Meaning, characteristics, types of debentures.

Q. Write meaning and characteristics of Debenture. Explain different types of debentures.

Ans. MEANING OF DEBENTURE: The word ‘Debenture’ is derived from the latin word ‘debere’, which means ‘taking a loan’. When a company wants to take a loan on a long-term basis so that the loan becomes the company’s capital. It issues debentures and debenture stock. By debenture is meant a ‘document that contains an acknowledgement of indebtedness’. It is issued by company under its common seal and gives an undertaking to repay the debt at a specified date (or at the company’s option), specifies the conditions related to the loan taken by the company. According to Section 2(30) of the Companies Act, 2013, ‘debenture’ includes debenture stock, bonds and any other securities of a company, whether constituting a charge on the assets of the company or not. 

— According to Tophamn, “Debenture is a document given by a company as evidence of a debt to the holder usually arising out of loan, and most commonly secured by a charge.”

CHARACTERISTICS OF DEBENTURES: A debenture has the following characteristics:

(i) A debenture is issued by a company and is an acknowledgement of the company’s debt to the holder. 

(ii) It is issued under the company’s common seal, but need not necessarily specify the company’s capital.

(iii) A debenture is normally issued for a specified amount, but one debenture may also be issued for the total amount given by a debenture holder.

(iv) The rate of interest and the date of renewal is stated in a debenture.

(v) A debenture normally, but not always, is secured by the company’s property.

(vi) The holder of a debenture does not have a right to vote in the company’s meetings, i.e. he does not participate in the company’s management.

DIFFERENT TYPES OF DEBENTURES: Depending upon the conditions of issue, debentures may be of different types, which are as follows:

(1) Registered Debentures: Debentures that have the names, addresses and other particulars of the holder recorded in the company’s Register of Debenture-holders are called ‘registered debentures’. The interest as well as the principal amount with respect to such debentures is payable only to the registered holders. Registered debentures can be transferred only in accordance with the conditions of their issue and the transfer must necessarily be recorded in the company’s register. As such, a registered debenture is not a negotiable instrument.

(2) Bearer Debentures: Debentures that are neither recorded in the company’s register nor require the prior consent of the company for their transfer are called ‘bearer debentures’. In other words, bearer debentures are transferable by mere delivery and whoever has the possession of a bearer debenture is deemed to be its owner. Only the  holder of a bearer debenture has the right to receive the interest or the principal amount. The transfer of such debentures does not involve any legal procedure, and no stamp duty is to be paid for the transfer. The holder of bearer debentures can, on the payment of a normal fee, gets his name recorded in the company’s register of debenture-holder. 

(3) Secured Debentures: Debentures which are secured by a charge on the company’s property are called ‘secured’ or ‘mortgage’ debentures. In case the company does not make the payment of such debentures, the holders can realise the payment from the company’s property which is held in charge or mortgage.

(4) Unsecured Debentures: Debentures that are not secured by any charge or mortgage on the assets of the company are called unsecured debentures. The company does not provide any security for the payment of interest or principal amount of these debentures. The holders of such debentures are like ordinary, unsecured creditors of the company who only have a certificate that they have paid the amount of debentures to the company. In case of default on the company’s part, the holders of such debentures can sue the company. 

(5) Redeemable Debentures: When the holder of debentures is given the option that provides for the payment of the principal amount on a specified date or on demand or notice, the debentures are said to be redeemable.

(6) Irredeemable Debentures: Debentures on which the issuing company does not fix any date by which they should be redeemed, and the holders of debentures cannot demand payment from the company as long as it is a going concern are called ‘irredeemable’ or ‘perpetual’ debentures. Even though the principal amount of such debentures is paid on winding up of the company, the interest is paid regularly. In case, there is a default in the payment of interest, such debentures can be paid during the company’s lifetime.

(7) Convertible Debentures: When the holders of debentures are given the optìon that within a specified period and on fulfillment of specified conditions, they can convert either fully or partially, their debentures into equity shares, the debentures are said to be ‘convertible’.

What is dividend policy? Explain the factors influencing the dividend policy of a company.

 Q. What is dividend policy? Explain the factors influencing the dividend policy of a company. 

Ans. MEANING OF DIVIDED POLICY:

Divided refers to that part of net profits of a company which is distributed among shareholders as a return on their investment in the company. 

A settled approach for the payment of dividend is known as dividend policy. Therefore, dividend policy means the broad approach according to which every year it is determined how much of the net profits are to be distributed as dividend and how much are to be retained in business. Thus, the dividend policy divide the net profits or earnings after taxes into two parts: 

(1) Earnings to be distributed as dividend 

(2) Earnings retained in business 

A firm will have to choose between the portion of profits distributed as dividends and the portion ploughed back into the business. The choice is called dividend policy and it will have its effect on both the long term financing and the wealth of shareholders. 

Factors influencing/determining/affecting the dividend policy.

The following are the factors which generally affect the dividend policy of a firm:

(1) Financial Needs of the Firm: Financial needs of a firm are directly related to the investment opportunities available to it. If a firm has abundant profitable investment opportunities, it will adopt a policy of distributing lower dividends. It would like to retain a large part of its earnings because it can reinvest them at a higher rate than the shareholders can. Other reason for retaining the earning is, that, issuing new share capital is inconvenient as well as involves flotation costs. On the other hand, if the firm has little or no investment opportunities, it should retain only a small portion of its earnings and distribute the rest as dividends.

(2) Stability of Dividends: Investors always prefer a stable dividend policy. They expect that they should get a fixed amount as dividends which should increase gradually over the years. Hence, while determining the dividend policy, the merits of stability of dividends like investor’s desire for current income, resolution of investor’s uncertainty, requirement of institutional investors etc. should be given due consideration.

(3) Legal Restrictions: The firm’s dividend policy has to be formulated within the legal provisions and restrictions. For instance, section 123 of the Indian Companies Act, 2013 provides that dividend shall be paid only out of current profits or past profits after providing for depreciation. Likewise, if there are past accumulated losses, they must be first set off against current year’s profits before the declaration of any dividend. Similarly, a firm is prohibited from declaring any dividends if its liabilities exceed its assests.

(4) Restrictions in Loan Agreements: Lenders, mostly the financial institutions, put certain restrictions on the payment of dividend to safeguard their interests. They may allow the payment of dividend only when some minimum amount has been transferred to sinking fund established for the redemption of their debt. Likewise, they may prohibited the payment of dividends in excess of certain percentage, say, 10%. Alternatively, they may fix the minimum limit of profits that may be used for dividend, say, not more than 40% of the net profits can be paid as dividends. When such restrictions are put, the company will have to keep a low dividend payout ratio.

(5) Liquidity: Payment of dividend causes sufficient outflow of cash. Although a firm may have adequate profits, it may not have enough cash to pay the dividends. It may happen when most of the sales are on credit and firm’s cash resources have been utilized in the expansion of assests or payment of its liabilities. This situation is common for growing firms which needs funds for their expanding activities and permanent working capital. Thus, the cash position is a significant factor in determining the size of dividends. Higher the cash and overall liquidity position of a firm, higher will be its ability to pay dividends. 

(6) Access to Capital Market: A company which is not sufficiently liquid can still pay dividends if it has esay accessibility to capital market. In other words, if a company is able to raise debt or equity in the capital market, it will be able to pay dividends even if its liquid position is not good. While evaluating the ability to raise funds in the capital market, the cost of funds and the promptness with which funds can be raised must be considered. Usually, mature firms have greater access to capital market than the new firms.

(7) Stability of Earnings: Stability of earnings has a significant effect on the dividend policy of a firm. Normally, the greater the stability of earnings, greater will be the dividend payout ratio. 

(8) Objective of Maintaining Control: Sometimes the present management employs dividend policy to retain control of the company in its own hands. When a company pays larger dividends, its liquidity position is adversely affected and it may have to issue new shares to raise funds to finance its investment opportunities. If the existing shareholders do not want or cannot purchase the new shares, their control over the company will be diluted. Under such circumstances, the management will declare lower dividends and earnings will be retained to finance the investment opportunities. 

(9) Effect on Earning per Share: As discussed above (5), high dividend payout ratio affects the liquidity position adversely and may necessitate the issue of new equity shares in the near future, causing an increase in the number of equity shares and ultimately the earning per share may reduce. On the other hand, by keeping a low dividend payout ratio the firm can retain and plough back larger portion of its earnings resulting in increase in future earnings and thereby an increase in earning per share.

(10) Firm’s Expected Rate of Return: If the firm’s expected rate of return would be less than the rate which could be earned by the shareholders themselves from external investment of their funds, then firm should retain smaller part of its earnings and should opt for a higher dividend payout ratio.

(11) Inflation: Inflation may also act as a constraint on paying larger dividends. Depreciation is charged on the original cost of the asset and as a result, when there is an imcrease in price level, funds generated from depreciation become inadequate to replace the obsolete assests. Consequently, companies will have to retain more of its earnings to provide funds to replace the assets and hence their dividend payout ratio will be low during periods of Inflation.

(12) General State of Economy: Earnings of a firm are subject to general economic conditions of the economy. If the future economic conditions are uncertain, it may lead to retention of larger part of the earnings of a firm to absorb any eventuality. Likewise, in the event of depression, when the level of level of business activity is very low, the management may reduce the dividend payout ratio to preserve its liquidity position.

All the above factors must be carefully considered before formulating a dividend policy.

Problems of economy of Haryana.

 Q. What are the various problems of economy of Haryana?

Ans. Haryana is one of the most developed state of India. Per capita income of Haryana is very high in comparison to many states in India. But despite this, Haryana economy has some problems which hinder the fast pace of its economic development. Some of the problems of Haryana economy are discussed below:

(1) Excessive Dependence on Agriculture Occupation: Haryana economy is mainly an agrarian economy where still majority of population is engaged in agriculture sector, which hinders the process of economic development. Problem of disguised unemployment is exist in the agriculture sector. It reflects the state of backwardness of agriculture sector in Haryana. Even growth rate of agriculture sector is less in comparison to growth of industry and service sector.

(2) Regional Disparities: In Haryana, some districts are relatively more developed while some other districts are economically backward. Some districts of Haryana, viz.– Faridabad, Gurgaon, Panipat, Sonipat, Karnal are making more contribution to state domestic product. On the other hand, some districts like Mewat, Mahendragarh, Jhajjar, Bhiwani, Fatehabad, Sirsa are making less contribution to state domestic product. It reflects that some districts of Haryana are forward, while some other districts are backward. 

(3) Weak Infrastructure: Haryana lacks in terms of infrastructure. Infrastructure includes roads, railways, power-generation, dams, irrigation facilities, public-health, etc. Poor Infrastructure creates hindrance in the path of economic development. The districts having good infrastructure like Faridabad, Gurgaon, Panipat, Yamunanagar attract entrepreneurs to set up infustrial units here. But such districts are not much in number. Many districts of Haryana still face problems of power shortage, poor quality roads etc. Haryana state is extremely far from sea port. It hinders its export potential. Weak infrastructural base creates hurdle in the path of faster economic development.

(4) Poor Sex Ratio (Female Ratio): Sex ratio refers to number of females per 1,000 males. Lower sex ratio leads to many social and moral evils. Sex ratio in Haryana is very low in comparison to national average. It reflects negative attitude of Haryana society towards girl child and serious problem of female foeticide. In such imbalanced society, female participation in work-force is less. It hinders the pace of economic development.

(5) Low Standard of Education: In comparison to many other states, the standard of education in Haryana is low. There is lack of professional, technical and vocational education. The quality of education in government run primary educational institutions is not satisfactory. Because of low standard of education, the development of human resources has been slow.

(6) Backward Social Custom: Backward social customs and traditions of society prove big obstacle in the path of economic development. People are trapped in old, outdated customs and conventions in such a way that they do not like to follow scientific and modern notions in place of outdated ideas. To observe social customs, people spend their hard earned money lavishly.  Because of illiteracy and backwardness people have deep faith in fatalism (भाग्यवाद). They consider their poverty is the result of their fate (भाग्य, luck) and they do not make much efforts for its eradication. They have indifferent attitude towards economic progress. So, backward and social customs create hindrance in the path of economic development.

(7) Weak Governance: Due to weak administrative set up, the implementation of economic strategies and plans remains less effective. The delivery system of various services is very weak. The implementation of developmental plans and programmes is ineffective. Due to weak governance, efforts of government do not bring the desired results. Some of the political leaders and government officials are dishonest and corrupt. Because of widespread corruption, scams and leakage of funds in public projects, plans cannot be properly implemented. A very small fraction of funds allocated for poverty alleviation reaches the target group. Corruption poses great challenge in the path of economic development.

(8) Lack of Modern Enterprise: Although in Gurgaon and Faridabad districts, many multinational companies have set up their industrial units/service enterprise but still many districts of Haryana lack in modern enterprise. People lack in entrepreneurial skills. They adopt traditional methods for managing their enterprise. In the lack of modern enterprise, the pace of economic development is hindered. 

(9) Technological Backwardness: Haryana lacks in modern research and development facilities. The level of technology in industry and agriculture is low. Backward technology results in higher capital output ratio and wastage of natural resources of the state. The lack of modern technology has negative effect on industrial and agricultural productivity. Lack of advanced technique also creates hindrance in the path of economic development.

(10) Lack of Natural Resources: Haryana lacks in natural resources like mineral wealth, perennial rivers, proximity to sea, etc. Some districts of Haryana have rocky land and deserts. Some districts of Haryana like Mewat, Mahendragarh, Bhiwani, Hisar, Sirsa share their border with Rajasthan. Some parts of these districts get very less rainfall.

(11) Slow Capital Formation: Capital formation refers to productive investment in the economy. Investment of savings into productive channels results in capital firmation. High rate of capital formation promotes the pace of economic development. In Haryana, rate of capital formation is not very high. People living in rural areas have less saving habits. Even if they save, their savings are not invested in productive channels due to poor banking habits, weak money and capital markets etc. In urban areas, people spend more due to demonstration effect resulting in less savings and thus less capital formation. 

(12) Weak Public Sector Units: Most of the state run PSUs are running into losses. Employees of the public sector units have poor work culture. Further, outdated technology used in the state run PSUs hinders their efficiency. These PSUs are managed by bureaucrats and not by professionals from management field.

In nutshell, there are many economic and non-economic problems in Haryana state which create hindrance in the path of economic development.

Sweat Equity Shares

Q. Explain in brief Sweat Equity Shares.

Sweat equity shares means equity shares issued by the company to its employees or directors at a discount or consideration other than cash for providing know-how or making available intellectual property rights. According to section 54 of Companies Act, 2013, a Company may issue sweat equity shares of a class of shares already issued, if the following conditions are fulfilled:

(i) the issue of sweat equity shares is authorised by a special resolution passed by the company in general meeting.

(ii) the resolution specifies the number of shares, current market price, the consideration, if any, and the class or classes of directors or employees to whom such equity shares are proposed to be issued.

(iii) not less than one year elapsed since the date on which the Company was entitled to commence business.

(iv) the sweat equity shares of a Company whose equity shares are listed on recognised stock exchange, are issued in accordance with the regulations made by the SEBI in this behalf.

(v) such shares cannot be resold by their holders within a period of three years called lock-in period.

It is to be noted that a company may issue sweat equity shares at a price lower than than the nominal value of equity shares.

The entries for issue of sweat equity shares are same as for issue of other equity shares.

Features and procedure of obtaining information under right to information act, 2005.

Q. Explain the features and procedure of obtaining information under right to information act, 2005. [KUK 2017-18]

Ans. FEATURES OF RIGHT TO INFORMATION ACT, 

https://english9192.blogspot.com/2025/05/salient-features-of-right-to-Information-act-2005.html

PROCEDURE OF OBTAINING INFORMATION UNDER RIGHT TO INFORMATION ACT, 2005: The procedure of obtaining information under Right to Information Act is as under: 

1. Request of obtaining information: A person, who desires to obtain any information under this act, shall make a request in writing or through electronic means in English or Hindi or in the official language of the area in which the application is being made, accompanying such fee as may be prescribed to the Public Information Officer (PIO) or Assistant Public Information Officer (APIO) as the case may be. Public Information Officer is an officer designated by the Public Authority in all administrative offices or units under it and Assistant Public Information Officer is an officer designated by the Public Authority at each sub-divisional or block levels. The duties of these officers are to receive the applications from the information seekers and provide them necessary information. If there is any prescribed format of seeking information, then the information-seeker must use that form. If there is no prescribed format of application for seeking information, the application can be made on plain paper. The application should have details of the information required as well as the name and complete postal address of the applicant.

Where request for obtaining information cannot be made by the applicant in writing, the concerned information officer shall render all reasonable assistance to the person making the request orally to reduce the same in writing.

An applicant making request for information shall not be required to give any reason for requesting the information or any other personal details except those that may be necessary for contacting him.

2. Depositing fees for obtaining information: For obtaining any information, the applicant is required to deposit a certain fees as prescribed by Central and State Governments. Different states have different fees for seeking information. The application fees for Central Government Departments is ₹ 10. The applicant may also be required to pay further fee towards the cost of providing information, the details of which shall be intimated (familiar) to the applicant by the public information officer. For obtaining information from Central Departments, the applicant is required to pay ₹ 2 for every page. The amount of fees differs from state to state. Similarly, for the inspection of documents a certain fees has been prescribed. Both at Centre and State levels, no fee for inspection of records, if such an inspection is made for one hour only. However, for every subsequent hour after one hour or a fraction thereof, the fee is ₹ 5. This position (fee structure) is applicable to Central Government Departments. State Governments have different fee rules. The fee is deposited in the name of concerned Public Information Officer/Assistant Public Information Officer. The modes of paying fees are Cash, Demand Draft, Banker’s Cheque, Indian Postal Order or Treasury Challan. Different State Governments have framed different rules for depositing application fee for seeking information.

There is no fee (Application fee or other additional fee) for citizens below poverty line.

3. Disposal of Request

Following are the provisions of Right to Information Act regarding Disposal of Request for obtaining information:

(i) In general cases, normally the request for information shall be disposed by the concerned information officer within 30 days of receipt of request.

(ii) where the information sought for concerns with the life or liberty of a person, the same shall be provided within 48 hours of the receipt of the request.

(iii) where the information sought (relates) to third party, the same shall be provided within 40 days of the receipt of request.

(iv) If the information sought relates to allegations of human rights violations against the listed intelligence and security organisations, the same shall be provided within 45 days of the receipt of request.

(v) If the concerned information officer does not provide information within the specified period, it shall be taken as a deemed refusal against which the applicant seeking information can file his first appeal to the next senior rank information officer.

(vi) Where a request has been rejected, the concerned Public Information Officer shall communicate to the person making request:

(a) The reason for such rejection,

(b) The period within which an appeal against such rejection and to whom may be preferred, and 

(c) The particulars of the appellate authority.

4. Appeals: The applicant can file appeal if there is delay in disposal of request or the information has been denied or the information given is found to be incorrect. Appeal can be filed at two levels – one within the organisation to the senior officer to the Public Information Officer known as First Appellate Authority. The second appeal may be filed with the Central or State information commission, as the case may be. The Central and State Governments have framed rules laying down the procedure for filing appeals. The appeals in respect of Union Territories can be filed before the Central Information Commission.

First Appeal:

Any person who does not receive a decision or request for information within the stipulated (specified) time or is aggrieved by a decision of the Public Information Officer may file first appeal of the Right to Information Act. First appeal can be filed within 30 days from the receipt of decision of Public Information Officer, and if no decision is given within 60 days from the date of making a request for information. No fee is charged for filling first appeal, though some states have prescribed a certain fee.

No format has been prescribed for filing first appeal. So, the first appeal can be filed on a plain paper. A copy of the original application which was sent to Public Information Officer for desired information along with reply letter of the Public Information Officer (if any) must be attached to the appeal application. First appeal has to be disposed of within 30 days from the date of its receipt. This period is extendable by 15 days if necessary. So if you do not obtain desired information even after making first appeal, you can file second appeal to the next level Appellate officer (Authority).

Second Appeal:

Second appeal is the last resort (help) for obtaining information under Right to Information Act. Second appeal can be filed with the information commission. A second appeal against the decisions of the State Government Departments can be filed with State Information Commission whereas appeal against Central Government Departments can be filed with the Central Information Commission. Though no fees has been prescribed for filing appeals before the Central Information Commission, some states have fixed fees for filing appeals with their State Commission. In case the applicant is still aggrieved by the decision of the First Appellate Authority, then he can file one more appeal (second appeal) with the commission. The second appeal shall lie within 90 days from the date on which decision should have been made or was actually received. However, the Central or State information commission may admit the appeal after the expiry of period of 90 days if it is satisfied that the appellant was prevented by sufficient cause from filling the appeal in time.

No format has been prescribed for filing second appeal too. So, the second appeal can also be filed on a plain paper. Though there is no time limit for the disposal of appeal by the commission but Central or State Commission gives its decision within 90 days of filing the appeal. The decision of Central or State Commission gives its decision within 90 days of filing the appeal. The decision of Central or State Commission shall be binding but an appeal can be filed in the High Court and Supreme Court against the decision of the Commission.

features and procedure of obtaining information under right to information act, 2005.

What is marketing? Explain various functions of marketing.

Q. What is marketing? Explain various functions of marketing. 

Ans. MEANING OF MARKETING: Marketing is a comprehensive term and it includes all resources and set of activities necessary to direct and facilitate the flow of goods and services from the producer to the consumer. Marketing is providing the right goods and services to the right people, at the right place, at the right time and at the right price with the right communication and promotion.

The concept of market gives us the concept of marketing. Marketing is a broader concept which includes all human activities in relation to the market. It includes product planning and development, buying and assembling, pricing and discounting, distribution and selling, branding and packaging, standardization and grading, transportation and warehousing, promotion and advertising, financing and risk bearing, analysis of market in terms of its present and potential customers.

In the words of Philip Kotler, “Marketing is a social process by which individuals and groups obtain what they need and want through creating and exchanging goods with others.”

According to Richard Buskrick, “Marketing is an integrated system of action that creates value in goods through the creation of form, place, time and ownership utilities.”

FUNCTIONS OF MARKETING: Marketing is the performance of business activities that direct the flow of goods and services from producer to consumer. These activities are called marketing functions. 

According to Clark and Clark, “A marketing function is a major specialised activity performed in marketing.”

According to Converse, Huegy and Mitchell, “A marketing function is an act, operation or service performed in the process of distributing goods and services.”

A brief explanation of marketing functions is as follows: 

(A) RESEARCH FUNCTIONS: The success of marketing depends upon the fact that how much we are able to understand the needs of our customers and to produce accordingly. The research functions are: 

1. Marketing Research: Marketing research is the systematic search for and analysis of facts related to a marketing problem. It has become one of the most important functions of marketing in modern times. Marketing research is the intelligence service of the organisation. It helps in analysing the buyer’s behaviour, relative popularity of product, effectiveness of advertising media, pricing policies, packaging and grading policies, distribution structure, strength and weaknesses of the competitors etc. 

The major task of marketing research is to provide the marketing manager with timely and accurate information about the change in nature of consumer’s demand, changing position of supply, prices prevailing in the market, attitude of consumers towards price of the product, sales incentive/promotion schemes, availability of substitutes, potentialities for increasing the sales, market trends, etc.

Nowadays marketing research is not only fact finding and information gathering activity but it is a problem solving and action recommending function of marketing.

2. Product Planning and Development: Product planning and development are two important functions of marketing. Product planning is a process in which the type, form and design of the product is determined on the basis of informations obtained with the help of marketing research. It is the starting point of every marketing programme. It is a pre production activity through which a marketeer try to fill the gap in the market demand and generate revenue out of it. Successful marketing depends on the efficient manufacturing of the product, matching with the interest of consumer, his assumptions and choices etc. 

Product development begins with the conception of idea to its successful commercialisation. The product must be so designed and developed that it meets the requirements of consumers. Product development involves decisions regarding colour, shape, style, size, quality and other features in order to arrive at a want satisfying product, which will give maximum satisfaction to the consumer and optimum profit to the manufacturer.

Product planning and development involves a number of decisions, such as, what to produce or buy, how to have its packaging, how to fix its price and how to sell it. 

This function of marketing includes new inventions, changes in product, elimination of product, determining the level of production and many other decisions regarding products of the company. Thus, product planning and development is an important function of marketing. The main objective of this function is to provide want satisfying products to the consumers which increases their welfare and standard of living. 

(B) EXCHANGE FUNCTIONS: In marketing, exchange means transfer of ownership. It involves two separate functions i.e. buying and selling. Both buying and selling are complementary to each other and not the contradictory. It is also known as merchandising functions, this include the activities which are conducted for creating the demand and making the products available in the market.

1. Buying and Assembling: Buying is the most important function of marketing, because it is carried out by all marketeers: the manufacturers, the wholesalers, the retailers etc. A manufacturer has to buy raw materials for production; a wholesaler has to buy products to sell them to the retailers; a retailer has to buy products to be sold them to the consumers.

The success of a marketer depends on his efficiency to buy the products of customer’s choice at competitive prices. Buying as a marketing function involves many activities such as:

(i) Determination of requirements 

(ii) Finding the sources of supply,

(iii) Placing the order and

(iv) Receiving the products.

Assembling is also an important function of marketing along with buying. Assembling has two different meanings. Firstly, assembling means creation and maintenence of stock of products, purchased from different sources at a common point. This is generally done by middlemen. This gives a chance to the buyer to select the products of his choice. Secondly, raw materials accessories and spare parts are purchased and assembled in order to produced finished goods and services.

2. Selling: For many persons selling means marketing, because selling is an indispensable part of marketing. The purpose of all marketing activities is to sell the products of the firm. Selling enables the firm to achieve its objectives by satisfying the needs of the customers. Nowadays, selling has become a very complicated function of marketing. A marketer has to develop such a marketing strategy that help him to sell his products.

Under selling, a marketer has to perform several functions such as:

(i) Determining the potential customers,

(ii) Persuading them to buy the products,

(iii) Creating demand for the products,

(iv) Selection of channel for distribution, and 

(v) Market research, advertisement, salesmanship and other sales promotional activities are widely used to create demand and increasing the sales.

(C) PHYSICAL DISTRIBUTION FUNCTIONS: These functions are related with creation of place and time utilities. Physical transfer of goods from the manufacturer to consumer take place by the means of transportation and storage. Followings are the physical distribution functions of marketing:

1. Transportation: Transportation is the physical means of carrying products from one place to another. It plays an important role in marketing. Business and transport are like twin brothers. With the development of one, another also develops. Transport helps in assembling and dispersing the products. It links together the manufacturers and the consumers who are located at different places. By carrying the products to such places where they are needed, it creates place utility. Transport also helps in widening the market area. 

Marketing system requires an economical and effective transport systems. There are different means of transportation, such as: (i) Road Transport, (ii) Rail Transport, (iii) Air transport, (iv) Water Transport and (v) Pipeline. The firm can use any mode of transport depending upon their requirements. Large scale production, specialisation, emergence of national and international markets increases the importance of transportation as a marketing function. Now, most of the companies uses their own means of transportation which ensure safe and timely delivery and also act as mode of advertisement. Take the example of Coca Cola, Pepsi, LG, Nirma, Bisleri, Pizza Hut, etc.

2. Storage and Warehousing: Storage is another function of marketing and it involves the holding of products in proper condition from the time they are produced until they are demanded by the consumers. When production is seasonal but consumption is perennial or when production is continuous but consumption is seasonal, storage becomes necessary. Moreover, the goods produced in advance have to be stored by the manufacturers till their demand arises. Nowadays storage function has been performed at different levels by manufacturers, wholesalers, retailers and professional warehouse-keepers.

Warehousing is also an important function of marketing. Warehousing is an act of storing goods that will be sold or distributed later. Warehouse is a place where the products can be stored safely. Warehousing is a necessary business activity to carry on production and distribution on a large scale. Warehouses help the marketeers to make the supply of the product elastic, which result in price stabilisation. Moreover, storage and warehousing create both time and place utilities. 

Marketing managers are taking special interest in the storage and warehousing function, because a slight lapse in storage may destroy the commodity and may cause heavy loss to the company. Owing to this reason the large size companies maintain their warehouses near the markets and keep their goods property stored. Many companies are using this strategy, for example, Hindustan Lever Ltd., Bata, Godrej, etc. 

The importance of storage and Warehousing can be judge from the following facts:

(i) Storage of some products increase their value and price. For example: rice, tobacco, liquor, etc. if storage for long time, will get more.

(ii) Some produces like tea, coffee, seeds require curing and processing before they are ready for sale. Hence, in this case storage is necessary.

(iii) Agriculture products are produced seasonally like: wheat, rice, grams, etc. but they are required for consumption throughout the year. Hence, storage is necessary for buffer stock.

(iv) Storage and Warehousing also helps in price stabilization, elasticity of supply, grading, packaging, risk minimising and financing.

3. Standardisation and Grading: Standardisation means setting standard of quality. It assures quality and promote uniformity of products. It also widens the market of the product. Standardisation assures the customers that the goods are pure and uniform in quality and performance. Generally, there are four bases for determining standards:

(i) Quality,

(ii) Quantity,

(iii) Measurement and

(iv) Size. 

It facilitates purchase and sale of products, because in case of Standardization/standard products, goods are purchased by their brand name. Industrial products are given brand names by their manufacturers to convey to the users that their products confirm to certain well deined standards. In actual practice various standard form are used by the marketers for their products such as (i) ISO, (ii) ISI, (iii) AG mark, (iv) Quality Mark, etc.

Grading means separating the products according to established standards. Each grade has uniformity in all attributes. The products are so grouped in accordance with predetermined standards, therefore, grading follows standardisation. Granding starts where standardisation ends. Both are closely related activities. Buying and selling becomes easier. Grading is very common in spices, food grains, fruits, milk products, petroleum products and other agricultural products, according to their size, quality, colour, taste, strength, juice contents, etc. Both buyers and sellers are benefited by standardisation and grading function of marketing.

(D) FACILITATING FUNCTIONS: Facilitating functions make the marketing process more esay and systematic. Facilitating functions are supporting activities to the marketing process. These are:

1. Branding: Agricultural products and mining products need grading whereas manufacturered products need branding. 

The main aim of branding is to identify the products of the company from similar products of the competitors. It enables the consumers to differentiate the product of similar types and to make their choice of products among the various brands. The brand ensures the quality and standard of the product. It helps the company in creating an image for its product in the market. 

Now, branding has become an important marketing function because a good brand name ensures success in the market. Branding helps in the distribution of products in a wider market. Hence, branding is an essential part of marketing. There are many popular brands. For example, LG, BPL, Tata, Bata, Nirma, Godrej, Lakme, etc. 

2. Packaging: Packaging is concerned with formulating container or wrapper for the product. Its main objectives is to provide convenience in handling, ensure freshness and quality and to prevent adulteration. It also helps in distinguishing the product of the company from that of competitors.

With the evolution in packaging materials and packaging technology in designing the package, the packaging has become an important function of modern marketing. Packaging plays an important role in buying decisions by the consumers. Consumers like good package products. Manier times, products are demanded because of their good looks and useful packages. Packaging acts as a multi-purpose arrangement such as:

(i) it gives protection to the product,

(ii) it acts as a silent salesman,

(iii) it facilitates more sales,

(iv) it ensures quality,

(v) it helps in advertising,

(vi) it increases the standard of living,

(vii) it ensures price stabilization and

(viii) handling convenience.

All these factors prove that packaging is an inseparable part of modern marketing. Infact, packaging boosts the sales, majority of products we consume in our daily life comes in packaging.

3. Pricing: Determining the price of a profuct is an important function of marketing. A sound pricing policy is an important factor for selling the products to the customers. The price policy of a firm should be such that it attracts all type of customers. Price policy of the company directly affects the profit element and successful functioning of the company.

Nowadays, marketers have to decide so many prices, for example:

(i) Wholesale price,

(ii) Retail price,

(iii) Unit price,

(iv) Prices for foreign markets or international pricing, and

(v) Resale price maintenence policy.

Price of the is now used as a competitive weapon by the marketers. In a close substitute product market, fixation of proper price is must. Any wrong decision in pricing the product may cause heavy loss of demand for the product. In determining the price of the products, several factors are to be kept in mind such as:

(i) Cost of the product,

(ii) Services offered,

(iii) Profit margin desired,

(iv) Competitor’s price,

(v) Government policy,

(vi) Marketing policies,

(vii) Marketing objectives,

(viii) Demand for the product, etc.

Pricing function includes pricing, discounts, allowances and terms of credit.

4. Financing: Finance is the life and blood of all economic activities. It is very difficult to carry on marketing activities smoothly without the availability of adequate and cheap finance. Nowadays, most of the marketing departments arrange themselves, finances for marketing activities. A marketing department arranges finance in two ways:

(i) By accepting advances from the wholesalers for supply of goods, but it is only possible when there is a seller’s market.

(ii) By accepting fixed deposits in lieu of granting agencies/authorized dealership/franchisee to sell the company’s products. Huge amount is collected in this way.

5. Advertising: Modern age is the age of advertising. There is hardly any product or service which goes to the consumer without advertising. That is why, nowadays, advertising is considered as the main function of marketing. Generally, customers have no knowledge about the new products launched in the market. Therefore, it is possible that until the customer is not duly informed about the product, its quality, price and the place where from it can be purchased, etc., he will not buy the same. This information is supplied with the help of advertisement.

The responsibility of advertising lies with the advertising department but in many cases this responsibility is shared by the marketing department. He takes the decision about the advertising budget, message, media selection and looks after the advertising programme and sales promotion activities like distribution of free samples, gifts, sales literature, launching sales incentive schemes, arranging sales contests, displays, participation of company in fairs and exhibitions etc. In the modern times without advertising marketing is not possible. Hence, advertising have also become an important function of marketing.

6. Risk Bearing: Business world is full of risks. Unforeseen conditions and uncertainties give rise to risks. Marketing of goods involves number of risks. A marketer has to face risk due to:

(i) Change in demand,

(ii) Change in fashion,

(iii) Fall in price,

(iv) Competition,

(v) New inventions,

(vi) Change in habits and tastes of consumers,

(vii) Change in technology,

(viii) Losses from spoilage, depreciation and obsolescence,

(ix) Losses from fire, theft, accident,

(x) Losses from natural calamities, etc.

That is why, it is said that marketing is a risk-bearing activity.

It is very difficult to eliminate all the risks completely. Some of the risks can be avoided by taking precautionary measures, for example, risk of fire, theft, etc. There are certain risks which can be minimized through proper planning and forecasting. For instance, risk bearing due to change in demand, price, fashion, technology and tastes of the consumer can be minimised through proper marketing research. Competition risk can be avoided through business combinations. Marketing department of the company is responsible for managing the risks. Hence, risk bearing is also an important function of marketing.

7. After Sales Services: Nowadays marketing functions do not end on sale. Rather, they continue even after sale as the marketer provides number of after sales services like home delivery, guarantee and warrantee, free repair services, financing facility, etc. These services improve the standard of marketing functions.

What do you mean by Human Resource Management? Describe its functions.

 Q. What do you mean by Human Resource Management? Describe its functions.

Ans. MEANING OF HUMAN RESOURCE MANAGEMENT: Human Resource Management is that branch of management which is concerned with the recruitment, selection, development and the optimum use of the employees. It ensures that every employee makes his maximum contribution to the achievement of business goals. 

For complete meaning refer:

https://english9192.blogspot.com/2025/05/Objectives-and-nature-of-human-resource-management-meaning-nature-objectives.html

FUNCTIONS OF HRM: HRM is concerned with managing resources to effectively and efficiently achieve objectives of the organisation. The major functions of human resource management are:

● (A) Managerial Functions: Human resource manager is supposed to perform basic managerial functions i.e. Planning, Organising, Staffing, Directing and Controlling in relation to his department. These functions are:

(1) Planning: Planning is the first and foremost function of every manager. It is the most essential function for the success of the organisation. Planning implies preparing a blueprint of future programs to achieve the organisation goal. A good plan is necessary for proper utilization of human and physical resources to achieve organisational objectives. 

   Human resource planning is one of the most important functions of HR manger. He has to constantly monitor human resource requirements according to the changing needs of the organisation, anticipate vacancies, anticipate demand and supply of work force for various job categories in the market, determine shortage and surplus of personnels, and develop plan to eliminate shortage of staff and separation plan of the surplus staff. He should determime human resource policies and programs. Besides, human resource planning, human resource research has also become a specialized function of HR department. Recruitment, selection, promotion, transfer, absenteeism, labour turnover etc. are subject of human resource research.

(2) Organising: Every organisation has three important constituents — Work which is to be done, Employees by whom it should be done, and Physical resources which are to be used to get it done. Organising therefore refers to establishing proper relationship among work, employees and physical resources. Need of Organising is felt to achieve desired goals. Process of organising involves the following stages– determination of activities, grouping of activities and assignment of these activities to individuals, delegation of authority and fixation of responsibility. HR department and other departments in the organisation have complex relationship. HR manger provides them proper consultancy services in respect of administration of the employees.

(3) Staffing: Success or failure of an organisation depends on the capability of the workforce working in the organisation. If an organisation lacks suitable and capable employees, it cannot achieve its goals. By way of staffing process, suitable and competent persons are employed at different levels of organisation’s structure. Staffing proces includes the following three aspects: 

(a) To forecast the need of human resources.

(b) To determine the qualifications of the persons to be selected.

(c) To recruit and select the employees and to impart training to them.

Thus, staffing function includes forecasting of human resource planning, recruitment of employees, selection, trainimg and development.

(4) Directing: To motivate and lead the employees in order to achieve the goals of the organisation is called directing. The main components of this process are: 

(a) To direct and command subordinates.

(b) To guide and educate the subordinates.

(c) To supervise the work of the subordinates so as to ensure that everything is going on as per the plan.

(d) To encourage the subordinates to achieve higher productivity.

In an organisation, HR manager performs the function of providing leadership, guiding, supervising and inspiring the workforce. Directing is essential to attain the goals of the organization and to secure the willing and effective co-operation of the employees. Under this function, besides securing the co-operation of the employees, good industrial and human relations are also established. HR manger should make proper coordination among managers of the different departments in the organisation.

(5) Controlling: Final function of a manager is controlling. Under this function, manager ensures whether the work is executed in accordance with the pre-determined plan, or not. Actual work being done is compared with pre-determined standards or work. Deviations are traced and remedial measures are taken. Controlling is an important activity in the field of human resource management whether or not HR policies, objectives and programs are being enforced strictly according to pre-determined plan. If not, shortcomings are looked into and corrective actions are taken to remove the same. This is what is implied under human resource controlling. HR management determines job standards for employees at different levels. Actual work done by them is compared with pre-determined standards. Shortcomings are enquired into and suggestions are given to remove them. Auditing of human resource development programs, analysis of employees turnover records, directing of morale survey, interviewing new employees on schedule date, and comparing organisation’s  human resource management programs with the programs of other organizations etc. are used as a means of controlling.

● (B) Operative Functions: These are also called service functions or staff functions. HR manger is required to have special knowledge of human relations. In this category, main functions of HR manger are:

(1) Procurement of Employees: It is the duty of HR manger to provide for adequate number of employees. It is on the basis of this that manpower forecasting is made and manpower planning is undertaken. Manpower planning is a process on the basis of which the quantity and quality of personnel required are determined and employees requisition prepared accordingly. Manager can proceed ahead to initiate the process of recruitment and selection. Recruitment refers to looking for the prospective employees for the organisation and to motivate them to apply for the vacant posts. It aims at increasing the selection ratio for each job. Selection is a negative process. Under this process, applications of the job-seekers are scrutinized, then the best among the suitable candidates are selected. 

Placement of newly selected employees in the organisation and giving them full information about the policies, programmes, objectives of the organisation and also about other employees etc. are the functions performed by the HR manager.

(2) Development of Personnel: After selection of the employees, there remains a special need for training and development so that they may perform their jobs in a better way. HR manager makes necessary arrangement for training and development of employees of all the departments. In this category of development, following functions are covered:

(a) Performance Appraisal: HR manager makes provisions for the performance appraisal of the employees. On its basis, he decides who deserves promotion, who needs training, who are to be transferred. He also takes decision regarding promotion of competent employees and punishment for incompetent one.

(b) Training: It is a short-term process. It concerns with adding to the knowledge and skill of non-managerial employees so as to enable them to perform specific functions efficiently. On the basis of work performance, it is found out so as to which employees need training. Accordingly, proper training programmes are conducted and the end-result of different training programmes are assessed.

(c) Development: It is a long-term process. Theoretical knowledge is imparted to the managers to enable them to achieve the objectives of the organisation. It includes fixation of work standards, comparing actual work with standard work, finding areas of managerial development, explaining development programmes, knowing the effect of different managerial development works, making provisions of educational facilities, holding of seminars and symposiums etc. All these help to develop human resources.

(3) Compensation Function: HR manager makes adequate provisions for adequate wages and salary for the workers and employees serving the organisation. It includes job evaluation, wage and salary survey, determination of wage rate, determination of mode of wage payment, incentive payment plans, bonus, benefits and services etc.

(4) Integration: Besides activities to work, the employees must also have willingness to work. Willingness to work is influenced by the extent to which interests of the management have been integrated with the interests of the employees. In case, the interests and objectives of the employees are not served, then the goals of the organisation cannot be achieved. Integration of interests of management and that of the employees is the main function of HR manager.

(5) Maintenance functions: Another important function of HR manager is to maintain the employees in the organisation. HR manager is required to obtain the best employees and having obtained them, it must look after them in such a way that they would like to stay in the organisation and accomplish their work in the best possible manner.

(6) Separation Functions: If the primary function of HR manager is to procure the services of human resources, its final function is to separate them. The latter function is opposite to the former or primary function. It include the following:

(a) Retirement 

(b) lay-off

(c) Termination

(d) Discharge

(e) Suspension.

(7) Career Planning and Development: HR manager plans to one’s career and implementation of careers plan by means of education, training, jobs search and acquisition of work experiences. It includes internal and external mobility.

(8) Organisation Development: OD is an organisation’s well planned effort, managed from the top, with a goal of increasing organisational performance through planned interventions. It helps to change attitudes, values, organisation structures and managerial practices in an effort to improve organisational performance. 

So, the main functions of HR manager is to develop a human resources philosophy in the entire organisation. He also influences personnel policies by providing the necessary inputs to the top management. He also plans and design new HR methods. He also inspires the line managers who are primarily responsible for the implementation of HR methods provided to them by the HR department.