GC-14: Enterprise Performance Management

(2019 Pattern) (Semester-IV) (401)

Time : 2½ Hours] [Max. Marks : 50
Instructions to the candidates :
1) All questions are compulsory.
2) Each question carries 10 marks.

Q1) Answer the following. ( any 5 out of 8) (2 marks each) :

a) Define enterprise performance management.
b) Define responsibility centre.
c) Give the types of responsibility centres.
d) Define transfer price.
e) Give the different methods of transfer pricing.
f) State performance evaluation parameters for projects.
g) What is Management Audit?
h) State performance evaluation parameters for non-profit organizations.

a) Define enterprise performance management.

Enterprise performance management (EPM) is a holistic approach to

managing an organization's performance. It includes the processes, systems,
and metrics used to measure, monitor, and improve performance across the
organization. EPM typically includes financial, operational, and strategic
performance measures.

b) Define responsibility centre.

A responsibility centre is a unit within an organization that is responsible for

its own performance. Responsibility centres are typically used to measure and
evaluate the performance of managers and employees. There are three main
types of responsibility centres:
• Cost centres: Cost centres are responsible for the costs incurred in their
area of responsibility.
• Revenue centres: Revenue centres are responsible for generating
revenue in their area of responsibility.
• Profit centres: Profit centres are responsible for both generating revenue
and incurring costs.
 c) Give the types of responsibility centres.

There are three main types of responsibility centres:

• Cost centres: Cost centres are responsible for the costs incurred in their
area of responsibility. They are typically evaluated on the basis of their
ability to control costs.
• Revenue centres: Revenue centres are responsible for generating
revenue in their area of responsibility. They are typically evaluated on
the basis of their ability to generate revenue.
• Profit centres: Profit centres are responsible for both generating revenue
and incurring costs. They are typically evaluated on the basis of their
ability to generate profit.

d) Define transfer price.

A transfer price is the price charged when goods or services are transferred
between different parts of an organization. Transfer prices are important
because they can affect the profitability of different parts of the organization.

e) Give the different methods of transfer pricing.

There are three main methods of transfer pricing:

• Market-based transfer pricing: Market-based transfer pricing uses the
market price of goods or services as the transfer price. This is the most
accurate method of transfer pricing, but it may not be feasible if there is
no active market for the goods or services being transferred.
• Cost-based transfer pricing: Cost-based transfer pricing uses the cost of
goods or services as the transfer price. This is a simpler method of
transfer pricing, but it may not be accurate if the costs of goods or
services are not directly comparable.
• Negotiated transfer pricing: Negotiated transfer pricing is the most
common method of transfer pricing. In this method, the transfer price is
negotiated between the different parts of the organization. This method
is flexible, but it can be time-consuming and may lead to disputes.

f) State performance evaluation parameters for projects.

The performance evaluation parameters for projects typically include:

• Time: The project should be completed on time.
• Cost: The project should be completed within budget.
• Scope: The project should meet the agreed-upon scope.
• Quality: The project should meet the agreed-upon quality standards.
• Customer satisfaction: The project should meet the customer's
satisfaction requirements.
 g) What is Management Audit?

Management audit is a systematic review of an organization's management

processes and systems. It is designed to assess the effectiveness of the
organization's management and to identify areas for improvement.
Management audit can be conducted internally or externally.

h) State performance evaluation parameters for non-profit organizations.

The performance evaluation parameters for non-profit organizations typically
include:
• Mission: The non-profit organization should be achieving its mission.
• Programs: The non-profit organization's programs should be effective
in achieving their objectives.
• Financial performance: The non-profit organization should be
financially sound.
• Governance: The non-profit organization should have effective
governance structures.
• Impact: The non-profit organization should be making a positive impact
on the community.

Q2) Answer the following. ( any 2 out of 3) (5 marks each) :

a) Describe the process of Capital Budgeting.

Capital budgeting is the process of evaluating and selecting long-term investments.
It is a critical decision-making process for businesses because it determines how
the business will allocate its resources.
The capital budgeting process typically includes the following steps:
1. Identifying investment opportunities: The first step is to identify potential
investment opportunities. This can be done by looking at market trends,
technological developments, and the company's strategic goals.
2. Evaluating investment opportunities: Once potential investment
opportunities have been identified, they need to be evaluated. This involves
estimating the costs and benefits of each investment and determining the
expected return on investment (ROI).
3. Making investment decisions: The final step is to make investment
decisions. This involves selecting the investments that have the highest ROI
and that are aligned with the company's strategic goals.

b) Explain various methods used to evaluate performance of investment centres.

There are a number of methods used to evaluate the performance of investment
centres. These methods typically fall into two categories:
• Financial methods: Financial methods use financial metrics to evaluate the
performance of investment centres. These metrics typically include return on
investment (ROI), return on assets (ROA), and profit margin.
• Non-financial methods: Non-financial methods use non-financial metrics to
evaluate the performance of investment centres. These metrics typically
include customer satisfaction, employee satisfaction, and product quality.
Some of the most common financial methods used to evaluate investment centres
include:
• Return on investment (ROI): ROI is a measure of the return on an
investment. It is calculated by dividing the net profit by the investment cost.
• Return on assets (ROA): ROA is a measure of the return on the assets of an
investment centre. It is calculated by dividing the net profit by the total
assets.
• Profit margin: Profit margin is a measure of the profit generated by an
investment centre as a percentage of sales. It is calculated by dividing the net
profit by sales.
Some of the most common non-financial methods used to evaluate investment
centres include:
• Customer satisfaction: Customer satisfaction is a measure of how satisfied
customers are with the products or services of an investment centre. It is
typically measured through surveys or interviews.
• Employee satisfaction: Employee satisfaction is a measure of how satisfied
employees are with their jobs at an investment centre. It is typically
measured through surveys or interviews.
• Product quality: Product quality is a measure of the quality of the products or
services produced by an investment centre. It is typically measured through
quality control tests or customer complaints.
The choice of method used to evaluate investment centres will depend on the
specific goals of the business. For example, a business that is focused on
maximizing profits may use financial methods, while a business that is focused on
customer satisfaction may use non-financial methods.

c) Discuss Malcolm Baldrige Framework with reference to 7 criteria.

The Malcolm Baldrige National Quality Award (MBNQA) is a prestigious award

given to organizations that demonstrate excellence in business performance. The
award is based on the Malcolm Baldrige Framework, which is a set of seven
criteria that organizations can use to assess and improve their performance.
The seven criteria of the Malcolm Baldrige Framework are:
1. Leadership: How the organization's leaders set the organization's vision and
values, create a customer-focused culture, and drive organizational
performance.
2. Strategy: How the organization sets its strategic direction, aligns its
resources, and measures its progress.
3. Customer focus: How the organization understands customer needs, creates
customer value, and builds relationships with customers.
4. Measurement, analysis, and knowledge management: How the organization
collects, analyzes, and uses data to improve its performance.
5. Workforce focus: How the organization engages, develops, and retains its
workforce.
6. Process management: How the organization designs, manages, and improves
its processes.
7. Results: How the organization's performance measures up to its goals and
objectives.
The Malcolm Baldrige Framework is a comprehensive and holistic approach to
organizational performance improvement. It can be used by organizations of all
sizes and in all industries. The framework has been used by thousands of
organizations around the world to improve their performance and achieve their
goals.
Here are some of the benefits of using the Malcolm Baldrige Framework:
• Improved performance: Organizations that use the Malcolm Baldrige
Framework typically see improvements in their performance in areas such as
customer satisfaction, employee satisfaction, and financial performance.
• Increased innovation: The Malcolm Baldrige Framework can help
organizations to become more innovative by encouraging them to collect and
analyze data, to experiment with new ideas, and to learn from their mistakes.
• Enhanced reputation: Organizations that win the Malcolm Baldrige National
Quality Award or that achieve a high score on the assessment process gain a
competitive advantage and enhanced reputation.
If you are interested in learning more about the Malcolm Baldrige Framework, you
can visit the website of the National Institute of Standards and Technology (NIST).
NIST is the organization that administers the Malcolm Baldrige National Quality
Award program.

Q3) Answer the following.

a) Explain performance evaluation parameters for banks.

Here are some of the performance evaluation parameters for banks:

• Profitability: Profitability is a key performance indicator for banks. It is

measured by the return on equity (ROE) and the return on assets (ROA).

• Liquidity: Liquidity is the ability of a bank to meet its short-term obligations.

 It is measured by the current ratio and the quick ratio.

• Capital adequacy: Capital adequacy is the amount of capital a bank has

relative to its risk. It is measured by the capital adequacy ratio.

• Risk management: Risk management is the process of identifying, assessing,

and mitigating risks. It is important for banks to have a strong risk
management framework in place.

• Compliance: Compliance is the adherence to laws and regulations. It is

important for banks to comply with all applicable laws and regulations.

• Customer satisfaction: Customer satisfaction is a measure of how satisfied

customers are with the services provided by the bank. It is typically
measured through surveys or interviews.

• Employee satisfaction: Employee satisfaction is a measure of how satisfied

employees are with their jobs at the bank. It is typically measured through
surveys or interviews.

These are just some of the performance evaluation parameters for banks. The
specific parameters that are used will vary depending on the bank's size, location,
and business model.

Here are some additional performance evaluation parameters for banks:

• Non-performing loans: Non-performing loans are loans that are not being
repaid by borrowers. They can be a significant risk for banks.

• Provisions for loan losses: Provisions for loan losses are reserves that banks
set aside to cover potential loan losses. They are an important measure of a
bank's financial health.

• Asset quality: Asset quality is a measure of the quality of a bank's assets. It is

important for banks to have high-quality assets because they are less likely to
lose value.

• Earnings quality: Earnings quality is a measure of the sustainability of a

bank's earnings. It is important for banks to have high-quality earnings
because they are less likely to be volatile.

• Risk-weighted assets: Risk-weighted assets are a measure of the risks that a

bank is exposed to. They are used to calculate the capital adequacy ratio.

Performance evaluation is an important process for banks. It helps banks to track

their performance, identify areas for improvement, and make strategic decisions.

OR

b) Write a brief outline on various KPIs used by E Commerce industry.

Here are some of the key performance indicators (KPIs) used by the e-commerce
industry:
• ** Website traffic: This is the number of visitors to a website. It can be
measured by the number of unique visitors, the number of page views, or the
amount of time spent on the website.
• ** Conversion rate: This is the percentage of website visitors who take a
desired action, such as making a purchase or signing up for a newsletter. It
can be calculated by dividing the number of conversions by the number of
visitors.
• ** Average order value: This is the average amount of money spent by a
customer on a single order. It can be calculated by dividing the total sales by
the number of orders.
• ** Customer lifetime value: This is the total amount of money that a
customer is expected to spend with a company over their lifetime. It can be
calculated by multiplying the average order value by the number of repeat
purchases.
• ** Churn rate: This is the percentage of customers who stop doing business
with a company. It can be calculated by dividing the number of customers
who churn by the total number of customers.
• ** Return on ad spend: This is the amount of money that a company makes
from advertising, divided by the amount of money that they spend on
advertising. It can be calculated by dividing the total sales from advertising
by the total advertising spend.
• ** Net promoter score: This is a measure of customer loyalty. It is calculated
by asking customers how likely they are to recommend a company to a
friend or colleague.
These are just some of the KPIs used by the e-commerce industry. The specific
KPIs that are used will vary depending on the company's goals and objectives.
Here are some additional KPIs that are used by the e-commerce industry:
• ** Search engine optimization (SEO): This is the process of optimizing a
website so that it ranks higher in search engine results pages (SERPs).
• ** Pay-per-click (PPC) advertising: This is a type of online advertising
where businesses pay a fee each time someone clicks on their ad.
• ** Social media marketing: This is the use of social media platforms to
promote a company's products or services.
• ** Email marketing: This is the use of email to send promotional messages
to customers.
• ** Customer support: This is the process of providing assistance to
customers with their questions or problems.
Performance evaluation is an important process for e-commerce businesses. It
helps businesses to track their performance, identify areas for improvement, and
make strategic decisions.

Q4) Answer the following.

a) Compare and contrast Engineered and Discretionary cost centre?

Here is a comparison of engineered and discretionary cost centers:
Characteristic Engineered cost center
Definition A cost center in which the costs
are directly linked to the output
of the center.
Examples Production, manufacturing, and
distribution.
Measurement The costs of engineered cost
centers are typically measured in
terms of units produced or hours
worked.
Control The costs of engineered cost
centers are typically controlled
by setting standards for output
and then tracking actual output
against those standards.
Benefits Engineered cost centers can help
to improve efficiency by
ensuring that costs are only
incurred when necessary.
Drawbacks Engineered cost centers can be
inflexible, as they may not be
able to adapt to changes in
demand.
Discretionary cost center
A cost center in which the
costs are not directly linked to
the output of the center.
Marketing, sales, and
administration.
The costs of discretionary cost
centers are typically measured
in terms of budgets or
spending levels.
The costs of discretionary cost
centers are typically controlled
by setting budgets and then
monitoring spending against
those budgets.
Discretionary cost centers can
help to improve flexibility by
allowing managers to make
decisions about how to spend
money.
Discretionary cost centers can
be wasteful, as managers may
spend money on unnecessary
activities.

In general, engineered cost centers are more suitable for activities that are directly
linked to the production of goods or services, while discretionary cost centers are
more suitable for activities that are not directly linked to the production of goods or
services.

Here are some additional points to consider when comparing engineered and
discretionary cost centers:

• Engineered cost centers are typically more efficient than discretionary cost
centers. This is because the costs of engineered cost centers are directly
linked to the output of the center, so managers can easily track and control
costs.
• Discretionary cost centers are typically more flexible than engineered cost
centers. This is because managers have more discretion over how to spend
money in discretionary cost centers, so they can adapt to changes in demand
more easily.
• Engineered cost centers are typically more predictable than discretionary
cost centers. This is because the costs of engineered cost centers are more
likely to be stable, while the costs of discretionary cost centers can be more
volatile.
The best type of cost center for a particular activity will depend on the specific
circumstances. However, in general, engineered cost centers are a good choice for
activities that are directly linked to the production of goods or services, while
discretionary cost centers are a good choice for activities that are not directly linked
to the production of goods or services.

OR

b) ABC Company fixes the inter-divisional transfer price for its products on
the basis of cost plus return on investment in the division. The budget for
the division A for 2021-22 is as under:

1) Fixed assets - 2,50,000

2) Current assets - 1,50,000

3) Debtors - 1,00,000

4) Annual fixed cost of division - 4,00,000

5) Variable cost per unit of product - 10

6) Budgeted volume - 2,00,000 units per year

7) Desired ROI - 28%

i) Determine the transfer price for division A.

ii) If the volume (units) can be increased by 10%, what will be the
impact of transfer prices.

i) Determine the transfer price for division A.

The transfer price for division A is calculated using the following formula:

Transfer price = Cost + ROI * Total assets

In this case, the cost is equal to the variable cost per unit multiplied by the
budgeted volume, or 10 * 200,000 = 2,000,000.

The total assets are equal to the fixed assets plus the current assets plus the debtors,
or 2,50,000 + 1,50,000 + 1,00,000 = 5,00,000.

The desired ROI is 28%.

Therefore, the transfer price is equal to 2,000,000 + 28/100 * 5,00,000 = 3,10,000.

ii) If the volume (units) can be increased by 10%, what will be the impact of
transfer prices.

If the volume (units) can be increased by 10%, the transfer price will increase by
10%.

The new transfer price will be equal to 3,10,000 * 1.1 = 3,41,000.

Here is the calculation of the new transfer price:

New transfer price = Cost + ROI * Total assets

In this case, the cost is equal to the variable cost per unit multiplied by the new
budgeted volume, or 10 * 220,000 = 2,200,000.

The total assets are the same as before, or 5,00,000.

The desired ROI is the same as before, or 28%.

Therefore, the new transfer price is equal to 2,200,000 + 28/100 * 5,00,000 =

3,41,000.

Q5) Answer the following.

a) Create a balanced scorecard for an engineering/construction company.
Make assumptions for strategic objectives of the company.
Sure, here is a balanced scorecard for an engineering/construction company:
Perspective Strategic Objective Metrics Goals
Financial Increase shareholder Net income 10% year-
value over-year
growth
Customer Deliver high-quality Customer 90%
products and services satisfaction score
Internal Improve operational Time to market 6 months
Processes efficiency
Learning and Attract and retain top Employee 10%
Growth talent turnover rate
Assumptions:
• The company is a mid-sized engineering/construction company with annual
 revenue of 100 million rupees.
• The company's target market is the commercial and industrial sector.
• The company's competitive advantage is its ability to deliver high-quality
products and services on time and within budget.
Notes:
• This balanced scorecard is for illustrative purposes only.
• The actual metrics and goals for an engineering/construction company will
vary depending on the specific business.
• The assumptions made in this balanced scorecard may not be accurate in
the future.
Here are some additional strategic objectives that an engineering/construction
company could have:
• Increase market share
• Expand into new geographic markets
• Develop new products and services
• Improve safety performance
• Reduce environmental impact
These strategic objectives could be further broken down into specific goals and
metrics. For example, the strategic objective of "increasing market share" could
be broken down into the following goals and metrics:
• Increase the number of new customers by 10% year-over-year.
• Increase the company's share of the commercial construction market by 5%
year-over-year.
• Increase the company's share of the industrial construction market by 3%
year-over-year.
The balanced scorecard is a powerful tool that can help engineering/construction
companies to track their performance and achieve their strategic objectives. By
carefully selecting the right metrics and goals, companies can use the balanced
scorecard to measure their progress and make necessary adjustments to their
strategies.
OR

b) Develop a dashboard for measuring and evaluating performance of a

retail store in. Make necessary assumptions if required.

Here is a dashboard for measuring and evaluating the performance of a retail

store:
Dashboard Name: Retail Store Performance Dashboard
Date: 2023-07-20
Metrics:
• Total Sales (in rupees)
• Average Transaction Value (in rupees)
• Customer Retention Rate (%)
• Inventory Turnover (times per year)
• Return on Investment (ROI) (%)
Goals:
• Increase total sales by 10% year-over-year.
• Increase average transaction value by 5% year-over-year.
• Improve customer retention rate to 80%.
• Reduce inventory turnover to 6 times per year.
• Increase ROI to 15%.
Current Performance:
• Total Sales: 100,000 rupees
• Average Transaction Value: 500 rupees
• Customer Retention Rate: 75%
• Inventory Turnover: 8 times per year
• ROI: 12%
Analysis:
• Total sales are on track to meet the goal of increasing by 10% year-over-
year.
• Average transaction value is below the goal of increasing by 5% year-over-
year.
• Customer retention rate is above the goal of improving to 80%.
• Inventory turnover is above the goal of reducing to 6 times per year.
• ROI is below the goal of increasing to 15%.
Recommendations:
• Focus on increasing average transaction value by offering promotions,
bundling products, or upselling.
• Improve inventory management by reducing the amount of deadstock and
increasing the amount of fast-moving inventory.
• Invest in marketing and advertising to attract new customers and increase
brand awareness.
Conclusion:
The retail store is performing well overall, but there are some areas where
improvement is needed. By focusing on increasing average transaction value,
improving inventory management, and investing in marketing and advertising, the
store can reach its full potential.
Assumptions:
• The data used in this dashboard is hypothetical.
• The goals and recommendations are based on the current performance of
the retail store.
• The assumptions made in this dashboard may not be accurate in the future.
Notes:
• This dashboard is for illustrative purposes only.
• The actual metrics and goals for a retail store will vary depending on the
specific business.
• The recommendations made in this dashboard should be customized to the
specific needs of the retail store.

  
 GC - 15 : INDIAN ETHOS & BUSINESS ETHICS
(2019 Pattern) (Semester - IV) (402)

Time : 2½ Hours] [Max. Marks : 50

Instructions to the candidates:
1) All questions are compulsory.
2) Each question carry equal marks.
3) Every question has internal choice.

Q1) Define any Five:

a) Indian Ethos.

b) Business Ethics.
c) IPR.

d) CSR.

e) Work Ethos.

f) PLUS Model.

g) Corporate strategy.
h) Social Media.

a) Indian Ethos

Indian ethos refers to the core values and principles that have shaped Indian culture
over centuries. These values include respect for elders, humility, compassion, and a
deep connection to nature. Indian ethos is often seen as a source of strength and
resilience for Indians, and it continues to influence Indian society today.

b) Business Ethics

Business ethics refers to the moral principles that should guide businesses in their
decision-making. These principles include honesty, integrity, fairness, and social
responsibility. Businesses that adhere to business ethics are more likely to be
successful in the long run, as they will be able to build trust with their customers,
employees, and other stakeholders.
c) IPR

IPR stands for intellectual property rights. These rights protect the creative work of
individuals and businesses, such as patents, trademarks, copyrights, and trade
secrets. IPR is important for innovation and creativity, as it gives inventors and
creators the incentive to share their work with the world.

d) CSR

CSR stands for corporate social responsibility. This refers to the responsibility that
businesses have to the society in which they operate. CSR includes activities such
as environmental protection, social welfare, and community development.
Businesses that engage in CSR are seen as being more responsible and sustainable,
and they are often more successful in the long run.

e) Work Ethos

Work ethos refers to the attitude and values that people bring to their work. A
strong work ethos is characterized by hard work, dedication, and a commitment to
excellence. People with a strong work ethos are often more successful in their
careers, as they are able to overcome challenges and achieve their goals.

f) PLUS Model

The PLUS Model is a framework for corporate social responsibility. The model
stands for Purpose, Leadership, Unity, and Sustainability. The PLUS Model helps
businesses to integrate CSR into their core business activities, and it provides a
framework for measuring the impact of CSR initiatives.

g) Corporate Strategy

Corporate strategy refers to the long-term plans and goals of a business. A well-
defined corporate strategy helps businesses to achieve their goals and objectives.
Corporate strategy should be based on the company's strengths and weaknesses, as
well as the opportunities and threats in the market.

h) Social Media

P.T.O.
Social media is a tool that can be used for a variety of purposes, including
communication, marketing, and customer service. Businesses can use social media
to connect with customers, build relationships, and promote their products and
services. Social media can also be used to gather feedback from customers and
improve products and services.

Q2) Differentiate any two: [2 × 5 = 10]

a) Eastern management v/s Western management.

Eastern Management v/s Western Management

Eastern and Western management have different philosophies and approaches to
leadership and management. Eastern management is often more collaborative and
relationship-oriented, while Western management is more task-oriented and
results-driven.
Here are some of the key differences between Eastern and Western management:
• Decision-making: Eastern managers tend to make decisions based on
consensus and consultation, while Western managers tend to make decisions
more independently.
• Leadership style: Eastern managers tend to be more paternalistic and
benevolent, while Western managers tend to be more transactional and
results-oriented.
• Workplace culture: Eastern workplaces tend to be more hierarchical and
formal, while Western workplaces tend to be more flat and informal.
• Motivation: Eastern employees are often motivated by a sense of duty and
responsibility, while Western employees are often motivated by financial
rewards and career advancement.
Eastern Management
• Collaborative: Eastern managers tend to value collaboration and teamwork.
They believe that everyone has something to contribute, and they encourage
employees to share their ideas and work together to achieve common goals.
• Relationship-oriented: Eastern managers also place a high value on
relationships. They believe that strong relationships between employees and
managers are essential for a productive and harmonious workplace.
• Hierarchical: Eastern workplaces tend to be more hierarchical than Western
workplaces. This means that there is a clear chain of command, and
employees are expected to respect their superiors.
• Formal: Eastern workplaces also tend to be more formal than Western
workplaces. This means that there are strict rules and procedures that
employees are expected to follow.
• Motivated by duty and responsibility: Eastern employees are often motivated
 by a sense of duty and responsibility. They believe that they have a
responsibility to their employers and their families, and they are willing to
work hard to fulfill their obligations.
Western Management
• Task-oriented: Western managers tend to be more task-oriented than Eastern
managers. They believe that the best way to achieve goals is to focus on
tasks and results.
• Results-driven: Western managers are also results-driven. They believe that
the only way to measure success is by results, and they are constantly
looking for ways to improve performance.
• Flat: Western workplaces tend to be more flat than Eastern workplaces. This
means that there is less of a hierarchy, and employees have more freedom to
make decisions and take initiative.
• Informal: Western workplaces also tend to be more informal than Eastern
workplaces. This means that there are fewer rules and procedures, and
employees are encouraged to be creative and think outside the box.
• Motivated by financial rewards and career advancement: Western employees
are often motivated by financial rewards and career advancement. They
believe that these are the best ways to achieve their goals and improve their
lives.
Conclusion
Eastern and Western management have different philosophies and approaches to
leadership and management. Eastern management is often more collaborative and
relationship-oriented, while Western management is more task-oriented and
results-driven. There is no one "right" way to manage, and the best approach
depends on the specific situation and the values of the organization. However,
understanding the differences between Eastern and Western management can help
businesses to make more informed decisions.

b) Deontological theory v/s Teleological theory.

Deontological theory and teleological theory are two different ethical theories that
can be used to guide decision-making in business. Deontological theory focuses on
the rightness or wrongness of an action itself, while teleological theory focuses on
the consequences of an action.

Deontological Theory

Deontological theory is based on the idea that there are certain actions that are
always right or wrong, regardless of the consequences. This theory is often
associated with the work of Immanuel Kant, who argued that there are certain
moral duties that we have simply because we are human beings. For example, Kant

P.T.O.
argued that we have a duty to tell the truth, even if it is not in our own best interests
to do so.

Teleological Theory

Teleological theory is based on the idea that the rightness or wrongness of an

action is determined by its consequences. This theory is often associated with the
work of Jeremy Bentham, who argued that the right action is the one that produces
the greatest amount of happiness for the greatest number of people. For example,
Bentham would argue that it is right to lie if it prevents someone from being
harmed.

Comparison

The main difference between deontological theory and teleological theory is that
deontological theory focuses on the action itself, while teleological theory focuses
on the consequences of the action. Deontological theory is often seen as being
more absolutist, meaning that there are certain actions that are always right or
wrong, regardless of the consequences. Teleological theory is often seen as being
more relativist, meaning that the rightness or wrongness of an action depends on
the specific situation.

Application in Business

Deontological theory and teleological theory can both be applied to business

decision-making. For example, a deontological approach might lead a business to
refuse to sell products that are harmful to the environment, even if those products
are profitable. A teleological approach might lead a business to sell products that
are harmful to the environment, if the profits from those products are used to fund
environmental protection initiatives.

Conclusion

Deontological theory and teleological theory are two different ethical theories that
can be used to guide decision-making in business. There is no one "right" theory,
and the best approach depends on the specific situation and the values of the
organization. However, understanding the differences between deontological
theory and teleological theory can help businesses to make more informed
decisions.

c) Ethics v/s Ethos

Ethics and ethos are two closely related terms that are often used interchangeably.
However, there is a subtle difference between the two.

Ethics is a branch of philosophy that deals with morality and right and wrong. It is
the study of what makes an action right or wrong, and it provides a framework for
making moral decisions.
Ethos is a set of beliefs or values that guide the way a person or group behaves. It is
the character or spirit of a person or group, and it is often expressed in their actions
and words.

In other words, ethics is about the rules that we follow, while ethos is about the
values that we hold dear.

Here is a table that summarizes the key differences between ethics and ethos:

Feature Ethics Ethos

Definition The study of morality and A set of beliefs or values that guide the
right and wrong way a person or group behaves
Focus Rules Values
Application Making moral decisions Guiding behavior

Here are some examples of how ethics and ethos can be used in different contexts:

• In a business setting, ethics would be used to determine whether or not it is

right to engage in certain practices, such as price-fixing or insider trading.
Ethos would be used to determine the values that the business wants to
uphold, such as honesty or integrity.
• In a personal setting, ethics would be used to determine whether or not it is
right to lie to a friend or cheat on a test. Ethos would be used to determine
the values that the person wants to live by, such as honesty or fairness.

It is important to note that ethics and ethos are not mutually exclusive. They are
often interrelated, and they can both play a role in making moral decisions. For
example, a person's ethos might influence their ethical beliefs, and their ethical
beliefs might influence their behavior.

P.T.O.
Ultimately, ethics and ethos are both important concepts that can help us to make
moral decisions. By understanding the difference between the two, we can better
understand how they can work together to guide our behavior.

Q3) a) "Kautilya's Arthashastra is a rich source of wisdom for business leaders".

Explain with suitable examples.

Kautilya's Arthashastra is a treatise on statecraft, economics, and military strategy

written in ancient India. It is considered one of the most important works of
political thought in Indian history, and it has been translated into many languages.

The Arthashastra contains a wealth of wisdom that can be applied to business

leadership. For example, Kautilya emphasizes the importance of planning and
strategy, and he provides detailed advice on how to manage a business effectively.
He also discusses the importance of ethics and morality in business, and he warns
against the dangers of corruption.

Here are some specific examples of how the Arthashastra can be applied to
business leadership:

• Planning and strategy: Kautilya emphasizes the importance of planning and

strategy in business. He argues that businesses should have a clear
understanding of their goals, and they should develop a plan to achieve those
goals. He also discusses the importance of flexibility, and he warns against
the dangers of being too rigid in one's approach to business.
• Management: Kautilya provides detailed advice on how to manage a
business effectively. He discusses the importance of delegation, and he
emphasizes the need to create a motivated and productive workforce. He also
discusses the importance of setting clear goals and objectives, and he
provides advice on how to motivate employees to achieve those goals.
• Ethics and morality: Kautilya emphasizes the importance of ethics and
morality in business. He argues that businesses should be based on principles
of honesty, fairness, and justice. He also warns against the dangers of
corruption, and he argues that businesses should be transparent and
accountable to their stakeholders.

The Arthashastra is a complex and challenging text, but it is also a valuable

resource for business leaders. By understanding the principles of statecraft,
economics, and military strategy outlined in the Arthashastra, business leaders can
develop the skills and knowledge they need to succeed in today's competitive
marketplace.

In addition to the specific examples mentioned above, the Arthashastra also

contains a number of other insights that can be applied to business leadership. For
example, Kautilya discusses the importance of intelligence gathering, the need to
build strong relationships with stakeholders, and the importance of adapting to
change.

The Arthashastra is a rich and complex text, and it offers a wealth of wisdom that
can be applied to business leadership. By studying the Arthashastra, business
leaders can gain a deeper understanding of the challenges and opportunities they
face, and they can develop the skills and knowledge they need to succeed in today's
competitive marketplace.

OR
b) Enumerate the Laws of Karma and relate the same with the management
principles and practices.

Here are the Laws of Karma and how they relate to management principles and
practices:

• The Law of Cause and Effect: This law states that every action has a
reaction, and that every thought, word, and deed will eventually bear fruit. In
management, this law can be applied to the concept of accountability.
Employees should be held accountable for their actions, and they should be
rewarded for good behavior and punished for bad behavior. This helps to
create a culture of responsibility and accountability in the workplace.
• The Law of Non-Attachment: This law states that we should not be attached
to the fruits of our actions, and that we should not dwell on the past or worry
about the future. In management, this law can be applied to the concept of
detachment. Managers should not be attached to the success or failure of
their team, and they should not take things personally when things go wrong.
This helps to create a more balanced and less stressful work environment.
• The Law of Karma Yoga: This law states that we should perform our actions
without attachment to the results, and that we should do our best to serve

P.T.O.
 others without expecting anything in return. In management, this law can be
applied to the concept of servant leadership. Servant leaders are those who
put the needs of their team members first, and who are willing to sacrifice
their own personal needs for the good of the team. This helps to create a
more collaborative and supportive work environment.
• The Law of Rebirth: This law states that we are reborn into different lives
based on our karma from past lives. In management, this law can be applied
to the concept of continuous improvement. Managers should always be
looking for ways to improve their team and their organization, and they
should never be satisfied with the status quo. This helps to create a culture of
innovation and growth in the workplace.

These are just a few of the ways that the Laws of Karma can be applied to
management principles and practices. By understanding these laws, managers can
create a more positive and productive work environment for their team members.

Here are some additional thoughts on how the Laws of Karma can be applied to
management:

• The Law of Cause and Effect can help managers to create a fair and just
workplace. By rewarding good behavior and punishing bad behavior,
managers can create a system where employees are motivated to do their
best work.
• The Law of Non-Attachment can help managers to stay calm and focused
under pressure. By not being attached to the results of their actions,
managers can avoid getting stressed out or making rash decisions.
• The Law of Karma Yoga can help managers to build strong relationships
with their team members. By serving others without expecting anything in
return, managers can create a sense of trust and respect in the workplace.
• The Law of Rebirth can help managers to have a long-term perspective. By
understanding that their actions in the present will affect their future,
managers can make decisions that will benefit their team and their
organization in the long run.

The Laws of Karma are a complex and nuanced set of principles, but they offer a
wealth of wisdom that can be applied to management. By understanding these
laws, managers can create a more positive and productive work environment for
their team members.
 Q4) a) In current materialistic world, discuss the relevance of value based
management and its impact on various stakeholders of the organization.

Value-based management (VBM) is an approach to management that focuses on

the creation of long-term value for all stakeholders. It is based on the belief that
businesses should be managed in a way that benefits not only shareholders, but also
employees, customers, suppliers, and the community as a whole.

In the current materialistic world, VBM is more relevant than ever. In a world
where businesses are increasingly driven by short-term profits, VBM provides a
framework for creating long-term value for all stakeholders. VBM can help
businesses to:

• Attract and retain top talent: Employees are more likely to be loyal to and
engaged in businesses that share their values. VBM can help businesses to
attract and retain top talent by demonstrating that they are committed to
creating long-term value for all stakeholders.
• Build strong relationships with customers: Customers are more likely to do
business with businesses that they trust and respect. VBM can help
businesses to build strong relationships with customers by demonstrating
that they are committed to providing quality products and services, and that
they are acting in a responsible and ethical manner.
• Gain the support of the community: Businesses that are committed to
creating long-term value for all stakeholders are more likely to gain the
support of the community. This can be in the form of government grants, tax
breaks, and other forms of support.

In addition to the benefits listed above, VBM can also help businesses to:

• Reduce costs: By focusing on long-term value creation, businesses can

identify and eliminate unnecessary costs.
• Increase innovation: By creating a culture of innovation and creativity,
businesses can develop new products and services that meet the needs of
their customers.
• Improve decision-making: By basing decisions on the values of the
organization, businesses can make better decisions that are more likely to be
successful in the long run.

P.T.O.
Overall, VBM is a valuable approach to management that can help businesses to
create long-term value for all stakeholders. In the current materialistic world, VBM
is more relevant than ever, and it can help businesses to gain a competitive
advantage.

Here are some specific examples of how VBM can impact various stakeholders of
the organization:

• Employees: VBM can help employees to feel more valued and appreciated,
as they will see that the organization is committed to their long-term success.
This can lead to increased employee morale, productivity, and retention.
• Customers: VBM can help customers to feel more confident in the
organization, as they will see that the organization is committed to providing
quality products and services. This can lead to increased customer loyalty
and repeat business.
• Suppliers: VBM can help suppliers to feel more secure in their relationships
with the organization, as they will see that the organization is committed to
fair and sustainable practices. This can lead to increased supplier
collaboration and innovation.
• Community: VBM can help the community to feel more connected to the
organization, as they will see that the organization is committed to giving
back. This can lead to increased community support and goodwill.

Overall, VBM can have a positive impact on all stakeholders of the organization.
By focusing on long-term value creation, VBM can help businesses to create a
more sustainable and successful future for all.

OR
c) Analyse the essence of Business Ethics and highlight various types of
Business Ethics.
Business ethics is a branch of applied ethics that examines ethical principles and
moral or ethical problems that arise in a business environment. It applies to all
aspects of business conduct, including corporate social responsibility, stakeholder
management, and corporate governance.
The essence of business ethics is the application of ethical principles to the
business world. This includes the following:
• Respect for individuals: Business ethics requires that businesses respect the
 rights and dignity of individuals. This includes respecting the privacy of
employees, customers, and suppliers.
• Honesty and integrity: Business ethics requires that businesses be honest
and truthful in their dealings with others. This includes avoiding misleading
or deceptive advertising and marketing practices.
• Fairness and justice: Business ethics requires that businesses treat all
stakeholders fairly and justly. This includes avoiding discrimination and
providing equal opportunities for all.
• Responsibility and accountability: Business ethics requires that businesses
be responsible and accountable for their actions. This includes taking steps
to mitigate the negative impacts of their business activities.
There are many different types of business ethics, but some of the most common
include:
• Corporate social responsibility (CSR): CSR is the responsibility of
businesses to act in a way that is beneficial to society as a whole. This
includes activities such as environmental protection, community
development, and employee welfare.
• Stakeholder management: Stakeholder management is the process of
identifying and managing the interests of all stakeholders in a business.
This includes employees, customers, suppliers, investors, and the
community.
• Corporate governance: Corporate governance is the system by which
businesses are managed and controlled. This includes ensuring that
businesses are run in a responsible and ethical manner.
Business ethics is an important field of study because it helps to ensure that
businesses operate in a way that is beneficial to society as a whole. By
understanding the principles of business ethics, businesses can make better
decisions that are more likely to be successful in the long run.
Here are some additional thoughts on the essence of business ethics:
• Business ethics is not just about avoiding doing bad things. It is also about
doing good things. Businesses have a responsibility to use their power and
influence to make the world a better place.
• Business ethics is not just about following the law. It is also about going
beyond the law to do what is right. Businesses should strive to set high
ethical standards for themselves, even if they are not required to do so by
law.
• Business ethics is not just about being nice. It is also about being fair and
P.T.O.
 just. Businesses should treat all stakeholders fairly, regardless of their size
or power.
Business ethics is an important concept that can help businesses to be more
successful and to make a positive impact on the world. By understanding the
principles of business ethics, businesses can make better decisions that are more
likely to be successful in the long run.

Q5) a) Discuss the five major ethical issues experienced by the managers with
relevant examples.

Here are five major ethical issues experienced by managers, with relevant
examples:

• Conflict of interest: This occurs when a manager's personal interests conflict

with the interests of the business. For example, a manager who owns stock in
a competitor may be tempted to make decisions that benefit the competitor,
even if it is not in the best interests of the business.
• Discrimination: This occurs when a manager treats employees or customers
differently based on their race, gender, religion, or other protected
characteristic. For example, a manager who refuses to hire women or who
gives preferential treatment to white customers may be guilty of
discrimination.
• Harassment: This occurs when a manager creates a hostile or intimidating
work environment for employees. For example, a manager who makes
sexual or racial jokes or who repeatedly belittles employees may be guilty of
harassment.
• Falsification of records: This occurs when a manager knowingly makes false
or misleading statements in business records. For example, a manager who
inflates sales figures or who covers up an accident may be guilty of
falsifying records.
• Insider trading: This occurs when a manager trades securities based on non-
public information that they have obtained as part of their job. For example,
a manager who buys stock in a company before the company announces a
major merger may be guilty of insider trading.

These are just a few of the many ethical issues that managers may face. It is
important for managers to be aware of these issues and to take steps to avoid them.
By doing so, managers can help to ensure that their businesses operate in a ethical
and responsible manner.

Here are some additional thoughts on the ethical issues faced by managers:

• These issues can be complex and difficult to resolve. There is often no easy
answer, and managers may need to make difficult decisions.
• It is important for managers to have a strong ethical compass. They should
be able to identify ethical issues and make decisions that are in the best
interests of all stakeholders.
• Managers should also be aware of the laws and regulations that apply to their
businesses. They should ensure that their businesses are in compliance with
these laws and regulations.

Ethical issues can be challenging, but they are also an opportunity for managers to
make a positive difference in the world. By taking steps to address these issues,
managers can help to create a more ethical and just society.

OR
c) Discuss the ethical issues in the functional areas of Finance and Human
Resource Management.
Here are some ethical issues in the functional areas of Finance and Human
Resource Management:
Finance
• Conflict of interest: This occurs when a financial manager's personal
interests conflict with the interests of the business. For example, a financial
manager who owns stock in a competitor may be tempted to make
decisions that benefit the competitor, even if it is not in the best interests of
the business.
• Insider trading: This occurs when a financial manager trades securities
based on non-public information that they have obtained as part of their
job. For example, a financial manager who buys stock in a company before
the company announces a major merger may be guilty of insider trading.
• Misrepresentation: This occurs when a financial manager provides false or
misleading information to investors or other stakeholders. For example, a
financial manager who inflates the company's profits or who hides its debts
may be guilty of misrepresentation.
P.T.O.
 • Fraud: This occurs when a financial manager intentionally deceives
investors or other stakeholders for personal gain. For example, a financial
manager who embezzles company funds or who engages in other forms of
financial fraud may be guilty of fraud.
Human Resource Management
• Discrimination: This occurs when a human resources manager treats
employees differently based on their race, gender, religion, or other
protected characteristic. For example, a human resources manager who
refuses to hire women or who gives preferential treatment to white
employees may be guilty of discrimination.
• Harassment: This occurs when a human resources manager creates a hostile
or intimidating work environment for employees. For example, a human
resources manager who makes sexual or racial jokes or who repeatedly
belittles employees may be guilty of harassment.
• Wage theft: This occurs when a human resources manager fails to pay
employees their wages or benefits in full or on time. For example, a human
resources manager who fails to pay overtime or who docks employees' pay
for unauthorized absences may be guilty of wage theft.
• Privacy violations: This occurs when a human resources manager violates
the privacy of employees. For example, a human resources manager who
accesses employees' personal records without their consent or who
discloses confidential information about employees may be guilty of
privacy violations.
These are just some of the many ethical issues that financial managers and human
resources managers may face. It is important for these professionals to be aware
of these issues and to take steps to avoid them. By doing so, they can help to
ensure that their businesses operate in an ethical and responsible manner.
Here are some additional thoughts on the ethical issues faced by financial
managers and human resources managers:
• These issues can be complex and difficult to resolve. There is often no easy
answer, and managers may need to make difficult decisions.
• It is important for financial managers and human resources managers to
have a strong ethical compass. They should be able to identify ethical
issues and make decisions that are in the best interests of all stakeholders.
• Financial managers and human resources managers should also be aware of
the laws and regulations that apply to their businesses. They should ensure
that their businesses are in compliance with these laws and regulations.
Ethical issues can be challenging, but they are also an opportunity for financial
managers and human resources managers to make a positive difference in the
world. By taking steps to address these issues, they can help to create a more
ethical and just society.



P.T.O.
[5946]-403 2