Entrepreneurship as Career Option

An educated person has broadly two career options. One is called wages or salary employment, Wherein people are employed in government service, public and private sectotrs and get fixed wage or salary. The other career option is entrepreneurial employment under which people set up their new venture. Wage employment is self-saturating. Once a valid, it blocks the employment opportunity to other for another ten years. On the other hand, the latter contributes towards national wealth and has a unique characteristic of self-generation.  Their starts a chain of activities that creates unending employment opportunities. Entrepreneurship promotes small activities that creates unending employment for investment into new ventures. It also provides an out let that create an urge among individuals to attain excellence in product design and related innovation. Thus, entrepreneurship provides a lasting solution to the acute problem of unemployment.

Read More

Entrepreneurship as a Process!!

In the last decade and a half there has been a resurgence of entrepreneurship in higher education. This revival is not from the traditional discipline of economic but from the discipline of business management. The business schools have instituted new courses in entrepreneurship.

While entrepreneur is a person who sets up a business, `Entrepreneurship` is considered as the process or action of setting up of the new venture and the venture so set-up is called the `enterprise`. Entrepreneurship has been considered as the propensity of mind to take a calculated risk with confidence to achieve a predetermined business objective. It is the risk taking ability of an individual coupled with the correct decision-making. Schumpeter described it a process and the entrepreneur as innovators who use the process to shatter the status quo through the combination of resources and new methods of commerce.

Read More

Concept of Entrepreneurship

    From the classical economists to the post-keynesian analysts, The topic of the entrepreneur has been surveyed, and observations, theories and pronouncements advanced. Not only were pure economists involved in the endeavors but also prominent social theorists such as Marx, Weber, Sombard and Veblen.
  In general, contemporary economists agree that the entrepreneur is a business leader and that his role in forecasting economic growth and development is a pivotal one. At present, however, there is no consensus at to what constitutes the issential activity, which makes the entrepreneur a crucial figure. While some economists have identified the basic entrepreneurial function as risk-taking, others have emphasised the coordination of production resources, the provision of capital or the introduction of innovations.

In the words of  A.H Cole, entrepreneurship is the purposeful activity of an individual or a group of associated individuals, undertaken to initiate, maintain or organise a profit-oriented business unit for the production or distribution or economic goods and services.

In other words, entrepreneurship means the function of creating something new, organising and coordinating and undertaking risk and handling economic uncertainty. Higgins define the terms as, entrepreneurship is meant the function of seeing investment and production opportunity. Organinsing an enterprise to undertake a new production process, raising capital, hiring labor  arranging for the supply of raw materials and selecting top managers for the day-to-day operation of the enterprise.

According to Peter F. Drucker, Entrepreneurship is neither a science nor an art. It is a practice. It has knowledge base. Knowledge in entrepreneurship is a means to end. In deed, what constitute knowledge in practice is largely defined by the ends, that is by the practice "Entrepreneurship is considerably less risky, if the entrepreneur is methodical and does not violate elementary and well known rulers."

Innovation and entrepreneurship are thus needed in society as much as in the economy, in public service institutions as much as in businesses. It is precisely because innovation and entrepreneurship are not "root and branch" but, "one step at a time", a product here, a policy there a public service yonder, because they are not planned but focused on this opportunity and that need; because, in other words, they are pragnostic rather than dogmatic and modest rather than grandiose - that they promise to keep any society, economiy, industry, public service, or business flexible and self-renewing.

Thus, entrepreneurship is a complex phenomenon, "some think of entrepreneurs primarily as innovators, some chiefly as managers of enterprise, some as bearers of risks, and others place major emphasis on their function as mobilisers and allocatiors of capital", In the Indian context, however, and entrepreneur may at best be defined as a person (or group of persons) responsible for the existence of a new business enterprise.

Related video:

Concept of Entrepreneurship

Read More

Meaning and Definitions of Entrepreneurhip

Meaning:
Entrepreneurship is the propensity to take calculated risks with confidence to achieve a pre-determined business or industrial objective. In substance, it is risk-taking ability of the individual, broadly coupled with correct decision-making. When one witnesses a community, who engage themselves in the industrial or commercial pursuits and appear to take risk and show enterprise, it is acknowledged to be a commercial class. The commercial class is a myth just like that of the so-called martial race.

Definitions:

Entrepreneurship is an elusive concept that cannot be defined precisely. How ever, people having different interests have defined 'Entrepreneurship' in a number of ways:

• Economists focus on "what happens when entrepreneurs act".
• Psychologists and Sociologists are interested in way they act.
• Management experts focus on how the entrepreneurs act, in the characteristics of entrepreneurial managers and the manner in which entrepreneurs achieve their goals.

"An entrepreneur is one who always searches for change, responds to it and exports it as an opportunity. Innovation is an instrument of 'entrepreneurship'."
                                                                                            ---- Peter F. Drucker.

"Entrepreneurship is a dynamic process of creating Inver mental wealth."
                                                                                            ---- Robert Ronstand

"The entrepreneur has a role of an industrialist in Adam Smith`s book, Wealth of nations he described the entrepreneur as an individual who forms an organisations for commercial purpose."

"Entrepreneur is an individual who bears the risk of operating a business in the face of uncertainity about future conditions."
                                                                                             ---- Encylopedia Britannica


Related video:

Read More

Limitations of Planning

Despite of many advantages of planning there may be some obstacles and limitations in this process. The follow are some of the planning.
1. Lack of Reliable data: Planning is based on various facts and figures supplied to the planners, which are difficult to procure absence of accurate data will upset the plan.
2. Expensive: Planning is an expensive process. The gathering of information and testing of various courses of action, setting up the planning machinery, require huge amount of money. Small companies can not afford to prepare plans.
3. Time consuming exercise: As planning involves a number of steps, a lot of time has to be devoted to plan before actual operations start.
4. Lack of workers initiatives: Under planning exercise worker has to act mechanically. It robs him of his interest in the work.
5. External factors may reduce utility: Besides internal factors, there are external factors is which adversely affect planning. These factors may be economic, social, political, technological or legal.
6. Psychological Hurdle: Human psychology also to an extent, places some hurdles in the success of planning. There is a certain degree of conservation in people which implies resistance to change.
7. Sudden emergencies: In case certain emergencies arise then the need of the hour is quick action and not advance planning. There situations may not be anticipated.

Read More

Significance of Planning

1. Minimizes uncertainty: Planning certainly minimizes future uncertainties by basing its decisions on past experiences and present situations.
2. Better utilisation of resources: All the resources are first identified and then operations are planned. All resources are put to best possible uses.
3. Economy in operation: The operations selected being among possible alternatives, there is an economy in operations.
4. Better co-ordination: Planning will lead to better co-ordination in the organisation which will ultimately lead to better results.
5. Encourage innovation: Planning helps innovative and creative thinking among managers because they will think of many new things while planning.
6. Planning makes control possible: Control cannot be exercised without planning. With the help of planning the actual output can be compared the desired one, difference is acquired and reasons are located to get necessary action towards unfavorable differences.
7. Planning helps motivation: The manager cannot only verify but can encourage workers to attain the targets. When tangible goals are insight it is easier to encourage the workers to reach those levels.
8. Planning ensures against failures and setbacks: Planning is based on estimates. It is an effort to visualise the future and attain goals through present action.
9. Management by exception possible: Planning fixes objectives of the organisation and all efforts should be made to achieve these objectives. Management should interfere in other aspects only when things are not going well. Thus by the introduction of management by exception, managers are given more time for planning. The objectives rather than wasting their time in directing day-to-day work.

Read More

Techniques of Planning

Planning will be useful only when it is effectively implemented. The following techniques makes the planning effective.
1. Consciousness for Planning: Planning will be effective only when there is proper climate for it.
The superiors should try to set objectives, review various goals and redraft them as is required for their effective implantation. The hurdles in the ways of planning should be removed. Every body should extend willing and co-operation for making the plans successful.
2. Initiative at top level: The initiative and support of top level management is essential for making the plans effective. The involvement of lower level management is also essential because execution will be more at these levels.
3. Proper communication: Communication among different levels in the organisation is very essential. If plans are not properly understood by those who are to implement them then these may not accheive the desired results. Communication provides a channel for the exchange of information among various persons without a proper communications system planning is bound to fail.
4. Participation in planning: The method and extent of participation will depend upon the type of organisation participating of persons at different levels may help in proper implementation of plans.
5. Emphasis on planning: Both long terms and short term plans should get proper emphasis. For effective implementation of planning both long-term and short-term plans should be given on equal weight-age.
6. Timing: Since the planning process is complex of any major and derivative plans and since plans are necessarily related to one another, it is important that they fit together, not only in terms of content and action, but also in terms of timing.

Read More

Planning Process

   Planning can be accomplished in a series of steps, it is called as planning process. It starts from perception of opportunities to realisation of opportunities. it determines the future course of action for utilizing resources in the best possible manner to get optimum possible results. The various steps in planning process are described below.

Steps in Planning process:

i) Awareness of opportunities: While planning basically managers are needed to know the availability of opportunities to the organisation. Opportunities are available from environment. These are new project can be had from changing needs of customers, technological changes, competitors weaknesses and innovative patterns of the organisation. Awareness of opportunities involves preliminary understanding and estimation of opportunities and analysing them in the light of strengths and weakness of the organisation for the purpose of assuming them. When the managers are utilising the opportunities, it is to be observed they should be free from threats.

ii) Establishing Objectives: The second steps in planning is to setup objectives for the enterprise as a whole, and for the departments and individuals. Objectives are to be set for the long run as well as for the short run. These are the end points for managerial course of action and they are the destination for all the activities. Objectives specify the expected results and show how the destination is to be achieved and where emphasis is to be placed. 

Objectives of enterprise are to be translated into departmental objectives, and departmental objectives are to be converted into individual goals. Then only overall objectives for which the organisation is established can be achieved  Enterprise objectives give direction to major plans, in turn they are used to setup objectives for lower levels. Objectives appear in different forms, they are mission, overall objectives, divisional objectives and individual objectives etc.

iii)Planning Premises: Once the objectives are determined the next step is establishing the planning premises. Planning premises refer to the environmental conditions or surrounding circumstances in which plans work. Plans will operate in future, hence it is appropriate to expect future conditions and should plan accordingly.

iv) Identifying the Alternatives: In order to achieve the objectives under expected conditions managers first must identify various alternative courses of action. For instance, to achieve the objectives of securing desired profits, necessary plant and machinery should be established in the organisation. The machinery can be of different types like-

Manual plant,

Semi automatic plant,

Complete automatic plant.

These are known as alternatives. While developing the alternatives, organisational frame work like constraint of capital, manpower and philosophies may be taken into account.

v) Evaluating the Alternatives: After identifying the alternatives, the following stage is to evaluate their advantages and disadvantages. Their evaluation should be done in the light of the enterprise objectives.

vi) Selecting a course of Action: Choice of a particular alternative is the next step after evolution. Evolution explains the merits and demerits. Selection is the real point of decision making. At many times, it is confirmed  that selection of two or more alternatives is better than choosing only one alternative. Hence, managers should plan in such a manner to select right combination.

vii) Formulating Derivative Plans: The developmental plans are know as Derivative Plans. For instance, in order to generate desired profits for the organisation, production department should have production plan regarding number and quality of units to be produced.

viii) Budgeting: A budget is forecasted statement of revenue and expenditure, it is a numberised plan. It allovates the various resources to the required activities keeping in view of objectives. The organisation and each department working in it can have their own budget. Hence, budgeting is the last stage of planning which puts the plan into action.

                                  The planning sequence discussed above, is almost similar to all the managers but may differ according to the complexity and time duration of plans like some steps may be prolonged and some stages may be shortened. Future, plans must be cost-effective. Thus, proper planning should be done keeping in view the circumstance, the need, the magnitude and level of commitment.

Read More

Concept of planning

 Planning is not only the first function of management, it is an integral part of it.
                  To plan is to look ahead and chart out the future course of operations. It is the determinant of a course of action to acheive a desired result. It is one of he corner stones upon which successful enterprise depends. Planning is meant for the following,
1) For the analysis of a problem.
2) Thinking out the forward solutions to that problem.
3) Outlining the steps that must be taken to reach the objectives
 A planning has to think about the following aspects,
a) What is to be done?
b) How it is to be done?
c) When it is to be done?
d) By whom it is to be done?
e) Where it is to be done?

Read More

Meaning of planning

                                     Every human activity undertaken with a view to achieve something must be proceed by planning. For instance, a student desirous of securing a good grade in the examination has to plan his study. A person intending to set up a business cannot do so unless he has done a lot of previous thinking considering various aspects and taken many decisions if not all. He has to plan within the available resources, the location, the products to be sold, customers to be approached or the markets to be entered.
                                    Managerial operations must be based on suitable and sufficient planning. It has to plan not only in the beginning but throughout the operations.

Definitions:

   "Planning is deciding in advance what is to be done"

   "Planning bridges the gap between where we are to where we want to go."

   "Planning will involved deciding a course of action from amongst a number of alternative courses which would help the enterprise to achieve its objectives most expeditiously and economically" 

   "Planning ensures proper application of resources for the attainment of desired ends"

Read More

Role and Responsibility of Lower level Management

                          Supervisory management (lower level management) consists of senior supervisor. Supervisor management is above the operatives but below the middle level management in the organisation. The executives at this level are in direct touch with the rank and file of workers and have to see that the work is properly carried out. The personnel employed at this level play an important role in the organisation. The effective implementation of the plans and polices, the quality of workmanship quality of output and over all success of the organisation very much depend on the hard labor, discipline and loyalty of the personnel at this level of management. Further, this level of management represents the workers before the higher management and the higher echelons of management to the workers.
                        As the supervisor is the immediate boss of the workers, the workers look to him for orders policies, instructions, guidance, encouragement, increased pay etc. The success of the supervisor depends on the preference of the workers, their co-operation, their ungrudging effort, their satisfaction and their loyality to him. The supervisor in turns looks to his superior in the middle management for orders, policy information, help and guidance.

Functions of Lower Level Management: 
                      The various functions of supervisor are as follows:
1) To issue orders and instructions to the workers and to supervise and control their work
2) To plan the activities of his section
3) To classify and assign jobs to the workers
4) To direct and guide the workers about work procedure
5) To arrange for the necessary tools, equipment, materials etc., for the workers
6) To arrange for providing on the-job training to the workers
7) To look after the proper maintenance of tools, machinery etc
8) To solve the problems of workers
9) To inform the management about the problems of workers which are not solved at this level.
10) To advise middle management about the working environment and to act as liaison between the middle management and the rank and file workers
11) To maintain discipline among the workers and to develop in them the right approach to work.
12) To maintain good human relations.
13)  To build a high group morale among the workers.

Read More

Role and Responsibility of Middle Level Management

                     Middle management consists of departmental, divisional or sectional heads and other executive officers attached to the different departments. This level of management is responsible for implementing the polices and plans decided by the top management. Middle management comes between the top management and the supervisory management. According to Mary C.Niles, middle managers have pressures from the corners, viz., (a) from above by his chief in top management with whose idea, policies and attitudes he must agree (b) From below by the supervisors who press for counsel  guidelines, decisions etc. and (c) sideways by colleagues whose departments or functions are interrelated with its own.

Functions of Middle Level Management:
                     According to Mary C. Niles  middle management acts with and under the top management to accomplish who follows board objectives of administration.
1) To execute the various functions of organisations, so that the top management gets enough time to look after their responsibilities.
2) To co-operate among themselves, will the top management and the supervisors so that the organisations functions smoothly.
3) To understand the interlocking of departments in major polices.
4) To achieve co-ordination between the different parts of the organisation.
5) To develop and train employees in the organisation for better functioning and for filling up vacancies that may arise in future.
6) To build company spirit where all are working to provide a product or service wanted by the public.

Read More

Role and Responsibilities of Top Level Management

                                           Top management is at the head of the organisation. It consists of the Board of Directors and its Chairman, the Chief Executive (Ex., Managing Director or General Manager) and the Senior Executive (viz, Deputy General manager). In the operation of the enterprise, top management is the ultimate level of authority. Further, these top level managers are primarily involved in board organisational matters such as policy formulation, long range planning, goal the top management of organisational strategies. In general, the top management effectively deals with all elements and forces that affet the survival, stability and growth of an organisation. 
                                           In other words of B.Yuill, the top management duty is to protect the integrity of the organisation, so that it can survive for ita own employees, the shareholders, suppliers and the customer`s interests and for the general good of the social and economic system within which it operates.

Functions of top level management:
 The main functions of top level management are as follows:
(a) Determine objectives for the organisation: Objectives may relate to profit, business growth, survival, prestige, competitive pricing, marketing method, widening the area of sales, relations with workers, customers, public etc.

(b) Frame the policy: To frame the policy and chalk out the plans to carry out the objectives and policies. Policies may relate to different aspects of the organisation. For example, production policy deals with the quality, product variety, scheduling of production to meet the market demand etc.
1) Market policy: this policy deals with such matters as advertising and sales promotion techniques, pricing product, channel of distribution, commission, discount, placements, training, remuneration promotion, appraisal of performance etc. of the personnel.
2)Financial policy: This relates to the procurement of funds, source of finance, management of earning, etc.

(c)Organisational Frame Work: Top management determines the organisational structure for the purpose of executing the plans that have been laid down. Execution of plans is necessary to carry out the objectives and policies.

(d)Assemble the Resources: For the purpose of executing the plans, the resources of men, machines, materials and money have to be assembled. This again is the task of top management.

(e)Control the operations through organisation: Controls the top management regarding operations through budgets, cost and statistics quality control and accounting devices.

Read More

Goals and Objectives of Management

1) Planning for future: Every management thinks and plans about future. The current as well as future planning go together. The activities to be undertaken in future will be planned at present. No concern can survive if it does not plan for future. The likely business trends, future global trends, likely business laws, changing consumer preference, impact of social changes are the factors which wil be taken into account while planing for future.
2) Better Quality Goods: The consumer has become quality conscious now. He will go to for only those products which are of good quality and satisfy his needs. At present, the survival of a unit is linked to the quality products it produces. The objectives of the management is to bring out quality products so that they are accepted by the market. It will require introduction of quality standards in the business. Management should make efforts to plan production process in such a way that only quality products are produced and marketed.
3) Proper Utilisation of Resources: Every management aims to utilise enterprise resources properly and economically. The proper use of men, materials and machinary will ensure reasonable cost and adequate profits. It is not only the management which will look onward business profits but other interest groups such as employees, shareholders, customer, government will also be affected by its quantum. The efforts of the management should be to make optimum use of available resources in order to achieve better results.
4) Growth and development of business: Managerial efforts to be expand and diversity the business. It there is a scope to expand the existing business then efforts should be made to develop it but avenues to enter new avenues should also be explored. It will give stability and strength to the business.
5) Mobilising best talent: The management should try to employ proper persons in various fields so that better results are possible. The employment of specialists in various fields will be increasing the efficiency of various factors of production. There should be proper environment which should encourage good person`s to join the enterprise. Better pay, scales, proper amenities, future potentialities will attract more people in joining the concern.
6) Promotion of Research: The greatest drawback in India business is its lack luster approach towards research. Management give hardly any importance to research activities. It restrict their strength and capacity to complete in the market. There is a need to keep ourself aware of what is going on in the market and prepare to face it. The promotion of research is the only answer at present. Management should always try benefits of latest technological changes and ready to face the future with conference and zeal.
7)Minimising risk element: Every business at present is facing global competition. The product from developed countries are flooding markets in India. There is a need to improve overall working for staying in such a competition. The management should plan the activities in such a way that business is able to survive, under uncertain conditions. There is a need to minimising risk element and also to explore newer and better avenues.

Read More

Essential Characters of business Organisation

1) Social Responsibility: The only and one aim of business undertaking is not to increase profits. They own some responsibilities to the society also. The society expects business undertaking to provide cheap and better quality goods of consumers.They are also expected to contribute towards social amenities by opening schools, hospitals, parks etc, not only for the employees but also for people lining in those facilities.
2) Profit Motives: All business undertakings are run to earn profits. An undertaking started for social service will not be able to called business undertaking because the aim is not to earn profit. The incentive of earning profit keeps undertaking going. The aim is to get back more than what has been invested.
3) Dealing in goods ans services: All business undertakings deal in goods and services. The goods, may be consumer goods or producer`s goods. The consumers goods are those which are purchased by them for consumption or day to day use.
4) Continuity of Transactions: The transactions in a business undertaking are continuous or regular. They are engaged in a series of successive transactions over time and space.
5) Risk and Uncertainty: Every business undertaking is exposed to risks and uncertainties. Business is influenced by further events and further is always uncertain. There are chances of price fluctuations, demand charges, consumer likings and dislikings etc. There may be fire, earthquake, strike by workers etc. All these factors make a business undertaking risky and uncertain.

Read More

Concept of Business Organisation

                                     A business undertaking is an institutional arrangement to conduct any type old business activity. The undertaking may be run by one person or association of person. It may be based on formal or informal agreement among persons who undertake to run the concern. According to Wheeler, a business undertaking is a concern, company or enterprise which buys and sells, is owned by one person or a group of persons and is managed under specific set of operating policies. The person join to gather and pool their resources and conduct the activities of the undertaking for the benefit of all.

Read More

Prerequisites for installing MBO programme

Some of the prerequisites for installing of MBO programme are:

1. Purpose of MBO shoould be clearly defined.
2. Top management support for using objectives to plan and control is essential.
3. Systematic traing is required in the organisation for disseminating the concepts and philosophy underlying MBO.
4. Success with MBO requires a commitment on the past of each individual involved in this type of system.
5. Feedback is an essential ingredient in sustained learning and improvement in situations.
6. It must be carried all way down to the first line of the organization.

Read More

Problems and Limitations of MBO

Some of the common problems of MBO are as follow:

1) Time and Cost:
                     It is a process which requires large amount of the most scarce resource in the organisation and time of the senior managers. Sometimes managers get frustrated and feel overburdened.
2) Failure to teach MBO Philosophy:
                     Management often fail to understand and appreciate this new approach. MBO demand rigorous analysis as an integral element of the management process but the organisation may not be used to rigour.
3) Problems in Objective setting:
                     Setting of verifiable objectives is difficult atleast in some areas. Objectives are more in the form of statement rather than in quantitative form.
4) Emphasis on short-term objectives:
                     Sometimes, in order to be more precise there is a tendency to emphasise on short-term objectives usually for a year or even less. There is a danger in emphasizing short-term objectives at the cost of long terms objectives.
5) Inflexibility:
                     In a dynamic environment, a particular objective may not be valid for even, in the context of revised objectives, changed premises, it is useless to follow the old objectives. Thus inflexibility created by applying MBO may cause harms.
6) Frustration:
                    Sometimes MBO creates frustration among managers, because it tends to arouse high expecation forrapid change, particularly among the young and junior managers.
               

                  Inspite of these obstacles MBO continues to be a way of managing the organisation problems of MBO can be over come by implementing it properly.

Read More

Benifits or merits of MBO

1) Better Managing: 
                                MBO helps in better managing the organisational resources and activities. Resources and activities are put in such a way that they result into better performance in the five ways,
    a) The relationship between clarity of objectives and improvement of performance is the cornerstone of MBO philosophy.
   b) Clarity of roles, including the areas of authority and responsibility, leads to improved performance.
   c)  Periodic review provides opportunities for taking stock of the situation and planning future course of action.
   d) Participation by managers in the management process is expected to ensure achievement of objectives.
   e) MBO provides a base for the philosophy that there is always scope for improved.

All these factors for performance improvement are generated if MBO is followed properly.
2) Clarity in organisational Action:
                             MBO tends to provide the key result areas where organisational efforts are needed. For instance A key factor in objective setting is the external environmental factors is taken care of at the level of objective setting itself. Thus it provides basis for long range planning in the organisation.
3) Personnel Satisfaction:
                             MBO provides greatest opportunity for personnel satisfaction. This is possible because of two closely related phenomena.
4) Basis for Organisational Change:
                             MBO stimulates organizational change and provides a frame work and guidelines for planned change, enabling the top management to initiate, plan, direct and control the direction and speed of change.

Read More

What are the goals of a business finance?

The initial goal of business finance is to manage a firm's monetary books while maximizing the value of the business and monitoring financial risks.
A business' finance team have many responsibilities and goals and although the main goal is to maximize the value of the company, many things have to be taken into account and put into place, these include:
Monitor Financial Activity:
All businesses set out to make money, and by monitoring financial activity, you will be able to keep track of the losses and profits made. In order to stick to the ultimate business goal of maximizing the company's value, you will need to accurately record every cent that the company is spending, and every cent that is coming into the company. Comparing those two factors should help you discover as to whether the business is increasing in value - one of the main goals of business finance.
Assessing:
A goal of business finance is to always be making progress in order to take the business to new heights. In order to ensure this happens and can be done, it's advisable that financial books are regularly assessed, as are the profit and loss mark ups. This allows the business to see what is working and what needs to be changed. For example, if an area of the company is losing too much money, this area will have to be discussed as it is hindering the main goal of business finance.
Financial Planning:
A goal of business finance is to always have a prolific company with a good, healthy income and minimal, if not non-existent losses. In order to obtain a prolific business, a financial plan should always be made and constantly added to. Although something like a budget plan can never be stuck to 100%, sticking to it as much as possible will result in avoiding unnecessary losses which is paramount to a business being successful and valuable.

Read More

Types of Debentures

Types of debentures:

1. Simple naked or unsecured debentures: - 

                              These debentures are not given any security on assets. They have no priority as compared to other creditors.
2.  Secured or mortgage debentures: -  

                              The se debentures are given a security on assets of the debentures company. In case of default in the payment of interest or principle amount, debenture holders can sell the assets in order to satisfy their claims.
3.  Bearer debentures: - 

                               These debentures are easily transferable. They are just like negotiable instruments. The debenture is handed over to the purchaser without any registration deed.
4.  Registered debentures: - 

                               As compared to bearer debenture which is transferred by mere delivery, registered debenture require a procedure to be followed for the transfer.
5.  Redeemable debenture: - 

                               These debentures are to be redeemed on the expiry of ascertain period. The interest on the debenture is paid periodically but the principle amount is returned after a fixed period.
6. Irredeemable debentures:-  

                               Such debentures are not redeemable during the life time of the company. There are payable either on the winding up of the company or at the time of any default on the part of the company.
7.  Convertible debenture: - 

                               Sometimes convertible debenture is issued by a company and the debenture holders are given an option to exchange the debenture into enquiry shared after the lapse of a specified periods.

8. Non-convertible debentures:- 

                                Non-convertible debentures do not confer any option on the holder to convert the debentures into equity shares and are redeemed at the expiry of specific period. these non-convertible debentures carry higher interest rate than other types of debentures because of the non-attractive feature of non-convertibility into other form of stocks.

9. Subordinate debentures: 

                                It is an unsecured debt, which is junior to all other debts. this types of debt will have a higher interest rate than senior debt and will frequently have rights of conversion into ordinary shares. subordinated debt is often called mezzanine finance because it ranks between equity and debt.

10. Guaranteed debentures: 

                                 Some business are able to raise long-term money because their debts are guaranteed, usually by their parent companies. in some instance, the governement guarantee the bonds issued by their undertakings and corporations like electricity supply board, irrigation corporaton, etc.

Read More

Features of MBO

Based on the definitions of MBO its features can listed out as follows:

1. MBO is an approach and philosophy to management and not merely a technique. It is likely to affect every management practice in the organisation. It employs several techniques but it is not merely the sum total of all these techniques. Thus it is a particular way of thinking about management.
2. MBO provides the stimulus for the introductions of new techniques of management and enhances the relevance and utility of the existing ones.
3. MBO is the joint application of a number of principles and techniques, and works as integrating device.
4. The basic emphasis of MBO is an objectives, it tries to match objectives and resources.
5. This process clarifies the role very sharply in terms of what one is expected to achieve.
6. Periodic review of performance is an important feature of MBO.
7. Objectives in MBO provide guidelines for appropriate systems and procedures for instance resource allocation, delegation of authority etc., are determined on the basis of objectives.

Read More

Concept of MBO

                   MBO is both a philosophy and approach of management. It is a process where by superiors and subordinates jointly identify the common objectives, set the resuts that should be achieved by the subordinate assess the contribution of each individual, and integrate individuals with the organisation so as to make best use of organisational resources.
                   `Koontz` defined MBO as---- 
                                    "MBO is a comprehensive managerial system that integrates many key managerial activities in a systematic manner consciously directed towards the effective and efficient achievement of organisational objectives". It emphasizes the importance and operation of MBO.
                   `S.K.Chakra borthy` opined--
                                   " MBO is a result - centered, non specialist operational managerial process for the effective utilization of material, physical and human resources of the organisation by integrating the individual with the organisation and oraganisation with the environment. 

Read More

What is MBO?

Management By Objectives(MBO) has gained immense popularity during the past decades. "Peter.F.Drucker" has pioneered the concept of MBO. According to him, objectives are the ends and means of an enterprise, all the activities must be framed and directed to perform objectives and no deviations from the achievement of objectives is permitted. There should be a great concern and commitment towards objectives throughout the organisations at any level, then only organisations can survive. It means organisations are to be managed in such a way to achive the objectives. Hence this concept has gained immense popularity all over the world. In India also, in many organisations, MBO has become the way of management process.

Read More

Management as a Profession

                   A profession is an "occupation backed by organized knowledge and training and to which entry is regulated by a representative body"
                   Thus, all professions are occupation in the sense that they provide means of livelihood.
                   However, all occupations are not professions because some of them lack certain features of a profession

Features of profession:

1. Organized body of knowledge, principles and techniques.
2. Formal training and education
3. Restriction on entrance
4. Existence of a representative body
5. Prevalence of a code of conduct
6. Sprit of service to the society

Application of the features to the Management:

1) Organized body of knowledge:

                  Management has its own body of systematized knowledge which contains the principles and techniques. These principles established cause and effect relationships and are capable of universal application.

A.P.M. Fleming has rightly remarked that management has a technique quite a part from the technology of the particular works concerned.
2) Formal training and Education:
                 Management is not merely theory. Here the person is prepared o take practical decision in business. To import management education and training, there are large number of formal institutes in various countries, including India. Several tools of management such as business, Psychology, Business law, Statistics, Data-processing, operations research and cost accounting etc. have been developed. The business house today prefer to employ those managerial personal who have obtained a professional degree in management from some recognised institutes.
3) Restriction on Entrance:
               Entrance into a profession is restricted by standards established by it. But management does not restrict the entry of people into managerial jobs with only a special academic degree. 
4) Existence of an organization: 
               Various management organizations have come into existence in India to guide the managers in: 

• To regulate the behaviors of members
• To create a code of conduct for guiding the activities of the profession.
• To promote and build up the image of management as a profession

              In India, All India Management Association and Indian Association for Management Development were established to train the managers.

              Function of Association is to manage and co-ordinate the research work in the various areas of management. It is, however, true that norms of managerial behaviour have not yet been established and we do not have uniform methods of entry.

5) Prevalence of a code of conduct:

             Every profession formulates its own ethical codes for the conduct of its members. But there is no uniform code of conduct for the practicing managers. In spite of it, managers are socially responsible. They have to protect the interest of the owners, workers, suppliers, consumers and the government.

6) Spirit of service to the society:

              Though professionals charge fee for the service rendered, they give priority to service over the desire for monetary reward.

              For Ex: a doctor earns his livelihood from his profession of medicine but service to society is upper most in his mind. As managers enjoy the respect of society, they should also fulfill their social obligation.

Read More

Management as a science

The word science literally means knowledge. It is a systematised body of knowledge acquired by mankind through observation and experimentation and which is capable of verification. The basic difference between Art and science is that Art implies knowing, how the application, where as science is concerned with knowing why?In the words of Keynes "Science is a systematised body of knowledge which establishes relationship between cause and effect".
The essential features of science:

1. It is a systematised body of knowledge that uses scientific methods for observation.
2. The principles are evolved on the basis of continued observation
3. The principles are exact and have universal applicability without any limitation.
4. The principles establish a cause and effect relationship between various factors.
5. The validity of scientific principles can be verified and they provide a reliable basis for predicting future events.

1) Systematised Body of Knowledge:
                Management is viewed as a science as it is an organised body of knowledge built up by management practitioners, thinkers and philosophers over a period of time. "Management science is a body of systematised knowledge accumulated and accepted with reference to the understanding of general truths concerning management".
               The principles of management make use of scientific methods for observation. Frederick W. Taylor, the Father of science Management applied scientific techniques to studies of planning, organising, staffing, motivating etc.
2) Continued Observation:
                As applied to management, the principles of management have been developed after continued effects of many theorists and practitioners over a period of years.
3) Universal Application:
               In the field of management, this knowledge has been accumulated and accepted with reference to general truths. There are certain fundamental principles of management which can be universally approved. In the words of Taylor "The fundamental principles of management are applicable to all human activities from our simplest individual acts to the working of our great corporations".
4) Cause and effect Relationship:
               Scientific principles establish cause and effect relationship between various factors. When applied to management the principles of management also establish cause and effect relationship.
e.g., Poor planning and plant layout cause low productivity.
5) Validity and predictability:
               More knowledge or collection of facts is not science. It is only when the knowledge so gathered can be verified, it becomes science. The management also be verified for their validity. The principles of management also be verified for their validity. The principles of management have been put to several tests and found to be valid. For Ex: a subordinate put under one boss will show better results, than a subordinate who has to follow two or more bosses. Further, the principles of management by finding cause and effect relationship can serve basis for predicting further events.
             

   

Read More

Management as an Art

An art is often regarded as the systematic application of skill or knowledge in effecting accomplishment of results. It represents the methods or ways of doing specific things and indicates how an objective is to be achieved. The function of art is to effect change and accomplish results through  deliberate efforts. Art is a personalised process and every artist has his own style. It is Practice - based and perfection and is requires continuous practice over a long period of time.
The main elements of Art are:

1. Personal skill
2. Practical knowledge
3. Result - oriented approach
4. Regular practice
5. Creativity

1) Personal skill:

           Like any other artist, a manger also uses his knowledge and skill in co-ordinating the activities of people to accomplish desired results.

2) Practical Knowledge:

           Management is concerned with the application of knowledge and skill, unless managerial principles are used for making the things effective and better, these will not be covered in art.

3) Result-oriented approach:

           Management is result oriented because it is concerned with accomplishment of objectives. It aims at achieving maximum productivity at lowest costs.

4) Regular Practice:

           Like an artist, management always tries to attain higher and higher goals in order to reach the state of absolute perfection. This efficiency and effectiveness is attained through regular practice.

5) Creativity:

           Every art has an element of creativity and in this sense also management is one of the most creative art as it is concerned with getting work done through others by motivating them to work and co-ordinating their activities.

Read More

Management Roles

The more complex the organization, the more crucial his role. The more crucial his role. The success of an organization will depend upon the caliber of a manager to achieve its objectives.

HENRY MINTZBERG`S opines every manager, plays roles in three areas:

1) Inter personal relatonships:

• As a figure head.
• Leadership role
• Liason officer 

2) Informantion processing:

• Monitoring information
• Disseminating Information
• Organisations Spokesman

3) Decision Mnking:

• As an Entrepreneur
• As a conflict handler
• As a Resource Allocate
• As a negotiator

Read More

Management skills

A skill is an acquired and learned ability to translate knowledge into performance. it is the competency of a person that allows his performance to be superior. All managers need to possess various skills which are necessary to carry at their jobs successfully.

1. Technical Skills:  Technical skills are necessary to accomplish or understand the specific kind of working done in an organisation. The perrsons who are working with tools and techniques are needed such skill. Ex: Engineers, Scientists, computer programmers etc. Technical skills are essential for first line managers who spend their time in training their subordinates and clear their doubts regarding were.
2. Human Skills:  Human skill is the ability to work with other people in a cooperative manner. Human skill are essential to hence effective team work in the organisation. It involves patience, understanding trust and genuine involvement in interpersonal relationship.
3. Analytical skills:  These skills are essential to identify key factors and to understand the interrelate roles they play in a given situation. Analytical skills help a manager to establish cause and effect relationship. These skills also help a manager for problem identifying, solving and decision making.
4. Conceptual Skills:  Such skills are essential to the managers to understand the overall working of the organisation and harmonise the working of the sub-system for reaching the organisational objectives.
5. Communication Skills:  Communication skills are an important element of interpersonal skills. Communication is essential for proper implementation of orders. The best ideas of manager may not be of any use if these are not properly communicated to subordinates.
6.  Decision-making Skills: Decision making is the process of reaching a point. It is choosing the best alternative of doing a thing from various choices available. Manager may make use of various techniques available for taking decisions.

 

Read More

Distinction between Administration and management

Administration:

1. It is concerned with the formation of objectives, plans and policies.
2. It is a thinking function.
3. It is a top-management function.
4. It makes major policy decisions.
5. Decisions are influenced by external factors such as social, political, legal etc.
6. Administration is often associated with government policies.

Management:

1. It means getting things done through and people.
2. It is a doing function.
3. It is a lower-level management functions.
4. It makes decisions with the frame work of administration.
5. Decisions are influenced by internal factors such as values, beliefs, and opinions.
6. Management is widlely used in the business world.

Read More

Importance of management

Management is overall the most important factor because no business runs itself, even no momentum. every business needs repeated stimulus which can only be provided by management. Thus management is dynamic, life giving element without which the "factors of production" will remain as were factors not become "production".
The following points bring out the importance of management:

1. Accomplishment of group goals,
2. Efficient operations of business,
3. Sound organization structure.

Accomplishment of group goals:

Success of a business enterprise depends on three important factors, viz

• How economically and efficiently the organization has used its man power and physical resources.
•  How effetively it has adapted the enterprise to the prevailing business environment e.g., needs and expectations of the customers, policies of rivals and
• How far the existing business policies have succeeded in realising the goals and objectives of the organisations.

Efficient operation of Business:

Efficient of an organisation depends on ability, experience, skills, co-operation zeal and enthusiasm to its employees. This, inturn, depends on proper motivation of there employee which can be accomplished only by an inspiring leadership provided by management makes sure that the workers know their jobs, helps them in improving their skills and abilities in doing their jobs.

Sound organisation structure:

Management establishes a sound organisation that is in accordance with the desired  objectives and goals and the weak to be done of accomplish them. Management establishes a system of authority and responsibility relationships, who will command whom, who will be responsible for what, and who shall be accountable to whom.

Read More

Characteristics of Management

1.   Management is a group activity:  Nobody can satisfy all his desires himself. Therefore he unities which his fellow beings and works in an organized group to achieve what he cannot achieve individually. Massie has rightly called management as a “Co-operative group”.
2.    Management is goal – oriented: According to THEO HAIMAN “Effective management is always management by objectives”. Group efforts are directed towards the achievements of some predetermined goals. Management is concerned with establishment and accomplishment of these objectives.
3.   Management is a factor of production: Management is not an end in itself. It is a means to achieve the group objectives. It is a factor of production that is required the co-ordinate with the other factors of production for the accomplishment of predetermined goal and objectives.
4.  Management is a universal character: Management is essential in all types of concerns. If somewhere there is human activity, management is must there. The basic principles of management are universal. These can be applied in all types of concerns i.e., business, social, religious, cultural, sports, educational international technology.
5.   Management is needed at all levels of the enterprise: On the basis of the nature of work or target and the scope of authority, management is needed at all  levels of the organisations e.g., top level, middle level and supervisor level.
6.   Management is a distinct function: Management is a distinct function performed to fix and achieve stated objectives by the use of manpower and other factors of production. Different from the activities, techniques and procedures, the process of management consists of such functions as planning, organizing, staffing, directing, coordinating, motivating and controlling.
7.  Management is a social process: Management is taken as a social process. It has a social responsibility to make reasonable use of scarce resources keeping in view the benefit of the community as a whole.
8.  Management is system of authority: Authority is the power to compel men to work in a specific manner. Management cannot work in the absence of authority. There cannot be an efficient management without well defined lives of command a superior subordinate relationship at the every levels of decision making.
9.   Management is a dynamic function: Management has to be performed continuously in a rapidly every changing business environment. It is constantly engaged in the moulding of the enterprise. It is also concerned about the change of environment itself so as to ensure the success of enterprise. Hence it is on-going function.
10. Management is intangible: It can be seen in the form of results and could not be actually seen. For ex: when we are not able to produce desired quantity, we say it is the results of poor management.
11. Management is Art as well as Science: Management is a science since its principles have universal application. Management is an art as the results of management depends upon the personal skill of managers. The art of the management is essential to make the best use of management science. Thus management is both science and art.
12. Management is a profession: It has systematic and specialized body of knowledge consisting of principles, techniques, rules and laws. It can be taught as a specialized subjet.

   

Read More

What is Management?

Management is universal in the modern industrial world and there is no substitute for good management. It makes human effects more productive and brings better technology, products and services to our society.

Management is a must to accomplish desired goals through group action. It is essential to convert the disorganised resources of men, machines, materials and methods into a useful and effective enterprise.

Management is the art of maximising efficiency, as a social process, a method of getting things done through others, a plan of action and its direction by a co-operative group moving towards a common goal. Effective utilisation of available resources to achieve same objective is management.
Management is a comprehensive function of planning, organising, forecasting, co-ordinating, leading, controlling, motivating the efforts of others to achieve specific objectives. management can precisely be called the Rule-making and Rule-enforcing body.
Some definitions of Management:

According to HAROLD KO

"Management is the art of getting things done through and with formally organized groups" 

 According to PETER F. DRUKER

"A Multipurpose organ that manages a usiness and manages managers and manages workers and works"

According to J.LUNDY

"Management is what a mangement does. It is the task of planning executing and controlling".

According to LAWRENCE APPLEY

"Management is the development of people and not the direction of things".

According to F.W.TYLOR

"Management is the development of people and not the direction of things". 

Read More