Stakeholders d) Entire board

32. Which of the following committee was appointed by the SEBI to make recommendations on the representation of independent directors on company board and the composition of audit committee

a) Cadbury committee b) Kumar mangalam committee c) Naresh Chandra committee d) Board committee

33. Basic shareholders rights include the right to-

a) Secure methods of ownership b) Convey or transfer shares c) Participate and vote in general shareholder meetings d) All of the above

34. Which of the following is use to ensure that the takeover bids are serious?

a) Disclosure b) Trigger c) Escrow d) Creeping acquisition

35. Which of the following are the natures of complaints by shareholders?

a) Non receipt of dividend b) Change of address c) Transmission of shares d) All of the above

36. The word “transmission” means-

a) Transfer by operation of law b) Transfer by operation c) Both a&b d) None of the above

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37. Competition, debt covenants, takeover and media pressure are the-

a) Internal corporate governance controls b) External corporate governance control c) Both a&b d) None

38. Simple directors who attends board meeting of a company and participate of a company and participate in the matters before the board is-

Corporate Governance Professional

a) Ordinary directors b) Managing directors c) Executive directors d) Shadow directors

39. The director who perform a specific role in a company under a service contract which requires a regular, possibly daily, involvement in management is known as-

a) Non-executive director b) Additional director c) Executive director d) Ordinary director

40. Which of the following is the duty of directors?

a) Statutory duties b) Duties of general nature c) Both a&b d) None

41. Which of the following are the not the general duty of directors?

a) Duty of good faith b) Duty of care c) Duty not to delegate d) To disclose interest

42. A document that specifies the regulations for a company’s operation is known as-

a) Memorandum of association b) Articles of association c) Both a&b d) None

43. Any person, company, or other institution that owns at least one share in a company is known as-

a) Stakeholder b) Employees c) Shareholder d) Customer

44. Nomination committee is appointed by the-

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a) CEO b) Board of directors c) Management d) Audit committee

45. The profit earned by the company with reference to the cost of capital in terms of economic profit is referred to as-

Corporate Governance Professional

a) Pay-performance b) Organization bylaws c) Economic value added d) None of the above

46. Which of the following are the types of the auditor?

a) Internal b) External c) Government d) All of the above

47. The auditors specialize in crimes and are used by law enforcement organization when financial documents are involved in a crime is known as-

a) Forensic auditor b) Government auditor c) External auditor d) Internal auditor

48. Set of standards against which the quality of audits is performed and may be judges is-

a) Generally accepted accounting principles b) General accepted auditing standards c) Audit d) None

49. A ______________ audit is a review in which an auditor analyzes and verifies various records and processes relating to a company’s quality programs.

a) Cost audit b) Forensic audit c) Quality audit d) none

50. The important aspects of cost audit are:

a) Property audit b) Efficiency audit c) Both a&b d) Government audit

51. SICA stands for_______________

52. BIFR stands for_______________

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53. Basic principles of audit are_______________

a) Integrity, objectivity & independence

Corporate Governance Professional

b) Confidentiality c) Documentation d) All of the above

54. As per the SEBI guidelines, the audit committee shall meet at least-

a) Twice a year b) Thrice a year c) Once a year d) None

55. _________________ opined that the chairman of the audit committee should be an independent director. a) Cadbury committee b) Board committee c) KM Birla committee d) Audit committee

56. An audit committee should aware of technological changes, which is_________________ risk/condition.

a) Internal b) External c) Both a&b d) None

57. The committees of the board involve_________________

a) Supervisory committee b) Risk management committee c) Shareholders’ redressal committee d) All of these

58. NBFCs stands for_________________

59. CSR stands for_________________

60. Which of the following is the essential of accord of Basel II?

a) Capital adequacy b) Risk based supervision c) Market disclosure d) All of the above

61. Which of the following are the objectives of Basel II ?

a) To promote adequate capitalization of banks b) To ensure better risk management c) To strengthen the stability of banking system d) All of the above

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Corporate Governance Professional

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62. The ganguly committee is of the view that the draft minutes of the board meeting should be forwarded to the director’s within_________________ hours of meeting.

a) 56 b) 64 c) 48 d) 32

63. In which ethical principle of the business ethics are measured by rightness of an act and depend little on the results of this act?

a) Teleological ethical system b) Deontological ethical system c) Hybrid theory d) Individual freedom

64. One of the major ethical issue in advertising is the use of______________

a) True b) False

65. Major social responsibilities of business involve-

a) Optimum utilization of scarce national resources b) Responsibility no to make losses c) Improve quality of life d) All of above

66. Government is thinking of making it mandatory for the companies to spend_________________% of their net profits on CSR.

a) 2 b) 4 c) 6 d) 8

67. It is the responsibility of the firm towards its________________ to avoid any type of cartel formation that a attempts to reap monopoly profits.

a) Shareholders b) Customers c) Employees d) Management

68. Four important group that business are shareholders, employees, customers and_________________

a) Management b) Board of director c) Society d) Stakeholder

Corporate Governance Professional

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69. NGO stands for_________________

70. Employees should get_________________ wages

a) Clear b) Minimum c) Maximum d) Fair

71. Objectives of environmental audit are-.

a) Verification of legislative and regulatory compliance b) Assessment of internal policy and procedural conformamance c) Establishment of current practice status d) All of the above

72. Review of documents and records, Review of policies, interviews are comes under which stage-

a) Pre-audit stage b) Post-audit stage c) Audit stage d) None

73. Environment protection act was passed in________________ for the protection of environment.

a) 1988 b) 1999 c) 1986 d) 1990

74. The financial or non-financial support of an activity, used primarily to reach the given business goals is-

a) Media b) finance c) Both a&b d) Sponsorship

75. A printed report giving news or information of interest to a special group.

a) Newsletter b) Formal meeting c) Mailing list d) Media release

76. Media can be used to promote_______________ communication.

a) One way b) Two way

Corporate Governance Professional

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c) Both a&b d) None

77. Businesses arrange for______________ meetings with powerful stakeholders.

a) Information display b) Public forum c) Formal meeting d) Informal meeting

78. MRTP stands for_________________

79. IRDA stands for_________________

80. It is said to be exist where there is a large number of procedures (firms) producing a same kind of product.

a) Monopoly competition b) Monopolistic competition c) Perfect competition d) None

81. Which of the following aspects of economic activity is not control by MRTP?

a) Restrictive on buying/selling b) Unfair trade practices c) Concentration of economic power d) Restrictive trade practices

82. Price control is the restriction on maximum prices that is established and maintained by the government.

a) True b) False

83. Public policy is an attempt by the government to address a private issue.

a) True b) False

84. The SEBI was established on________________

a) March 12, 1992 b) September 14, 1992 c) April 12, 1992 d) June 15, 1993

85. The seller of the security is-.

a) Bear b) Bull

Corporate Governance Professional

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c) Both a&b d) none

86. Insider trading can be defined as the sale or purchase of securities by persons who possess price sensitive information about the company.

a) True b) False

87. _______________ makes a commitment to get the underwritten issue subscribed either by other or by them.

a) Utilitarianism b) Underwriters c) Insider trading d) None

88. The board of SEBI consists of_______________

a) 8 b) 7 c) 4 d) 6

89. SEBI has three functions rolled into one body quasi-legislative, quasi-judicial, and quasi-executive.

a) True b) False

90. SEBI is the regulator for the securities market in India.

a) True b) False

91. AMFI stands for_________________.

92. Buying a commodity at a low price and instantly selling it for a higher price in another market is known as-

a) Hedging b) Speculating c) Arbitrage d) Shifting of risk

93. An over-the-counter market where buyers and sellers conduct foreign exchange transaction.

a) Commodity exchange b) Foreign direct investment c) FOREX d) None

Corporate Governance Professional

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94. Licensing grant a permit to aloe the use of something or to allow a business activity to take place.

a) True b) False

95. Government often uses quotas to restrict export.

a) True b) False

96. Private companies can enjoy the right to transfer shares.

a) True b) False

97. India has 22 stock exchanges.

a) True b) False

98. Foreign companies are those, which have been incorporated outside India and conduct business in India.

a) True b) False

99. Clause 49 has been prepared by the Reserve Bank of India.

a) True b) False

100. Corporate Governance ensures easy access to capital. a) True b) False

Distribution & Logistics Management

Part One: Multiple Choices: 1. It deals with the movement of finished goods from the last point of production to the point of consumption. a. Marketing Channel Management b. Logistics Management c. Boundaries d. Relationships

2. Which conflict is one of the major bottleneck in the development & maintenance of partnering channel relationship a. Channel conflict b. Management conflict c. Logistics conflict d. Distribution conflict

3. The phase of externally integrated business function era (1990s onwards) is recognized as the era of

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a. Logistics Management b. Human Resource Management c. Financial Management d. Supply Chain Management

4. ___________ may be conducted from time-to-time or at least once in a year to know about change in the expectation levels & actual performance a. Customer Service Monitoring cell b. Formal Customer Satisfaction Survey c. Customer Conference d. Customer Feedback System

5. The firm’s incomplete or inaccurate knowledge of customer’s service expectations is known as a. Market Information Gap b. Service Standards Gap c. Service Performance Gap d. Internal Communication Gap

6. This gap exist between the present level of customer service offered and the corporate vision about customer service a. Gap 1 b. Gap 2 c. Gap 3 d. Gap 4

7. This stock refers to window display of an inventory in order to stimulate demand and act as a silent salesman a. Decoupling stock b. Psychic stock c. Pipeline stock d. None

8. This stock is also known as cycle or lot size stock a. Working stock b. Safety stock c. Anticipation stock d. None

9. In this system manufacturer is given the responsibility for monitoring & controlling inventory levels at the retail store level a. Quick Response b. Continuous Replenishment c. Vendor-managed Inventory d. Customer Relationship

10. This mode of transport is a very significant one but with a very restricted scope. It is used primarily for the shipment of liquid & gas a. Airways b. Railways c. Pipelines d. Seaways

Part Two:

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1. What is Containerization and also mention the main features of Containerization.

2. What is Third Party Logistics?

3. Differentiate between Public & Private Warehouse.

4. What is Logistics Information System?

Caselete 1 Superior Medical Equipment Company supplies electrical equipment that is used as components in the assembly of MRI, CAT scanners, PET scanners, and other medical diagnostic equipment. Superior has production facilities in Phoenix, Arizona, and Monterrey, Mexico. Customers for the components are located in selected locations throughout the United States and Canada. Currently, a warehouse, that receives all components from the plants and redistributed them to customers, is located at Kansas City, Kansas. Superior’s management is concerned about location of its warehouse since its sales have declined due to increasing competition and shifting sales levels among the customers. The lease is about to expire on the current warehouse, and management wishes to examine whether it should be renewed or warehouse space at some other location should be leased. The warehouse owner has offered to renew the lease at an attractive rate of $2.75 per sq. ft. per year for the 200,000 sq. ft. facility. It is estimated that any other location would cost $3.25 per q. ft. for a similar-size warehouse. A new or renewed lease will be for five years. Moving the inventory, moving expenses for key personnel, and other location expenses would result in a one-time charge of $3, 00,000. Warehouse operating costs are expected to be similar at any location. In the most recent year, Superior was able to achieve sales of nearly $70 million. Transportation costs from the plants to the Kansa warehouse were $2,162,535, and from the warehouse to customers were $4,819,569. One million dollars was paid annually as warehouse lease expenses. To study the warehouse location question, data shown in Tables 1 and 2 were collected. Although transport costs are not usually expressed on a $/cwt./mile basis, given that the outbound transportation costs for the most recent year were $4,819,569, the weighted average distance of the shipments was 1128 miles, and the annual volume shipped was 182,100 cwt., the estimated average outbound rate from a warehouse is $0.0235/cwt./mile. Table 1 Volume, Rate, Distance, and Coordinate Data for Shipping from Plants to the Kansas City Warehouse in Truckload Quantities (Class 100) for the Most Recent Year. PLANT LOCATION

ANNUAL VOLUME, CWT.b

TRANSPORT RATE, $/CWT.

DISTANCE, MILES

GRID Coordinatesa

X

Y

Phoenix 61,500 16.73 1163 3.60 3.90 Monterrey 120,600 9.40 1188 6.90 1.00 Total 182,100

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Enterprise Resource Planning

Part One:Multiple Choices:1. Enterprise Resource Planning is:a. Computer Systemb. Manufacturing organizationc. Method of effective planning of all the resources in an organizationd. None of the above2. Enterprise Resource Planning vendors are those people:a. Who are experts in administration and management of projectsb. Who have developed the ERP packagesc. Who uses the ERP systemd. None of the above3. Interviewing and cost justification is tool and technique of:a. Design step of ERPb. Implementation step of ERPc. Requirement analysis of ERPd. Planning step of ERP4. Support re-engineering processes to fit the software systems best practice is approach of:a. Re-engineering approachb. Customizing approachc. Rational approachd. None of the above5. Process of tracking customer contacts and providing the customer with a price quote is:a. Inventory sourcingb. Sales order processingc. Pre-salesd. None of the above6. The difficulty in creating an audit trial of transactions when multiple transactions use multipledatabase is associated with:a. Product profitability sub-systemb. Finished goods inventory sub-systemc. Management reporting sub-systemd. Creating an audit trial sub-system7. Differences occur between standard costs and actual costs is problem associated with:a. Accountingb. Productionc. Purchasing / Materials Managementd. None of the above8. MRP in Enterprise resource planning stands for:a. Maximum retail priceb. Material requirement planningc. Management requirement planningd. None of the above9. Process of providing status of purchase order comes in a category of:a. Purchase order follow-upb. Source determinationc. Determine requirementd. Invoice verification10. Resource failure occurs when:a. People clashesb. Inability to communicate with the system userc. Poor specification of requirementsd. Conflicts of people, time and project scope due to insufficient personnel

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Part Two:1. What are the advantages of the re-engineering method of implementing ERP?2. What are the benefits reported from implementing ERP?3. Write a short note on “Credit Management”.4. Define Material Requirements Planning.

Caselet 1Tech Knowledge is a start-up founded in 1997 by Robert Thyer. The company is a distributer ofpresentation technologies, including computer based projection systems, video equipment, anddisplay technologies. The firm has 25 employees and does $5 million in sales. It is growing rapidly.The owner, Robert Thyer, would like to net source the back-office functions of the firm because thecompany does not have an internal IT capability. The applications to be net sourced would includesales and distribution, financial accounting, and inventory management.Tech Knowledge would like to source SAP or another ERP vendor via a hosting arrangement. Itdoes not expect to do much customization, and it does not have any legacy systems.Questions:1. What factors should it use to evaluate each of these potential hosts?2. What controls should be in place to monitor the hosting arrangement?

Caselet 2ITM is a company specializing in network implementation and management. It provides networkingservices to mid-sized companies, which do not have an internal networking analyst or IT, manager.These organizations include real estate companies, law offices, medical practices, architectural /engineering firms, construction companies, business services providers, country clubs, communityorganizations, and churches.ITM uses a legacy accounting system to handle its financial accounting and financial managementfunctions. It has added on a billing package for client services. The next step is to obtain a CRMcapability to manage information about current and prospective customers more effectively.You have been assigned to identify potential sources for a net-sourcing arrangement with an ERPvendor, which provides CRM capabilities.Questions:1. Identify potential sources of software.2. Determine five criteria you will recommend be used to evaluate each of alternative providers.

1. Explain in brief Sales and Marketing Modules in ERP System.2. What are the different development process in ERP systems and write a detailed note on it?

Financial Management

Multiple choices:1. The approach focused mainly on the financial problems of corporate enterprisea. Ignored non-corporate enterpriseb. Ignored working capital financingc. External approachd. Ignored routine problems2. These are those shares, which can be redeemed or repaid to the holders after a lapse of thestipulated perioda. Cumulative preference sharesb. Non-cumulative preference sharesc. Redeemable preference sharesd. Perpetual shares3. This type of risk arise from changes in environmental regulations, zoning requirements, fees,licenses and most frequently taxesa. Political riskb. Domestic riskc. International riskd. Industry risk

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4. It is the cost of capital that is expected to raise funds to finance a capital budget or investmentproposala. Future costb. Specific costc. Spot costd. Book cost5. This concept is helpful in formulating a sound & economical capital structure for a firma. Financial performance appraisalb. Investment evaluationc. Designing optimal corporate capital structured. NoneExamination Paper Semester I: Financial ManagementIIBM Institute of Business Management6. It is the minimum required rate of return needed to justify the use of capitala. From investorsb. Firms pointc. Capital expenditure pointd. Cost of capital7. It arises when there is a conflict of interest among owners, debenture holders and the managementa. Seasonal variationb. Degree of competitionc. Industry life cycled. Agency costs8. Some guidelines on shares & debentures issued by the government that are very important for theconstitution of the capital structure area. Legal requirementb. Purpose of financec. Period of financed. Requirement of investors9. It is that portion of an investments total risk that results from change in the financial integrity ofthe investmenta. Bull- bear market riskb. Default riskc. International riskd. Liquidity risk10. _____________ measure the systematic risk of a security that cannot be avoided throughdiversificationa. Betab. Gammac. Probability distributiond. Alpha

Part Two:1. What is Annuity kind of cash flow?2. What do understand by Portfolio risk?3. What do you understand by ‘Loan Amortization’?4. What is the Difference between NPV and IRR?

Case let 1This case provides the opportunity to match financing alternatives with the needs of different companies.It allows the reader to demonstrate a familiarity with different types of securities. George Thomas wasfinishing some weekend reports on a Friday afternoon in the downtown office of Wishart and Associates,an investment-banking firm. Meenda, a partner in the firm, had not been in the New York office sinceMonday. He was on a trip through Pennsylvania, visiting five potential clients, who were considering theflotation of securities with the assistance of Wishart and Associates. Meenda had called the office onWednesday and told George's secretary that he would cable his recommendations on Friday afternoon.George was waiting for the cable. George knew that Meenda would be recommending different types ofsecurities for each of the five clients to meet their individual needs. He also knew Meenda wanted him tocall each of the clients to consider the recommendations over the weekend. George was prepared to make

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these calls as soon as the cable arrived. At 4:00 p.m. a secretary handed George the following telegram.George Thomas, Wishart and Associates STOP Taking advantage of offer to go skiing in Poconos STOPRecommendations as follows: (1) common stock, (2) preferred stock, (3) debt with warrants, (4)convertible bonds, (5) callable debentures STOP. See you Wednesday STOP Meenda. As George pickedup the phone to make the first call, he suddenly realized that the potential clients were not matched withthe investment alternatives. In Meenda's office, George found folders on each of the five firms seekingfinancing. In the front of each folder were some handwritten notes that Meenda had made on Mondaybefore he left. George read each of the notes in turn. APT, Inc needs $8 million now and $4 million infour years. Packaging firm with high growth rate in tri-state area. Common stock trades over the counter.Stock is depressed but should rise in year to 18 months. Willing to accept any type of security. Goodmanagement. Expects moderate growth. New machinery should increase profits substantially. Recentlyretired $7 million in debt. Has virtually no debt remaining except short-term obligations.Sandford EnterprisesNeeds $16 million. Crusty management. Stock price depressed but expected to improve. Excellent growthand profits forecast in the next two year. Low debt-equity ratio, as the firm has record of retiring debtprior to maturity. Retains bulk of earnings and pays low dividends. Management not interested insurrendering voting control to outsiders. Money to be used to finance machinery for plumbing supplies.Sharma Brothers., Inc.Needs $20 million to expand cabinet and woodworking business. Started as family business but now has1200 employees, $50 million in sales, and is traded over the counter. Seeks additional shareholder but notwilling to stock at discount. Cannot raise more than $12 million with straight debt. Fair management.Good growth prospects. Very good earnings. Should spark investor's interest. Banks could be willing tolend money for long-term needs.Sacheetee Energy SystemsThe firm is well respected by liberal investing community near Boston area. Sound growth company.Stock selling for $16 per share. Management would like to sell common stock at $21 or more willing toExamination Paper Semester I: Financial ManagementIIBM Institute of Business Managementuse debt to raise $ 28 million, but this is second choice. Financing gimmicks and chance to turn quickprofit on investment would appeal to those likely to invest in this company.Ranbaxy IndustryNeeds $25 million. Manufactures boat canvas covers and needs funds to expand operations. Needs longtermmoney. Closely held ownership reluctant surrender control. Cannot issue debt without permission ofbondholders and First National Bank of Philadelphia. Relatively low debt-equity ratio. Relatively highprofits. Good prospects for growth Strong management with minor weaknesses in sales and promotionareas. As George was looking over the folders, Meenda's secretary entered the office. George said, "DidMeenda leave any other material here on Monday except for these notes?” She responded, "No, that's it,but I think those notes should be useful. Meenda called early this morning and said that he verified thefacts in the folders. He also said that he learned nothing new on the trip and he sort of indicated that, hehad wasted his week, except of course, that he was invited to go skiing at the company lodge up there".George pondered over the situation. He could always wait until next week, when he could be sure that hehad the right recommendations and some of the considerations that outlined each client's needs andsituation. If he could determine which firm matched each recommendation, he could still call the firms by6:00 P.M. and meet the original deadline. George decided to return to his office and match each firm withthe appropriate financing.

Question:1. Which type of financing is appropriate to each firm?2. What types of securities must be issued by a firm which is on the growing stage in order to meetthe financial requirements?

Case let 2This case has been framed in order to test the skills in evaluating a credit request and reaching a correctdecision. Perluence International is large manufacturer of petroleum and rubber-based products used in avariety of commercial applications in the fields of transportation, electronics, and heavy manufacturing.In the northwestern United States, many of the Perluence products are marketed by a wholly-ownedsubsidiary, Bajaj Electronics Company. Operating from a headquarters and warehouse facility in SanAntonio, Strand Electronics has 950 employees and handles a volume of $85 million in sales annually.About $6 million of the sales represents items manufactured by Perluence. Gupta is the credit manager at

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Bajaj electronics. He supervises five employees who handle credit application and collections on 4,600accounts. The accounts range in size from $120 to $85,000. The firm sells on varied terms, with 2/10, net30 mostly. Sales fluctuate seasonally and the average collection period tends to run 40 days. Bad-debtlosses are less than 0.6 per cent of sales. Gupta is evaluating a credit application from Booth Plastics, Inc.,a wholesale supply dealer serving the oil industry. The company was founded in 1977 by Neck A. Boothand has grown steadily since that time. Bajaj Electronics is not selling any products to Booth Plastics andhad no previous contact with Neck Booth. Bajaj Electronics purchased goods from PerluenceInternational under the same terms and conditions as Perluence used when it sold to independentcustomers. Although Bajaj Electronics generally followed Perluence in setting its prices, the subsidiaryoperated independently and could adjust price levels to meet its own marketing strategies. The Perluence'scost-accounting department estimated a 24 per cent markup as the average for items sold to PuccaElectronics. Bajaj Electronics, in turn, resold the items to yield a 17 per cent markup. It appeared thatthese percentages would hold on any sales to Booth Plastics. Bajaj Electronics incurred out-of pocketexpenses that were not considered in calculating the 17 per cent markup on its items. For example, thecontact with Booth Plastics had been made by James, the salesman who handled the Glaveston area.Examination Paper Semester I: Financial ManagementIIBM Institute of Business ManagementJames would receive a 3 per cent commission on all sales made Booth Plastics, a commission that wouldbe paid whether or not the receivable was collected. James would, of course, be willing to assist incollecting any accounts that he had sold. In addition to the sales commission, the company would incurvariable costs as a result of handling the merchandise for the new account. As a general guideline,warehousing and other administrative variable costs would run 3 per cent sales. Gupta Holmsteadapproached all credit decisions in basically the same manner. First of all, he considered the potentialprofit from the account. James had estimated first-year sales to Booth Plastics of $65,000. Assuming thatNeck Booth took the, 3 per cent discount. Bajaj Electronics would realize a 17 per cent markup on thesesales since the average markup was calculated on the basis of the customer taking the discount. If NeckBooth did not take the discount, the markup would be slightly higher, as would the cost of financing thereceivable for the additional period of time. In addition to the potential profit from the account, Gupta wasconcerned about his company's exposure. He knew that weak customers could become bad debts at anytime and therefore, required a vigorous collection effort whenever their accounts were overdue. Hisdepartment probably spent three times as much money and effort managing a marginal account ascompared to a strong account. He also figured that overdue and uncollected funds had to be financed byBajaj Electronics at a rate of 18 per cent. All in all, slow -paying or marginal accounts were very costly toBajaj Electronics. With these considerations in mind, Gupta began to review the credit application forBooth Plastics.Question:1. How would you judge the potential profit of Bajaj Electronics on the first year of sales to BoothPlastics and give your views to increase the profit.2. Suggestion regarding Credit limit. Should it be approved or not, what should be the amount ofcredit limit that electronics give to Booth Plastics.

1. Honey Well Company is contemplating to liberalize its collection effort. Its present sales are Rs.10 lakh, its average collection period is 30 days, its expected variable cost to sales ratio is 85 percent and its bad debt ratio is 5 per cent. The Company’s cost of capital is 10 per cent and tax areis 40 per cent. He proposed liberalization in collection effort increase sales to Rs. 12 lakhincreases average collection period by 15 days, and increases the bad debt ratio to 7 percent.Determine the change in net profit.

2. Explain the concept of working capital. What are the factors which influence the working capital?

Human Resource Management

Multiple choices:1. It is a cultural attitude marked by the tendency to regard one’s own culture as superior to othersa. Geocentrismb. Polycentrismc. Ethnocentrismd. Egocentrism

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2. It is the systemic study of job requirements & those factors that influence the performance ofthose job requirementsa. Job analysisb. Job rotationc. Job circulationd. Job description3. This Act provides an assistance for minimum statutory wages for scheduled employmenta. Payment of Wages Act, 1936b. Minimum Wages Act, 1948c. Factories Act, 1948d. Payment of Gratuity act, 19724. __________ is the actual posting of an employee to a specific joba. Inductionb. Placementc. Attritiond. None5. Broadening an individual’s knowledge, skills & abilities for future responsibilities is known asa. Trainingb. Developmentc. Educationd. MentoringExamination Paper Semester I: Human Resource ManagementIIBM Institute of Business Management6. Change that is designed and implemented in an orderly and timely fashion in anticipation offuture eventsa. Planned changeb. Technology changec. Structural changed. None7. It is a process for setting goals and monitoring progress towards achieving those goalsa. Performance appraisalb. Performance gapc. Performance factord. Performance management system8. A method which requires the rates to provide a subjective performance evaluation along a scalefrom low to higha. Assessment centreb. Checklistc. Rating scaled. Monitoring9. It is the sum of knowledge, skills, attitudes, commitment, values and the liking of the people in anorganizationa. Human resourcesb. Personal managementc. Human resource managementd. Productivity10. A learning exercise representing a real-life situation where trainees compete with each other toachieve specific objectivesa. Executive developmentb. Management gamec. Programmed learningd. Understudy

Part Two:1. Explain the importance of Career Planning in industry.2. Write the features of HRM.3. Briefly explain the concept of Performance Appraisal.4. Explain On-Job and Off Job Training.

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Case let 1Trust them with knee-jerk reactions," said Vikram Koshy, CEO, Delta Software India, as he looked at thequarterly report of Top Line Securities, a well-known equity research firm. The firm had announced adowngrade of Delta, a company listed both on Indian bourses and the NASDAQ. The reason? "One outof every six development engineers in the company is likely to be benched during the remaining part ofthe year." Three analysts from Top Line had spent some time at Delta three weeks ago. Koshy and histeam had explained how benching was no different from the problems of excess inventory, idle time, andsurplus capacity that firms in the manufacturing sector face on a regular basis, "Delta has witnessed ascorching pace of 30 per cent growth during the last five years in a row," Koshy had said, "What ishappening is a corrective phase." But, evidently, the analysts were unconvinced.

Why Bench?Clients suddenly decide to cut back on IT spends Project mix gets skewed, affecting work allocationEmployee productivity is set to fall, creating slack working conditions. High degree of job specialization

leads to redundancyWhat are the options?Quickly cut costs in areas which are non-core look for learning’s from the manufacturing sector Focus onalternative markets like Europe and Japan Move into products, where margins are better. Of course, theTop Line report went on to cite several other "signals," as it said: the rate of annual hike in salaries atDelta would come down to 5 per cent (from between 20 and 30 per cent last year); the entry-level intakeof engineers from campuses in June 2001, would decline to 5 per cent (unlike the traditional 30 per centaddition to manpower every year); and earnings for the next two years could dip by between 10 and 12per cent. And the loftiest of them all: "The meltdown at Nasdaq is unlikely to reverse in the near future.""Some of the signals are no doubt valid. And ominous," said Koshy, addressing his A-Team, which hadassembled for the routine morning meeting. "But, clearly, everyone is reading too much into this businessof benching. In fact, benching is one of the many options that our principals in the US have been pursuingas part of cutting costs right since September, 2000. They are also expanding the share of off-shore jobs.Five of our principals have confirmed that they would outsource more from Delta in India-which is likelyto hike their billings by about 30 per cent. At one level, this is an opportunity for us. At another, ofcourse, I am not sure if we should be jubilant, because they have asked for a 25-30 per cent cut in billingrates. Our margins will take a hit, unless we cut costs and improve productivity." "Productivity is clearly amatter of priority now," said Vivek Varadan, Vice-President (Operations). "If you consider benching as anon-earning mode, we do have large patches of it at Delta. As you are aware, it has not been easy tosecure 70 per cent utilization of our manpower, even in normal times. I think we need to look at why wehave 30 per cent bench before examining how to turn it into an asset." "There are several reasons,"remarked Achyut Patwardhan, Vice-President (HR). "And a lot of it has to do with the nature of ourbusiness, which is more project-driven than product-driven. When you are managing a number ofoverseas and domestic projects simultaneously, as we do at Delta, people tend to go on the bench. Theywait, as they complete one project, and are assigned the next. There are problems of coordination betweenprojects, related to the logistics of moving people and resources from one customer to another. In fact, Iam fine-tuning our monthly manpower utilization report to provide a breakup of bench costs intoExamination Paper Semester I: Human Resource ManagementIIBM Institute of Business Managementspecifics-leave period, training programmes, travel time, buffers, acclimatization period et al." "It wouldbe worthwhile following the business model used by US principal Techno Inc," said Aveek Mohanty,Director (Finance). "The company has a pipeline of projects, but it does not manage project by project.What it does is to slice each project into what it calls 'activities'. For example, communicationnetworking; user interface development; scheduling of processes are activities common to all projects.People move from one project to another. It is somewhat like the Activity Based Costing. It throws up thebench time straightaway, which helps us control costs and revenue better." "I also think we should reduceour dependence on projects and move into products," said Praveen Kumar, Director (Marketing). "That iswhere the opportunity for brand building lies. In fact, now is the time to get our technology guys involvedin marketing. Multiskilling helps reduce the bench time." "Benching has an analogy in the manufacturingsector," said Girish Shahane, Vice-President (Services). "We could look for learning's there. Many firmshave adopted Just-In-Time (JIT) inventory as part of eliminating idle time. It would be worthwhileexploring the possibility of JIT. But the real learning lies in standardization of work. It is linked to whatMohanty said about managing by activities." "At a broader level, I see several other opportunities," saidKoshy, "We can fill in the space vacated by US firms and move up the value chain. But before we do so,

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Delta should consolidate its position as the premier outsourcing centre. Since there are only two ways inwhich we can generate revenue-sell expertise or sell products-we should move towards a mix of both.Tie-ups with global majors will help. Now is the time to look beyond the US and strike alliances withfirms in Europe- and also Japan-as part of developing new products for global markets."

Questions1. Should benching be a matter of concern at Delta?2. What are the risks involved in moving from a project-centric mode to a mix of projects and products?

Case let 2The contexts in which human resources are managed in today's organizations are constantly, changing.No longer do firms utilize one set of manufacturing processes, employ a homogeneous group of loyalemployees for long periods of time or develop one set way of structuring how work is done andsupervisory responsibility is assigned. Continuous changes in who organizations employ and what theseemployees do require HR practices and systems that are well conceived and effectively implemented toensure high performance and continued success.1. Automated technologies nowadays require more technically trained employees possessing multifariousskills to repair, adjust or improve existing processes. The firms can't expect these employees (Gen Xemployees, possessing superior technical knowledge and skills, whose attitudes and perceptions towardwork are significantly different from those of their predecessor organizations: like greater self control,less interest in job security; no expectations of long term employment; greater participation urge in workactivities, demanding opportunities for personal growth and creativity) to stay on without attractivecompensation packages and novel reward schemes.2. Technology driven companies are led by project teams, possessing diverse skills, experience andexpertise. Flexible and dynamic organizational structures are needed to take care of the expectations ofmanagers, technicians and analysts who combine their skills, expertise and experience to meet changingcustomer needs and competitive pressures.3. Cost cutting efforts have led to the decimation of unwanted layers in organizational hierarchy in recenttimes. This, in turn, has brought in the problem of managing plateau employees whose careers seem tohave been hit by the delivering process. Organizations are, therefore, made to find alternative career pathsfor such employees.Examination Paper Semester I: Human Resource ManagementIIBM Institute of Business Management4. Both young and old workers, these days, have values and attitudes that stress less loyalty to thecompany and more loyalty to oneself and one's career than those shown by employees in the past,Organizations, therefore, have to devise appropriate HR policies and strategies so as to prevent the flightof talented employees

Question1.Discuss that technological breakthrough has brought a radical changes in HRM.

1. Several types of interviews are commonly used depending on the nature & importance of the position to be filled within an organization. Explain the different types of Interviews.2. Explain the legal provisions regarding safety of workers.

Managerial Economics

Multiple choices:1. It is a study of economy as a wholea. Macroeconomicsb. Microeconomicsc. Recessiond. Inflation2. A comprehensive formulation which specifies the factors that influence the demand for theproducta. Market demandb. Demand schedulec. Demand function

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d. Income effect3. It is computed when the data is discrete and therefore incremental changes is measurablea. Substitution effectb. Arc elasticityc. Point elasticityd. Derived demand4. Goods & services used for final consumption is calleda. Demandb. Consumer goodsc. Producer goodsd. Perishable goods5. The curve at which satisfaction is equal at each pointa. Marginal utilityb. Cardinal measure of utilityc. The Indifference Curved. Budget lineExamination Paper Semester I: Managerial EconomicsIIBM Institute of Business Management6. Costs that are reasonably expected to be incurred in some future period or periodsa. Future costsb. Past costsc. Incremental costsd. Sunk costs7. Condition when the firm has no tendency either to increase or to contract its outputa. Monopolyb. Profitc. Equilibriumd. Market8. Total market value of all finished goods & services produced in a year by a country’s residents isknown asa. National incomeb. Gross national productc. Gross domestic productd. Real GDP9. The sum of net value of goods & services produced at market pricesa. Government expenditureb. Product approachc. Income approachd. Expenditure approach10. The market value of all the final goods & services made within the borders of a nation in an yeara. Globalizationb. Subsidiesc. GDPd. GNPPart Two:1. Define ‘Arc Elasticity’.2. Explain the law of ‘Diminishing marginal returns’.3. What is ‘Prisoner’s Dilemma’, of non cooperative game?4. What is ‘Third degree Discrimation’?

Case let 1The war on drugs is an expensive battle, as a great deal of resources go into catching those who buy orsell illegal drugs on the black market, prosecuting them in court, and housing them in jail. These costsseem particularly exorbitant when dealing with the drug marijuana, as it is widely used, and is likely nomore harmful than currently legal drugs such as tobacco and alcohol. There's another cost to the war ondrugs, however, which is the revenue lost by governments who cannot collect taxes on illegal drugs. In arecent study for the Fraser Institute, Canada, Economist Stephen T. Easton attempted to calculate howmuch tax revenue the government of the country could gain by legalizing marijuana. The study estimatesthat the average price of 0.5 grams (a unit) of marijuana sold for $8.60 on the street, while its cost of

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production was only $1.70. In a free market, a $6.90 profit for a unit of marijuana would not last for long.Entrepreneurs noticing the great profits to be made in the marijuana market would start their own growoperations, increasing the supply of marijuana on the street, which would cause the street price of thedrug to fall to a level much closer to the cost of production. Of course, this doesn't happen because theproduct is illegal; the prospect of jail time deters many entrepreneurs and the occasional drug bust ensuresthat the supply stays relatively low. We can consider much of this $6.90 per unit of marijuana profit arisk-premium for participating in the underground economy. Unfortunately, this risk premium is making alot of criminals, many of whom have ties to organized crime, very wealthy. Stephen T. Easton argues thatif marijuana was legalized, we could transfer these excess profits caused by the risk premium from thesegrow operations to the government: If we substitute a tax on marijuana cigarettes equal to the differencebetween the local production cost and the street price people currently pay – that is, transfer the revenuefrom the current producers and marketers (many of whom work with organized crime) to the government,leaving all other marketing and transportation issues aside we would have revenue of (say) $7 per [unit].If you could collect on every cigarette and ignore the transportation, marketing, and advertising costs, thiscomes to over $2 billion on Canadian sales and substantially more from an export tax, and you forego thecosts of enforcement and deploy your policing assets elsewhere. One interesting thing to note from such ascheme is that the street price of marijuana stays exactly the same, so the quantity demanded shouldremain the same as the price is unchanged. However, it's quite likely that the demand for marijuana wouldchange from legalization. We saw that there was a risk in selling marijuana, but since drug laws oftentarget both the buyer and the seller, there is also a risk (albeit smaller) to the consumer interested inbuying marijuana. Legalization would eliminate this risk, causing the demand to rise. This is a mixed bagfrom a public policy standpoint: Increased marijuana use can have ill effects on the health of thepopulation but the increased sales bring in more revenue for the government. However, if legalized,governments can control how much marijuana is consumed by increasing or decreasing the taxes on theproduct. There is a limit to this, however, as setting taxes too high will cause marijuana growers to sell onthe black market to avoid excessive taxation. When considering legalizing marijuana, there are manyeconomic, health, and social issues we must analyze. One economic study will not be the basis ofCanada's public policy decisions, but Easton's research does conclusively show that there are economicbenefits in the legalization of marijuana. With governments scrambling to find new sources of revenue topay for important social objectives such as health care and education expect to see the idea raised inParliament sooner rather than later.

Questions1. Plot the demand schedule and draw the demand curve for the data given for Marijuana in the case above.2. On the basis of the analysis of the case above, what is your opinion about legalizing marijuana in Canada?

Case let 2Companies that attend to productivity and growth simultaneously manage cost reductions very differentlyfrom companies that focus on cost cutting alone and they drive growth very differently from companiesthat are obsessed with growth alone. It is the ability to cook sweet and sour that under grids theremarkable performance of companies likes Intel, GE, ABB and Canon. In the slow growth electrotechnicalbusiness, ABB has doubled its revenues from $17 billion to $35 billion, largely by exploitingnew opportunities in emerging markets. For example, it has built up a 46,000 employee organization inthe Asia Pacific region, almost from scratch. But it has also reduced employment in North America andWestern Europe by 54,000 people. It is the hard squeeze in the north and the west that generated theresources to support ABB's massive investments in the east and the south. Everyone knows about thestaggering ambition of the Ambanis, which has fuelled Reliance's evolution into the largest privatecompany in India. Reliance has built its spectacular rise on a similar ability to cook sweet and sour. Whatpeople may not be equally familiar with is the relentless focus on cost reduction and productivity growththat pervades the company. Reliance's employee cost is 4 per cent of revenues, against 15-20 per cent ofits competitors. Its sales and distribution cost, at 3 per cent of revenues, is about a third of globalstandards. It has continuously pushed down its cost for energy and utilities to 3 per cent of revenues,largely through 100 per cent captive power generation that costs the company 4.5 cents per kilowatt-hour;well below Indian utility costs, and about 30 per cent lower than the global average. Similarly, its capitalcost is 25-30 per cent lower than its international peers due to its legendary speed in plant commissioningand its relentless focus on reducing the weighted average cost of capital (WACC) that, at 13 per cent, isthe lowest of any major Indian firm.A Bias for GrowthComparing major Indian companies in key industries with their global competitors shows that Indian

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companies are running a major risk. They suffer from a profound bias for growth. There is nothing wrongwith this bias, as Reliance has shown. The problem is most look more like Essar than Reliance. Whilethey love the sweet of growth, they are unwilling to face the sour of productivity improvement.Nowhere is this more amply borne out than in the consumer goods industry where the Indian giantHindustan Lever has consolidated to grow at over 50 per cent while its labour productivity declined byaround 6 per cent per annum in the same period. Its strongest competitor, Nirma, also grew at over 25 percent per annum in revenues but maintained its labour productivity relatively stable. Unfortunately,however, its return on capital employed (ROCE) suffered by over 17 per cent. In contrast, Coca Cola,worldwide, grew at around 7 per cent, improved its labour productivity by 20 per cent and its return oncapital employed by 6.7 per cent. The story is very similar in the information technology sector whereInfosys, NIIT and HCL achieve rates of growth of over 50 per cent which compares favorably with theworld's best companies that grew at around 30 per cent between 1994-95. NIIT, for example, stronglybelieves that growth is an impetus in itself. Its focus on growth has helped it double revenues every twoyears. Sustaining profitability in the face of such expansion is an extremely challenging task. For now,this is a challenge Indian InfoTech companies seem to be losing. The ROCE for three Indian majors fellby 7 per cent annually over 1994-96. At the same time IBM Microsoft and SAP managed to improve thisratio by 17 per cent. There are some exceptions, however. The cement industry, which has focused onproductivity rather than on growth, has done very well in this dimension when compared to their globalExamination Paper Semester I: Managerial EconomicsIIBM Institute of Business Managementcounterparts. While Mexico's Cemex has grown about three times fast as India's ACC, Indian cementcompanies have consistently delivered better results, not only on absolute profitability ratios, but also onabsolute profitability growth. They show a growth of 24 per cent in return on capital employed whileinternational players show only 8.4 per cent. Labour productivity, which actually fell for most industriesover 1994-96, has improved at 2.5 per cent per annum for cement.The engineering industry also matches up to the performance standards of the best in the world.Companies like Cummins India have always pushed for growth as is evidenced by its 27 per cent rate ofgrowth, but not at the cost of present and future profitability. The company shows a healthy excess ofalmost 30 per cent over WACC, displaying great future promise. BHEL, the public sector giant, has seensimilar success and the share price rose by 25 per cent despite an indecisive sensex. The only note ofcaution: Indian engineering companies have not been able to improve labour productivity over time,while international engineering companies like ABB, Siemens and Cummins Engines have achievedabout 13.5 per cent growth in labour productivity, on an average, in the same period. The pharmaceuticalsindustry is where the problems seem to be the worst, with growth emphasized at the cost of all otherperformance. They have been growing at over 22 per cent, while their ROCE fell at 15.9 per cent perannum and labour productivity at 7 per cent. Compare this with some of the best pharmaceuticalcompanies of the world – Glaxo Wellcome, SmithKline Beecham and Pfizer –who have consistentlyachieved growth of 15-20 per cent, while improving returns on capital employed at about25 per cent and labour productivity at 8 per cent. Ranbaxy is not an exception; the bias for growth at thecost of labour and capital productivity is also manifest in the performance of other Indian Pharmacompanies. What makes this even worse is the Indian companies barely manage to cover their cost ofcapital, while their competitors worldwide such as Glaxo and Pfizer earn an average ROCE of 65 percent. In the Indian textile industry, Arvind Mills was once the shining star. Like Reliance, it had learnt tocook sweet and sour. Between 1994 and 1996, it grew at an average of 30 per cent per annum to becomethe world's largest denim producer. At the same time, it also operated a tight ship, improving labourproductivity by 20 per cent. Despite the excellent performance in the past, there are warning signals forArvind's future. The excess over the WACC is only 1.5 per cent, implying it barely manages to satisfy itsinvestor’s expectations of return and does not really have a surplus to re-invest in the business.Apparently, investors also think so, for Arvind's stock price has been falling since Q4 1994 despite suchexcellent results and, at the end of the first quarter of 1998, is less than Rs 70 compared to Rs 170 at theend of 1994. Unfortunately, Arvind's deteriorating financial returns over the last few years is also typicalof the Indian textile industry. The top three Indian companies actually showed a decline in their returnratios in contrast to the international majors. Nike, VF Corp and Coats Viyella showed a growth in theirreturns on capital employed of 6.2 per cent, while the ROCE of Grasim and Coats Viyella (India) fell byalmost 2 per cent per annum. Even in absolute returns on assets or on capital employed, Indian companiesfare a lot worse. While Indian textile companies just about cover their WACC, their international rivalsearn about 8 per cent in excess of their cost of capital.

Questions

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1. Is Indian companies running a risk by not giving attention to cost cutting?2. Discuss whether Indian Consumer goods industry is growing at the cost of future profitability.3. Discuss capital and labour productivity in engineering context and pharmaceutical industries in India.4. Is textile industry in India performing better than its global competitors?

1. Free trade promotes a mutually profitable regional division of labour, greatly enhances thepotential real national product of all nations and makes possible higher standards of living allover the globe.” Critically explain and examine the statement.

2. What role does a decision tree play in business decision-making? Illustrate the choice betweentwo investment projects with the help of a decision tree assuming hypothetical conditions aboutthe states of nature, probability distribution, and corresponding pay-offs.

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Marketing ManagementMultiple choices:1. It is a concept where goods are produced without taking into consideration the choices or tastes ofcustomersa. Marketing mixb. Production conceptc. Marketing conceptd. Relationship marketing2. It involves individuals who buys products or services for personal use and not for manufacture orresalea. Environment analysisb. Macro environmentc. Micro environmentd. Consumer3. It is the groups of people who interact formally or informally influencing each other’s attitudes&behaviora. Consumer behaviorb. Culturec. Reference groupsd. Primary groups4. The concept of the product that passes through various changes in its total life known asa. Product life cycleb. Line stretchingc. Consumer adoptiond. Product5. It refers to unique set of brand associations that brand strategist aspires to create or maintaina. Brandingb. Packagingc. Brand identityd. Brand imageExamination Paper Semester I: Marketing ManagementIIBM Institute of Business Management6. It involves a pricing strategy that charges customers different prices for the same product orservicea. Promotional pricingb. Price discriminationc. Non price competitiond. None

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7. It refers to an arrangement where another company through its own marketing channel sells theproducts of one producersa. End customerb. Wholesalerc. Retailingd. Strategic channel alliance8. It involves facility consisting of the means & equipments necessary for the movement ofpassengers of goodsa. Logisticsb. Warehousingc. Transportationd. None9. The advertising which is used to inform consumers about a new product or feature & to buildprimary demands is known asa. Advertisingb. Informative advertisingc. Persuasive advertisingd. Advertising strategy10. An art that predicts the likelihood of economic activity on the basis of certain assumptionsa. Compensationb. Sales forecastingc. Sales budgetingd. Selling policyPart Two:1. Write a note on importance of consumer behavior for a business firm?2. Define the term ‘Price’.3. Distinguish between Marketing Concept and Selling Concept?4. What are the new trends in advertisement?5. Briefly explain the following :a) Socio –culture environmentb) Marketing environment interface.

Case let 1Ask the company top brass what ‘almost there’ means. The answer: a premier Indian retail company thathas come to be known as a specialty chain of apparel and accessories. With 52 product categories underone roof, Shoppers’ Stop has a line-up of 350 brands. Set up and headed by former Corona employee, B.S. Nagesh, Shoppers’ Stop is India’s answer to Selfridges and Printemps. As it proudly announces, ‘Wedon’t sell, we help you buy.’ Back in 1991, there was the question of what to retail. Should it be asupermarket or a departmental store? Even an electronics store was considered. Finally, common senseand understanding won out. The safest bet, for the all-male team was to retail men’s wear. They knew themale psyche and felt that they had discerning taste in men’s clothing. The concept would be that of alifestyle store in a luxurious space, which would make for a great shopping experience. The firstShoppers’ Stop store took shape in Andheri, Mumbai, in October 1991, with an investment of nearly Rs.20 lakh. The original concept that formed the basis of a successful marketing campaign for seven years ishere to stay. And the result is an annual turnover of Rs. 160 crores and five stores, nine years later.Everything went right from the beginning, except for one strange happening. More than 60 per cent of thecustomers who walked into Shoppers’ Stop in Mumbai were women. This gave rise to ideas. Soon, thestore set up its women’s section. Later, it expanded to include children’s wear and then, householdaccessories. The second store in Bangalore came in 1995. The store at Hyderabad followed in 1998 withthe largest area of 60,000 sq. ft. The New Delhi and Jaipur stores were inaugurated in 1999. All thiswhile, the product range kept increasing to suit customer needs. The most recent experiment was homefurnishings. Secure in the knowledge that organised retailing in global brands was still in its infancy inIndia, Shoppers’ Stop laid the ground rules which the competition followed. The biggest advantage forShoppers’ Stop is that it knows how the Indian consumer thinks and feels while shopping. Yes, feeling –for in India, shopping remains an outing. And how does it compare itself to foreign stores? While it is notmodeled on any one foreign retailer, the ‘basic construct’ is taken from the experience of a number ofsuccessfully managed retail companies. It has leveraged expertise for a critical component like technologyfrom all over the world, going as far as hiring expatriates from Littlewoods and using state-of-the-art ERPmodels. Shoppers’ Stop went a step further by even integrating its financial system with the ERP model.

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Expertise was imported wherever it felt that expertise available in-house was inadequate. But the store feltthere was one acute problem. A shortage of the most important resource of them all was trained humans.Since Indian business institutes did not have professional courses in retail management, people were hiredfrom different walks of life and the training programme was internalized. By 1994, the senior executivesat Shoppers’ Stop were taking lectures at management institutes in Mumbai. The Narsee Monjee Instituteof Management Studies (NMIMS) even restructured its course to include retail management as a subject.Getting the company access to the latest global retail trends and exchange of information with businessgreats was an exclusive membership to the Intercontinental Group of Department Stores (IGDS). It allowsmembership by invitation to one company from a country and Shoppers’ Stop rubs shoulders with 29 ofthe hottest names in retailing – Selfridges from the UK, C.K. Tang from Singapore, Lamcy Plaza fromDubai and the like. With logistics I in place, the accent moved to the customer. Shoppers’ Stop conductedsurveys with ORG-MARG and Indian Market Research Bureau (IMRB) and undertook in-housewardrobe audits. The studies confirmed what it already knew. The Indian customer is still evolving and isvery different from, say, a European customer, who knows exactly what he wants to purchase, walks upto a shelf, picks up the merchandise, pays and walks out. In India, customers like to touch and feel theExamination Paper Semester I: Marketing ManagementIIBM Institute of Business Managementmerchandise, and scout for options. Also, the majority of Indian shoppers still prefer to pay in cash. So,transactions must be in cash as against plastic money used the world over. Additionally, the Indiancustomer likes being served – whether it is food, or otherwise. The company’s customer profile includespeople who want the same salesperson each time they came to the store to walk them through the shopfloors and assist in the purchase. Others came with families, kids and maids in tow and expected to besuitably attended to. Still others wanted someone to carry the bags. So, the shops have self-help counters,with an assistant at hand for queries or help. The in-house wardrobe audit also helped with another facetof the business. It enabled Shoppers’ Stop to work out which brands to stock, based on customerpreferences. In fact, the USP of Shoppers’ Stop lies in judiciously selected global brands, displayedalongside an in-house range of affordable designer wear. The line-up includes Levi’s, Louis Philippe,Allen Solly, Walt Disney, Ray Ban and Reebok, besides in-house labels STOP and I. Brand selection isthe same across the five locations, though the product mix may be somewhat city-based to accommodatecuts and styles in women’s wear, as well as allowing for seasonal variations (winter in Delhi, for instance,is a case in point). Stocking of brands is based on popular demand – recently, Provogue, MTV Style, andBenetton have been added. In-house labels are available at competitive prices and target the value-formoneycustomer and make up around 12 per cent of Shoppers’ Stop’s business. Sometimes in-housebrands plug the price gap in certain product categories. To cash in on this, the company has big plans forits in-house brands: from re-branding to repositioning, to homing in on product categories where existingbrands are not strong. Competition between brands is not an issue, because being a trading house, allbrands get equal emphasis. The in-house brand shopper is one who places immense trust in the companyand the quality of its goods and returns for repeat buys. And the company reposed its faith in regularcustomers by including them in a concept called the First Citizen’s Club (FCC). With 60,000 oddmembers, FCC customers account for 10 per cent of entries and for 34 per cent of the turnover. It was thesheer appeal of the experience that kept pulling these people back. Not one to let such an opportunitypass, the company ran a successful ad campaign (that talks about just this factor) in print for more thaneight years. The theme is still the same. In 1999, a TV spot, which liked the shopping experience to theslowing down of one’s internal clock and the beauty of the whole experience, was aired. More recently,ads that spell out the store’s benefits (in a highly oblique manner) are being aired.The campaign is based on entries entered in the Visitors’ Book. None of the ads has a visual or text – orany heavy handedly direct reference to the store or the merchandise. The ads only show shoppers havingthe time of their lives in calm and serene locales, or elements that make shopping at the store a pleasure –quite the perfect getaway for a cosmopolitan shopper aged between 25 and 45. The brief to the agency,Contract, ensured that brand recall came in terms of the shopping experience, not the product. And it hasworked wonders. Value-addition at each store also comes in the form of special care with car parks,power backup, customer paging, alteration service and gift-wrapping. To top it all, cafes and coffee barsmake sure that the customer does not step out of the store. In Hyderabad, it has even created a FoodCourt. Although the food counter was not planned, it came about as there was extra space of 67,000 sq. ft.Carrying the perfect experience to the shop floor is an attempt to stack goods in vast open spaces neatly.Every store has a generic structure, though regional customer variances are accounted for. Each store ison lease, and this is clearly Shoppers’ Stop’s most expensive resource proposition – renting huge spacesin prime properties across metros, so far totaling 210,000 sq. ft of retail space. Getting that space was easyenough for Shoppers’ Stop, since its promoter is the Mumbai-based Raheja Group, which also owns 62

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per cent of the share capital.

Questions1. What are the significant factors that have led to the success of Shoppers’ Stop?2. Draw the typical profile(s) of Shoppers’ Stop customer segments.

3. How are Indian customers visiting Shoppers’ Stop any different from customers of developedwestern countries?4. How should Shoppers’ Stop develop its demand forecasts?

Case let 2The rise of personal computers in the mid 1980s spurred interest in computer games. This caused a crashin home Video game market. Interest in Video games was rekindled when a number of differentcompanies developed hardware consoles that provided graphics superior to the capabilities of computergames. By 1990, the Nintendo Entertainment System dominated the product category. Sega surpassedNintendo when it introduced its Genesis System. By 1993, Sega commanded almost 60 per cent of Videogame market and was one of the most recognized brand names among the children. Sega’s success wasshort lived. In 1995, Saturn (a division of General Motors) launched a new 32-bit system. The productwas a miserable failure for a number of reasons. Sega was the primary software developer for Saturn andit did not support efforts by outside game developers to design compatible games. In addition, Sega’sgames were often delivered quite late to retailers. Finally, the price of the Saturn system was greater thanother comparable game consoles. This situation of Saturn’s misstep benefited Nintendo and Sony greatly.Sony’s Play Station was unveiled in 1994 and was available in 70 million homes worldwide by the end of1999. Its “Open design” encouraged the efforts of outside developers, resulting in almost 3,000 differentgames that were compatible with the PlayStation. It too featured 32-bit graphics that appealed to olderaudience. As a result, at one time, more than 30 per cent of PlayStation owners were over 30 years old.Nintendo 64 was introduced in 1996 and had eye-popping 64-bit graphics and entered in more than 28million homes by 1999. Its primary users were between the age of 6 and 13 as a result of Nintendo’sefforts to limit the amount of violent and adult-oriented material featured on games that can be played onits systems. Because the company exercised considerable control over software development, Nintendo64 had only one-tenth the number of compatible games as Sony’s PlayStation did. By 1999, Sony hadcaptured 56 per cent of the video game market, followed by Nintendo with 42 per cent. Sega’s share hadfallen to a low of 1%. Hence, Sega had two options, either to concede defeat or introduce an innovativevideo machine that would bring in huge sales. And Sega had to do so before either Nintendo or Sonycould bring their next-generation console to market. The Sega Dreamcast arrived in stores in September1999 with an initial price tag of $199. Anxious gamers placed 300,000 advance orders, and initial saleswere quite encouraging. A total of 1.5 million Dreamcast machines were bought within the first fourmonths, and initial reviews were positive. The 128-bit system was capable of generating 3-D visuals, and40 different games were available within three months of Dream cast’s introduction. By the end of theyear, Sega had captured a market share to 15 per cent. But the Dreamcast could not sustain itsmomentum. Although its game capabilities were impressive, the system did not deliver all thefunctionality Sega had promised. A 56K modem (which used a home phone line) and a Web browserwere meant to allow access to the Internet so that gamers could play each other online, surf the Web, andvisit the Dreamcast Network for product information and playing tips. Unfortunately, these features eitherwere not immediately available or were disappointing in their execution. Sega was not the only one inhaving the strategy of adding functionality beyond games. Sony and Nintendo followed the sameapproach for their machines introduced in 1999. Both Nintendo’s Neptune and Sony’s PlayStation 2(PS2) were built on a DVD platform and featured a 128-bit processor. Analysts applauded the move toDVD because it is less expensive to produce and allows more storage than CDs. It also gives buyers theability to use the machine as CD music player and DVD movie player. As Sony marketing directorcommented, “The full entertainment offering from Play Station 2 definitely appeals to a much broaderaudience. I have friends in their 30s who bought it not only because it’s a gaming system for their kids,but also a DVD for them.” In addition, PlayStation 2 is able to play games developed for its earlier modelthat was CD-based. This gives the PS2 an enormous advantage in the number of compatible game titlesExamination Paper Semester I: Marketing ManagementIIBM Institute of Business Managementthat were immediately available to gamers. Further enhancing the PS2’s appeal is its high-speed modemand allows the user’s easy access to the Internet through digital cable as well as over telephone lines. Thisgives Sony the ability to distribute movies, music, and games directly to PS2 consoles. “We are

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positioning this as an all-round entertainment player,” commented Ken Kutaragi, the head of SonyComputer Entertainment. However, some prospective customers were put off by the console’s initialprice of $360. Shortly after the introduction of Neptune, Nintendo changed its strategies and announcedthe impending release of its newest game console, The GameCube. However, unlike the Neptune, theGameCube would not run on a DVD platform and also would not initially offer any online capabilities. Itwould be more attractively priced at $199. A marketing vice president for Nintendo explained thecompany’s change in direction, “We are the only competitor whose business is video games. We want tocreate the best gaming system.” Nintendo also made the GameCube friendly for outside developers andstarted adding games that included sports titles to attract an older audience. Best known for its extraordinary successes with games aimed at the younger set, such as Donkey Kong, Super Mario Bros, andPokemon, Nintendo sought to attract older users, especially because the average video game player is 28.Youthful Nintendo users were particularly pleased to hear that they could use their handheld Game BoyAdvance systems as controllers for the GameCube. Nintendo scrambled to ensure there would be anadequate supply of Game Cubes on the date in November 2001, when they were scheduled to be availableto customers. It also budgeted $450 million to market its new product, as it anticipated stiff competitionduring the holiday shopping season. With more than 20 million PlayStation 2 sold worldwide, theGameCube as a new entry in the video game market would make the battle for market share even moreintense. For almost a decade, the video game industry had only Sega, Nintendo, and Sony; just threeplayers. Because of strong brand loyalty and high product development costs, newcomers faced adaunting task in entering this race and being competitive. In November 2001, Microsoft began selling itsnew Xbox, just three days before the GameCube made its debut. Some observers felt the Xbox was aimedto rival PlayStation 2, which has similar functions that rival Microsoft’s Web TV system and even somelower level PCs. Like the Sony’s PlayStation 2, Xbox was also built using a DVD platform, but it used anIntel processor in its construction. This open design allowed Microsoft to develop the Xbox in just twoyears, and gave developers the option of using standard PC tool for creating compatible games. Inaddition, Microsoft also sought the advice of successful game developers and even incorporated some oftheir feedback into the design of the console and its controllers. As a result of developers’ efforts,Microsoft had about 20 games ready when the Xbox became available. By contrast, the GameCube hadonly eight games available. Microsoft online strategy was another feature that differentiated of the Xboxfrom the GameCube. Whereas Nintendo had no immediate plans for Web-based play, the Xbox cameequipped with an Ethernet port for broadband access to Internet. Microsoft also announced its own Webbasednetwork on which gamers can come together for online head-to head play and for organised onlinematches and tournaments. Subscribers to this service were to pay a small monthly fee and must havehigh-speed access to the Internet. This is a potential drawback considering that a very low percentage ofhouseholds world over currently have broadband connections. By contrast Sony promoted an opennetwork, which allows software developers to manage their own games, including associated fees chargedto users. However, interested players must purchase a network adapter for an additional $39.99. Althoughgame companies are not keen on the prospect of submitting to the control of a Microsoft-controllednetwork, it would require a significant investment for them to manage their own service on the Sonybasednetwork. Initially the price of Microsoft’s Xbox was $299. Prior to the introduction of Xbox, in acompetitive move Sony dropped the price of the PlayStation 2 to $299. Nintendo’s GameCube alreadyenjoyed a significant price advantage, as it was selling for $100 less than either Microsoft or Sonyproducts. Gamers eagerly snapped up the new consoles and made 2001 the best year ever for video gamesales. For the first time, consumers spent $9.4 billion on video game equipment, which was more thanthey did at the box office. By the end of 2001 holiday season, 6.6 million PlayStation 2 consoles had beensold in North America alone, followed by 1.5 million Xbox units and 1.2 million Game Cubes. Whatensued was an all out price war. This started when Sony decided to put even more pressure on theMicrosoft’s Xbox by cutting the PlayStation 2 price to $199. Microsoft quickly matched that price.Examination Paper Semester I: Marketing ManagementIIBM Institute of Business ManagementWanting to maintain its low-price status, Nintendo in turn responded by reducing the price of its theGameCube by $50, to $149. By mid 2002, Microsoft Xbox had sold between 3.5 and 4 million unitsworldwide. However, Nintendo had surpassed Xbox sales by selling 4.5 million Game Cubes. Sony hadthe benefit of healthy head start, and had shipped 32 million PlayStation 2s. However, seven years afterthe introduction of original PlayStation, it was being sold in retail outlets fora mere $49. It had a significant lead in terms of numbers of units in homes around the world with a 43 percent share. Nintendo 64 was second with 30 per cent, followed by Sony PlayStation 2 with 14 per cent.The Xbox and GameCube each claimed about 3 per cent of the market, with Sega Dreamcast comprisingthe last and least market share of 4.7 per cent. Sega, once an industry leader, announced in 2001 that it

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had decided to stop producing the Dreamcast and other video game hardware components. The companysaid it would develop games for its competitors’ consoles. Thus Sega slashed the price of the Dreamcastto just $99 in an effort to liquidate its piled up inventory of more than 2 million units and immediatelybegan developing 11 new games for the Xbox, four for PlayStation 2, and three for Nintendo’s Game BoyAdvance. As the prices of video game consoles have dropped, consoles and games have become theequivalent of razors and blades. This means the consoles generate little if any profit, but the games are ahighly profitable proposition. The profit margins on games are highly attractive, affected to some degreeby whether the content is developed by the console maker (such as Sony) or by an independent gamepublisher (such as Electronic Arts). Thus, the competition to develop appealing, or perhaps evenaddictive, games may be even more intense than the battle among players to produce the best console. Inparticular, Nintendo, Sony, and Microsoft want games that are exclusive to their own systems. With thatin mind, they not only rely on large in-house staffs that design games but they also pay added fees toindependent publishers for exclusive rights to new games. The sales of video games in 2001 rose to 43per cent, compared to just 4 per cent increase for computer-based games. But computer game players arebelieved to be a loyal bunch, as they see many advantages in playing games on their computers ratherthan consoles. For one thing, they have a big advantage of having access to a mouse and a keyboard thatallow them to play far more sophisticated games. In addition, they have been utilizing the Internet foryears to receive game updates and modifications and to play each other over the Web. Sony andMicrosoft are intent on capturing a portion of the online gaming opportunity. Even Nintendo has decidedto make available a modem that will allow GameCube users to play online. As prices continue to fall andtechnology becomes increasingly more sophisticated, it remains to be seen whether these three companiescan keep their names on the industry’s list of “high scorers”.

Questions1. Considering the concept of product life cycle, where would you put video games in their life cycle?2. Should video game companies continue to alter their products to include other functions, such as e-mail?

1. What is meant by sales promotion? Describe briefly the various methods of sales promotionaltools used by business organizations to boost the sales. Explain any four methods of salespromotion?

2. Write notes on the fowling :a) Explain right to safety.b) What is right to consumer protection?

Organizational Behavior

Multiple choices:1. It is the degree to which a person identifies with a particular organization and its goals, & wishesto maintain membership in the organizationa. Job involvementb. Terminal valuec. Attituded. Value2. _________ means moving information from the hidden area to the open areaa. blind areab. unknown areac. public aread. self disclosure3. An approach in which the goals of one party are in direct conflict with the goals of the other partya. Negotiationb. Distributive bargainingc. Stressd. None4. The measure of a person’s ability to operate within business organizations through socialcommunication & interactionsa. Transactional analysisb. Interpersonal skill

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c. Life positiond. Johari window5. Where the source of power is in person’s control over rewarding outcomes, that power is calleda. Coercive powerb. Referent powerc. Legitimate powerd. Reward powerExamination Paper Semester I: Organizational BehaviourIIBM Institute of Business Management6. It means melting resistance to change; the people who will be affected by the change come toaccept the need for ita. Organizationb. Unfreezingc. Changingd. Refreezing7. This training is also known as laboratory training, encounter groups & T-groupsa. Sensitivityb. Surveyc. Processd. Team building8. They are the things that come together to define a culture & reveal that the culture is about tothose who pay attention to thema. Cultureb. Espoused valuec. Artifactsd. Organizational culture9. This stage encompasses all the learning that occurs before a new member joins the organizationsa. Socializationb. The Pre-arrival stagec. Encounter staged. Metamorphosis stage10. It refers to the behavior pattern adopted by a leader to influence the behavior of his subordinatefor attaining the organizational goala. Leadershipb. Traits of leadershipc. Leadership gridd. Leadership style

Part Two:1. Define Informal groups.2. What do you understand by the term ‘Emotion’?3. Write a note on ‘Reinforcement theory’.4. Explain the terms ‘Attitudes and Values’.

Case let 1M/s. ABC Ltd is a medium-sized engineering company producing a large-range of product linesaccording to customer requirements. It has earned a good reputation as a quick and reliable supplier to itscustomers because of which its volume of business kept on increasing. However, over the past one year,the Managing Director of the company has been receiving customer complaints due to delays in dispatchof products and at times the company has to pay substantial penalty for not meeting the schedule in time.The Managing Director convened an urgent meeting of various functional managers to discuss the issue.The marketing manager questioned the arbitrary manner of giving priority to products in manufacturingline, causing delays in wanted products and over-stocking of products which are not requiredimmediately. Production Control Manager complained that he does not have adequate staff to plan andcontrol the production function; and whatever little planning he does, is generally overlooked by shopfloor manager. Shop floor managers complained of unrealistic planning, excessive machine breakdowns,power failure, and shortage of materials for scheduled products because of which it is impossible to stickto the schedule. Maintenance manager says that he does not get important spares required for equipmentmaintenancebecause of which he cannot repair machines at a faster rate. Inventory control manager says

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that on one hand the company often accuses him of carrying too much stock and on other hand people aregrumbling over shortages. Fed up by mutual mud-slinging, the Managing Director decided to appointyou, a bright management consultant with training in business management to suggest ways and means toput his “house in order”.

Questions1. How would you examine if there is any merit in the remarks of various functional managers?2. What, in your opinion, could be the reasons for different Managerial thinking in this case?3. How would you design a system of getting correct information about job status to identify delays quickly?4. What would you suggest to promote co-ordinate interaction of various people to meet the scheduled dates?

Case let 2Rajender Kumar was a production worker at competent Motors Limited (CML) which made componentsand accessories for the automotive industry. He had worked at CML for almost seven years as a welder,along with fifteen other men in the plant. All had received training in welding both on the job and throughcompany sponsored external programmes. They had friendly relations and got along very well with oneanother. They played Volleyball in the playground regularly before retiring to the quarters allotted by thecompany. They work together in the company canteen, cutting Jokes on each other and making fun ofeveryone who dared to step into their privacy during lunch hour. Most of the fellows had been there forsome length of time, except for two men who had joined the ranks only two months back. Rajender wasgenerally considered to be the leader of the group, so it was no surprise that when the foreman of the newwas transferred and his job was posted, Rajender applied for the job and got it.There were only four other applicants for the job, two from mechanical section and two from outside,when there was a formal announcement of the appointment on a Friday afternoon, everyone in the groupcongratulated Rajender. They literally carried him on their shoulders, and bought him snacks andcelebrated. On Monday morning, Rajender joined duty as Foreman. It was company practice for allforemen to wear blue jacket and a white shirt. Each man’s coat had his name badge sewn onto the leftside pocket. The company had given two pairs to Rajender. He was proud to wear the coat to work onMonday. People who saw him from a distance went up to him and admired the new blue coat. There wasa lot of kidding around calling Rajender as ‘Hero’, ‘Raja Babu’ and ‘Officer’ etc. One of the guys wentback to his locker and returned with a long brush and acted as though he were removing dust particles onthe new coat. After about five minutes of horseplay, all the men went back to work. Rajender went to hisoffice to familiarize himself with the new job and environment. At noon, all the men broke for Lunch andwent to the canteen to eat and take a break as usual. Rajender was busy when they left but followed afterthem a few minutes later. He bought the food coupon, took the snacks and tea and turned to face the opencanteen. On the left-side corner of the room was his old work group; on the right-hand side of the canteensat the other entire foreman in the plant—all in their smart blue coats.At that point of time, silence descended on the canteen. Both groups looked at Rajender anxiously,waiting to see which group he would choose to eat with.Questions

1. Whom do you think Rajender will eat with? Why?2. If you were one of the other foremen, what could you do to make Rajinder’s transition easier?

1. A large unit manufacturing electrical goods which has been known for its liberal personnelpolicies and fringe benefits is facing the problem of low productivity and high absenteeism. Howshould the management improve the organizational climate?

2. The leader is expected to play many roles & therefore he must be qualified to guide others toorganizational achievement. On the basis of this explain the leadership skills & leadership traits.

Principles and Practice of Management

Multiple Choices:1. A plan is a trap laid to capture the ________.a. Future

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b. Pastc. Policyd. Procedure2. It is the function of employing suitable person for the enterprisea. Organizingb. Staffingc. Directingd. Controlling3. ___________ means “ group of activities & employees into departments”a. Orientationb. Standardizationc. Processd. Departmentation4. This theory states that authority is the power that is accepted by othersa. Acceptance theoryb. Competence theoryc. Formal authority theoryd. Informal authority theory5. It means dispersal of decision-making power to the lower levels of the organizationa. Decentralizationb. Centralizationc. Dispersiond. DelegationExamination Paper Semester I: Principles and Practice of ManagementIIBM Institute of Business Management6. This chart is the basic document of the organizational structurea. Functional chartb. Posts chartc. Master chartd. Departmental chart7. Communication which flow from the superiors to subordinates with the help of scalarchain is known asa. Informal communicationb. Downward communicationc. Upward communicationd. Oral communication8. Needs for belongingness, friendship, love, affection, attention & social acceptance area. Physiological needsb. Safety needsc. Ego needsd. Social needs9. A management function which ensures “jobs to be filled with the right people, with theright knowledge, skill & attitude”a. Staffing definedb. Job analysisc. Manpower planningd. Recruitment10. It is a process that enables a person to sort out issues and reach to a decisions affectingtheir lifea. Selectionb. Rainingc. Rewardd. CounselingPart Two:

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1. Differentiate between ‘Administration’ and ‘Management’.2. What were the common drawbacks in classical and Neo classical theories of management?3. Write a short note on “Line Organization.”4. Write a short note on ‘Acceptance theory’.

Case let 1Mr. Vincent, the Manager of a large supermarket, was taking a management course in theevening programme at the local college. The Professor had given an interesting but disturbinglecture the previous night on the various approaches to management. Vincent had always thoughtthat management involved just planning, organizing and controlling. Now this Professor wassaying that management could also be thought of as quantitative models, systems theory andanalysis, and even something called contingency relationships. Vincent had always consideredhimself a good manager, and his record with the supermarket chain had proved it. He thought ofhimself, “I have never used operations research models, thought of my store as an open system,or developed or utilized any contingency relationship. By doing a little planning ahead,organizing the store, and making some things got done, I have been a successful manager. Thatother stuff just does not make sense. All the professor was trying to do was complicate things. Iguess I will have to know it for the test, but I am sticking with my old plan, organize and controlapproach to managing my store.”

Questions1. Critically analyze Mr. Vincent’s reasoning.2. If you were the professor and you knew what was going through Vincent’s mind, what would yousay to Vincent?

Case let 2The Regional Administration Office of a company was hastily set up. Victor D’Cuhna a young executivewas directly recruited to take charge of Data Processing Cell of this office. The data processing was tohelp the administrative office in planning and monitoring. The officer cadre of the administrative officewas a mix of directly recruited officers and promotee officers (promotion from within the organization).Females dominated the junior clerical cadre. This cadre was not formally trained. The administrativeoffice had decided to give these fresh recruits on-the-job training because when results were not upto theexpectations blame was brought on the Data Processing Cell. Victor D’Cuhna realized that theadministrative office was heading for trouble. He knew that his task would not be easy and that he hadbeen selected because of his experience, background and abilities. He also realized that certain functionalaspects of the administrative office were not clearly understood by various functionaries, and systems andprocedures were blindly and randomly followed. Feedback was random, scanty and controversial, andData Processing Cell had to verify every item of feedback. Delays were inevitable. D’Cuhna sought thepermission of senior management to conduct a seminar on communication and feedback of which he wasan expert. The permission was grudgingly given by the senior management. Everyone appreciated theseminar. Following the first seminar, D’Cuhna conducted a one week training course for the clericalExamination Paper Semester I: Principles and Practice of ManagementIIBM Institute of Business Managementcadre, especially for the junior, freshly recruited clerks. Amongst other topics, D’Cuhna laid emphasis onfiling system, information tracking, communication, and feedback. This helped reorient attitudes to someextent. But the female clerks preferred to ignore the theme and widely circulated the belief that D’Cuhnawas an upstart and a show off. Within a short time, considerable friction had been generated in theadministrative office While directly recruited officers supported D’Cuhna’s initiative and the specialistofficers admired him, senior management became cautious and uncomfortable. The junior promoteeofficers were prejudiced against him. The grand finale followed swiftly. D’Cuhna happened to getannoyed with a female clerk. During the absence of her officer, who was on sick leave and had not beensubstituted by another officer, she began submitting nil returns. D’Cuhna took pains to explain to her thatfor certain topics a nil feedback was not tenable. The current status had to be reported— the stage atwhich the matter was pending, what had been done, and what would be done about it? The lady reportedthat it was none of his business to tell her this. He should talk to her officer when the officer reports backfrom leave. D’Cuhna said he would, but in the meanwhile she should present the correct picture. WhenD’Cuhna called for the files, she refused to part with them. D’Cuhna fired her and reported the situation

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to the Chief Regional Manager. The other ladies were up in the arms against D’Cuhna. The lady alsocomplained to higher management that D’Cuhna had made passes at her. Other ladies supported hercomplaint. She also complained that D’Cuhna had no business to scold her. D’Cuhna countered that hadthere been a male clerk in her place he would have scolded him too. When females enjoyed equal rightswith males, D’Cuhna felt he must remain impartial. Nevertheless, D’Cuhna was transferred to anotherplace. The transfer to another place, rather than to another department in same place, was particularlyhumiliating to him. A shocked and disillusioned D’Cuhna quit the enterprise.

Questions1. Diagnose the problem and enumerate the reasons for the failure of D’Cuhna?2. What could D’Cuhna have done to avoid the situation in which he found himself?

Detailed information should form the part of your answer (Word limit 200-250 words).1. What is Training? Explain the different methods of training?2. Explain Decision-Making process of an organization?

Financial Management

Part one:Multiple choices:1. The approach focused mainly on the financial problems of corporate enterprisea. Ignored non-corporate enterpriseb. Ignored working capital financingc. External approachd. Ignored routine problems2. These are those shares, which can be redeemed or repaid to the holders after a lapse of thestipulated perioda. Cumulative preference sharesb. Non-cumulative preference sharesc. Redeemable preference sharesd. Perpetual shares3. This type of risk arise from changes in environmental regulations, zoning requirements, fees,licenses and most frequently taxesa. Political riskb. Domestic riskc. International riskd. Industry risk4. It is the cost of capital that is expected to raise funds to finance a capital budget or investmentproposala. Future costb. Specific costc. Spot costd. Book cost5. This concept is helpful in formulating a sound & economical capital structure for a firma. Financial performance appraisalb. Investment evaluationc. Designing optimal corporate capital structured. None6. It is the minimum required rate of return needed to justify the use of capitala. From investorsb. Firms pointc. Capital expenditure pointd. Cost of capital7. It arises when there is a conflict of interest among owners, debenture holders and the managementa. Seasonal variationb. Degree of competitionc. Industry life cycled. Agency costs

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8. Some guidelines on shares & debentures issued by the government that are very important for theconstitution of the capital structure area. Legal requirementb. Purpose of financec. Period of financed. Requirement of investors9. It is that portion of an investments total risk that results from change in the financial integrity ofthe investmenta. Bull- bear market riskb. Default riskc. International riskd. Liquidity risk10. _____________ measure the systematic risk of a security that cannot be avoided throughdiversificationa. Betab. Gammac. Probability distributiond. AlphaPart Two:1. What is Annuity kind of cash flow?2. What do understand by Portfolio risk?3. What do you understand by ‘Loan Amortization’?4. What is the Difference between NPV and IRR?

Case let 1This case provides the opportunity to match financing alternatives with the needs of different companies.It allows the reader to demonstrate a familiarity with different types of securities. George Thomas wasfinishing some weekend reports on a Friday afternoon in the downtown office of Wishart and Associates,an investment-banking firm. Meenda, a partner in the firm, had not been in the New York office sinceMonday. He was on a trip through Pennsylvania, visiting five potential clients, who were considering theflotation of securities with the assistance of Wishart and Associates. Meenda had called the office onWednesday and told George's secretary that he would cable his recommendations on Friday afternoon.George was waiting for the cable. George knew that Meenda would be recommending different types ofsecurities for each of the five clients to meet their individual needs. He also knew Meenda wanted him tocall each of the clients to consider the recommendations over the weekend. George was prepared to makethese calls as soon as the cable arrived. At 4:00 p.m. a secretary handed George the following telegram.George Thomas, Wishart and Associates STOP Taking advantage of offer to go skiing in Poconos STOPRecommendations as follows: (1) common stock, (2) preferred stock, (3) debt with warrants, (4)convertible bonds, (5) callable debentures STOP. See you Wednesday STOP Meenda. As George pickedup the phone to make the first call, he suddenly realized that the potential clients were not matched withthe investment alternatives. In Meenda's office, George found folders on each of the five firms seekingfinancing. In the front of each folder were some handwritten notes that Meenda had made on Mondaybefore he left. George read each of the notes in turn. APT, Inc needs $8 million now and $4 million infour years. Packaging firm with high growth rate in tri-state area. Common stock trades over the counter.Stock is depressed but should rise in year to 18 months. Willing to accept any type of security. Goodmanagement. Expects moderate growth. New machinery should increase profits substantially. Recentlyretired $7 million in debt. Has virtually no debt remaining except short-term obligations.Sandford EnterprisesNeeds $16 million. Crusty management. Stock price depressed but expected to improve. Excellent growthand profits forecast in the next two year. Low debt-equity ratio, as the firm has record of retiring debtprior to maturity. Retains bulk of earnings and pays low dividends. Management not interested insurrendering voting control to outsiders. Money to be used to finance machinery for plumbing supplies.Sharma Brothers., Inc.Needs $20 million to expand cabinet and woodworking business. Started as family business but now has1200 employees, $50 million in sales, and is traded over the counter. Seeks additional shareholder but notwilling to stock at discount. Cannot raise more than $12 million with straight debt. Fair management.Good growth prospects. Very good earnings. Should spark investor's interest. Banks could be willing tolend money for long-term needs.Sacheetee Energy Systems

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The firm is well respected by liberal investing community near Boston area. Sound growth company.Stock selling for $16 per share. Management would like to sell common stock at $21 or more willing toExamination Paper Semester I: Financial ManagementIIBM Institute of Business Managementuse debt to raise $ 28 million, but this is second choice. Financing gimmicks and chance to turn quickprofit on investment would appeal to those likely to invest in this company.Ranbaxy IndustryNeeds $25 million. Manufactures boat canvas covers and needs funds to expand operations. Needs longtermmoney. Closely held ownership reluctant surrender control. Cannot issue debt without permission ofbondholders and First National Bank of Philadelphia. Relatively low debt-equity ratio. Relatively highprofits. Good prospects for growth Strong management with minor weaknesses in sales and promotionareas. As George was looking over the folders, Meenda's secretary entered the office. George said, "DidMeenda leave any other material here on Monday except for these notes?” She responded, "No, that's it,but I think those notes should be useful. Meenda called early this morning and said that he verified thefacts in the folders. He also said that he learned nothing new on the trip and he sort of indicated that, hehad wasted his week, except of course, that he was invited to go skiing at the company lodge up there".George pondered over the situation. He could always wait until next week, when he could be sure that hehad the right recommendations and some of the considerations that outlined each client's needs andsituation. If he could determine which firm matched each recommendation, he could still call the firms by6:00 P.M. and meet the original deadline. George decided to return to his office and match each firm withthe appropriate financing.

Question:1. Which type of financing is appropriate to each firm?2. What types of securities must be issued by a firm which is on the growing stage in order to meetthe financial requirements?

Case let 2This case has been framed in order to test the skills in evaluating a credit request and reaching a correctdecision. Perluence International is large manufacturer of petroleum and rubber-based products used in avariety of commercial applications in the fields of transportation, electronics, and heavy manufacturing.In the northwestern United States, many of the Perluence products are marketed by a wholly-ownedsubsidiary, Bajaj Electronics Company. Operating from a headquarters and warehouse facility in SanAntonio, Strand Electronics has 950 employees and handles a volume of $85 million in sales annually.About $6 million of the sales represents items manufactured by Perluence. Gupta is the credit manager atBajaj electronics. He supervises five employees who handle credit application and collections on 4,600accounts. The accounts range in size from $120 to $85,000. The firm sells on varied terms, with 2/10, net30 mostly. Sales fluctuate seasonally and the average collection period tends to run 40 days. Bad-debtlosses are less than 0.6 per cent of sales. Gupta is evaluating a credit application from Booth Plastics, Inc.,a wholesale supply dealer serving the oil industry. The company was founded in 1977 by Neck A. Boothand has grown steadily since that time. Bajaj Electronics is not selling any products to Booth Plastics andhad no previous contact with Neck Booth. Bajaj Electronics purchased goods from PerluenceInternational under the same terms and conditions as Perluence used when it sold to independentcustomers. Although Bajaj Electronics generally followed Perluence in setting its prices, the subsidiaryoperated independently and could adjust price levels to meet its own marketing strategies. The Perluence'scost-accounting department estimated a 24 per cent markup as the average for items sold to PuccaElectronics. Bajaj Electronics, in turn, resold the items to yield a 17 per cent markup. It appeared thatthese percentages would hold on any sales to Booth Plastics. Bajaj Electronics incurred out-of pocketexpenses that were not considered in calculating the 17 per cent markup on its items. For example, thecontact with Booth Plastics had been made by James, the salesman who handled the Glaveston area.Examination Paper Semester I: Financial ManagementIIBM Institute of Business ManagementJames would receive a 3 per cent commission on all sales made Booth Plastics, a commission that wouldbe paid whether or not the receivable was collected. James would, of course, be willing to assist incollecting any accounts that he had sold. In addition to the sales commission, the company would incurvariable costs as a result of handling the merchandise for the new account. As a general guideline,warehousing and other administrative variable costs would run 3 per cent sales. Gupta Holmsteadapproached all credit decisions in basically the same manner. First of all, he considered the potentialprofit from the account. James had estimated first-year sales to Booth Plastics of $65,000. Assuming that

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Neck Booth took the, 3 per cent discount. Bajaj Electronics would realize a 17 per cent markup on thesesales since the average markup was calculated on the basis of the customer taking the discount. If NeckBooth did not take the discount, the markup would be slightly higher, as would the cost of financing thereceivable for the additional period of time. In addition to the potential profit from the account, Gupta wasconcerned about his company's exposure. He knew that weak customers could become bad debts at anytime and therefore, required a vigorous collection effort whenever their accounts were overdue. Hisdepartment probably spent three times as much money and effort managing a marginal account ascompared to a strong account. He also figured that overdue and uncollected funds had to be financed byBajaj Electronics at a rate of 18 per cent. All in all, slow -paying or marginal accounts were very costly toBajaj Electronics. With these considerations in mind, Gupta began to review the credit application forBooth Plastics.

Question:1. How would you judge the potential profit of Bajaj Electronics on the first year of sales to BoothPlastics and give your views to increase the profit.2. Suggestion regarding Credit limit. Should it be approved or not, what should be the amount ofcredit limit that electronics give to Booth Plastics.

1. Honey Well Company is contemplating to liberalize its collection effort. Its present sales are Rs.10 lakh, its average collection period is 30 days, its expected variable cost to sales ratio is 85 percent and its bad debt ratio is 5 per cent. The Company’s cost of capital is 10 per cent and tax areis 40 per cent. He proposed liberalization in collection effort increase sales to Rs. 12 lakhincreases average collection period by 15 days, and increases the bad debt ratio to 7 percent.Determine the change in net profit.2. Explain the concept of working capital. What are the factors which influence the working capital?

Human Resource Management

Multiple choices:1. It is a cultural attitude marked by the tendency to regard one’s own culture as superior to othersa. Geocentrismb. Polycentrismc. Ethnocentrismd. Egocentrism2. It is the systemic study of job requirements & those factors that influence the performance ofthose job requirementsa. Job analysisb. Job rotationc. Job circulationd. Job description3. This Act provides an assistance for minimum statutory wages for scheduled employmenta. Payment of Wages Act, 1936b. Minimum Wages Act, 1948c. Factories Act, 1948d. Payment of Gratuity act, 19724. __________ is the actual posting of an employee to a specific joba. Inductionb. Placementc. Attritiond. None5. Broadening an individual’s knowledge, skills & abilities for future responsibilities is known asa. Trainingb. Developmentc. Educationd. MentoringExamination Paper Semester I: Human Resource ManagementIIBM Institute of Business Management

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6. Change that is designed and implemented in an orderly and timely fashion in anticipation offuture eventsa. Planned changeb. Technology changec. Structural changed. None7. It is a process for setting goals and monitoring progress towards achieving those goalsa. Performance appraisalb. Performance gapc. Performance factord. Performance management system8. A method which requires the rates to provide a subjective performance evaluation along a scalefrom low to higha. Assessment centreb. Checklistc. Rating scaled. Monitoring9. It is the sum of knowledge, skills, attitudes, commitment, values and the liking of the people in anorganizationa. Human resourcesb. Personal managementc. Human resource managementd. Productivity10. A learning exercise representing a real-life situation where trainees compete with each other toachieve specific objectivesa. Executive developmentb. Management gamec. Programmed learningd. Understudy

Part Two:1. Explain the importance of Career Planning in industry.2. Write the features of HRM.3. Briefly explain the concept of Performance Appraisal.4. Explain On-Job and Off Job Training.

Case let 1Trust them with knee-jerk reactions," said Vikram Koshy, CEO, Delta Software India, as he looked at thequarterly report of Top Line Securities, a well-known equity research firm. The firm had announced adowngrade of Delta, a company listed both on Indian bourses and the NASDAQ. The reason? "One outof every six development engineers in the company is likely to be benched during the remaining part ofthe year." Three analysts from Top Line had spent some time at Delta three weeks ago. Koshy and histeam had explained how benching was no different from the problems of excess inventory, idle time, andsurplus capacity that firms in the manufacturing sector face on a regular basis, "Delta has witnessed ascorching pace of 30 per cent growth during the last five years in a row," Koshy had said, "What ishappening is a corrective phase." But, evidently, the analysts were unconvinced.Why Bench?Clients suddenly decide to cut back on IT spends Project mix gets skewed, affecting work allocationEmployee productivity is set to fall, creating slack working conditions. High degree of job specializationleads to redundancyWhat are the options?Quickly cut costs in areas which are non-core look for learning’s from the manufacturing sector Focus onalternative markets like Europe and Japan Move into products, where margins are better. Of course, theTop Line report went on to cite several other "signals," as it said: the rate of annual hike in salaries atDelta would come down to 5 per cent (from between 20 and 30 per cent last year); the entry-level intakeof engineers from campuses in June 2001, would decline to 5 per cent (unlike the traditional 30 per centaddition to manpower every year); and earnings for the next two years could dip by between 10 and 12per cent. And the loftiest of them all: "The meltdown at Nasdaq is unlikely to reverse in the near future.""Some of the signals are no doubt valid. And ominous," said Koshy, addressing his A-Team, which had

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assembled for the routine morning meeting. "But, clearly, everyone is reading too much into this businessof benching. In fact, benching is one of the many options that our principals in the US have been pursuingas part of cutting costs right since September, 2000. They are also expanding the share of off-shore jobs.Five of our principals have confirmed that they would outsource more from Delta in India-which is likelyto hike their billings by about 30 per cent. At one level, this is an opportunity for us. At another, ofcourse, I am not sure if we should be jubilant, because they have asked for a 25-30 per cent cut in billingrates. Our margins will take a hit, unless we cut costs and improve productivity." "Productivity is clearly amatter of priority now," said Vivek Varadan, Vice-President (Operations). "If you consider benching as anon-earning mode, we do have large patches of it at Delta. As you are aware, it has not been easy tosecure 70 per cent utilization of our manpower, even in normal times. I think we need to look at why wehave 30 per cent bench before examining how to turn it into an asset." "There are several reasons,"remarked Achyut Patwardhan, Vice-President (HR). "And a lot of it has to do with the nature of ourbusiness, which is more project-driven than product-driven. When you are managing a number ofoverseas and domestic projects simultaneously, as we do at Delta, people tend to go on the bench. Theywait, as they complete one project, and are assigned the next. There are problems of coordination betweenprojects, related to the logistics of moving people and resources from one customer to another. In fact, Iam fine-tuning our monthly manpower utilization report to provide a breakup of bench costs intoExamination Paper Semester I: Human Resource ManagementIIBM Institute of Business Managementspecifics-leave period, training programmes, travel time, buffers, acclimatization period et al." "It wouldbe worthwhile following the business model used by US principal Techno Inc," said Aveek Mohanty,Director (Finance). "The company has a pipeline of projects, but it does not manage project by project.What it does is to slice each project into what it calls 'activities'. For example, communicationnetworking; user interface development; scheduling of processes are activities common to all projects.People move from one project to another. It is somewhat like the Activity Based Costing. It throws up thebench time straightaway, which helps us control costs and revenue better." "I also think we should reduceour dependence on projects and move into products," said Praveen Kumar, Director (Marketing). "That iswhere the opportunity for brand building lies. In fact, now is the time to get our technology guys involvedin marketing. Multiskilling helps reduce the bench time." "Benching has an analogy in the manufacturingsector," said Girish Shahane, Vice-President (Services). "We could look for learning's there. Many firmshave adopted Just-In-Time (JIT) inventory as part of eliminating idle time. It would be worthwhileexploring the possibility of JIT. But the real learning lies in standardization of work. It is linked to whatMohanty said about managing by activities." "At a broader level, I see several other opportunities," saidKoshy, "We can fill in the space vacated by US firms and move up the value chain. But before we do so,Delta should consolidate its position as the premier outsourcing centre. Since there are only two ways inwhich we can generate revenue-sell expertise or sell products-we should move towards a mix of both.Tie-ups with global majors will help. Now is the time to look beyond the US and strike alliances withfirms in Europe- and also Japan-as part of developing new products for global markets."

Questions1. Should benching be a matter of concern at Delta?2. What are the risks involved in moving from a project-centric mode to a mix of projects andproducts?

Case let 2The contexts in which human resources are managed in today's organizations are constantly, changing.No longer do firms utilize one set of manufacturing processes, employ a homogeneous group of loyalemployees for long periods of time or develop one set way of structuring how work is done andsupervisory responsibility is assigned. Continuous changes in who organizations employ and what theseemployees do require HR practices and systems that are well conceived and effectively implemented toensure high performance and continued success.1. Automated technologies nowadays require more technically trained employees possessing multifariousskills to repair, adjust or improve existing processes. The firms can't expect these employees (Gen Xemployees, possessing superior technical knowledge and skills, whose attitudes and perceptions towardwork are significantly different from those of their predecessor organizations: like greater self control,less interest in job security; no expectations of long term employment; greater participation urge in workactivities, demanding opportunities for personal growth and creativity) to stay on without attractivecompensation packages and novel reward schemes.2. Technology driven companies are led by project teams, possessing diverse skills, experience and

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expertise. Flexible and dynamic organizational structures are needed to take care of the expectations ofmanagers, technicians and analysts who combine their skills, expertise and experience to meet changingcustomer needs and competitive pressures.3. Cost cutting efforts have led to the decimation of unwanted layers in organizational hierarchy in recenttimes. This, in turn, has brought in the problem of managing plateau employees whose careers seem tohave been hit by the delivering process. Organizations are, therefore, made to find alternative career pathsfor such employees.4. Both young and old workers, these days, have values and attitudes that stress less loyalty to thecompany and more loyalty to oneself and one's career than those shown by employees in the past,Organizations, therefore, have to devise appropriate HR policies and strategies so as to prevent the flightof talented employees

Question

1. Discuss that technological breakthrough has brought a radical changes in HRM.1. Several types of interviews are commonly used depending on the nature & importance of theposition to be filled within an organization. Explain the different types of Interviews.2. Explain the legal provisions regarding safety of workers.Examination Paper Semester I: Marketing ManagementIIBM Institute of Business Management

Marketing ManagementMultiple choices:1. It is a concept where goods are produced without taking into consideration the choices or tastes ofcustomersa. Marketing mixb. Production conceptc. Marketing conceptd. Relationship marketing2. It involves individuals who buys products or services for personal use and not for manufacture orresalea. Environment analysisb. Macro environmentc. Micro environmentd. Consumer3. It is the groups of people who interact formally or informally influencing each other’s attitudes&behaviora. Consumer behaviorb. Culturec. Reference groupsd. Primary groups4. The concept of the product that passes through various changes in its total life known asa. Product life cycleb. Line stretchingc. Consumer adoptiond. Product5. It refers to unique set of brand associations that brand strategist aspires to create or maintaina. Brandingb. Packagingc. Brand identityd. Brand imageExamination Paper Semester I: Marketing ManagementIIBM Institute of Business Management6. It involves a pricing strategy that charges customers different prices for the same product orservicea. Promotional pricingb. Price discriminationc. Non price competition

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d. None7. It refers to an arrangement where another company through its own marketing channel sells theproducts of one producersa. End customerb. Wholesalerc. Retailingd. Strategic channel alliance8. It involves facility consisting of the means & equipments necessary for the movement ofpassengers of goodsa. Logisticsb. Warehousingc. Transportationd. None9. The advertising which is used to inform consumers about a new product or feature & to buildprimary demands is known asa. Advertisingb. Informative advertisingc. Persuasive advertisingd. Advertising strategy10. An art that predicts the likelihood of economic activity on the basis of certain assumptionsa. Compensationb. Sales forecastingc. Sales budgetingd. Selling policyPart Two:1. Write a note on importance of consumer behavior for a business firm?2. Define the term ‘Price’.3. Distinguish between Marketing Concept and Selling Concept?4. What are the new trends in advertisement?5. Briefly explain the following :a) Socio –culture environmentb) Marketing environment interface.

Case let 1Ask the company top brass what ‘almost there’ means. The answer: a premier Indian retail company thathas come to be known as a specialty chain of apparel and accessories. With 52 product categories underone roof, Shoppers’ Stop has a line-up of 350 brands. Set up and headed by former Corona employee, B.S. Nagesh, Shoppers’ Stop is India’s answer to Selfridges and Printemps. As it proudly announces, ‘Wedon’t sell, we help you buy.’ Back in 1991, there was the question of what to retail. Should it be asupermarket or a departmental store? Even an electronics store was considered. Finally, common senseand understanding won out. The safest bet, for the all-male team was to retail men’s wear. They knew themale psyche and felt that they had discerning taste in men’s clothing. The concept would be that of alifestyle store in a luxurious space, which would make for a great shopping experience. The firstShoppers’ Stop store took shape in Andheri, Mumbai, in October 1991, with an investment of nearly Rs.20 lakh. The original concept that formed the basis of a successful marketing campaign for seven years ishere to stay. And the result is an annual turnover of Rs. 160 crores and five stores, nine years later.Everything went right from the beginning, except for one strange happening. More than 60 per cent of thecustomers who walked into Shoppers’ Stop in Mumbai were women. This gave rise to ideas. Soon, thestore set up its women’s section. Later, it expanded to include children’s wear and then, householdaccessories. The second store in Bangalore came in 1995. The store at Hyderabad followed in 1998 withthe largest area of 60,000 sq. ft. The New Delhi and Jaipur stores were inaugurated in 1999. All thiswhile, the product range kept increasing to suit customer needs. The most recent experiment was homefurnishings. Secure in the knowledge that organised retailing in global brands was still in its infancy inIndia, Shoppers’ Stop laid the ground rules which the competition followed. The biggest advantage forShoppers’ Stop is that it knows how the Indian consumer thinks and feels while shopping. Yes, feeling –for in India, shopping remains an outing. And how does it compare itself to foreign stores? While it is notmodeled on any one foreign retailer, the ‘basic construct’ is taken from the experience of a number ofsuccessfully managed retail companies. It has leveraged expertise for a critical component like technologyfrom all over the world, going as far as hiring expatriates from Littlewoods and using state-of-the-art ERP

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models. Shoppers’ Stop went a step further by even integrating its financial system with the ERP model.Expertise was imported wherever it felt that expertise available in-house was inadequate. But the store feltthere was one acute problem. A shortage of the most important resource of them all was trained humans.Since Indian business institutes did not have professional courses in retail management, people were hiredfrom different walks of life and the training programme was internalized. By 1994, the senior executivesat Shoppers’ Stop were taking lectures at management institutes in Mumbai. The Narsee Monjee Instituteof Management Studies (NMIMS) even restructured its course to include retail management as a subject.Getting the company access to the latest global retail trends and exchange of information with businessgreats was an exclusive membership to the Intercontinental Group of Department Stores (IGDS). It allowsmembership by invitation to one company from a country and Shoppers’ Stop rubs shoulders with 29 ofthe hottest names in retailing – Selfridges from the UK, C.K. Tang from Singapore, Lamcy Plaza fromDubai and the like. With logistics I in place, the accent moved to the customer. Shoppers’ Stop conductedsurveys with ORG-MARG and Indian Market Research Bureau (IMRB) and undertook in-housewardrobe audits. The studies confirmed what it already knew. The Indian customer is still evolving and isvery different from, say, a European customer, who knows exactly what he wants to purchase, walks upto a shelf, picks up the merchandise, pays and walks out. In India, customers like to touch and feel theExamination Paper Semester I: Marketing ManagementIIBM Institute of Business Managementmerchandise, and scout for options. Also, the majority of Indian shoppers still prefer to pay in cash. So,transactions must be in cash as against plastic money used the world over. Additionally, the Indiancustomer likes being served – whether it is food, or otherwise. The company’s customer profile includespeople who want the same salesperson each time they came to the store to walk them through the shopfloors and assist in the purchase. Others came with families, kids and maids in tow and expected to besuitably attended to. Still others wanted someone to carry the bags. So, the shops have self-help counters,with an assistant at hand for queries or help. The in-house wardrobe audit also helped with another facetof the business. It enabled Shoppers’ Stop to work out which brands to stock, based on customerpreferences. In fact, the USP of Shoppers’ Stop lies in judiciously selected global brands, displayedalongside an in-house range of affordable designer wear. The line-up includes Levi’s, Louis Philippe,Allen Solly, Walt Disney, Ray Ban and Reebok, besides in-house labels STOP and I. Brand selection isthe same across the five locations, though the product mix may be somewhat city-based to accommodatecuts and styles in women’s wear, as well as allowing for seasonal variations (winter in Delhi, for instance,is a case in point). Stocking of brands is based on popular demand – recently, Provogue, MTV Style, andBenetton have been added. In-house labels are available at competitive prices and target the value-formoneycustomer and make up around 12 per cent of Shoppers’ Stop’s business. Sometimes in-housebrands plug the price gap in certain product categories. To cash in on this, the company has big plans forits in-house brands: from re-branding to repositioning, to homing in on product categories where existingbrands are not strong. Competition between brands is not an issue, because being a trading house, allbrands get equal emphasis. The in-house brand shopper is one who places immense trust in the companyand the quality of its goods and returns for repeat buys. And the company reposed its faith in regularcustomers by including them in a concept called the First Citizen’s Club (FCC). With 60,000 oddmembers, FCC customers account for 10 per cent of entries and for 34 per cent of the turnover. It was thesheer appeal of the experience that kept pulling these people back. Not one to let such an opportunitypass, the company ran a successful ad campaign (that talks about just this factor) in print for more thaneight years. The theme is still the same. In 1999, a TV spot, which liked the shopping experience to theslowing down of one’s internal clock and the beauty of the whole experience, was aired. More recently,ads that spell out the store’s benefits (in a highly oblique manner) are being aired.The campaign is based on entries entered in the Visitors’ Book. None of the ads has a visual or text – orany heavy handedly direct reference to the store or the merchandise. The ads only show shoppers havingthe time of their lives in calm and serene locales, or elements that make shopping at the store a pleasure –quite the perfect getaway for a cosmopolitan shopper aged between 25 and 45. The brief to the agency,Contract, ensured that brand recall came in terms of the shopping experience, not the product. And it hasworked wonders. Value-addition at each store also comes in the form of special care with car parks,power backup, customer paging, alteration service and gift-wrapping. To top it all, cafes and coffee barsmake sure that the customer does not step out of the store. In Hyderabad, it has even created a FoodCourt. Although the food counter was not planned, it came about as there was extra space of 67,000 sq. ft.Carrying the perfect experience to the shop floor is an attempt to stack goods in vast open spaces neatly.Every store has a generic structure, though regional customer variances are accounted for. Each store ison lease, and this is clearly Shoppers’ Stop’s most expensive resource proposition – renting huge spacesin prime properties across metros, so far totaling 210,000 sq. ft of retail space. Getting that space was easy

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enough for Shoppers’ Stop, since its promoter is the Mumbai-based Raheja Group, which also owns 62per cent of the share capital.Questions1. What are the significant factors that have led to the success of Shoppers’ Stop?2. Draw the typical profile(s) of Shoppers’ Stop customer segments.3. How are Indian customers visiting Shoppers’ Stop any different from customers of developedwestern countries?4. How should Shoppers’ Stop develop its demand forecasts?Case let 2The rise of personal computers in the mid 1980s spurred interest in computer games. This caused a crashin home Video game market. Interest in Video games was rekindled when a number of differentcompanies developed hardware consoles that provided graphics superior to the capabilities of computergames. By 1990, the Nintendo Entertainment System dominated the product category. Sega surpassedNintendo when it introduced its Genesis System. By 1993, Sega commanded almost 60 per cent of Videogame market and was one of the most recognized brand names among the children. Sega’s success wasshort lived. In 1995, Saturn (a division of General Motors) launched a new 32-bit system. The productwas a miserable failure for a number of reasons. Sega was the primary software developer for Saturn andit did not support efforts by outside game developers to design compatible games. In addition, Sega’sgames were often delivered quite late to retailers. Finally, the price of the Saturn system was greater thanother comparable game consoles. This situation of Saturn’s misstep benefited Nintendo and Sony greatly.Sony’s Play Station was unveiled in 1994 and was available in 70 million homes worldwide by the end of1999. Its “Open design” encouraged the efforts of outside developers, resulting in almost 3,000 differentgames that were compatible with the PlayStation. It too featured 32-bit graphics that appealed to olderaudience. As a result, at one time, more than 30 per cent of PlayStation owners were over 30 years old.Nintendo 64 was introduced in 1996 and had eye-popping 64-bit graphics and entered in more than 28million homes by 1999. Its primary users were between the age of 6 and 13 as a result of Nintendo’sefforts to limit the amount of violent and adult-oriented material featured on games that can be played onits systems. Because the company exercised considerable control over software development, Nintendo64 had only one-tenth the number of compatible games as Sony’s PlayStation did. By 1999, Sony hadcaptured 56 per cent of the video game market, followed by Nintendo with 42 per cent. Sega’s share hadfallen to a low of 1%. Hence, Sega had two options, either to concede defeat or introduce an innovativevideo machine that would bring in huge sales. And Sega had to do so before either Nintendo or Sonycould bring their next-generation console to market. The Sega Dreamcast arrived in stores in September1999 with an initial price tag of $199. Anxious gamers placed 300,000 advance orders, and initial saleswere quite encouraging. A total of 1.5 million Dreamcast machines were bought within the first fourmonths, and initial reviews were positive. The 128-bit system was capable of generating 3-D visuals, and40 different games were available within three months of Dream cast’s introduction. By the end of theyear, Sega had captured a market share to 15 per cent. But the Dreamcast could not sustain itsmomentum. Although its game capabilities were impressive, the system did not deliver all thefunctionality Sega had promised. A 56K modem (which used a home phone line) and a Web browserwere meant to allow access to the Internet so that gamers could play each other online, surf the Web, andvisit the Dreamcast Network for product information and playing tips. Unfortunately, these features eitherwere not immediately available or were disappointing in their execution. Sega was not the only one inhaving the strategy of adding functionality beyond games. Sony and Nintendo followed the sameapproach for their machines introduced in 1999. Both Nintendo’s Neptune and Sony’s PlayStation 2(PS2) were built on a DVD platform and featured a 128-bit processor. Analysts applauded the move toDVD because it is less expensive to produce and allows more storage than CDs. It also gives buyers theability to use the machine as CD music player and DVD movie player. As Sony marketing directorcommented, “The full entertainment offering from Play Station 2 definitely appeals to a much broaderaudience. I have friends in their 30s who bought it not only because it’s a gaming system for their kids,but also a DVD for them.” In addition, PlayStation 2 is able to play games developed for its earlier modelthat was CD-based. This gives the PS2 an enormous advantage in the number of compatible game titlesExamination Paper Semester I: Marketing ManagementIIBM Institute of Business Managementthat were immediately available to gamers. Further enhancing the PS2’s appeal is its high-speed modemand allows the user’s easy access to the Internet through digital cable as well as over telephone lines. Thisgives Sony the ability to distribute movies, music, and games directly to PS2 consoles. “We arepositioning this as an all-round entertainment player,” commented Ken Kutaragi, the head of SonyComputer Entertainment. However, some prospective customers were put off by the console’s initial

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price of $360. Shortly after the introduction of Neptune, Nintendo changed its strategies and announcedthe impending release of its newest game console, The GameCube. However, unlike the Neptune, theGameCube would not run on a DVD platform and also would not initially offer any online capabilities. Itwould be more attractively priced at $199. A marketing vice president for Nintendo explained thecompany’s change in direction, “We are the only competitor whose business is video games. We want tocreate the best gaming system.” Nintendo also made the GameCube friendly for outside developers andstarted adding games that included sports titles to attract an older audience. Best known for its extraordinary successes with games aimed at the younger set, such as Donkey Kong, Super Mario Bros, andPokemon, Nintendo sought to attract older users, especially because the average video game player is 28.Youthful Nintendo users were particularly pleased to hear that they could use their handheld Game BoyAdvance systems as controllers for the GameCube. Nintendo scrambled to ensure there would be anadequate supply of Game Cubes on the date in November 2001, when they were scheduled to be availableto customers. It also budgeted $450 million to market its new product, as it anticipated stiff competitionduring the holiday shopping season. With more than 20 million PlayStation 2 sold worldwide, theGameCube as a new entry in the video game market would make the battle for market share even moreintense. For almost a decade, the video game industry had only Sega, Nintendo, and Sony; just threeplayers. Because of strong brand loyalty and high product development costs, newcomers faced adaunting task in entering this race and being competitive. In November 2001, Microsoft began selling itsnew Xbox, just three days before the GameCube made its debut. Some observers felt the Xbox was aimedto rival PlayStation 2, which has similar functions that rival Microsoft’s Web TV system and even somelower level PCs. Like the Sony’s PlayStation 2, Xbox was also built using a DVD platform, but it used anIntel processor in its construction. This open design allowed Microsoft to develop the Xbox in just twoyears, and gave developers the option of using standard PC tool for creating compatible games. Inaddition, Microsoft also sought the advice of successful game developers and even incorporated some oftheir feedback into the design of the console and its controllers. As a result of developers’ efforts,Microsoft had about 20 games ready when the Xbox became available. By contrast, the GameCube hadonly eight games available. Microsoft online strategy was another feature that differentiated of the Xboxfrom the GameCube. Whereas Nintendo had no immediate plans for Web-based play, the Xbox cameequipped with an Ethernet port for broadband access to Internet. Microsoft also announced its own Webbasednetwork on which gamers can come together for online head-to head play and for organised onlinematches and tournaments. Subscribers to this service were to pay a small monthly fee and must havehigh-speed access to the Internet. This is a potential drawback considering that a very low percentage ofhouseholds world over currently have broadband connections. By contrast Sony promoted an opennetwork, which allows software developers to manage their own games, including associated fees chargedto users. However, interested players must purchase a network adapter for an additional $39.99. Althoughgame companies are not keen on the prospect of submitting to the control of a Microsoft-controllednetwork, it would require a significant investment for them to manage their own service on the Sonybasednetwork. Initially the price of Microsoft’s Xbox was $299. Prior to the introduction of Xbox, in acompetitive move Sony dropped the price of the PlayStation 2 to $299. Nintendo’s GameCube alreadyenjoyed a significant price advantage, as it was selling for $100 less than either Microsoft or Sonyproducts. Gamers eagerly snapped up the new consoles and made 2001 the best year ever for video gamesales. For the first time, consumers spent $9.4 billion on video game equipment, which was more thanthey did at the box office. By the end of 2001 holiday season, 6.6 million PlayStation 2 consoles had beensold in North America alone, followed by 1.5 million Xbox units and 1.2 million Game Cubes. Whatensued was an all out price war. This started when Sony decided to put even more pressure on theMicrosoft’s Xbox by cutting the PlayStation 2 price to $199. Microsoft quickly matched that price.Examination Paper Semester I: Marketing ManagementIIBM Institute of Business ManagementWanting to maintain its low-price status, Nintendo in turn responded by reducing the price of its theGameCube by $50, to $149. By mid 2002, Microsoft Xbox had sold between 3.5 and 4 million unitsworldwide. However, Nintendo had surpassed Xbox sales by selling 4.5 million Game Cubes. Sony hadthe benefit of healthy head start, and had shipped 32 million PlayStation 2s. However, seven years afterthe introduction of original PlayStation, it was being sold in retail outlets fora mere $49. It had a significant lead in terms of numbers of units in homes around the world with a 43 percent share. Nintendo 64 was second with 30 per cent, followed by Sony PlayStation 2 with 14 per cent.The Xbox and GameCube each claimed about 3 per cent of the market, with Sega Dreamcast comprisingthe last and least market share of 4.7 per cent. Sega, once an industry leader, announced in 2001 that ithad decided to stop producing the Dreamcast and other video game hardware components. The companysaid it would develop games for its competitors’ consoles. Thus Sega slashed the price of the Dreamcast

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to just $99 in an effort to liquidate its piled up inventory of more than 2 million units and immediatelybegan developing 11 new games for the Xbox, four for PlayStation 2, and three for Nintendo’s Game BoyAdvance. As the prices of video game consoles have dropped, consoles and games have become theequivalent of razors and blades. This means the consoles generate little if any profit, but the games are ahighly profitable proposition. The profit margins on games are highly attractive, affected to some degreeby whether the content is developed by the console maker (such as Sony) or by an independent gamepublisher (such as Electronic Arts). Thus, the competition to develop appealing, or perhaps evenaddictive, games may be even more intense than the battle among players to produce the best console. Inparticular, Nintendo, Sony, and Microsoft want games that are exclusive to their own systems. With thatin mind, they not only rely on large in-house staffs that design games but they also pay added fees toindependent publishers for exclusive rights to new games. The sales of video games in 2001 rose to 43per cent, compared to just 4 per cent increase for computer-based games. But computer game players arebelieved to be a loyal bunch, as they see many advantages in playing games on their computers ratherthan consoles. For one thing, they have a big advantage of having access to a mouse and a keyboard thatallow them to play far more sophisticated games. In addition, they have been utilizing the Internet foryears to receive game updates and modifications and to play each other over the Web. Sony andMicrosoft are intent on capturing a portion of the online gaming opportunity. Even Nintendo has decidedto make available a modem that will allow GameCube users to play online. As prices continue to fall andtechnology becomes increasingly more sophisticated, it remains to be seen whether these three companiescan keep their names on the industry’s list of “high scorers”.

Questions1. Considering the concept of product life cycle, where would you put video games in their life cycle?2. Should video game companies continue to alter their products to include other functions, such as e-mail?

1. What is meant by sales promotion? Describe briefly the various methods of sales promotionaltools used by business organizations to boost the sales. Explain any four methods of salespromotion?

2. Write notes on the fowling :a) Explain right to safety.b) What is right to consumer protection?

Organizational Behavior

Multiple choices:1. It is the degree to which a person identifies with a particular organization and its goals, & wishesto maintain membership in the organizationa. Job involvementb. Terminal valuec. Attituded. Value2. _________ means moving information from the hidden area to the open areaa. blind areab. unknown areac. public aread. self disclosure3. An approach in which the goals of one party are in direct conflict with the goals of the other partya. Negotiationb. Distributive bargainingc. Stressd. None4. The measure of a person’s ability to operate within business organizations through socialcommunication & interactionsa. Transactional analysisb. Interpersonal skillc. Life positiond. Johari window

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5. Where the source of power is in person’s control over rewarding outcomes, that power is calleda. Coercive powerb. Referent powerc. Legitimate powerd. Reward powerExamination Paper Semester I: Organizational BehaviourIIBM Institute of Business Management6. It means melting resistance to change; the people who will be affected by the change come toaccept the need for ita. Organizationb. Unfreezingc. Changingd. Refreezing7. This training is also known as laboratory training, encounter groups & T-groupsa. Sensitivityb. Surveyc. Processd. Team building8. They are the things that come together to define a culture & reveal that the culture is about tothose who pay attention to thema. Cultureb. Espoused valuec. Artifactsd. Organizational culture9. This stage encompasses all the learning that occurs before a new member joins the organizationsa. Socializationb. The Pre-arrival stagec. Encounter staged. Metamorphosis stage10. It refers to the behavior pattern adopted by a leader to influence the behavior of his subordinatefor attaining the organizational goala. Leadershipb. Traits of leadershipc. Leadership gridd. Leadership stylePart Two:1. Define Informal groups.2. What do you understand by the term ‘Emotion’?3. Write a note on ‘Reinforcement theory’.4. Explain the terms ‘Attitudes and Values’.

Case let 1M/s. ABC Ltd is a medium-sized engineering company producing a large-range of product linesaccording to customer requirements. It has earned a good reputation as a quick and reliable supplier to itscustomers because of which its volume of business kept on increasing. However, over the past one year,the Managing Director of the company has been receiving customer complaints due to delays in dispatchof products and at times the company has to pay substantial penalty for not meeting the schedule in time.The Managing Director convened an urgent meeting of various functional managers to discuss the issue.The marketing manager questioned the arbitrary manner of giving priority to products in manufacturingline, causing delays in wanted products and over-stocking of products which are not requiredimmediately. Production Control Manager complained that he does not have adequate staff to plan andcontrol the production function; and whatever little planning he does, is generally overlooked by shopfloor manager. Shop floor managers complained of unrealistic planning, excessive machine breakdowns,power failure, and shortage of materials for scheduled products because of which it is impossible to stickto the schedule. Maintenance manager says that he does not get important spares required for equipmentmaintenancebecause of which he cannot repair machines at a faster rate. Inventory control manager saysthat on one hand the company often accuses him of carrying too much stock and on other hand people aregrumbling over shortages. Fed up by mutual mud-slinging, the Managing Director decided to appointyou, a bright management consultant with training in business management to suggest ways and means to

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put his “house in order”.Questions1. How would you examine if there is any merit in the remarks of various functional managers?2. What, in your opinion, could be the reasons for different Managerial thinking in this case?3. How would you design a system of getting correct information about job status to identify delays quickly?4. What would you suggest to promote co-ordinate interaction of various people to meet the scheduled dates?

Case let 2Rajender Kumar was a production worker at competent Motors Limited (CML) which made componentsand accessories for the automotive industry. He had worked at CML for almost seven years as a welder,along with fifteen other men in the plant. All had received training in welding both on the job and throughcompany sponsored external programmes. They had friendly relations and got along very well with oneanother. They played Volleyball in the playground regularly before retiring to the quarters allotted by thecompany. They work together in the company canteen, cutting Jokes on each other and making fun ofeveryone who dared to step into their privacy during lunch hour. Most of the fellows had been there forsome length of time, except for two men who had joined the ranks only two months back. Rajender wasgenerally considered to be the leader of the group, so it was no surprise that when the foreman of the newwas transferred and his job was posted, Rajender applied for the job and got it.There were only four other applicants for the job, two from mechanical section and two from outside,when there was a formal announcement of the appointment on a Friday afternoon, everyone in the groupcongratulated Rajender. They literally carried him on their shoulders, and bought him snacks andcelebrated. On Monday morning, Rajender joined duty as Foreman. It was company practice for allforemen to wear blue jacket and a white shirt. Each man’s coat had his name badge sewn onto the leftside pocket. The company had given two pairs to Rajender. He was proud to wear the coat to work onMonday. People who saw him from a distance went up to him and admired the new blue coat. There wasa lot of kidding around calling Rajender as ‘Hero’, ‘Raja Babu’ and ‘Officer’ etc. One of the guys wentback to his locker and returned with a long brush and acted as though he were removing dust particles onthe new coat. After about five minutes of horseplay, all the men went back to work. Rajender went to hisoffice to familiarize himself with the new job and environment. At noon, all the men broke for Lunch andwent to the canteen to eat and take a break as usual. Rajender was busy when they left but followed afterthem a few minutes later. He bought the food coupon, took the snacks and tea and turned to face the opencanteen. On the left-side corner of the room was his old work group; on the right-hand side of the canteensat the other entire foreman in the plant—all in their smart blue coats.At that point of time, silence descended on the canteen. Both groups looked at Rajender anxiously,waiting to see which group he would choose to eat with.Questions1. Whom do you think Rajender will eat with? Why?2. If you were one of the other foremen, what could you do to make Rajinder’s transition easier?1. A large unit manufacturing electrical goods which has been known for its liberal personnelpolicies and fringe benefits is facing the problem of low productivity and high absenteeism. Howshould the management improve the organizational climate?2. The leader is expected to play many roles & therefore he must be qualified to guide others toorganizational achievement. On the basis of this explain the leadership skills & leadership traits.

Strategic Management

1. A plan of action designed to achieve a particular goal is:a. Tacticb. Strategyc. Financial benefitsd. None of the above2. It is important to develop mission statement for:a. Allocating organizational resourcesb. Provide useful criteriac. Company creedd. Customer orientation3. The five forces model was developed by :a. Airbusb. Karin Larsson

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c. Michael E.Porterd. Boeing4. How many elements are involve in developing in an organizational strategy:a. Sixb. Twoc. Fourd. Nine5. The three important steps in SWOT analysis are:a. Identification, Conclusion, Translationb. Opportunities, Threats, Strengthsc. People, Corporate cultures, Labourd. Power, Role, Task6. GE matrix consists of how many cells?a. Nine cellsb. Six cellsc. Eight cellsd. Three cells7. Which of these is the type of Games:a. Simultaneous Gamesb. Sequential Gamesc. Repeated Gamesd. All of the above8. SBU stands fora.Simple Basic Unitb. Strategic Basic Unitc. Strategic Business Unitd. Speed Business Unit9. The BCG matrix is known as:a. Growth share matrixb. Directional policy matrixc. GE nine-cell matrixd. Space matrix10. ______________ specifies sales revenues and selling distribution and marketing costs.a. Financial budgetb. Sales budgetc. Operating budgetd. Expenses budgetPart Two:1. What are the dimensions of Strategic management?2. Critically analyze the concept of BCG Matrix.3. What is SWOT analysis?4. What are the characteristics of Short-term Objectives?

Case let 1National Competitive Advantage of IKEA Group, a Swedish company founded in 1943 with itsheadquarters in Denmark, is a multinational operator of a chain of stores for home furnishing andfurniture. It is the world’s largest retailer, which specializes, in stylish but inexpensive Scandinaviandesigned furniture. At the end of 2005 the IKEA Group of Companies had a total of 175 stores in 31countries. In addition there are 19 IKEA stores owned and run by franchisees, outside the IKEA storearound the world.In Sweden, nature and a home both play a big part in people’s life. In fact one of the best ways to describethe Swedish home furnishing style is to describe nature-full of light and fresh air, yet restrained andunpretentious.To match up the artist Carl and Karin Larsson combined classical influences with warmer Swedish folkstyles .They created a model of Swedish home furnishing design that today enjoys world-wide renown. Inthe 1950s the styles of modernism and functionalism developed at the same time as Sweden established asociety founded on social equality .The IKEA product range –The IKEA product range- modern but nottrendy, functional yet attractive, human-centered and child friendly – carries on these various Swedishhome furnishing traditions.The IKEA Concept, like lots founder, was born in Samaland. This is a part of Southern Sweden where thesoil is thin and poor. The people are famous for working hard, living on small means and using theirheads to make the best possible use of the limited resources they have. This way of doing things is at the

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heart of the IKEA approach to keeping prices low.IKEA was founded when Sweden was fast becoming an example of the caring society, where rich andpoor alike were well looked after. This is also a theme that fits well with the IKEA vision. In order to givethe many people a better everyday life, IKEA asks the customer to work as a partner. The product range ischild-friendly and covers the need of the whole family, young and old. So together we can a bettereveryday life for everyone.In addition to working about around 1,800 different suppliers across the world, IKEA produces many ofits own products through sawmills and factories in the IKEA industrial group, Swedwood.Swedwood also has a duty to transfer knowledge to other suppliers, for example by educating them inissues such as efficiency, quality and environmental work.Swedwood has 35 industrial units in 11 countries.Examination Paper: Semester IIIIBM Institute of Business ManagementPurchasing: IKEA has 42 Trading Service Offices (TSO’s) in 33 countries. Proximity to their suppliersis the key to rational, long term cooperation. That’s why TSO co-workers visit suppliers regularly tomonitor production, test new ideas, negotiate prices and carry out quality audits and inspection.Distribution: The route from supplier to customer must be as direct, cost- effective and environmentallyfriendly as possible. Flat packs are important aspects of this work: eliminating wasted space means wecan transport and store goods more efficiently. Since efficient distribution plays a key role in the work ofcreating the low price, goods routing and logistics are a focus for constant development.The business Idea: The IKEA business idea is to offer a wide range of home furnishings with good designand function at prices so low that as many people as possible will be able to afford them. And still havemany left! The company targets the customer who is looking for value and is willing to do a little bit ofwork serving themselves, transporting the items home and assembling the furniture for a better price. Thetypical IKEA customer is young low to middle income family.The Competition Advantage: The competition advantage strategy of IKEA’s product is reflected throughIKEA’s success in the real industry. It can be attributed to its vast experience in the retail market, productdifferentiation, and cost leadership.IKEA Product Differentiation: A wide product range The IKEA product range is wide and versatile inseveral ways. First, it’s versatile in function. Because IKEA think customer, shouldn’t have to run fromone small specialty shop to another to furnish their home, IKEA gather plants, living room furnishings,toys , frying pans, whole kitchens i.e.; everything which in a functional way helps to build a home – inone place , at IKEA stores.Second, it’s wide in style. The romantic at heart will find choices just as many as the minimalist at IKEA.But There is only one thing IKEA don’t have, and that is, the far- out or the over-decorated. They onlyhave what helps build a home that has room for good living.Third, by being coordinated, the range is wide in function and style at the same time. No matter whichstyle you prefer, there’s an armchair that goes with the bookcase that goes with the new extending tablethat goes with the armchair. So their range is wide in a variety of ways.Cost Leadership: A wide range with good form and function is only half the story. Affordability has a partto play – the largest part. A wide range with good form and function is only half the story. Affordabilityhas a part to play- the largest part. And the joy of being able to own it without having to forsakeeverything else. And the customers help, too, by choosing the furniture, getting it at the warehouse,transporting it home and assembling it themselves , to keep the price low.

Questions1. Do you think that IKEA has been successful to utilize Porter’s Five force analysis?Give reasons.2. Where do you think can IKEA improve?

Case let 2For ITC Ltd., 2007-2008 continued to be year of quiet growth. Just more launches in its relatively newsegment of non-cigarettes fast moving consumer goods, and solid growth. As in the past few years, ITC’snon-cigarettes businesses continued to grow at a scorching pace, accounting for a bigger share of overallrevenues. “The non-cigarette portfolio grew by 37.6% during 2006-2007 and accounted during that yearfor 52.3% of the company’s net turnover.” An ITC spokesman said. In fact, over the first three quarters of2007-08, ITC’s non-cigarette FMCG businesses have grown by 48% on the same period last year,“Indicating that its plans for increasing market share and standing are succeeding.”The branded packaged foods business continued to expand rapidly, with the focus on snacks range Bingo.The biscuit category continued its growth momentum with the ‘Sun feast’ range of biscuits launching‘Coconut’ and ‘Nice’ variants and the addition of ‘ Sunfeast BenneVita Flaxseed’ biscuits. Aashirwad attaand kitchen ingredients retained their top slots at the national level, with the spices category adding an

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organic range. In the confectionery category which grew by 38% in the third quarter, ITC cited ACNielsen data it claims market leader status in throat lozenges. Instant mixes and pasta powdered the salesof its ready to eat foods under the kitchens of India and Aashirwad brands.In Lifestyle apparel, ITC launched Miss Players fashion wear for young women to compliment its rangefor men.Overall, the biscuit category grew by 58% during the last quarter, ready to eat foods under the kitchens ofIndia and Aashirwad brands by 63% and the lifestyle business by 26%.For the Industry, the most significant initiative to watch the ITC foray into premium personal careproducts with its Fiama Di Wills range of shampoos , conditioners, shower gels, and soaps. In the popularsegment, ITC has launched a range of soaps and shampoos under the brand name Superia.Ravi Naware, Chief executive of ITC’s food business was quoted recently as saying that the business willmake a positive contribution to ITC’s bottom line in the next two to three years.In hotels, ITC’s Fortune Park brand was making the news during the year, with a rapid rollout of firstclass business hotels.In the agri-business segment, the e-choupal network is trying out a pilot in retailing fresh fruits andvegetables. The e-choupals have already specialized in feeding ITC high quality wheat and potato, amongother commodities grown by farmers with help from e-choupal.Questions:Q1. Do you think the progress of ITC Ltd. is realistic?Q2. After analyzing the above case, do you think every company should aim at cost leadership with highquality product?

1. What are the basic principles of Organizational structure? What are the types of Organizational structures?2. Though BCG matrix can be very helpful in forcing decisions in managing a portfolio of products, it can be employed as a sole men of determining strategies for a portfolio of the product. Do you agree with this statement or not? Why orwhy not?

Enterprise Resource Planning

1. Enterprise Resource Planning isa. Computer Systemb. Manufacturing organizationc. Method of effective planning of all the resources in an organizationd. None of the above2. Enterprise Resource Panning vendors are those peoplea. Who are experts in administration and management of projectsb. Who have developed the ERP packagesc. Who uses the ERP systemd. None of the above3. Interviewing and cost justification is tool and technique ofa. Design step of ERPb. Implementation step of ERPc. Requirement analysis of ERPd. Planning step of ERP4. Support re-engineering processes to fit the software systems best practice is approach ofa. Re-engineering approachb. Customizing approachc. Rational approachd. None of the above5. Process of tracking customer contacts and providing the customer with a price quote isa. Inventory sourcingb. Sales order processingc. Pre-salesd. None of the above6. The difficulty in creating an audit trial of transactions when multiple transactions use multipledatabase is associated witha. Product profitability sub-systemb. Finished goods inventory sub-systemc. Management reporting sub-systemd. Creating an audit trial sub-system7. Differences occur between standard costs and actual costs is problem associated with

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a. Accountingb. Productionc. Purchasing / Materials Managementd. None of the above8. MRP in Enterprise resource planning stands fora. Maximum retail priceb. Material requirement planningc. Management requirement planningd. None of the above9. Process of providing status of purchase order comes in a category ofa. Purchase order follow-upb. Source determinationc. Determine requirementd. Invoice verification10. Resource failure occurs whena. People clashesb. Inability to communicate with the system userc. Poor specification of requirementsd. Conflicts of people, time and project scope due to insufficient personnel

Part Two:1. What are the advantages of the re-engineering method of implementing ERP?2. What are the benefits reported from implementing ERP?3. Write a short note on “Credit Management”?4. Define Material Requirements Planning?

Caselet 1Tech Knowledge is a start-up founded in 1997 by Robert Thyer. The company is a distributer ofpresentation technologies, including computer based projection systems, video equipment, anddisplay technologies. The firm has 25 employees and does $5 million in sales. It is growing rapidly.The owner, Robert Thyer, would like to netsource the back-office functions of the firm because thecompany does not have an internal IT capability. The applications to be netsourced would includesales and distribution, financial accounting, and inventory management.TechKnowledge would like to source SAP or another ERP vendor via a hosting arrangement. Itdoes not expect to do much customization, and it does not have any legacy systems.1. What factors should it use to evaluate each of these potential hosts?2. What controls should be in place to monitor the hosting arrangement?

Caselet 2ITM is a company specializing in network implementation and management. It provides networkingservices to mid-sized companies, which do not have an internal networking analyst or IT manager.These organizations include real estate companies, law offices, medical practices, architectural /engineering firms, construction companies, business services providers, country clubs, communityorganizations, and churches.ITM uses a legacy accounting system to handle its financial accounting and financialmanagement functions. It has added on a billing package for client services. The next step is toobtain a CRM capability to manage information about current and prospective customers moreeffectively.You have been assigned to identify potential sources for a net-sourcing arrangement with an ERPvendor, which provides CRM capabilities.

1. Identify potential sources of software?2. Determine five criteria you will recommend be used to evaluate each of alternative providers?1. Explain in brief Sales and Marketing Modules in ERP System?2. What are the different development process in ERP systems and write a detailed note on it?

Material Management1. Season Index =a. =Period average demand / deseasonalized demandb. =deseasonalized demand / period average demandc. =Period average demand / average demand for all periods

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d. = average demand for all periods / period average demand2. Poke-yoke was first introduce bya. Edger Schein of Americab. Lawrence D. Miles of U.S.Ac. Shigeo Shingo of Japand. None of the above3. Utilization is the consolidation of several units into large units, calleda. Units loadsb. Unit systemc. Unit waitd. None of the above4. Mean Absolute Deviationa. = sum of forecast error / number of observationsb. = algebraic sum of forecast errors / number of observationsc. = sum of absolute deviations / number of observationsd. None of the above5. How many variations of network useda. Oneb. Threec. Twod. None of the aboveExamination PaperIIBM Institute of Business Management 26. Housing starts and gasoline consumption are calleda. Economic indicatorsb. Nonleading indicatorc. Leading indicatord. None of the above7. The capability of manufacturing to produce goods and services is calleda. Capacityb. Priorityc. Strategyd. Production8. APICS stands fora. The American Property and Investment Control Societyb. The American Production and Inventory Control Societyc. The America Product and Inventory Control Societyd. None of the above9. The bill provides a list of the parts needed to make or assemble a product isa. Planningb. Manufacturingc. Product definitiond. None of the above10. Which file contains a record for each part manufactureda. The routing fileb. The product structure filec. Item master filed. Work center master file

Part Two:1. Write a note on “ERP” (Enterprise Resource Planning).2. What do you understand by ‘Operation Overloading’?3. What is “Two –Bin System”.4. Explain the “Just in time” philosophy.

1. Calculate the available to promise (ATP) using the following data. There are 100 units on hand.Week 1 2 3 4 5 6Customer Orders 70 70 20 40 10MPS 100 100 100ATP2. Given the following data, can an order for 30 more units delivery in week 5 be accepted? If not,what do you suggest can be done?

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Week 1 2 3 4Forecast 80 80 80 70Customer Orders 100 90 50 40Projected AvailableBalance140MPS3. Given the following parents and components, construct a product tree. Figures in parenthesesshow the quantities per item. How many Gs are needed to make one A?Parent A B C EComponent B(2) E(2) G(2) G(4)C(4) F(1) F(3)D(4) H(2)4. An order for 100 of a product is processed on operations A and operations B. the setup time on Ais 50 minutes, and the run time per piece is 9 minutes. The setup time on B is 30 minutes, and therun time is 6 minutes per piece. It takes 20 minutes to move a lot between A and B. since this is arush order, it is given top priority (president’s edict) and is run as soon as it arrives at eitherworkstation.It is decided to overlap the two operations and to split the lot of 100 into two lots of 60 and 40.When the first lot is finished on operation A, it is moved to operation B where it is set up and run.Meanwhile, operation A completes the balance of the 100 units (40) and sends the units over tooperation B. These 40 units should arrive as operation B is completing the first batch of 60; thus,operation B can continue without interruption until all 100 are completed.a. Calculate the total manufacturing lead time for operation A and for B without overlapping.b. Calculate the manufacturing lead time if the operations are overlapped. How much time issaved?

1. Suppose a manufacturer makes wagons composed of a box body, a handle assembly, and twowheel assemblies. Demand for the wagons is 500 a week. The wheel assembly capacity is 1200sets a week, the handle assembly capacity is 450 a week, and final assembly can produce 550wagons a week.a. What is the capacity of the factory?b. What limits the throughput of the factory?c. How many wheel assemblies should be made each week?d. What is the utilization of the wheel assembly operation?e. What happens if the wheel assembly utilization is increased to 100?2. If the annual cost of goods sold is $12 million and the average inventory is $2.5 million:a. What is the inventory turns ratio?b. What would be the reduction in average inventory if, through better materials management,inventory turns were increased to 10 times per year?c. If the cost of carrying inventory is 20% of the average inventory, what is the annual savings?3. Suppose management stated that it could tolerate only one stock out per year for a specific item.For this particular item, the annual demand is 52,000 units, it is ordered in quantities of 2600, andthe standard deviation of demand during the lead time is 100 units. The lead time is one week.Calculate:a. Number of orders per year.b. Service level.c. Safety stock.d. Order point.4. Delivery of goods from a supplier is in transit for ten days. If the annual demand is 4200 units,what is the average annual inventory in transit?

Production and Operation Management

Multiple choices:1. If the number of restrictions on sources be ‘a’ and the number of restrictions on destinations be‘b’ then with the use of ‘stepping stone procedure’, the number of ‘used cells’ will bea. a+b+1b. a+b+2c. a-b-1d. a+b-1

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2. Value of smoothing coefficient ‘α’ liesa. Between 1 and ∞b. Between 0 and 1c. Between -1 and 1d. Between 1 and 23. Forecasting error isa. The difference between forecasted demand and actual demandb. The ratio of forecasted demand and actual demandc. The difference between the standard forecast demand and the evaluated forecast demandd. Ratio of standard forecast demand and the evaluated forecast demand4. For forecasting the analyzers plot the demand data on a time scale, study the plot and then lookfor the consistent patterns. Now what does the high noise mean to these patternsa. Many of the point lie away from the patternb. Most of the points lie close to the patternc. All the points lie on the patternd. None5. Payback period isa. The length of time after which the production startsb. The length of time after which the selling startsc. The length of time required to recover the investmentd. The length of time for which firm bears replacement of the good.Semester II Examination PapersIIBM Institute of Business Management6. Salvage value is the income froma. Selling an assetb. Buying an assetc. Bargaining in sellingd. Price raised stock7. On total factor basis ‘Productivity’ is given by x/y, where ‘y’ isa. Labor + Capital +Materialsb. Labor + Capital + Materials + Energyc. Capitald. Capital + Materials8. Economic efficiency is given bya. Input /outputb. Input /100c. (Output-input)/inputd. Output /input9. This implies an effective management that ensures an organization’s long-term commitment tothe continuous improvement of quality.a. Quality managementb. Strategic managementc. Total quality managementd. Operations management10. This techniques for improving productivity involves analyzing the operations of the product orservice, estimate the value of each operation, and modifying (or) improving that operation so thatthe cost is lowered.a. Value engineeringb. Time-event networkc. Work simplificationsd. Quality circles

Part Two:1. What are the different types of models in production and operation management?2. Define ‘Depreciation’.3. What do you understand by ‘Bias’?4. What are ‘Learning curves’?

Caselet 1COMPANY BACKGROUNDThe Bronson Insurance Group was originally founded in 1900 in Auxvasse, Missouri, by James Bronson.The Bronson Group owns a variety of companies that underwrite personal and commercial insurance

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policies. Annual sales of the Bronson Group are $100 million. In recent years, the company has sufferedoperating losses. In 1990, the company was heavily invested in computer hardware and software. One ofthe problems the Bronson Group faced (as well as many insurance companies) was a conflict betweenestablished manual procedures and the relatively recent (within the past 20 years) introduction ofcomputer equipment. This conflict was illustrated by the fact that much information was captured oncomputer but paper files were still kept for practical and legal reasons.FILE CLERKSThe file department employed 20 file clerks who pulled files from stacks, refilled used files, and deliveredfiles to various departments including commercial lines, personal lines, and claims. Once a file clerkreceived the file. Clerks delivered files to underwriters on an hourly basis throughout the day. Theaverage file clerk was paid $8,300 per year. One special file clerk was used full time to search forrequested files that another file clerk had not been able to find in the expected place. It was estimated that40 percent of the requested files were these “no hit” files requiring a search. Often these “no hit” fileswere eventually found stacked in the requester’s office. The primary “customers” of the file clerks wereunderwriters and claims attorneys.UNDERWRITINGCompany management and operations analysts were consistently told that the greatest problem in thecompany was the inability of file clerks to supply files in a speedy fashion. The entire company from topto bottom viewed the productivity and effectiveness of the department as unacceptable. An underwriterused 20-50 files per day. Because of their distrust of the files department, underwriters tended to hoardoften used files. A count by operations analysts found that each underwriter kept from 100-200 files in hisor her office at any one time. An underwriter would request a file by computer and work on otherbusiness until the file was received. Benson employed 25 underwriters.MANAGEMENT INFORMATION SYSTEMUpper management was deeply concerned about this problem. The MIS department had suggested usingvideo disks as a possible solution. A video disk system was found that would be sufficient for theSemester II Examination PapersIIBM Institute of Business Managementcompanies needs at a cost of about $12 million. It was estimated that the system would take two years toinstall and make compatible with existing information systems. Another, less attractive was usingmicrofilm. A microfilm system would require underwriters to go to a single keyboard to request papercopies of files. The cost of a microfilm system was $5 million.

1. What do you recommend? Should the company implement one of the new technologies? Why orwhy not?2. An operations analyst suggested that company employees shared a “dump on the clerks”mentality. Explain.

Caselet 2Harrison T. Wenk III is 43, married, and has two children, ages 10 and 14. He has a master’s degreein education and teachers junior high school music in a small town in Ohio. Harrison’s father passedaway two months ago, leaving his only child an unusual business opportunity. According to hisfather’s will, Harrison has 12 months to become active in the family food-catering business, Kare-Full Katering, Inc., or it will be sold to two key employees for a reasonable and fair price. IfHarrison becomes involved, the two employees have the option to purchase a significant, but lessthan majority, interest in the firm. Harrison’s only involvement with this business, which hisgrandfather established, was as an hourly employee during high school and college summers. He isconfident that he could learn and perhaps enjoy the marketing side of the business, and that he couldretain the long-time head of accounting/finance. But he would never really enjoy day-to-dayoperations. In fact, he doesn’t understand what operations management really involves. In 1991Kare-Full Katering, Inc. had $3.75 million in sales in central Ohio. Net profit after taxes was $105,000, the eleventh consecutive year of profitable operations and the seventeenth in the last 20years. There are 210 employees in this labor-intense business. Institutional contracts account forover 70 percent of sales and include partial food services for three colleges, six commercialestablishments) primarily manufacturing plants and banks), two long -term care facilities, and fivegrade schools. Some customer location employs a permanent operations manager; others are servedfrom the main kitchens of Kare-Full Katering. Harrison believes that if he becomes active in thebusiness, one of the two key employees, the vice president of operations, will leave thefirm.Harrison has decided to complete the final two months of this school year and then spend thesummer around Kare-Full Katering – as well as institutions with their own food services – to assesswhether he wants to become involved in the business. He is particularly interested in finding out asmuch as possible about operations. Harrison believes he owes it to his wife and children to fairly

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evaluate this opportunity.1. Prepare a worksheet of operations activities that Harrison should inquire about this summer.2. If you were Harrison, what would you do? Why?

1. Productivity is an important tool for mangers as it helps them to track progress toward the moreefficient use of resources in producing goods and services. Elucidate.2. In additional to operations research, what are the other tools and techniques used by organizationsto improve productivity?

Project Management

Multiple Choices: Total Marks: 1001. A ________________ is a temporary endeavor undertaken to create a unique product, service, orresult.a) Programb) Processc) Projectd) Portfolio2. Which of the following is not a potential advantage of using good project management?a) Shorter development timesb) Higher worker moralec) Lower cost of capitald) Higher profit margins3. Which of the following is not an attribute of a project?a) Projects are uniqueb) Projects are developed using progressive elaborationc) Projects have a primary customer or sponsord) Projects involve little uncertainty4. Which of the following is not part of the triple constraint of project management?a) Meeting scope goalsb) Meeting time goalsc) Meeting communications goalsd) Meeting cost goals5. The first stage of any project isa) Proposalb) Conceptualizationc) Implementationd) Management6. __________________ is the application of knowledge, skills, tools and techniques to projectactivities to meet project requirements.a) Project managementb) Program managementc) Project portfolio managementd) Requirements management7. Project portfolio management addresses ____________________ goals of an organization, whileproject management addresses _________________ goals.a) Strategic, tacticalb) Tactical, strategicc) Internal, externald) External, internal8. Several application development projects done for the same functional group might best bemanaged as part of aa) Portfoliob) Programc) Investmentd) Collaborative9. Which of the following is not one of the top ten skills or competencies of an effective projectmanager?a) People skillsb) Leadershipc) Integrity

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d) Technical skills10. What is the certification program called that the Project Management Institute provides?a) Microsoft Certified Project Manager (MCPM)b) Project Manager Professional (PMP)c) Project Management Expert (PME)d) Project Management Mentor (PMM)11. A _________________ is a series of actions directed towards a particular result.a) Goalb) Processc) Pland) Project12. ____________________ Processes include coordinating people and other resource to carry outthe project plans and produce the products, service, or results of the project or phase.a) Initiatingb) Planningc) Executingd) Monitoring & controlling13. Which process group normally requires the most resources and time?a) Initiatingb) Planningc) Executingd) Monitoring and controlling14. A work breakdown structure, project schedule, and cost estimates are outputs of the process.a) Initiatingb) Planningc) Executingd) Monitoring and controlling15. Which process group includes activities from each of the nine knowledge areas?a) Initiatingb) Planningc) Executingd) Monitoring and controlling16. Project management as a profession is almost unique in having institutions concerned with itsdevelopment who promote what they term theira) Body of languageb) Body of knowledgec) Strategyd) Work17. Initiating involves developing a project charter and preliminary project scope statement, whichare part of the project _____________________ management knowledge.a) Integrationb) Scopec) Communicationsd) Risk18. A ________________ describes how things should be done, and different organizations oftenhave different ways of doing things.a) Regulationb) Processc) Standardd) Methodology19. ___________________ involves measuring progress toward project objectives and talkingcorrective actions.a) Initiatingb) Planningc) Executingd) Monitoring and controlling20. What type of report do project teams create to reflect on what went right with the project?a) Lessons – learned reportb) Status reportc) Final project reportd) Business case21. Project manager is responsible for

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a) Overseeing changeb) Cross functional activitiesc) Ever changing set of tasksd) All above22. Many people use ________________ to have a standard format for preparing various projectmanagement documents.a) Methodologiesb) Templatesc) Project management softwared) Standards23. What is the last step in the four – stage planning process for selecting information technologyprojects?a) Information technology strategy planningb) Business area analysisc) Project planningd) Resource allocation24. A new government law requires an organization to report data in anew way. Under whichcategory would a new information system project to provide this data fall?a) Problemb) Opportunityc) Directived) Regulation25. A __________________ is a document that formally recognizes the existence of a project andprovides direction on the project’s objectives and management.a) Project charterb) Preliminary scope statementc) Business cased) Project management plan26. ICOM model, which is one of the major roles of project manager, stand fora) Integrated Constraint of Mechanismb) Inputs, Outputs, Constraints & Mechanismc) Inputs, Outputs, Constraints & Moneyd) None27. A _______________ often includes sensitive information, so it should not be part of the overallproject plan for anyone to see.a) Business caseb) Project charterc) Personnel chartd) Stakeholder analysis28. Which of the following is not a suggestion for performing integrated change control?a) Use good configuration managementb) Minimize changec) Establish a formal change control systemd) View project management as a process of constant communication and negotiation29. _______________ refer(s) to all the work involved in creating the products of the projects andprocesses used to create them.a) Deliverablesb) Milestonesc) Scoped) Product development30. Assume you have a project with major categories called planning, analysis, design, and testing.What level of the WBS would these items fall under?a) 0b) 1c) 2d) 331. Which of the following is not a best practice that can help in avoiding scope problems oninformation technology projects?a) Keep the scope realisticb) Use off-the-shelf hardware and software whenever possiblec) Follow good project management processesd) Don’t involve too many users in scope management

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32. Having ascertains the portfolio of projects obtained objectives for each of them, we have to moveto the next stage of the strategy process to balance the objectivesa) Policy deploymentb) Strategy matrixc) Project performance measurementd) None33. What major restaurant chain terminated a large project after spending $170 million on it,primarily because they realized the project scope was too much to handle?a) Burger Kingb) Pizza Hutc) McDonaldsd) Taco Bell34. Scope ____________________ is often achieved by a customer inspection and then sign – off onkey deliverables.a) Verificationb) Validationc) Completiond) Close – out35. Project management software helps you develop a _________________, which serves as a basisfor creating Gantt charts, assigning resources, and allocating costs.a) Project planb) Schedulec) WBSd) Deliverable36. WBS (Work Breakdown Structure) is also known asa) Chunkingb) Unbundlingc) Both (a) & (b)d) None37. What is the first process in planning a project schedule?a) Milestone definitionb) Activity definitionc) Activity resource estimationd) Activity sequencing38. Predecessors, successes, logical relationships, leads and lags, resource requirements, constraints,imposed dates, and assumptions are all examples of ___________________.a) Items in an activity listb) Items on a Gantt chartc) Milestone attributesd) Activity attributes39. As the project manager for a software development project, you are helping to develop itsschedule. You decide that writing code for a system cannot start until sign off on the analysiswork. What type of dependency is this?a) Technicalb) Mandatoryc) Discretionaryd) External40. You cannot start editing a technical report until someone else completes the first draft. What typeof dependency does this represent?a) Finish – to – startb) Start – to – startc) Finish – to – finishd) Start – to – finish41. …………………. Involves going through the cycle several times to test the effects of the changesmake on the outcomes.a) Planningb) Strategyc) Iteratived) None42.Above figure shows two activities A & B; B cannot start until A finished and the times for A &B are 5 and 7 days respectively. This logic is known as

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a) Dependencyb) Precedencec) Freedomd) None43.In the above figure calculate the EET (earliest event time) at 20.a) 10b) 20c) 5d) 25100200A5Days1 23A B5Days 7Days44. What symbol on a Gantt chart represents a slipped milestone?a) A black arrowb) A white arrowc) A black diamondd) A white diamond45. What type of diagram shows planned and actual project schedule information?a) A networkb) A Gantt chartc) A Trackingd) A milestone chart46. ____________________ is a network diagramming technique used to predict total projectduration.a) PERTb) A Gantt chartc) Critical path methodd) Crashing47. Which of the following statement is false?a) “Growing grass” was on the critical path for a large theme park project.b) The critical path is the series of activities that determine the earliest time by which aproject can be completed.c) A forward pass through a project network diagram determines the early start andearly finish dates for each activity.d) Fast tracking is a technique for marking cost and schedule trade-offs to obtain theobtain the greatest amount of schedule comparison for the least incremental cost.48. _____________________ is a method of scheduling that considers limited resources whencreating a project schedule and includes buffers to protect the project completion date.a) Parkinson’s Lawb) Murphy’s Lawc) Critical path analysisd) Critical chain scheduling49. _______________ is a resource scarified or foregone to achieve a specific objective or somethinggiven up in exchange.a) Moneyb) Liabilityc) Traded) Cost50. What is main goal of project cost management?a) To complete a project for as little cost as possibleb) To complete a project within an approved budgetc) To provide truthful and accurate cost information on projectsd) To ensure that an organization’s money is used widely

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51. A fundamental of ‘Theory of Constraints’ (TOC) is to manage systems by focusing on theconstraints, termed asa) Watermarkb) Bottleneckc) Tick-sheetd) None52. “An activity will expand to fill the time available”; it isa) Newton’s Lawb) Parkinson’s Lawc) Einstein’s Lawd) None53. Which of the following is not a key output of project cost management?a) A cost estimateb) A cost management planc) Updates to the cost management pland) A cost baseline54. If a company loses $5 for every $100 in revenue for a certain product, what is profit margin forthat product?a) -5 percentb) 5 percentc) -$5d) $555. __________________ reserves allow for future situations that are unpredictable.a) Contingencyb) Financialc) Managementd) Baseline56. You are preparing a cost estimate for a building based on its location, purpose, number of squarefeet, and other characteristics. What cost estimating technique are you using?a) Parametricb) Analogousc) Bottom – upd) Top – down57. ______________ involves allocating the project cost estimate to individual work items over time.a) Reserve analysisb) Life cycle costingc) Project cost budgetingd) Earned value analysis58. _________________ is a project performance measurement technique that integrates scope time,and cost data.a) Reserve analysisb) Life cycle costingc) Project cost budgetingd) Earned value analysis59. If the actual cost for a WBS item is $1500 and its earned value was $2000, what is its costvariance, and is it under or over budget?a) The cost variance is -$500, which is over budgetb) The cost variance is -$500, which is under budgetc) The cost variance is $500, which is over budgetd) The cost variance is $500, which is under budget60. If a project is halfway completed and its schedule performance index is 110% and its costperformance index is 95%, how is it progressing?a) It is ahead of schedule and under budgetb) It is ahead of schedule and over budgetc) It is behind schedule and under budgetd) It is behind schedule and over budget61. To determine the cost of particular element in advance of the project, which technique can beemployed?a) Parametric estimatingb) As…………but…………sc) Forecastsd) All above

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62. _______________ is the degree to which a set of inherent characteristics fulfills requirements.a) Qualityb) Conformance to requirementsc) Fitness for used) Reliability63. What is the purpose of project quality management?a) To produce the highest quality products and services possibleb) To ensure that appropriate quality standards are metc) To ensure that the project will satisfy the needs for which it was undertakend) All of the above64. _______________ generates ideas for quality improvements by comparing specific projectpractices or product characteristics to those of other projects or products within or outside theperforming organization.a) Quality auditsb) Design of experimentsc) Six Sigmad) Benchmarking65. What tool could you use to determine whether a process is in control or out of control?a) A cause – and – effect diagramb) A control chartc) A run chartd) A scatter chart66. Complication to the critical path represents the formation of compound series of activities ofteninvolving different paths which has been termeda) The critical chainb) The critical pathc) TOCd) Resource path67. Six Sigma’s target for perfection is the achievement of no more than ________________ defects,errors, or mistakes per million opportunities.a) 6b) 9c) 3.4d) 168. The seven run rule states that if seven data points in a row on a control chart are all below themean, above the means, or all increasing or decreasing, then the process needs to be examined for_________________ problems.a) Randomb) Non – randomc) Six Sigmad) Quality69. What is the preferred order for performing testing on information technology projects?a) Unit testing, integration testing, system testing, user acceptance testingb) Unit testing, system testing, integration testing, user acceptance testingc) Unit testing, system testing, user acceptance testing, integration testingd) Unit testing, integration testing, user acceptance testing, system testing70. ___________________ is known for his work on quality control in Japan and developed the 14points for Management in his text Out of the Crisis.a) Juranb) Demingc) Crosbyd) Ishikawa71. The theory of constraints (TOC) is successfully applied ina) Planningb) Checkingc) Manufacturingd) Controlling72. PMI’s OPM3 is an example of a ____________________ model or framework for helpingorganization improve their processes and systems.a) Benchmarkingb) Six Sigmac) Maturity

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d) Quality73. Which of the following is not part of project human resource management?a) Resource estimatingb) Acquiring the project teamc) Developing the project teamd) Managing the project team74. _________________ causes people to participate in an activity for their own enjoyment.a) Intrinsic motivationb) Extrinsic motivationc) Self motivationd) Social motivation75. At the bottom of Maslow’s pyramid or hierarchy of needs are _____________ needs.a) Self – actualizationb) Esteemc) Safetyd) Physiological76. ________________ power is based on a person’s individual charisma.a) Affiliationb) Referentc) Personalityd) Legitimate77. What technique can you use to resolve resource conflicts by delaying tasks?a) Resource loadingb) Resource levelingc) Critical path analysisd) Over allocation78. Which of the following is not a tool or technique for managing project team?a) Observation and conversationb) Project performance appraisalsc) Issue logsd) Social Styles Profile79. What do many experts agree is the greatest threat to the success of any project?a) Lack of proper fundingb) A failure to communicatec) Poor listening skillsd) Inadequate staffing80. Which communication skill is most important for information technology professionals for careeradvancement?a) Writingb) Listeningc) Speakingd) Using communication technologies81. Which of the following is not a process in project communication management?a) Information planningb) Information distributionc) Performance reportingd) Managing stakeholders82. A building may not be constructed unless the planning permission for it has been obtained, this isthea) Legal constraintb) Quality constraintc) Cost constraintd) Logic constraint83. A ________________ report describes where the project stands at a specific point in time.a) Statusb) Performancec) Forecastd) Earned value84. __________________ is an uncertainly that can have a negative or positive effect on meetingproject objectives.a) Risk utilityb) Risk tolerance

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c) Risk managementd) Risk85. A person who is a risk - ______________ receives greater satisfaction when more payoffs is atstake and is willing to pay a penalty to take risks.a) Averseb) Seekingc) Neutrald) Aware86. Which risk management process involves prioritizing based on their probability and impact ofoccurrence?a) Risk management planningb) Risk identificationc) Qualitative risk analysisd) Quantitative risk analysis87. The 7-S framework of project management issues was promoted bya) McJonald and Co.b) McKinsly and Co.c) J & K Co.d) None88. Your project involves using a new release of a software application, but if that release is notavailable, your team has ______________ plans to use the current release.a) Contingencyb) Fallbackc) Reserved) Mitigation89. A risk _________________ is a document that contains results of various risk managementprocesses, often displayed in a table or spreadsheet format.a) Management planb) Registerc) Breakdown structured) Probability / impact matrix90. Your project team has decided not to use an upcoming release of software because it might causeyour schedule to slip. Which negative risk response strategy are you using?a) Avoidanceb) Acceptancec) Transferenced) Mitigation91. For non critical activities, network diagrams build in …………………………. at the start ofactivities.a) Temporaryb) Bufferc) Slackd) Anywhere92. If a project being undertaken by a particular project team, then these are referred asa) Resource capabilityb) Resource capacityc) Resource calendard) Resource pool93. The term ‘hedgehog syndrome’ meansa) Management problemb) Solving problemc) Repetition of problemd) Find out a problem94. What is the first procurement process?a) Planning contractingb) Planning purchasing and acquisitionsc) Requesting seller responsesd) Procurement management planning95. The _____________ is the point at which the contractor assumes total responsibility for eachadditional dollar of contract cost.a) A breakeven pointb) Share ratio point

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c) Point of reconciliationd) Point of total assumption96. We’re standing on this hill here. We want to be on that hill over there, this isa) Viewb) Visionc) Missiond) Aim97. A ______________________ is a document prepared by a seller when there are differentapproaches for meeting buyer needs.a) RFPb) RFQc) Proposald) Quote98. Buyers often prepare a ______________________ list when selecting a seller to make thisprocess more manageable.a) Preferredb) Shortc) Qualified suppliersd) BAFO99. A proposal evaluation sheet is an example of a(n) ______________________.a) RFPb) NPV analysisc) Earned value analysisd) Weighted scoring model100. __________________ is a term used to describe various procurement functions that arenow done electronically.a) E – procurementb) eBayc) E – commerced) EMV

Export Import Management

Part One Multiple Choices 1. In case of goods being rejected or wrong shipments which section of customer act provides drawback facility on the customer’s duty? a. Section 47 b. Section 88 c. Section 74 d. Section 40 2. Risks arising out of foreign law due to________________. a. Lack of knowledge about foreign market b. Expensive and complex litigation c. A & B both d. None of these 3. Import LC is also known as ______________________. a. Letter of Debt b. Bills of exchange c. Open account d. Letter of credit 4. How much digits are there in IEC number? a. 8 b. 10 c. 12 d. 15 5. What is the full form of RFID?

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a. Rural fund information development b. Request for international development c. Radio frequency identification system d. Radio frequency internal system 6. The Export Inspection Council is a _____________________

b. Responsible for the enforcement of QC c. Administrative control of the ministry of Commerce & industry d. Provides consultancy to export organization 7. The World Trade Organization was formed in_________________. a. 1994 b. 1995 c. 1996 d. 1997 8. Government policies are related to__________________________. a. Income tax b. Sales tax c. A & B both d. None 9. Clearing and forwarding agents are an important link between_______________. a. The exporter and various other agencies b. The importer and various other agencies c. Import and export of goods d. All of the above 10. Which Regional issues are important to commercial success? a. Taxation matters b. Importance of negotiations c. Degree of market risk d. All of the above

Part Two 1. Define EDI procedure?

2. Differentiation between “Measurement Rules” and “Pallet Rules”?

3. Explain the Benefits of Electronic Procurement?

4. What is DGCI$S?

5. Define the role of intermediaries in Shipping Industry?

Case let 1 “Large Package Meal” is a full-package meals service company, a large hotel by the Shanghai Li Yang couple of laid-off workers, was founded in 1994 and now has developed into a small Suxichang and Hangjiahu area famous food service businesses.“Popular Package Meal” service is divided into two categories: lunch and package delivery services. Lunch mainly by the meat dish, vegetables, Lu Cai, popular soup and fruit composition of normal. Available for customers to choose menu: six kinds of meat dish, vegetables, 10 species of Lu Cai 4, three kinds of soup and the general public three kinds of fruit can also be adorned with custom-made drinks. Despite little change in the menu, but the annual report on the point of view, the overall level of demand for this service fairly stable, the old customers will call to order a day usually. However, as facilities and equipment reasons, the “public packet meals” will ask the customers at 10 am before the telephone booking, in order to ensure that the day of delivery in place.

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In the package of services, the company’s core competency is to provide enterprises buffet reception, large gatherings, as well as the average family feast and celebration dinner. Customers need a variety of food and services can be pre-booking, but because of the service highly seasonal, but also with a variety of community festivals and national holidays related to the demand fluctuated, with high season and low season, so ask the customer a few weeks or even a month ahead of schedule to come to book. Volkswagen meal package layout is similar to the company’s facilities in a processing plant. There are five work areas: thermal system for food work areas, cold dish work area, Lu Cai preparation area, soups and fruit preparation area, as well as a work area catering specifically for the installation of the sets of dishes lunch box and book Zhuangpen share. In addition, there are three small refrigerators for storing frozen foods, a large dry storage rooms for non-perishable materials. As the facilities and equipment limitations and the risk of food spoilage constrained plant mass the size of the company’s development package meals. While the drinks and fruit can be purchased, and some stores are willing to deliver door, but the overall package on the limits of human congregation offers flexible meal service. Li Yang couples employed 10 staff: two chefs and eight food preparation workers, part-time employment during the peak season other attendants. Packet meals sector, competition is very intense, high-quality food products, reliable delivery, flexible service and low-cost carriers are all in this line of survival and development is fundamental. Recently, the public packet meals from the company has began to feel more and more discerning customers and several new packages meal providers of professional competition. Customers increasingly need to diversify the menu of services, flexible, and the response-time. Li Yang wife recently attended knowledge of modern logistics training courses, on the time of the operation and the concept of third-party logistics services, was impressed by careful consideration of these concepts is the public packet meals company to maintain its competitiveness need. But they are puzzled, popular package Meals Company’s ability to help third-party logistics services

1. The public package meal companies implement service-time availability of difficulties, please explain?

2. The introduction of third-party logistics services to the public packet meals would you put forward any firm recommendations?

Case let 2 UPS is a large international express delivery company, has hundreds of planes in addition to its own cargo planes, he also rented hundreds of aircraft cargo aircraft, the transport capacity of more than 1,000 a day. UPS in this world has established more than 10 air transport transit center in more than 200 countries and regions of the tens of thousands of delivery centers. UPS’s employees to reach hundreds of thousands. Annual turnover of the amount could reach tens of billions of dollars; express delivery companies in the world enjoy a high reputation. UPS Company is engaged in correspondence, documents and parcel delivery business, the company quickly. It is the world’s countries and regions have made access to the air traffic rights. In the China, which established a number of delivery centers. A company to take advantage of high-tech means to achieve rapid and safe, is a wide range of logistics services, image perfect. Questions 1. Why do we say UPS is an international logistics business, and general transport logistics Company? 3. To describe the international express logistics enterprises in the development prospects?

1. Discuss the role of Banks in an export-import transaction?

2. Describe briefly the steps involved in export business to succeed in the era of Globalization?

International Trade

Part One: Multiple Choices: 1. _________is beneficial between two nations that have strong markets in two different sectors. a. Economic Growth

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b. International Trade c. Trade Integration d. Trade Diversion 2. What is the full form of UNCTAD? a. United Nation Conference on Trade and Development b. Union Nations Committee of Trade and Development c. Union Nations Conference on Trade and Development d. None of the above 3. ______is fixed through negotiation between the importing country and the exporting country. a. Tariff Quota b. Bilateral Quota c. Mixing Quota d. Unilateral Quota 4. Under which Act Reserve Code Number is required? a. Foreign Exchange Regulation Act b. Custom Act c. Export Import Control Act d. Foreign Trade Act 5. Which policy of the government will have a direct bearing on the exchange rate of the country? a. Fiscal Policy b. Instrument of Trade Policy c. Monetary Policy d. A and C both Examination Paper of Export Import Management

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6. Which scheme helps the exporters in procuring imported raw materials? a. IES b. C.C.S. c. IRS d. None of the above 7. Which of the following factor affecting the Exchange rate? a. Purchasing power Parity b. Exchange Control c. Balance of Payments d. All of the above 8. The system of permitting the currencies to move within a band is called___________ a. Snake in the tunnel b. Turtle Device c. UNCTAD d. None of the above 9. Periodic, as often as daily devaluations of pre-announced magnitude means________ Managed Float Regime b. The crawling Peg Regime c. Single currency Peg d. Composite currency Peg 10. The Export Policy of Government of India can be divided into_______ distinct phases. a. 2 b. 3 c. 4 d. 5 Part Two: 1. Write a brief note on “INTERNATIONAL MONETARY FUND”? 2. Write the components of the Uruguay Round Agreement? 3. Differentiate between Export Expansion and Import Substitution. 4. Explain the Term:- a. Bill of Landing b. Marine Insurance Policy

Case let 1 India’s tea export rose to 46.74 million kg during the first quarter of the current financial year from 35.47 million kg in the previous comparable period. Export earnings from this item aggregates Rs. 81.61 crores during April-June 1981, against Rs. 68.03 crores in the corresponding period last year. Thus, although in terms of quantity our tea exports have looked upon this year, the unit value realization dropped from Rs. 19.8 per kg, to Rs 17.46 per kg. The drop in unit value realization is attributed to the slackness in the international tea market due to the global oversupply in this commodity. Since 1975, world tea production has gone up by 41 percent whereas increase in consumption by the tea importing countries has been only of the order of the 9 percent. Naturally, the prospects of a revival in international tea price are dim at least in the immediate future. The recommendations made by the recent national meet on tea; ‘revitalize’ the tea industry in the country have to be viewed in this context. The national meet on tea, organized by the Union Commerce Ministry, was held in the first week of August to take a close look at the various problems confronting the tea industry the meeting which was attended by the representatives of the Central Government, tea producing states, planter’s associations and small growers, has recommended a package of fiscal reliefs –both at the Central and State levels. The package includes, among other things, a substantial reduction in excise duty on tea, refund of indirect taxes paid on tea exports, simplification of drawback procedures, substantial reduction or removal of the exercise duty on packet tea until further review,, suspension of sales tax an auction teas, concessional credit and a significant cut in the agriculture income tax and other local taxed by the respective state governments. It was also recommended that the state government should consider grant of exemption from rural employment cess to all export sales of tea and teas used for

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packaging by the procedures themselves. According to the available information these recommendations are being considered by the central and states concerned by the central and states concerned for implementation. The basic problem that confronts the tea industry in the international sphere is one of depressed price. More and more black tea is coming into the international markets from several new tea producing export countries leading to oversupply, lower realization. Among the tea producing nations area realizing without greater cooperation among them, to bring a better equilibrium between demand and supply, they cannot get incentives for tea exports. Because of lower production cost, some of our competitors have an edge over us in export makers, and incentives may be necessary to an extent for offsetting this price disadvantage. Similarly, assistance for exports of non-traditional items such as tea bags and packet tea would be advantageous for establishing markets for these high value added items whose share in our overall a tea exports is small at present

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Questions 1. Discuss the problem that comforts the Tea Industry in the International sphere?

2. How you asses would the Tea producing states has recommended a package of fiscal reliefs.

Case let 2 August 12, 1992 was a really bad day for John Martin. That was the day Canada, Mexico and the United States announced an agreement, in principle, to the North America Free Trade Agreement (NAFTA). Under the plan, all tariffs between the three countries would be eliminated within the next 10 to 15 years, with most being cut in five years. What disturbed Martin most was the plan’s provision that all tariffs on trade of textiles among the three countries are to be removed within 10 years. Under the proposed agreement, Mexico and Canada would also be allowed to ship a specific amount of clothing and textiles made from foreign materials to the United States each year, and this quota would raise slightly over the first five years of the agreement. “My God!” thought Martin. Martin is the CEO of a New York based textile company, Martin’s Textiles. The company has been in the Martin family for four generations, having been founded by his great grandfather in 1910. Today, the company employs 1500 people in three New York plants that produce cotton based clothes, primarily underwear. All production employees are union members and the company has a long history of good labour relations. The company has never had a labour dispute and Martin, like his father, grandfather, and great -grandfather before him, regards the workforce as part of the "Martin family". Martin prides himself not only in knowing many of the employees by name, but also in knowing a great deal about the family circumstances of many of the long time employees. Over the past 20 years the company has experienced increasingly tough competition, both from overseas and at home. The mid 1980s was particularly difficult. The strength of the dollar on the foreign exchange market during that period enabled Asian producers to enter the US market with very low prices. Since then, although the dollar has weakened against many major currencies, the Asian producers have not raised their prices in response to the falling driven by wage rates and labour productivity. Not surprisingly, most of Martin’s competitors in the north-eastern United States respond to the intense cost competition by moving production south, first to states such as South Carolina and Mississippi where non –union labour could be hired for significantly less than in the unionized North-east, and then to Mexico, where labour costs for textile workers were less than $2 per hour. In contrast, wage rates are $12.50 per hour at Martin’s New York plant and $8 to $10 per hour at non-union textile plants in the south eastern United States. The last three years have been particularly tough at Martin’s Textiles. The company has registers a small loss each year, and Martin knows the company cannot go on like this. His major customers, while praising the quality of Martin’s products, have worried him that his prices are getting too high and they may not be able to continue to do business with him, His long-time banker has told him he must get his labour costs down. Martin agrees, but he knows of only one surefire way to do that, to move production south, way south, to Mexico. He has always been reluctant to do that, but now he seems to have little choice. Examination Paper of Export Import Management

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He fear as that in a5 years the Us market will be flooded with cheap imports from Asian, US and Mexican companies, all producing in Mexico. It looks like the only way for Martin’s Textiles to survive is to close the New York plant and move production to Mexico. All that would be left in the United States would be the Sales force. Martin’s mind was spinning. How could something that throws good honest people out of work be good for the country? The politicians said it would be good for trade, good for economic growth and good for the three countries. Martin could not see it that way. What about Mary Morgan who has worked for Martin’s for 30 years? She is now 54 year as old. How will she and others like her find another job? What about his moral obligation to his workers? What about the loyalty his workers have shown his family over the years? Is this a good way to repay it? How would he break the news to his employees, many of whom have worked for the company for 10 to 20 years? And what about the Mexican workers? Could they be as loyal and production in Mexico, he had heard stories of low productivity, poor workmanship high turnover and high absenteeism. Is this true? If so, how could be ever cope with that? Martin has always felt that the success of Martin’s textiles was partly due to the family atmosphere, which encourages worker loyalty, productivity and attention to quality, an atmosphere that has been built up over four generations. How could he replicate that in Mexico with a bunch of foreign workers who speak a language he doesn’t even understand?

Questions 1. What are the social costs of benefits to Martin’s Textiles of shifting production to Mexica? 2. What seems to be the most ethical action?

1. Describe the current issues affecting the Exchange Rate of India? 2. Explain briefly “New Trade Theory”?

Examination Paper of Foreign Trade management

IIBM Institute of Business Management 1

IIBM Institute of Business Management Examination Paper MM.100 Indian Foreign Trade Section A: Objective Type (30 Marks) This section consists of Multiple Choice Questions and Short Questions Answer all the questions Part one carry 1 mark each and Part Two questions carry 5 marks each.

Part One: Multiple choices: 1. Which of the following is NOT an initiative for attracting a higher Quantum of FDI?

a. Further Liberalization of Foreign Trade Policy b. Rationalization of Labour Policy c. Development of Infrastructure d. Increase in Joint ventures

2. ECB stands for ______________________________

3. The textile and garment exports have been affected due to __________________

4. _____ is a popular export inductive scheme.

5. To overcome many of the problems associated with the advance licensing system this scheme was introduced

a. Passbook Scheme

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b. EPGC Scheme c. Post Export Duty Exemption Scheme d. Duty Drawback Scheme

6. Which of the following is a potential Export product

a. Automobile Products c. Agricultural Products b. Leather Products d. Engineering Products

7. To give a special trust for export of computer software which of the following scheme was developed

a. DEPB Scheme c. EOU/EPI Scheme b. EPCG Scheme d. Duty Exemption scheme

8. It is a bilateral agreement between two countries to purchase specific amounts of each other’s products over a specified period of time

a. Swap c. Clearing Examination Paper of Foreign Trade management IIBM Institute of Business Management 2

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b. Switch d. Evidence Accounts 9. TRIPS stands for ____________________________

10. Foreign Investment Promotion Board does not consist which of the following member

a. Secretary Minister of External Affairs b. Industry Secretary - Chairman c. Foreign Investment Minister d. Finance Secretary

Part Two: 1. Write a short note on ‘Globalization’?

2. Differentiate between Current Account Convertibility and Capital Account Convertibility?

3. Define ‘Deemed Exports’?

4. Discus the measures announced in the Union Budget 1990 – 00 for Trade Policy Reforms?

END OF SECTION A Section B: Caselets (40 Marks) This section consists of Caselets Answer all the questions Each Caselet carries 20 marks each. Detailed information should form the part of your answer (Word limit 150 to 200 Words)

Caselet 1 An American World Wide Corporation has decided to expand aggressively in Asia. It plans to source much of its raw materials and subcontracting there and manufacture and market throughout Asia, from Japan in the north to New Zealand in the South. You were appointed to organize and direct this major new effort and one question was where to locate the regional headquarters for the Asian Division (ADR). After considerable study, you selected the island nation of Luau. Luau’s advantages are several. It is about equidistant between New Zealand and Japan. It was a British Colony, so the main language is English. It has a relatively efficient telephone and telegraph system and Examination Paper of Foreign Trade management IIBM Institute of Business Management 3

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good air service to all the major Asian destinations in which you are interested and to the United states, as well. Not least important, the Luau government is delighted to have your company locate and invest there. It has made very attractive tax concessions to the company and to its personnel who will move there. The company moves in, leases one large building and puts out invitations to bid on the construction of a large building which will be its permanent headquarters. Now as you begin to work much more with the private banking and business people of luau and less with government officials, you begin to be more aware of luau characteristics about which you had not thought much previously. Almost all of the middle and upper management personnel in the business and finance sector are of Chinese extraction. The native population of luau, which is the majority, is a Micronesian race. On enquiry why the Chinese are dominant in banking and business; while the Micronesians stay with farming, fishing, government and manual labor, you are told that this is the way it developed historically. The Chinese enjoy and are good at banking and business; while the native Luauans do not like those activities and have stayed with their traditional pastimes. The two groups buy and sell from and to each other, but there are almost no social relations and very little business or professional overlap between the groups. Occasionally, some of the Micronesians study abroad and some work abroad for periods; when they return they frequently go to work in a bank or business or take a government position. You must staff your headquarters with middle and lower management people and with clerical help. You find that the only applicants for the jobs are Chinese, and you select the best available. They are quite satisfactory, and the operation gets off to a good start. Then as the months pass, you notice a gradual change of attitude towards you and the company among the government officials and among the people in general. They have become less friendly, more evasive, and less co-operative. You ask your Chinese staff about it, but they have noticed nothing unusual. Required Q. Give some suggestions to improve the Government and Public Relations? Caselet 2 Vertex, the tenth largest bank in the world has promoted world – class institutions in India. A few of such institutions built by Vertex are National Stock Exchange, The National Securities Depository Services Limited, Stock Holding Corporation of India etc. vertex is a strategic investor in a plethora of institutions, which have revolutionized the Indian Financial Markets. Vertex promoted Vertex Bank to make the formal foray of the Vertex group into commercial banking. The birth of Vertex Bank took place after RBI issued guidelines to for the entry of new private sector banks in January 19, 1993. Subsequently, Vertex as promoters sought permission to establish a commercial bank and retained Examination Paper of Foreign Trade management IIBM Institute of Business Management 4

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KPMG a management consultant of international repute to prepare the groundwork for establishing a commercial Bank. Vertex successfully completed its public issue in February 1999, which led to its paid – up capital expanding to Rs. 1400 million. The promoters holding consequent to this public issue stood reduced to 71% with Vertex holding 57% and SIDBI 14% of the paid –up capital of Vertex Bank. This was in line with the requirement of RBI which stipulated that eventually the promoters holding should be bought down to 40%. Banking as a whole was undergoing a change in India. With the retail – banking sector expected to grow at a rate of 30%, players were focusing more and more on the retail sector. In 2000, there was a corporate shift in the emphasis of Vertex bank from corporate banking to retail Banking. This shift was mainly initiated due to the change in the top management at corporate office and also due to a paradigm shift in the global banking industry from corporate banking to retail Banking. The bank felt the need to provide its retail clients with complete banking solutions under one roof top penetrate the retail sector. In line with the change in emphasis, Vertex Bank decided to divide the functions of Rajendra Pillai who was earlier looking after both corporate and retail services, by appointing a young and dynamic management graduate Sanjay Singh to head the retail banking segment. The following were some of the measures adopted by the bank for promoting its retail products. Product: The bank introduced a wide array of retail banking products in order to penetrate the retail – banking segment. Earlier, the bank had concentrated on big retail clients. Only clients having a minimum balance of Rs. 25,000 were allowed to open a savings account. However, the minimum balance requirement was lowered to Rs. 5,000. The first category consisted of clients having an average quarterly balance of Rs 5 lakh and above, and the second category consisted of customers having an average quarterly balance of Rs. 25 lakh and above. These preferred customers were provided special facilities like home delivery of demand drafts. The facilities were higher in the first category of clients. State – of –the – art technology was used in the banking services by introducing ATMs, Internet banking, demat services, International debit cards with multiple currency facility options available globally etc. Direct Tax Payments: The Reserve Bank of India has authorized Vertex bank to conduct all government transactions pertaining to the Central and State Government ministries and non – civil ministers e.g. Indian Railways Income tax etc.

Investment Options: Bank helped clients to invest in government bonds, relief bonds, Suvidha bonds, insurance policies etc.

ATMs: Vertex bank had set up 7 ATMs in Indore at prominent locations to facilitate better customer service. The cost of availing an ATM card facility entailed an annual charge of Rs. 99. From their inception, ATMs were being used merely as cash dispensing machines. Just four years back, people were apprehensive of using ATMs for cheque/cash deposit. They feared the loss/ misuse of their cheques/cash, if they deposited it in the ATMs.

Demat Account: The bank offer the demat account dealing in physical securities. The demat account took care of all customers worries involved in portfolio management which was facilitated electronically.

Debit Cards: All the account holders of the bank were issued debit cards. These cards could be used for ATM transactions and for payment of the purchase made at several retail outlets. The bank did not provide any Credit Card facilities. Examination Paper of Foreign Trade management IIBM Institute of Business Management 5

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World Currency Card: This card was exclusively designed for international travelers’ needs. From a single card, customers can make payments/withdrawls in five foreign currencies.

Gift Cards: This card was issued to Vertex saving Account holders and had a minimum limit of Rs. 51,000. The card enabled clients to make payment at various gift stores throughout the country. Home Loans: The bank offered home loans at a competitive interest rates for purchase, construction, refinance, extension etc.

Phone Banking and Mobile Phone Banking: Banking services such as updated balance, details of last five transactions, request for cheque book etc, were offered free of cost.

Internet Banking: All banking solutions were offered on the Vertex Website www.vertexbank.com. The bank believed in providing anywhere anytime banking to its customers.

Promotion: The corporate office was promoting the retail products through nationwide ad campaigns. These campaigns used billboards and hoardings mounted on kiosks. These campaigns were highly innovative using animals for promoting major themes of customized services. The bank was, however, not using any electronic media for advertising and used sales promotion for selling some of the products like gift cards. Initially, the branch was allowed a promotional budget of Rs. 2 – 3 lacs in order to establish itself in the market. Distribution: In order to support Sanjay Singh, a marketing team was appointed which consisted of two young sales managers and 20 marketing executives who operated in the field. These marketing representatives engaged in direct marketing included personal selling. The sales force was totally target – oriented and various incentives were provided to the star performers. HR Policies: In order to develop and motivate the sales force the bank had come up with key result areas like budgets, star performance incentives etc. under this activity each employee’s performance was appraised through a unique five – tier performance appraisal system. The employee was also given a certificate of appreciation for his excellent performance. For creating a sense of belongingness, the birthdays of employees were celebrated by flashing their name and birthday greetings on the Intranet. The employee was also presented with a bouquet. The bank had been able to increase its retail customers from 20,000 to 40,000 in Indore. The contribution of retail services to the annual profits had increased from Rs. 73 Crores to Rs. 123 Crores nationwide and from 1.50 Crores to 3.5 Crores for the Indore branch. Vertex bank as a whole had the lowest Non Performing Assets (NPA) amongst private banks namely 0.2% and was known for its efficiency. The Indore branch had established itself as number one private banks in terms of overall profitability. In the present scenario, Sanjay Singh wondered whether the strategies adopted for penetrating the retail market were sufficient to retain current customers and attract new ones. With aggressive promotional strategies followed by other banks and the proposed entry of Citicorp, he pondered on whether the current strategies would continue to be effective in the long run. Questions Q 1. Discuss the measures adopted by the bank for promoting its retail products? Q2. Evaluate the impact of strategies on financial performance of the firm? Examination Paper of Foreign Trade management IIBM Institute of Business Management 6

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END OF SECTION B Section C: Applied Theory (30 Marks) This section consists of Long Questions Answer all the questions Each question carries 10 marks each. Detailed information should form the part of your answer (Word limit 200 to 250 Words

1. What are the major features of EXIM policy 1992 - 97?

2. Discuss the elements of the Capital Account?

3. Describe the state’s role in Export Promotion?

Foreign Exchange ManagementMultiple choices: 1. It is established to help countries in reconstructing their economies in the post World War II?

a. International Monetary Fund b. World Bank c. International Finance Corporation d. International Development Association

2. The exchange rates which is variable between currencies and determined by demand and supply

a. Floating Exchange Rate System c. Fixed Exchange Rate System b. Free Float d. Managed float

3. The branches which do not maintain independent foreign currency accounts but have powers to operate the accounts falls under a. Category A c. Category B b. Category C d. Category D

4. _____ quote is given by a bank to its retail customers a. Merchant Quote c. Interbank Quote b. American Quote d. European Quote

5. To take the base rate and add the appropriate margin to it is an a. Spot TT Buying Rate c. Spot TT Selling Rate b. Forward TT Buying Rate d. Forward TT Selling Rate

6. Which of the following is not an assumption to Law of One Price a. Movement of Goods c. No Transaction Costs b. No Tariffs d. Relative Form of PPP

7. The approach in which the value of a currency is determined by the relative demand and supply of money and, the relative demand and supply of bonds is

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a. The Monetary Approach c. Exchange Rate Volatility Approach c. The Asset Approach d. The Portfolio Balance Approach 8. Which of the following is the most important currency in the world after the collapse of Bretten Woods a. Yen c. US Dollar b. Sterling d. DM

9. Option Forward is a a. Forward Contract entered along with buying a call option. b. Forward Contract entered along with writing a put option c. Forward Contract entered by buying or selling at a future date.

d. Forward Contract entered by buying or selling over a period. 10. Hedging aims to a. Increase Profits c. Reduce Costs b. Maximize Profits d. Minimize Risk

Part Two: 1. Differentiate between Forward Rates and Expected Spot Rates? 2. Write a note on ‘Swaps’? 3. Differentiate between Bid Rate and Ask Rate? 4. Write a note on ‘Interest Rate Parity’?

Caselet 1 International asset swaps can be used to achieve international diversification without eroding the level of foreign exchange reserves and weakening local market development. These asset swaps demand limited foreign currency flows, which implies that there is a need for only net gains or losses to be exchanged. Asset swaps protect foreign investors from market manipulation and expropriation risk and have much lower transaction costs than outright investments. In spite of all this, asset swaps are constrained by the attractiveness of local markets to foreign investors, and by various regulatory issues covering counter-party risk, collateral considerations, accounting, valuation, and reporting rules. Examination Paper of Foreign Trade management

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Institutional investors, especially pension funds and life insurance companies, are becoming the major participants in the financial systems of many developing countries. In some cases like Egypt, Malaysia or Sri Lanka, the sector is dominated by public agencies, but in several countries, including Argentina, Brazil, Chile, Cyprus, Hungary, Mauritius and especially South Africa private institutions play a prominent role in the accumulation of long-term financial resources. But in most developing countries, pension funds and other institutional investors operate under strict limitations on their foreign investments, mainly because of the shortage of foreign exchange reserves and the fear of capital flight. The imposition of exchange controls on investment in foreign assets affects the financial performance of pension funds and insurance companies. Exchange controls prevent an international diversification of risk and a reduction in the exposure of contractual savings institutions to domestic currency and market risk. Pension funds and other institutional investors in most developing countries are not generally allowed to invest overseas. Even OECD countries, until the early 1980s, used to apply tight quantitative restrictions on overseas investments by local institutions. The most common rationale for such restrictions is to reduce the risk of capital ‘flight’, especially institutionalized capital flight. Another rationale is to invest the locally mobilized long-term savings ‘at home’ to stimulate the development of local capital markets and enhance employment opportunities for the same workers. Even in the absence of legal limitations on foreign investing by local institutional investors, there are other significant barriers—the most important are risk of expropriation by foreign governments and transaction costs. These costs can be so large that they may offset any diversification benefits that would otherwise accrue, especially when relatively low volumes of funds are involved. International diversification improves the risk/return trade-off of investment portfolios by reducing the exposure to cyclical and long-term structural shifts in local economic performance. In the US, where the large local economy is highly diversified and where presence of global corporations provides an indirect avenue of international diversification, overseas assets are less than 12% of total assets, although this represents a significant increase over time. Removing exchange controls and fully integrating with international capital markets should be the ultimate objective of policy in all developing countries. However, complete removal of exchange controls is often constrained by the paucity of foreign exchange reserves and the fear of stimulating capital flight, especially if confidence in future stability is low. Asset swaps are clearly a second best option compared to the lifting of exchange controls. Developing countries should consider authorizing their institutional investors to engage in international asset swaps. But they should authorize to use properly designed swap contracts, preferably based on the basket of liquid securities, permit only global investment banks to act as counter-parties, require use of global custodians, properly monitor credit risk, maintain adequate collateral, and adopt market-to-market valuation rules. Questions Q 1. How does the international asset swap mechanism work? Explain. Q2. Discuss the various benefits of international asset swaps. Caselet 2 The RBI held the view, for long, that strong exchange reserves need to be maintained, due to the bad experience India had to go through in 1991. It has been a widely known policy of the RBI to keep Examination Paper of Foreign Trade management

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accumulating dollar reserves, whenever there are strong inflows of foreign funds, which also ensures that the rupee does not appreciate much. The policy has, over the years, resulted in the foreign exchange reserves increasing to over $100 billion. However, this policy has also led to the RBI being criticized for interfering in the foreign exchange markets too often. Several justifications have been given for this policy. The first one, as mentioned in the opening sentence, is the lack of confidence in the international architecture. That is, the liquidity support available to a country when it suffers from Balance of Payments problems could be inadequate, not available when needed urgently, or be set with political preconditions not acceptable to the country facing the problems. The second reason is often the desire to contain the risks that may arise from external shocks. External private capital often comes in when the country is doing well and exits at the first indication of trouble. Having large reserves is essential to contain the panic conditions that prevail in the markets in such situations. The third reason is the opportunity created by the current excessive liquidity in the international financial markets and the associated low interest rates. If the interest rates escalate later, capital may again reverse its direction, and flow to the markets in the developed countries. Reserves accumulated at present will be helpful to withstand such shocks later. The final reason, which is no less important, is that foreign currency reserves are required to withstand the periodical volatility in the foreign exchange markets. The markets of emerging economies are less efficient and cannot be depended upon to make automatic adjustments to correct the volatility in the markets. Similarly, a politically sensitive event like the Pokhran blasts or skirmishes with Pakistan on the border can cause a lot of Non-Resident Indians (NRIs) who are currently pumping money into the country to withdraw it over night. Such swings in sentiment can play havoc with the exchange rates, and the government will be called on to play a stabilizing role in such a situation. The consistent accumulation of dollars has been often stopping the rupee from appreciating, though there have been strong inflows of the dollar, on numerable counts in the past. The resultant liquidity released into the system used to be sterilized by the RBI through issue of government securities. To an extent, the inclination of the banks to invest in government securities beyond the statutory requirements has come in handy for the RBI in achieving stability in the exchange rate of the rupee. However, the situation changed from early last year (2003), when the rupee started appreciating against the dollar. At the same time, the rupee has been depreciating against other major currencies like the Euro and Yen, indicating that the appreciation is basically due to the weakness of the dollar against these currencies. The RBI, this time, chose to allow some amount of appreciation of the rupee, against dollar. The appreciation gained momentum due to inflows of dollars continuing, with the NRIs encouraged by the gain of the rupee. Added to this, the prices of crude oil fell, easing the pressure on the need for payments for oil imports. With the fear of losing out due to further improvement in the rupee exchange rate, exporters also rushed to remit the dollars to India, pushing the exchange rate further up. The sustained positive current account balance also appears to have had its impact in generating positive sentiments for the rupee. It has been alleged, however, that most of the fund flows to India are to gain from the arbitrage. Investors always prefer to invest in a currency that is appreciating, so that they can gain from the interest and also from the appreciation if the currency. However, this argument is refuted on several counts. The spread on the NRI deposits is capped at 2.5% and is often not more than forward premium on the dollar in the Indian market. The investment by the FIIs in debt funds is limited to $1 billion, all the FIIs put together. This cap prevents them from making any meaningful arbitrage gains. The variability in interest rates in the two currencies involved, keeping in view the narrow spreads, can add risk to the seemingly risk-less arbitrage. In view of these arguments, it Examination Paper of Foreign Trade management

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can be said that the flow of dollars into India is driven by factors other than the strength of the rupee and the resultant opportunities for arbitrage. Questions -

Q 1. What measures according to you the RBI should take to manage rupee-dollar exchange rates? Q2. Do you think appreciation of rupee against dollar have any significant adverse impact on the Indian economy? Discuss.

1. How many types of Exposures are there in terms of Exchange Risk? 2. Write a note on International Monetary Fund International Finance Corporation International Development Association

Information Technology & Management

Part One: Multiple Choices: 1. Computer crime is defined by a. AITP b. SWAT c. Both (a) & (b) d. None of the above

2. Prototyping is sometimes called a. ASD b. RSD c. RAD d. None of the above

3. Virtual reality is also called a. Computer-simulated reality b. Neurons c. Software robots d. Telepresence

4. A trackball is a stationary device related to the a. Keyboard b. Joystick c. Mouse d. All of the above

5. Hand-held microcomputer devices known as a. Personal digital assistance b. Super computers c. Both (a) & (b) d. None of the above

6. KMS stands for a. Knowledge memory systems b. Knowledge making system c. Knowledge management systems d. None of the above

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7. A basic system component of information systems is a. Memory b. Processing c. Storage d. All of the above

8. How many characters uses the MICR system a. 15 characters b. 18 characters c. 24 characters d. 14 characters

9. EBCDIC stands for a. Extended Binary Coded Decimal Interchange Code b. Extended Binary Coded Decimal Instruction Code c. Extended Binary Coded Data Interchange Code d. Electronic Binary Coded Data Interchange Code

10. The smallest element of data is called a. Byte b. Bit c. Giga byte d. None of the above

Part Two: 1. Write a note on ‘Cache Memory’.

2. What do know about ‘Assembler’?

3. Write a note on ‘Optical Character Recognition’.

4. Explain the term ‘Electronic commerce’.

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Caselet 1 It began as a trading site for nerds, the newly jobless, home-bound housewives, and bored retirees to sell subprime goods: collectibles and attic trash. But eBay (www.ebay.com) quickly grew into a teeming marketplace of 30 million, with its own laws and norms, such as a feedback system in which buyers and sellers rate each other on each transaction. When that wasn’t quite enough, eBay formed its own police force to patrol the listings for fraud and kick out offenders. The company even has something akin to a bank: Its Paypal payment-processing unit allows buyers to make electronic payments to eBay sellers who can’t afford a merchant credit card account. “eBay is creating a second, virtual economy,” says W. Brian Arthur, an economist at think tank Santa Fe Institute. “It’s opening up a whole new medium of exchange.” eBay’s powerful vortex is drawing diverse products and players into its profitable economy, driving its sellers into the heart of traditional retailing, a $2 trillion market. Among eBay’s 12 million daily listings are products from giants such as Sears Roebuck, Home Depot, Walt Disney, and even IBM. More than a quarter of the offerings are listed at fixed prices. The result, says Bernard H. Tenenbaum, president of a retail buyout firm, is “They‘re coming right for the mainstream of the retail business.” So what started out as a pure consumer auction market-place is now also becoming a big time business-to-consumer and even business-to-business bazaar that is earning record profits for eBay’s stockholders. And as the eBay economy expands, CEO Meg Whitman and her team may find that managing it could get a lot tougher, especially because eBay’s millions of passionate and clamorous users demand a voice in all major decisions. This process is clear in one of eBay’s most cherished institutions: the voice of the Customer program. Every couple of months, the executives of eBay bring in as many as a dozen sellers and buyers, especially its high selling “Power Sellers,” to ask them questions about how they work and what else eBay needs to do. And at least twice a week, it holds hour-long teleconferences to poll users on almost every new feature or policy, no matter how small. The result is that users feel like owners, and they take the initiative to expand the eBay economy – often beyond management’s wildest dreams. Stung by an aerospace down-turn, for instance, machine-tool shop Reliable Tools Inc., tried listing a few items on eBay in late 1998. Some were huge, hulking chunks of metal, such as a $7,000 2,300-pound milling machine. Yet they sold like ice cream in August. Since then, says Reliable’s auction manager, Richard Smith, the company’s eBay business has “turned into a monster.” Now the Irwindale (California) shop’s $1 million in monthly eBay sales constitutes 75% of its overall business. Pioneers such as Reliable promoted eBay to set up an industrial products marketplace in January that’s on track to top $500 million in gross sales this year.Then there is eBay Motors. When eBay manager Simon Rothman first recognized a market for cars on cars on eBay in early 1999, he quickly realized that such high-ticket items would require a different strategy than simply opening a new category. To jump-start its supply of cars and customers, eBay immediately bought a collector-car auction company, Kruse International, for $150 million in stock, and later did a deal to include listings from online classifieds site, AutoTrader.com. Rothman also arranged insurance and warranty plans, an escrow service, and shipping and inspection services.This approach worked wonder. Sales of cars and car parts, at a $5 billion-plus annual clip, are eBay's single largest market. That has catapulted eBay in front of No. 1 U.S. auto dealer AutoNation in number of used cars sold. About half of the sellers are brick-and-mortar dealers who now have a much larger audience than their local area. “eBay is by far one of my better sources for buyers,” says Bradley Bonifacius, Internet sales director at Dean Stallings Ford in Oak Ridge, Tennessee. And for now, the big corporations, which still account for under 5 percent of eBay’s gross sales, seem to be bringing in more customers then they steal. Motorola Inc., for example, helped kick off a new wholesale business for eBay last year, selling excess and returned cell phones in large lots. Thanks to the initiative of established companies such as Motorola, eBay’s wholesale business jumped ninefold, to $23 million, in the first quarter.As businesses on eBay grow larger, they spur the creation of even more businesses. A new army of merchants, for example, is making a Examination Paper of Information Technology

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business out of selling on eBay for other people. From almost none a couple of years ago, these so called Trading Assistants now number nearly 23,000. This kind of organic growth makes it exceedingly though to predict how far the eBay economy can go. Whitman professes not to know. “We don’t actually control this,” she admits. “We are not building this company by ourselves. We have a unique partner – million of people.” 1. Why has eBay become such a successful and diverse online marketplace? Visit the eBay website to help you answer, and check out their many trading categories, specialty sites, international sites, and other features.

2. Why do you think eBay has become the largest online/offline seller of used cars, and the largest online seller of certain other products, like computers and photographic equipment?

Caselet 2 It’s no secret that somewhere in a back room in the typical Fortune 500 company, there’s a team of analytical wizards running sophisticated data mining queries that mine for gems such as data about about the company’s best customers – those top 20 percent of clients that produce 80 percent of the company’s profits. These jewels can be a business’s most valuable intellectual property, which makes them very valuable to competitors. What’s to prevent that data set from walking out the door or falling into the wrong hands? Some times, not much. Many companies lack the internal controls to prevent that information from leaking. The problem is that such data is as hard to protect as it is to find. Owens & Minor Inc. (www.ownes-minor.com), a $4 billion medical supplies distributor, counts some of the nation’s largest health care organizations among its customers. In late 1996, it started mining data internally using business intelligence software from Business Objects SA. “From the beginning, we were aware of security issues around this strategic information about our operations,” says Don Stoller, senior director of information systems at Owens & Minor. “For example, a sales executive in Dallas should only have access to analyses from his region.” It is always possible that someone who has legitimate access will abuse that trust, but companies can minimize that potential by strictly limiting access to only those who need it. thus, Owens & Minor uses role-level security functions that clearly define who has access to which data. “This meant we had to build a separate security table in our Oracle database,” says Stoller. A few years later, when the company wanted to open its systems to suppliers and customers, security became even more important. In 1998, Owens & Minor moved quickly to take advantage of Web-intelligence software from Business Objects that’s designed to Web-enable business intelligence systems. The result was Wisdom, an extranet Web portal that lets Owens & Minor’s suppliers and customers access their own transactional data and generate sophisticated analyses and reports from it.“It business-to-business transactions, security is key,” says Stoller. “We had to make absolutely sure that Jhonson & Jhonson, for example, could not see any 3M’s information. This meant we had to set up specific customer and supplier security tables, and we had to maintain new, secured database views using the Oracle DBMS and Business Objects.”Wisdom was such a success that Owens & Minor decided to go into the intelligence business with the launch of wisdom2 in the spring of 2000. “We capture data out of a hospital’s materials management system and load it into our data warehouse,” Stoller explains. A hospital can then make full use of its business-intelligence software to mine and analyze purchasing data. Owens & Minor receives a licensing and maintenance fee for the services.Layers of security and encryption require a considerable amount of overhead data for systems administration. Both Stoller and Michael Rasmussen, an analyst at Giga Information Group, say that’s the main reason security concerns about business intelligence are often swept under the carpet. The issues of authentication (identifying the user) and authorization (what things the user is allowed to do) must be addressed, usually across different applications, Rasmussen says, adding, “Systems Examination Paper of Information Technology

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administration can be a real nightmare.”“We are going through some of this,” says David Merager, director of Web services and corporate applications at Vivendi Universal Games Inc. (www.vugames.com). “Our business intelligence needs more security attention.” Business intelligence reports come from two systems: an Oracle-based for budgets on a Microsoft SQL Server database. The heart of the business intelligence system consists of Microsoft’s OLAP application and software from Comshare Inc. that provides the Web-based front end for the analytics. “Our budget teams use these reports to do real-time analyses,” says Merager. Rodger Sayles, manager of data warehousing at Vivendi Universal, says one way to secure such a system is to assign roles to all users within the Microsoft application. Roles determine precisely what a user is allowed to see and do and are usually managed within a directory. If your computing architecture is amenable to a single, centralized directory that supports roles, this may be an attractive solution. “The problem is that once you have over 40 distinct roles, you run into performance issues, and we have identified about 70 user roles,” Sayles explains. He says there’s way around this difficulty. “I think we are going to use a combination of Web portals and user roles. A user would sign on through a particular Web portal, which would effectively place the user in a role category. This reduces the overhead burden on the application,” says Sayles. 1. Why have developments in IT helped to increase the value of the data resources of many companies?

2. How can companies use IT to meet the challenges of data resources security?

1. What potential security problems do you see in the increasing use of intranets and extranets in business? What might be done to solve such problems? Give several examples?

2. Suppose you are a manager being asked to develop e-business and e-commerce applications to gain a competitive advantage in an important market for your company. What reservations might you have about doing so? Why?

Database Management Systems

Part One: Multiple choices: 1. The normal language of database is

a. PHP

b. SQL

c. C++

d. Java

2. DDL, a database system language

a. Creates table

b. Manipulates table

c. Cannot work with table

d. None

3. Symbol for one to one relationship is………………………………………………………

4. HDBMS stands for

a. Hello DBMS

b. Hierarchical DBMS

c. Hyper DBMS

d. High DBMS

5. In Anti joining of R►S means ……………………………………………………………

Part Two: 1. What are “Foreign Keys”?

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2. Differentiate between ‘DBMS’ and ‘RDBMS’.

3. Write the syntax to Insert charts into a table from another table.

4. What are ‘Armstrong’s Axioms’.

5. Write short ‘Boyce-Codd Normal Form (BCNF)’.

1. Elaborate the testing of Serializability techniques with example.

2. Explain the working of lock manager.

3. What is deadlock? How is a deadlock detected? Enumerate the method for recovery from the deadlock.

4. Explain why a transaction execution should be atomic. Explain ACID properties, considering the following transaction.

Ti: read (A); A : = A- 50; Write (A); Read (B); B : = B + 50; Write (B)

1. The HR manager has decided to raise the salary for all the employees in department number 30 by 0.25. Whenever any such raise is given to the EMPLOYEES, a record for the same is maintained in the EMP-RAISE table. It includes the employee number, the date when the raise was given and the actual raise. Write a PL/SQL block to update the salary of each employee and insert a record in the EMP-RAISE table.

2. Retrieve the salesman name in ‘New Delhi’ whose efforts have resulted into atleast one sales transaction.

Table Name : SALES-MAST Salesman-no

Name City

B0001 B0002 B0003 B0004 B0005 B0006 B0007

Puneet Kumar Pravin Kumar Radha Krishna Brijesh Kumar Tushar Kumar Nitin Kumar Mahesh Kumar

Varanasi Varanasi New Delhi New Delhi Allahabad Allahabad Gr. Noida

International Business Management

Part One: Multiple choices: 1. What is the series consideration for strategy implementation? a. Strategic orientation b. Location c. Dimensions d. Both (a) & (b)

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2. The major activity in global marketing is a. Pricing policies b. Product lines c. Market assessment d. All of the above

3. The third ‘P’ in the international marketing mix is a. Product b. Price c. Promotion d. Place

4. The European Economic Community was established a. 1958 b. 1975 c. 1967 d. 1957

5. Environment Protection Act a. 1986 b. 1967 c. 1990 d. None of the above

6. People’s attitude toward time depend on a. Language b. Relationship c. Culture d. All of the above

7. Culture necessitates adaption of a. Product b. Price c. Promotion d. Place

8. The legal term for brand is a. Symbol b. Name c. Trade mark d. All of the above

9. FDI flows are often a reflection of rivalry among firms in a. Global market b. Indian market c. International market d. None of the above

10. ISO certification is a. Expensive process b. Elaborate process c. Evaluative Process d. Both (a) & (b)

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Part Two: 1. What do understand by ‘Inward-oriented Policies’?

2. What is ‘Factor Endowments Theory’?

3. Explain the term ‘Totalitarianism’.

4. Write about ‘Persistent Dumping’.

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Caselet 1 THE EU’S LAGGING COMPETITIVENESS In a report produced for the European Commission, published in November 1998, it was argued that the EU lags behind the USA and Japan on most measures of international competitiveness. Gross domestic product per capita, sometimes used as an indicator of international competitiveness at the country level, was 33 per cent lower in the EU as a whole than in the USA and 13 per cent lower than in Japan. The EU’s poor record in creating employment was singled out for particular criticism. As this appeared to apply across the board in most industrial sectors, it suggested that the EU’s poor performance related to the business environment in general and, in particular, to the inflexibility of Europe’s labour markets for goods and services. A shortage of risk capital for advanced technological development and high cost and inefficiency of Europe’s financial services were also highlighted by the report. For one reason or another, European industries generally lag behind in technology industries. If measured by the number of inventions patented in at least two countries, the USA is well ahead of most European countries, as well as Japan. Despite these shortcomings, the report’s authors focus attention on flexible markets, market liberalisation, and the creation of a competitive business environment rather than on targeted intervention by the EU or national authorities. 1. Is gross domestic product per capita a useful indicator of International competitiveness in the EU?

2. Is it fair to point the blame for the EU’s poor international competitiveness at inflexible labour markets, regulated goods and services markets, and a general lack of competition? What alternative explanations might be suggested?

Caselet 2 PERU Peru is located on the west coast of South America. It is the third largest nation of the continent (after Brazil and Argentina), and covers almost 500,000 square miles (about 14 per cent of the size of the United States). The land has enormous contrasts, with a desert (drier than the Sahara), the towering snow-capped Andes mountains, sparkling grass-covered plateaus, and thick rain forests. Peru has approximately 27 million people, of which about 20 per cent live in Lima, the capital. More Indians (one half of the population) live in Peru than in any other country in the western hemisphere. The ancestors of Peru’s Indians were the famous Incas, who built a great empire. The rest of the population is mixed and a small percentage is white. The economy depends heavily on agriculture, fishing, mining, and services. GDP is approximately $115 billion and per capita income in recent years has been around $4,300. In recent years the economy has gained some relative strength and multinationals are now beginning to consider investing in the country. One of these potential investors is a large New York based that is considering a $25 million loan to the owner of a Peruvian fishing fleet. The owner wants to refurbish the fleet and add one more ship. During the 1970s, the Peruvian government nationalised a number of industries and factories and began running them for the profit of the state. In most cases, these state-run ventures became disasters. In the late 1970s, the fishing fleet owner was given back his ships and are getting old and he needs an influx of capital to make repairs and add new technology. As he explained it to the NEW YORK banker: “fishing is no longer just un art. There is a great deal of technology involved. And to keep costs low and be competitive on the world market , you have to have the latest equipment for both locating as well Examination Paper of International Business Management

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as catching and then loading and unloading the fish.”Having reviewed the fleet owner’ operation, the large multinational bank believes that the loan is justified. The financial institution is concerned , however , that the Peruvian government might step in during the next couple of years and again take over the business . If this were to happen, it might take an additional decade, for the loan to be repaid. If the government were to allow the fleet owner to operate the fleet the way he has over the last decade, the loan could be rapid within seven years. Right now, the bank is deciding on the specific terms of the agreement. Once these have been worked out , either a loan officer will fly down to lima and close the deal or the owner will be asked to come to NEW YORK for the signing. Whichever approach is used, the bank realize that final adjustments in the agreement will have to be made on the spot. Therefore, if the bank sends a representative to Lima, the individual will have to the authority to commit the bank to specific terms. These final matters should be worked out within the next ten days. 1. What are some current issues Facing Peru? What is the climate for doing business in Peru today?

2. Would the bank be better off negotiating the loan in New York or in Lima? Why?

1. Imagine that you are the director of a major international lending institution supported by funds from member countries. What one area in newly industrialized and developing economics would be your priority for receiving development aid? Do you suspect that any member country will be politically opposed to aid in this area? Why or Why not?

2. The principle problem in analysing different forms of export financing is the distribution of risks between the exporter and the importer. Analyse the following export financing instruments in this respect: (a) Letter of Credit (b) Cash in advance (c) Draft (d) Consignment (e) Open Account

Global Marketing Management

Part One: Multiple Choices: 1. All the ethnocentric orientations are collectively called…………………………………………………………….

2. Presently number of members countries in OECD are a. 12 b. 20 c. 24 d. 29

3. If the value be ‘a’ , benefit be ‘b’ and the price be ‘c’ then relation between the threes is given by a. a=b/c b. a=c/b c. a=b+c d. none

4. If the confidence limit be ‘t’ standard deviation be ‘b’ and the error limit be ‘c’ then the sample size will be given by a. n=t+b/c b. n=t*b/c c. n=t*c/b d. none

5. According to Backer spielvogel and Bates’s global scan the segment content of Achiever is a. 26 b. 22

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c. 13 d. 18

6. CAT stands for ………………………………………………………………………….…

7. Cave dwellers are…………………………………………………………………………

8. LIFO stands for life in fire option.(T/F) Examination Paper of International Business Management

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9. Starbursts are ………………………………………………………………………………………………………

10. Name one of the common wealth of independent States (CIS)……………………………………………..

Part Two: 1. Write short “Hofstede’s Cultural Typology”.

2. Write a short note on “Diffusion Theory”.

3. According to “D’arcy Massius Benton & Bowles’s Euroconsumer Study”. Who are disaffected survivors.

4. What do you understand by “Piggyback Marketing”.

Caselet 1 Which Company Is Transnational? Four senior executives of companies operating in many countries speaks: COMPANY A We are transnational company. We sell our products in over 80 countries, and we manufacturer in 14 countries. Our overseas subsidiaries manage our business in their respective countries. They have complete responsibility for their country operations including strategy formulation. Most of the key executives in our subsidiaries are host-country nationals, although we still rely on home-country persons for the CEO and often the CFO (chief financial officer) slots. Recently, we have divided the world regions and the United States. Each of the world regions reports to our world trade organization, which is responsible for all of our business outside United States. The overseas companies are responsible for adapting to the unique market preferences that exist in their country or region and are quite autonomous. We are proud of our international reach: We manufacture not only in the United States but also in Europe and the United Kingdom, Latin America, and Australia. We have done very well in overseas markets, especially in the high-income countries with the exception of Japan. We would like to enter the Japanese market, but let’s face it, Japan is a protected country. There is no level playing field, and as you no doubt know, the Japanese have taken advantage of the protection they enjoy in their home country to launch an export drive that has been a Examination Paper of International Business Management

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curse for us. Our industry and our home country (the United States) has been a principle target of the Japanese, who have taken a real bite out of our market share here in the United States. We are currently lobbying for more protection from Japanese competition. COMPANY B We are a unique transnational media company. We do not dominate any particular area, but we have an important presence on three continents in magazines, newspapers, and television. We have a global strategy. We are a global communications and entertainment company. We’re in the business of informing people around the world on the widest possible basis. We know how to serve the needs of our customers who are readers, viewers, and advertisers. We transfer people and money across national boundaries, and we know how to acquire and integrate properties as well as how to start up a new business. We started out as Australian, and then the weight of our main effort is in the United States. We go where the opportunity is because we are market driven. Sure, there are lots of Australians in the top management of this company, but we started in Australia, and those Aussies know our business and the company from the ground up. Look around and you’ll see more and more Americans and Brits taking the top jobs. We stick to English because I don’t believe that we could really succeed in foreign print or broadcast. We know English, and so far the English-speaking world is big enough for us. The world is shrinking faster than we all realize, and to be in communications is to at the center of all change. That’s the excitement of what we’re doing – and also the importance. COMPANY C We’re a transnational company. We are committed do being the number-one company in our industry worldwide. We do all of our manufacturing in our home country because we have been able to achieve the lowest cost and the highest quality in the world by keeping all engineering and manufacturing in order to maintain our cost advantage. We are doing this reluctantly but we believe that the essence of being global is dominating markets and we plan to do whatever we must do in order to maintain our position of leadership. It is true that all of our senior managers at home and in most of our foreign markets are home-country nationals. We feel more comfortable with our own nationals in key jobs because they speak our language and they understand the history and the culture of our company and our country. It would be difficult for an outsider to have this knowledge, which is so important to smooth-working relationships. COMPANY D We are a transnational company. We have 24 nationalities represented on our headquarters staff, we manufacture in 28 countries, we market in 92 countries, and we are committed to leadership in our industry. It is true that we are backing off on our commitment to develop business in the Third World. We have found it extremely difficult to increase sales and earnings in the Third World, and we have been criticized for our aggressive marketing in these countries. It is also true that only home-country nationals may own voting shares in our company. So, even though we are global, we do have a home and a history and we respect the traditions and sensibilities of our home country. We want to maintain our number-one position in Europe, and over time achieve the same position of leadership in our target markets in North America and Japan. We are also keeping a close eye on the developing countries of the world, and whenever we see a country making the move from low income to lower middle, or from lower middle to upper middle, or from upper middle to high income we commit our best effort to expand our positions, or, if we don’t have a positions, to establish a position. Since our objective is to achieve an undisputed leadership position in our industry, we simply cannot afford not to be in every growing market in the world. We have always had a European CEO, and this will probably not change. The executives in this company from Europe tend to serve all over the world, whereas the executives from the United States Examination Paper of International Business Management

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and Japan serve only in their home countries. They are very able and valuable executives, but they lack the necessary perspective of the world required for the top jobs here at headquarters. 1. Which company is transnational?

2. What are the attributes of a transnational company?

3. What is the difference between a domestic, international, multinational, global, and transnational company?

4. At what stage of development is your company and your line of business today? Where should you be?

Caselet 2 Parker Pen Co. (A) INTRODUCTION The meeting at sunny Palm Beach concluded with nary a whimper of dissent from its participants. After years of being run as a completely decentralized company whose managers in all corners of the world enjoyed a high degree of flexibility, Parker Pen Co., Janesville, Wisconsin, was forced to reexamine itself. The company had enjoyed decade after decade of success until the early 1980s. By this time, Parker faced strong competitive threats and a deteriorating internal situation. A new management team was bought in from outside the company – an unprecedented step for what had been until then an essentially family-run business. At the March 1984 Palm Beach meeting, this new group of decision makers would outline a course of action that would hopefully set Parker back on a path to success. The men behind the new strategy were supremely confident of its chances for success – and with good reason. Each was recognized as a highly skilled practitioner of international business and their combined extensive experience gave them an air of invincibility. They had been recruited from larger companies, had left high-paying, rewarding jobs, and each had come to Janesville with a grand sense of purpose. For decades, Parker had been a dominant player in the pen industry. In the early 1980s, hoe-ever, the company had seen its market share dwindle to a mere 6 percent and, in 1982, net income plunged a whopping 60 percent. To reverse this decline, Parker recruited James Peterson, an executive vice president at R.L. Reynolds, as the new president and CEO. Peterson hired Manville Smith as president of the writing instruments group at Parker Smith, who was born in Ecuador and had a broad international background, came from 3M where he had been appointed division president at the tender age of 30. Richard Swart was vice president/marketing of the writing instruments group. He spent 11 years at the advertising agency BBDO and was an expert on marketing planning and theory. Jack Marks was head of writing instruments advertising. Marks came to Parker from Gillette, where, among other things, he assisted in the worldwide marketing of Paper Mate pens. Rounding out the team was Carlos Del Nero, manager of global marketing planning, who brought with him considerable international experience at Fisher-Price. Each of these men was convinced that Parker would right itself by following the plan they unveiled at Palm Beach. A BRIEF HISTORY OF PARKER PEN The “Rolls Royce” of the Pen Industry The Parker name has been identified with pens since 1888 when George S. Parker delighted ink-splotched pen users everywhere by introducing a leakproof fountain model called the Parker Lucky Curve. Parker Pen would eventually blossom into America’s, if not the world’s, largest and best-known pen market. Parker’s products, which would eventually include ballpoint pens, felt-tip pens, Examination Paper of International Business Management

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desk sets, mechanical pencils, inks, leads, erasers, and, of course, the fountain pen, were also known for their price tags. In 1921, for example, Parker introduced the Duofold pen. The Duofold, even though it was comparable to other $3 pens on the market, was extravagantly priced at $7. Parker was able to charge a premium price because of its reputation for quality and style, and its skill in positioning products in the top price segment. Parker’s position as America’s leading pen marker was solidified during the years when the pen was mainly viewed as a gift item. High school and college graduates in the 1940s and 1950s, for example, were quite likely to receive a Parker “51” fountain pen (priced at & 12.50) commemorating their achievement. Indeed, it was with a “51” that General Douglas MacArthur signed the Japanese Peace Treaty in 1945. Parker’s stylish products and high profile name would keep it at the top of the pen market until the late sixties as well as a few foreign brands, knocked them out of first place once and for all. Of course, Parker would not have lost its hold on the market had it not made some oversights along the way. In addition to a more competitive environment, Parker failed to come to terms with a fundamental change in the pen market – the development of the disposable, ballpoint market. When Parker unveiled the $25 “75” pen in 1963, it showed that it remained committed to supplying high showed that it remained committed to supplying high priced pens to the upper end of the market. As the 1960s wore on, a clear trend toward cheap ballpoint and soft-tip pens developed. Meanwhile, Parker’s only ultimately successful addition to its product range in the late sixties was the “75” Classic line, yet another high-priced pen. A Brie Flirtation with Low-Priced Pens Parker did, however, make an effort to compete in the lower price segment of the market in the late 1960s only to see it fail. In an attempt to capitalize on the trend toward inexpensive pens, Parker introduced the T-Ball Jotter, priced at $1. 98. The success of the Jotter led it to move even further down the price ladder when it acquired Eversharp. Whereas the Jotter had given Parker reason to believe it could make the shift from pricy pens to cheap pens with little or no difficulty, the Eversharp experience proved to be different. George Parker, a grandnephew of the company’s founder and president of Parker at the time, stated the reasons for the Eversharp failure, as well as its consequences: All the market research surveys said go lower, go lower, go lower, that’s where the business is. So I said, ‘Go lower? Fine. But we don’t know how.’ We bought Eversharp and tried to run it ourselves, and we couldn’t do it. our people just couldn’t think in terms of big units, and they didn’t know how to sell people on the lower-priced end of the business – grocers, supermarkets, rack jobbers. The result was, Bic and Paper Mate were cleaning up in the lower-priced end, Cross in the high, and Parker was getting up, but our costs went up faster, and our profits were squeezed. The 1970s: The Illusion of Success Despite the difficulties Parker encountered when it left its niche in the upper end of the pen market, the company experienced a healthy period of growth and profitability for most of the 1970s. Demand for its products remained strong, and its worldwide markets expanded significantly due to a rise in consumer income and increasing literacy rates in much of the Third World. Parker also chose to diversify during this decade, and its most noteworthy acquisition, Manpower, Inc., proved to be a temporary-help firm, Parker was the slightly more profitable of the two. With the boom in temporary services in the late seventies and early eighties, however, Manpower eclipsed Parker in sales and earnings and eventually subsidized its parent company during down periods. Why did parker fall from its position of leadership in the writing instrument market” there were many reasons, and one of the most important was the weakening of the U.S. dollars. At its peak, Parker accounted for half of all U.S. exports of writing instruments and 80 percent of its total sales Examination Paper of International Business Management

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came from 154 foreign countries. Parker was especially strong in Europe, most particularly in the United Kingdome. When sales in the strong European currencies were translated into dollars, Parker earned huge profits. The downside of a weak dollar, however, was that it gave Parker the illusion that it was a well-run company. In fact, throughout the 1970s, Parker was a model of inefficiency. Manufacturing facilities were dated and inefficient. Production was so erratic that the marketing department often had no idea what type of pens they would be selling from year to year or even month to month. Under the leadership of George Parker, nothing was done by company headquarters to update these facilities or to develop new products. As a result, subsidiaries and distributors around the world saw fit to develop their own products. By the end of George Parker’s reign, the company’s product line included 500 writing instruments. That distant subsidiaries would have the leeway to make such decisions was not at all unusual at Parker, for it had long been known as one of the most globally decentralized companies in the world. Decentralization , in fact, was something that Parker took pride in and considered to be vital to its success as a multinational. Yet it was this very concept that Peterson and his new management team would hold to be responsible for much of what ailed Parker Pen. PARKER’S GLOBAL OPERATIONS BEFORE PETERSON In addition to having a hand in manufacturing and product-line decisions, Parker’s subsidiaries developed their own marketing strategies. More than 40 different advertising agencies promoted Parker pens in all the corners of the globe. When Peterson came to Parker, he was proudly informed that the company was a “federation” of autonomous geographical units. The downside to the “federation” concept, Peterson though, was that home country management often lacked the information needed to make and coordinate basic business decisions. Control was so completely decentralized that Parker didn’t even know how many pens it was selling by the time Peterson and his group arrived. On the other hand, decentralization obviously had its positive aspects, most noticeably in the field of advertising. Pens mean different things to different people. Whereas Europeans are more likely to choose a pen based on its style and feel, a consumer from a lesser-developed country in the seventies viewed the pen as nothing less than a badge of literacy. In additional, tastes varied widely from country to country. The French, for example, remained attached to the fountain pen. Scandinavians, for their part, showed a market preference for the ballpoint. The logic behind having so many different advertising agencies was that, even if it appeared to be somewhat inefficient, in the end the company was better off from a sales standpoint. Some of the individual advertising agencies were able to devise excellent, imaginative campaigns that struck a responsive chord among their local audiences. One example was the Lowe Howard-Spink agency in London. The Parker U.K. division became the company’s most profitable during the tenure of the Lowe agency. An example of its creativity is an ad is a picture of a dead plumber, on his back, with a giant Parker pen protruding from his heart. Part of the text is as follows: Do you know plumbers who never turn up? Hairdressers who missed their vocations as butchers? Drycleaners who make your stains disappear – and your clothes with them? Today, we at Parker give you the chance to get your own back. Examination Paper of International Business Management

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Not only are we offering a beautiful new pen called the Leque which owes its deep luster to a Chinese technique 2000 years old, but we are attempting to revive something that went out when the telephone came in. The well-armed, witty, malicious dart. Although the Parker U.K. division was a success, however, the company’s general inefficiencies, loss of market share, and lack of strategic direction were finally revealed in the early 1980s with the rise of the U.S. dollar. Parker’s financial decline was even more precipitous than the dollar’s increase. When the huge 1982 losses were registered, Peterson was brought in from R.J. Reynolds to try and turn things around for Parker. He decided that every aspect of the company needed to be closely examined, not the least of which was Parker’s decentralization of global operations. 1. What would you do if you were in James Peterson’s shoes in January 1982?

2. What changes, if any, would you make in Parker’s marketing strategy?

3. Which aspects of Parker’s structure would you discard? Which would you keep?

4. Assume that you are James Peterson and you have just hired a new management team composed of highly qualified executives from outside companies. You and your new team are convinced that you have the solution to Parker’s problems but there are many hold overs who disagree with you. How would you implement your plan? To what extent would you incorporate the views of Parker management into your plan?

1. Consider the equation Y=f(A,B,C,D,E,F,G), where Y stands for consumption of soft drinks and D is the variable for cultural elements. How would this equation help a soft-drink marketer understand demand for soft drinks in global markets?

2. The president of XYZ Manufacturing Company of Buffalo, New York, comes to you with a license offer from a company in Osaka. In return for sharing the company’s patents and know-how, the Japanese company will pay a license fee of 5percent of the ex-factory price of all products sold based on the U.S. company’s license. The president wants your advice what would you tell him?

International Financial ManagementPart One:Multiple choices:1. Foreign exchange market in India is relatively very:a. Bigb. Smallc. Mediumd. None of the above2. Balance of payment is a systematic record of all _______ during a given period of time.a. Political transactionsb. Social transactionsc. Economic transactionsd. None of the above3. Merchandise trade balance, services balance & balance on unilateral transfer are the part of________ accounta. Current accountb. Capital accountc. Official accountd. None of the above4. Interest rate swaps can be explained as an agreement between _________ partiesa. Oneb. Twoc. Threed. None of the above5. Capital account convertibility in India evolved in Augusta. 1996b. 1995c. 1994d. None of the above

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6. Interest rate parity is an economic concept, expressed as a basic algebraic identity that relatesa. Capital rate & interest rateb. Interest rate & exchange ratec. Currency rate & exchange rated. None of the above7. The two kind of swap in the forward market area. Forward & reverse swapb. Reverse swap & option swapc. Forward & option less swapd. Forward swap & option swap8. FEMA stands fora. Forward exchange marketb. Future exchange marketc. Foreign exchange management actd. None of the above9. Exchange rate quotation methods area. Direct and directb. Indirect and indirectc. Direct and indirectd. None of the above10. International Fisher effect or generalized version of the Fisher effect is a combination ofa. PPP theory and Fisher‟s open propositionb. Fisher‟s open and closed propositionc. PPP theory and Fisher‟s closed propositiond. None of the abovePart Two:1. Write a short note on „Interest Rate Parity System‟ for exchange rates.2. What are Direct & Indirect Quotes of exchange rates?3. What is „International Mutual Fund‟?4. Briefly describe „swaps in foreign exchanges markets‟.Case let 1Managing Exchange Rate RiskMahindra International (India) imported spares of an engine from a US manufacturer for $ 5,000 perannum at a price of $ 2.5 per piece. The average exchange rate during 2001-02 was Rs. 47.70/$. TheIndian company imported the spares also from a British manufacturer. In fact, it had diversified itsimport in view of reducing the risk associated with the supply. The import from the USA wascompetitive in view of the fact the same spares imported from the UK was slightly costlier. TheAmerican spares cost Rs. 119.25 per piece, while the British spares cost Rs. 120.00 per piece. In2002-03, US dollar appreciated to Rs. 48.40 with the result that the cost of American spares turnedhigher than the British spares. In the sequel of the appreciation of US dollar, the Indian importer cutits demand from 2,000 pieces to 500 pieces. The loss to the US exporter was colossal. But at the sametime, the Indian Importer suffered a lot. It had to pay a higher price for the US spares in terms ofrupee. And also, it had to divert its import from the USA to the UK insofar as the pound sterling didnot appreciate during this period. All this happened in the wake of the exchange rate changes.Questions:1. Mention the loss borne by the US exporter in the sequel of appreciation of dollar.2. What strategy the Indian importer needs to follow to hedge the exchange rate risk?Case let 2ABN Amro Bank and Correspondent Banking in IndiaABN AMRO bank has emerged as a major correspondent bank owing to a large network. InIndia, it operates in six major cities, viz. Baroda, Chennai, Kolkata, Mumbai, New Delhi andPune. Being a correspondence bank, its product offerings are found primarily in the area oftrade and clearing. It is doing well in these owing to strong tie-up with local Indian banksreaching 350 centres across the country. As a result, payments are effected speedily andeffectively.Cash Management

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The customized products in the area of cash management include cheques payable at par at all itsbranches across the country, apart from traditional collection services, such as collection ofoutstation/upcountry cheques drawn on other banks. ABN AMRO is a member of all major clearingcenters in the major financial centers. It has an electronic delivery system and structures multilateralnetting of cash.Trade ServicesUnder trade services, the Bank offers a comprehensive range of products, such as:1. LC reimbursement2. Indian rupee trade payments3. Handling documentary bills for collection4. Bills negotiation5. Letter of credit advising6. Letter of credit confirmation7. GuaranteesTreasury ServicesTreasury services at ABN AMRO Bank (India) are available round-the-clock. Rupee funding at itstreasury desk is provided at competitive rates along with advice on market trends and rates. Itprovides also advisory services on the request of financial institutions and corporate in the area ofregulatory, economic and financial matters including depository services.Questions:1. Describe the network of ABN AMRO Bank in India.2. What role does it play for global cash management?

1. Discuss the factors that affect foreign exchange market. Explain the different types of foreignexchange quotations.2. What do you mean by balance of payment? What are the key components of balance ofPaymentThis section consists of Multiple choice questions & Short Answer type questions.Answer all the questions.Part One questions carry 1 mark each & Part Two questions carry 5 marks each.Part One:Multiple choices:1. Beta is useful for comparing the relative _____________ of different stocks.a. Business riskb. Systematic riskc. Liquidity riskd. Country risk2. The price prevailing in market is calleda. Market securityb. Market valuec. Market priced. None of the above3. Line charts, Bar charts, Candles tic charts are the parts ofa. Fundamental analysisb. Technical analysisc. Company analysisd. None of the above4. A market portfolio is a portfolio consisting of a weighted __________ in the market.a. Sum of every equityb. Sum of every liabilitiesc. Sum of every assetsd. None of the above5. The date on the option contract is called the ___________a. Expiration dateb. Date of maturityc. Both a) & b)

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d. None of the aboveExamination Paper of Finance Management6IIBM Institute of Business Management6. A forward contract is an agreement made today between a ___________ to exchange thecommoditya. Buyer & buyerb. Buyer & sellerc. Seller & sellerd. None of the above7. Portfolio means a collection or combination of financial assets such asa. Sharesb. Debenturesc. Government securitiesd. All of the above8. CAPM is the abbreviation ofa. Capital Asset Pricing Measureb. Capital Average Pricing Modelc. Capital Asset Pricing Modeld. None of the above9. In India the secondary market for shares is regulated bya. RBIb. SEBIc. Company law boardd. There is no regulatory authority10. The risk of the whole market as measured by „Beta‟ isa. 1b. 0c. -1d. None of the abovePart Two:1. What does „β‟ (Beta) mean in risk management?2. Write a note on „options‟ & „future‟ derivatives.3. Define Capital market theory.4. Write a short note on CAPM.Case let 1TOUAX is a French company and is currently Europe‟s no. 1 in shipping containers and riverbarges, and no. 2 in modular building and freight railcars. The group provides operating leases tocustomers around the world, both on its own account and for third-party investors. On June 24, 2009,TOUAX announced that its capital increased by waiving preferential subscription rights but withpriority for existing shareholders, launched on 18 June 2009 for a total of E17, 851,519.76 (gross)through the issue of 936,596 new shares which were subscribed in the entirely. Following partialapplication of the extension clause, 952,747 shares were placed or 101.72% of the issue; totalproceeds were E18, 159,357.82.This rights issue has enabled the Group to strengthen its financial structure, to position itself withadvantage for possible acquisitions of tangible stock, and to grasp opportunities thrown up by thecrisis (purchase of shipping containers, modular buildings, river barges and railcars, for hiring out onmainly long-term leases). 370,062 new shares allotted under absolute entitlement were subscribed or39.51% of the total number of new shares issue. Another 555,685 shares were applied for subject tocutting back in the event of over subscription, and orders for these were all filled. Another 27,000shares had been applied for by the general public, and following partial application of the extensionclause it proved possible to fill orders for all of these.All the result of the right issue, TOUAX is well placed to respond to the boom in corporateoutsourcing of non-core assets, and every day provides over 5,000 customers with quick and flexibleleasing solutions. TOUAX is now listed on Euronext in Paris – NYSE Euronext Compartment C(ISIN Code FR0000033003), and features in the SBF 250 Index.

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Questions:1. After analyzing the case, do you think all the companies that can afford, should opt for rightissue to improve their financial status?2. What do you analyze as the two main advantages of the right issue?Case let 2In mid-February 1994, the British paper, the Sunday times ran on article that alleged that a 1 billionsterling ($ 750 M) sale of equipment by British companies to Malaysia was secured only after bribes hadbeen paid to Malaysian government officials and after the British overseas development administration(ODA) had agreed to approve a 234 million sterling grant to the Malaysian government for ahydroelectric dam of (according to the Sunday times) dubious economic value. The clear implication wasthat UK officials, in their enthusiasm to see British companies win a large defence contract, had yield topressures from “corrupt” Malaysian officials for bribes – both personal and in the form of the 234 millionsterling development grants.What happened next took everyone by surprise. The Malaysian government promptly announced a an onthe impact of all British goods and services into Malaysia and demanded an apology from BritishGovernment. Officially the ban applied only to government orders for British goods and services; theprivate sector was free to busy as it chose. However, British companies with experience in the regionwere nervous that the private sector would follow the government‟s lead in shunning British products. Atstake was as much as 4 billion sterling in British exports and construction activities in Malaysia and apresence in one of the world‟s fastest growing developing economies (Malaysia‟s economic growth hasaveraged 8% per annum since 1989). In announcing the ban, Malaysia‟s Prime Minister, Dr MahathirMohammad, noted that the British media portrays Malaysians as corrupt because “ They are not Britishand not white”…And “we believe the foreign media must learn the fact that developing countries,including a country led by brown Moslem, have the ability to manage their own affairs successfully”.The British government responded by stating, it could not tell the British press what and what not topublish, to which Dr Mahathir replied there would be “no contracts for British press freedom to tell lies”.At the same time, the British government came under attack from members of parliament in Britain, whosuspected the government acted unethically and approved the ODA hydroelectric grant to help Britishcompanies win orders in Malaysia.Questions:1. If you are the CEO of a British company that now faces the loss of a lucrative contract inMalaysia because of the dispute. What action should you take?2. How do you think British government should respond to the Malaysian action?1. What do you mean by risk management? Elaborate the various kinds of systematic and nonsystematicrisks.2. What do you mean by Portfolio management? What are the methods of calculating portfolioperformance evaluation?

International Marketing Management

1. International marketing includes activities that direct the flow of goods froma. One country to one countryb. One country to another countryc. One country to multiple countryd. All of the above2. ETC stands fora. Expert trading companiesb. Essential trading companiesc. Export trading companiesd. None of the above3. Till 1950-56 there was no clear exim policy and no _________ restrictions of any kinda. Importb. Exportc. Both a) & b)d. None of the above4. Tariffs have been one of the classical methods of regulating ________ trade

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a. Internationalb. Nationalc. Domesticd. None of the above5. The world trade organization (WTO) was established on 1st Januarya. 1996b. 1995c. 1997d. None of the aboveThis section consists of Multiple choice questions & Short Answer type questions.Answer all the questions.Part One questions carry 1 mark each & Part Two questions carry 5 marks each.Examination Paper of Marketing ManagementIIBM Institute of Business Management 26. Export documentation is a very important area in _______ managementa. Internationalb. Importc. Exportd. None of the above7. Methods of export pricing area. Cost plus pricingb. Competitive pricingc. Marginal pricingd. All of the above8. OCED has been a destination of a major portion of _______ exportsa. Japanb. USAc. Indiad. UK9. Psychographic segmentation involves grouping people in terms ofa. Attitudesb. Life stylesc. Valuesd. All of the above10. Foreign direct investment would be permitted up to ________ in the development of thezonesa. 100%b. 90%c. 38%d. 48%Part Two:1. Differentiate between domestic & international marketing.2. Write a short note on World trade organization (WTO).3. Briefly describe the exim policy of India (one part of India‟s export import policy).4. Write a short note on tariff and non tariff barriers of international trade.Case let 1Export Marketing:The trade in black pepper is unhappy that exports may not show a sign of revival in prices in theimmediate future. World prices have been showing a downward trend for eighteen months and thishas resulted in much lower earnings for exporters. The UK, West Germany and the Netherlands havecut their import requirement though the American demand has shown some growth. Brazil has beenresorting to aggressive selling at lower prices and the expectations are that its exports will reach anall-time peak of 32,000 tones in the 1981-82 season. The 1981-82 Indian season is only about sixweeks away. The Brazilian offensive has forced India to withdraw so to any from the US and WestEuropean markets and increase its reliance on communist buyers. As many as 1980-81.the SovietUnion alone accounting for 12,647 tones. But exporters are concerned at the diversion on such a scale

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of this trade.Questions:1. Had you been the pepper exporter, what would be your short term and medium-term exportmarketing strategy in the above environment?2. Could you examine the weak points in this case study?Case let 2SMART KIDS – SELLING EDUCATIONAL GAMES ANDRESOURCES TO THE WORLDSmart Kids Ltd. An Auckland company that makes educational games and resources to read andunderstand math‟s has won a Trade New Zealand Export Award for its success in internationalmarkets in 2003.Established eight years ago in the family home basement, Smart Kids is led byhusband and wife team, joint chief executives David and Sun Milne and their sons Duncan and Frase.She Milne, an ex-teacher, says from just 30 products when it started, the company produces morethan 200 produces catering for student‟s activities, grammar concepts and numeracy. She says theinternational appeal of Smart Kids products was highlighted recently, when company‟s SMARTPHONICS was listed amongst the top five products out of almost 100 in the education trade show inthe United Kingdom. The key requirement for every new Smart Kids products is that it stimulatesstudent‟s minds in the classroom, teaches them a specific concept easily, enjoyably and permanentlyand enables problem solving. David Milne says Smart Kids started selling its educational games andExamination Paper of Marketing ManagementIIBM Institute of Business Management 4resources to New Zealand schools in 1995, drawings an immediate and strong response. It quicklybecame apartment that the New Zealand market was not large enough to sustain considerableinvestment in product development, and secondly, that their products have done so well that theydeserved wider exposure.”Our export research came down to two options. Find educationaldistributors in other countries or set-up our own operations. The first option was less risky and easy tomanage but it meant that Smart Kids products were lost in a wide range of materials. So we went forthe second option and over the next few years established offices in Australia, in UK and Canada”.This has successfully branded Smart Kids as a leading supplier of educational resources in thesecountries. Mr. Milne says the Smart Kids product catalogue is now sent regularly to teachers in morethan 50,000 schools across the UK, Ireland, Canada and Australia. “We also sell to schools in the US.In that market we elected to work through a distributor, we didn‟t have the financial resources to setupan operation that could cover almost 70,000 schools and compete with every establishededucational publisher”. He says annual exports now exceed $2.2 million and account for more than90% of turnover. In order to grow the business, surplus profits are reinvested back into productdevelopment, infrastructure – the company recently moved its Auckland operation into new 20,000square feet premises in Ellerslie. Mr. Milne says the Smart Kids brand is now well establishedinternationally with the company enjoying many competitive advantages, including its New Zealandorigin. New Zealand education is highly regarded overseas and we find that international teachers toget hold of educational products made in this country.Questions:1. What are the major considerations for a firm in order to while deciding its markets entrystrategy?2. To what extent direct control and ownership are critical for Smart kids export distributionstrategy?1. What do mean by International marketing? Discuss the scope of International marketing.2. Describe the export documentation framework in India in detail.Research MethodologyThis section consists of Multiple choice questions & Short Answer type questions.Answer all the questions.Part One questions carry 1 marks each & Part Two questions carry 5 marks each.Part One:Multiple Choices:1. Research is an art of _________ investigationa. Technologicalb. Scientific

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c. Politicald. None of the above2. Exploratory research is flexible and very ________ researcha. Variableb. Visualsc. Versatiled. None of the above3. Frame error, chance error and response error are collectively calleda. Total errorb. Non sampling errorc. Sampling errord. Universal error4. Hypothesis testing is sometimes called _________ analysisa. Exploratory datab. Confirmatory datac. Experimental datad. Both a) & b)5. Execution of the project is a very important step in the ________ processa. Questionsb. Identificationc. Researchd. None of the aboveExamination Paper of Marketing ManagementIIBM Institute of Business Management 66. Thurstone scale is also known as _________ scalea. Equal appearing intervalb. Equal alternatives intervalc. Equal alternatives itemd. None of the above7. A ratio in which the units of numerator & denominator are not the same is termed as aa. Classb. Ratec. Datad. None of the above8. ANOVA stands fora. Analysis of automobilesb. Analysis of variablec. Analysis of varianced. None of the above9. One tailed & two tailed test are the part of _________ testa. Nullb. Hypothesisc. Alternatived. None of the above10. Chi – square is an important ______ testa. Parametricb. Probabilityc. Non – parametricd. None the abovePart Two:1. What is „Sequential sampling‟?2. Write a short note on „nominal scale‟.3. Write a note on „Z – Test‟. (One of the parametric test for hypothesis).4. What are the cautions to be taken on χ2 (chi square) test?Case let 1Swastika Computer System was established in 1981 at Delhi to provide computer training. In 1980s

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computer education was relatively new in India. Personal computers 286 existed and MS DOS wasthe operating system. Languages like Basic, Pascal, COBOL, FORTRAN were used in programming.Swastika Computer Systems was established with their support departments namely computerassembly, faculty training and computer servicing department. In the first financial year, it recorded aturnover of Rs 11.5 lakhs. Within a few years of its existence, Swastik Computer System opened itsbranches in eight major cities of India and had a gross annual turnover of Rs 86 lakhs. Theorganization was highly centralized. The head office at Delhi handled all accounts, recruitment, andplacement of students and servicing of computers. The Bhopal branch of Swastik Computer Systemswas set up in May 1987. The branch was headed by a dynamic branch manager Hemant Gupta. Hewas a BSc in computers and had previously worked in the data processing department of amanufacturing concern. To establish the Bhopal branch, Hemant Gupta realized the need for makingSwastik Computer Systems, Bhopal known to the younger generation. With this in mind heintroduced some innovative promotional schemes like offering scholarships to students doing well inthe intelligence tests administered by the branch, giving personal computers to students to depositterm fees at their convenience. Hemant Gupta also ensured that teaching standards were high andcomputers at the branch were well maintained, so a student once enrolled felt that he had made theright decision by joining Swastik Computer Systems. He also made himself available from 8.00 am to7.00 p.m at the branch. Students were free to go to him with their problems, which he took pains tosolve. Soon Swastik Computer Systems was one of the leading computer training centres in Bhopal.As the Bhopal branch prospered, the head office at Delhi started taking an active interest in therunning of this branch. The Regional Manager who visited Bhopal once a month started makingfrequent visits. During one of his visits, his attention was drawn to rumors that branch funds werebeing misappropriated. When the Regional Manager informed the Delhi office about the rumor, ateam was sent to the Bhopal Branch to look into the matter. On investigation, the term was convincedthat the rumors had some truth in them. It was found that a larger number of students attended theclasses than were enrolled. It was felt that this fraud was not possible without the consent of HemantGupta, and without any further inquiry a decision was taken to remove him forthwith. Amit Vermawho was a senior faculty at Swastik Computer Systems, Delhi was asked to take over the Bhopalbranch as Manager. He was an MCA and had been associated with the organization since itsinception. Amit Verma‟s appointment at Bhopal was welcomed at the Bhopal branch by both, staffand faculty as he had the reputation of being an easy going person. After he joined the Bhopal, it wasobserved that Amit Verma, although academically sound, was not an effective administrator. Hisapproach towards staff and faculty was lenient. He was not particular about punctuality and was notExamination Paper of Marketing ManagementIIBM Institute of Business Management 8available during office hours. This had an adverse effect on faculty in general and classes inparticular. Not only did classes suffer but even administrative work was affected. Monthly reports tothe head office were not sent on time, as a result requisitions for computer servicing, reading materialand funds were unduly delayed. Due to lack of maintenance, computer breakdowns became common,students did not receive their reading material on time and payment of building rent, and telephonebills etc were unnecessarily delayed. The symptoms of deterioration at the Bhopal branch wereobvious. The branch which had an annual turnover of Rs 30.7 lakhs fell to Rs. 4 lakhs. Asenrollments decreased the head office at Delhi started feeling the pinch. It started delaying transfer offunds to the Bhopal branch. As a result faculty salaries were unduly delayed. The faculty startedleaving for greener pastures.Worried by the number of faculty turnover, the head office started a practice of recruiting onlythose faculties willing to sign a bond of 3 years. The organization started a practice of taking a depositof Rupees 5000 from the joining faculty, which would be refunded after 3 years. In case the facultyleft before this duration, the deposit stood forfeited. This policy further reduced the quality of facultyjoining Swastik Computer Systems, Bhopal.Questions:1. What according to you went wrong at the Bhopal branch?2. What can be done to revive the Bhopal branch?Case let 2Mind tree which was founded in 1999 in India by a group of IT professionals who wanted to chart asomewhat distinctive path. Today, it has a top line of $269 million and is rated as one of the most

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promising mid-sized IT services companies. Creditable as that is, Mind Tree does not want to be justthat. There is an element of serendipity about what it has been doing over the last year. In 2008, itdesignated one of its founders Subroto Bagchi „Gardener‟, a gimmicky signal, intended to declarethat he was moving out of the day-to-day running of the company to nurture talent which would runthe company in the future. He has now a report card ready on a year as gardener. During this oneyear, he has also spent around 45 days travelling round the world talking to clients and prospectiveones which has yield remarkable insights into what firms are doing in these traumatic times. Lastly,Mind Tree as a whole has spent the last year going through the exercise of redefining its missionstatement and vision for the next five years. Quite fortuitously these processes have come togetherwith a unifying thread, presenting a coherent big picture. Mind Tree wants to seed the future whilestill young, and executive chairman Ashok Soota has declared that by 2020, it will be led by a nonfounder.So a year ago the gardener Bagchi set out to “touch” 100 top people in the organization,with a goal of doing 50 in a year so as to eventually identify the top 20 by 2015. From among themwill emerge not just the leader but a team of ten who would eventually, as group heads, deliver $200million of turnover each. That will give a turnover of $2 billion. To put it in perspective, one oneVC-funded company, which has not closed or been bought over, has been able to get to $2 billionand that is Google. But to get there it has to periodically redefine its mission (why we exist) and itsvision – measurable goals for the next five years. Its redefined mission is built around “successfulExamination Paper of Marketing Managementcustomers, happy people, and innovative solution”. Its new vision targets a turnover of $1 billion by2014. It wants to be among the globally 20 most profitable IT services companies and also amongthe 20 globally most admired ones. Admired in terms of customer satisfaction (pay for the course),people practices (creditable), knowledge management (exciting) and corporate governance (theEnron-Satyam effect). The really interesting bit about Mind Tree in the last one year is what Bagchihas been up to. He has been embedding himself in the 50 lives, working in a personal privatecontinuum, making it a rich learning process “which has helped connect so many dots.” Of thehundred who will be engaged, may be 50 will leave, of them 25 may better themselves onlymarginally, and from the remaining 25 ten will emerge who will carry the company forward.Questions:1. What do you analyse as the main reason behind the success of Mind tree?2. Do you think that redefining the mission statement shows the lacunae on the part of thefounder members of an organization? Why?1. What are the various methods of collecting statistical data? Explain in brief their merits anddemerits.2. What do mean by Research design. What are basic types of research design?

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IIBM Institute of Business Management Examination Paper MM.100 Financial Services Section A: Objective Type (30 marks) This section consists of Multiple Choice questions & Short Answer type questions. Answer all the questions. Part One questions carries 1 mark each & Part Two questions carries 5 marks each.

Part One: Multiple Choices: 1. NBFS stands for …………………………………………………………………………

2. ALCO is a decision making unit responsible for balance sheet planning from risk return perspective. (T/F)

3. A contract of ‘Indemnity’ is one whereby a. A person tries to use the other’s property b. A person promises to save the other’s property from loss caused. c. A person tries to trick the property of other for some other person. d. None 4. The transaction between the lassor and the lessee being a demand sale is called a. First sale b. Second sale c. Third sale d. Fourth sale 5. If the net present value of leasing be ‘a’ and net advantage of leasing be ‘b’ then decision criterion is given by a. a/b b. a+b c. b/a d. a-b 6. Break even lease rental BERL has NAL value equal to a. 1 b. 2 c. 0 d. 0.5 7. The right under which an unpaid seller who is in possession of the goods is entitled to retain them until payment of the price is done is termed as ……………………………………… Examination Paper of Banking & Financial Services Management 6 IIBM Institute of Business Management

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8. If the no of level investments be ‘t’, total no of level installments be ‘n’ and total charge for credit be ‘c’ then the interest rebate is given by………………………………………… 9. The practice of discounting accommodation bills is known as ……………………….. 10. HUDCO stands for ……………………………………………………………………………………………………… Part Two: 1. What do you understand by “Lock-in period”.

2. Write a short note “Hybrid Debt Capital Instruments”.

3. What do you understand by “Bipartite Lease”.

4. What is “Suit for Quantum Meruit”?

END OF SECTION A Section B: Caselets (40 marks) This section consists of Caselets. Answer all the questions. Each caselet carries 20 marks. Detailed information should form the part of your answer (Word limit 200 to 250 words).

Caselet 1 Sunlight Industries Ltd manages its accounts receivables internally by its sales and credit department. The cost of sales ledger administration stands at Rs 9 crore annually. It supplies chemicals to heavy industries. These chemicals are used as raw material for further use of are directly sold to industrial units for consumption. There is good demand for both the types of uses. For the direct consumers, the company has a credit policy of 2/10, net 30. Past experience of the company has been that on average 40 per cent of the customers avail of the discount while the balance of the receivables are collected on average 75 days after the invoice date. Sunlight Industries also has small dealer networks that sell the chemicals. Bad debts of the company are currently 1.5 per cent of total sales. Sunlight Industries finances its investment in debtors through a mix of bank credit and own long-term funds in the ratio of 60:40. The current cost of bank credit and long-term funds are 12 per cent and 15 per cent respectively. There has been a consistent rise in the sales of the company due to its proactive measures in cost reduction and maintaining good relations with dealers and customers. The projected sales for the next year are Rs 800 crore, up 15 per cent from last year. Gross profiles have been maintained at a healthy 22 per cent over the years and are expected to continue in future. With escalating cost associated with the in-house management of debtors coupled with the need to unburden the management with the task so as to focus on sales promotion, the CEO of Sunlight Industries is examining the possibility of outsourcing its factoring service for managing its Examination Paper of Banking & Financial Services Management 7 IIBM Institute of Business Management

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receivables. He assigns the responsibility of Anita Guha, the CFO of Sunlight. Two proposals, the details of which are given below, are available for Anita’s consideration. Proposal from Canbank Factors Ltd: The main elements of the proposal are: (i) Guaranteed payment within 30 days (i) Advance, 88 per cent and 84 per cent for the resource and non-recourse arrangements respectively (iii) discount charge in advance, 21 per cent for with resource and 22 per cent without resource (iv) Commission, 4.5 per cent without resources 2.5 per cent and with resource. Proposal from Indbank Factors: (i) Guaranteed payment within 30 days (ii) Advance, 84 per cent with resource and 80 per cent without resource (iii) Discount charge upfront, without resource 21 per cent and with resource, 20 per cent and (iv) Commission upfront, without resource 3.6 per cent and with resource 1.8 per cent. The opinion of the Chief Marketing Manager is that in the context of the factoring arrangement, his staff would be able to exclusively focus on sales promotion which would result in additional sales of Rs 75 crore. Required The CFO of Sunlight Industries seeks your advice as a financial consultants on the alternative proposals. What advice would you give? Why? Calculations can be upto one digit only. Caselet 2 Following are the financial statements for A Ltd and T Ltd for the current financial year. Both firms operate in the same industry. BALANCE SHEETS Particulars Firm A Firm B Total current assets Rs 14,00,000 Rs 10,00,000 Total fixed assets (net) 10,00,000 5,00,000 _____________ __________ Total assets 24,00,000 15,00,000 _____________ ___________ Equity capital (of Rs 10 each) 10,00,000 8,00,000 Retained earnings 2,00,000 _ 14% Long-term debt 5,00,000 3,00,000 Total current liabilities 7,00,000 4,00,000 _____________ ___________ 24,00,000 15,00,000

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