rbi grade b phase ii descriptive super notes: finance and management
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Reserve Bank of India Grade B Exam Super Notes: If you are preparing for Phase II of the Grade B examination of Reserve Bank of India - these are a must-have. Visit http://sirfbusiness.bl... for more info.---This is work in progress, may or may not be completed.TRANSCRIPT
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Finance and Management
RBI – Grade B Exam
Phase II - Descriptive
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
RBI – DESCRIPTIVE – SUPER NOTES
Finance and Management
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Contents
- The Union Budget - Direct and Indirect Taxes; Non-tax
sources of Revenue; Financial Sector Reforms; Outlays; New
Measures;
- Capital Market, Money Market and Foreign Exchange Market,
- Stock Exchanges and their Regulation; Capital Market
Intermediaries and their Regulation; Role of SEBI;
- Functions of the Money Market;
- Growth and Operation of the Money Market;
The Foreign Exchange Market; From FERA to FEMA; Exchange
Rate Management; Exchange Risk Management,
- Role of Banks and Financial Institutions in Economic
Development;
- Regulation of Banks and Financial Institutions;
- Disinvestment in Public Sector Units.
- Management, its Nature and Scope;
- The Management Processes
- Leadership
- Human Resource Development; Concept of HRD, Goals of
HRD, Performance Appraisal - Potential Appraisal and
Development - Feedback and Performance Counselling -
Career Planning - Training and Development - Rewards -
Employee Welfare,
- Motivation, Morale and Incentives; Theories of Motivation:
How Managers motivate; Concept of Morale; Factors
Determining Moral; Role of Incentives in Building up Morale.
Communication: Steps in the Communication Process;
Communication channels; Oral versus written
communication; Verbal versus Non-Verbal Communication;
Upward, Downward and Lateral Communication; Barriers to
Communication, Role of Information Technology,
- Corporate Governance; Factors affecting Corporate
Governance; Mechanisms of Corporate Governance.
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
FINANCE
1.
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
THE UNION BUDGET
1.1.
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
MANAGEMENT
2.
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
INTRODUCTION TO MANAGEMENT
2.1.
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
THE MANAGEMENT PROCESSES
2.2.
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
The Management Processes
Planning
Organizing
Staffing
Directing
Controlling
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
CONTROLLING
2.2.5
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Controlling
• Measurement and correction to ensure achievement of goals
• Direct control is through the control of managers
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Types of Control
Based on scope
Based on scope
Partial Partial
Complete Complete
Based on nature
Based on nature
Direct Direct
Indirect Indirect
Based on timing
Based on timing
Feedback Control
Feedback Control
Feed-forward Control
Feed-forward Control
Real Time Control
Real Time Control
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Control Devices
Budget Scenarios
Budget Scenarios
P&L Statements
P&L Statements
ROI ROI Enterprise Self-Audit Enterprise Self-Audit
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
The Control Process
Establishment of Standards Establishment of Standards
Measurement of Performance Measurement of Performance
Correction of Deviations Correction of Deviations
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
The Feedback Loop
Measurement of Actual
Performance
Measurement of Actual
Performance
Actual Perf. Vs. Desired Perf.
Actual Perf. Vs. Desired Perf.
Identification of Deviations
Identification of Deviations
Analysis of causes of deviations
Analysis of causes of deviations
Program of corrective
action
Program of corrective
action
Implementation of Corrections
Implementation of Corrections
Desired Performance
Desired Performance
Actual Performance
Actual Performance
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Simple feedback vs. Feed-forward comparison
Inputs Inputs Process Process Outputs Outputs
Desired Values of Outputs
Desired Values of Outputs
Simple Feedback
Simple Feedback
Feedforward Feedforward
Information Corrective Action
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Designing Feed-forward Control
Action Action
Actual input vs. planned input variation to be assessed Actual input vs. planned input variation to be assessed
Input data about input variables into the system Input data about input variables into the system
Update model real-time Update model real-time
Develop a model of the system Develop a model of the system
Analysis of Planning & Control System (Identification of important control variables) Analysis of Planning & Control System (Identification of important control variables)
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Factors to be kept in mind while designing controls
Plans to be controlled Plans to be controlled
Position of person controlling
Position of person controlling
Critical factors Critical factors Organisation
Pattern Organisation
Pattern
Understanding levels of individual
managers
Understanding levels of individual
managers
Personalities of individual managers
Personalities of individual managers
Should point exceptions at critical points
Should point exceptions at critical points
Should be objective Should be objective
Flexibility Flexibility Economical (Efficiency) Economical (Efficiency)
Should lead to corrective action
Should lead to corrective action
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Critical Points
• In the sense either of being limiting factors in the operation or
of showing better than other factors whether plans are
working out
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Types of Critical Point Standards
•Non-monetary measurements
Physical Standards Physical Standards
•Monetary Measurements
Cost Standards Cost Standards
•Application of monetary measurements to physical items (related to Balance sheet & not P&L)
Capital Standards Capital Standards
•Attaching monetary value to sales
Revenue Standards Revenue Standards
•Usually subjective, objective standards such as program performance, timing and other factors
Program Standards Program Standards
•Standards for goals that cannot be given clear quantitative or qualitative measurement (ex: success of PR program)
Intangible Standards Intangible Standards
•Through research and thinking it is possible to define goals that can be used as performance standards
Goals as Standards Goals as Standards
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Control Techniques
Traditional Control
Techniques
The Budget
Revenue and Expense Budgets
Sales Budget
Operating Expense Budget
Time, Space, Material and
Product Budgets
Capital Expenditure
Budgets Cash Budgets
Traditional Non- Budgetary Control
Devices
Statistical Data
Special reports and analysis
Operational Audit
Personal Observation
Time Event Network Analysis
Milestone budgeting
PERT – Optimistic, Most Likely, Pessimistic
Program planning and Budgeting
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
The Budget
• The Budget: Formulation of plan for a given future period in
numerical terms
• Variable or Flexible Budgets: Vary with variance in sales or some
other measure of output
• Zero-Base Budgeting: To start entire budgeting from a zero base
instead of only previous period changes
• Alternative Budget: Budget for alternative eventualities
• Supplementary Budget: Budget prepared on a more frequent basis
in addition to the basic budget prepared for a period
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
The Budget: Dangers in Budgeting
Over-budgeting
Budgetary goals becoming more important than enterprise goals
Hiding inefficiencies
Inflexibility
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Control of Overall Performance
• Budget summaries and reports:
– Profit and Loss control
– Control through ROI
– The enterprise self-audit
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
LEADERSHIP
2.3.
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Leadership
• About coping with change
• Establish direction by developing a vision of the future
• Ability to influence a group towards the achievement of goals
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
THE TASKS OF A LEADER
2.3.1
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LEADERSHIP STYLES
2.3.2
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LEADERSHIP THEORIES
2.3.3
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Leadership Theories
Lead
ersh
ip T
heo
ries
Le
ader
ship
Th
eori
es
Trait Theories Trait Theories
Behavioral Theories Behavioral Theories
Ohio State Studies Ohio State Studies
University of Michigan Studies
University of Michigan Studies
Managerial Grid Managerial Grid
Scandinavian Studies Scandinavian Studies
Contingency Theories Contingency Theories
Fiedler Model Fiedler Model
Hershey and Blanchard’s Situational Theory
Hershey and Blanchard’s Situational Theory
Leader Member Exchange Theory Leader Member Exchange Theory
Path-goal Theory Path-goal Theory
Leader Participation Model
Leader Participation Model
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Trait Theories
• High self-monitors => Flexible behavior as per situation
• 6 Traits:
Ambition and Energy Ambition
and Energy Desire to
Lead Desire to
Lead Honesty and
Integrity Honesty and
Integrity
Self Confidence
Self Confidence
Intelligence Intelligence Job Relevant Knowledge
Job Relevant Knowledge
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Trait Theories
• Limitations:
– No universal traits
– Traits predict behavior in ‘weak’ situations
– Evidence is unclear in separating cause from effect
– Predicts behavior of leadership, not effective/ineffective leadership
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Behavioral Theories :: Ohio State Studies
• Sought to identify independent dimensions of leader behavior
• Two dimensions:
– Initiating Structure: Behavior that attempts to organize work, work
relationships and goals
– Consideration: Extent to which a person is likely to have job relationships
• High-High leaders achieved high employee performance and
satisfaction more frequently
• Weakness: Situational factors not considered
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Behavioral Theories :: University of Michigan Studies
• Two dimensions:
– Employee Oriented: High productivity and job satisfaction
– Production Oriented
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Behavioral Theories :: Managerial Grid
• Also known as Leadership Grid
• Two dimensions:
– Concern for people
– Concern for production
• It shows the leader’s thinking, not the result produced
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Behavioral Theories :: Scandinavian Studies
• Leaders would exhibit development oriented behaviour
• Leaders who value experimentation, seek new ideas, and
generate and implement change
• Added a third dimension – Development Orientation
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Contingency Theories :: Fiedler Model
• Group performance depends on proper match between the
leader’s style and degree to which the situation gives control
to the leader
• Process for model implementation given on following page
• Cognitive Resource Theory: Stress unfavorably affects a
situation; intelligence and experience can lessen the
influence of stress on a leader
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Contingency Theories :: Fiedler Model
Identify leadership style
• Relationship/Task Oriented
Identify leadership style
• Relationship/Task Oriented
Define the Situation
• 3 dimensions:
• Leader member relations
• Task structure
• Position power
Define the Situation
• 3 dimensions:
• Leader member relations
• Task structure
• Position power
Matching leaders and situations
• Task oriented: favorable/unfavorable situations
• Relationship oriented: Moderately favorable situation
• Change leader to fit situation or vice-a-versa
Matching leaders and situations
• Task oriented: favorable/unfavorable situations
• Relationship oriented: Moderately favorable situation
• Change leader to fit situation or vice-a-versa
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Contingency Theories :: Situational Leadership Theory
• Also known as Hershey and Blanchard’s Situational Theory
• Leaders can compensate for ability and motivational limitations in their
followers
Supportive/Participative
Style
Supportive/Participative
Style
Clear and Specific
Directions
Clear and Specific
Directions
Leader doesn’t do
much
Leader doesn’t do
much
High Task/High
Relationship orientation
High Task/High
Relationship orientation
Unable Able
Unwilling
Willing
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Contingency Theories :: LMX Theory
• LMX: Leader Member Exchange Theory
• Highly satisfied in-group
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Contingency Theories :: Path-Goal Theory
• Leader’s job is to assist followers in attaining their goals
• Same leader can display all these behaviors based on situation
Directive Leader
Supportive Leader
Participative Leader
Achievement Oriented Leader
Leader Behavior
Subordinate Contingency Factors
Environmental Contingency Factors
Outcomes
• Performance
• Satisfaction
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Contingency Theories :: Leader Participation Model
• Leader behavior must adjust to reflect the task structure
• 12 contingency variables
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
A SUCCESSFUL LEADER VERSUS AN EFFECTIVE LEADER
2.3.4
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THE ROLE OF A MANAGER IN AN ORGANISATION
2.3.5
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HUMAN RESOURCE DEVELOPMENT
2.4
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CONCEPT OF HRD
2.4.1
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GOALS OF HRD
2.4.2
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PERFORMANCE APPRAISAL
2.4.3
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Purpose of Performance Evaluation
General HR Decisions Identify training &
development needs
Can be used as a criterion against which
selection and development programs
are validated
Measuring effectiveness of training programs
Providing feedback to employees
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
What to and Who should evaluate?
What is evaluated?
Individual task
outcomes
Behaviors (subjective/ contextual
factors)
Traits
Who should evaluate?
(360 Degree Evaluations)
Immediate Supervisor
Peers
Self-Evaluation
Immediate Subordinates
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Methods of Performance Evaluation
Written Essays Critical Incidents Graphic Rating
Scales
Behaviorally Anchored Rating
Scales
Forced Comparisons
• Group Order Ranking
• Individual Ranking
• Paired Comparison
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
Suggestions for Improving Performance Evaluation
(To avoid leniency, halo and similarity errors and intentional political intervention)
Emphasize behaviors rather
than traits*
Document performance
behaviors in a diary
Use multiple evaluators
Evaluate selectively Train evaluators Provide employees with due process
* Traits suffer from weak inter-rater agreement
RBI – Descriptive – Super-Notes © M S Ahluwalia Sirf Business
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M S Ahluwalia, amongst other things, is a visual artist, blogger,
blog designer, MBA, CAIIB (First Class with
Distinction) and Ex-Banker from New Delhi, India.
To know more visit : Estudiante De La Vida