They serve two purposes. The first is a means to count reptitions of your mantra. The larger “guru” bead indicated when the count starts over. The second is as a tangible reminder of your practice. Something you can touch to keep you in mind of the teachings.
The sum of a person’s actions in this and previous states of existence, viewed as deciding their fate in future existences. Karma in Sanskrit literally means “action”. It is not divine punishment or divine reward. There is no master of karma who decides on punishment. It is cause and effect. It is harmony and disharmony.