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ASSET MANAGEMENT

Q-2) EXPLAINS THE STRUCTURE OF INTEREST RATES? (5)

ANS 2)

The "term structure" of interest rates refers to the relationship between bonds of different terms. When interest rates of bonds are plotted against their terms, this is called the "yield curve". Economists and investors believe that the shape of the yield curve reflects the market's future expectation for interest rates and the conditions for monetary policy.

Usually, longer term interest rates are higher than shorter term interest rates. This is called a "normal yield curve" and is thought to reflect the higher "inflation-risk premium" that investors demand for longer term bonds. When interest rates change by the same amount for bonds of all terms, this is called a "parallel shift" in the yield curve since the shape of the yield curve stays the same, although interest rates are higher or lower "across the curve". A change in the shape of the yield curve is called a "twist" and means that interest rates for bonds of some terms change differently than bond of other terms.A small or negligible difference between short and long term interest rates occurs later in the economic cycle when interest rates increase due to higher inflation expectations and tighter monetary policy. This is called a "shallow" or "flat" yield curve and higher short term rates reflect less available money, as monetary policy is tightened, and higher inflation later in the economic cycle.When the difference between long and short term interest rates is large, the yield curve is said to be "steep". This is thought to reflect a "loose" monetary policy which means credit and money is readily available in an economy. This situation usually develops early in the economic cycle when a country's monetary authorities are trying to stimulate the economy after a recession or slowdown in economic growth. The low short term interest rates reflect the easy availability of money and low or declining inflation. Higher longer term interest rates reflect investors' fears of future inflation, recognizing that future monetary policy and economic conditions could be much different.

Tight monetary policy results in short term interest rates being higher than longer term rates. This occurs as a shortage of money and credit drives up the cost of short term capital. Longer term rates stay lower, as investors see an eventual loosening of monetary policy and declining inflation. This increases the demand for long term bonds which lock in the higher long term rates.Economists and financial academics have developed theories to explain the shape of the yield curve. The "expectations" theory states that sinces short term bonds can be combined for the same time period as a longer term bond, the total interest earned should be equivalent, given the efficiency of the market and the chance for arbitrage (speculators using opportunities to make money). Mathematically, the yield curve can then be used to predict interest rates at future dates.The "segmentation" theory explains the shape of the yield curve by investors' term preferences. Some investors need to deploy their funds for specific periods of time, hence a preference for long or short term bonds which is reflected in the shape of the yield curve. An inverted curve can then be seen to reflect a definite investor preference for longer term bonds.With powerful computers and mathematical techniques, investors and academics are constantly striving to build models which explain the shape of the yield curve and hopefully provide insight into the future direction of interest rates. This has given rise to "yield curve" strategies which are employed by bond managers to add value to their portfolios.

BUSINESS ETHICS

CASE -1 (20 Marks)

Joan, an employee of Great American Market, was warned about her excessive absenteeism several times, both verbally and in writing. The written warning included notice that "further violations will result in disciplinary actions," including suspension or discharge.

A short time after the written warning was issued, Joan called work to say she was not going to be in because her babysitter had called in sick and she had to stay home and care for her young child. Joan's supervisor, Sylvia, told her that she had already exceeded the allowed number of absences and warned that if she did not report to work, she could be suspended. When Joan did not report for her shift, Sylvia suspended her for fifteen days.

In a subsequent hearing, Joan argued that it was not her fault that the babysitter had canceled, and protested that she had no other choice but to stay home. Sylvia pointed out that Joan had not made a good faith effort to find an alternate babysitter, nor had she tried to swap shifts with a co-worker. Furthermore, Sylvia said that the lack of a babysitter was not a justifiable excuse for being absent.

Questions:

1. Was the suspension fair?Ans:

Yes, I think the suspension was fair. Over a period of time, Joan was warned several times about her excessive absenteeism, both verbally and in writing, but she did almost nothing about resolving the problem. Joan hasn't shown an inclination to look for alternate solutions and she just expects Great American Market to put up with her excessive absenteeism, and the loss in productivity that comes with it. It appears to me that only a suspension would drive the point hard in this case.

SUBJECT : BUSINESS COMMUNICATION CASE-1 (20 Marks)

Nestle has launched quality street, lion and after 8 chocolates imported from Europe. Quality Street is an assortment

of chocolates priced at Rs. 75 for 218 gm. After Eight is a popular adult chocolate priced at Rs.25 for 20 gm and Lion

is a caramel wafer bar priced at Rs. 20 for a 45 gm bar. (Kit Kat ) is priced at Rs. 6 for a 17 gm bar and has a

chocolaty taste while Lion has a crunchy taste). The brands have different tastes and will appeal to different target

segments (though the target segment is one which may have already been exposed to these brands during visits

abroad). These brands have been introduced in metros in upmarket stores which sell brands bears the label "imported

by Nestle India Ltd." indicating that they may be better than smuggled ones (which may be stale).

Question:

1. Suggest suitable media /media vehicles for promoting these brands. Give reasons in support of your answer

Ans:

A number of media vehicles have been used to promote nestle. Television has been used extensively and

commercials can been aired across TV channels in India. Radio (FM) across Metros have can used and 5

creative executions have been broadcasted in the past year. Press, Outdoor and On-ground activities have

been used tactically, across the country, to promote nestle.

The spends on the brand depends on a number of factors – the competitive scenario being a major one. We

believe in being flexible when deciding the spends on a specific brand and we let the market factors

determine the spends on the brand and on different media vehicles.

Choosing media vehicles

The choice of different media vehicles for any market is based on an analysis of the standard features like:

reach, frequency, cost & availability. Depending on the factor of reach & frequency, the different media can

be classified into the following categories. This categorization can help the marketer to make a decision

about which type of media would be more suitable to the product & the organization.

 

Media Vehicles

Mass Media Local Media Personalized Media

Radio Haats, Melas, Fairs Direct Communication

Cinema Wall Paintings Dealers

Press Hoardings Sales Persons

TV Leaflets

Video Vans

Folk Media

Animal Parade

Transit Media

Researchers

Formal media

It includes Press and print, TV, Cinema, Radio, and Point of purchase and Outdoor advertisement. Reach of

formal media is low in rural households (Print: 18%, TV: 27%, Cinema: 30%, and Radio: 37%) and

therefore the marketer has to consider the following points:

SUB: CORPORATE LAW

Q.1. In the following statements only one is correct statement. Explain Briefly?

(5 Marks)

i) An invitation to negotiate is a good offer.

ii) A quasi-contract is not a contract at all.

iii) An agreement to agree is a valid contract.

Ans: A quasi-contract is not a contract at all

A quasi-contract (or implied-in-law contract) is a fictional contract created by courts for equitable, not

contractual purposes. A quasi-contract is not an actual contract, but is a legal substitute for a contract

formed to impose equity between two parties. The concept of a quasi-contract is that of a contract that

should have been formed, even though in actuality it was not. It is used when a court finds it appropriate to

create an obligation upon a non-contracting party to avoid injustice and to ensure fairness. It is invoked in

circumstances of unjust enrichment, and is connected with the concept of restitution.

Generally the existence of an actual or implied-in-fact contract is required for the defendant to be liable for

services rendered, and a person who provides a service uninvited is an officious intermeddler who is not

entitled to compensation. "Would-be plaintiffs cannot deliver unordered goods or services and demand

payment for the benefit....A corollary is that one who does have an enforceable contract is bound by the

contract's terms: subject to a few controversial exceptions, she cannot sue for restitution of the value of

benefits conferred..." However, in many jurisdictions under certain circumstances plaintiffs may be entitled

to restitution under quasi-contract (as in the example of Oklahoma below).

SUBJECT: FINANCIAL & COST ACCOUNTING

Total Marks: 80

N.B.: 1) All questions are compulsory2) All questions carry equal marks.

Q1) ABC Ltd. Produces room coolers. The company is considering whether it should continue to manufacture air circulating fans itself or purchase them from outside. Its annual requirement is 25000 units. An outsider vendor is prepared to supply fans for Rs 285 each. In addition, ABC Ltd will have to incur costs of Rs 1.50 per unit for freight and Rs 10,000 per year for quality inspection, storing etc of the product.

In the most recent year ABC Ltd. Produced 25000 fans at the following total cost:

Material Rs. 50,00,000Labour Rs. 20,00,000Supervision & other indirect labour Rs. 2,00,000Power and Light Rs. 50,000Depreciation Rs. 20,000Factory Rent Rs. 5,000Supplies Rs. 75,000

Power and light includes Rs 20,000 for general heating and lighting, which is an allocation based on the light points. Indirect labour is attributed mainly to the manufacturing of fans. About 75% of it can be dispensed with along with direct labour if manufacturing is discontinued. However, the supervisor who receives annual salary of Rs 75,000 will have to be retained. The machines used for manufacturing fans which have a book value of Rs 3,00,000 can be sold for Rs 1,25,000 and the amount realized can be

invested at 15% return. Factory rent is allocated on the basis of area, and the company is not able to see an alternative use for the space which would be released. Should ABC Ltd. Manufacture the fans or buy them?

SUBJECT : GENERAL MANAGEMENT

CASE-1: ATTEMPT ANY 4 CASES, EQUAL MARKS PER CASE (20 Marks)

CASE-2 (20 Marks)A small group of managers at Falcon Computer met regularly on Wednesday mornings to develop a statement capturing what they considered to be the 'Falcon Culture'. Their discussions were wide-ranging, covering what they thought their firm's culture was, what it should be and how to create it. They were probably influenced by other firms in their environment since they were located in the Silicon Valley area of California. Falcon computer was a new firm, having been created just eight months earlier. Since the corporation was still in the start- up phase managers decided it would be timely to create and instill the type of culture they thought would be most appropriate for their organization. After several weeks of brain storming, writing, debating, and rewriting, the management group eventually produced a document called 'Falcon Values', which described the culture of the company as they saw it. The organizational culture statement covered such topics, as treatment of customers, relations among work colleagues, preferred style of social communication, the decision making process, and the nature of working environment.

Peter Richards read over the Falcon values statement shortly after he was hired as a software trainer. After observing managerial and employee behaviors at Falcon for a few weeks, he was struck by wide discrepancy between the values expressed in the document and what he observed as actual practice within the organization. For example the Falcon values document-contained statements such as this: "Quality; attention to detail is our trademark; our goal s to do it right the first time. We intend to deliver defect free products and services to customers on the date promised."

However Richards had already seen shipping reports showing that a number of defective computers were being shipped to customers. And his personal experience supported his worst fears. When he borrowed four brand-new Falcon computers from the shipping room for use in a training class he found that only two of them started up correctly without additional technical work on his part.

Another example of the difference between the Falcon Values document and actual practice concerned this statement on communication: "Managing by personal communication is part of the Falcon way. We value and encourage open, direct, person to person communication as part of our daily routine." Executives bragged about how they arranged their chairs in a circle to show equality and to facilitate open communications whenever they met to discuss the Falcon values document Richards had heard the "open communication" buzzword a lot since coming to Falcon, but he hadn't seen much evidence of such communication. As a matter of fact all other meetings used a more traditional layout with top executives at the front of the room. Richards believed that the real organizational culture that was developing at Falcon was characterised by secrecy and communications that followed the formal chain of command. Even the Falcon values document Richard was told had been created in secret.

H R MANAGEMENT

CASE 1:

1. If you were the programmer would you want to work at Microsoft why or why not ?

ANS :First of all, who does not want to work in Microsoft? First, Microsoft is a huge company of software. The Microsoft’s employees are known for the putting in long hours. Although, the workers there working with codes and evaluating the bugs in every single days, the employees still got appreciated by many people out there. The meaning of appreciated here’s, they are very special if they get a job in Microsoft. Because the company putting new recruits through a grueling µinterview loop, and it is not that easy to get a job there, and only the best and the brightest survive to become employees in Microsoft. In spring of 2002, the Microsoft stocks prices down, and the growth for Microsoft products were slowing. Though the company had fallen down caused by the economic situation, I still would like to work for this company. There will be no others companies would give a high salaries than Microsoft.

SUBJECT : INTERNATIONAL BUSINESS

COURSE : Total Marks : 80

CASE 1 (20 Marks)

Kodak started selling photographic equipment on Japan 1889 and by the 1930s it had a dominant position in the Japanese market. But after World War II, U.S occupation forces persuaded most U.S companies including Kodak to leave Japan to give the war torn local industry a chance to recover. Kodak was effectively priced out of the market by tariff barriers; over the next 35 years Fuji gained 70% share of the market while Kodak saw its share slip to miserable 5%. During this period Kodak limited much of its activities in Japan.

This situation persisted until early 1980s when Fuji launched an aggressive export drive, attacking Kodak in the north American and European markets. Deciding that a good offence is the best defense, in 1984 and the next six year, Kodak outspent Fuji in Japan by a ratio of more than 3 to 1. It erected mammoth $ 1 million near signs as land marks in many of the Japan’s big cities and also sponsored Sumo wrestling, Judo, and tennis tournaments and even the Japanese team at the 1988 Seoul Olympics. Thus Kodak has put Fuji on defensive, forcing it to divert resources from overseas to defend itself at home. By 1990’s, some of Fuji’s best executives had been pulled back to Tokyo.

All this success, however , was apparently not enough for Kodak. In may 1995, Kodak filed a petition with the US trade office, that accured the Japanese government and Fuji of “Unfair trading practices”. According to the petition, the Japanese government helped to create a ‘ profile sanctuary’ for Fuji in Japan by systematically denying Kodak access to Japanese distribution channels for consumer film and paper. Kodak claims Fuji has effectively shut Kodak products out of four distributors that have a 70% share of the photo distribution market. Fuji has an equity position in two of the distributors, gives large year –end relates and cash payments to all four distributors as a reward for their loyalty to Fuji, and owns stakes in the banks that finance them. Kodak also claims that Fuji uses similar tactics to

control 430 wholesale photo furnishing labs in Japan to which it is the exclusive supplier. Moreover Kodak’s petition claims that the Japanese government has actively encourages these practices.

But Fuji a similar counter arguments relating to Kodak in U.S. and states bluntly that Kodak’s charges are a clear case of the pot calling the kettle back.

(a) What was the critical catalyst that led Kodak to start taking the Japanese market seriously? Ans:

Though Kodak entered the Japanese market in 1905, the company never took the Japanese market seriously.

In the early 1980s, Japan emerged as the second largest market in photographic products.

In January 1998, the top management of the US-based Eastman Kodak Company (Kodak) in Rochester,

New York, was extremely worried after reviewing the company's financial results for the year ending

December 1997.

The company's revenues had come down from $15.97 billion in 1996 to $14.36 billion in 1997, a fall of

more than 10%. Kodak's net earnings had taken a big hit falling from $1.29 billion to just $5 million for the

same period. However, the most worrying factor for Kodak's management was the more than five percent

points decline (from 80.1% to 74.7%) in its US market share. Kodak had been consistently losing its market

share to its competitors since the early 1980s even when it enjoyed almost a monopoly status in the

photographic film and paper industry in the US with more than 85% market share. However, the fall of 5-

percentage points in just one year was alarming. Market observers wondered what had happened to Kodak,

which had built a strong presence in the US markets and had established a household brand name

synonymous for films.

SUBJECT : MARKETING MANAGEMENT Total Marks : 80

Case-1 : The use of the marketing mix in product launch

IntroductionNIVEA® is an established name in high quality skin and beauty care products. It is part of a range of brands produced and sold by Beiersdorf. Beiersdorf, founded in 1882, has grown to be a global company specialising in skin and beauty care.

In the UK, Beiersdorf’s continuing goal is to have its products as close as possible to its consumers, regardless of where they live. Its aims are to understand its consumers in its many different markets and

delight them with innovative products for their skin and beauty care needs. This strengthens the trust and appeal of Beiersdorf brands. The business prides itself on being consumer-led and this focus has helped it to grow NIVEA into one of the largest skin care brands in the world.

Beiersdorf’s continuing programme of market research showed a gap in the market. This led to the launch of NIVEA VISAGE® Young in 2005 as part of the NIVEA VISAGE range offering a comprehensive selection of products aimed at young women. It carries the strength of the NIVEA brand image to the target market of girls aged 13-19. NIVEA VISAGE Young helps girls to develop a proper skin care routine to help keep their skin looking healthy and beautiful.

The market can be developed by creating a good product/range and introducing it to the market (product-orientated approach) or by finding a gap in the market and developing a product to fill it (market-orientated approach). Having identified a gap in the market, Beiersdorf launched NIVEA VISAGE Young using an effective balance of the right product, price, promotion and place. This is known as the marketing mix or ‘four Ps’. It is vital that a company gets the balance of these four elements correct so that a product will achieve its critical success factors. Beiersdorf needed to develop a mix that suited the product and the target market as well as meeting its own business objectives.

The company re-launched the NIVEA VISAGE Young range in June 2007 further optimising its position in the market. Optimised means the product had a new formula, new design, new packaging and a new name. This case study shows how a carefully balanced marketing mix provides the platform for launching and re-launching a brand onto the market.

Product :The first stage in building an effective mix is to understand the market. NIVEA uses market research to target key market segments which identifies groups of people with the same characteristics such as age/gender/attitude/lifestyle. The knowledge and understanding from the research helps in the development of new products. NIVEA carries out its market research with consumers in a number of different ways. These include:• using focus groups to listen to consumers directly• gathering data from consumers through a variety of different research techniques• product testing with consumers in different markets.

Beiersdorf’s market research identified that younger consumers wanted more specialised face care aimed at their own age group that offered a ‘beautifying’ benefit, rather than a solution to skin problems. NIVEA VISAGE Young is a skin care range targeted at girls who do not want medicated products but want a regime for their normal skin.

SUB: OPERATION MANAGEMENT

Attempt any Eight QuestionsAll questions carries equal marks.

Q.1 How would operations strategy for a service industry be different if any from that

for a manufacturing industry? (It’s an example & explains)

Ans 1 )

1. A service has much higher customer involvement than a product but manufacturing is a combination of products and services. 

2. Products can be stored but services can't, so you have to ensure that your services are sold before they perish. 

3. In manufacturing, you should strive to maximise the utilisation of assets and resources but minimise the storage of products without adversely affecting key service measures defined by customers. 

OPERATIONS MANAGEMENT

CASE-1

Bloomsday Outfitters produces T-shirts for road races. They need to acquire some new stamping machines to produce 30,000 good T-shirts per month. Their plant operates 200 hours per month, but the new machines will be used for T-shirts only 60 percent of the time and the output usually includes 5 percent that are "seconds" and unusable. The stamping operation takes 1 minute per T-shirt, and the stamping machines are expected to have 90 percent efficiency considering adjustments, changeover of patterns, and unavoidable downtime. How many stamping machines are required?

ANSWER 1 : Target stamping-30000nos  limting Factor-machine availability time-200*60%=120hrs per month. Practical stamping Capacity-120*60mins *90%(efficiency)*95(Good units)=6156 Machines Required-30000/6156= Aprox 5 machines

SUBJECT: ORGANIZATIONAL BEHAVIOUR

Total Marks: 80

CASE STUDY -1 (20 Marks) Introduction: XYZ -An Organizational PerspectiveThe Pre-OD Scenario: Our Strengths and Areas of Concern

In the years 1990-91 XYZ had grown into the largest Indian HARDWARE company with revenues of over Rs. 1100 crores and racing towards achieving its vision of being global top ten. As pioneers in the industry,

XYZ’s strengths included on time delivery, premier position in the industry in terms of revenues, focus on training programs, quality initiatives, use of good technical tools and procedures and encouragement of individual excellence in performance. However, XYZ’s was also, at that point in time, grappling with a few areas of concern with regard to its operational paradigm.

Mounting revenue pressures: The pressure to retain its strong premier position led the organization to tend towards short-term revenues, and relatively lesser efforts were being put into medium and long-term markets and activities (such as products and building up knowledge). Though XYZ’s built relationships with individual customers, Relationship Managers largely tended to focus on obtaining short-term projects – there was lesser investment on aligning to long-term objectives of customers. The approach, by and large, was of reactive project management and we were yet to espouse the approach of architecting proactive solutions for the customer.

Selectivity in projects: There was a tangible tension at, XYZ’s between generating revenues and organizing strategically, on basis of technology and business areas, impacting selectivity in projects accepted. Pressures from customers on schedules was resulting in faster delivery and hence, snowballing into further pressure on future schedules.

Focus on specialization: There was diffusion of expertise and we were yet to focus on building strategic expertise in individual centers. Employees were rotated across domains and skills in the interest of learn ability as well as for meeting requirements. In a sense, there was heightened focus on Voice of the Customer, in comparison to the Voice of Employee.

SUBJECT: PERSONNEL MANAGEMENT

CASE STUDY : 1

Manpower planning is important aspect. Macro issues concerning factors like national population trends, educational plans, economic growth rate, overall supply and demand for various categories of manpower will certainly have an impact on the manpower plans of the enterprise.

These factors impinge on the enterprises plans the manpower planner needs to be aware of their impact. One of the assumptions made in a less developed country like India, with surplus labour, is that there are large number of trained manpower available for any specific skill requirement. It is generally not so.

Q1) Define the term “Manpower Planning”?

Ans;

Manpower Planning

Manpower planning means planning means deciding the number and type of the human resources required

for each job, unit and the total company for a particular future date in order to carry out organizational

activities. Manpower planning may be viewed as foreseeing the human resources requirement of an

organization and the future supply of human resources and (i) making necessary adjustments between these

two and organizational plans and (ii) foreseeing the possibility of developing the supply of manpower

resources in order to match it with the requirements by introducing necessary changes in the functions of

human resources management.

SUBJECT: PRINCIPLE & PRACTICE OF MANAGEMENT

Marks: 80

CASE STUDY : 1

International Case : Carrefour — Which Way to Go?

Wal-Mart's biggest global competitor is the big French retailer Carretour, a firm that has hypermarkets, big

stores offering a variety of goods. It has made large investments around the globe in Latin America and

China. But not all is well as competitors taking market share its home market, for instance. There has been

even speculation of a takeover by Wal-Mart or Tesco, an English chain. Mr. Barnard has been ousted after

heading the company for 12 years; he was replaced by Jose Luis Durant who is of German-Spanish descent.

Although the global expansion is cited by some as success, it may be even a big mistake. It withdrew from

Japan and sold 29 hypermarkets in Mexico. Carrefour also had problems competing with Tesco in Slovakia

and the Czech Republic. In Germany, the company faced tough competition from Aldi and Lidle, two

successful discounters. On the other hand, it bought stores in Poland, Italy, Turkey, and opened new stores

in China, South Korea, and Columbia. Carrefour has become more careful in selecting markets. But. the

company is eager to enter the Indian market, but found out in late 2006 that Wal-Mart will do so as well.

SUBJECT: SUPPLY CHAIN MANAGEMENT

Total Marks: 80

CASE - 1 (20 Marks)

E-TENDERING IN SUPPLY CHAIN MANAGEMENT-VENDOR SELECTION

The e-tendering process has meant a transformation from a traditional vendor selection process through tenders to an online process making huge advances in efficiency, transparency and Data Storage solutions

and retrieval systems. Wipro Infotech Enterprise application practice through its e-procurement application development service has ensured a smooth migration for governments.

The e-tendering service offering allows vendors to electronically upload and download documents, access project details as well as enabling you to maintain a track on the overall status of the tenders.

The key benefits of our E-tendering service offering include:

Reducing collusion among vendors and making the process fair and competitive Enabling systematic documentation of the complete tendering process and hence reducing

administrative costs and minimising human error Ensuring significant reduction in processing time and tender cycle time Ensuring timely completion of tendering process thereby resulting in better utilisation of available

funds from financial institutions Providing onsite service and training to ensure that government adopts the new system without any

difficulties