CBSE Class 12 Business Studies Notes
Last Updated : 21 Apr, 2025
Business Studies is a study of how to control and manage an organization effectively and efficiently. After providing the basic knowledge about Business Studies in Class 11 Notes, GeeksforGeeks has designed Notes for Class 12 Business Studies according to the CBSE Syllabus. The mentioned below Chapterwise quick links of Class 12 Business Studies provide detailed knowledge about the subject and the related topics. The notes contain 12 chapters covering every important topic, like Functions of Management, Principles of Management, Marketing, Stock Exchange, Training, Recruiting, Planning, and many more.
PART - A
Chapter 1: Nature and Significance of Management
Management is important for every organization, irrespective of its nature, size, and other factors. Therefore, it is crucial to understand the concept of management, its nature, and its functions. The GeeksforGeeks Notes of Class 12th Business Studies covers detailed information required to know about management or business management. The notes of the first chapter, 'Nature and Significance of Management' provided with the quick links given below, include important topics like, Effectiveness, Efficiency, Coordination, Planning, Controlling, Management as a Science, and many more.
Chapter 2: Principles of Management
To attain better results through management, an organization has to follow certain principles of management. The notes of the second chapter, 'Principles of Management', cover detailed information on different principles of management required for better functioning of an organization. The notes include Nature and Significance of Management Principles, Fayol's Principle of Management, Taylor's Scientific Management, Techniques of Scientific Management, and a Comparison between Taylor's and Fayol's Principles.
Chapter 3: Business Environment
Business Environment is the surrounding of an organization that affects its decisions and performance during its existence. It is essential to understand the surroundings of an organization for a better decision-making process and results. The notes of the third chapter of Class 12 Business Studies Notes involve important topics, like Features, Importance, Dimensions of business environment, Demonetization, and many more in detail.
Chapter 4: Planning
Planning means deciding in advance regarding the works of an organization. Planning is the first function of management and is crucial to a business. The fourth chapter, 'Planning' of Class 12 Business Studies, covers everything required to know about planning as a function of management. The notes of this chapter include Features, Importance, and Limitations of Planning, Process of Planning, and Different Types of Plans in detail and easy-to-understand language.
Chapter 5: Organising
The second function of management is Organising. In other words, it means organising people and their jobs together. The fifth chapter, 'Organising' of Class 12 Business Studies, covers everything to know about organising as a function of management. The notes of this chapter covered in the given below quick links consist of Organising Process, Organisation Structure, Formal and Informal Organisation, Delegation, Centralisation, and Decentralisation in detail.
Chapter 6: Staffing
Every organization requires human force to run their business for which they need the Staffing function of management. Staffing means recruiting, selecting, and training individuals in an organization for the individuals' and organization's benefit. The sixth chapter of Class 12 Business Studies is Staffing, and its notes provided with the quick links given below cover important topics, like Staffing Process, Selection Process, Training Methods, etc.
Chapter 7: Directing
Directing is the fourth function of management and is crucial to every organization as it cannot attain the pre-determined goals if the human resource is not directed towards the organizational goals properly. The seventh chapter of Class 12 Business Studies, 'Directing', covers everything required to know about directing, leadership, supervision, and communication. The notes of this chapter include important topics, like Principles of Directing, Qualities of a Good Leader, Barriers to Communication, Communication Process, and many more.
Chapter 8: Controlling
The last function of management is controlling. A business can achieve success only when it knows how to detect its performance and control it. The last chapter of Class 12 Business Studies, Part-A 'Controlling', covers important topics, like Limitations of Controlling, Process of Controlling, Techniques of Managerial Control, and many more.
PART - B
Chapter 9: Financial Management
Every organization requires finance to run its business and achieve organizational objectives. A good amount of finance can only be helpful to a business only when it is managed properly, leading to the ninth chapter of Class 12 Business Studies 'Financial Management'. The notes of this chapter provided through the below-mentioned quick links cover important topics, like Financial Decisions, Capital Structure, Working Capital, Business Finance, and many more.
Chapter 10: Financial Markets
There are two main sectors in an economy, households (the savers) and business firms (the investors). Financial Markets serve as a link between them and help them connect with each other to maintain a flow of funds in the economy. The tenth chapter of Class 12 Business Studies, 'Financial Markets' talks about Financial Markets and Stock Exchanges in detail. The notes provided through the below-mentioned quick links consist of important topics, like Primary Market, Secondary Market, Dematerialisation, NSE, BSE, SEBI, and many more.
Chapter 11: Marketing
A business does not run itself just through the production of goods and services, it needs to perform marketing of the business too. Marketing means interacting with people, providing them information about the business and its product or service, and convincing them to purchase those goods or services. The eleventh chapter of Class 12 Business Studies, 'Marketing' covers everything required to know about marketing and its related concepts. The notes of this chapter consist of important topics, like Marketing Management Philosophies, Marketing Mix, Promotion, Advertising, Sales Promotion, Public Relation, and many more.
Chapter 12: Consumer Protection
A consumer is said to be the king of a free market economy. Therefore, it is crucial to protect the consumer from different unfair trade practices. Consumer Protection means educating the consumer about their rights and responsibilities and helping them get redressal for any unfair trade practice. The last chapter of Class 12th Business Studies Part-B, 'Consumer Protection' covers detailed information regarding Consumer, Consumer Protection, Consumer Protection Act and Redressal Agencies under the Act.
CBSE Previous Year Papers (2020)
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CBSE Class 12 Business Studies Notes Business Studies is a study of how to control and manage an organization effectively and efficiently. After providing the basic knowledge about Business Studies in Class 11 Notes, GeeksforGeeks has designed Notes for Class 12 Business Studies according to the CBSE Syllabus. The mentioned below Chapt
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Chapter 1: Nature and Significance of Management
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Difference between Efficiency and EffectivenessWe can define management as the process of getting things done through and with people to achieve a common goal efficiently and effectively. When we go through the definition, we find the two buzzwords efficiency and effectiveness which are alike terms and popularly used by managers. They are essent
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Nature of Management as a Science, Art and ProfessionThe term management is used in various senses. Some consider it as an activity, some treat it as a group, some call it a discipline, whereas some look at it as a process. Management as an activity is getting things done through others. Management as a group is all those who manage. Management as a d
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Coordination in Management : Concept, Features & ImportanceWhat is Coordination?Coordination is the force that connects all managerial functions and ensures the smooth and efficient functioning of an organization. All the activities of an organization such as purchase, production, sales, and finance are connected through this link of coordination, which ena
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Difference between Coordination and CooperationEffective coordination cannot be achieved without cooperation, so a manager should try to achieve both coordination and cooperation. Coordination and cooperation are two wheels of a bicycle. If any one wheel is missing, then the bicycle cannot function. Similarly, both coordination and cooperation a
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Chapter 2: Principles of Management
Chapter 3: Business Environment
What is Business Environment ? | Meaning and FeaturesWhat is Business Environment? The word environment is derived from the French word 'environ', which means surrounding, i.e., external conditions involving manifold variables like objects or conditions affecting the development and growth of all living organisms, including human beings. There is clos
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Importance of Business EnvironmentWhat is Business Environment?Business environment means the total of all individuals, institutions, and other forces that are outside the control of a business enterprise, but that may affect its performance. In other words, the business environment can be defined as all those conditions and forces
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Dimensions of Business EnvironmentWhat is Business Environment?Business Environment means the total of all individuals, institutions, and other forces that are outside the control of a business enterprise, but that may affect its performance. In other words, a business environment can be defined as all those conditions and forces un
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Economic Environment in IndiaEconomic environment refers to all these forces that have an economic impact on business activities. We know that business is an economic organization. Therefore, its survival and growth are dependent on economic factors. The economic environment includes various factors, such as inflammation, inter
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New Industrial Policy : Features & ImpactIn order to review a backward economy, it was necessary for the government to plan for new economic planning. The new economic planning focused on the role of the public sector. The main objective of the new economic planning was: to initiate rapid economic growth in order to raise the standard of l
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Concept and Features of DemonetizationWhat is Demonetization?When a currency is stripped of its legal status and replaced with a new currency, it is known as demonetization. It is also interpreted as a shift on the part of the government indicating that tax evasion will no longer be tolerated or accepted. The government of India, announ
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Chapter 4: Planning
Planning: Meaning, Features, Importance and LimitationsWhat is Planning?Planning is a blueprint of the course of action to be followed in the future. It is also a mental exercise that requires imagination, foresight, and sound judgment. It is thinking before doing. It is a preparatory step and refers to detailed programs regarding the future course of a
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Planning Process: Concept and StepsPlanning is the process of setting objectives for a given period and formulating various courses of action to achieve them and selecting the best possible alternatives from the various courses of action available there. According to this application, planning is a choice-making activity because it i
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Types of Plans: Standing Plan and Single-use PlanA management plan is a global plan that provides the objective of any organization's project. A plan certainly defines responsibilities, roles, etc., to ensure the achievement of the targeted goal. A plan is a resource that everyone in the firm can use, be it the top-level manager or the low-level m
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Difference between Standing Plans and Single-Use PlansStanding Plans and Single-Use Plans are two different types of plans. The former is a plan which is made for activities that occur after regular intervals of time; however, the latter is a plan which is made for a one-time event or project. Table of Content What is a Standing Plan?What is a Single-U
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Difference between Procedures and MethodsProcedures and Methods are two types of Standing Plan. Procedures are the routine steps to carry out activities in an organization. However, a Method is a prescribed process in which a particular task or activity is performed as per the objective. What are Procedures? Routine steps to carry out acti
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Difference between Procedures and RulesProcedures and Rules are two types of Standing Plan. Procedures are the routine steps to carry out activities in an organization. However, Rules are the specific statements that inform what must and must not be done. What are Procedures? Routine steps to carry out activities in an organization are k
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Difference between Policies and RulesPolicies and Rules are two types of standing plans of an organisation. Policies are the general statements that guide thinking and channel energy toward a particular direction. However, Rules are the specific statements that inform what must and must not be done. What are Policies? The general state
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Difference between Rules and MethodsRules and Methods are two types of Standing Plan. Rules are the specific statements that inform what must and must not be done. However, a Method is the prescribed process in which a particular task or activity is performed as per the objective. What are Rules? Specific statements that inform what m
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Chapter 5: Organising
Organising : Meaning, Importance and ProcessWhat is Organising in Management?Organising refers to a process consisting of a series of steps to identify and group various activities, collect or assemble various resources and establish authority relationships with responsibility amongst job positions. It can be mentioned as collecting and utili
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Types of Organisation StructureThe term structure refers to the management of parts and interrelationships among activities and people. Therefore, organisation structure is an element of job position that provides the basis on which managers and non-managerial employees perform their assigned jobs. It is the role assigned to them
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Difference between Functional Structure and Divisional StructureOrganisation Structure is an element of job position that provides the basis on which managers and non-managerial employees perform their assigned jobs. Functional Structure and Divisional Structure are types of Organisation Structure. What is Functional Structure? The structure under which jobs of
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Formal and Informal OrganisationOrganising refers to identifying and growing different activities in the organisation. It brings together human and non-human resources to achieve organisational goals. Organising helps in the implementation of the plan by clarifying job and working relationships for the attainment of desired goals.
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Difference between Formal and Informal OrganisationOrganisations are a network of relationships amongst people working together so as to get the best output in an enterprise. The two types of organisation formed on the basis of relationships are  Formal Organisation and Informal Organisation. What is a Formal Organisation?In every organisation, empl
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Elements and Importance of DelegationIt is not possible for an individual to perform all the tasks assigned to him. To meet the targets, the appropriate authority is to be delegated to the respective person. Delegation of authority means the division of authority, position, and power flowing downwards to the subordinate. It can also be
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Difference between Authority, Responsibility and AccountabilityAuthority, Responsibility, and Accountability are three important elements or processes of Delegation. All these three elements are essential for successful achievement of organisational goals. What is Authority? The right of an individual to command his subordinates and take actions within the powe
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Centralization and DecentralizationAs far as we are concerned with different business organizations, Centralization and Decentralization are two relative terms. Centralization focuses all the decision-making functions at the top of the management hierarchy. Such a situation would get rid of the need for a management hierarchy. In oth
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Difference between Centralization and DecentralizationAccording to Henri Fayol,'' Everything which goes to increase the importance of a subordinate's role is decentralization, everything that goes to reduce it is centralization''. What is Centralization? Centralization refers to the concentration of authority at the top level of the organisation. It is
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Difference between Delegation and DecentralizationDelegation and Decentralization are two terms which are mostly misunderstood as the same. Delegation of authority means assigning work to subordinates and giving them authority to do it. However, Decentralization means the dispersal of authority throughout the organisation. What is Delegation?Delega
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Chapter 6: Staffing
Staffing : Meaning, Definition, Features and ImportanceWhat is Staffing?Staffing is that part of management concerned with obtaining, utilizing, and maintaining capable people to fill all positions in the organization from top level to bottom level. It involves the scientific and systematic procurement, allocation, utilization, conservation, and develop
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Staffing and Human Resource ManagementStaffing and Human Resource Management Human resource management is a process that brings people and organizations together so that organizational and individual goals can be achieved. Human resource management can be defined as the art of procuring, developing, and maintaining a competent workforce
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Staffing ProcessStaffing is the art of acquiring, developing, and maintaining a satisfactory and satisfied workforce. Staffing is that function by which a manager builds an organization through the recruitment, selection, and development of the individual, which also includes a series of activities. It ensures that
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Sources of Recruitment (Internal and External: Meaning, Merits and Demerits)Recruitment can be defined as the process of publicizing information about various job vacancies in the organization. It is a process of searching for prospective employees and encouraging them to apply for the job in the organization. Recruitment is a positive process because it stimulates people t
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Difference between Internal Recruitment and External RecruitmentInternal Recruitment and External Recruitment are two ways of recruiting people into an organization. In the former method, a company makes use of the existing staff to fill up the vacant jobs. However, in the latter method, a company searches for employees from outside sources. Table of Content Wha
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Steps in Selection ProcessWhat is Selection?Selection is the process of recognizing and choosing the best candidate out of several potential candidates for a job. The candidates who are not suitable for the job are eliminated. For selection, the candidates have to take several employment tests and interviews. At every step,
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Difference between Recruitment and SelectionRecruitment and Selection are two of the most important terms used in the hiring process. Recruitment is the process of searching for appropriate employees and encouraging them to apply for jobs whereas the process of identifying and choosing the best person out of a number of prospective candidates
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Importance of Training and Development to Organisation and EmployeesWhat is Training and Development? Training is a process by which the skills, talents, and capabilities of the employees of an organization are increased. Training helps employees to grasp new skills and utilize the knowledge provided. It is not only required by the new employees, but it is also nece
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Methods of Training: On-the-Job Methods and Off-the-Job MethodsMeaning of TrainingTraining is a process by which the skills, talents, and capabilities of the employees of an organization are increased. Training helps employees to grasp new skills and utilize the knowledge provided. Training is not only required by the new employees, but it is also necessary for
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Difference between On-the-Job Training Methods and Off-the-Job Training MethodsOn-the-Job Training Methods and Off-the-Job Training Methods are two different training methods. In the first method, the employees are trained at their actual workplace, while they are doing work. However, in the second method, the employees are provided training outside their actual workplace. Wha
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Difference between Training and DevelopmentTraining and Development are one of the most important aspects of staffing. Training and development play an important role in improving the effectiveness and efficiency of the organisation and the employees. Training increases job skills while development shapes attitude. Training focuses on develo
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Difference between Training, Development and EducationTraining, Development, and Education are different from each other. Training focuses on developing the skills, which are already possessed by an employee; development focuses on developing hidden qualities and talents of employees; and education focuses on increasing the knowledge and understanding
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Chapter 7: Directing
Directing: Meaning, Characteristics and ImportanceWhat is Directing?The process of instructing, guiding, counselling, motivating, and leading people in an organisation to achieve the organisational goals is known as Directing. Directing not only includes order and instructions by a superior to the subordinates but also includes guiding and inspiri
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Principles and Elements of DirectingDirecting is the managerial function of guiding, inspiring, instructing, and harnessing people towards the accomplishment of the desired results. Directing includes issuing orders and instructions that are clear and complete; continuing guidance and supervision to ensure that the assigned tasks are
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Importance of SupervisionSupervision refers to the process by which managers oversee the activities and performance of their subordinates to ensure that tasks are completed correctly, efficiently, and in alignment with organizational goals. Effective supervision involves various responsibilities and practices, including Gui
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Features and Importance of MotivationWhat is Motivation?The process of stimulating and inspiring people at work to contribute to the best of their capability for the achievement of organisational objectives is known as Motivation. Motivation is the inner psychological force that activates and compels a person to behave in a particular
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Process of MotivationThe process of stimulating and inspiring people at work to contribute to the best of their capability for the achievement of organisational objectives is known as Motivation. Motivation is the inner psychological force that activates and compels a person to behave in a particular manner. It is a pro
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Maslow's Hierarchy of Needs TheoryBehind every successful organisation, there is a highly motivated and committed team of employees. Since motivation is complex as it deals with human behaviour, various researchers have given different theories. Maslow's Hierarchy of Needs theory is considered very significant as it highlights the n
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Features and Importance of LeadershipThe process of influencing the behaviour of people towards achievement of organisational goals is known as Leadership. It indicates the ability of an individual to maintain good interpersonal relations with followers and motivate them to contribute to achieving organisational objectives. An individu
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Types of Leadership StylesThe process of influencing the behaviour of people towards the achievement of organisational goals is known as Leadership. It indicates the ability of an individual to maintain good interpersonal relations with followers and motivate them to contribute to achieving organisational objectives. An indi
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10 Qualities of a Good LeaderLeaders are individuals who possess attributes of leadership. They focus on satisfying the behavior of each member of the group and the realization of group goals. A leader inspires employees, provides psychological support, helps in implementing changes, handles conflicts effectively, and works tow
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Which is more effective Push or Pull marketing ?What is Push Marketing?Push marketing is when a company actively shows its products to people, instead of waiting for customers to come looking for them. It's like when someone tries to sell you something directly, by either talking to you about it, sending you ads in the mail, or putting up big pos
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Communication: Meaning, Definition, Features and ImportanceWhat is Communication?Communication is an indispensable element in human relationships. Humans interact with one another through communication. The term 'communication' is derived from the Latin word 'communis', which means common. Therefore, communication is defined as an exchange of facts, ideas,
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Elements of Communication ProcessThe process of exchange of ideas, views, facts, feelings, etc., between two or more persons in order to reach a common understanding is known as Communication. "Communication is the sum of all things, a person does when he wants to create an understanding in the minds of another. It involves a syste
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Communication Channels | Formal and InformalThe path through which information flows from sender to receiver is known as the channel of communication.There are two main channels of communication: Formal CommunicationInformal CommunicationFormal Communication Official communication taking place in an organisation is known as formal communicati
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Formal Communication: Meaning, Types, Merits and DemeritsWhat is Formal Communication ? Official communication taking place in an organisation is known as formal communication. It is related to the status or position of the sender and receiver. It generally takes place either between employees of different levels as in the case of superior-subordinate or
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Informal Communication: Meaning, Networks, Merits and DemeritsThe process of exchange of ideas, views, facts, feelings, etc., between two or more persons to reach a common understanding is known as Communication. Communication is a social process as it involves two or more persons. It is a pervasive and continuous function. There are two main communication cha
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Barriers to Effective CommunicationThe factors which obstruct the effectiveness of communication is known as Communication Barriers. These barriers cause a mismatch between the understanding of the message by the sender and the receiver. These barriers can occur at any stage of the communication process. Table of Content Classificat
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Measures to improve Communication EffectivenessThe factors that obstruct the effectiveness of communication are known as communication barriers. Through these barriers, communication can be prevented or a part of it is filtered or incorrect information may be carried, which leads to misunderstanding.For the success of an organisation, effective
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Chapter 8: Controlling
Chapter 9: Financial Management
Role and Objectives of Financial ManagementWe all know that finance is essential for running a business. Business enterprises require careful financial planning and understanding of the resultant capital structure, risks, and profitability that they may have. All these have an effect on shareholders as well as the employees. They require an
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Types of Financial DecisionsWhat is Financial Decision?The decisions regarding the financial matters of any organization are known as Financial Decisions. In simple terms, it refers to the decision regarding the investment of the funds of the business in various assets. Financial management focuses on providing solutions to th
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Investment Decision: Meaning and Factors affecting Investment DecisionWhat is Investment Decision? Investment decision refers to the decisions that involve the investment of various resources of the firm to gain the highest possible return on investment for their investors. An investment decision is categorized as a long-term and short-term investment decision. Financ
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Financing Decision: Meaning and Factors affecting Financing DecisionFinancial Management is concerned with the management of the flow of funds and involves decisions related to the acquisition and application of funds in long-term and short-term assets. It is concerned with two aspects, they are procurement of funds as well as usage of finance. Financial decision re
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Dividend Decision: Meaning and Factors affecting Dividend DecisionFinancial Management is concerned with the management of the flow of funds and involves decisions related to the acquisition and application of funds in long-term and short-term assets. It is concerned with two aspects, they are procurement of funds and usage of finance. Financial decision refers to
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Financial Planning: Objectives and ImportanceFinancial Planning is essential for the preparation of a financial blueprint for a business organization. Its main objective is to ensure that ample funds are available at right time. If enough funds are not available the firm will not be able to honour its commitments and carry out its plans. On th
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What is Capital Structure?Finance being the life force of every organization, needs to be estimated, raised and utilized properly to maximize the returns from such investments. A correct estimate of current and future needs of capital needs to be made to have an optimum capital structure which shall help the organization to
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Factors affecting the choice of Capital StructureWhat is Capital Structure? Capital structure decisions involve determining the types of securities to be issued as well as their relative share in the capital structure. The financial decision regarding the composition of the capital structure is made after the financial requirements have been estab
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What is Fixed Capital and Working Capital?We all know that finance is essential for running a business. Business enterprises require careful financial planning and understanding of the resultant capital structure, risks, and profitability that they may have. All these have an effect on shareholders as well as the employees. They require an
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Factors Affecting the Fixed CapitalThe assets which remain in the business for a period of more than one year are known as Fixed Assets. For example, plant, machinery, building, land, furniture, equipment, etc. These assets are not meant for sale. Fixed Capital is the money invested by a company in its fixed assets, which are to be u
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Factors Affecting the Working CapitalExcess of current assets of an organisation over its current liabilities is known as Working Capital. Simply put, it is the finance available to an organisation for its day-to-day business operations. It can also be defined as that part of the total capital, which is required for holding current ass
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