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MB0034 Research Methodology

Set - 1

1 Give examples of specific situations that would call for the

following types of research, explaining why – a) Exploratory research b)
Descriptive research c) Diagnostic research d) Evaluation research.
Ans: a) Exploratory research: Exploratory research provides insights into and
comprehension of an issue or situation. It should draw definitive conclusions only
with extreme caution. Exploratory research is a type of research conducted
because a problem has not been clearly defined. Exploratory research helps
determine the best research design, data collection method and selection of
subjects. Given its fundamental nature, exploratory research often concludes that
a perceived problem does not actually exist. Exploratory research often relies on
secondary research such as reviewing available literature and/or data, or
qualitative approaches such as informal discussions with consumers, employees,
management or competitors, and more formal approaches through in-depth
interviews, focus groups, projective methods, case studies or pilot studies. The
Internet allows for research methods that are more interactive in nature: E.g., RSS
feeds efficiently supply researchers with up-to-date information; major search
engine search results may be sent by email to researchers by services such as
Google Alerts; comprehensive search results are tracked over lengthy periods of
time by services such as Google Trends; and Web sites may be created to attract
worldwide feedback on any subject. The results of exploratory research are not
usually useful for decision-making by themselves, but they can provide significant
insight into a given situation. Although the results of qualitative research can give
some indication as to the "why", "how" and "when" something occurs, it cannot
tell us "how often" or "how many."
b) Descriptive research: Descriptive research, also known as statistical
research, describes data and characteristics about the population or phenomenon
being studied. Descriptive research answers the questions who, what, where,
when and how...
Although the data description is factual, accurate and systematic, the research
cannot describe what caused a situation. Thus, Descriptive research cannot be
used to create a causal relationship, where one variable affects another. In other
words, descriptive research can be said to have a low requirement for internal
validity.
The description is used for frequencies, averages and other statistical
calculations. Often the best approach, prior to writing descriptive research, is to
conduct a survey investigation. Qualitative research often has the aim of
description and researchers may follow-up with examinations of why the
observations exist and what the implications of the findings are.
In short descriptive research deals with everything that can be counted and
studied. But there are always restrictions to that. Your research must have an
impact to the lives of the people around you. For example, finding the most
frequent disease that affects the children of a town. The reader of the research
will know what to do to prevent that disease thus, more people will live a healthy
life.
c) Diagnostic research: diagnostic research has been focusing primarily on
sensitivity and specificity of individual tests. In this highly interactive course we
will challenge the usefulness of this so called ‘test research’, by showing that
diagnostic test results can, and should, only be interpreted in the context of other
diagnostic test results and clinical parameters. We will extend your horizon by
proposing modern methods of diagnostic research design and analysis. You will
be actively involved by designing diagnostic studies and analyzing real life data
sets. At the end of this course, you should be able to directly estimate individual
probabilities of the presence or absence of disease, based on integrated clinical

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and diagnostic information. You will be able to evaluate the true added value of
any diagnostic test in a clinical context. Finally, you will be equipped with the
skills to conceptualize, design and analyse modern diagnostic research.
d) Evaluation research: evaluation research is of particular interest here. The
Introduction to Evaluation Research presents an overview of what evaluation is
and how it differs from social research generally. We also introduce several
evaluation models to give you some perspective on the evaluation endeavor.
Evaluation should not be considered in a vacuum. Here, we consider evaluation as
embedded within a larger Planning-Evaluation Cycle. Evaluation can be a
threatening activity. Many groups and organizations struggle with how to build a
good evaluation capability into their everyday activities and procedures. This is
essentially an organizational culture issue. Here we consider some of the issues a
group or organization needs to address in order to develop an evaluation culture
that works in their context.

2. In the context of hypothesis testing, briefly explain the difference

between a) Null and alternative hypothesis b) Type 1 and type 2 error c)
Two tailed and one tailed test d) Parametric and non parametric tests.
Ans. a) The logic of traditional hypothesis testing requires that we set up two
competing statements or hypotheses referred to as the null hypothesis and the
alternative hypothesis. These hypotheses are mutually exclusive and exhaustive.
Ho: The finding occurred by chance
H1: The finding did not occur by chance
The null hypothesis is then assumed to be true unless we find evidence to the
contrary. If we find that the evidence is just too unlikely given the null hypothesis,
we assume the alternative hypothesis is more likely to be correct. In "traditional
statistics" a probability of something occurring of less than .05 (= 5% = 1 chance
in 20) is conventionally considered "unlikely"
b) When an observer makes a Type I error in evaluating a sample against its
parent population, he or she is mistakenly thinking that a statistical difference
exists when in truth there is no statistical difference (or, to put another way, the
null hypothesis should not be rejected but was mistakenly rejected). For example,
imagine that a pregnancy test has produced a "positive" result (indicating that the
woman taking the test is pregnant); if the woman is actually not pregnant though,
then we say the test produced a "false positive" (assuming the null hypothesis,
Ho, was that she is not pregnant). A Type II error, or a "false negative", is the
error of failing to reject a null hypothesis when the alternative hypothesis is the
true state of nature. For example, a type II error occurs if a pregnancy test reports
"negative" when the woman is, in fact, pregnant.
From the Bayesian point of view, a type one error is one that looks at information
that should not substantially change one's prior estimate of probability, but does.
A type two error is that one looks at information which should change one's
estimate, but does not. (Though the null hypothesis is not quite the same thing as
one's prior estimate, it is, rather, one's pro forma prior estimate.)
Rejecting a null-hypothesis when it should not have been rejected creates a type I
error.
failing to reject a null-hypothesis when it should have been rejected creates a
type II error.
(In either case, a wrong decision or error in judgment has occurred.)
Decision rules (or tests of hypotheses), in order to be good, must be designed to
minimize errors of decision. Minimizing errors of decision is not a simple issue—for
any given sample size the effort to reduce one type of error generally results in
increasing the other type of error. Based on the real-life application of the error,
one type may be more serious than the other. (In such cases, a compromise
should be reached in favor of limiting the more serious type of error.) The only

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way to minimize both types of error is to increase the sample size, and this may
or may not be feasible.
Hypothesis testing is the art of testing whether a variation between two sample
distributions can be explained by chance or not. In many practical applications
type I errors are more delicate than type II errors. In these cases, care is usually
focused on minimizing the occurrence of this statistical error. Suppose, the
probability for a type I error is 1% , then there is a 1% chance that the observed
variation is not true. This is called the level of significance. While 1% might be an
acceptable level of significance for one application, a different application can
require a very different level. For example, the standard goal of six sigma is to
achieve precision to 4.5 standard deviations above or below the mean. This
means that only 3.4 parts per million are allowed to be deficient in a normally
distributed process. The probability of type I error is generally denoted with the
Greek letter alpha, α.
To state it simply, a type I error can usually be interpreted as a false alarm or
under-active specificity. A type II error could be similarly interpreted as an
oversight, but is more akin to a lapse in attention or under-active sensitivity. The
probability of type II error is generally denoted with the Greek letter beta, β.
c) There are two different types of tests that can be performed. A one-tailed test
looks for an increase or decrease in the parameter whereas a two-tailed test
looks for any change in the parameter (which can be any change- increase or
decrease).
We can perform the test at any level (usually 1%, 5% or 10%). For example,
performing the test at a 5% level means that there is a 5% chance of wrongly
rejecting H0.
If we perform the test at the 5% level and decide to reject the null hypothesis, we
say "there is significant evidence at the 5% level to suggest the hypothesis is
false".
One-Tailed Test
We choose a critical region. In a one-tailed test, the critical region will have just
one part (the red area below). If our sample value lies in this region, we reject the
null hypothesis in favour of the alternative.
Suppose we are looking for a definite decrease. Then the critical region will be to
the left. Note, however, that in the one-tailed test the value of the parameter can
be as high as you like.

Example
Suppose we are given that X has a Poisson distribution and we want to carry out a
hypothesis test on the mean, , based upon a sample observation of 3.
Suppose the hypotheses are:
H0:  = 9
H1:  < 9
We want to test if it is "reasonable" for the observed value of 3 to have come from
a Poisson distribution with parameter 9. So what is the probability that a value as
low as 3 has come from a Po(9)?
P(X ≤ 3) = 0.0212 (this has come from a Poisson table)

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The probability is less than 0.05, so there is less than a 5% chance that the value
has come from a Poisson(3) distribution. We therefore reject the null hypothesis in
favour of the alternative at the 5% level.
However, the probability is greater than 0.01, so we would not reject the null
hypothesis in favour of the alternative at the 1% level.
Two-Tailed Test
In a two-tailed test, we are looking for either an increase or a decrease. So, for
example, H0 might be that the mean is equal to 9 (as before). This time, however,
H1 would be that the mean is not equal to 9. In this case, therefore, the critical
region has two parts:

Example
Lets test the parameter p of a Binomial distribution at the 10% level. Suppose a
coin is tossed 10 times and we get 7 heads. We want to test whether or not the
coin is fair. If the coin is fair, p = 0.5 . Put this as the null hypothesis:
H0: p = 0.5
H1: p ≠ 0.5
Now, because the test is 2-tailed, the critical region has two parts. Half of the
critical region is to the right and half is to the left. So the critical region contains
both the top 5% of the distribution and the bottom 5% of the distribution (since
we are testing at the 10% level).
If H0 is true, X ~ Bin(10, 0.5).
If the null hypothesis is true, what is the probability that X is 7 or above? P(X ≥ 7)
= 1 - P(X < 7) = 1 - P(X ≤ 6) = 1 - 0.8281 = 0.1719
Is this in the critical region? No- because the probability that X is at least 7 is not
less than 0.05 (5%), which is what we need it to be.
So there is not significant evidence at the 10% level to reject the null hypothesis.
d) There are two types of test data and consequently different types of analysis.
As the table below shows, parametric data has an underlying normal distribution
which allows for more conclusions to be drawn as the shape can be
mathematically described. Anything else is non-parametric.

Parametric Non-parametric

Assumed distribution Normal Any

Assumed variance Homogeneous Any

Typical data Ratio or Interval Ordinal or Nominal

Data set relationships Independent Any

Usual central
Mean Median
measure

Can draw more Simplicity; Less

Benefits
conclusions affected by outliers

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Tests

Choosing parametric Choosing a non-

Choosing
test parametric test

Correlation test Pearson Spearman

Independent Independent-
Mann-Whitney test
measures, 2 groups measures t-test

One-way,
Independent
independent- Kruskal-Wallis test
measures, >2 groups
measures ANOVA

Repeated measures,
Matched-pair t-test Wilcoxon test
2 conditions

Repeated measures, One-way, repeated

Friedman's test
>2 conditions measures ANOVA

As the table shows, there are different tests for parametric and non-parametric
data.

3. Explain the difference between a causal relationship and correlation,

with an example of each. What are the possible reasons for a correlation
between two variables?
Ans. Cause and correlation are terms that are often confused or used incorrectly,
particularly the former. This is an unfortunate thing for people who ever listen to a
news report or read a newspaper. If you’ve followed the many things that have
been reported as causes of cancer, you might never eat, drink, or leave your
home again. When we hear that there might be a link between one thing and
another, we often mistakenly assume that one thing causes the other.
The main difference between cause and correlation is the strength and degree to
which two things are related and the certainty with which anyone can establish a
causal relationship. Essentially when you say one thing causes another, you are
saying that there is a direct line between that one thing and the result. Cause
means that an action will always have a predictable reaction.
When you define correlation, the terms cause and correlation become easier to
understand. If you see a correlation between two things, you can see that there is
a relationship between those two things. One thing doesn’t necessarily result in
the other thing occurring, but it may increase likelihood that something will occur.
Understanding the difference of cause and correlation can be helped by an
example. You can, perhaps, examine the statement: “Violent video games cause
violent behavior.” According to all research on this matter, this statement is not
true, due to the use of the word causes in the sentence. Research has shown that
violent video games may influence violent behavior.
It also shows that a number of different factors may be responsible for a person
being violent, among them, poorer socioeconomic status, mental illness, abusive
childhoods, and bad parenting. You cannot say violent video games are the cause
of violence. In order to make the above statement, you’d have to be able to prove
that everyone who ever played a violent video game subsequently exhibited
violence.
Instead, what you can say, and what has been studied, is the correlation between
violent video games and violent behavior. Researchers have shown that there is a
connection/correlation there. Such games may influence others to act in more
aggressive ways but they are not the sole factor and sometimes not even a factor
for predicting violence. Thus there’s a correlation there, which should be
considered, but there is no cause factor. Plenty of people were violent, prior to the

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advent of video games, thus if you’re deciding between cause and correlation
here, you must choose correlation.
In some ways, it can be almost impossible, except in extremely controlled
circumstances to say any one thing causes something else, especially when
you’re dealing with human health or behavior. You can, in limited ways, make
blanket cause/effect statements about some things. For example, heating water
to a certain temperature causes it to boil. This is a specific cause/effect
relationship that no one would dispute.
Yet it can be helpful to understand the difference between cause and correlation
since we are often barraged with information about things that may pose health
risks to us. What most researchers arrive at in research is that some things, for
instance, alcoholism and cancer are connected or co-related. Alcoholism may
increase your risk of getting cancer, but it does not, in and of itself, cause cancer.
When you hear about the causes of disease, it’s important to be skeptical.
Scientists define correlations all the time, and unfortunately, news media loves to
call these causes, since they then translate to a much more dramatic story. Read
or listen carefully for qualifying words that suggest correlation like “may,” “might
increase,” “could have an effect,” to separate the differences between cause and
correlation
The correlation is one of the most common and most useful statistics. A
correlation is a single number that describes the degree of relationship between
two variables. Let's work through an example to show you how this statistic is
computed.
Correlation Example
Let's assume that we want to look at the relationship between two variables,
height (in inches) and self esteem. Perhaps we have a hypothesis that how tall
you are effects your self esteem (incidentally, I don't think we have to worry
about the direction of causality here -- it's not likely that self esteem causes your
height!). Let's say we collect some information on twenty individuals (all male --
we know that the average height differs for males and females so, to keep this
example simple we'll just use males). Height is measured in inches. Self esteem is
measured based on the average of 10 1-to-5 rating items (where higher scores
mean higher self esteem). Here's the data for the 20 cases (don't take this too
seriously -- I made this data up to illustrate what a correlation is):
Person Height Self Esteem
1 68 4.1
2 71 4.6
3 62 3.8
4 75 4.4
5 58 3.2
6 60 3.1
7 67 3.8
8 68 4.1
9 71 4.3
10 69 3.7
11 68 3.5
12 67 3.2
13 63 3.7
14 62 3.3
15 60 3.4
16 63 4.0
17 65 4.1
18 67 3.8
19 63 3.4
20 61 3.6

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Now, let's take a quick look at the histogram for each variable:

And, here are the descriptive statistics:

Maximu
Variable Mean StDev Variance Sum Minimum Range
m

Height 65.4 4.40574 19.4105 1308 58 75 17

Self
Est
3.755 0.426090 0.181553 75.1 3.1 4.6 1.5
ee
m

Finally, we'll look at the simple bivariate (i.e., two-variable) plot:

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You should immediately see in the bivariate plot that the relationship between the
variables is a positive one (if you can't see that, review the section on types of
relationships) because if you were to fit a single straight line through the dots it
would have a positive slope or move up from left to right. Since the correlation is
nothing more than a quantitative estimate of the relationship, we would expect a
positive correlation.
What does a "positive relationship" mean in this context? It means that, in
general, higher scores on one variable tend to be paired with higher scores on the
other and that lower scores on one variable tend to be paired with lower scores on
the other. You should confirm visually that this is generally true in the plot above.
Calculating the Correlation
Now we're ready to compute the correlation value. The formula for the correlation
is:

We use the symbol r to stand for the correlation. Through the magic of
mathematics it turns out that r will always be between -1.0 and +1.0. if the
correlation is negative, we have a negative relationship; if it's positive, the
relationship is positive. You don't need to know how we came up with this formula
unless you want to be a statistician. But you probably will need to know how the
formula relates to real data -- how you can use the formula to compute the
correlation. Let's look at the data we need for the formula. Here's the original data
with the other necessary columns:

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Self Esteem
Person Height (x) x*y x*x y*y
(y)
1 68 4.1 278.8 4624 16.81
2 71 4.6 326.6 5041 21.16
3 62 3.8 235.6 3844 14.44
4 75 4.4 330 5625 19.36
5 58 3.2 185.6 3364 10.24
6 60 3.1 186 3600 9.61
7 67 3.8 254.6 4489 14.44
8 68 4.1 278.8 4624 16.81
9 71 4.3 305.3 5041 18.49
10 69 3.7 255.3 4761 13.69
11 68 3.5 238 4624 12.25
12 67 3.2 214.4 4489 10.24
13 63 3.7 233.1 3969 13.69
14 62 3.3 204.6 3844 10.89
15 60 3.4 204 3600 11.56
16 63 4 252 3969 16
17 65 4.1 266.5 4225 16.81
18 67 3.8 254.6 4489 14.44
19 63 3.4 214.2 3969 11.56
20 61 3.6 219.6 3721 12.96
Sum = 1308 75.1 4937.6 85912 285.45

The first three columns are the same as in the table above. The next three
columns are simple computations based on the height and self esteem data. The
bottom row consists of the sum of each column. This is all the information we
need to compute the correlation. Here are the values from the bottom row of the
table (where N is 20 people) as they are related to the symbols in the formula:

Now, when we plug these values into the formula given above, we get the
following (I show it here tediously, one step at a time):

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So, the correlation for our twenty cases is .73, which is a fairly strong positive
relationship. I guess there is a relationship between height and self esteem, at
least in this made up data!
Testing the Significance of a Correlation
Once you've computed a correlation, you can determine the probability that the
observed correlation occurred by chance. That is, you can conduct a significance
test. Most often you are interested in determining the probability that the
correlation is a real one and not a chance occurrence. In this case, you are testing
the mutually exclusive hypotheses:

Null Hypothesis: r=0

Alternative Hypothesis: r <> 0

The easiest way to test this hypothesis is to find a statistics book that has a table
of critical values of r. Most introductory statistics texts would have a table like
this. As in all hypothesis testing, you need to first determine the significance level.
Here, I'll use the common significance level of alpha = .05. This means that I am
conducting a test where the odds that the correlation is a chance occurrence is no
more than 5 out of 100. Before I look up the critical value in a table I also have to
compute the degrees of freedom or df. The df is simply equal to N-2 or, in this
example, is 20-2 = 18. Finally, I have to decide whether I am doing a one-tailed or
two-tailed test. In this example, since I have no strong prior theory to suggest
whether the relationship between height and self esteem would be positive or
negative, I'll opt for the two-tailed test. With these three pieces of information --
the significance level (alpha = .05)), degrees of freedom (df = 18), and type of
test (two-tailed) -- I can now test the significance of the correlation I found. When I
look up this value in the handy little table at the back of my statistics book I find
that the critical value is .4438. This means that if my correlation is greater than .
4438 or less than -.4438 (remember, this is a two-tailed test) I can conclude that
the odds are less than 5 out of 100 that this is a chance occurrence. Since my
correlation 0f .73 is actually quite a bit higher, I conclude that it is not a chance
finding and that the correlation is "statistically significant" (given the parameters
of the test). I can reject the null hypothesis and accept the alternative.
The Correlation Matrix
All I've shown you so far is how to compute a correlation between two variables.
In most studies we have considerably more than two variables. Let's say we have
a study with 10 interval-level variables and we want to estimate the relationships
among all of them (i.e., between all possible pairs of variables). In this instance,

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we have 45 unique correlations to estimate (more later on how I knew that!). We
could do the above computations 45 times to obtain the correlations. Or we could
use just about any statistics program to automatically compute all 45 with a
simple click of the mouse.
I used a simple statistics program to generate random data for 10 variables with
20 cases (i.e., persons) for each variable. Then, I told the program to compute the
correlations among these variables. Here's the result:
C1 C2 C3 C4 C5 C6 C7 C8 C9 C10
C1 1.000
C2 0.2741.000
C3-0.134-0.2691.000
C40.201-0.1530.0751.000
C5-0.129-0.1660.278-0.0111.000
C6-0.0950.280 -0.348-0.378-0.0091.000
C7 0.171-0.1220.2880.0860.1930.0021.000
C80.219 0.242-0.380-0.227-0.5510.324-0.0821.000
C90.518 0.2380.0020.082-0.0150.3040.347-0.0131.000
C100.2990.5680.165-0.122-0.106-0.1690.2430.0140.3521.000
This type of table is called a correlation matrix. It lists the variable names (C1-
C10) down the first column and across the first row. The diagonal of a correlation
matrix (i.e., the numbers that go from the upper left corner to the lower right)
always consists of ones. That's because these are the correlations between each
variable and itself (and a variable is always perfectly correlated with itself). This
statistical program only shows the lower triangle of the correlation matrix. In
every correlation matrix there are two triangles that are the values below and to
the left of the diagonal (lower triangle) and above and to the right of the diagonal
(upper triangle). There is no reason to print both triangles because the two
triangles of a correlation matrix are always mirror images of each other (the
correlation of variable x with variable y is always equal to the correlation of
variable y with variable x). When a matrix has this mirror-image quality above and
below the diagonal we refer to it as a symmetric matrix. A correlation matrix is
always a symmetric matrix.
To locate the correlation for any pair of variables, find the value in the table for
the row and column intersection for those two variables. For instance, to find the
correlation between variables C5 and C2, I look for where row C2 and column C5
is (in this case it's blank because it falls in the upper triangle area) and where row
C5 and column C2 is and, in the second case, I find that the correlation is -.166.
OK, so how did I know that there are 45 unique correlations when we have 10
variables? There's a handy simple little formula that tells how many pairs (e.g.,
correlations) there are for any number of variables:

where N is the number of variables. In the example, I had 10 variables, so I know I

have (10 * 9)/2 = 90/2 = 45 pairs.

4. Briefly explain any two factors that affect the choice of a sampling
technique. What are the characteristics of a good sample?
Ans. Sample is a finite part of a statistical population whose properties are studied to
gain information about the whole(Webster, 1985). When dealing with people, it
can be defined as a set of respondents(people) selected from a larger population
for the purpose of a survey.
A population is a group of individuals persons, objects, or items from which
samples are taken for measurement for example a population of presidents or
professors, books or students.

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What is sampling? Sampling is the act, process, or technique of selecting a
suitable sample, or a representative part of a population for the purpose of
determining parameters or characteristics of the whole population.
What is the purpose of sampling? To draw conclusions about populations from
samples, we must use inferential statistics which enables us to determine a
population`s characteristics by directly observing only a portion (or sample) of the
population. We obtain a sample rather than a complete enumeration (a census )
of the population for many reasons. Obviously, it is cheaper to observe a part
rather than the whole, but we should prepare ourselves to cope with the dangers
of using samples. In this tutorial, we will investigate various kinds of sampling
procedures. Some are better than others but all may yield samples that are
inaccurate and unreliable. We will learn how to minimize these dangers, but some
potential error is the price we must pay for the convenience and savings the
samples provide.
There would be no need for statistical theory if a census rather than a sample was
always used to obtain information about populations. But a census may not be
practical and is almost never economical. There are six main reasons for sampling
instead of doing a census. These are; -Economy -Timeliness -The large size of
many populations -Inaccessibility of some of the population -Destructiveness of
the observation -accuracy
The economic advantage of using a sample in research Obviously, taking a
sample requires fewer resources than a census. For example, let us assume that
you are one of the very curious students around. You have heard so much about
the famous Cornell and now that you are there, you want to hear from the
insiders. You want to know what all the students at Cornell think about the quality
of teaching they receive, you know that all the students are different so they are
likely to have different perceptions and you believe you must get all these
perceptions so you decide because you want an indepth view of every student,
you will conduct personal interviews with each one of them and you want the
results in 20 days only, let us assume this particular time you are doing your
research Cornell has only 20,000 students and those who are helping are so fast
at the interviewing art that together you can interview at least 10 students per
person per day in addition to your 18 credit hours of course work. You will require
100 research assistants for 20 days and since you are paying them minimum
wage of $5.00 per hour for ten hours ($50.00) per person per day, you will require
$100000.00 just to complete the interviews, analysis will just be impossible. You
may decide to hire additional assistants to help with the analysis at another
$100000.00 and so on assuming you have that amount on your account.
As unrealistic as this example is, it does illustrate the very high cost of census. For
the type of information desired, a small wisely selected sample of Cornell
students can serve the purpose. You don`t even have to hire a single assistant.
You can complete the interviews and analysis on your own. Rarely does a
circumstance require a census of the population, and even more rarely does one
justify the expense.
The time factor.
A sample may provide you with needed information quickly. For example, you are
a Doctor and a disease has broken out in a village within your area of jurisdiction,
the disease is contagious and it is killing within hours nobody knows what it is.
You are required to conduct quick tests to help save the situation. If you try a
census of those affected, they may be long dead when you arrive with your
results. In such a case just a few of those already infected could be used to
provide the required information.
The very large populations
Many populations about which inferences must be made are quite large. For
example, Consider the population of high school seniors in United States of
America, a group numbering 4,000,000. The responsible agency in the
government has to plan for how they will be absorbed into the different
departments and even the private sector. The employers would like to have

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specific knowledge about the student’s plans in order to make compatible plans to
absorb them during the coming year. But the big size of the population makes it
physically impossible to conduct a census. In such a case, selecting a
representative sample may be the only way to get the information required from
high school seniors.
The partly accessible populations
There are Some populations that are so difficult to get access to that only a
sample can be used. Like people in prison, like crashed aero planes in the deep
seas, presidents etc. The inaccessibility may be economic or time related. Like a
particular study population may be so costly to reach like the population of
planets that only a sample can be used. In other cases, a population of some
events may be taking too long to occur that only sample information can be relied
on. For example natural disasters like a flood that occurs every 100 years or take
the example of the flood that occurred in Noah’s days. It has never occurred
again.
The destructive nature of the observation sometimes the very act of observing
the desired characteristic of a unit of the population destroys it for the intended
use. Good examples of this occur in quality control. For example to test the
quality of a fuse, to determine whether it is defective, it must be destroyed. To
obtain a census of the quality of a lorry load of fuses, you have to destroy all of
them. This is contrary to the purpose served by quality-control testing. In this
case, only a sample should be used to assess the quality of the fuses
Accuracy and sampling. A sample may be more accurate than a census. A sloppily
conducted census can provide less reliable information than a carefully obtained
sample.
Criteria governing the choice of the sampling technique
1. Purpose of the survey- What does the researcher aim at? If he intends
to generalize the findings based on the sample survey to the population, then
an appropriate probability sampling method must be selected. The choice of a
particular type of probability sampling depends on the geographical area of
the survey and the size and the nature of the population under study.
2. Measurability- the application of statistical interference theory requires
computation of the sampling error from the sample itself. Probability samples
only allow such computation. Hence, where the research objective requires
statistical interference, the sample should be drawn by applying simple
random sampling method, depending on whether the population is
homogenous or heterogeneous.
3. Degree of precision- should the results of the survey be very precise or
even rough results could serve the purpose? The desired level of precision as
one of the criteria of sampling method selection. Where a high degree of
precision of results is desired, probability sampling should be used. Where
even crude results would serve the prupose (E.g., marketing surveys,
readership surveys etc) any convenient non-random sampling like quota
sampling would be enough.
4. Information about population: How much information is available
about the population to be studied? Where no list of population and no
information about its exploratory study with non-probability sampling may be
made to gain a better idea of population. After gaining sufficient knowledge
about the population through the exploratory study, appropriate probability
sampling design may be adopted.
5. The nature of the population: In terms of the variables to be studied, is
the population homogenous or heterogenous? In the case of a homogenous
population, heterogenous, stratified random sampling is appropriate.
6. Geographical Area of the Study and the Size of the Population: If
the area covered by a survey is very large and the size of the population is

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quite large, multi-stage cluster sampling would be appropriate. But if the area
and the size of the population are small, single stage probability sampling
methods could be used.
7. Financial resources: If the available finance is limited, it may become
necessary to choose a less costly sampling plan like multistage cluster
sampling or even quota sampling as a compromise. However, if the objectives
of the study and the desired level of precision cannot be attained within the
stipulated budget, there is not alternative than to give up the proposed
survey. Where the finance is not a constraint, a researcher can choose the
most appropriate method of sampling that fits the research objective and the
nature of population.
8. Time Limitation: The time limit within which the research project should
be completed restricts the choice of a sampling method. Then, as a
compromise , it may become necessary to choose less time consuming
methods like simple random sampling instead of stratified sampling/sampling
with probability proportional to size; multi-stage cluster sampling instead of
single-stage sampling of elements. Of course, the precision has to be scarified
to some extent.
9. Economy: It should be another criterion in choosing the sampling method.
It means achieving the desired level of precision at minimum cost. A sample is
economical if the precision per unit cost is high or the cost per unit of variance
is low. The above criteria frequently conflict and the reasercher must balance
and blend them to obtain to obtain a good sampling plan. The chosen plan
thus represents an adaptation of the sampling theory to the available facilities
and resources. That is, it represents a compromise between idealism and
fasibility. One should use simple workable methods instead of unduly
elaborate and complicated techniques.
The Characteristics of a good sample:
Representativeness: a sample must be representative of the population.
Probability sampling technique yield representative sample.
Accuracy: accuracy is defined as the degree to which bias is absent from the
sample. An accuracy sample is the one which exactly represents the population.
Precision: The sample must yield precise estimate. Precision is measured by
standard error.
Size: a good sample must be adequate in size in order to be reliable.

5. Select any topic for research and explain how you will use both
secondary and primary sources to gather the required information.
Ans. After you have decided to assess the problems and the needs of the audience,
and develop their profiles, the next step is to collect information. The programme
planners and producers will use the information only when they are sure about
the quality of information. You should, therefore, be concerned not only about the
type and the amount of information but also about the quality of information.
Some key criteria for quality information are given below :
Accuracy or Validity: It should show the true situation. For this, plan in advance,
be clear and specific with regard to information needed, simplify your samples
and research methods, use more than one method/ source for the same data and
develop guidelines for analysis of the data.
Relevance: It should be relevant to the information users. Should reflect the
commitment for the cause of the community, engage the target population in the
process of information collection, try to know in advance who needs what
information and how it will be used.
Significance: It should be important. Many a time researchers collect a lot of
information, which is irrelevant, unnecessary and insignificant for the purpose.

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Credibility: The information should be collected in a scientific manner to be
believable. Researchers should be objective while gathering, analyzing and
interpreting information, be transparent about the methods used to obtain
information and draw conclusions.
Timeliness: Information should be available in time to make necessary decisions.
There is little use in providing information after programming has already made a
significant headway. For this you should plan in advance, use simple tools for
collection and analysis, create a schedule with deadlines and stick to it.
Representativeness: It should represent the entire target audience and not just
some part of it.
Sources of Information
You can collect the required information from various sources. If possible, use
more than source and method for the same set of information. This enables you
to verify accuracy and gives more credence to the data.
Sources of information may broadly be classified as primary sources and
secondary sources.
Primary sources refer to people or places where you can obtain new and raw
information that does not exist. The new information that you gather from primary
sources is referred to as primary data.
Secondary sources refer to sources that have already gathered information,
possibly for reasons other than the purposes of your present concern. The
information is already available, and is referred to as secondary data.
Primary Data
Primary data are obtained by going to the field to collect new information for the
purpose of your specific requirement. Typically, primary data are often needed for
baseline study, assessment of needs and development of audience profiles.
Examples of primary sources include:
Target population
Extension functionaries of government and non-government agencies Social
workers, activists etc. Other interested parties working with the same or similar
populations
By using primary sources, you can have full control over what, when and how the
information is collected. In this way, it is easier to maintain control over quality of
information and to do follow-up for any critical findings or missing information.
However, primary data have also certain limitations:
Primary sources may not be easily accessible. For example, farmers during the
sowing season would not be available to give you the information you need. Skills
needed for successfully designing study and implementation of primary data
collection are substantially greater than those needed for working with secondary
data.
There may be errors of judgment in selecting the respondents or places from
which to gather information e.g. contacting persons of high socio-economic status
from the villages along the main road only and thereby not reflecting the issues of
the target populations of lower socio-economic status who live in remote areas.
Costs of primary data collection can be high. It is more time consuming also.
Despite limitations, primary sources are essential and important for audience
research. Extensive interaction with them, particularly the target audience
themselves, yields rich dividends. In fact, nothing can replace the information
collected from primary sources. However, keep your data collection sharply
focused for the reasons of time and costs.
Secondary Data

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The term secondary data refers to information that already exists and that has
been previously gathered by some other person or organization. You may find it
useful for your purpose. Secondary data include many kinds of written and visual
materials such as:
Previous research reports
Project reports
Historical accounts
Books and materials describing the region and the people
Documentary films/photographs.
Statistical reports/digests of various government agencies and other institutions
Maps and other materials
Obtaining data from secondary sources is obviously cheaper and easier to access
than going out to the field to gather fresh information. Therefore, gathering and
using secondary data should generally be considered as a first option when it is
available. You can use secondary data for various purposes:
o To serve as an independent piece of information.
o To select areas for further intensive study by you.
o To supplement the information gathered by you from the primary sources.
However, use the secondary data with caution, because these, too, have certain
inherent limitations:
May be out-dated and old.
May be inadequate.
If the methods and circumstances of data collection are not recorded, you cannot
be sure of their quality. The definition of concepts used in the data may be
different. For example, your concept of a small family may be different than what
has been adopted there. Nevertheless it is always a good idea to exploit the
potential of the secondary data to your best advantage.
A central principle to keep in mind for undertaking audience research, therefore,
is that after examining the available secondary data, primary data collection may
be done by focusing only on most significant issues and using simple and
straightforward research methods such as observations, in-depth inter views and
focused group discussions.

6. Case Study: You are engaged to carry out a market survey on behalf of a
leading Newspaper that is keen to increase its circulation in Bangalore
City, in order to ascertain reader habits and interests. Develop a title for
the study; define the research problem and the objectives or questions
to be answered by the study.
Ans. Newspaper publishers spend millions of dollars annually to ensure that the
newspaper arrives at the newspaper stand or the subscriber’s doorstep every day.
Reporters track down stories and editors diligently maintain the editorial integrity
of the newspaper. The production department meticulously guarantees that
advertisements make it onto the right page. It is no small feat that this daily
production process has continued for centuries across every city and town in the
world. Therein lies the rub. With a resolute focus on both the published newspaper
and production efficiencies, newspapers have become true stalwarts of the
industrial age. The last decade has ushered in a new era, the information age,
which is characterized by an unwavering focus on customers. A newspaper’s most
valuable asset is customer acceptance. Today, customer service means more
than delivering the newspaper on time, every time. Many newspapers are
transforming their organizations from manufacturing-oriented enterprises to
customer-centric businesses and relying on customer relationship management
solutions to help catapult newspapers into the new age
Objectives of the Study

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The primary objective of the study is to identify and describe the use of various
elements of marketing mix in the newspaper industry of Bangalore through
focusing the marketing practices of the highest circulated newspaper, Prothom
Alo. This paper has been carried out with the following specific objectives:
i. To cite the price determination process of a leading newspaper.
ii. To describe the marketing cost of Prothom Alo.
iii. To narrate the distribution channel of a national newspaper.
iv. To illustrate the promotional activities of Prothom Alo.
v. To identify the current marketing problems of a daily newspaper.
vi. To find out the ways of increasing the marketing efficiency of Prothom Alo.
Research Problem
Despite of the level best effort of the researchers, this article is not fully free of
certain obvious limitations. The basic limitation of this article is its sole
dependence on secondary data. Secondly, the sources of secondary data were
very limited. Relevant data is not available regarding this field. For this reason the
accuracy of this report depends on the accuracy of the information furnished by
the secondary sources.

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MB0034 Research Methodology

Set- 2

1. Discuss the relative advantages and disadvantages of the different

methods of distributing questionnaires to the respondents of a study.
Ans. Questionnaires are easy to analyze, and most statistical analysis software can
easily process them. They are cost effective when compared to face-to-face
interviews, mostly because of the costs associated with travel time.
Questionnaires are familiar to most people (Berdie, Anderson, and Niebuhr, 1986).
Nearly everyone has had some experience completing questionnaires and they
generally do not make people apprehensive. They are less intrusive than
telephone or face-to-face surveys. When respondents receive a questionnaire in
the mail, they are free to complete it on their own time-table. Unlike other
research methods, the respondent is not interrupted by the research instrument.
On the other hand, questionnaires are simply not suited for some people. For
example, a written survey to a group of poorly educated people might not work
because of reading skill problems. More frequently, some people are turned off by
written questionnaires because of misuse. Questionnaires should leave adequate
space for respondents to make comments. One criticism of questionnaires is their
inability to retain the "flavor" of a response. Leaving space for comments will
provide valuable information not captured by the response categories. Leaving
white space also makes the questionnaire look easier and this might increase
response. Researchers should design the questionnaire so it holds the
respondent's interest. The goal is to make the respondent want to complete the
questionnaire. One way to keep a questionnaire interesting is to provide variety in
the type of items used. Likewise, the most important items should appear in the
first half of the questionnaire. Respondents often send back partially completed
questionnaires. By putting the most important items near the beginning, the
partially completed questionnaires will still contain important information. An
anonymous study is one in which nobody (not even the study directors) can
identify who provided data on completed questionnaires." (Berdie, Anderson,
Niebuhr, 1986, p. 47) It is generally not possible to conduct an anonymous
questionnaire through the mail because of the need to follow-up on
nonresponders. However, it is possible to guarantee confidentiality, where the
those conducting the study promise not to reveal the information to anyone. For
the purpose of follow-up, identifying numbers on questionnaires are generally
preferred to using respondents' names. It is important, however, to explain why
the number is there and what it will be used for.
A good questionnaire makes it convenient for the respondent to reply. Mail
surveys that include a self-addressed stamped reply envelope get better response
than business reply envelopes, although they are more expensive since you also
pay for the non-respondents. One important area of question wording is the effect
of the interrogation and assertion question formats. The interrogation format asks
a question directly, where the assertion format asks subjects to indicate their
level of agreement or disagreement with a statement.
The prenotification letter should address five items (Walonick, 1993):
1. Briefly describe why the study is being done.
2. Identify the sponsors.

3. Explain why the person receiving the pre-letter was chosen.

4. Justify why the respondent should complete the questionnaire.

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5. Explain how the results will be used.
The researcher should prepare a mailing list of the selected respondents by
collecting the addresses from the telephone directory of the association or
organization to which they belong. A covering letter should accompany a copy of
the questionnaire.
Other modes of sending quetionnaries.
Methods of distributing quetionnaries to the respondents. They are: (1) Personal
delivery (2) attaching questionnaire to a product (3) advertising questionnaire in a
newspaper of magazine, and (4) news stand insets.
Personal Delivery
The researcher or his assistant may deliver the questionnaires to the potential
respondents with a request to complete them at their convenience. After a day or
two he can collect the questionnaire method, it combines the advantages of the
personal interview and the mail survey. Alternatively, the questionnaires may be
delivered in person and the completed questionnaires may be returned by mail by
the respondent.
Attaching Questionnaire to a product
A firm test marketing a product may attch a questionnaire to a product and
request the buyer to complete it and mail it back to the firm. The respondent is
usually rewarded by a gift or a discount coupon.
Advertising the Questionnaires
The questionnaire with the instructions for completion may be advertised on a
page of magazine or in section of newspapers. The potential respondent
completes it tears it out and mails it to the advertiser. For example, the
committee of Banks customer services used this method. Management studies for
collecting information from the customers of commercial banks in India. This
method may be used for large-scale on topics of common interest.
News-stand Inserts
This method involves inserting the covering letter, quetionnarie and self
addressed reply-paid envelope into a random sample of news-stand copies of a
newspaper or magazine.
Improving the Response Rate in a Mail survey.
The response rate in mail survey is generally very low more so in developing
countries like India. Certain techniques have to be adopted to increase the
response rate. They are:
1. Quality Printing: The questionnaire may be neatly printed in quality light
coloured paper, so as to attract the attention of the respondent.
2. Covering Letter: The covering letter should be couched in a pleasant style
so as to attract and hold the interest of the respondent. It must anticipate
objections and answer them briefly. It is a desirable to address the
respondent by name.
3. Advance Information: Advance information can be provided to potential
respondents by a telephone call or advance notice in the newsletter of the
concerned organization or by a letter. Such preliminary contact with
potential respondents is more successful than follow up efforts.
4. Incentives: Money, stamps for collection and other incentives are also used
to induce respondents to complete and return mail questionarie.
5. Follow-up-contacts: In the case of respondents belonging to an
organization, they may be approached through some one in that
organization known as the researcher.

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6. Larger sample size: A large sample may be drawn than the estimated
sample size. For example, if the required sample size is 1000, a sample of
1500 may be drawn. This may help the researcher to secure an effective
sample size closer to the required size.
Advantages of Questionnaires
The advantages of mail surveys are:
1. They are less costly than personal interviews, as cost of mailing is the same
through out the country, irrespective of distance.
2. They can cover extensive geographical areas.
3. Mailing is useful in contacting persons such as senior business executives
who are difficult to reach in any other way.
4. The respondents can complete the questionnaires at their convenience. Mail
surveys, being more impersonal, provide more anonymity than
5. personal interviews
6. Mail surveys are totally free from the interviewer’s bias, as there is no
personal contact between the respondents and the investigator.
7. Certain personal and economic data may be given accurately in an unsigned
mail questionnaire.
Disadvantages of Questionnaires
The disadvantages of mail surveys are:
1. The scope for mail survey is very limited in a country like India where the
percentage of literacy is very low.
2. The response rate of mail survey is low. Hence, the resulting sample will not
be a representative one.

2. In processing data, what is the difference between measures of central

tendency and measures of dispersion? What is the most important
measure of central tendency and dispersion?
Ans. These are the most familiar measurements of dispersion. Variance is the
arithmetic mean (average) of the square of the difference between the value of
an observation and the arithmetic mean of the value of all observations. It is also
referred to as the second moment about the mean. The formal definition of
variance being:

For computation purposes, the formula can be used in the form shown below
which allows the variance to be derived without first calculating the mean:

Standard Deviation
Standard deviation is the square root of the variance:

Normalized Standard Deviation

It is often useful to express the difference between the mean and a given value in
units of standard deviation.
The normalized standard deviation is often referred to as z. Probability tables for
the normal distribution are usually based on z.
Mean Absolute Deviation (MAD)
A weakness of standard deviation as a measure of dispersion is its sensitivity to
anomalous values which are a feature of real life data. This is a result of the

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square of the difference between a value and the mean, this conveniently gets rid
of negative values, but at the expense of increasing the significance of extreme
ones. An alternative is based the absolute value of the difference between a
given value and the mean:

The downside is that the use of absolute values makes the analytical treatment of
functions difficult, but this is a small price to pay for such an acronym.
In situations where the median is a more stable measure of central tendency, it is
used in place of the mean.
The example below compares the standard deviation and the MAD for a small
sample which contains an anomalous extreme value. The measures of central
tendency for the sample are:

Mean 1.7

Median 1.5

1.2 0.5 0.3 0.25

1.4 0.3 0.1 0.09

1.5 0.2 0.0 0.04

1.6 0.1 0.1 0.01

2.8 1.1 1.3 1.21

Totals 2.2 1.8 1.60

Mean Absolute Deviation 0.44

Median Absolute Deviation 0.36

Standard Deviation 0.57

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The MAD statistics are less sensitive to extreme anomalous values, however, it is
important to use the statistic which is best suited for a given analysis.
Easily telling people about your data
Collecting data can be easy and fun. But sometimes it can be hard to tell other
people about what you have found. That’s why we use statistics. Two kinds of
statistics are frequently used to describe data. They are measures of central
tendency and dispersion. These are often called descriptive statistics because
they can help you describe your data.
Mean, median and mode
These are all measures of central tendency. They help summarize a bunch of
scores with a single number. Suppose you want to describe a bunch of data that
you collected to a friend for a particular variable like height of students in your
class. One way would be to read each height you recorded to your friend. Your
friend would listen to all of the heights and then come to a conclusion about how
tall students generally are in your class But this would take too much time.
Especially if you are in a class of 200 or 300 students! Another way to
communicate with your friend would be to use measures of central tendency like
the mean, median and mode. They help you summarize bunches of numbers with
one or just a few numbers. They make telling people about your data easy.
Range, variance and standard deviation
These are all measures of dispersion. These help you to know the spread of
scores within a bunch of scores. Are the scores really close together or are they
really far apart? For example, if you were describing the heights of students in
your class to a friend, they might want to know how much the heights vary. Are
all the men about 5 feet 11 inches within a few centimeters or so? Or is there a lot
of variation where some men are 5 feet and others are 6 foot 5 inches? Measures
of dispersion like the range, variance and standard deviation tell you about the
spread of scores in a data set. Like central tendency, they help you summarize a
bunch of numbers with one or just a few numbers.

3. What are the characteristics of a good research design? Explain how the
research design for exploratory studies is different from the research
design for descriptive and diagnostic studies.
Ans. Design research investigates the process of designing in all its many fields. It is
thus related to Design methods in general or for particular disciplines. A primary
interpretation of design research is that it is concerned with undertaking research
into the design process. Secondary interpretations would refer to undertaking
research within the process of design. The overall intention is to better
understand and to improve the design process.
Throughout the design construction task, it is important to have in mind some
endpoint, some criteria which we should try to achieve before finally accepting a
design strategy. The criteria discussed below are only meant to be suggestive of
the characteristics found in good research design. It is worth noting that all of
these criteria point to the need to individually tailor research designs rather than
accepting standard textbook strategies as is Theory-Grounded. Good research
strategies reflect the theories which are being investigated. Where specific
theoretical expectations can be hypothesized these are incorporated into the
design. For example, where theory predicts a specific treatment effect on one
measure but not on another, the inclusion of both in the design improves
discriminant validity and demonstrates the predictive power of the theory.
Situational. Good research designs reflect the settings of the investigation. This
was illustrated above where a particular need of teachers and administrators was
explicitly addressed in the design strategy. Similarly, intergroup rivalry,
demoralization, and competition might be assessed through the use of additional
comparison groups who are not in direct contact with the original group.

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Feasible. Good designs can be implemented. The sequence and timing of events
are carefully thought out. Potential problems in measurement, adherence to
assignment, database construction and the like, are anticipated. Where needed,
additional groups or measurements are included in the design to explicitly correct
for such problems.
Redundant. Good research designs have some flexibility built into them. Often,
this flexibility results from duplication of essential design features. For example,
multiple replications of a treatment help to insure that failure to implement the
treatment in one setting will not invalidate the entire study.
Efficient. Good designs strike a balance between redundancy and the tendency
to overdesign. Where it is reasonable, other, less costly, strategies for ruling out
potential threats to validity are utilized.
This is by no means an exhaustive list of the criteria by which we can judge good
research design. nevertheless, goals of this sort help to guide the researcher
toward a final design choice and emphasize important components which should
be included.
The development of a theory of research methodology for the social sciences has
largely occurred over the past half century and most intensively within the past
two decades. It is not surprising, in such a relatively recent effort, that an
emphasis on a few standard research designs has occurred. Nevertheless, by
moving away from the notion of "design selection" and towards an emphasis on
design construction, there is much to be gained in our understanding of design
principles and in the quality of our research.
Exploratory research provides insights into and comprehension of an issue or
situation. It should draw definitive conclusions only with extreme caution.
Exploratory research is a type of research conducted because a problem has not
been clearly defined. Exploratory research helps determine the best research
design, data collection method and selection of subjects. Given its fundamental
nature, exploratory research often concludes that a perceived problem does not
actually exist.
Exploratory research often relies on secondary research such as reviewing
available literature and/or data, or qualitative approaches such as informal
discussions with consumers, employees, management or competitors, and more
formal approaches through in-depth interviews, focus groups, projective methods,
case studies or pilot studies. The Internet allows for research methods that are
more interactive in nature: E.g., RSS feeds efficiently supply researchers with up-
to-date information; major search engine search results may be sent by email to
researchers by services such as Google Alerts; comprehensive search results are
tracked over lengthy periods of time by services such as Google Trends; and Web
sites may be created to attract worldwide feedback on any subject.
The results of exploratory research are not usually useful for decision-making by
themselves, but they can provide significant insight into a given situation.
Although the results of qualitative research can give some indication as to the
"why", "how" and "when" something occurs, it cannot tell us "how often" or "how
many."
Exploratory research is not typically generalizable to the population at large.
Applied research in administration is often exploratory because there is need for
flexibility in approaching the problem. In addition there are often data limitations
and a need to make a decision within a short time period. Qualitative research
methods such as case study or field research are often used in Exploratory
research..
There are three types of objective in a marketing research project.
Exploratory Research or Formulative Research
Descriptive research
Causal research

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Exploratory Research or Formulative Research 'The objective of exploratory
research is to gather preliminary information that will help define problems and
suggest hypotheses.'
Descriptive Research 'The objective of descriptive research is to describe things,
such as the market potential for a product or the demographics and attitudes of
consumers who buy the product.

4. How is the Case Study method useful in Business Research? Give two
specific examples of how the case study method can be applied to
business research.
Ans. A case study is a research methodology common in social science. It is based on
an in-depth investigation of a single individual, group, or event. Case studies may
be descriptive or explanatory. The latter type is used to explore causation in order
to find underlying principles. Rather than using samples and following a rigid
protocol (strict set of rules) to examine limited number of variables, case study
methods involve an in-depth, longitudinal (over a long period of time)
examination of a single instance or event: a case. They provide a systematic way
of looking at events, collecting data, analyzing information, and reporting the
results. As a result the researcher may gain a sharpened understanding of why
the instance happened as it did, and what might become important to look at
more extensively in future research. Case studies lend themselves to both
generating and testing hypotheses.
Another suggestion is that case study should be defined as a research strategy,
an empirical inquiry that investigates a phenomenon within its real-life context.
Case study research means single and multiple case studies, can include
quantitative evidence, relies on multiple sources of evidence and benefits from
the prior development of theoretical propositions. Case studies should not be
confused with qualitative research and they can be based on any mix of
quantitative and qualitative evidence. Single-subject research provides the
statistical framework for making inferences from quantitative case-study data.
This is also supported and well-formulated in (Lamnek, 2005): "The case study is a
research approach, situated between concrete data taking techniques and
methodologic paradigms." When selecting a case for a case study, researchers
often use information-oriented sampling, as opposed to random sampling. This is
because an average case is often not the richest in information. Extreme or
atypical cases reveal more information because they activate more basic
mechanisms and more actors in the situation studied. In addition, from both an
understanding-oriented and an action-oriented perspective, it is often more
important to clarify the deeper causes behind a given problem and its
consequences than to describe the symptoms of the problem and how frequently
they occur. Random samples emphasizing representativeness will seldom be able
to produce this kind of insight; it is more appropriate to select some few cases
chosen for their validity, but this isn't always the case.
Three types of information-oriented cases may be distinguished:
Critical cases
Extreme or deviant cases
Paradigmatic cases
Yin (2005) suggested that researchers should decide whether to do single-case or
multiple-case studies and chose to keep the case holistic or have embedded sub-
cases. This two-by-two combination can produce four basic designs for case
studies. In business research, Case study research excels at bringing us to
an understanding of a complex issue or object and can extend experience or add
strength to what is already known through previous research. Case studies
emphasize detailed contextual analysis of a limited number of events or
conditions and their relationships. Researchers have used the case study research
method for many years across a variety of disciplines. Social scientists, in
particular, have made wide use of this qualitative research method to examine
contemporary real-life situations and provide the basis for the application of ideas

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and extension of methods. Researcher Robert K. Yin defines the case study
research method as an empirical inquiry that investigates a contemporary
phenomenon within its real-life context; when the boundaries between
phenomenon and context are not clearly evident; and in which multiple sources of
evidence are used. Critics of the case study method believe that the study of a
small number of cases can offer no grounds for establishing reliability or
generality of findings. Others feel that the intense exposure to study of the case
biases the findings. Some dismiss case study research as useful only as an
exploratory tool. Yet researchers continue to use the case study research method
with success in carefully planned and crafted studies of real-life situations, issues,
and problems. Reports on case studies from many disciplines are widely available
in the literature. How to use the case study method and then applies the method
to an example case study project designed to examine how one set of users, non-
profit organizations, make use of an electronic community network. The study
examines the issue of whether or not the electronic community network is
beneficial in some way to non-profit organizations and what those benefits might
be. Many well-known case study researchers such as Robert E. Stake, Helen
Simons, and Robert K. Yin have written about case study research and suggested
techniques for organizing and conducting the research successfully. This
introduction to case study research draws upon their work and proposes six steps
that should be used:
Determine and define the research questions
Select the cases and determine data gathering and analysis techniques
Prepare to collect the data
Collect data in the field
Evaluate and analyze the data
Prepare the report

5. What are the differences between observation and interviewing as

methods of data collection? Give two specific examples of situations
where either observation or interviewing would be more appropriate.
Ans. The most complete form of the sociological datum, after all, is the form in which
the participant observer gathers it: An observation of some social event, the
events which precede and follow it, and explanations of its meaning by
participants and spectators, before, during, and after its occurrence. Such a
datum gives us more information about the event under study than data gathered
by any other sociological method. Participant observation can thus provide us
with a yardstick against which to measure the completeness of data gathered in
other ways, a model which can serve to let us know what orders of information
escape us when we use other methods.' By participant observation we mean that
method in which the observer participates in the daily life of the people under
study, either openly in the role of researcher or covertly in some disguised role,
observing things that happen, listening to what is said, and questioning people,
over some length of time. We want, in this paper, to compare the results of
intensive field work with what might be regarded as the first step in the other
direction along this continuum: the detailed and conversational interview (often
referred to as the unstructured or undirected interview).3 In this kind of interview,
the interviewer explores many facets of his interviewee's concerns, treating
subjects as they come up in conversation, pursuing interesting leads, allowing his
imagination and ingenuity full rein as he tries to develop new hypotheses and test
them in the course of the interview. In the course of our current participant
observation among medical students? we have thought a good deal about the
kinds of things we were discovering which might ordinarily be missed or
misunderstood in such an interview. W e have no intention of denigrating the
interview or even such less precise modes of data gathering as the questionnaire,
for there can always be good reasons of practicality, economy, or research design
for their use. We simply wish to make explicit the difference in the data gathered
by one or the other method and to suggest the differing uses to which they can
legitimately be put. In general, the shortcomings we attribute to the interview
exist when it is used as a source of information about events that have occurred

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elsewhere and are described to us by informants. Our criticisms are not relevant
when analysis is restricted to interpretation of the interviewee's conduct during
the interview, in which case the researcher has in fact observed the behavior he is
talking about.? The differences we consider between the two methods involve two
interacting factors: the kinds of words and acts of the people under study that the
researcher has access to, and the kind of sensitivity to problems and data
produced in him. Our comparison may prove useful by suggestive areas in which
interviewing (the more widely used method at present and likely to continue so)
can improve its accuracy by taking account of suggestions made from the
perspective of the participant observer. We begin by considering some concrete
problems: learning the native language, or the problem of the degree to which the
interviewer really understands what is said to him; matters interviewees are
unable or unwilling to talk about; and getting information on matters people see
through distorting lenses. We then consider some more general differences
between the two methods.
Observation as a method of data collection has certain characteristics.
1. It is both a physical and a mental activity: The observing eye catches many things that
are present. But attention is focused on data that are pertinent to the given study.
2. Observation is selective: A researcher does not observe anything and everything, but
selects the range of things to be observed on the basis of the nature, scope and
objectives of his study. For example, suppose a researcher desires to study the causes
of city road accidents and also formulated a tentative hypothesis that accidents are
caused by violation of traffic rules and over speeding. When he observed the
movements of the vehicles, the persons sitting in them, their hair style, etc. all such
things which are not relevant to his study are ignored and only over speeding and traffic
violation are keenly observed by him.
3. Observation is purposive and not casual: it is made for the specific purpose of
noting things relevant to the study. It captures the natural social context in which
persons behavior occur. It grasps the significant events and occurrences that affect
social relations of the participants.
4. Observation should be exact and be based on standardized tools of research and such as
observation schedule, social metric scale etc., and precision instruments, if any.
Observation has following advantages:
(1) The main virtue of observation is its directness: It makes it possible to study behavoiur as
it occurs. The researcher need not ask people about their behavour and intereactions he
can simply watch what they do and say.
(2) Data collected by observation may describe the observed phenomena as they occur in
their natural settings. Other methods introduce elements or artificiality into the
researchers situation for instance, in interviews, the respondent may not behave in a
natural way. There is no such artificiality into the researched situation for instance, in
interview; the respondent may not behave in a natural way. There is not such artificiality
in observational studies, especially when the observed persons are not aware of their
being observed
(3) Observations is more suitable for studying subjects who are unable to articulate
meaningfully, e.g. studies of children, tribal, animals, birds etc.
(4) Obeservations improve the opportunities for analyzing the contextual back ground of
behavior. Further more verbal resorts can be validated and compared with behavior
through observation. The validity of what men of position and authority say can be
verified by observing what they actually do.
Observation is less demanding of the subjects and has less biasing effect on their
conduct than questioning.
Interview method
Interviewing is one of the prominent methods of data collection. It may be defined
as a two way systematic conversation between an investigator and an informant,
initiated for obtaining information relevant to a specific study. It involves not only
conversation, but also learning from the respondent’s gesture, facial expressions
and pauses, and his environment. Interviewing requires face to face contact or
contact over telephone and calls for interviewing skills. It is done by using a

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structured schedule or an unstructured guide. Interviewing may be used either as
a main method or as a supplementary one in studies of persons. Interviewing is
the only suitable method for gathering information from illiterate or less educated
respondents. It is useful for collecting a wide range of data from factual
demographic data to highly personal and intimate information relating to a
person’s opinions, attitudes, values, beliefs past experience and future intentions.
When qualitative information is required or probing is necessary to draw out fully,
and then interviewing is required. Where the area covered for the survey is a
compact, or when a sufficient number of qualified interviewers are available,
personal interview is feasible. Interview is often superior to other data-gathering
methods. People are usually more willing to talk than to write. Once report is
established, even confidential information may be obtained. It permits probing
into the context and reasons for answers to questions.Interview can add flesh to
statistical information. It enables the investigator to grasp the behavioural context
of the data furnished by the respondents.
There are several advantages to personal interviewing. First the greatest
value of this method is the depth and detail of information that can be secured.
When used with well conceived schedules, an interview can obtain a great deal of
information. It far exceeds mail survey in amount and quality of data that can be
secured. Second, the interviewer can do more to improve the percentage of
responses and the quality of information received than other method. He can note
the conditions of the interview situation, and adopt appropriate approaches to
overcome such problems as the respondent’s unwillingness, incorrect
understanding of questions, suspicion, etc. Third, the interviewr can gather other
supplemental information like economic level, living conditions etc. through
observation of the respondents environment. Fourth, the interviewer can use
special scoring devices, visual materials and the like in order to improve the
quality of interviewing. Fifth, the accuracy and depdendability of the answers
given by the respondent can be checked by observation and probing. Last,
interview is flexible and adaptable to individual situations. Even more, control can
be exercised over the interview situation.
Demerits of interview method
Interviewing is not free limitations. Its greatest drawback is that it is costly both in
money and time. Second, the interview results are often adversely affected by
interviewer’s mode of asking questions and interactions, and incorrect recording
and also by the respondent’s faulty perception, faulty memory, inability to
articulate etc.
Third, certain types of personal and financial information may be refused in face-
to face interviews. Such information might be supplied more willingly on mail
questionnaires, especially if they are to be unsigned. Fourth, interview poses the
problem of recording information obtained from the respondents. No full proof
system is available. Note taking in invariably distracting to both the respondent
and the interviewer and affects the trhead of the conversation. Last interview
calls for highly interviewers. The availability of such persons is limited and the
traininmg of interviewers is often a long and costly process.
Situation where observation is appropriate: Observations make it possible to
capture the whole event as it occurs. For example only observation can provide
an insight into all the aspects of the process of negotiation between union and
management representatives. Situation where interview method is appropriate: to
study the Reading habits of newspaper/magazines readers.

6. Case study- you are engaged to carry out a market survey on behalf of a
leading Newspaper that is keen to increase its circulation in Bangalore
city, in order to ascertain reader habits and interests. What type of
Research report would be most appropriate? Develop an outline of the
research report with the main sections.
Ans- Popular Reports would be most appropriate for this study.

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In popular report the reader is less interested in the methodological details, but
more interested in the findings of the study. Complicated statistics are avoided
and pictorial devices are used. After a brief introduction to the problem and the
objectives of the study, and abstract of the findings of the study, conclusion and
recommendations are presented. More headline, underlining pictures and graphs
may be used. Sentences and paragraphs should be short.
Title of the study: A study of Reader’s Choice of Topics on the front page
and depth of coverage of various categories of news.
Objectives of the study/ Questions to be answered by the study:
• To understand what the readers wish to see on the front page of the
newspaper.
• To understand how much depth of the news is to be covered.
• To understand the kind of images the readers like.
• To understand what proportion of politics, sports, cinema and health etc is
to be covered in the newspaper.
• What readers want to read in the newpaper other that the current topics.
And outline of a research report is given below:
Prefatory items
Title page
Declaration
Preface/acknowledgement
Table of contents
List of tables
List of graphs/figures/ charts
Abstract of synopsis.
Body of the report
• Introduction
• Theoretical background of the topic
• Statement of the problem
• Review of literature
• The scope of the study
• The objectives of the study
• Hypothesis to be tested
• Definition of the concepts
• Models if any
• Design of the study
• Methodology
• Method of data collection
• Sources of data
• Sampling plan
• Data collection instruments
• Field work
• Data processing and analysis plan
• Overview of the report
• Limitation of the study
• Results: findings and discussions
• Summary, conclusions and recommendations.

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MB0035 – Legal Aspects of Business

Set - 1

Q.1 What do you mean by free consent? Under what circumstances consent
is considered as free? Explain.
Ans.: Free consent:
One of the essential of a valid contract is free consent. Sec. 13 of the act defense
consent has two or more persons are said to consent where they agree upon think
in the same sense. There should be consents at the ad idem or identity of minds.
The validity of consent depends not only on consents parties but their consents
must also be free. According to section 14, consent is said to be free when it is
not caused by
1) Coercion has defined under sec.15 or
2) Undue influence as defined under sec. 16 or
3) Fraud has defined under sec. 17 or
4) Mis-representation or defined under sec. 18 or
5) Mistake subject to the probations of sec. 21& 22.
1) Coercion:
Sec. 15 “coercion is the committing or threatening to commit any act forbidden
by the Indian penal code or the unlawful detaining or threatening to detain any
property, to the prejudice of any person whatever, with the intention of causing
any person to enter into an agreement. “ It is immaterial weather the Indian penal
code is or is not in force in the place where the coercion is employed. Under
English Law, coercion must be applied to one’s person only whereas under Indian
Law it can be one’s person or property. So also under English Law, the subject of
it must be the contracting party himself or his wife, parent, child or other near
relative. Under Indian Law, the act or threat may be against any person. It is to be
noted that he act need not be committed in India itself. Unlawful detaining or
threatening to detain any property it also coercion. While threat to sue does not
amount to coercion threat to file a false suit amounts to coercion since Indian
Penal Code forbids such an act.
2) Undue influence:
In the words of Holland,” Undue influence refers to “the unconscious use of power
over another person, such power being obtained by virtue of a present or
previously existing dominating control arising out of relationship between the
parties.”
According sec. 16(1) “ A contract is said to be induced by undue influence where
the relation subsisting between the parties are such that one of the parties is in a
position to dominate the will of the other and uses that position to obtain an
unfair advantage over the other.”
A person is deemed to be in a position to dominate the will of other.
(a) Where he holds a real or apparent authority over the other or where he
stands in a fiduciary relation to the other; or
(b) Where he makes a contract with a person whose mental capacity is
temporarily or permanently affected by reason of age, illness or mental or bodily
distress:
(c) Where a person, who is in a position to dominate the will of another, enters
into a contract with him and the transaction appears to be unconscionable. The burden of
proving that such contract was not by undue influence shall lie upon the person in a
position to dominate the will of the other.
Both coercion and undue influence are closely related. What contributes coercion
or undue influence depends upon the facts of each case.

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Sec. 16(i) provides that two elements must be present. The first one is that the
relations subsisting between the parties to a contract are such that one of them is
in a position to dominate the will of the other.
Secondly, he uses that position to obtain unfair advantage over the other. In other
words, unlike coercion undue influence must come from a party to the contract
and not a stranger to it. Where the parties are not in equal footing or there is trust
and confidence between the parties, one party may be able to dominate the will
of the other and use the position to obtain an unfair advantage. However, where
there is no relationship shown to exit from which undue influence is presumed,
that influence must be proved.
3) Fraud:
A false statement made knowingly or without belief in its truth or recklessly
careless whether it be true or false is called fraud.
Sec. 17 of the act instead of defining fraud gives various acts which amount to
fraud.
Sec. 17: Fraud means and includes any of the following acts committed by a party
to a contract or with his connivance or by his agent to induce him to enter into
contract:
1) The suggestion that a fact is true when it is not true by one who does not
believe it to be true. A false statement intentionally made is fraud. An absence of honest
belief in the truth of the statement made is essential to constitute fraud. The false
statement must be made intentionally.
2) The active concealment of a fact by a person who has knowledge or belief
of the fact. Mere non-disclosure is not fraud where there is no duty to disclose.
3) A promise made without any intention of performing it.
4) Any other act fitted to deceive. The fertility of man’s invention in devising
new schemes of fraud is so great that it would be difficult to confine fraud within the
limits of any exhaustive definition.
5) Any such act or omission as the law specially declares to be fraudulent.
4) Misrepresentation:
Before entering into a contract, the parties will may certain statements inducing
the contract. Such statements are called representation. A representation is a
statement of fact made by one party to the other at the time of entering into
contract with an intention of inducing the other party to enter into the contract. If
the representation is false or misleading, it is known as misrepresentation. A
misrepresentation may be innocent or intentional. An intentional
misrepresentation is called fraud and is covered under section 17 sec. 18 deals
with an innocent misrepresentation.
5) Mistake:
Usually, mistake refers to misunderstanding or wrong thinking or wrong belief.
But legally, its meaning is restricted and is to mean “operative mistake”. Courts
recognize only such mistakes, which invalidate the contract. Mistake may be
mistake of fact or mistake of law.
Sec. 20”Where both parties to an agreement are under a mistake as to a matter
of fact essential to the agreement, the agreement is void”.
Sec.21” A contract is not voidable because it was caused by a mistake as to any
law in force in India: but a mistake as to a law not in force in India has the same
effect as a mistake of fact”.
Bilateral mistake: Sec.20 deals with bilateral mistake. Bilateral mistake is one
where there is no real correspondence of offer and acceptance. The parties are
not really in consensus-ad-item. Therefore there is no agreement at all.
A bilateral mistake may be regarding the subject matter or the possibility of
performing the contract.

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Q.2 Define negotiable instrument. What are its features and characteristics?
Which are the different types of negotiable instruments? If Mr. A is the
holder of a negotiable instrument, under what situations
i. Will he be the Holder in due course?
ii. He has the right to discharge?
iii. He can make endorsements?
Ans.: Meaning of Negotiable Instruments
To understand the meaning of negotiable instruments let us take a few examples
of day-to-day business transactions. Suppose Pitamber, a book publisher has sold
books to Prashant for Rs 10,000/- on three months credit. To be sure that
Prashant will pay the money after three months, Pitamber may write an Order
addressed to Prashant that he is to pay after three months, for value of goods
received by him, Rs.10, 000/- to Pitamber or anyone holding the order and
presenting it before him (Prashant) for payment. This written document has to be
signed by Prashant to show his acceptance of the order. Now, Pitamber can hold
the document with him for three months and on the due date can collect the
money from Prashant. He can also use it for meeting different business
transactions. For instance, after a month, if required, he can borrow money from
Sunil for a period of two months and pass on this document to Sunil. He has to
write on the back of the document an instruction to Prashant to pay money to
Sunil, and sign it. Now Sunil becomes the owner of this document and he can
claim money from Prashant on the due date. Sunil, if required, can further pass on
the document to Amit after instructing and signing on the back of the document.
This passing on process may continue further till the final payment is made. In the
above example, Prashant who has bought books worth Rs. 10,000/- can also give
an undertaking stating that after three month he will pay the amount to Pitamber.
Now Pitamber can retain that document with himself till the end of three months
or pass it on to others for meeting certain business obligation (like with Sunil, as
discussed above) before the expiry of that three months time period.
You must have heard about a cheque. What is it? It is a document issued to a
bank that entitles the person whose name it bears to claim the amount mentioned
in the cheque. If he wants, he can transfer it in favour of another person. For
example, if Akash issues a cheque worth Rs. 5,000/ - In favour of Bidhan, then
Bidhan can claim Rs. 5,000/- from the bank, or he can transfer it to Chander to
meet any business obligation, like paying back a loan that he might have taken
from Chander. Once he does it, Chander gets a right to Rs. 5,000/- and he can
transfer it to Dayanand, if required. Such transfers may continue till the payment
is finally made to somebody. In the above examples, we find that there is certain
documents used for payment in business transactions and are transferred freely
from one person to another. Such documents are called Negotiable Instruments.
Thus, we can say negotiable instrument is a transferable document, where
negotiable means transferable and instrument means document. To elaborate it
further, an instrument, as mentioned here, is a document used as a means for
making some payment and it is negotiable i.e., its ownership can be easily
transferred. Thus, negotiable instruments are documents meant for making
payments, the ownership of which can be transferred from one person to another
many times before the final payment is made.
Definition of Negotiable Instrument
According to section 13 of the Negotiable Instruments Act, 1881, a negotiable
instrument means “promissory note, bill of exchange, or cheque, payable either
to order or to bearer”.
Types of Negotiable Instruments
According to the Negotiable Instruments Act, 1881 there are just three types of
negotiable instruments i.e., promissory note, bill of exchange and cheque.
However many other documents are also recognized as negotiable instruments on
the basis of custom and usage, like hundis, treasury bills, share warrants, etc.,
provided they possess the features of negotiability. In the following sections, we
shall study about Promissory Notes (popularly called pronotes), Bills of Exchange

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(popularly called bills), Cheque and Hundis (a popular indigenous document
prevalent in India), in detail.
i. Promissory Note
Suppose you take a loan of Rupees Five Thousand from your friend Ramesh. You
can make a document stating that you will pay the money to Ramesh or the
bearer on demand. Or you can mention in the document that you would like to
pay the amount after three months. This document, once signed by you, duly
stamped and handed over to Ramesh, becomes a negotiable instrument. Now
Ramesh can personally present it before you for payment or give this document
to some other person to collect money on his behalf. He can endorse it in
somebody else’s name who in turn can endorse it further till the final payment is
made by you to whosoever presents it before you. This type of a document is
called a Promissory Note. Section 4 of the Negotiable Instruments Act, 1881
defines a promissory note as ‘an instrument in writing (not being a bank note or a
currency note) containing an unconditional undertaking, signed by the maker, to
pay a certain sum of money only to or to the order of a certain person or to the
bearer of the instrument’.
Specimen of a Promissory Note
Rs. 10,000/- New Delhi
September 25, 2002
On demand, I promise to pay Ramesh, s/o RamLal of Meerut or order a sum of
Rs 10,000/- (Rupees Ten Thousand only), for value received.
To, Ramesh Sd/ Sanjeev
Address… Stamp
Features of a promissory note
Let us know the features of a promissory note.
i. A promissory note must be in writing, duly signed by its maker and properly
stamped as per Indian Stamp Act.
ii. It must contain an undertaking or promise to pay. Mere acknowledgement of
indebtedness is not enough. For example, if some one writes ‘I owe Rs. 5000/-
to Satya Prakash’, it is not a promissory note.
iii. The promise to pay must not be conditional. For example, if it is written ‘I
promise to pay Suresh Rs 5,000/- after my sister’s marriage’, is not a
promissory note.
iv. It must contain a promise to pay money only. For example, if some one writes
‘I promise to give Suresh a Maruti car’ it is not a promissory note.
v. the parties to a promissory note, i.e. the maker and the payee must be
certain.
vi. A promissory note may be payable on demand or after a certain date. For
example, if it is written ‘three months after date I promise to pay Satinder or
order a sum of rupees Five Thousand only’ it is a promissory note.
vii. The sum payable mentioned must be certain or capable of being made
certain. It means that the sum payable may be in figures or may be such that
it can be calculated.
ii. Bill of Exchange
Suppose Rajeev has given a loan of Rupees Ten Thousand to Sameer, which
Sameer has to return.
Now, Rajeev also has to give some money to Tarn. In this case, Rajeev can make
a document Directing Sameer to make payment up to Rupees Ten Thousand to
Tarn on demand or after expiry of a specified period. This document is called a bill
of exchange, which can be transferred to some other person’s name by Tarn.
Section 5 of the Negotiable Instruments Act, 1881 defines a bill of exchange as
‘an instrument in writing containing an unconditional order, signed by the maker,
directing a certain person to pay a certain sum of money only to or to the order of
a certain person, or to the bearer of the instrument’.

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Specimen of a bill of exchange

Rs. 10,000/- New Delhi

May 2, 2001

Five months after date pay Tarn or (to his) order the sum of Rupees Ten Thousand

only for value received.

To Accepted Stamp

Sameer Sameer S/d

Address Rajeev

iii. Cheques
Cheque is a very common form of negotiable instrument. If you have a savings
bank account or current account in a bank, you can issue a cheque in your own
name or in favour of others, thereby directing the bank to pay the specified
amount to the person named in the cheque.
Therefore, a cheque may be regarded as a bill of exchange; the only difference is
that the bank is always the drawee in case of a cheque.
The Negotiable Instruments Act, 1881 defines a cheque as a bill of exchange
drawn on a specified banker and not expressed to be payable otherwise than on
demand. Actually, a cheque is an order by the account holder of the bank
directing his banker to pay on demand, the specified amount, to or to the order of
the person named therein or to the bearer.
iv. Hundis
A Hundi is a negotiable instrument by usage. It is often in the form of a bill of
exchange drawn in any local language in accordance with the custom of the
place. Some times it can also be in the form of a promissory note. A Hundi is the
oldest known instrument used for the purpose of transfer of money without its
actual physical movement. The provisions of the Negotiable Instruments Act shall
apply to hundis only when there is no customary rule known to the people.
Types of Hundis
There are a variety of hundis used in our country. Let us discuss some of the most
common ones.
Shah-jog Hundi: one merchant draws this on another, asking the latter to pay the
amount to a Shah. Shah is a respectable and responsible person, a man of worth
and known in the bazaar. A shah-jog Hundi passes from one hand to another till it
reaches a Shah, who, after reasonable enquiries, presents it to the drawee for
acceptance of the payment.
Darshani Hundi: This is a Hundi payable at sight. The holder must present it for
payment within a reasonable time after its receipt. Thus, it is similar to a demand
bill.
Muddati Hundi: A Muddati or miadi Hundi is payable after a specified period of
time. This is similar to a time bill.
There are few other varieties like Nam-jog Hundi, Dhani-jog Hundi, and Jawabee
Hundi, Jokhami Hundi, Fireman-jog Hundi, etc.
Features of Negotiable Instruments

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After discussing the various types of negotiable instruments let us sum up their
features as under.
i. A negotiable instrument is freely transferable. Usually, when we transfer any
property to somebody, we are required to make a transfer deed, get it
registered, pay stamp duty, etc.
ii. But, such formalities are not required while transferring a negotiable
instrument. The ownership is changed by mere delivery (when payable to the
bearer) or by valid endorsement and delivery (when payable to order).
Further, while transferring it is also not required to give a notice to the
previous holder.
iii. Negotiability confers absolute and good title on the transferee. It means that a
person who receives a negotiable instrument has a clear and undisputable
title to the instrument. However, the title of the receiver will be absolute, only
if he has got the instrument in good faith and for a consideration. Also the
receiver should have no knowledge of the previous holder having any defect in
his title. Such a person is known as holder in due course. For example,
suppose Rajeev issued a bearer cheque payable to Sanjay. A person, who
passed it on to Girish, stole it from Sanjay. If Girish received it in good faith
and for value and without knowledge of cheque having been stolen, he will be
entitled to receive the amount of the cheque. Here Girish will be regarded as
‘holder in due course’.
iv. A negotiable instrument must be in writing. This includes handwriting, typing,
computer print out and engraving, etc.
v. In every negotiable instrument there must be an unconditional order or
promise for payment.
vi. The instrument must involve payment of a certain sum of money only and
nothing else. For example, one cannot make a promissory note on assets,
securities, or goods.
vii. The time of payment must be certain. It means that the instrument must be
payable at a time which is certain to arrive. If the time is mentioned as ‘when
convenient’ it is not a negotiable instrument. However, if the time of payment
is linked to the death of a person, it is nevertheless a negotiable instrument as
death is certain, though the time thereof is not.
viii.The payee must be a certain person. It means that the person in whose favour
the instrument is made must be named or described with reasonable
certainty. The term ‘person’ includes individual, body corporate, trade unions,
even secretary, director or chairman of an institution.
ix. The payee can also be more than one person.
x. A negotiable instrument must bear the signature of its maker. Without the
signature of the drawer or the maker, the instrument shall not be a valid one.
xi. Delivery of the instrument is essential. Any negotiable instrument like a
cheque or a promissory note is not complete till it is delivered to its payee. For
example, you may issue a cheque in your brother’s name but it is not a
negotiable instrument till it is given to your brother.
xii. Stamping of Bills of Exchange and Promissory Notes is mandatory. This is
required as per the Indian Stamp Act, 1899. The value of stamp depends upon
the value of the promote or bill and the time of their payment.
Negotiation and indorsement
Persons other than the original obligor and obligee can become parties to a
negotiable instrument. The most common manner in which this is done is by
placing one's signature on the instrument (“indorsement”): if the person who
signs does so with the intention of obtaining payment of the instrument or
acquiring or transferring rights to the instrument, the signature is called an
indorsement. There are four types of indorsements contemplated by the Code:
• An indorsement which purports to transfer the instrument to a specified
person is a special indorsement;
• An indorsement by the payee or holder which does not contain any
additional notation (thus puporting to make the instrument payable to bearer) is an
indorsement in blank;

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• An indorsement which purports to require that the funds be applied in a
certain manner (i.e. "for deposit only", "for collection") is a restrictive indorsement; and,
• An indorsement purporting to disclaim retroactive liability is called a
qualified indorsement (through the inscription of the words "without recourse" as part of
the indorsement on the instrument or in allonge to the instrument).
If a note or draft is negotiated to a person who acquires the instrument
1. in good faith;
2. for value;
3. without notice of any defenses to payment,
the transferee is a holder in due course and can enforce the instrument without
being subject to defenses which the maker of the instrument would be able to
assert against the original payee, except for certain real defenses. These real
defenses include (1) forgery of the instrument; (2) fraud as to the nature of the
instrument being signed; (3) alteration of the instrument; (4) incapacity of the
signer to contract; (5) infancy of the signer; (6) duress; (7) discharge in
bankruptcy; and, (8) the running of a statute of limitations as to the validity of the
instrument.
The holder-in-due-course rule is a rebuttable presumption that makes the free
transfer of negotiable instruments feasible in the modern economy. A person or
entity purchasing an instrument in the ordinary course of business can reasonably
expect that it will be paid when presented to, and not subject to dishonor by, the
maker, without involving itself in a dispute between the maker and the person to
whom the instrument was first issued (this can be contrasted to the lesser rights
and obligations accruing to mere holders). Article 3 of the Uniform Commercial
Code as enacted in a particular State's law contemplate real defenses available to
purported holders in due course.
The foregoing is the theory and application presuming compliance with the
relevant law. Practically, the obligor-payor on an instrument who feels he has
been defrauded or otherwise unfairly dealt with by the payee may nonetheless
refuse to pay even a holder in due course, requiring the latter to resort to
litigation to recover on the instrument.

3.a. Distinguish between guarantee and indemnity.

Ans:

Indemnity Guarantee

Comprise only two parties- There are three parties

the indemnifier and the namely the surety, principal
indemnity holder. debtor and the creditor

The liability of the surety is

secondary. The surety is
Liability of the indemnifier is liable only if the principal
primary debtor makes a default. The
primary liability being that of
the principal debtor.

The indemnifier need not The surety give guarantee

necessarily act at the only at the request of the
request of the indemnified. principal debtor

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The possibility of any loss

There is an existing debt or
happening is the only
duty, the performance of
contingency against which
which is guarantee by the
the indemnifier undertakes
surety
to indemnify.

b. Give a short note on Rights of Surety.

Ans.: Joint sureties or debtors:
Where several persons are bound together in any bond, bill or other writing as
joint debtors or as joint sureties, in any sum of money made payable to any
person, his/her executors, administrators, order or assign and such bond, bill, or
other writing shall be paid by any of such joint debtors or joint sureties, the
creditor shall assign such bond, bill, or other writing, to the person paying the
same; and such assignee shall, in his/her own name, as assignee, or otherwise,
have such action or remedy as the creditor himself/herself might have had
against the other joint debtors, or sureties, or their representatives, to recover
such proportion of the money, so paid, as may be justly due from the defendants.
Defense of infancy to joint sureties or debtors:
Where several persons are bound together in any bond, bill or other writing or
judgment as joint debtors or as joint sureties, in any sum of money, made payable
to any person or corporation, the executors, administrators, successors, order or
assigns, and 1 or more of such persons was, at the time of making, signing or
executing the same, or at the time of the rendition of such judgment, an infant,
such fact shall be no defense in any action, proceeding or suit for the
enforcement of the liability of those bound there under, excepting as regards the
person who was an infant at the time of making, signing or executing such bond,
bill or other writing, or who was an infant at the time such judgment was
rendered.
Rights of surety or of joint debtor on payment of judgment:
(a) If a judgment recovered against principal and surety shall be paid by the
surety, the creditor shall mark such judgment to the use of the surety so paying
the same; and the transferee shall, in the name of the plaintiff, have the same
remedy by execution or other process against the principal debtor as the creditor
could have had, the transfer by marking to the use of the surety being first filed of
record in the court where the judgment is.
(b) Where there is a judgment against several debtors or sureties and any of them
shall pay the whole, the creditor shall mark such judgment to the use of the
persons so paying the same; and the transferee shall, in the name of the plaintiff,
be entitled to an execution or other process against the other debtors or sureties
in the judgment, for a proportion able part of the debt or damages paid by such
transferee; but, no defendant shall be debarred of any remedy against the
plaintiff or the plaintiff's representatives or assigns by any legal or equitable
course of proceeding whatever.

4.a. Mention the remedies for breach of contract. How will the injured party
claim it?
Ans.: Breach of Contract & Remedies:
Nature of breach A breach of contract occurs where a party to a contract fails
to perform, precisely and exactly, his obligations under the contract. This can take
various forms for example, the failure to supply goods or perform a service as
agreed. Breach of contract may be either actual or anticipatory.
Actual breach occurs where one party refuses to form his side of the bargain on
the due date or performs incompletely. For example: Poussard v Spiers and
Bettini v Gye.

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Anticipatory breach occurs where one party announces, in advance of the due
date for performance, that he intends not to perform his side of the bargain. The
innocent party may sue for damages immediately the breach is announced.
Hochster v De La Tour is an example.
Effects of breach A breach of contract, no matter what form it may take, always
entitles the innocent party to maintain an action for damages, but the rule
established by a long line of authorities is that the right of a party to treat a
contract as discharged arises only in three situations.
The breaches, which give the innocent party the option of terminating the
contract, are:
(a) Renunciation
Renunciation occurs where a party refuses to perform his obligations under the
contract. It may be either express or implied. Hochster v De La Tour is a case law
example of express renunciation.
Renunciation is implied where the reasonable inference from the defendant’s
conduct is that he no longer intends to perform his side of the contract. For
example: Omnium D’Enterprises v Sutherland.
(b) Breach of condition
The second repudiator breach occurs where the party in default has committed a
breach of condition. Thus, for example, in Poussard v Spiers the employer had a
right to terminate the soprano’s employment when she failed to arrive for
performances.
(c) Fundamental breach
The third repudiator breach is where the party in breach has committed a serious
(or fundamental) breach of an in nominate term or totally fails to perform the
contract.
A repudiator breach does not automatically bring the contract to an end. The
innocent party has two options: He may treat the contract as discharged and
bring an action for damages for breach of contract immediately. This is what
occurred in, for example, Hochster v De La Tour.
He may elect to treat the contract as still valid, complete his side of the bargain
and then sue for payment by the other side. For example, White and Carter Ltd v
McGregor.
2 Introduction to remedies
Damages are the basic remedy available for a breach of contract. It is a common
law remedy that can be claimed as of right by the innocent party.
The object of damages is usually to put the injured party into the same financial
position he would have been in had the contract been properly performed.
Sometimes damages are not an adequate remedy and this is where the equitable
remedies (such as specific performance and injunction) may be awarded.
3 Damages
1 Nature:
The major remedy available at common law for breach of contract is an award of
damages. This is a monetary sum fixed by the court to compensate the injured
party.
In order to recover substantial damages the innocent party must show that he has
suffered actual loss; if there is no actual loss he will only be entitled to nominal
damages in recognition of the fact that he has a valid cause of action. In making
an award of damages, the court has two major considerations:
Remoteness – for what consequences of the breach is the defendant legally
responsible?

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The measure of damages – the principles upon which the loss or damage is
evaluated or quantified in monetary terms. The second consideration is quite
distinct from the first, and can be decided by the court only after the first has
been determined.
2.Remoteness of loss
The rule governing remoteness of loss in contract was established in Hadley v
Baxendale. The court established the principle that where one party is in breach
of contract, the other should receive damages which can fairly and reasonably be
considered to arise naturally from the breach of contract itself (‘in the normal
course of things’), or which may reasonably be assumed to have been within the
contemplation of the parties at the time they made the contract as being the
probable result of a breach.
Thus, there are two types of loss for which damages may be recovered:
1. What arises naturally; and
2. What the parties could foresee when the contract was made as the likely result
of breach.
As a consequence of the first limb of the rule in Hadley v Baxendale, the party in
breach is deemed to expect the normal consequences of the breach, whether he
actually expected them or not. Under the second limb of the rule, the party in
breach can only be held liable for abnormal consequences where he has actual
knowledge that the abnormal consequences might follow or where he reasonably
ought to know that the abnormal consequences might follow – Victoria Laundry v
Newman Industries.
3.The measure (or quantum) of damages
In assessing the amount of damages payable, the courts use the following
principles:
The amount of damages is to compensate the claimant for his loss not to punish
the defendant.
Damages are compensatory – not restitutionary.
The most usual basis of compensatory damages is to put the innocent party into
the same financial position he would have been in had the contract been properly
performed. This is sometimes called the ‘expectation loss’ basis. In Victoria
Laundry v Newman Industries, for example, Victoria Laundry were claiming for the
profits they would have made had the boiler been installed on the contractually
agreed date.
Sometimes a claimant may prefer to frame his claim in the alternative on the
‘reliance loss’ basis and thereby recover expenses incurred in anticipation of
performance and wasted as a result of the breach – Anglia Television v Reed. In a
contract for the sale of goods, the statutory (Sale of Goods Act 1979) measure of
damages is the difference between the market price at the date of the breach and
the contract price, so that only nominal damages will be awarded to a claimant
buyer or claimant seller if the price at the date of breach was respectively less or
more than the contract price. In fixing the amount of damages, the courts will
usually deduct the tax (if any) which would have been payable by the claimant if
the contract had not been broken. Thus if damages are awarded for loss of
earnings, they will normally be by reference to net, not gross, pay. Difficulty in
assessing the amount of damages does not prevent the injured party from
receiving them: Chaplin v Hicks. In general, damages are not awarded for non-
pecuniary loss such as mental distress and loss of enjoyment. Exceptionally,
however, damages are awarded for such losses where the contract’s purpose is to
promote happiness or enjoyment, as is the situation with contracts for holidays –
Jarvis v Swan Tours. The innocent party must take reasonable steps to mitigate
(minimise) his loss, for example, by trying to find an alternative method of
performance of the contract: Brace v Calder.
4.Liquidated damages clauses and penalty clauses

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If a contract includes a provision that, on a breach of contract, damages of a
certain amount or calculable at a certain rate will be payable, the courts will
normally accept the relevant figure as a measure of damages. Such clauses are
called liquidated damages clauses.
The courts will uphold a liquidated damages clause even if that means that the
injured party receives less (or more as the case may be) than his actual loss
arising on the breach. This is because the clause setting out the damages
constitutes one of the agreed contractual terms – Cellulose Acetate Silk Co Ltd v
Widnes Foundry Ltd.
However, a court will ignore a figure for damages put in a contract if it is classed
as a penalty clause – that is, a sum which is not a genuine pre-estimate of the
expected loss on breach.
This could be the case where:
1. The prescribed sum is extravagant in comparison with the maximum loss that
could follow from a breach.
2. The contract provides for payment of a certain sum but a larger sum is
stipulated to be payable on a breach.
3.The same sum is fixed as being payable for several breaches, which would be
likely to cause varying amounts of damage. All of the above cases would be
regarded as penalties, even though the clause might be described in the contract
as a liquidated damages clause. The court will not enforce payment of a penalty,
and if the contract is broken only the actual loss suffered may be recovered (Ford
Motor Co (England) Ltd v Armstrong).
b. What is the difference between anticipatory and actual breach?
Ans.: Anticipatory Breach:
A seller and a buyer have entered into a contract. Prior to the start of the
contract, the buyer informs the seller that he no longer requires his goods. The
seller writes back stating his intention to store the goods until the contract expires
and then sue for a breach of contract. The buyer replies with an angry letter
stating that he could just sell the goods to someone else. Advise all parties.
Actual breach:
A breach of contract occurs where a party to a contract fails to perform, precisely
and exactly, his obligations under the contract. This can take various forms for
example, the failure to supply goods or perform a service as agreed. Breach of
contract may be either actual or anticipatory.
Actual breach occurs where one party refuses to form his side of the bargain on
the due date or performs incompletely. For example: Poussard v Spiers and
Bettini v Gye.

5 a. Explain the term Privity of contract.

Ans.: Privity of contract:
The doctrine of privity in contract law provides that a contract cannot confer
rights or impose obligations arising under it on any person or agent except the
parties to it.
The premise is that only parties to contracts should be able to sue to enforce their
rights or claim damages as such. However, the doctrine has proven problematic
due to its implications upon contracts made for the benefit of third parties who
are unable to enforce the obligations of the contracting parties.
Third-party rights:
Privity of contract occurs only between the parties to the contract, most
commonly contract of sale of goods or services. Horizontal privity arises when the
benefits from a contract are to be given to a third party. Vertical privity involves a

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contract between two parties, with an independent contract between one of the
parties and another individual or company.
If a third party gets a benefit under a contract, it does not have the right to go
against the parties to the contract beyond its entitlement to a benefit. An
example of this occurs when a manufacturer sells a product to a distributor and
the distributor sells the product to a retailer. The retailer then sells the product to
a consumer. There is no privity of contract between the manufacturer and the
consumer.
This, however, does not mean that the parties do not have another form of action
e.g. Donoghue v. Stevenson – here a friend of Ms. Donoghue bought her a bottle
of ginger beer, which was defective. Specifically, the ginger beer contained the
partially decomposed remains of a snail. Since the contract was between her
friend and the shop owner, Mrs. Donoghue could not sue under the contract, but it
was established that the manufacturer has a duty of care owed to their
consumers and she was awarded damages in tort.
Privity is the legal term for a close, mutual, or successive relationship to the
same right of property or the power to enforce a promise or warranty.
b. Define a company? What are the features of Joint Stock Company?
Ans.: Company:
The term ‘company’ implies an association of a number of persons for some
common objective e.g. to carry on a business concern, to promote art, science or
culture in the society, to run a sport club etc. Every association, however, may not
be a company in the eyes of law as the legal import of the word ‘company’ is
different from its common parlance meaning. In legal terminology its use is
restricted to imply an association of persons,’ registered as a company' under the
law of the land. The following are some of the definitions of the company given by
legal luminaries and scholars of law.
“Company means a company formed and registered under this Act or an existing
company. Existing company means a company formed and registered under the
previous company laws.” Companies Act, 1956 Sec. 3(i & ii)
A joint stock company is an artificial person invisible, intangible and existing only
in the eyes of law. Being a mere creature of law, it possesses only those
properties which the charter of its creation confers upon it, either expressly or as
incidental to its very existence.” – Justice Marshall
“A company is an association of many persons who contribute money or money’s
worth to a common stock and employ it in some common trade or business and
who share the profit or loss arising there from. The common stock so contributed
is denoted in terms of money and is the capital of the company. The persons who
contribute it or to whom it belongs are members. The proportion of capital to
which each member is entitled is his share. Shares are always transferable
although the right to transfer them is often more or less restricted." - Lord Lindley
From the above definitions it is clear that a company has a corporate and legal
personality. It is an artificial person and exists only in the eyes of law. It has an
independent legal entity, a common seal and perpetual succession.
Sometimes, the term ‘corporation’ (a word derived from the Latin word ‘corpus’
which means body) is also used for a company.
At present the companies in India are incorporated under the Companies Act,
1956.
Characteristics of Joint Stock Company:
The various definitions reveal the following essential characteristics of a company
1. Artificial Person: A company is an association of persons who have agreed to
form the company and become its members or shareholders with the object of
carrying on a lawful business for profit. It comes into existence when it is
registered under the Companies Act. The law treats it as a legal person as it can

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conduct lawful business and enter into contracts with other persons in its own
name. It can sell or purchase property. It can sue and be sued in its name. It
cannot be regarded as an imaginary person because it has a legal existence. Thus
company is an artificial person created by law.
2. Independent corporate existence: A company has a separate independent
corporate existence. It is in law a person. Its entity is always separate from its
members. The property of the company belongs to it and not to the shareholders.
The company cannot be held liable for the acts of the members and the members
can not be held liable for the acts or wrongs or misdeeds of the company. Once a
company is incorporated, it must be treated like any other independent person.
As a consequence of separate legal entity, the company may enter into contracts
with its members and vice-versa.
3. Perpetual existence: The attribute of separate entity also provides a
company a perpetual existence, until dissolved by law. Its life remains unaffected
by the lunacy, insolvency or death of its members. The members may come and
go but the company can go on forever. Law creates it and the law alone can
dissolve it.
4. Separate property: A company, being a legal entity, can buy and own
property in its own name. And, being a separate entity, such property belongs to
it alone. Its members are not the joint owners of the property even though it is
purchased out of funds contributed by them. Consequently, they do not have
even insurable interest in the property of the company. The property of the
company is not the property of the shareholders; it is the property of the
company.
5. Limited liability: In the case of companies limited by shares the liability of
every member of the company is limited to the amount of shares subscribed by
him. If the member has paid full amount of the face value of the shares
subscribed by him, his liability shall be nil and he cannot be asked to contribute
anything more. Similarly, in the case of a company limited by guarantee, the
liability of the members is limited up to the amount guaranteed by a member. The
Companies Act, however, permits the formation of companies with unlimited
liability. But such companies are very rare.
6. Common seal: As a company is devoid of physique, it can’t act in person like a
human being. Hence it cannot sign any documents personally. It has to act
through a human agency known as Directors. Therefore, every company must
have a seal with its name engraved on it. The seal of the company is affixed on
the documents, which require the approval of the company. Two Directors and
the Secretary or such other person as the Board may authorize for this purpose,
witness the affixation of the seal. Thus, the common seal is the official signature
of the company.
7. Transferability of shares: The shares of a company are freely transferable
and can be sold or purchased through the Stock Exchange. A shareholder can
transfer his shares to any person without the consent of other members. Under
the articles of association, even a public limited company can put certain
restrictions on the transfer of shares but it cannot altogether stop it. A
shareholder of a public limited company possessing fully paid up shares is at
liberty to transfer his shares to anyone he likes in accordance with the manner
provided for in the articles of association of the company. However, private
limited company is required to put certain restrictions on transferability of its
shares. But any absolute restriction on the right of transfer of shares is void
8. Capacity to sue and be sued: A company, being a body corporate, can sue
and be sued in its own name.

Q. 6. Om is enrolled in a managerial course. He has to write an assignment on

company management and various types of meetings that a company
holds. You are asked to help him in preparing the assignment.

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Ans.: There are many types of businesses, and because of this, businesses are
classified in many ways. One of the most common focuses on the primary profit-
generating activities of a business:
• Agriculture and mining businesses are concerned with the production of
raw material, such as plants or minerals.
• Financial businesses include banks and other companies that generate
profit through investment and management of capital.
• Information businesses generate profits primarily from the resale of
intellectual property and include movie studios, publishers and packaged software
companies.
• Manufacturers produce products, from raw materials or component parts,
which they then sell at a profit. Companies that make physical goods, such as cars or
pipes, are considered manufacturers.
• Real estate businesses generate profit from the selling, renting, and
development of properties, homes, and buildings.
• Retailers and Distributors act as middle-men in getting goods produced by
manufacturers to the intended consumer, generating a profit as a result of providing
sales or distribution services. Most consumer-oriented stores and catalogue companies
are distributors or retailers. See also: Franchising
• Service businesses offer intangible goods or services and typically
generate a profit by charging for labor or other services provided to government, other
businesses, or consumers. Organizations ranging from house decorators to consulting
firms, restaurants, and even entertainers are types of service businesses.
• Transportation businesses deliver goods and individuals from location to
location, generating a profit on the transportation costs
• Utilities produce public services, such as heat, electricity, or sewage
treatment, and are usually government chartered.
There are many other divisions and subdivisions of businesses. The authoritative
list of business types for North America is generally considered to be the North
American Industry Classification System, or NAICS. The equivalent European
Union list is the Statistical Classification of Economic Activities in the European
Community (NACE).
Management
The efficient and effective operation of a business, and study of this subject, is
called management. The main branches of management are financial
management, marketing management, human resource management, strategic
management, production management, operation management, service
management and information technology management.
Reforming State Enterprises
In recent decades, assets and enterprises that were run by various states have
been modeled after business enterprises. In 2003, the People's Republic of China
reformed 80% of its state-owned enterprises and modeled them on a company-
type management system.[2] Many state institutions and enterprises in China and
Russia have been transformed into joint-stock companies, with part of their
shares being listed on public stock markets.
Organization and government regulation
Most legal jurisdictions specify the forms of ownership that a business can take,
creating a body of commercial law for each type.
The major factors affecting how a business is organized are usually:
The Bank of England in Threadneedle Street, London, England.
• The size, scope of the business firm and its structure, management,
and ownership, broadly analyzed in the theory of the firm. Generally a smaller business is
more flexible, while larger businesses, or those with wider ownership or more formal
structures, will usually tend to be organized as partnerships or (more commonly)
corporations. In addition a business that wishes to raise money on a stock market or to

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be owned by a wide range of people will often be required to adopt a specific legal form
to do so.
• The sector and country. Private profit making businesses are different
from government owned bodies. In some countries, certain businesses are legally obliged
to be organized in certain ways.
• Limited liability. Corporations, limited liability partnerships, and other
specific types of business organizations protect their owners or shareholders from
business failure by doing business under a separate legal entity with certain legal
protections. In contrast, unincorporated businesses or persons working on their own are
usually not so protected.
• Tax advantages. Different structures are treated differently in tax law,
and may have advantages for this reason.
• Disclosure and compliance requirements. Different business
structures may be required to make more or less information public (or reported to
relevant authorities), and may be bound to comply with different rules and regulations.
Many businesses are operated through a separate entity such as a corporation or
a partnership (either formed with or without limited liability). Most legal
jurisdictions allow people to organize such an entity by filing certain charter
documents with the relevant Secretary of State or equivalent and complying with
certain other ongoing obligations. The relationships and legal rights of
shareholders, limited partners, or members are governed partly by the charter
documents and partly by the law of the jurisdiction where the entity is organized.
Generally speaking, shareholders in a corporation, limited partners in a limited
partnership, and members in a limited liability company are shielded from
personal liability for the debts and obligations of the entity, which is legally
treated as a separate "person." This means that unless there is misconduct, the
owner's own possessions are strongly protected in law, if the business does not
succeed.
Where two or more individuals own a business together but have failed to
organize a more specialized form of vehicle, they will be treated as a general
partnership. The terms of a partnership are partly governed by a partnership
agreement if one is created, and partly by the law of the jurisdiction where the
partnership is located. No paperwork or filing is necessary to create a partnership,
and without an agreement, the relationships and legal rights of the partners will
be entirely governed by the law of the jurisdiction where the partnership is
located.
A single person who owns and runs a business is commonly known as a sole
proprietor, whether he or she owns it directly or through a formally organized
entity.
A few relevant factors to consider in deciding how to operate a business include:
1. General partners in a partnership (other than a limited liability
partnership), plus anyone who personally owns and operates a business without creating
a separate legal entity, are personally liable for the debts and obligations of the business.
2. Generally, corporations are required to pay tax just like "real" people. In
some tax systems, this can give rise to so-called double taxation, because first the
corporation pays tax on the profit, and then when the corporation distributes its profits to
its owners, individuals have to include dividends in their income when they complete
their personal tax returns, at which point a second layer of income tax is imposed.
3. In most countries, there are laws which treat small corporations differently
than large ones. They may be exempt from certain legal filing requirements or labor
laws, have simplified procedures in specialized areas, and have simplified, advantageous,
or slightly different tax treatment.
4. To "go public" (sometimes called IPO) -- which basically means to allow a
part of the business to be owned by a wider range of investors or the public in general—
you must organize a separate entity, which is usually required to comply with a tighter

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set of laws and procedures. Most public entities are corporations that have sold shares,
but increasingly there are also public LLCs that sell units (sometimes also called shares),
and other more exotic entities as well (for example, REITs in the USA, Unit Trusts in the
UK). However, you cannot take a general partnership "public."
Types of meetings: Common types of meeting include:
1. Status Meetings, generally leader-led, which are about reporting by one-
way communication
2. Work Meeting, which produces a product or intangible result such as a
decision
3. Staff meeting, typically a meeting between a manager and those that
report to the manager
4. Team meeting, a meeting among colleagues working on various aspects of
a team project
5. Ad-hoc meeting, a meeting called for a special purpose
6. Management meeting, a meeting among managers
7. Board meeting, a meeting of the Board of directors of an organization
8. One-on-one meeting, between two individuals
9. Off-site meeting, also called "offsite retreat" and known as an Awayday
meeting in the UK
10. Kickoff meeting, the first meeting with the project team and the client of
the project to discuss the role of each team member
11. Pre-Bid Meeting, a meeting of various competitors and or contractors to
visually inspect a jobsite for a future project. The meeting is normally hosted by the
future customer or engineer who wrote the project specification to ensure all bidders are
aware of the details and services expected of them. Attendance at the Pre-Bid Meeting
may be mandatory. Failure to attend usually results in a rejected bid.

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MB0035 – Legal Aspects of Business
Set- 2

1 a. What is an arbitration agreement? Discuss its essentials.

Ans.: Arbitration Agreement:
The foundation of arbitration is the arbitration agreement between the parties to
submit to arbitration all or certain disputes which have arisen or which may arise
between them. Thus, the provision of arbitration can be made at the time of
entering the contract itself, so that if any dispute arises in future, the dispute can
be referred to arbitrator as per the agreement. It is also possible to refer a dispute
to arbitration after the dispute has arisen. Arbitration agreement may be in the
form of an arbitration clause in a contract or in the form of a separate agreement.
The agreement must be in writing and must be signed by both parties. The
arbitration agreement can be by exchange of letters, document, telex, telegram
etc
Court must refer the matter to arbitration in some cases: If a party approaches
court despite the arbitration agreement, the other party can raise objection.
However, such objection must be raised before submitting his first statement on
the substance of dispute. The original arbitration agreement or its certified copy
must accompany such objection. On such application the judicial authority shall
refer the parties to arbitration. Since the word used is “shall”, it is mandatory for
judicial authority to refer the matter to arbitration. However, once the opposite
party already makes first statement to court, the matter has to continue in the
court. Once other party for referring the matter to arbitration makes an
application, the arbitrator can continue with arbitration and even make an arbitral
award.
1. It must be in writing [Section 7(3)]: Like the old law, the new law also
requires the arbitration agreement to be in writing. It also provides in section 7(4)
that an exchange of letters, telex, telegrams, or other means of
telecommunications can also provide a record of such an agreement. Further, it is
also provided that an exchange of claim and defense in which the existence of an
arbitration agreement is alleged by one party and not denied by the other, will
also amount to be an arbitration agreement.
It is not necessary that the parties should sign such written agreement. All that is
necessary is that the parties should accept the terms of an agreement reduced in
writing. The naming of the arbitrator in the arbitration agreement is not
necessary. No particular form or formal document is necessary.
2. It must have all the essential elements of a valid contract: An
agreement stands on the same footing as any other agreement. Every person
capable of entering into a contract may be a party to an arbitration agreement.
The terms of the agreement must be definite and certain; if the terms are vague it
is bad for indefiniteness.
3. The agreement must be to refer a dispute, present or future, between
the parties to arbitration: If there is no dispute, there can be no right to
demand arbitration. A dispute means an assertion of a right by one party and
repudiation thereof by another. A point as to which there is no dispute cannot be
referred to arbitration. The dispute may relate to an act of commission or
omission, for example, with holding a certificate to which a person is entitled or
refusal to register a transfer of shares.
Under the present law, certain disputes such as matrimonial disputes, criminal
prosecution, questions relating to guardianship, questions about validity of a will
etc. or treated as not suitable for arbitration. Section 2(3) of the new Act
maintains this position. Subject to this qualification Section 7(1) of the new Act
makes it permissible to enter into an arbitration agreement “in respect of a
defined legal relationship whether contractual or not”.

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4. An arbitration agreement may be in the form of an arbitration clause
in a contract or in the form of a separate agreement [Section 7(2)].
Appointment of Arbitrator: The parties can agree on a procedure for
appointing the arbitrator or arbitrators. If they are unable to agree, each party will
appoint one arbitrator and the two appointed arbitrators will appoint the third
arbitrator who will act as a presiding arbitrator [Section 11(3)]. If one of the
parties does not appoint an arbitrator within 30 days, or if two appointed
arbitrators do not appoint third arbitrator within 30 days, the party can request
Chief Justice to appoint an arbitrator [Section 11(4)]. The Chief Justice can
authorize any person or institution to appoint an arbitrator. [Some High Courts
have authorized District Judge to appoint an arbitrator]. In case of international
commercial dispute, the application for appointment of arbitrator has to be made
to Chief Justice of India. In case of other domestic disputes, application has to be
made to Chief Justice of High Court within whose jurisdiction the parties are
situated [Section 11(12)]
Challenge to Appointment of arbitrator: An arbitrator is expected to be
independent and impartial. If there are some circumstances due to which his
independence or impartiality can be challenged, he must disclose the
circumstances before his appointment [Section 12(1)]. Appointment of Arbitrator
can be challenged only if
(a) Circumstances exist that give rise to justifiable doubts as to his independence
or impartiality (b) He does not possess the qualifications agreed to by the parties
[Section 12(3)]. Appointment of arbitrator cannot be challenged on any other
ground. The challenge to appointment has to be decided by the arbitrator himself.
If he does not accept the challenge, the proceedings can continue and the
arbitrator can make the arbitral award. However, in such case, application for
setting aside arbitral award can be made to Court. If the court agrees to the
challenge, the arbitral award can be set aside [Section 13(6)]. Thus, even if the
arbitrator does not accept the challenge to his appointment, the other party
cannot stall further arbitration proceedings by rushing to court. The arbitration
can continue and challenge can be made in Court only after arbitral award is
made.
Conduct of Arbitral Proceedings: The Arbitral Tribunal should treat the parties
equally and each party should be given full opportunity to present his case
[Section 18]. The Arbitral Tribunal is not bound by Code of Civil Procedure, 1908
or Indian Evidence Act, 1872 [Section 19(1)]. The parties to arbitration are free to
agree on the procedure to be followed by the Arbitral Tribunal. If the parties do
not agree to the procedure, the procedure will be as determined by the arbitral
tribunal.
Law of Limitation Applicable: Limitation Act, 1963 is applicable. For this
purpose, date on which the aggrieved party requests other party to refer the
matter to arbitration shall be considered. If on that date, the claim is barred under
Limitation Act, the arbitration cannot continue [Section 43(2)]. If Court sets
Arbitration award aside, time spent in arbitration will be excluded for purpose of
Limitation Act. So that case in court or fresh arbitration can start.
Flexibility in respect of procedure, place and language: Arbitral Tribunal
has full powers to decide the procedure to be followed, unless parties agree on
the procedure to be followed [Section 19(3)]. The Tribunal also has powers to
determine the admissibility, relevance, materiality and weight of any evidence
[Section 19(4)]. Place of arbitration will be decided by mutual agreement.
However, if the parties do not agree to the place, the same will be decided by
tribunal [Section 20]. Similarly, language to be used in arbitral proceedings can be
mutually agreed. Otherwise, Arbitral Tribunal can decide [Section 22].
Submission of statement of claim and defense: The claimant should submit
statement of claims, points of issue and relief or remedy sought. The respondent
shall state his defense in respect of these particulars. All relevant documents
must be submitted. Such claim or defense can be amended or supplemented any
time [section 23].

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Hearings and Written Proceedings: After submission of documents and defense,
unless the parties agree otherwise, the Arbitral Tribunal can decide whether there
will be oral hearing or proceedings can be conducted on the basis of documents
and other materials. However, if one of the parties requests the hearing shall be
oral. Sufficient advance notice of hearing should be given to both the parties
[Section 24]. [Thus, unless one party requests, oral hearing is not compulsory].
Settlement during Arbitration: It is permissible for parties to arrive at mutual
settlement even when arbitration is proceeding. In fact, even the Tribunal can
make efforts to encourage mutual settlement. If parties settle the dispute by
mutual agreement, the arbitration shall be terminated. However, if both parties
and the Arbitral Tribunal agree, the settlement can be recorded in the form of an
arbitral award on agreed terms. Such Arbitral Award shall have the same force as
any other Arbitral Award [Section 30].
Arbitral Award: Decision of Arbitral Tribunal is termed as 'Arbitral Award'.
Arbitrator can decide the dispute ex aqua ET bono (In justice and in good faith) if
both the parties expressly authorize him to do so [Section 28(2)]. The decision of
Arbitral Tribunal will be by majority. The arbitral award shall be in writing and
signed by the members of the tribunal [Section 29]. The award must be in writing
and signed by the members of Arbitral Tribunal [Section 31(1)]. It must state the
reasons for the award unless the parties have agreed that no reason for the
award is to be given [Section 31(3)]. The award should be dated and place where
it is made should be mentioned. Copy of award should be given to each party.
Tribunal can make interim award also [Section 31(6)].
Cost of Arbitration- Cost of arbitration means reasonable cost relating to fees
and expenses of arbitrators and witnesses, legal fees and expenses,
administration fees of the institution supervising the arbitration and other
expenses in connection with arbitral proceedings. The tribunal can decide the cost
and share of each party [Section 3 1(8)]. If the parties refuse to pay the costs, the
Arbitral Tribunal may refuse to deliver its award. In such case, any party can
approach Court. The Court will ask for deposit from the parties and on such
deposit, the Tribunal will deliver the award. Then Court will decide the costs of
arbitration and shall pay the same to Arbitrators. Balance, if any, will be refunded
to the party [Section 39].
Intervention by Court - One of the major defects of earlier arbitration law was
that the party could access court almost at every stage of arbitration - right from
appointment of arbitrator to implementation of final award. Thus, the defending
party could approach court at various stages and stall the proceedings. Now,
approach to court has been drastically curtailed. In some cases, if the party raises
an objection, Arbitral Tribunal itself can give the decision on that objection. After
the decision, the arbitration proceedings are continued and the aggrieved party
can approach Court only after Arbitral Award is made. Appeal to court is now only
on restricted grounds. Of course, Tribunal cannot be given unlimited and
uncontrolled powers and supervision of Courts cannot be totally eliminated.
Arbitration Act has Over-Riding Effect: Section 5 of Act clarifies that
notwithstanding anything contained in any other law for the time being in force, in
matters governed by the Act, the judicial authority can intervene only as provided
in this Act and not under any other Act.
Modes of Arbitration
(a) Arbitration without the intervention of the court. [Sec.3 to 19]
(b) Arbitration with the intervention of the court when there is no suit pending
[Sec.20]
(c) Arbitration with the intervention of the court where a suit is pending. [Sec.21
to 25]
b. What do you mean by mediation?
Ans.: Meditation is a holistic discipline during which time the practitioner trains his or
her mind in order to realize some benefit.

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Meditation is generally an internal, personal practice and most often done without
any external involvement, except perhaps prayer beads to count prayers.
Meditation often involves invoking or cultivating a feeling or internal state, such
as compassion, or attending to a specific focal point. The term can refer to the
state itself, as well as to practices or techniques employed to cultivate the state.
There are hundreds of specific types of meditation. The word, 'meditation,' means
many things dependent upon the context of its use. People practice meditation for
many reasons, within the context of their social environment. Meditation is a
component of many religions, and has been practiced since antiquity, particularly
by monastics. A 2007 study by the U.S. government found that nearly 9.4% of
U.S. adults (over 20 million) have used meditation within the past 12 months, up
from 7.6% (more than 15 million people) in 2002.
To date, the exact mechanism at work in meditation remains unclear, while
scientific research continues.

2 a. What kinds of rights are considerable under consumer rights?

Ans.: Consumer right is defined as 'the right to be informed about the quality, quantity,
potency, purity, standard and price of goods or services, as the case may be, so
as to protect the consumer against unfair trade practices'
Even though strong and clear laws exist in India to protect consumer rights, the
actual plight of Indian consumers could be declared as completely dismal. Very
few consumers are aware of their rights or understand their basic consumer
rights. Of the several laws that have been enacted to protect the rights of
consumers in India, the most significant is the Consumer Protection Act, 1986.
Under this law, everyone, including individuals, a Hindu undivided family, a firm,
and a company, can exercise their consumer rights for the goods and services
purchased by them. It is important that, as consumers, we know at least our
basic rights and about the courts and procedures that deal with the infringement
of our rights.
In general, the rights of consumers in India can be listed as under:

* The right to be protected from all types of hazardous goods and services
* The right to be fully informed about the performance and quality of all goods
and services
* The right to free choice of goods and services
* The right to be heard in all decision-making processes related to consumer
interests
* The right to seek redressal, whenever consumer rights have been infringed
* The right to complete consumer education
The Consumer Protection Act, 1986 and various other laws like the Standards,
Weights & Measures Act have been formulated to ensure fair competition in the
market place and free flow of true information from the providers of goods and
services to those who consume them. However, the success of these laws would
depend upon the vigilance of consumers about their rights, as well as their
responsibilities. In fact, the level of consumer protection in a country is
considered as the correct indicator of the extent of progress of the nation.
The production and distribution systems have become larger and more
complicated today. The high level of sophistication achieved by the providers of
goods and services in their selling and marketing practices and various types of
promotional activities like advertising resulted in an increased need for higher
consumer awareness and protection. In India, the government has realized the
plight of Indian consumers and the Ministry of Consumer Affairs, Food and Public
Distribution has established the Department of Consumer Affairs as the nodal
organization for the protection of consumer rights, redressal of all consumer
grievances and promotion of standards governing goods and services offered in
India.
A complaint for infringement of consumer rights could be made under the
following circumstances in the nearest designated consumer court:

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* The goods or services bought by a person or agreed to be bought by a person
suffer from one or more deficiencies or defects in any respect
* A trader or a service provider resorting to restrictive or unfair trade practices
* A trader or a service provider charging a price in excess of the price displayed
on the goods or the price that had been agreed upon between the parties or the
price that had been stipulated under any law in force
* Goods or services that pose a hazard to the safety and life of a person offered
for sale, knowingly or unknowingly, causing injury to health, safety or life.
Consumerdaddy.com is India's only online consumer protection site offering
consumer report, consumer review and different opinions on different products
and companies.
b. Distinguish between Memorandum of Association and Articles of
Association.
Ans.: Memorandum of Association:
The memorandum of association of a company, often simply called the
memorandum (and then often capitalised as an abbreviation for the official
name, which is a proper noun and usually includes other words), is the document
that governs the relationship between the company and the outside. It is one of
the documents required to incorporate a company in the United Kingdom, Ireland
and India, and is also used in many of the common law jurisdictions of the
Commonwealth.
Requirements
While it is still necessary to file a memorandum of association to incorporate a
new company, it no longer forms part of the company’s constitution and it
contains limited information compared to the memorandum that was required
prior to 1 October 2009.
It is basically a statement that the subscribers wish to form a company under the
2006 Act, have agreed to become members and, in the case of a company that is
to have a share capital, to take at least one share each. It is no longer required to
state the name of the company, the type of company (such as public limited
company or private company limited by shares), the location of its registered
office, the objects of the company, and its authorised share capital.[1]
Companies incorporated prior to 1 October 2009 are not required to amend their
memorandum. Those details which are now required to appear in the Articles,
such as the objects clause and details of the share capital, are deemed to form
part of the Articles.
Capacities
The memorandum no longer restricts what a company is permitted to do. Since 1
October 2009, if a company's constitution contains any restrictions on the objects
at all, those restrictions will form part of the articles of association.
Historically, a company's memorandum of association contained an objects
clause, which limited its capacity to act. When the first limited companies were
incorporated, the objects clause had to be widely drafted so as not to restrict the
board of directors in their day to day trading. In the Companies Act 1989 the term
"General Commercial Company" was introduced which meant that companies
could undertake "any lawful or legal trade or business."
The Companies Act 2006 relaxed the rules even further, removing the need for an
objects clause at all. Companies incorporated on and after 1 October 2009
without an objects clause are deemed to have unrestricted objects. Existing
companies may take advantage of this change by passing a special resolution to
remove their objects clause.
If the company is to be a non-profit making company, the articles will contain a
statement saying that the profits shall not be distributed to the members.

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Articles of association:
The term articles of association of a company, or articles of incorporation,
of an American or Canadian Company, are often simply referred to as articles
(and are often capitalized as an abbreviation for the full term). The Articles are a
requirement for the establishment of a company under the law of India, the
United Kingdom and many other countries. Together with the memorandum of
association, they constitute the constitution of a company. The equivalent term
for LLC is Articles of Organization. Roughly equivalent terms operate in other
countries, such as Gesellschaftsvertrag in Germany, statuts in France, statut in
Poland.[1]
The following is largely based on British Company Law, references which are
made at the end of this Article.
The Articles can cover a medley of topics, not all of which is required in a
country's law. Although all terms are not discussed, they may cover:
• the issuing of shares (also called stock), different voting rights attached to
different classes of shares
• valuation of intellectual rights, say,the valuations of the IPR of one partner
and,for example,the real estate of the other
• the appointments of directors - which shows whether a shareholder
dominates or shares equality with all contributors
• directors meetings - the quorum and percentage of vote
• management decisions - whether the board manages or a founder
• transferability of shares - assignment rights of the founders or other
members of the company do
• special voting rights of a Chairman,and his/her mode of election
• the dividend policy - a percentage of profits to be declared when there is
profit or otherwise
• winding up - the conditions, notice to members
• confidentiality of know-how and the founders' agreement and penalties for
disclosure
• first right of refusal - purchase rights and counter-bid by a founder.
A Company is essentially run by the shareholders, but for convenience, and day-
to-day working, by the elected Directors. Usually, the shareholders elect a Board
of Directors (BOD) at the Annual General Meeting (AGM), which may be statutory
(e.g. India).
The number of Directors depends on the size of the Company and statutory
requirements. The Chairperson is generally a well-known outsider but he /she may
be a working Executive of the company, typically of an American Company. The
Directors may, or may not, be employees of the Company.

3. Write a short note on unfair trade practices and Restrictive trade

practice.
Ans.: Unfair trade practices:
The law of unfair competition serves five purposes. First, the law seeks to protect
the economic, intellectual, and creative investments made by businesses in
distinguishing themselves and their products. Second, the law seeks to preserve
the good will that businesses have established with consumers. Third, the law
seeks to deter businesses from appropriating the good will of their competitors.
Fourth, the law seeks to promote clarity and stability by encouraging consumers
to rely on a merchant's good will and reputation when evaluating the quality of
rival products. Fifth, the law seeks to increase competition by providing
businesses with incentives to offer better goods and services than others in the
same field.
Although the law of unfair competition helps protect consumers from injuries
caused by deceptive trade practices, the remedies provided to redress such

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injuries are available only to business entities and proprietors. Consumers who
are injured by deceptive trade practices must avail themselves of the remedies
provided by state and federal Consumer Protection laws. In general, businesses
and proprietors injured by unfair competition have two remedies: injunctive relief
(a court order restraining a competitor from engaging in a particular fraudulent or
deceptive practice) and money damages (compensation for any losses suffered
by an injured business).
General Principles
The freedom to pursue a livelihood, operate a business, and otherwise compete in
the marketplace is essential to any free enterprise system. Competition creates
incentives for businesses to earn customer loyalty by offering quality goods at
reasonable prices. At the same time, competition can also inflict harm. The
freedom to compete gives businesses the right to lure customers away from each
other. When one business entices enough customers away from competitors,
those rival businesses may be forced to shut down or move.
The law of unfair competition will not penalize a business merely for being
successful in the marketplace. Nor will the law impose liability simply because a
business is aggressively marketing its product. The law assumes, however, that
for every dollar earned by one business, a competitor will lose a dollar.
Accordingly, the law prohibits a business from unfairly profiting at a competitor's
expense. What constitutes unfair competition varies according to the Cause of
Action asserted in each case. These include actions for the infringement of
Patents, Trademarks, and copyrights; actions for the wrongful appropriation of
Trade Dress, trade names, trade secrets, and service marks; and actions for the
publication of defamatory, false, and misleading representations.
Restrictive trade practice:
The restrictive trade practices, or antitrust, provisions in the Trade Practices Act
are aimed at deterring practices by firms which are anti-competitive in that they
restrict free competition. This part of the act is enforced by the Australian
Competition and Consumer Commission (ACCC). The ACCC can litigate in the
Federal Court of Australia, and seek pecuniary penalties of up to $10 million from
corporations and $500,000 from individuals. Private actions for compensation
may also be available.
These provisions prohibit:
• Most Price Agreements (see Cartel and Price-Fixing)
• Primary boycotts (an agreement between parties to exclude another)
• Secondary boycotts whose purpose is to cause substantial lessen
competition (Actions between two persons engaging in conduct hindering
3rd person from supplying or acquiring goods or services from 4th)
• Misuse of market power – taking advantage of substantial market power in
a particular market, for one or more proscribed purposes; namely, to
eliminate or damage an actual or potential competitor, to prevent a person
from entering a market, or to deter or prevent a person from engaging in
competitive conduct.
• Exclusive dealing – an attempt to interfere with freedom of buyers to buy
from other suppliers, such as agreeing to supply a product only if a retailer
does not stock a competitor’s product. Most forms of exclusive dealing are
only prohibited if they have the purpose or likely effect of substantially
lessening competition in a market.
• Third-line forcing: A type of exclusive dealing, third-line forcing involves
the supply of goods or services on the condition that the acquirer also
acquires goods or services from a third party. Third-line forcing is
prohibited per se.
• Resale price maintenance – fixing a price below which resellers cannot sell
or advertise
• Mergers and acquisitions that would result in a substantial lessening of
competition

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A priority of ACCC enforcement action in recent years has been cartels. The ACCC
has in place an immunity policy, which grants immunity from prosecution to the
first party in a cartel to provide information to the ACCC allowing it to prosecute.
This policy recognizes the difficulty in gaining information/evidence about price-
fixing behaviours.

4. Present a detail note on Shops and Establishment Act.

Ans.: Shops and Establishment Act:
Objectives
- To provide statutory obligation and rights to employees and employers in the
unorganized sector of employment, i.e., shops and establishments.
Scope And Coverage
- A state legislation; each state has framed its own rules for the Act.
- Applicable to all persons employed in an establishments with or without wages,
except the members of the employer's family.
- State government can exempt, either permanently or for a specified period, any
establishments from all or any provisions of this Act.
Main Provisions
- Compulsory registration of shop/establishment within thirty days of
commencement of work.
- Communications of closure of the establishment within 15 days from the closing
of the establishment.
- Lays down the hours of work per day and week.
- Lays down guidelines for spread-over, rest interval, opening and closing hours,
closed days, national and religious holidays, overtime work.
- Rules for employment of children, young persons and women
- Rules for annual leave, maternity leave, sickness and casual leave, etc.
- Rules for employment and termination of service.
- Maintenance of registers and records and display of notices.
- Obligations of employers.
- Obligations of employees.
About What:
1. To regulate conditions of work and employment in shops, commercial
establishments, residential hotels, restaurants, eating houses, theatres, other places of
public entertainment and other establishments.
2. Provisions include Regulation of Establishments, Employment of Children,
Young Persons and Women, Leave and Payment of Wages, Health and Safety etc.
Applicability & Coverage:
1. It applies to all local areas specified in Schedule-I
2. Establishment means any establishment to which the Act applies and any
other such establishment to which the State Government may extend the provisions of
the Act by notification
3. Employee means a person wholly or principally employed whether directly
or through any agency, whether for wages or other considerations in connection with any
establishment
4. Member of the family of an employer means, the husband, wife, son,
daughter, father, mother, brother or sister and is dependent on such employer
Returns:
1. Form-A or Form-B (as the case may be) {Section 7(2)(a), Rule 5} Before
15th December of the calendar year, i.e. 15 days before the expiry date The employer
has to submit these forms to the authority notified along with the old certificate of
registration and the renewal fees for minimum one year’s renewal and maximum of three
year’s renewal
2. Form-E (Notice of Change) {Rule 8} Within 15 days after the expiry of the
quarter to which the changes relate in respect of total number of employees qualifying
for higher fees as prescribed in Schedule-II and in respect of other changes in the original
statement furnished within 30 days after the change has taken place. (Quarter means
quarter ending on 31st March, 30th June, 30th September and 31st December)
Registers:

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1. Form-A {Rule 5} Register showing dates of Lime Washing etc
2. Form-H, Form-J {Rule 20(1)} (if opening & closing hours are ordinarily
uniform)
Register of Employment in a Shop or Commercial Establishment
3. Form-I {Rule 20(3)}, Form-K (if opening & closing hours are ordinarily
uniform)
Register of Employment in a Residential Hotel, Restaurant, Eating-House, Theatre, or
other places of public amusement or entertainment
4. Form-M {Rule 20(4)} Register of Leave – This and all the above Registers
have to be maintained by the Employer
5. Visit Book This shall be a bound book of size 7” x 6” containing at least
100 pages with every second page consecutively numbered, to be produced to the
visiting Inspector on demand. The columns shall be:
i. Name of the establishment or Employer
ii. Locality
iii. Registration Number
iv. Date and
v. Time

5 a. What is a cyber crime? What are the categories of cyber crime?

Ans.: Cyber crime It refers to all the activities done with criminal intent in cyberspace
or using the medium of Internet. These could be either the criminal activities in
the conventional sense or activities, newly evolved with the growth of the new
medium. Any activity, which basically offends human sensibilities, can be included
in the ambit of Cyber crimes.
Because of the anonymous nature of Internet, it is possible to engage in a variety
of criminal activities with impunity, and people with intelligence, have been
grossly misusing this aspect of the Internet to commit criminal activities in
cyberspace. The field of cyber crime is just emerging and new forms of criminal
activities in cyberspace are coming to the forefront each day. For example, child
pornography on Internet constitutes one serious cyber crime. Similarly, online
pedophiles, using Internet to induce minor children into sex, are as much cyber
crimes as any others.
Categories of cyber crimes:
Cyber crimes can be basically divided in to three major categories:
1. Cyber crimes against persons;
2. Cyber crimes against property; and
3. Cyber crimes against government.
1. Cyber crimes against persons: Cyber crimes committed against persons
include various crimes like transmission of child-pornography, harassment of any
one with the use of a computer and cyber stalking. The trafficking, distribution,
posting, and dissemination of obscene material including pornography, indecent
exposure, and child pornography constitute the most important cyber crimes
known today. These threaten to undermine the growth of the younger generation
and also leave irreparable scars on the minds of the younger generation, if not
controlled.
Similarly, cyber harassment is a distinct cyber crime. Various kinds of
harassments can and do occur in cyberspace, or through the use of cyberspace.
Harassment can be sexual, racial, religious, or of any other nature. Cyber
harassment as a crime also brings us to another related area of violation of
privacy of citizens. Violation of privacy of online citizens is a cyber crime of a
grave nature.
Cyber stalking: The Internet is a wonderful place to work, play and study. The net
is merely a mirror of the real world, and that means it also contains electronic
versions of real life problems. Stalking and harassment are problems that many

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persons especially women, are familiar within real life. These problems also occur
on the Internet, in the form of “cyber stalking” or “online harassment”.
2. Cyber crimes against property: The second category of Cyber crimes is
Cyber crimes against all forms of property. These crimes include unauthorized
computer trespassing through cyberspace, computer vandalism, and transmission
of harmful programs and unauthorized possession of computerized information.
3. Cyber crimes against Government: The third category of Cyber crimes is
Cyber crimes against Government. Cyber Terrorism is one distinct kind of crime in
this category. The growth of Internet has shown that individuals and groups to
threaten international governments as also to terrorize the citizens of a country
are using the medium of cyberspace. This crime manifests itself into Cyber
Terrorism when an individual “cracks” into a government or military maintained
website, for the purpose of perpetuating terror.
Since Cyber crime is a newly emerging field, a great deal of development has to
take place in terms of putting into place the relevant legal mechanism for
controlling and preventing cyber crime. The courts in United States of America
have already begun taking cognizance of various kinds of fraud and cyber crimes
being perpetrated in cyberspace. However, much work has to be done in this
field. Just as the human mind is ingenious enough to devise new ways for
perpetrating crime, similarly, human ingenuity needs to be canalized into
developing effective legal and regulatory mechanisms to control and prevent
cyber crimes. A criminal mind can assume very powerful manifestations if it is
used on a network, given the reachability and size of the network.
Legal recognition granted to Electronic Records and Digital Signatures would
certainly boost E – Commerce in the country. It will help in conclusion of contracts
and creation of rights and obligations through electronic medium. In order to
guard against the misuse and fraudulent activities over the electronic medium,
punitive measures are provided in the Act. The Act has recognized certain
offences, which are punishable. They are: -
Tampering with computer source documents (Sec 65)
Any person, who knowingly or intentionally conceals, destroys or alters or
intentionally or knowingly causes another person to conceal, destroy or alter any -
a. Computer source code when the computer source code is required to be
kept by law for the time being in force,
b. Computer programme,
c. Computer system and
d. Computer network.
- Is punishable with imprisonment up to three years, or with fine, which may
extend up to two lakh rupees, or with both.
Hacking with computer system (Sec 66):
Hacking with computer system is a punishable offence under the Act. It means
any person intentionally or knowingly causes wrongful loss or damage to the
public or destroys or deletes or alters any information residing in the computer
resources or diminishes its value or utility or affects it injuriously by any means,
commits hacking.
Such offenses will be punished with three years imprisonment or with fine of two
lakh rupees or with both.
Publishing of information which is obscene in electronic form (Sec 67):
Whoever publishes or transmits or causes to be published in the electronic form,
any material which is lascivious or appeals to prurient interest or if its effect is
such as to tend to deprave and corrupt persons who are likely, having regard to
all relevant circumstances, to read, see or hear the matter contained or embodied
in it shall be punished on first conviction with imprisonment for a term extending
up to 5 years and with fine which may extend to one lakh rupees. In case of

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second and subsequent conviction imprisonment may extend to ten years and
also with fine which may extend up to two lakh rupees.
Failure to comply with orders of the controller by a Certifying Authority
or any employee of such authority (Sec 68):
Failure to comply with orders of the Controller by any Certifying Authority or by
any employees of Certifying Authority is a punishable offence. Such persons are
liable to imprisonment for a term not exceeding three years or to a fine not
exceeding two lakh rupees or to both.
Fails to assist any agency of the Government to decrypt the information
(Sec 69):
If any subscriber or any person-in-charge of the computer fails to assist or to
extend any facilities and technical assistance to any Government agency to
decrypt the information on the orders of the Controller in the interest of the
sovereignty and integrity of India etc. is a punishable offence under the Act. Such
persons are liable for imprisonment for a term, which may extend to seven years.
Unauthorized access to a protected system (Sec 70):
Any person who secures access or attempts to secure access to a protected
system in contravention of the provisions is punishable with imprisonment for a
term which may extend to ten years and also liable to fine.
Misrepresentation before authorities (Sec 71):
Any person who obtains Digital Signature Certificate by misrepresentation or
suppressing any material fact from the Controller or Certifying Authority as the
case may be punished with imprisonment for a term which may extend two years
or with fine up to one lakh rupees or with both.
Breach of confidentiality and privacy (Sec 72):
Any person in pursuant of the powers conferred under the act, unauthorized
secures access, to any electronic record, books, register, correspondence,
information, document or other material without the consent of the person
concerned discloses such materials to any other person shall be punished with
imprisonment for a term which may extend to two years, or with fine up to one
lakh rupees or with both.
Publishing false particulars in Digital Signature Certificate (Sec 73):
No person can publish a Digital Signature Certificate or otherwise make it
available to any other person with the knowledge that: -
a. The Certifying Authority listed in the certificate has not issued it; or
b. The subscriber listed in the certificate has not accepted it; or
c. The certificate has been revoked or suspended
Unless such publication is for the purpose of verifying a digital signature created
prior to such suspension or revocation. Any person who contravenes the
provisions shall be punishable with imprisonment for a term, which may extend to
two years or with fine up to rupees one lakh or with both.
b. Mention the provisions covered under IT Act?
Ans.: IT Act:
Publication of Digital Signature Certificate for fraudulent purpose (Sec
74):
Any person knowingly creates, publishes or otherwise makes available a Digital
Signature Certificate for any fraudulent or unlawful purpose shall be punished
with imprisonment for a term which may extend to two years or with fine up to
one lakh rupees or with both.
Search and Arrest

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Any Police Officer not below the rank of a Deputy Superintendent of Police or any
other officer of the Central Government or a State Government authorized in this
behalf may enter any public place, search and arrest without warrant any person
found therein who is reasonably suspected or having committed or of committing
or of being about to commit any offence under this Act.

6 Ishaan is a fresher and recently is appointed as a part-time employee in

Consumer Redressal Dispute Agency. As his superior, how will you guide
him regarding the redressal forums, the nature of making complaints
and the working of the agency?
Ans.: Redressal forum: Twenty-five years ago, consumer action in India was virtually
unheard of. It consisted of some action by individuals, usually addressing their
own grievances. Even this was greatly limited by the resources available with
these individuals. There was little organized effort or attempts to take up wider
issues that affected classes of consumers or the general public.
All this changed in the Eighties with the Supreme Court-led concept of public
interest litigation. It gave individuals and the newly formed consumer groups,
access to the law and introduced in their work the broad public interest
perspective.
Telepress Features Several important legislative changes took place during this
period. Significant were the amendments to the Monopolies and Restrictive Trade
Practices Act (hereafter "MRTP Act") and the Essential Commodities Acts, and the
introduction of the Environment Protection Act and the Consumer Protection Act.
These changes shifted the focus of law from merely regulating the private and
public sectors to actively protecting consumer interests.
The Consumer Protection Act, 1986 (hereafter "the Act") is a remarkable piece of
legislation for its focus and clear objective, the minimal technical and legalistic
procedures, providing access to redressal systems and the composition of courts
with a majority of non-legal background members.
The Act establishes a hierarchy of courts, with at least one District Forum at the
district level (Chennai has two), a State Commission at the State capitals and the
National Commission at New Delhi. The pecuniary jurisdiction of the District
Forum is up to Rs. one lakh and that of the State Commission is above Rs. one
lakh and below Rs. 10 lakhs. All claims involving more than Rs. 10 lakhs are filed
directly before the National Commission. Appeals from the District Forum are to
be filed before the State Commission and from there to the National Commission,
within thirty days of knowledge of the order.
How to make a complaint
This section explains how to make a complaint using our Complaints Registration
Form. It tells you what information you need to include on the form, and where
you need to send your completed form.
Definition of a complaint
The UK Border Agency defines a complaint as “any expression of dissatisfaction
about the services provided by or for the UK Border Agency and/or about the
professional conduct of UK Border Agency staff, including contractors.”
The following will not be treated as complaints:
• Letters relating to the decision to refuse a UK visa. Visa applicants are
expected to raise this using the existing appeal channels.
• Letters-chasing progress on an application unless it is outside our
published processing times.
What information should you send?
You should make your complaint using our Complaints Registration Form. It is
important that you give as much information about yourself as possible. The
Complaints Registration Form tells you the type of information we need. This will

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help us to find the information relevant to your case and to contact you about it.
If possible you should also include:
• Full details about the complaint (including times, dates and locations);
• The names of any UK Border Agency / Visa Application Centre staff you
have dealt with;
• Details of any witnesses to the incident (if appropriate);
• Copies of letters or papers that are relevant; and
• Any travel details that relate to your complaint.
What happens next?
The 'How we will deal with your complaint' page explains:
• How we handle your complaint
• What to do if you are not happy with the outcome of your complaint or how
we have handled it
• What will happen after your complaint has been dealt with

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MI0024 – Software Engineering

Set- 1
1. Discuss the CMM 5 Levels for Software Process.
ans : The Software Engineering Institute (SEI) has developed a comprehensive model predicated on a
set of software engineering capabilities, that should be present as organizations reach different
levels of process maturity. To determine an organization’s current state of process maturity, the
SEI uses an assessment that results in a five point grading scheme. The grading scheme
determines compliance with a capability maturity model (CMM) [PAU93] that defines key
activities required at different levels of process maturity. The SEI approach provides a measure
of the global effectiveness of a company's software engineering practices, and establishes five
process maturity levels that are defined in the following manner:
Level 1: Initial. The software process is characterized as ad hoc and occasionally even chaotic.
Few processes are defined, and success depends on individual effort.
Level 2: Repeatable. Basic project management processes are established to track cost,
schedule, and functionality. The necessary process discipline is in place to repeat earlier
successes on projects with similar applications.
Level 3: Defined. The software process for both management and engineering activities is
documented, standardized, and integrated into an organization-wide software process. All
projects use a documented and approved version of the organization's process for developing
and supporting software. This level includes all characteristics defined for level 2.
Level 4: Managed. Detailed measures of the software process and product quality are collected.
Both the software process and products are quantitatively understood and controlled using
detailed measures. This level includes all characteristics defined for level 3.
Level 5: Optimizing. Continuous process improvement is enabled by quantitative feedback from
the process and from testing innovative ideas and technologies. This level includes all
characteristics defined for level 4. The five levels defined by the SEI were derived as a
consequence of evaluating responses to the SEI assessment questionnaire that is based on the
CMM. The results of the questionnaire are distilled to a single numerical grade that provides an
indication of an organization's process maturity.
The SEI has associated key process areas (KPAs) with each of the maturity levels. The KPAs
describe those software engineering functions (e.g., software project planning, requirements
management) that must be present to satisfy good practice at a particular level. Each KPA is
described by identifying the following characteristics:
1. Goals – the overall objectives that the KPA must achieve.
2. Commitments – requirements (imposed on the organization) that must be met to achieve
the goals, or provide proof of intent to comply with the goals.
3. Abilities – those things that must be in place (organizationally and technically) to enable the
organization to meet the commitments.
4. Activities – the specific tasks required to achieve the KPA function.
5. Methods for monitoring implementation – the manner in which the activities are monitored
as they are put into place.
6. Methods for verifying implementation – the manner in which proper practice for the KPA can
be verified.

2. Discuss the Water Fall model for Software Development.

Ans The Linear Sequential Model
Sometimes called the classic life cycle or the waterfall model, the linear sequential model
suggests a systematic, sequential approach to software development that begins at the system
level and progresses through analysis, design, coding, testing, and support. The linear
sequential model for software engineering. Modeled after a conventional engineering cycle, the
linear sequential model encompasses the following activities:
System/information engineering and modeling. Because software is always part of a larger
system (or business), work begins by establishing requirements for all system elements and

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then allocating some subset of these requirements to software. This system view is essential
when software must interact with other elements such as hardware, people, and databases.
System engineering and analysis encompass requirements gathering at the system level, with a
small amount of top level design and analysis. Information engineering encompasses
requirements gathering at the strategic business level and at the business area level.
Software requirements analysis. The requirements gathering process is intensified and focused
specifically on software. To understand the nature of the program(s) to be built, the software
engineer ("analyst") must understand the information domain for the software, as well as
required function, behavior, performance, and interface. Requirements for both the system and
the software are documented and reviewed with the customer.
Design. Software design is actually a multistep process that focuses on four distinct attributes of
a program: data structure, software architecture, interface representations, and procedural
(algorithmic) detail. The design process translates requirements into a representation of the
software that can be assessed for quality before coding begins. Like requirements, the design is
documented and becomes part of the software configuration. Code generation. The design must
be translated into a machine-readable form. The code generation step performs this task. If
design is performed in a detailed manner, code generation can be accomplished
mechanistically. Testing. Once the code has been generated, program testing begins. The
testing process focuses on the logical internals of the software, ensuring that all statements
have been tested, and on the functional externals; that is, conducting tests to uncover errors
and ensure that defined input will produce actual results that agree with the required results.
Support. Software will undoubtedly undergo change after it is delivered to the customer (a
possible exception is embedded software). Change will occur because errors have been
encountered, because the software must be adapted to accommodate changes in its external
environment (e.g., a change required because of a new operating system or peripheral device),
or because the customer requires functional or performance enhancements.
Software support/maintenance reapplies each of the preceding phases to an existing program
rather than a new one. The linear sequential model is the oldest and the most widely used
paradigm for software engineering.
However, criticism of the paradigm has caused even active supporters to question its efficacy
[HAN95]. Among the problems that are sometimes encountered when the linear sequential
model is applied are:
1. Real projects rarely follow the sequential flow that the model proposes. Although the linear
model can accommodate iteration, it does so indirectly. As a result, changes can cause
confusion as the project team proceeds.
2. It is often difficult for the customer to state all requirements explicitly. The linear sequential
model requires this and has difficulty accommodating the natural uncertainty that exists at
the beginning of many projects.
3. The customer must have patience. A working version of the program(s) will not be available
until late in the project time-span. A major blunder, if undetected until the working program
is reviewed, can be disastrous.
In an interesting analysis of actual projects Bradac [BRA94], found that the linear nature of the
classic life cycle leads to “blocking states” in which some project team members must wait for
other members of the team to complete dependent tasks. In fact, the time spent waiting can
exceed the time spent on productive work! The blocking state tends to be more prevalent at the
beginning and end of a linear sequential process. Each of these problems is real. However, the
classic life cycle paradigm has a definite and important place in software engineering work. It
provides a template into which methods for analysis, design, coding, testing, and support can be
placed. The classic life cycle remains a widely used procedural model for software engineering.
While it does have weaknesses, it is significantly better than a haphazard approach to software
development.
fig : 1(c) Pg NO: 21 (30)

3. Explain the Different types of Software Measurement Techniques

Ans : Software Measurement

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Measurements in the physical world can be categorized in two ways: direct measures (e.g., the
length of a bolt) and indirect measures (e.g., the "quality" of bolts produced, measured by
counting rejects). Software metrics can be categorized similarly. Direct measures of the
software engineering process include cost and effort applied. Direct measures of the product
include lines of code (LOC) produced, execution speed, memory size, and defects reported over
some set period of time. Indirect measures of the product include functionality, quality,
complexity, efficiency, reliability, maintainability, and many other "– abilities"
(1) Size oriented metrics:
Size-oriented software metrics are derived by normalizing quality and/or productivity measures
by considering the size of the software that has been produced. If a software organization
maintains simple records, a table of size-oriented measures, such as the one shown in Figure
4.4, can be created. The table lists each software development project that has been completed
over the past few years and corresponding measures for that project. 12,100 lines of code were
developed with 24 person-months of effort at a cost of $168,000. It should be noted that the
effort and cost recorded in the table represent all software engineering activities (analysis,
design, code, and test), not just coding. Further information for project alpha indicates that 365
pages of documentation were developed, 134 errors were recorded before the software was
released, and 29 defects were encountered after release to the customer within the first year of
operation. Three people worked on the development of software for project alpha.
(2) Function oriented metrics:
Function-oriented software metrics use a measure of the functionalitydelivered by the
application as a normalization value. Since ‘functionality’ cannot be measured directly, it must
be derived indirectly using other direct measures. Function-oriented metrics were first proposed
by Albrecht [ALB79], who suggested a measure called the function point. Function points are
derived using an empirical relationship based on countable (direct) measures of software's
information domain and assessments of software complexity.
(3) Extended Function Point Metrics:
The function point measure was originally designed to be applied to business information
systems applications. To accommodate these applications, the data dimension (the information
domain values discussed previously) was emphasized to the exclusion of the functional and
behavioral (control) dimensions. For this reason, the function point measure was inadequate for
many engineering and embedded systems (which emphasize function and control). A number of
extensions to the basic function point measure have been proposed to remedy this situation.

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MI0024 – Software Engineering

Set- 2
1. Quality and reliability are related concepts but are fundamentally different in a
number of ways. Discuss them.
Ans: The Quality Movement
Today, senior managers at companies throughout the industrialized world recognize that high
product quality translates to cost savings and an improved bottom line. However, this was not
always the case. The quality movement began in the 1940s with the seminal work of W.
Edwards Deming [DEM86] and had its first true test in Japan.
The first step, called kaizen, refers to a system of continuous process improvement. The goal
of kaizen is to develop a process (in this case, the software process) that is visible, repeatable,
and measurable.
The second step, invoked only after kaizen has been achieved, is called atarimae hinshitsu.
This step examines intangibles that affect the process and works to optimize their impact on the
process. For example, the software process may be affected by high staff turnover, which itself
is caused by constant reorganization within a company. Maybe a stable organizational structure
could do much to improve the quality of software. Atarimae hinshitsu would lead management
to suggest changes in the way reorganization occurs.
While the first two steps focus on the process, the next step, called kansei (translated as “the
five senses”), concentrates on the user of the product (in this case, software). In essence, by
examining the way the user applies the product kansei leads to improvement in the product
itself and, potentially, to the process that created it. Finally, a step called miryokuteki hinshitsu
broadens management concern beyond the immediate product. This is a business-oriented step
that looks for opportunity in related areas identified by observing the use of the product in the
marketplace. In the software world, miryokuteki hinshitsu might be viewed as an attempt to
uncover new and profitable products or applications that are an outgrowth from an existing
computer-based system.
2. Explain the Advantages of Prototype Model, & Spiral Model in Contrast to Water Fall
model.
ans : The Prototyping Model
Often, a customer defines a set of general objectives for software but does not identify detailed
input, processing, or output requirements. In other cases, the developer may be unsure of the
efficiency of an algorithm, the adaptability of an operating system, or the form that
human/machine interaction should take. In these, and many other situations, a prototyping
paradigm may offer the best approach. The prototyping paradigm begins with requirements
gathering. Developer and customer meet and define the overall objectives for the software,
identify whatever requirements are known, and outline areas where further definition is
mandatory. A "quick design" then occurs. The quick design focuses on a representation of those
aspects of the software that will be visible to the customer/user (e.g., input approaches and
output formats). The quick design leads to the construction of a prototype. The prototype is
evaluated by the customer/user and used to refine requirements for the software to be
developed. Iteration occurs as the prototype is tuned to satisfy the needs of the customer, while
at the same time enabling the developer to better understand what needs to be done. The
prototype can serve as "the first system." The one that Brooks recommends we throw away. It is
true that both customers and developers like the prototyping paradigm. Users get a feel for the
actual system, and developers get to build something immediately.
3. Write a Note on Spiral Model.
Ans. The Spiral Model
The spiral model, originally proposed by Boehm [BOE88], is an evolutionary software process
model that couples the iterative nature of prototyping with the controlled and systematic
aspects of the linear sequential model. It provides the potential for rapid development of
incremental versions of the software. Using the spiral model, software is developed in a series of
incremental releases. During early iterations, the incremental release might be a paper model or
prototype. During later iterations, increasingly more complete versions of the engineered

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system are produced. A spiral model is divided into a number of framework activities, also called
task regions.
Typically, there are between three and six task regions. A spiral model contains six task regions:
1. Customer Communication – tasks required to establish effective communication between
developer and customer.
2. Planning – tasks required to define resources, timelines, and other project-related
information.
3. Risk Analysis – tasks required to assess both technical and management risks.
4. Engineering – tasks required to build one or more representations of the application.
5. Construction and Release – tasks required to construct, test, install, and provide user
support (e.g., documentation and training).
6. Customer Evaluation – tasks required to obtain customer feedback based on evaluation of
the software representations created during the engineering stage and implemented during
the installation stage. Each of the regions is populated by a set of work tasks, called a task
set, that are adapted to the characteristics of the project to be undertaken. For small
projects, the number of work tasks and their formality is low. For larger, more critical
projects, each task region contains more work tasks that are defined to achieve a higher
level of formality. In all cases, the umbrella activities (e.g., software configuration
management and software quality assurance) noted in Section 2.2 are applied. As this
evolutionary process begins, the software engineering team moves around the spiral in a
clockwise direction, beginning at the center. The first circuit around the spiral might result in
the development of a product specification; subsequent passes around the spiral might be
used to develop a prototype, and then progressively more sophisticated versions of the
software. Each pass through the planning region results in adjustments to the project plan.
Cost and schedule are adjusted based on feedback derived from customer evaluation. In
addition, the project manager adjusts the planned number of iterations required to complete
the software. Unlike classical process models that end when software is delivered, the spiral
model can be adapted to apply throughout the life of the computer software. An alternative
view of the spiral model can be considered by examining the project entry point axis, the
starting point for different types of projects. A “concept development project” starts at the
core of the spiral and will continue (multiple iterations occur along the spiral path that
bounds the central shaded region) until concept development is complete. If the concept is
to be developed into an actual product, the process proceeds through the next cube (new
product development project entry point) and a “new development project” is initiated. The
new product will evolve through a number of iterations around the spiral, following the path
that bounds the region that has somewhat lighter shading than the core. In essence, the
spiral, when characterized in this way, remains operative until the software is retired. There
are times when the process is dormant, but whenever a change is initiated, the process
starts at the appropriate entry point (e.g., product enhancement). The spiral model is a
realistic approach to the development of large-scale systems and software.
Because software evolves as the process progresses, the developer and customer had better
understand and react to risks at each evolutionary level. The spiral model uses prototyping as a
risk reduction mechanism but, more importantly, enables the developer to apply the prototyping
approach at any stage in the evolution of the product. It maintains the systematic stepwise
approach suggested by the classic life cycle, but incorporates it into an iterative framework that
more realistically reflects the real world. The spiral model demands a direct consideration of
technical risks at all stages of the project and, if properly applied, should reduce risks before
they become problematic. But like other paradigms, the spiral model is not a panacea. It may be
difficult to convince customers (particularly in contract situations) that the evolutionary
approach is controllable. It demands considerable risk assessment expertise and relies on this
expertise for success. If a major risk is not uncovered and managed, problems will undoubtedly
occur.

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MI0025– Database Management System

Set- 1

1. Differentiate between Traditional File System & Modern Database System? Describe
the properties of Database & the Advantage of Database?
Ans : Traditional File System
1. Traditional File system is the system that was followed before the advent of DBMS i.e., it is
the older way.
2. In Traditional file processing, data definition is part of the application program and works
with only specific application.
3. File systems are Design Driven; they require design/coding change when new kind of data
occurs. E.g.:In a traditional employee the master file has employee Employee_name,
Employee_no, Employee_addr, Employee_designation, Employee_dept, Employee sal, if we
want to insert one more column ‘Employee_Mobile number’ then it requires a complete
restructuring of the file or redesign of the application code, even though basically all the
data except that in one column is the same.
4. Traditional File system keeps redundant [duplicate] information in many locations. This
might result in the loss of Data Consistency. For e.g.: Employee names might exist in
separate files like Payroll Master File and also in Employee Benefit Master File etc. Now if an
employee changes his or her last name, the name might be changed in the pay roll master
file but not be changed in Employee Benefit Master File etc. This might result in the loss of
Data Consistency.
5. In a File system data is scattered in various files, and each of these files may be in different
formats, making itdifficult to write new application programs to retrieve the appropriate
data.
6. Security features are to be coded in the Application Program itself.
Modern Database Management Systems
1. This is the Modern way which has replaced the older concept of File system.
2. a. Data definition is part of the DBMS
b. Application is independent and can be used with any application.
3. a. One extra column (Attribute) can be added without any difficulty
b. Minor coding changes in the Application program may be required.
4. Redundancy is eliminated to the maximum extent in DBMS if properly defined.
5. This problem is completely solved here.
6. Coding for security requirements is not required as most of them have been taken care by
the DBMS.

2. What is the disadvantage of sequential file organization? How do you overcome it?
What are the advantages & disadvantages of Dynamic Hashing?
Ans : One disadvantage of sequential file organization is that we must use linear search or binary
search to locate the desired record and that results in more I/O operations. In this there are a
number of unnecessary comparisons. In hashing technique or direct file organization, the key
value is converted into an address by performing some arithmetic manipulation on the key
value, which provides very fast access to records.
Dynamic Hashing Technique
In dynamic hashing, the access structure is built on the binary representation of the hash value.
In this, the number of buckets is not fixed [as in regular hashing] but grows or diminishes as
needed. The file can start with a single bucket, once that bucket is full, and a new record is

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inserted, the bucket overflows and is slit into two buckets. The records are distributed among
the two buckets based on the value of the first [leftmost] bit of their hash values. Records whose
hash values start with a 0 bit are stored in one bucket, and those whose hash values start with a
1 bit are stored in another bucket. At this point, a binary tree structure called a directory is built.
The directory has two types of nodes.
1. Internal nodes: Guide the search, each has a left pointer corresponding to a 0 bit, and a right
pointer corresponding to a 1 bit.
2. Leaf nodes: It holds a pointer to a bucket – a bucket address. Each leaf node holds a bucket
address. If a bucket overflows, for example: a new record is inserted into the bucket for
records whose hash values start with 10 and causes overflow, then all records whose hash
value starts with 100 are placed in the first split bucket, and the second bucket contains
those whose hash value starts with 101. The levels of a binary tree can be expanded
dynamically
Disadvantages:
1. The index tables grow rapidly and too large to fit in main memory. Whenpart of the index
table is stored on secondary storage, it requires extra access.
2. The directory must be searched before accessing the bucket, resulting in two-block access
instead of one in static hashing.
3. A disadvantage of extendable hashing is that it involves an additional level of indirection.

3. What is relationship type? Explain the difference among a relationship instance,

relationship type & a relation set?
Ans: Relationships: In the real world, items have relationships to one another. E.g.: A book is
published by a particular publisher. The association or relationship that exists between the
entities relates data items to each other in a meaningful way. A relationship is an association
between entities.
A collection of relationships of the same type is called a relationship set. A relationship type R is
a set of associations between E, E2…..En entity types mathematically, R is a set of relationship
instances ri. E.g.: Consider a relationship type WORKS_FOR between two entity types - employee
and department, which associates each employee with the department the employee works for.
Each relationship instance in WORKS_FOR associates one employee entity and one department
entity, where each relationship instance is ri which connects employee and department entities
that participate in ri. Employee el, e3 and e6 work for department d1, e2 and e4 work for d2 and
e5 and e7 work for d3. Relationship type R is a set of all relationship instances.

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MI0025– Database Management System

Set- 2
1. Discuss Multi Table Queries? (143)
Ans: There are many occasions in the database applications where we need to retrieve data from
more than one table.
SIMPLE EQUI-JOINS:
When two tables are joined together we must follow these guidelines:
a. Table names in the FROM clause are separated by commas.
b. Use appropriate joining condition. This means that the foreign key of table 1 will be made
equal to the primary key of table 2. This column acts as the joining attribute. For
example, dno of employee table and dno of department will be involved in the joining
condition of WHERE clause.
c. EXAMPLE-1: This example demonstrates the equijoin and the purpose is to display the
employee names and the department names for which they work.
i. SELECT NAME, DNAME
ii. FROM Employee, Department
iii. WHERE employe.Dno = department.Dno;
d. OUTPUT:
i. NAME DNAME
ii. Prasad Accounts
iii. Reena Accounts
iv. Deepak Admin
v. Venkat Accounts
vi. Pooja Research
e. EXAMPLE 2:
Let us now try to display only employees working for Accounts department.
i. SELECT Name, salary, Dname
ii. FROM Employee, department
iii. WHERE (Emplyee.DNO = Department.DNO)
iv. AND (Dname = 'Accounts');
f. OUT PUT:
i. NAME SALARY DNAME
ii. Prasad 32000 Accounts
iii. Reena 8000 Accounts
iv. Venkat 30000 Accounts
v. SELF JOIN and TABLE ALIASES:
The self-join is one where you involve the same table in the join. This is illustrated in the
following example. This technique is used fully to solve many queries.
g. To find the employee who earns more than venkat
i. SELECT e1.name, e1.salary
ii. FROM Employee e1, Employee e2
iii. WHERE (e1.salary > e2.salary) AND (e2.name = 'venkat')
h. OUT PUT:
i. NAME SALARY
ii. Prasad 32000
iii. OUTER JOINS:
Outer joins are used to display rows that do not meet the join condition. For left outer join
use a plus sign(+) to left condition and for right outer join use the plus sign to the right
condition. The syntax for left and right outer joins are given below:
i. Left outer join
ii. SELECT table1.col, table2.col
iii. FROM table1 t1, table2 t2
iv. WHERE t1.col(+) = t2.col;
Notice that the plus sign cannot be placed on both sides of the condition.
i. EXAMPLE 1: This example demonstrates the right outer join by retaining the right side
table(department) tuples and giving null values for the tuples that do not match the left
side table (employee).
i. SELECT Name, Dname
ii. FROM Employee E, Department D

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iii. WHERE E.Name(+) =D.Dname;

j. OUTPUT::
i. NAME DNAME
ii. Accounts
iii. Admin
j. EXAMPLE 2: This is same as ex.1, but the only difference is that it is a left outer join. So
all the left table (employee) rows are kept, and if no match occurs with the right side
table (department) a null is shown.
iv. SELECT Name, Dnaem
v. FROM Employee E, Department D
vi. WHERE E.Name = D.Dname(+);
k. OUT PUT:
vii. NAME DNAME
viii. Deepak
ix. Venkat
x. Pooja
xi. Prasad
xii. Reena

2. Discuss Transaction Processing Concept? Describe properties of Transactions?

Ans: Definition: A transaction is an atomic unit comprised of one or more SQL statements. A
transaction begins with the first executable statement and ends when it is committed or rolled
back.
Single User V/S Multi User systems: A DBMS is used if at most one user at a time can use
the system. It is multi-user if many users can use the system and have access to the DB
concurrently. For e.g.: An air line reservation system is used by 100's of travel agency and
clerks concurrently.
Multiple users can access databases and use computer systems simultaneously. Because of the
concept of multiprogramming, this system executes some commands from one process than
suspend that process, and executes some command from the next process. Therefore it is inter
leaved. In a single user system one can execute at most one process at a time. The Read
and Write operations and DBMS Buffers:
A transaction is a logical unit of database processing that includes one or more database access
operations (insertion, delete etc). Only retrieving of data is called read only transaction.
The basic database access operations are
1) Read-item (x) It reads a database item named 'x' into a program variable.
2) Write-item (x) writes the value of the program variable x into the database.
Read-item (x) includes the following steps:
1. Find the address of the disk block that contains item 'x'.
2. Copy that disk block into a bugger in main memory.
3. Copy item x from the buffer to the program variable x.
Executing the write-item (x) includes the following steps.
1. Find the address of the disk block that contains item (x).
2. Copy that disk block into a buffer in main memory.
3. Copy item x from the program variable into its current location in the buffer
4. Store the updated block from the buffer back to disk.
Why concurrency control is needed: In a multiuser database, transactions submitted by the
various users may execute concurrently and may update the same data. Concurrently executing
transactions must be guaranteed to produce the same effect as serial execution of transactions
[one by one]. Several problems can occur when concurrent transactions execute in an
uncontrolled manner, therefore the primary concern of a multiuser database includes how to
control data concurrency and consistency.

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Data concurrency: Access to data concurrently (simultaneously) used by many users must be
co-ordinates.
Data consistency: A user always sees a consistent (accurate) view of all data committed by
other transactions as of that time and all changes made by the user up to that time. Several
problems can occur when concurrent transactions execute in an uncontrolled manner.
1. The lost update problem: Suppose transactions T1 and T2 are submitted at the same time,
when these two transactions are executed concurrently as shown in fig. a, then the final
value of x is incorrect. Because T2 reads the value of x before T1 changes it in the database,
and hence the updated value resulting from T1 is lost. For e.g.: x=80 at the start (80
reservation at the beginning), n=5 (T1 transfers 5 seat reservation from the flight x to y),
and m=4 (T2 reserves 4 seats on x), the final result should be x=79 but due to interleaving
of operations x=84, because updating T1 that removed the 5 seats from x was lost.
2. Dirty read problem: This problem occurs when one transaction updates a database item and
then the transaction fails for some reason. The updated item is accessed by another
transaction before it is changed back to its original value.
3. Incorrect Summary Problem: If one transaction is calculating an aggregate summary function
on a number of records, while other transactions are updating some of these records, the
aggregate function may calculate some values before they are updated, and others after
they are updated.
Desirable Properties of Transactions
To ensure data integrity, the database management system should maintain the following
transaction properties. These are often called the ACID properties.
1. Atomicity: A transaction is an atomic unit of processing. It is either performed in its
entirety (completely) or not performed at all.
2. Consistency: The basic idea behind ensuring atomicity is as follows.
The database system keeps back of the old values of any data on which a transaction
performs a write, and if the transaction does not complete its execution, the old values are
restored to make it appear as though the transaction was never executed.
For Ex: Let Ti be a transaction that transfers 850 from account A to account B. This
transaction can be defined as
Ti ; read(A)
A :=A-50;
Writ (A);
Read(B);
B:=B+50;
Write (B).
Suppose that before execution of transactions Ti the values of accounts A and B are Rs.1000
and Rs.2000 respectively. Now suppose that, during the execution of transaction Ti, a failure
has occurred after write(A) operation, that prevents Ti from completing its execution
successfully. But before the write of B operation was executed values of A and B in database
are Rs.950 and`Rs.2000. We have lost Rs.50 which is executed in a sequential fashion.
3. Durability: Once a transaction changes the database and the changes are committed,
these changes must never be lost because of subsequent failures. The users need not worry
about the incomplete transactions. Partially executed transactions can be rolled back to the
original state, ensuring durability is the responsibility of the recovery management
component of the DBMS.

3. Describe the advantage of Distributed database? What is Client/server Model?

Discuss briefly the security and Internet violation?
Ans Advantages of Distributed Databases

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1. Increased reliability and availability: Reliability is broadly defined as the probability that a
system is running at a certain time point, whereas reliability is defined as the system that is
continuously available during a time interval. When the data and DBMS software are distributed
over several sites, one site may fail while other sites continue to operate. Only the data and
software that exist at the failed site cannot be accessed. In a centralized system, failure at a
single site makes thewhole system unavailable to all users.
2. Improved performance: Large database is divided into smaller databases by keeping the
necessary data where it is needed most. Data localization reduces the contention for CPU and
I/O services, and simultaneously reduces access delays involved in wide area network. When a
large database is distributed over multiple sites, smaller databases exist at each site. As a
result, local queries and transactions accessing data at a single site have better performance
because of the smaller local databases. To improve parallel query processing a single large
transaction is divided into a number of smaller transactions and executes multiple transactions
at different sites.
3. Data sharing: Data can be accessed by users at other remote sites through the distributed
database management system (DDBMS) Software.
4. Transparency: Ideally, a distributed database should be distribution transparent in the sense
of hiding the details of where each file is physically stored within the system. It provides network
transparency, that is the command used to perform a task is independent of the location of
data, and the location of the system where the command was issued.
5. Easier expansion: In a distributed environment, expansion of the system in terms of adding
more data, increasing database size, or adding more processors is much easier.
Client-Server Model
The Client-Server model is basic to distributed systems, it allows clients to make requests that
are routed to the appropriate server in the form of transactions. The client_server model
consists of three parts.
1. Client - The client is the machine (workstation or pc) running the front and applications. It
interacts with a user through the keyboard, display and mouse. The client has no direct data
access responsibilities. The client machine provides front_end application software for
accessing the data on the server. The clients initiates transactions, the server processes the
transactions. Interaction between client and server might be processed as follows during
processing of an SQL query.
i. The client passes a user query and decomposes it into a number of independent site
queries. Each site query is sent to the appropriate server site.
ii. Each server processes the local query and sends the resulting relation to the client site.
iii. The client site combines the results of the queries to produce the result of the originally
submitted query. So the server is called database processor or back end machine,
where as the client is called application processor or front end machine. Another
function controlled by the client is that of ensuring consistency of replicated copies of a
data item by using distributed concurrency control techniques. The client must also
ensure the atomicity of global transactions by performing global recovery when certain
sites fail. It provides distribution transparency, that is the client hides the details of data
distribution from the user.
2. Server – The server is the machine that runs the DMS software. It is referred to as back
end. The server processes SQL and other query statements received from client applications.
It can have large disk capacity and fast processors.
3. Network – The network enables remote data access through client server and server-to-
server communication.
Each computer in a network is a node, acts as a client, a server, or both, depending on the
situation.
Advantages:

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a. a Client applications are not dependent on physical location of the data. If the data is moved
or distributed to other database servers, the application continues to function with little or
no modification.
b. b It provides multi-tasking and shared memory facilities; as a result they can deliver the
highest possible degree of concurrency and data integrity.
c. c In networked environment, shared data is stored on the servers, rather than on all
computers in the system. This makes it easier and more efficient to manage concurrent
access. Inexpensive, low-end client work stations can access the remote data of the server
effectively.
Security and Integrity Violations
Misuse of database can be categorized as being either intentional or accidental.
Accidental loss of data consistency:
1. System crashes during transaction processing
2. Due to multiusers accessing the database.
3. Distribution of data over several computers.
Intentional loss of data may be due to reading, writing or destruction of data by unauthorized
users. Database security usually protects data by several techniques.
Certain portion [selected columns] of a database is available only to those persons who are
authorized to access it. This ensures that the confidentiality of data is maintained. For e.g.: In
large organizations, where different users may use the same database, sensitive information
such as employees’ salaries should be kept confidential from most of the other users. To protect
database we must take security measures at several levels. Network security is also important
as database security. Security within the operating system is implemented by providing a
password for the user accounts. It Protects data in primary memory by avoiding direct access to
the data.

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MI0026 – Computer Network

Set- 1
1 Explain all design issues for several layers in Computer. What is connection –
oriented and connectionless service?
Ans Design Issues for the Layers
There are some key design issues that are to be considered in computer networks. Every layer
needs a mechanism for identifying senders and receivers. Many computers are normally
connected in networks,a few of which have multiple processes. A means for a process on one
machine is needed to specify with whom it wants to communicate to. Thus some form of
addressing scheme is to be devised.
Another design issue is data transmission modes. It concerns the rules for the data transfer. The
systems can use serial or parallel transmission, synchronous or Asynchronous transmission,
simplex or duplex transmission. The protocol also must determine how many logical channels
the connection corresponds to and what their priorities are.
Another major design issue is Error Control techniques as physical circuits are not perfect. Some
of the error detecting or correcting codes are to be used at both the ends of the connection. At
the same time we need to consider Flow Control techniques which is necessary to keep a fast
sender from swamping a slow receiver. Some systems use some kind of feedback from the
receiver which is useful to limit the transmission rate.
It is inconvenient and expensive to set up a separate connection for each pair of communicating
processes. The same connection can be used for multiple & unrelated conversation. Thus we
need to focus on Multiplexing and de-multiplexing techniques as one of the design issues.
Multiplexing is needed in the physical layer, where all the traffic for all connections has to be
sent over at most a few physical circuits.
When there are multiple paths between the source and destination the complexity lies in finding
the best, optimum and shortest path. Hence to find the optimum path we need Routing
schemes. Apart from these some of the design issues can be related to security, compression
techniques and so on
Connection-Oriented and Connectionless Services
Layers can offer two types of services to the layers above them. They are Connection oriented
and Connection less. Connection oriented service is modeled after the telephone system. To use
this service, the service user first establishes a connection, uses the connection and then
releases the connection. In most of the cases the order is preserved so that bits arrive at the
receiver in the same order as they were sent by the transmitter. In some cases when a
connection is established the source, the subnet, and the receiver conduct negotiation of certain
parameters like the maximum size of the message, quality of service (QoS) required and other
issues. We have another type of service called Connection less service. This is modeled after the
postal system. Here each message carries the full destination address, and each one is routed
through the system independent of each others. Here messages may not arrive at the receiver
in the same order as they were sent, as it depends on the route each message takes on the way
to the destination. Six different types of services are summarized in table 1.3.
Pg. 21

2 Classify Guided medium (wired).Compare fiber optics and copper wire.

Ans. Guided media provides a guided (by a solid medium) path for propagation of
signals such as twisted pairs, coaxial cables, optical fibers etc. Selection of transmission
Media depends on the characteristics and quality of data transmission which is in turn
determined by characteristics of the medium and signal. For guided media the medium itself in
determining the limitations of transmission. The key concern in design of data transmission
system is Data Rate and Distance: The greater the data rate and distance, the better.
Number of factors used to determine data rate and distance:
• Bandwidth: Greater the BW of the signal, the higher data rate can be achieved.

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• Transmission impairment: these limit the distance Twisted pair suffers more impairment
than coaxial cable which in turn suffers more than optical fiber.
• Interference: overlapping frequency bands can distort/wipeout a signal. It is of more
concern for unguided media than guided. For guided it can be caused due to nearby cables.
Proper shielding of cables can minimize this problem.
• Number of receivers: A point to pint links are used or shared link is used with multiple
attachments are used. In shared link each attachment introduces some attenuation and
distortion on the line limiting the distance and/or data rate.
• For guided the transmission capacity depends on data rate or BW and depends critically
on the distance (whether medium is p-p or multipoint)
Twisted pair:
They are least expensive and most widely used. They are easier to work with but limited in
terms of data rate and distance. It consists of two insulated cu wires arranged in regular spiral
pattern as shown in figure 4.1. The wire pair acts like a communication link. Usually numbers of
these pairs are bundled together in a protective sheath into a cable. Twisting tends to decrease
the crosstalk. On long distance links, the twist length typically varies from 5-15 cm. The
thickness of wires may be 0.4-0.9mm. Over long distance, cables may contain hundreds of pairs.
It is most common for both analog and digital signals. It is commonly used in telephone network
and is the workhouse for communication within buildings.
Example: Individual residential telephone or in an office building. These were designed to
support voice traffic using analog signaling. However it can handle digital data traffic at modest
data rates. It is also commonly used for digital signaling with the use of a digital switch or digital
PBX with data rate of 64kbps commonly. It is for LAN supporting PC’s with commonly 10Mbps
(nowadays may 1Gbps also is possible). For long distance Twisted pair with 4Mbps or more is
used.
Transmission characteristics
Twisted pair can be used for both analog and digital transmission. For analog signals, amplifiers
are required about every 5-6 km. For digital transmission (analog and digital signals), repeaters
are required every 2-3 kms. Attention is very strong function of frequency. Other impairments
are also severe for twisted pair. It is susceptible to interference and noise. Impulse noise can
also intrude easily.
Coaxial Cable
Coaxial cable has traditionally been an important part of the long distance telephone network.
Today, it faces increasing competition from optical fiber, terrestrial microwave, and satellite.
Using frequency-division multiplexing (FDM), a coaxial cable can carry over 10,000 voice
channels simultaneously. Coaxial cable, like twisted pair, consists of two conductors, but
constructed differently to permit it to operate over a wider range frequency. It consists of hollow
outer cylindrical conductor that surrounds a single inner wire conductor. The inner conductor is
held in place by either regularly spaced insulating rings or a solid dielectric material. The outer
conductor is covered with jacket or shield. The physical description is illustrated in figure 4.2. A
single coaxial cable has a diameter of from 1 to 2.5 cm. Because of its shielded, concentric
construction, coaxial cable is much less susceptible to interference and crosstalk than twisted
pair. Coaxial cable can be used over long distances and support more stations on a shared line
than twisted pair. Coaxial cable is perhaps the most versatile transmission medium and is
enjoying widespread use in a wide variety of applications. The most important of these are used
in television distribution and Long-distance telephone transmission. Also they find applications
in Short-run computer system links and Local area networks. Coaxial cable is spreading rapidly
as a means of distributing TV signals to individual homes-cable TV. From its modest beginnings
as Community Antenna Television (CATV), designed to provide service to remote areas, cable TV
will eventually reach almost as many homes and offices as the telephone. A cable TV system
can carry dozens or even hundreds of TV channels at ranges up to a few tens of kilometers.
Coaxial cable is also commonly used for short range connections between devices. Using digital
signaling, coaxial cable can be used to provide high-speed I/O channels on computer systems.
Transmission Characteristics
Coaxial cable is used to transmit both analog and digital signals. Coaxial cable has frequency
characteristics that are superior to those of twisted pair, and can hence be used effectively at

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higher frequencies and data rates. Because of its shielded, concentric construction, coaxial
cable is much less susceptible to interference and crosstalk than twisted pair. The principal
constraints on performance are attenuation, thermal noise, and inter-modulation noise. The
latter is present only when several channels (FDM) or frequency bands are in use on the cable.
For long-distance transmission of analog signals, amplifiers are needed every few kilometers,
with closer spacing required if higher frequencies are used. The usable spectrum for analog
signaling extends to about 500 MHz. For digital signaling, repeaters are needed every kilometer
or so, with closer spacing needed for higher data rates.
Application as LAN Cables
Co-axial Cable has better shielding than twisted pairs and can span longer distance at higher
speeds. There are two types of coaxial cable that are used in LAN
1. Thick coax: They are used for Ethernets but are difficult to work with and are expensive. It
has greater degree of noise immunity and is strong. It requires vampire tap and a drop cable
to connect to the network.
2. Thin coax: They are easier to work and less expensive. It carries signal over shorter distance
and is preferred over thick coax as it needs simple BNC connector. They are flexible,
cheaper, soft and idle for office cabling.
Optical Fiber
An optical fiber is a thin, flexible medium capable of guiding an optical ray. Total internal
reflection is the basic principle on which the transmission of data takes place through fibers. If
the angle of incidence is sufficiently large, then the light in the fiber will reflect repeatedly in the
interface between the materials. The fiber need not be straight but can conduct light even when
bent. An optical fiber has a cylindrical shape and consists of three concentric sections; the core,
the cladding and the jacket. The core is the inner most sections and consists of one or more
very thin strands, or fibers, made of glass or plastic and is as shown in figure 4.5. The core has
a diameter in the range of 8 to 100?m. Each fiber is surrounded by its own cladding, a glass or
plastic coating that has optical properties different from those of the core.
Various glasses and plastics can be used to make optical fibers. The lowest losses have been
obtained using fibers of ultra-pure fused silica. Ultra pure fiber is difficult to manufacture; higher
loss multi component glass fibers are more economical and still provide good performance.
Plastic fiber is even less costly and can be used for short-haul links, for which moderately high
losses are acceptable.
The interface between the core and cladding acts as a reflector to confine light that would
otherwise escape the core. The outermost layer, surrounding one or a bundle of cladded fibers,
is the jacket. The jacket is composed of plastic and other material layered to protect against
moisture, abrasion, crushing and other environmental dangers. One of the most significant
technological breakthroughs in data transmission has been the development of practical fiber
optic communication systems. Optical fiber already enjoys considerable use in long-distance
telecommunications, and its use in military applications is growing. The continuing
improvements in performance and decline in prices, together with the inherent advantages of
optical fiber, have made it increasingly attractive for LAN.
Transmission Characteristics
Optical fiber transmits a signal encoded beam of light by means of total internal reflection. Total
internal reflection can occur in any transparent medium that has a higher index of refraction
than the surrounding medium. The principle is described in figure 4.4. In effect, the optical fiber
acts as a waveguide for frequencies in the range of about 1014 to 1015 Hz, this covers portions
of infrared and visible spectra.
Light from a source enters the cylindrical glass or plastic core. Rays at shallow angles are
reflected and propagated along the fiber; other rays are absorbed by the surrounding material.
This form of propagation is called Step-index multimode referring to the variety of angles that
will reflect. With multimedia transmission, multiple propagation paths exist, each with a
different path length and hence time to traverse the fiber. This causes signal elements (light
pulses) to spread out in time, which limits the rate at which data can be accurately received. In
other words, the need to leave spacing between the pulses limits data rate. This type of fiber is
best suited for transmission over very short distances. When the fiber core radius is reduced,
fewer angles will reflect. By reducing the radius of the core to the order of a wavelength, only a

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single angle or mode can pass: the axial ray. This single mode propagation provides superior
performance for the following reason, because there is a single transmission path with single
mode transmission. The distortion found in multimode cannot occur. Singlemode is typically
used for long distance applications, including telephone and cable television.
Finally, by varying the index of refraction of the core, a third type of transmission, known a
graded index multimode, is possible. This type is intermediate between the other two in
characteristics. The higher refractive index at the center makes the light rays moving down the
axis advance more slowly than those curves helically because of the graded index, reducing its
travel distance. The shortened path and higher speed allows light at the periphery to arrive at a
receiver at about the same time as the straight rays in the core axis. Graded index fibers are
often used in LANs.
Applications
The advantages of optical fiber over twisted pair and coaxial cable become more compelling as
the demand for all types of information (voice, data, image and video) increases. Five basic
categories of applications have become important for optical fiber, they are Long-haul trunks,
Metropolitan trunks, Rural exchange trunks, Subscriber loops, and Local area networks.
Long-haul transmission:
It is becoming increasingly common in the telephone network. Long-haul routes average about
1500 kms in length and offer higher capacity (typically 20,000 to 60,000 voice channels). These
systems compete economically with microwave. Undersea optical fiber cables have also enjoyed
increasing use.
Metropolitan trunking:
These circuits have an average length of 12 km and may have as many as 1,00,000 voice
channels in a trunk group. Most facilities are installed in underground conduits and are repeater-
less, joining telephone exchange in a metropolitan or city area. Included in this category are
routes that link long haul microwave facilities that terminate at a city perimeter to the main
telephone exchange building downtown.
Rural exchange trunks:
These have circuit lengths ranging from 40 to 60km and link towns and villages. In the United
States, they often connect the exchanges of different telephone companies. Most of these
systems have fewer than 5000 voice channels. The technology used in these applications
competes with microwave facilities.
Subscriber loop circuits:
These are fibers that run directly from the central exchange to a subscriber. These facilities are
beginning to displace twisted pair and coaxial cable links as the telephone networks evolve into
full service networks capable of handling not only voice and data, but also image and video.
Application as LAN Cable
Standards have been developed and products introduced for optical fiber networks that have a
total capacity of 100 Mbps to 1 Gbps. Recent Achievable bandwidth is in excess of 50,000 Gbps
i.e. 50 Tbps but Current limit is 10 Gbps. It can support hundreds or even thousand of stations in
a large office building of a complex of buildings.
Comparison of fiber optics and copper wire
The following characteristics distinguish optical fiber from twisted pair or coaxial cable:
Greater capacity:
The potential bandwidth, and hence data rate, of optical fiber is immense, data rates of hundred
of Gbps over tens of kilometers have been demonstrated. Compare this to the practical
maximum of hundreds of Mbps over about 1km for coaxial cable and just a few Mbps over 1km
or up to 100Mbps to 1Gbps over a few tens of meters for twisted pair.
Smaller size and lighter weight:
Optical fibers are considerably thinner than coaxial cable or bundled twisted – pair cable at least
an order of magnitude thinner for comparable information transmission capacity. For cramped
conduits in buildings and underground along public rights-of-way, the advantage of small size is
considerable. The corresponding reduction in weight reduces structural support requirements.

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Lower attenuation:
Attenuation is significantly lower for optical fiber than for coaxial cable or twisted pair and is
constant over a wide range.
Electromagnetic Isolation:
Optical fiber systems are not affected by external electromagnetic fields. Thus the systems are
not vulnerable to interference, impulses noise or crosstalk. By the same token, fibers do not
radiate energy, so there is little interference with other equipment and there is a high degree of
security from eavesdropping. In addition, fiber is inherently difficult to tap.
Greater repeater spacing:
Fewer repeaters mean lower cost and fewer sources of error. The performance of optical fiber
systems from this point of view has been steadily improving. Repeater spacing in the tens of
kilometers for optical fiber is common, and repeater spacing of hundreds of kilometers have
been demonstrated. Coaxial and twisted pair systems generally have repeaters every few
kilometers.

3 What are different types of satellites?

Ans Three types of satellites GEO, MEO and LEO
Classification of satellites : Satellite orbits may be classified in a number of ways:
1. The orbit may be circular, with the center of the circle at the center of the earth, or
elliptical, with the earth's center at one of the two foci of the ellipse.
2. A satellite may orbit around the earth in different planes. An equatorial orbit is directly
above the earth's equator. A polar orbit passes over both poles. Other orbits are referred to
as inclined orbits.
3. The altitude of communications satellites is classified as geostationary orbit (GEO),
medium earth orbit (MEO), and low earth orbit (LEO), as explained subsequently.
Geostationary Satellites repetition
Satellites used for telecommunications are placed in geostationary orbits in the equatorial plane
35,800 km above the earth's surface. They have an orbiting time of 24 hours which, because of
the earth's rotation, gives them the appearance of being stationary. Approximately one third of
the earth's surface is covered by an antenna with global radiation. Satellite links are used in
national as well as international telecommunications networks.
Intercontinental use has decreased in favor of optical submarine cables. The transmission
properties of satellite links are excellent and problems are few. However, the long distance
between terrestrial stations via the satellite does cause a 240 ms delay, which in itself is
troublesome to voice communication and which may give echoes with a propagation time of
about 0.5 seconds. repetition The most common type of communications satellite today is the
geostationary (GEO) satellite, first proposed by the science fiction author Arthur C. Clarke, in a
1945 article in Wireless World. If the satellite is in a circular orbit 35,863 km above the earth's
surface and rotates in the equatorial plane of the earth, it will rotate at exactly the same angular
speed as the earth and will remain above the same spot on the equator as the earth rotates!
Figure 6.3 depicts the GEO orbit in scale with size of the earth; the satellite symbols are
intended to suggest that there are many satellites in GEO orbit, some of which are quite close
together.
The GEO orbit has several advantages to recommend it:
a. 1 Because the satellite is stationary in relation to the earth, there is no problem with
frequency changes due to the relative motion of the satellite and antennas on earth
(Doppler effect).
b. 2 Tracking the satellite by its earth stations is simplified.
c. 3 At 35,863 km above the earth the satellite can communicate with roughly a fourth of
the earth; three satellites in geostationary orbit separated by 120° cover most of the
inhabited portions of the entire earth excluding only the areas near the north and south
poles.

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On the other hand, there are problems:

a. 4 The signal can get quite weak after traveling over 35,000 km.
b. 5 The polar regions and the far northern and southern hemispheres are poorly served by
geostationary satellites.
c. 6 Even at the speed of light, about 300,000 km/s, the delay in sending a signal from a
point on the equator beneath the satellite to the satellite and back is substantial.
Medium-Earth Orbit Satellites
MEO Satellites have the following characteristics:
1. Circular orbit at an altitude in the range 5000 to 12,000 km.
2. The orbit period is about 6 hours.
3. The diameter of coverage is from 10,000 to 15,000 km.
4. Round-trip signal propagation delay is less than 50 ms.
5. The maximum time that the satellite is visible from a fixed point on earth (above the radio
horizon) is a few hours.
MEO satellites require much fewer handoffs than LEO satellites. While propagation delay to
earth from such satellites and the power required are greater than for LEOs, they are still
substantially less than for GEO satellites. New ICO, established in January 1995, proposed a MEO
system.
Launches began in 2000. Twelve satellites, including two spares, are planned in 10,400-km-high
orbits. The satellites will be divided equally between two planes tilted 45 to the equator.
Proposed applications are digital voice, data, facsimile, high-penetration notification, and
messaging services.
In order to overcome the delay and to complement current terrestrial cellular networks;
companies that want to provide satellite – based data communications are mostly deploying
medium earth orbit (MEO) / low earth orbit (LEP) satellite constellations.
Low-Earth Orbit Satellites
LEO Satellites have the following characteristics:
1. Circular or slightly elliptical orbit at under 2000 km. Proposed and actual systems are in the
range 500 to 1500 km.
2. The orbit period is in the range of 1.5 to 2 hours.
3. The diameter of coverage is about 8000 km.
4. Round-trip signal propagation delay is less than 20 ms.
5. The maximum time from a fixed point on earth (above the radio horizon) is up to 20 minutes.
6. Because the motion of the satellite relative to a fixed point on earth is high, the system must
be able to cope with large Doppler shifts, which change the frequency of the signal.
7. The atmospheric drag on a LEO satellite is significant, resulting in gradual orbital
deterioration.
LEO satellites have a number of advantages over GEO satellites. In addition to the reduced
propagation delay mentioned previously, a received LEO signal is much stronger than that of
GEO signals for the same transmission power. LEO coverage can be better localized so that
spectrum can be better conserved. For this reason, this technology is currently being proposed
for communicating with mobile terminals and with personal terminals that need stronger signals
to function. On the other hand, to provide broad coverage over 24 hours, many satellites are
needed.

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MI0026 – Computer Network

Set- 2
1 Differentiate the working between pure ALOHA and slotted ALOHA.
Ans The Aloha protocol is an OSI layer 2 protocols for LAN networks with broadcast topology.
The first version of the protocol was basic:
i. If you have data to send, send the data
ii. If the message collides with another transmission, try resending later
The Aloha protocol is an OSI layer 2 protocol for LAN. Pure Aloha had a maximum throughput of
about 18.4%. This means that about 81.6% of the total available bandwidth was essentially
wasted due to losses from packet collisions. The basic throughput calculation involves the
assumption that the aggregate arrival process follows a Poisson distribution. For successful
transmission of one frame, the vulnerable time is twice the frame time, as shown. That is the
average number of arrivals – 2G. Therefore, the lambda parameter in the Poisson distribution
becomes 2G. The mentioned peak is reached for G = 0.5 resulting in a maximum throughput of
0.184, i.e. 18.4%.

Pure ALOHA Vulnerable period for the node: frame

An improvement to the original Aloha protocol was Slotted Aloha, which introduced
discrete timeslots and increased the maximum throughput to 36.8%. The throughput for pure
and slotted ALOHA system is as shown. A station can send only at the beginning of a timeslot,
and thus collisions are reduced. In this case, the average number of aggregate arrivals is G
arrivals per frame time. This leverages the lambda parameter to be G. The maximum
throughput is reached for G = 1.

Throughput versus offered load traffic

It should be noted that Aloha's characteristics are still not much different from those
experienced today by Wi-Fi, and similar contention-based systems that have no carrier sense
capability. There is a certain amount of inherent inefficiency in these systems. It is typical to see
these types of networks' throughput break down significantly as the number of users and
message burstiness increase. For these reasons, applications which need highly deterministic
load behavior often use token-passing schemes (such as token ring) instead of contention
systems.
For instance ARCNET is very popular in embedded applications. Nonetheless, contention based
systems also have significant advantages, including ease of management and speed in initial
communication. Slotted Aloha is used on low bandwidth tactical Satellite communications
networks by the US Military, subscriber based Satellite communications networks, and contact
less RFID technologies. With Slotted Aloha, a centralized clock sent out small clock tick packets
to the outlying stations. Outlying stations were only allowed to send their packets immediately

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after receiving a clock tick. If there is only one station with a packet to send, this guarantees
that there will never be a collision for that packet. On the other hand if there are two stations
with packets to send, this algorithm guarantees that there will be a collision, and the whole of
the slot period up to the next clock tick is wasted. With some mathematics, it is possible to
demonstrate that this protocol does improve the overall channel utilization, by reducing the
probability of collisions by a half.

2 Write down distance vector algorithm. Explain path vector protocol.

Ans Distance vector algorithms
Distance vector algorithms use the Bellman-Ford algorithm. This approach assigns a number,
the cost, to each of the links between each node in the network. Nodes will send information
from point A to point B via the path that results in the lowest total cost (i.e. the sum of the costs
of the links between the nodes used).
The algorithm operates in a very simple manner. When a node first starts, it only knows of its
immediate neighbors, and the direct cost involved in reaching them. (This information, the list of
destinations, the total cost to each, and the next hop to send data to get there, makes up the
routing table, or distance table.) Each node, on a regular basis, sends to each neighbor its own
current idea of the total cost to get to all the destinations it knows of. The neighboring node(s)
examine this information, and compare it to what they already 'know'; anything which
represents an improvement on what they already have, they insert in their own routing table(s).
Over time, all the nodes in the network will discover the best next hop for all destinations, and
the best total cost. When one of the nodes involved goes down, those nodes which used it as
their next hop for certain destinations discard those entries, and create new routing-table
information. They then pass this information to all adjacent nodes, which then repeat the
process. Eventually all the nodes in the network receive the updated information, and will then
discover new paths to all the destinations which they can still "reach".
Path vector protocol
Distance vector and link state routing are both intradomain routing protocols. They are used
inside an autonomous system, but not between autonomous systems. Each network in an
internetwork is independent of all the others, it is often referred to as an Autonomous System
(AS). Both these routing protocols become intractable in large network and cannot be used in
Interdomain routing. Distance vector routing is subject to instability if there are more than few
hops in the domain. Link state routing needs huge amount of resources to calculate routing
tables. It also creates heavy traffic because of flooding.
Path vector routing is used for intra domain routing. It is similar to Distance vector routing. In
path vector routing we assume there is one node (there can be many) in each autonomous
system which acts on behalf of the entire autonomous system. This node is called speaker node.
The speaker node creates routing table and advertises it to neighboring speaker nodes in
neighboring autonomous systems. The idea is same as Distance vector routing except that only
speaker nodes in each autonomous system can communicate with each other. The speaker
node advertises the path, not the metric of the nodes, in its autonomous systems or other
autonomous systems.

3 State the working principle of TCP segment header and UDP header.
Ans. TCP segment structure
A TCP segment consists of two sections: header and data The header consists of 11 fields, of
which only 10 are required. The eleventh field is optional (pink background in table) and aptly
named: options.
Source port: This field identifies the sending port.
a Destination port: This field identifies the receiving port.
b Sequence number: The sequence number has a dual role. If the SYN flag is present then this is
the initial sequence number and the first data byte is the sequence number plus 1. Otherwise if
the SYN flag is not present then the first data byte is the sequence number.

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• Acknowledgement number: If the ACK flag is set then the value of this field is the
sequence number that the sender of the acknowledgement expects next.

• Data offset: This 4-bit field specifies the size of the TCP header in 32-bit words. The
minimum size header is 5 words and the maximum is 15 words thus giving the minimum size
of 20 bytes and maximum of 60 bytes. This field gets its name from the fact that it is also
the offset from the start of the TCP packet to the data.
• Reserved: 4-bit reserved field for future use and should be set to zero.
• Flags (Control bits): This field contains 8 bit flags:
o CWR: Congestion Window Reduced (CWR) flag is set by the sending host to indicate that
it received a TCP segment with the ECE flag set
o ECE: ECN-Echo flag. Used to indicate that the tcp peer is ECN capable during 3-way
handshake
o URG: Urgent pointer field is significant
o ACK: Acknowledgement field is significant
o PSH: Push function
o RST: Reset the connection
o SYN : Synchronize sequence numbers
o FIN: No more data from sender

• Window: The number of bytes the sender is willing to receive starting from the
acknowledgement field value

• Checksum: The 16-bit checksum field is used for error-checking of the header and data.
UDP protocol
User Datagram Protocol (UDP) is one of the core protocols of the Internet protocol suite. Using
UDP, programs on networked computers can send short messages sometimes known as
datagrams (using Datagram Sockets) to one another. UDP is sometimes called the Universal
Datagram Protocol or Unreliable Datagram Protocol. UDP does not guarantee reliability or
ordering in the way that TCP does.
Datagrams may arrive out of order, appear duplicated, or go missing without notice. Avoiding
the overhead of checking whether every packet actually arrived makes UDP faster and more
efficient, at least for applications that do not need guaranteed delivery. Time-sensitive
applications often use UDP because dropped packets are preferable to delayed packets. UDP's
stateless nature is also useful for servers that answer small queries from huge numbers of
clients. Unlike TCP, UDP supports packet broadcast (sending to all on local network) and
multicasting (send to all subscribers). Common network applications that use UDP include the
Domain Name System (DNS), streaming media applications such as IPTV, Voice over IP (VoIP),
Trivial File Transfer Protocol (TFTP) and online games. UDP uses ports to allow application-to-
application communication. The port field is 16-bits so the valid range is 0 to 65,535. Port 0 is
reserved, but is a permissible source port value if the sending process does not expect
messages in response. Ports 1 through 1023 are named "well-known" ports and on Unix-derived
operating systems, binding to one of these ports requires root access. Ports 1024 through
49,151 are registered ports. Ports 49,152 through 65,535 are ephemeral ports and are used as
temporary ports primarily by clients when communicating to servers.
Packet structure
UDP is a minimal message-oriented transport layer protocol. In the Internet protocol suite, UDP
provides a very simple interface between a network layer below and a session layer or
application layer above. UDP provides no guarantees to the upper layer protocol for message
delivery and a UDP sender retains no state on UDP messages once sent. For this reason UDP is
sometimes called the Unreliable Datagram Protocol. UDP adds only application multiplexing and
check summing of the header and payload. If any kind of reliability for the information
transmitted is needed, it must be implemented in upper layers.
+ Bits 0 - 15 16 - 31 0 Source Port Destination Port
32 Length Checksum
64 Data
Figure 8.2: UDP header format
The UDP header consists of only 4 fields. The use of two of those is optional

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Source port
This field identifies the sending port when meaningful and should be assumed to be the port to
reply to if needed. If not used, then it should be zero.
Destination port
This field identifies the destination port and is required.
Length
A 16-bit field that specifies the length in bytes of the entire datagram: header and data. The
minimum length is 8 bytes since that's the length of the header. The field size sets a theoretical
limit of 65,527 bytes for the data carried by a single UDP datagram.
Checksum
The 16-bit checksum field is used for error-checking of the header and data.
With IPv4
When UDP runs over IPv4, the method used to compute the checksum is defined within RFC
768:

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MI0027- Business Intelligence Tools

Set- 1
1 Define the term business intelligence tools? Discuss the roles in Business Intelligence
project
Ans Business Intelligence (BI) is a generic term used to describe leveraging the organizational
internal and external data, information for making the best possible business decisions. The field
of Business intelligence is very diverse and comprises the tools and technologies used to access
and analyze various types of business information. These tools gather and store the data and
allow the user to view and analyze the information from a wide variety of dimensions and
thereby assist the decision-makers make better business decisions. Thus the Business
Intelligence (BI) systems and tools play a vital role as far as organizations are concerned in
making improved decisions in the current cut throat competitive scenario.
Business intelligence tools are a type of application software designed to help in making better
business decisions.
A business intelligence project can be successful only when the BI system is able to deliver the
business value. Thus, the most important determinant of long-term success of a BI system is the
‘Business Value’ delivered by such a system.
The business value that organizations derive through the use of BI Systems is as follows:
a. The BI applications provide data access for broad, important user community. This
enables the managers to build their own reports at their convenience.
b. The BI applications assist in data validation. For example, a report that compares the
sales by product type, gender and store would pull the data from three different
dimensions; product, customer and store.
c. The BI applications can generate more complex queries and they can be effectively used
to get the ongoing performance metrics.
BI system delivers business value from the data available within an organization for a given set
of business drivers of an organization. However, delivery of the business value is not that easy
in practice. The manager of a BI system has to take care of the following steps in order to
deliver the intended business value:
Step 1: Ensuing strong business partnership
Developing a solid business sponsorship is the first step to start a BI project. Your business
sponsors (it is generally good to have more than one) will take a lead role in determining the
purpose, content, and priorities of the system and so the business sponsors are expected to
have the following skills;
o Visionary - a sense for the value and potential of information with clear, specific ideas as
to how to apply it.
o Resourceful - able to obtain necessary resources and facilitate the organizational change
that the BI system will bring about.
o Reasonable - can temper the enthusiasm with the understanding that the BI system
takes time and resources to come out as a major information system.
Step 2: Defining organizational-level business requirements
The long-term goal of a BI system is to build an organizational-wide information infrastructure.
This cannot be done unless the BI system developing team understands business requirements
at an organizational level. Thus the process of understanding the organizational-level business
requirements includes the following steps:
o Establishing the initial Project Scope
o Interviewing the BI System stakeholders
o Gathering the organizational level business requirements
o Preparation of an overall Requirements document
Step 3: Prioritizing the business requirements

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The prioritization process is a planning meeting that involves the BI system developing team,
the business sponsors, and other key senior managers across the organization. A Prioritization
Grid can be developed for the set of business processes identified in the previous step against
the feasibility of a business process and the business value that the processes likely generate.
Thus the output of a prioritization process is a list of business processes in the priority order.
Step 4: Planning the Business Intelligence project
After getting the complete understanding about the business priorities, the BI System
developing team revisits the Project plan. Now the plan is made based on the priority of the
business processes detailed in the previous step.
Step 5: Defining the Project-level business requirements
Based on the previous steps, now the BI System developing team defines and documents the
project-level business requirements. These requirements act as guidelines while developing the
BI system.

2 Discuss enterprise data model in detail?

Ans Enterprise Data Model
The Enterprise Data Model (EDM) is an approach to develop a data warehouse data model. An
EDM is a consistent definition of all the data elements common to the business, from a high-
level business view to a generic logical data design. Using this model, you can derive the
general scope and understanding of the business requirements and the model also includes
links to the physical data designs of the individual applications.
A typical EDM can be any of the following types;
o Phased Enterprise Data Modeling
o A simple Enterprise Data Modeling
Phased Enterprise Data Modeling
There are several methodologies for Enterprise Data Modeling in practice. Some authors
propose a 3-tiered methodology (such as conceptual, logical and physical data model) or a 5-
tiered model. According to the Worldwide Solution Design and Delivery Method proposed by
IBM, a phased enterprise data modeling includes the following tiers:
o ISP: Information System Planning
o BAA: Business Area Analysis
o BSD: Business System Design
o BSI: Business System Implementation
o BSM: Business System Maintenance
Whatever is the type of methodology used, the methodology focuses on the phased or layer
approach and the phases include the following tasks or phases:
o Information Planning
o Business Analyzing
o Logical data modeling
o Physical data design
The tasks or phases in a phased enterprise data model. The size of the phases represents the
amount of information to be included in a specific phase. It is observed from the figure that the
amount of information is minimal at the Information Planning phase, but increases in later
phases.
The Information Planning phase provides the highly consolidated view of the business wherein
you can view the business concepts. These business concepts can be categorized into business
entity, super entity,or subject area and each of these items maintain related data elements.
For example, the business concepts in an organization can be customer, product, policy,
schedule, etc. This phase provides the scope and architecture of a data warehouse and acts as a
single, comprehensive view for the remaining phases.
o The Business Analyzing phase provides means for further defining of the concepts provided
in the above phase. This phase is described in business terms to make business people

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understand the data details without any special training. The purpose of the phase is to
gather and arrange the business requirements and define the business terms.
o The Logical Data Modeling phase is organizational-wise in scope and generic to all
applications located in the next phases. This model typically consists of several hundred
entities and contains the identification and definition of all entities, relationships and
attributes.
o The entities of the logical data model can be further portioned into views by subject areas or
by applications. This phase can be divided into two types; ‘Generic logical data model’ for
the organizational level and ‘Logical application model’ for the application level of data view.
o The Physical Data Design is to design for the actual physical implementation and applies
physical constraints, such as space, performance, and the physical distribution of the data.
Simple Enterprise Data Model
A simple Enterprise Data Model is a data model wherein some of the core components that are
required for the data warehouse modeling can be extracted and grouped to use in a phased
approach. For a simple EDM, you can make a list of around 20 subject areas and then draw a
subject area model of the organization by defining the business relationships among the subject
areas. Then you are required to define the contents of each of these subject areas. For example,
when you define a customer, you can also mention whether the customer is a prospective
customer or an ex-customer.
Advantages and Limitations of EDM
An EDM will ensure the following advantages in an organization compared to that of an
application or department model:
o EDM stands as a single development base for the applications andthereby promotes the
integration of the existing applications
o This model provides a single set of consistent data definitions
o The model supports sharing of the data among various business areas But organizations
are facing the following challenges while implementing an
EDM:
o All business areas of the organization need to be involved concurrently to deliver the best
possible value of EDM to the business, which is an unrealistic expectation As the scope of
the EDM tends to cover the entire organization, the size of the project would be so large that
it seldom appropriates results in a reasonable time period
o The people who involve in the EDM project are expected to have both a broad understanding
of the business and a detailed knowledge of a specific business area.

3 Discuss the important phases involved in the process of knowledge discovery

process?
Ans The Knowledge Discovery Process
Data mining helps you to understand the substance of the data in a special unsuspected way. It
unearths patterns and trends in the raw data that you are hardly aware of. Thus data mining is
seen by the experts as a knowledge discovery process. This process aims at uncovering the
hidden knowledge manifested in the data as relationships or patterns.
o Data mining techniques discover the relationship between two or more different objects
along with the time dimension. For instance, the tools may discover the relationships
between bread and chips and between milk and cheese packs, especially in an evening
rush hour. Sometimes, you may determine the relationship between the attributes of the
same object.
o Pattern discovery is another important outcome of the data mining tools. For instance,
the credit card companies use the data mining tools to mine the usage patterns of
thousands of card-holders that help them to design an appropriate marketing campaign.

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o The important phases involved in the process of knowledge discovery process is shown in
Fig 10.1. Each of these phases is discussed below.
Determination of Business Objectives
This is the first phase where you make an attempt to understand the purpose of going for data
mining techniques. You can state these objectives as:
o How can I detect the frauds in the credit card usage?
o What is the best marketing campaign to increase my current sales?
o Can I identify the associations between the products that sell together?
Whatever data mining method is employed later, this is an important phase as the rest of the
phases are determined as per the objectives set in this phase.
Selection and Preparation of Data
This phase consists of selection of the data, preprocessing of the data, and transformation of the
data. Based on the business objectives identified in the previous phase, select the appropriate
data and extract it from the data warehouse. Then you preprocess the data by enriching the
selected data with the appropriate external data. Also, remove the noisy data that is out of
range and make sure that you have selected the entire data with the characteristics required to
attempt the business objective detailed in the previous phase.
Application of appropriate Mining techniques
This is a crucial phase wherein the knowledge discovery engine applied the selected algorithm
to the prepared data. The output of this phase is a set of relationships or patterns. But this
phase and the next phase are to be performed in an iterative manner as you may have to adjust
the data and redo the step after an initial evaluation.
Evaluation of Data Mining Results
In the data selected in the second phase, there are many potential patterns or relationships.
During this phase, you examine all the resulting patterns. You can see interesting patterns and
relationship between various parameters; products, customers, sales, per unit cost, etc. you
may apply the filtering mechanism and come out with the appropriate and realistic patterns of
data.
Presentation of Data Discoveries
You may present the data discoveries in the form of visual navigation, charts, graphs, and text
as well. The presentation mainly deals with highlighting the important discoveries you have
found and storing them in the knowledge base for future use.
Incorporation of Usage of Discoveries
This is the phase where you apply the results obtained in the earlier phases into business
actions. You may assemble the results of the discovery in the best meaningful manner so that
they can be applied for the effective improvement of the business.

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MI0027- Business Intelligence Tools

Set- 2
1 What are the basic fundamentals of data ware house? (Refer Unit 2) [10 Marks]
Ans Fundamentals of a Data Warehouse
In simple terms, a data warehouse is the repository of an organization's historical data (also
termed as the corporate memory). For example, an organization would get the information that
is stored in its data warehouse to find out what day of the week they sold the most number of
gadgets in May 2002, or how employees were on sick leave for a specific week. A data
warehouse is a database designed to support decision making in an organization. Here, the data
from various production databases are copied to the data warehouse so that queries can be
forwarded without disturbing the stability or performance of the production systems. So the
main factor that leads to the use of a data warehouse is that complex queries and analysis can
be obtained over the information without slowing down the operational systems. While
operational systems are optimized for simplicity and speed of modification (online transaction
processing, or OLTP), the data warehouse is optimized for reporting and analysis (online
analytical processing, or OLAP). (The concepts of OLTP and OLAP are discussed in later Units).
Apart from traditional query and reporting, a data warehouse provides the base for the powerful
data analysis techniques such as data mining and multidimensional analysis (discussed in detail
in later Units). Making use of these techniques will result in easier access to the information you
need for informed decision making.
Evolution of Data Warehouse
Data Warehouses became a distinct type of computer databases during the early 1990s. The
intention to develop these databases is to meet the growing demand for management
information and analysis as the operational systems were unable to meet this need for a range
of reasons:
o The processing load of reporting reduced the response time of the operational systems
o The database designs of operational systems were not optimized to prove information
analysis and reporting
o Generally, organizations had more than one operational system and so organizational-wide
reporting was not possible from a single system
o Report generation through operational systems often required specific computer programs
which was time-consuming and expensive
As a result, separate computer databases began to be built that were specifically designed to
support management information and analysis purposes. These data warehouses were able to
bring in data from a range of different data sources (such as mainframe computers,
minicomputers, personal computers, etc.) and integrate this information in a single place.
This capacity, coupled with user-friendly reporting tools and freedom from operational impacts,
has led to a growth of data warehouses. As technology improved (lower cost for more
performance) and user requirements increased (faster data load cycle times and more features),
data warehouses have evolved through several fundamental stages:
Offline Operational Databases:
During this stage, data warehouses are developed by simply copying the database of an
operational system to an off-line server where the processing load of reporting does not impact
on the operational system's performance.
Offline Data Warehouse:
Data warehouses in this stage are updated on a regular basis (usually daily, weekly or monthly)
from the operational systems and the data is stored in an integrated reporting- oriented data
structure.
Real Time Data Warehouse:

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Data warehouses at this stage are updated on a transaction or event basis. The data is updated
every time an operational system performs a transaction (e.g. an order or a delivery or a
booking, etc.)
Integrated Data Warehouse:
Data warehouses at this stage are used to generate activity or transactions that are passed
back into the operational systems for use in the daily activity of the organization.
Need of a Data Warehouse
Typically, the data in an organization is available in different formats, exist on various platforms,
and reside in many different file and database structures developed by different vendors. Thus
organizations have had to develop perhaps hundreds of programs to extract, prepare, and
consolidate data for use, analysis and reporting. Also, decision makers often want to dig deeper
into the data once initial findings are made and this would require development of new
programs or modification of the current programs. Thus the process is becoming costly,
inefficient, and time-consuming. Also, the volume of data in an organization is normally very
large, particularly when one considers the requirements for historical data analysis. Thus the
data analysis programs are required to scan vast amounts of that data, which may result in a
negative impact on operational applications. As operational applications are more performance
sensitive, there is a need to separate the two environments to minimize conflicts and
degradation of performance in the operational environment. In such a scenario, the data
warehousing concept has evolved out of the need for easy access to a structured store and
retrieval of quality data that can be effectively used for decision making. Data warehousing
implements the process to access different types of data sources (called heterogeneous data
sources), clean, filter, and transform the data; and store the data in a structure that is easy to
access, understand, and use. The data is then used for query, reporting, and data analysis. As
such, the access, use, technology, and performance requirements in a data warehousing
environment are quite different from those in a transaction-oriented operational environment.
Characteristics of a Data Warehouse
According to Bill Inmon, who is considered to be the Father of Data warehousing, the data in a
Data Warehouse consists of the following characteristics:
Subject oriented
The first feature of DW is its orientation toward the major subjects of the organization instead of
applications. The subjects are categorized in such a way that the subject-wise collection of
information helps in decision-making. For example, the data in the data warehouse of an
insurance company can be organized as customer ID, customer name, premium, payment
period, etc. rather auto insurance, life insurance, fire insurance, etc.
Integrated
The data contained within the boundaries of the warehouse are integrated. This means that all
inconsistencies regarding naming convention and value representations need to be removed in
a data warehouse. For example, one of the applications of an organization might code gender as
‘m’ and ‘f’ and the other application might code the same functionality as ‘0’ and ‘1’. When the
data is moved from the operational environment to the data warehouse environment, this will
result in conflict.
Time variant
The data stored in a data warehouse is not the current data. The data is a time series data as
the data warehouse is a place where the data is accumulated periodically. This is in contrast to
the data in an operational system where the data in the databases are accurate as of the
moment of access.
Non-volatility of the data
The data in the data warehouse is non-volatile which means the data is stored in a read-only
format and it does not change over a period of time. This is the reason the data in a data
warehouse forms as a single source for all decision system support processing. Keeping the
above characteristics in view, ‘data warehouse’ can be defined as a subject-oriented, integrated,
non-volatile, time-variant collection of data designed to support the decision-making
requirements of an organization.
Types of Data Warehouses

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The Data Warehouses can be divided into two types:

o Enterprise Data Warehouse
o Data Mart
Enterprise Data Warehouse
The Enterprise data warehouse consists of the data drawn from multiple operational systems of
an organization. This data warehouse supports timeseries and trend analysis across different
business areas of an organization and so can be used for strategic decision-making. Also, this
data warehouse is used to populate various data marts.
Data Mart
As data warehouses contain larger amounts of data, organizations often create ‘data marts’ that
are precise, specific to a department or product line. Thus data mart is a physical and logical
subset of an Enterprise data warehouse and is also termed as a department-specific data
warehouse. Generally, data marts are organized around a single business process. There are
two types of data marts; independent and dependant. The data is fed directly from the legacy
systems in case of an independent data mart and the data is fed from the enterprise data
warehouse in case of a dependent data mart. In the long run, the dependent data marts are
much more stable architecturally than the independent data marts.
Advantages and Limitations of a DW System
Use of a data warehouse brings in the following advantages for an organization:
End-users can access a wide variety of data.
o Management can obtain various kinds of trends and patterns of data.
o A warehouse provides competitive advantage to the company by providing the data and
timely information.
o A warehouse acts as a significant enabler of commercial business applications viz., Customer
Relationship Management (CRM)applications.
However, following are the concerns that one has to keep in mind while using a data warehouse:
o The scope of a Data warehousing project is to be managed carefully to attain the defined
content and value.
o The process of extracting, cleaning and loading the data and finally storing it into a data
warehouse is a time-consuming process.
o The problems of compatibility with the existing systems need to be resolved before building
a data warehouse.
o Security of the data may become a serious issue, especially if the warehouse is web
accessible.
o Building and maintenance of the data warehouse can be handled only through skilled
resources and requires huge investment.

2 What are the term data partitioning? What are the objectives and criteria of
partitioning?
Ans: Data Partitioning
The term ‘partition’ refers to the physical status of a data structure that has been divided into
two or more separate structures. But logical partitioning of the data is also required to
understand and use the data in a better way. In such a case, the logical partitioning overlaps
with the physical partitioning.
Objectives of partitioning
he partitioning of the data in a data warehouse enables the accomplishment of the following
objectives:
o Flexible access to the data
o Easy and efficient data management services
o Easy to restructure, index, sequentially scan, recover, reorganize and monitor
o Ensure scalability of the data warehouse
o Enable the data warehouse elements to be portable

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Criteria of Partitioning
There are a number of important criteria to be considered for partitioning of the data and some
of them include:
o Product (according to the line of business)
o Time period (date, week, or month)
o Geography (location)
o Department or organizational unit-wise
o A combination of the above
However, the choice of criteria is based on the business requirements and physical database
constraints. But ‘time period’ must always be considered while partitioning the data. Every
database management system has it own way of implementing the physical partitioning. But the
important consideration for selecting a database management system on which the data resides
is, support for partition indexing. Instead of system level partitioning, you can also consider
partitioning by application as this would provide flexibility in defining data over time, and
portability in moving the data to the other data warehouses.
But you have to understand that the issue of partitioning is closely related to the data
granularity modeling, multi-dimensional modeling and the ability of the specific database
management system to support data warehousing.
Logical Data Partitioning
The logical and physical partitioning of the data plays an important role to understand, maintain
and navigate the data warehouse in a better way. The physical partitioning is designed
according to the physical implementation requirements and constraints. But logical partitioning
of the data is much more important as it affects physical partitioning not only for the overall
structure but also the detailed table partitioning.
‘Subject area’ is considered to be the most common criterion to determine the overall logical
data partitioning and it can be defined as ‘a portion of a data warehouse that is classified by a
specific consistent perspective’. This perspective is usually based on the characteristics of the
data, such as product, customer, time period, account, geographical location, etc.
Partitioning of the data in a data warehouse environment is different from the partitioning in an
operational environment. In an operational environment, the partitioning is according to an
application or function because the operational environment has been built around transaction
oriented applications that perform a specific set of functions. Also, the objective is to perform
those functions as quickly as possible. The type of queries performed in an operational
environment is more tactical in nature and they are concerned with a specific point of time. But
the queries in a data warehouse environment are strategic in nature and are concerned with a
larger scope. Therefore the data in a data warehouse should be structured and oriented to
subject areas such as product or organizational unit. As you will remember, a data warehouse is
subject-oriented as per its definition and so the data is oriented to specific subject areas. In a
data warehouse modeling, identification of subject areas become useful in defining the following
criteria:
o Unit of the data model
o Unit of an executing project
o Unit of management of the data
o Basis for integration of the multiple implementations

3 What do you mean by data loading and its type?

Ans Data Loading
After the creation of load images, the next set of activities is to take the prepared data, apply it
to the data warehouse, and store it in the data warehouse database. Here, the data warehouse
will be offline during the loads. As the process of loading is a time-consuming activity, it is
preferred to divide the whole load process into smaller chunks and populate a few files at a
time. This enables you to run the smaller loads in parallel. Also, you can keep some parts of the
warehouse up and running while loading the other parts.
Types of Load

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There are three types of application of data to the data warehouse:

o Initial Load that involves populating all the data warehouse tables for the first time
o Increment Load that involves applying ongoing changes as necessary in a periodic
manner
o Full refresh that involves complete erasing of the contents of one or more tables and
reloading with fresh data (initial load is afresh of all the tables)
For instance, consider a product data. During the initial load, you extract the data for all
products from the source systems, integrate and transform it, and create load images to load
the data into the product dimension table. During an incremental load, you collect the changes
to the product data in the source systems since the previous extract, run the changes through
the integration and transformation process, and create output records to be applied to the
product dimension table. A full refresh is similar to the initial load wherein the fresh data is
reloaded.

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