Tag: Characteristics

Negotiable Instruments: Definition, Characteristics, and Features!
A Negotiable Instrument is a document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payer usually named on the document. The Concept of the study Explains – Negotiable Instruments: Meaning, Definition of Negotiable Instruments, Characteristics of Negotiable Instruments, and Features of Negotiable Instruments. More specifically, it is a document contemplated by or consisting of a contract, which promises the payment of money without condition, which may be paid either on demand or at a future date. The term can have different meanings, depending on what law is being applied and what country and context it is used in. Also learned, Commercial Bills, Negotiable Instruments: Definition, Characteristics, and Features! Read and share the given article in Hindi.

Explain and Learn, Negotiable Instruments: Definition, Characteristics, and Features!

Negotiable Instruments Act: The law relating to “Negotiable Instruments” is contained in the Negotiable Instruments Act, 1881, as amended up-to-date. It deals with three kinds of negotiable instruments, i.e., Promissory Notes, Bills of Exchange and Cherubs. The provisions of the Act also apply to “hands” (an instrument in oriental language), unless there is a local usage to the contrary.

Other documents like treasury bills, dividend warrants, share warrants, bearer debentures, port trust or improvement trust debentures, railway bonds payable to bearer etc., are also recognized as negotiable instruments either by mercantile custom or under other enactments like the Companies Act, and therefore, Negotiable Instruments Act is applicable to them.

#Definition of Negotiable Instruments:

The word “Negotiable” means “Transferable by delivery”, and the word “Instrument” means “A written document by which a right is created in favor of some person”. Thus, the term “Negotiable instrument” literally means “a written document transferable by delivery”.

According to Section 13 of the Negotiable Instruments Act,

“A negotiable instrument means a promissory note, bill of exchange or cheque payable either to order or to bearer.”

The Act, thus, mentions three kinds of negotiable instruments, namely notes, bills and cherubs and declares that to be negotiable they must be made payable in any of the following forms:

A) Payable to order:

A note, bill or cheque is payable to order which is expressed to be “payable to a particular person or his order”.

But it should not contain any words prohibiting the transfer, e.g., “Pay to A only” or “Pay to A and none else” is not treated as “payable to order” and therefore such a document shall not be treated as the negotiable instrument because its negotiability has been restricted.

There is, however, an exception in favor of a cherub. A cheque crossed “Account Payee only” can still be negotiated further; of course, the banker is to take extra care in that case.

B) Payable to bearer:

“Payable to bearer” means “payable to any person whom so ever bears it.” A note, bill or cheque is payable to bearer which is expressed to be so payable or on which the only or last endorsement is an endorsement in blank.

The definition given in Section 13 of the Negotiable Instruments Act does not set out the essential characteristics of a negotiable instrument. Possibly the most expressive and all-encompassing definition of negotiable instrument had been suggested by Thomas who is as follows:

“A negotiable instrument is one which is, by a legally recognized custom of trade or by law, transferable by delivery or by endorsement and delivery in such circumstances that (a) the holder of it for the time being may sue on it in his own name and (b) the property in it passes, free from equities, to a bonfire transferee for value, notwithstanding any defect in the title of the transferor.”

#Characteristics of Negotiable Instruments:

An examination of the above definition reveals the following essential characteristics of negotiable instruments which make them different from an ordinary chattel:

Easy negotiability:

They are transferable from one person to another without any formality. In other words, the property (right of ownership) in these instruments passes by either endorsement or delivery (in case it is payable to order) or by delivery merely (in case it is payable to bearer), and no further evidence of transfer is needed.

The transferee can sue in his own name without giving notice to the debtor:

A bill, note or a cheque represents a debt, i.e., an “actionable claim” and implies the right of the creditor to recover something from his debtor. The creditor can either recover this amount himself or can transfer his right to another person. In case he transfers his right, the transferee of a negotiable instrument is entitled to sue on the instrument in his own name in case of dishonor, without giving notice to the debtor of the fact that he has become the holder.

The better title to a bonfire transferee for value:

A bonfire transferee off a negotiable instrument for value (technically called a holder in due course) gets the instrument “free from all defects.” He is not affected by any defect of title of the transferor or any prior party. Thus, the general rule of the law of transfer applicable in the case of ordinary chattels that “nobody can transfer a better title than that of his own” does not apply to negotiable instruments.

Examples of Negotiable Instruments:

The following instruments have been recognized as negotiable instruments by statute or by usage or custom:
- Bills of exchange;
- Promissory notes;
- Cheques;
- Government promissory notes;
- Treasury bills;
- Dividend warrants;
- Share warrants;
- Bearer debentures;
- Port Trust or Improvement Trust debentures;
- Hindus, and;
- Railway bonds payable to bearer, etc.
Examples of Non-negotiable Instruments:

These are:
- Money orders;
- Postal orders;
- Fixed deposit receipts;
- Share certificates, and;
- Letters of credit.
Endorsement:

Section 15 defines endorsement as follows: “When the maker or holder of a negotiable instrument signs the same, otherwise than as such maker, for the purpose of negotiation, on the back or face thereof or on a slip of paper annexed thereto, or so signs for the same purpose a stamped paper intended to be completed as negotiable instrument, he is said to endorse the same, and is called the endorser.”

Thus, an endorsement consists of the signature of the holder usually made on the back of the negotiable instrument with the object of transferring the instrument. If no space is left on the back of the instrument for the purpose of endorsement, further endorsements are signed on a slip of paper attached to the instrument. Such a slip is called “along” and becomes part of the instrument. The person making the endorsement is called an “endorser” and the person to whom the instrument is endorsed is called an “endorse.”

Kinds of Endorsements:

Endorsements may be of the following kinds:
1. Blank or general endorsement: If the endorser signs his name only and does not specify the name of the indorse, the endorsement is said to be in blank. The effect of a blank endorsement is to convert the order instrument into a bearer instrument which may be transferred merely by delivery.
2. Endorsement in full or special endorsement: If the endorser, in addition to his signature, also adds a direction to pay the amount mentioned in the instrument to, or to the order of, a specified person, the endorsement is said to be in full.
3. Partial endorsement: Section 56 provides that a negotiable instrument cannot be endorsed for a part of the amount appearing to be due on the instrument. In other words, a partial endorsement which transfers the right to receive only a partial payment of the amount due on the instrument is invalid.
4. Restrictive endorsement: An endorsement which, by express words, prohibits the indorse from further negotiating the instrument or restricts the indorse to deal with the instrument as directed by the endorser is called “restrictive” endorsement. The indorse under a restrictive endorsement gets all the rights of an endorser except the right of further negotiation.
5. Conditional endorsement: If the endorser of a negotiable instrument, by express words in the endorsement, makes his liability, dependent on the happening of a specified event, although such event may never happen, such endorsement is called a “conditional” endorsement.
In the case of a conditional endorsement, the liability of the endorser would arise only upon the happening of the event specified. But they endorse can sue other prior parties, e.g., the maker, acceptor etc. if the instrument is not duly met at maturity, even though the specified event did not happen.

Negotiable Instruments: Definition, Characteristics, and Features!

#Features of Negotiable Instruments:

Negotiable Instrument, in law, a written contract or another instrument whose benefit can be passed on from the original holder to new holders. The original holder (the transferor) must countersign the instrument (as in the case of a cheque) or merely deliver it (as in the case of a bank note) to the new holder; the new holder is then entitled to the benefit of the instrument (in the case of a cheque, to the money from the bank; in the case of the banknote, to the sum promised on the note).

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.”

Major features of negotiable instruments are:

The following features below are:

Easy Transferability:

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. 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 notice to the previous holder.

Title:

Negotiability confers an absolute and good title on the transferee. It means that a person who receives a negotiable instrument has a clear and indisputable 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 consideration.

Also, the receiver should have no knowledge of the previous holder having any defect in his title. Such a person is known as the holder in due course.

Must be in writing:

A negotiable instrument must be in writing. This includes handwriting, typing, computer print out and engraving, etc.

Unconditional Order:

In every negotiable instrument, there must be an unconditional order or promise for payment.

Payment:

The instrument must involve the payment of a certain sum of money only and nothing else.

For example, one cannot make a promissory note on assets, securities, or goods.

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.

The payee must be a certain person:

It means that the person in whose favor 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. The payee can also be more than one person.

Signature:

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.

Delivery:

Delivery of the instrument is essential. Any negotiable instrument like a cheque or a promissory note is not complete until 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 until it is given to your brother.

Stamping:

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 pro-note or bill and the time of their payment.

Right to file suit:

The transferee of a negotiable instrument is entitled to file a suit in his own name for enforcing any right or claim on the basis of the instrument.

Notice of transfer:

It is not necessary to give notice of transfer of a negotiable instrument to the party liable to pay.

Presumptions:

Certain presumptions apply to all negotiable instruments, for example, consideration is presumed to have passed between the transferor and the transferee.

Procedure for suits:

In India, a special procedure is provided for suits on promissory notes and bills of exchange.

The number of transfer:

These instruments can be transferred indefinitely until they are at maturity.

Rule of evidence:

These instruments are in writing and signed by the parties, they are used as evidence of the fact of indebtedness because they have special rules of evidence.

Exchange:

These instruments relate to payment of certain money in legal tender, they are considered as substitutes for money and are accepted in exchange of goods because cash can be obtained at any moment by paying a small commission. Read and share the given article (Negotiable Instruments: Definition, Characteristics, and Features) in Hindi.
June 20, 2018
Personnel Management: Characteristics, Nature, and Scope!

Explain and Learn, Personnel Management: Characteristics, Nature, and Scope!

Personnel management can also be defined as, that field of management which is concerned with the planning, organising, directing and controlling various operative functions of procurement, development, maintenance and utilisation of a labour force in such a way that objectives of company, those of personnel at all levels and those of community are achieved. The Concept of Personnel Management study is – Characteristics of Personnel Management, Nature of Personnel Management, and Scope of Personnel Management! Also learned, PDF Reader, Free Download, Personnel Management: Characteristics, Nature, and Scope!

Personnel management can be defined as obtaining, using and maintaining a satisfied workforce. It is a significant part of management concerned with employees at work and with their relationship within the organization.

According to Flippo, “Personnel management is the planning, organizing, compensation, integration, and maintenance of people for the purpose of contributing to organizational, individual and societal goals.”

According to Brech, “Personnel Management is that part which is primarily concerned with the human resource of the organization.”

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Characteristics of Personnel Management:

The definitions on personnel management reveal the following characteristics:

(i) Personnel management is a specialized branch of management and hence all the principles of general management (as well as functions of management) are applicable to personnel management.

(ii) Personnel management is basically concerned with human resources. Personnel management advocates the ways to get best possible results by managing the scarcely available human resources effectively and efficiently.

(iii) Personnel management is concerned with the relationship between employer and employee; between employee and employee; and among employees. By the term employee, we mean to include blue-collar as well as white-collar workers.

(iv) Personnel management concentrates on the development of individual and group in an organization for achieving better results.

(v) Personnel management focuses on employment planning.

(vi) Personnel management gives adequate direction to the developmental activities—of lower-level employees as well as executives.

(vii) Personnel management aims at providing the necessary guidance for improving performance (through performance appraisal of employees) of employees.

(viii) Personnel management aims at maintaining good human relations.

(ix) Above all, personnel management is concerned with recruitment, selection, training, and placement of employees within work organizations.

(x) Personnel management provides for fair and reasonable compensation to employees.

Thus, personnel management is an approach (an approach to deal with human beings in organisation), a point of view (regarding the personnel policies and wage administration), and a technique of thinking (as to how to motivate employees towards higher productivity) and a philosophy of management (of getting things done through people effectively and efficiently).

Nature of Personnel Management:

The emergence of personnel management can be attributed to the writings of human religionists who attached great significance to the human factor.

Lawrence Apply remarked. “Management is personnel administration”.

This view is partially true as management is concerned with the efficient and effective use of both human as well as non-human resources. Thus, personnel management is only a part of the management process. At the same time, it must be recognized that personnel management is inherent in the process of management.

This function is performed by all the managers throughout the organization rather than by the personnel department only. If a manager is to get the best of his people, he must undertake the basic responsibility of selecting people who will work under him and to develop, motivate and guide them.

However, he can take the help of the specialized services of the personnel department in discharging this responsibility.

Personnel management permeates all the functional areas of management such as production management, financial management, and marketing management. That is, every manager from top to bottom, working in any department has to perform the personnel functions.

Though the personnel department is created under the supervision of a person designated as ‘Personnel Manager’, it should not be assumed that the other managers are relieved of this responsibility.

Personnel management is not a ‘one-shot’ function. It must be performed continuously if the organizational objectives are to be achieved smoothly. To quote G.R. Terry, “The personnel function cannot be turned on and off like water from a faucet; it cannot be practiced only one hour each day or one day a week.

Personnel management requires a constant alertness and awareness of human relations and their importance in everyday operations.”

The scope of Personnel Management:

As we recall history, personnel management was basically concerned with recruitment, selection, placement of employees in organizations. Now the scope of personnel management has become wide and is concerned with organizing human resources with a view to maximize output and profits of the organisation and to develop the talent of the employees at work to the fullest possible extent securing personal satisfaction (job satisfaction of the employees) and personal satisfaction (as far as the organisation is concerned).

In the early stage of industrialization, dominated by single-ownership concerns, owner himself used to act as a personnel manager and recruit and select the people of his choice and taste irrespective of the requirements of the job. With the advent of industrialization and the consequent developments, company type and partnership firms came into vogue broadening the scope of personnel management.

The scope of personnel management can be seen in terms of the activities of personnel management discussed hereunder:

(a) Employee training

(b) Recruitment and maintenance of labor force.

(c) Executive development

(d) Determination of equitable wages and Salaries for laborers and employees.

(e) Job analysis and job description

(f) Labour welfare activities-such as education to children of the employee, recreation, sanitary conditions, etc.

(g) Maintaining personnel records.

(h) Maintaining sound human relations in industry.

(i) Settlement of labor disputes.

June 16, 2018
Merchant Banks: Definition, Nature, and Characteristics
Merchant Banks is a combination of Banking and consultancy services, Banks Essay, Definition, Nature, Functions, and Characteristics. It provides consultancy to its clients for financial, marketing, managerial and legal matters. Consultancy means providing advice, guidance, and service for a fee. It helps a businessman to start a business. It helps to raise (collect) finance. Also, They help to expand and modernize the business. It helps in the restructuring of business. This helps to revive sick business units. It also helps companies to register, buy and sell shares at the stock exchange. Also learned, Set-Up of Merchant Banking.

Learn, Explain Banks of Merchant Banking: Definition, Nature, and Characteristics.

Definition: Banking can define as a skill-oriented professional service provided by banks to their clients, concerning their financial needs, for adequate consideration, in the form of a fee. The Concept of Merchant Banking is studying and explains – Definition, Nature, Functions, and Characteristics.

Definition of Merchant Banking:

The Notification of the Ministry of Finance defines merchant banker as;

“Any person who is engaged in the business of issue management either by making arrangements regarding selling, buying or subscribing to securities as manager-consultant, adviser or rendering corporate advisory services in relation to such issue management.”

The Amendment Regulation specifies that issue management consists of a prospectus and other information relating to the issue, determining the financial structure, tie-up of financiers, and final allotment and refund of the subscriptions, underwriting, and portfolio management services.

In the words of Skully,

“A Merchant Bank could be best defined as a financial institution conducting money market activities and lending, underwriting and financial advice, and investment services whose organization is characterized by a high proportion of professional staff able to able to approach problems in an innovative manner and to make and implement decisions rapidly.”

Nature of Merchant Banking:

It is skill-based activity and involves serving every financial need of every client. It requires a focused skill-base to provide for the requirements of the client. As well as SEBI has made the quality of manpower one of the criteria for registration as a banker. These skills should not be concentrated in issue management and underwriting alone, which may hurt business.

Merchant bankers can turn to any of the activities mentioned above depending upon resources, such as capital, foreign tie-ups for overseas activities, and skills. The depth and sophistication in the banking business are improving since the avenues for participating in capital market activities have widened from issue management and underwriting to private placement, bought out deals (BODS), buy-back of shares, mergers, and takeovers.

The services of merchant banks cover project counseling, pre-investment activities, feasibility studies, project reports, the design of the capital structure, issue management, underwriting, loan syndication, mobilization of funds from Non-Resident Indians, foreign currency finance, mergers, amalgamation, takeover, venture capital, buyback, and public deposits. Also, A Category-1 banker can undertake issue management only. Separate registration is not necessary to carry on the act as the underwriter; next, we are going to study the functions of banking.

Functions of Merchant Banking Organization:

The following functions of merchant banking below are:

1] Portfolio Management:

Banks provide advisory services to institutional investors, on account of investment decisions. Also, They trade in securities, on behalf of the clients, to provide portfolio management services.

2] Raising funds for clients:

Banking organization assists the clients in raising funds from the domestic and international market, by issuing securities like shares, debentures, etc., which can be deployed for starting a new project or business or expansion activities.

3] Promotional Activities:

One of the most important activities of banking is the promotion of a business enterprise, during its initial stage, right from conceiving the idea of obtaining government approval. There is some organization, which even provides financial and technical assistance to the business enterprise.

4] Loan Syndication:

Loan Syndication means service provided by the bankers, in raising credit from banks and financial institutions, to finance the project cost or working capital of the client’s project, also termed as project finance service.

5] Leasing Services:

Banking organizations render leasing services to their customers. Also, Some banks maintain venture capital funds to help entrepreneurs.

They help in coordinating the operations of intermediaries, concerning the issue of shares like registrar, advertising agency, bankers, underwriters, brokers, printers, and so on. Further, it ensures compliance with the rules and regulations, of the capital market.

Merchant Banking: Definition, Nature, and Characteristics! Image credit from #Pixabay.

Characteristics of Merchant Banking:

They are below as;
- The high proportion of decision-makers as a percentage of total staff.
- Quick decision process.
- Also, The high density of information.
- Intense contact with the environment.
- Loose organizational structure.
- A concentration of short and medium-term engagements.
- Emphasis on fee and commission income.
- Innovative instead of repetitive operations.
- Sophisticated services on a national and international level.
- Also, The low rate of profit distribution, and.
- High liquidity ratio.
Qualities of a Banker:
- Ability to analyze.
- Also, Abundant knowledge.
- Ability to built up a relationship.
- Innovative approach, and.
- As well as Integrity.
Merchant Banking in India:

The activity was formally initiated into the Indian capital markets when Grind lays the bank received a license from Reserve Bank in 1967. Grind lays started with the management of capital issues, recognized the needs of the emerging class of entrepreneurs for diverse financial services ranging from production planning and system design to market research.

Even it provides management consulting services to meet the requirements of the small and medium sectors rather than a large sector. Also, Citibank set up its banking division in 1970. The various tasks performed by these divisions namely assisting new entrepreneurs, evaluating new projects, raising funds through borrowing, and issuing equity.

Indian banks started banking services as a part of the multiple services they offer to their clients from 1972. The state bank of India started the banking division in 1972. In the initial years, the SBI’s objective was to render corporate advice and assistance to small and medium entrepreneurs.

Merchant banking activities are of course organized and undertaken in several forms. Commercial banks and foreign development finance institutions have organized them through formation divisions, nationalized banks have formed subsidiaries companies and share brokers and consultancies constituted themselves into public limited companies or registered themselves as private limited companies. Some banking outfits have entered into the collaboration with bankers abroad with several branches.
May 30, 2018
The Techniques of Directing with Good Characteristics!
Learn, Explain the Techniques of Directing with Good Characteristics!

The direction is called management in action. Definition of directing, In the words of Theo Haimann, “In order to make any managerial decision really meaningful, it is necessary to convert it into effective action, which the manager accomplishes by directing. Without this managerial function nothing or at best very little is likely to come about. Also learn, Definition, now, Explain the Techniques of Directing with Good Characteristics!

Planning, organizing, and staffing can be considered preparatory managerial functions the purpose of control are to find out whether or not the goals are being achieved. The connecting and actuating link between these functions is the managerial function of directing, which means the issuance of directives and the guidance and overseeing of subordinates.” Related questions: What is the Importance of Directing Functions?

Good Characteristics of Directing:

A good order has the following characteristics:

1) The order should be clear and easily understood.

2) The order should be complete in all respects. It should not create doubts in the minds of subordinates.

3) It should be compatible with the objectives of the organization.

4) There should be specific instructions as to the time by which the order should be executed or completed.

5) The order should be so conveyed that it stimulates ready acceptance.

6) The order should preferably be in writing.

7) The order should be conveyed through the proper chain of command and it should also contain the reasons for issuing it.

Techniques of Directing:

Directing is an important function carried out by top management. It is the order or instruction to subordinate staff to perform a work or not to perform in a specific way. The techniques of directing are delegation, supervision, orders, and instructions.

(1) Delegation:

Delegation is an important mean of directing. The subordinates are assigned tasks and given powers to recruit them. In delegation, a superior assigns some of his work to the subordinates and gives them rights or powers. The subordinates are authorized to undertake the assigned work. Delegation is a means of sharing authority with the subordinates and providing them with an opportunity to learn. Delegation as a means of directing may bring out some problems.
- It may be difficult to spell out exact tasks and assignments of the subordinates. There may be some overlapping and uncertainties in job descriptions. The subordinates should learn to adjust them in such situations.
- There may be some contradiction in the assignment of task and delegation of authority.
- The subordinates may sometimes act beyond the assigned authority taking it as implied by the superiors. The superiors will have to bear with such situations.
- An indiscriminate delegation may create an imbalance in the organization since every subordinate may not have the same capacity and maturity.
- If the delegation of authority is too rigid then it kills initiative and creativity.
(2) Supervision:

Supervision is a means to oversee the work performed by subordinates. It should be ensured that work is performed as per the plans and guidelines. Every superior has to supervise the work of his subordinates. At operative level supervision is the job of a manager. A supervisor at the lower level remains in touch with the workers. He guides them for doing the work, maintains discipline and work standards and solves the grievances of workers. Supervision at different levels acts as a directing activity.

(3) Issuing Orders and Instructions:

The issuing of orders and instructions is essential to undertake the work for achieving the organizational goals. No manager can get a work done without issuing orders and instructions to subordinates. An order, instruction, directing or command is a means of initiating, modifying or stopping an activity. In the words of Koontz and O’Donnel has a directional technique, an instruction is understood to be a charge (command) by a superior requiring a subordinate to act or refrain from acting in a given circumstance.

According to this definition, an instruction is always given by a superior to a subordinate directing to undertake a work in a specified manner or prohibit him from some activity. The orders and instructions are the primary tools of directing by means of which the activities are started, altered, guided and terminated. While issuing an order a manager should be clear in his mind what he wants the subordinates to do or not to do. The clarity of orders will determine the level of performance of subordinates.
May 24, 2018
Characteristics of MIS Management Information Systems

Characteristics of MIS (Management information systems). It is a set of systems that helps management at different levels to take better decisions by providing the necessary information to managers, for long-term planning. The management information system is not a monolithic entity but a collection of systems that provide the user with a monolithic feel as far as relevant information delivery, transmission and storage are concerned. Also learned, the Role of The MIS, and its Characteristics!

Learn, Explain the Characteristics of Management Information Systems (MIS)!

The different subsystems working in the background have different objectives but work in concert with each other to satisfy the overall requirement of managers for good quality information. Management information systems can install by either procuring off the self-systems or by commissioning a completely customized solution.

A management information system has the following characteristics:

System approach:

The information system follows a System approach. The system’s approach implies a holistic approach to the study of the system and its performance to achieve the objective for which it has stood formed.

Management-oriented:

For designing MIS top-down approach should follow. The top-down approach suggests that system development starts from the determination of the management needs and overall business objectives. Management-oriented characteristic of MIS also implies that the management actively directs the system development efforts.

Need-based:

MIS design and development should be as per the information needs of managers at different levels that are strategic planning level, management control level, and operational control level.

Exception-based:

MIS should develop with the exception-based reporting principle. This means an abnormal situation, that is the maximum, minimum or expected values vary beyond the limits. In such cases, there should be exceptions reporting to the decision-maker at the required level.

Future-oriented:

Besides exception-based reporting, MIS should also look at the future. In other words, MIS should not merely provide past or historical information. Rather it should provide information based on projections based on which actions may initiate.

Integrated:

Integration is significant because of its ability to produce more meaningful information. For example, to develop an effective production scheduling system, it is necessary to balance such factors as set-up costs, workforce, overtime rates, production capacity, inventory level, capital requirements, and customer services. Integration means taking a comprehensive view of the subsystems that operate within the company.

Common data flows:

Because of the integration concept of MIS, there is an opportunity to avoid duplication and redundancy in data gathering, storage, and dissemination. System designers are aware that a few key source documents account for much of the information flow. For example, customer’s orders are the basis for billing the customer for the goods ordered, setting up accounts receivables, initiating production activity, sales analysis, sales forecasting, etc.

The Following Characteristics of Good Management Information Systems Explained!

For information to be useful to the decision maker, it must have certain characteristics and meet certain criteria.

Some of the characteristics of good information discuss as follows:

Understandable:

Since information is already in a summarized form, it must understand by the receiver so that he will interpret it correctly. He must be able to decode any abbreviations, shorthand notations, or any other acronyms contained in the information.

Relevant:

Information is good only if it is relevant. This means that it should be pertinent and meaningful to the decision maker and should be in his area of responsibility.

Complete:

It should contain all the facts that are necessary for the decision maker to satisfactorily solve the problem at hand using such information. Nothing important should stand left out. Although information cannot always be complete, every reasonable effort should make to obtain it.

Available:

Information may be useless if it is not readily accessible ‘ in the desired form when it needs. Advances in technology have made information more accessible today than ever before.

Reliable:

The information should count on being trustworthy. It should be accurate, consistent with facts, and verifiable. Inadequate or incorrect information generally leads to decisions of poor quality. For example, sales figures that have not stood adjusted for returns and refunds are not reliable.

Concise:

Too much information is a big burden on management and cannot process in time and accurately due to “bounded rationality”. Bounded rationality determines the limits of the thinking process which cannot sort out and process large amounts of information. Accordingly, information should be to the point and just enough – no more, no less.

Timely:

The information must deliver at the right time and in the right place to the right person. Premature information can become obsolete or forgotten by the time it stands needed.

Similarly, some crucial decisions can delay because proper and necessary information is not available in time, resulting in missed opportunities. Accordingly, the time gap between the collection of the central database and the presentation of the proper information to the decision maker must reduce as much as possible.

Cost-effective:

The information is not desirable if the solution is more costly than the problem. The cost of gathering data and processing it into information must weigh against the benefits derived from using such information.

Characteristics of MIS Management Information Systems

May 23, 2018
Description of the Key Characteristics of the Planning!
Learn and Understand, Description of the Key Characteristics of the Planning!

Planning involves setting objectives and deciding in advance the appropriate course of action to achieve these objectives so we can also, define planning as setting up of objectives and targets and formulating an action plan to achieve them. After that also, discuss the main steps involved in the planning process in an organization. Also learn, What is the Importance of Planning in Management? Description of the Key Characteristics of the Planning!

Another important ingredient of planning is time. Plans are always developed for a fixed time period as no business can go on planning endlessly. Also, keeping in mind the time dimension we can define planning as “Setting objectives for a given time period, formulating various courses of action to achieve them and then selecting the best possible alternative from the different courses of actions”.

The main key Characteristics of Planning!

It is goal-oriented.
- Planning is made to achieve the desired objective of business.
- The goals established should general acceptance otherwise individual efforts & energies will go misguided and misdirected.
- Planning identifies the action that would lead to desired goals quickly & economically.
- It provides a sense of direction to various activities. E.g. Maruti Udhyog is trying to capture once again Indian Car Market by launching diesel models.
It is looking ahead.
- Planning is done for future.
- It requires peeping in future, analyzing it and predicting it.
- Thus planning is based on forecasting.
- A plan is a synthesis of the forecast.
- It is a mental predisposition for things to happen in future.
It is an intellectual process.
- Planning is a mental exercise involving creative thinking, sound judgment, and imagination.
- It is not a mere guesswork but a rotational thinking.
- A manager can prepare sound plans only if he has sound judgment, foresight, and imagination.
- Planning is always based on goals, facts and considered estimates.
It involves choice & decision making.
- Planning essentially involves the choice among various alternatives.
- Therefore, if there is only one possible course of action. As well as, there is no need planning because there is no choice.
- Thus, decision making is an integral part of planning.
- A manager is surrounding by no. of alternatives. Also, he has to pick the best depending on requirements & resources of the enterprises.
It is the primary function of management / Primacy of Planning.
- Planning lays the foundation for other functions of management.
- It serves as a guide for organizing, staffing, directing and controlling.
- All the functions of management are performing within the framework of plans laid out.
- Therefore planning is the basic or fundamental function of management.
It is a Continuous Process.
- Planning is a never ending function due to the dynamic business environment.
- Plans are also preparing for specific period f time and at the end of that period, plans are subjecting to revaluation and review in the light of new requirements and changing conditions.
- Planning never comes into end till the enterprise exists issues, problems may keep cropping up and they have to tackle by planning effectively.
Planning is all Pervasive.
- It is requiring at all levels of management and in all departments of the enterprise.
- Of course, the scope of planning may differ from one level to another.
- The top level may be more concerned about planning the organization as a whole whereas the middle level may be more specific in departmental plans and the lower level plans implementation of the same.
It is designing for efficiency.
- Planning leads to accomplishment of objectives at the minimum possible cost.
- It avoids wastage of resources and ensures adequate and optimum utilization of resources.
- A plan is worthless or useless if it does not value the cost incurred on it.
- Therefore planning must lead to the saving of time, effort, and money.
- Planning leads to proper utilization of men, money, materials, methods, and machines.
It is Flexible.
- Planning is done for the future.
- Since future is unpredictable, planning must provide enough room to cope with the changes in customer’s demand, competition, govt. policies etc.
- Under changed circumstances, the original plan of action must revise and updated to make it more practical.
The Main Steps Involving the Planning Process!

The few main steps involved in the planning process in an organization.

Environment Analysis:

The external environment covers uncontrollable and unpredictable factors such as technology, market (prices, Competition, customers, etc.), socio-economic climate, political conditions and ecological conditions within which our plans will have to operate. Also read, What is the Process of Manpower Planning?

Also, the internal environment covers relatively controllable factors, such as personnel resources, technology, knowledge, finance, facilities, etc., at the disposal of the firm. The study of the environment or situation analysis will reveal the threats to be met and the opportunities to exploit as well as strengths and weaknesses.

Determination of Mission and Objectives:

The situation analysis will serve as a background for the formulation of our mission and objectives.

A mission provides the central or basic purpose answering a few basic questions:

(1) What is our business?

(2) Who are our customers?

(3) What is our economic and social responsibility? and so on.

The mission or creed statement will ensure purposeful life for our enterprise in the Justness world. It will give firm direction and make our activities meaningful and interesting.

On the basis of situation analysis and our balance sheet of assets and liabilities, we can easily take the first step in actual business planning, viz., the setting of the hierarchy of objectives — overall comparable objectives as well as divisional and departmental objectives. Objectives and goals are formulating at each level of management.

“Developing Strategies”:

Objectives give us the precise idea regarding our destination, i.e., where we want to go. The real problem is how to find the best way to achieve the stated objectives.

Finding the best way to go there (where we want to be) is called strategy development, Objectives answer the question:

What business is going to be? Strategy answers the question: How best can the business achieve under intelligent competition? The strategy is the magic wand of action to accomplish our objectives; For each functional area of our business, we will formulate our strategic i.e., desirable means to achieve stated ends or objectives.

Developing Programmes or Action Plans:

On the basis of our objectives and strategies, we will now formulate our detailed programmes or time-bound action plans to achieve specific goals or targets.

An action plan has three elements:

(1) The time limit of performance,

(2) The allocation of tasks to personnel in each department,

(3) The timetable or schedule of work to accomplish targets within the stated period.

Control Mechanism:

Control is the final phase of our planning, process. It is the other half of planning. Control is the extension of the planning process and the two take place together. Also, Control answers the question: How will we know where we are in future? By means of feedback loop, it ensures accomplishment of objectives.

Results or performance will compare with standards. If deviations are noted, corrective actions are taking in time. Thus planning-action-control-re-planning cycle assures the achievement of our goals or objectives.

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April 12, 2018
Explain are the Features, Nature, Characteristics of Planning!

Learn and Understand, Explain are the Features, Natures, Characteristics of Planning!

Planning is a particular type of decision making that addresses the specific future that managers desire for their organizations. It is the process of fixing goals of the business and finding the ways to attain these goals. The plan will help the managers to organize people and resources effectively. Plans develop confidence in managers. Also, the importance of planning in management, Explain are the Features, Nature, Characteristics of Planning!

Planning is the first managerial function to perform in the process of management. It is concerning with deciding in advance what is to do, when, where, how and by whom it is to do. Thus, it is a predetermined course of action to achieve a specified aim or goal.

All organizations whether it is the government, a private business or small businessman require planning. To turn their dreams of increase in sale, earning the high profit and getting success in business all businessmen have to think about future; make predictions and achieve the target. To decide what to do, how to do and when to do they do planning.

Meaning of Planning!

Planning can define as “thinking in advance what is to do when it is to do, how it is to do and by whom it should do”. In simple words we can say, planning bridges the gap between where we are standing today and where we want to reach.

Planning involves setting objectives and deciding in advance the appropriate course of action to achieve these objectives. So, we can also define planning as setting up of objectives and targets and formulating an action plan to achieve them.

Another important ingredient of planning is time. Plans are always developing for a fix time period as no business can go on planning endlessly.

Keeping in mind the time dimension we can define planning as “Setting objectives for a given time period, formulating various courses of action to achieve them and then selecting the best possible alternative from the different courses of actions”.

The definitions of planning given by the different writers are listing here.

In the words of Alfred and Beatty, “Planning is thinking process, the organizing foresight, the vision based on facts and experience that is requiring intelligent action.”

According to Koontz and O’Donnell, “Planning is essentially decision-making since it involves choosing from among alternatives.” According to George Terry, “Planning is the selecting and relating of facts and making and using of assumptions regarding. The future in the visualization and formulation of proposing activities believes necessary to achieve the desired results.”

The following Features, Nature, Characteristics of Planning are!

1. Planning contributes to Objectives:

Planning starts with the determination of objectives. We cannot think of planning in absence of objective. After setting up of the objectives, planning decides the methods, procedures, and steps to take for the achievement of set objectives. Planners also help and bring changes in the plan if things are not moving in the direction of objectives.

For example, if an organization has the objective of manufacturing 1500 washing machines and in one month only 80 washing machines are manufacturing. Then changes are making the plan to achieve the final objective.

2. Planning is the Primary function of management:

Planning is the primary or first function performing by every manager. No other function can execute by the manager without performing planning function because objectives are set up in planning and other functions depend on the objectives only.

For example, in organizing function, managers assign authority and responsibility to the employees and level of authority and responsibility depends upon objectives of the company. Similarly, in staffing, the employees are appointed. The number and type of employees again depend on the objectives of the company. So planning always proceeds and remains at no. 1 as compared to other functions.

3. Pervasive:

Planning is requiring at all levels of the management. It is not a function restricted to top-level managers only but planning is done by managers at every level. Formation of major plan and framing of overall policies is the task of top-level managers whereas departmental managers form the plan for their respective departments. And lower level managers make plans to support the overall objectives and to carry on the day to day activities.

4. Planning is futuristic/Forward-looking:

The Planning always means looking ahead or planning is a futuristic function. A Planning is never done in the past. All the managers try to make predictions and assumptions for future and these predictions are creating on the basis of past experiences of the manager and with the regular and intelligent scanning of the general environment.

5. Planning is continuous:

Planning is a never-ending or continuous process because after making plans also one has to be in touch with the changes in changing the environment and in the selection of one best way.

So, after making plans also planners keep making changes in the plans according to the requirement of the company. For example, if the plan is made during the boom period and during its execution. There is depression period then planners have to make changes according to the conditions prevailing.

6. Planning involves decision making:

The planning function is needed only when different alternatives are available and we have to select the most suitable alternative. We cannot imagine planning in absence of choice because in planning function managers evaluate various alternatives and select the most appropriate. But if there is one alternative available then there is no requirement of planning.

For example, to import the technology if the license is only with STC (State Trading Co-operation) then companies have no choice but to import the technology through STC only. But if there are 4-5 import agencies including in this task then the planners have to evaluate terms and conditions of all the agencies and select the most suitable from the company’s point of view.

7. Planning is a mental exercise:

It is the mental exercise. Planning is a mental process which requires higher thinking that is why it is kept separate from operational activities by Taylor. In planning assumptions and predictions regarding future are made by scanning the environment properly. This activity requires the higher level of intelligence. Secondly, in planning various alternatives are evaluated and the most suitable is selected which again requires the higher level of intelligence. So, it is right to call planning an intellectual process.

Main Nature or Characteristics of Planning!

The following are the important characteristics of planning:

1. Focus on objectives.

A plan starts with the setting of objectives and then makes efforts to realize them by developing policies, procedures, strategies, etc.

2. It is an intellectual process.

According to Koontz and O’Donnell, planning is an intellectual process involving mental exercise, foreseeing future developments, making forecasts and the determination of the best course of action.

3. Planning is a selective process.

It involves the selection of the best one after making a careful analysis of various alternative courses of action. It is concerning with decision-making relating to (a) what is to do, (b) how it is to do, (c) when it is to do, and (d) by whom it is to do.

4. Planning is pervasive.

Planning is a pervasive activity covering all the levels of an enterprise. While top management is concerning with strategical planning, the middle management and the lower management are concerning with administrative planning and operational planning respectively.

5. Planning is an integrated process.

Planning involves not only the determination of objectives but also the formulation of sound policies, programmes, procedures and strategies for the accomplishment of these objectives. It is the first of the managerial functions and facilitates other managerial functions like organizing, staffing, directing and controlling.

6. Planning is directed towards efficiency.

To increase the efficiency of the enterprise is the main purpose of planning. The guiding principles of a good plan are the maximum output and profit at the minimum cost. Terry has aptly stated that “planning is the foundation of the most successful action of an enterprise.”

7. Planning is flexible.

The process of planning should be adaptable to the changes take place in the environment. Koontz and O’Donnell emphasize that “effective planning requires continual checking on events and forecasts and the redrawing of plans to maintain a course towards a designed goal.”

8. The first function in the process of management.

Planning is the beginning of the process of management. A manager must plan before he can possibly organize, staff, direct/control. Because planning sets all other functions into action, it can see as the most basic function of the management. Without planning, other functions become the meaningless activity, producing nothing, but chaos.

9. It is a decision-making process.

Decision-making is an integral part of planning. It is defined as the process of choosing among alternatives. Obviously, decision-making will occur at many points in the planning process. For example, in planning for their organization, the managers first decide which goals to pursue: shall we manufacture all parts internally or buy some parts from outside?

10. It is a continuous process.

Planning is a continuous process. Koontz and Donnell rightly observe that like a navigator constantly checking where his ship is going in the vast ocean, a manager should constantly watch the progress of his plans. He must constantly monitor the conditions, both within and outside the organization, to determine if changes are requiring in his plans.

April 11, 2018
What are the Features of Sole Proprietorship?

Sole proprietorship highlights or characteristics or Features; It refers to a business organization in which enterprises are controlled or owned by a single person. The sole proprietorship is the oldest form of business enterprise in India. It is the simplest form of business and all the risks or losses are bearer by a single person. Also, if he wants any help they can get it from their friends, family, or relatives. It doesn’t require any legal recognition or formalities and the simplest way to open a business. Also learn, Sole Proprietorship: the Advantages and Disadvantages!

Explaining, What are the highlights or characteristics or Features of Sole Proprietorship?

Also, A sole proprietorship is a business owned by a single individual. This sole owner is responsible for the entire business and is the sole recipient of the business’s earnings. Unlike other legal structures, the sole proprietorship requires less paperwork and is subject to few business restrictions and regulations.

15 best Features of Sole Proprietorship:

The main highlights or characteristics or features of the sole proprietorship form of business can list as follows:

One Man Ownership:

In the proprietorship, only one man is the owner of the enterprise.

No Separate Business Entity:

No distinction is made between the business concern and the proprietor. Both are the same.

No Separation between Ownership and Management:

In the proprietorship, management rests with the proprietor himself/herself. The proprietor is a manager also.

Unlimited Liability:

Unlimited liability means that in case the enterprise incurs losses, the private property of the proprietor can also utilize for meeting the business obligations to outside parties. As there is no division between the business and the business person, accordingly the individual risk of the entrepreneur is boundless. If the business can’t pay its obligations and liabilities, at that point, the entrepreneur is responsible for the equivalent and pay them. For example, the proprietor needs to pay the forthcoming sum either by selling their resources or property, a house, care, and others.

All Profits or Losses to the Proprietor:

Being the sole owner of the enterprise, the proprietor enjoys all the profits earned and bears the full brunt of all losses incurred by the enterprise.

A Less-Formalities:

A proprietorship business can start without completing many legal formalities. Some businesses too can start simply after obtaining the necessary manufacturing license and permits.

Personal Organization or Common Identity:

A sole traders’ concern has no separate legal entity independent of the owner. The owner and the business concern are the same. The owner owns everything the business owns and he owes everything the business owns.

Capital:

In the sole traders, the capital is employing by the owner himself from his personal resources. He may also borrow money from his friends and relatives if he cannot depend solely on his personal resources.

Profits and Losses:

The surplus arising in the business of the sole trader entirely belongs to him and similarly, all the business losses and risks are to be borne by him alone.

No Special Legislation:

Sole traders are not governing by any special legislation. A partnership firm is governing by the Partnership Act, a joint-stock company is governing by the Companies Act, and a co-operative society by the Co-operative Societies Act. Any person who is competent to contract can start his business as a sole trader. However, he is subject to the common law, the law of contract, and the law of insolvency.

The concept of Unlimited Liability. As well as, the liability of a shareholder or member of a company or a co-operative society limits to the extent of the face value of the shares held by him. For example, if Mr. X subscribes to 100 shares of Rs. 10 each, his total liability is unto Rs. 1,000 only. If he has already paid Rs.5 per share, his liability will restrict to the unpaid portion of his shares, i.e., Rs. 500 only. Thus, there is a limit to the extent of liability of the shareholder of a company.

Thanks, Also, Photo Credit to pixabay.com/ More free Images!

No Legal Formalities:

There is no different law-related with a sole proprietorship to oversee it and accordingly, there is no presence of any arrangement of extraordinary standards just as guidelines to follow. Also, best of all, it doesn’t require either any enrollment or consolidation of any sort. Much of the time, we require just the permit to fire up the ideal business. Like that of the beginning, there are no legitimate tasks joined to the end methods. Along these lines, it gives effortlessness to start a business and do it with less issue.

Danger and Profit:

The proprietor of this business is the danger carrier in a sole exclusive. Since the business person is the main individual who put resources into the business monetarily, so all dangers have a place with him in particular. Regardless of whether the business fizzles or develops, the proprietor is the individual who gets influenced by the equivalent. Actually, he additionally appreciates all benefits acquired from the business. There is no compelling reason to separate and offer benefits with partners as there is no presence. Consequently, he bears all dangers and acquires benefits as well.

No different legitimate character:

In legitimate terms, the business and the proprietor are not treated independently as both are the one and same thing. No different legitimate element has a place with a sole owner and the proprietor is entirely and solely answerable for all business exercises and exchanges.

Progression:

As we as a whole realize that the business and the proprietor have a similar character. In this way, a sole proprietorship has altogether depended on the entrepreneur. A few variables influence a sole proprietorship, for example, retirement, craziness, demise, and detainment. In such a circumstance, the sole proprietorship puts to an end.

Control:

As all the business activities and duties lie with the sole owner, so he controls all the business solely. No other individual can participate in business exercises and the proprietor can alter or grow the business according to their solace and plans.

These are altogether highlights or characteristics or features of a sole proprietorship that will clarify what precisely the business structure and how it runs. Let us take a look at the upsides of selecting a sole proprietorship that we will write down underneath.

March 19, 2018
Most Important Characteristics of Organizational Culture

Characteristics of Organizational Culture; Like every person has his style of behavior, his personality, similarly the organization has a distinct culture. This culture may define as a set of all the espoused values of the organization. The culture of the organization can tier into 3 levels based on their visibility and how closely they are adhering to in the organization. The first level is Artifacts and Behavior. Artifacts and behavior are the most visible components of organizational culture. Also learn, What is Organizational Commitment? Most Important Characteristics of Organizational Culture!

How to Explain Most Important Characteristics of Organizational Culture?

They include the physical layout of the workplace and the observable behavior of its employees. The next level is Values. Values are less visible than behavior but they can see as they influence the observable behavior of the individuals working in the organization. But the top tier of organizational culture may see at the level of Assumptions and Beliefs. They cannot see, but they are so well ingrained in the employees that they come out quite naturally because that is the way the organization thinks.

Organizational culture is the outcome of both the management’s initial beliefs and employees’ adoption of those beliefs.

Explaining the Primary Characteristics of organizational culture:

The following characteristics of organizational culture below are;

As we can see, the unique ‘behavior’ of an organization can attribute to the makeup of the values that it espouses – the organizational culture. Let us understand these primary characteristics that define an organization’s culture as a whole, the ones that help shape up the organization’s ‘personality’.

These are very general characteristics that every organization would have to look into, otherwise, the culture would seem incomplete. Although all these characteristics are at some level a part of every company, the importance and individual interpretation of each differs from business to business, thus making each business unique in its way.

Innovation and Risk-Taking:

Risk and returns go hand in hand. In places where you take a risk (calculate the risk of course!), the chances of returns are higher. The same goes for innovation. You could either be a follower or a pioneer. Pioneering has its share of risks, but at times, it can also have a breakthrough outcome for the organization. Thus, innovation and risk-taking are one of the main characteristics of organizational culture-defining how much room the business allows for innovation.

Companies with cultures that place a high value on innovation encourage their employees to take risks and innovate in the performance of their jobs. Companies with cultures that place a low value on innovation expect their employees to do their jobs the same way that they have the train to do them, without looking for ways to improve their performance.

Attention to Detail:

Attention to detail defines how much importance a company allows precision and detail in the workplace. This is also a universal value as the degree of attention the employees are expecting to give is crucial to the success of any business. The management defines the degree of attention to be given to details.

This characteristic of organizational culture dictates the degree to which employees exist expected to be accurate in their work. A culture that places a high value on attention to detail expects its employees to perform their work with precision. A culture that places a low value on this characteristic does not.

Outcome Orientation or Emphasis:

Some organizations pay more attention to results rather than processes. It is the business model of each business that defines whether the focus should be on the outcome of the processes. This defines the outcome orientation of the business.

Companies that focus on results, but not on how the results exist achieving, place a high emphasis on this value of organizational culture. A company that instructs its sales force to do whatever it takes to get sales orders has a culture that places a high value on the emphasis on outcome characteristics.

People Orientation or Emphasis:

This is still one of the most contentious issues in organizational culture today. How much should be the management focus on the people? Some organizations are famous for being employee orient as they focus more on creating a better work environment for their ‘associates’ to work in. Others still are feudal, treating employees no better than work-machines.

Companies that place a high value on this characteristic of organizational culture place a great deal of importance on how their decisions will affect the people in their organizations. For these companies, it is important to treat their employees with respect and dignity.

Teamwork or Team Orientation:

It is a well-established fact that synergistic teams help give better results as compared to individual efforts. Each organization makes its efforts to create teams that will have complementary skills and will effectively work together.

Companies that organize work activities around teams instead of individuals place a high value on this characteristic of the organizational culture. People who work for these types of companies tend to have a positive relationship with their coworkers and managers.

Aggressiveness:

Every organization also lays down the level of aggressiveness with which their employees work. Some businesses like Microsoft are known for their aggression and market-dominating strategies.

This characteristic of organizational culture dictates whether group members exist expecting to be assertive or easygoing when dealing with companies they compete in the marketplace. Companies with an aggressive culture place a high value on competitiveness and outperform the competition at all costs.

Stability:

While some organizations believe that constant change and innovation are the keys to their growth, others are more focused on making themselves and their operations stable. The management of these organizations is looking at ensuring the stability of the company rather than looking at indiscriminate growth.

Just like having a strong personality adds character to a person, organizational culture does give a business its own special identity. It helps create cohesion among the employees as they share the primary characteristics of organizational culture and imbibes in them the spirit of teamwork.

A company whose culture places a high value on stability is rule-oriented, predictable, and bureaucratic. These types of companies typically provide consistent and predictable levels of output and operate best in non-changing market conditions. The culture of any organization is a reflection of the belief system or the values of its leaders, it is majorly a leadership factor that determines the culture of the firm. When the right leader is in the place he or she can shield the firm from the wrong external negative culture.

Simple Characteristics of Organisational Culture:

The following characteristics help us to understand the nature of organizational culture better. When we mix and match these characteristics, we get to the basis of culture:

Individual Autonomy:

The degree of responsibility, freedom, and opportunities of exercising initiative that individuals have in the organization.

Structure:

The degree to which the organization creates clear objectives and performance expectations. It also includes the degree of direct supervision that is used to control employee behavior.

Management Support:

The degree to which, managers provide clear communication, assistance; warmth, and support to their subordinates.

Identity:

The degree to which, members identify with the organization. As a whole rather than with their particular workgroup or field of professional expertise.

Performance Reward System:

The degree to which reward system in the organization like an increase in salary, promotions, etc. is based on employee performance rather than on seniority, favoritism, and so on.

Conflict Tolerance:

The degree of conflict present in relationships between colleagues and workgroups. As well as the degree to which employees are encouraged to air conflict and criticisms openly.

Risk Tolerance:

The degree to which, employees are encouraged to be innovative, aggressive, and risk-taking.

Communication Patterns:

The degree to which, organizational communications are restricted to the formal hierarchy of authority.

Outcome Orientation:

The degree to which, management focuses on results or outcomes rather than on the techniques and processes used to achieve these outcomes.

People Orientation:

The degree to which, management decisions take into consideration the impact of outcomes on people within the organization. When we appraise the organization based on the above characteristics. We get a complete picture of the organization’s culture. This picture becomes the basis of shared norms, beliefs, and understanding that members have about the organization. How things are done in it and how the members exist supposing to behave.

How to Explain the Most Important Characteristics of Organizational Culture?

February 28, 2018
How to explain the Nature of Business Economics?
Nature of Business Economics; A Traditional economic theory has developed along two lines; viz., normative, and positive. Normative focuses on prescriptive statements and helps establish rules aimed at attaining the specified goals of the business. Positive, on the other hand, focuses on the description it aims at describing how the economic system operates without staffing how it should operate.

Here is the article, How to explain the Nature of Business Economics?

The emphasis in business economics is on normative theory. Business economic seeks to establish rules which help business firms attain their goals, which indeed is also the essence of the word normative. However, if the firms are to establish valid decision rules, they must thoroughly understand their environment [Hindi]. This requires the study of positive or descriptive theory. Thus, Business economics combines the essentials of the normative and positive economic theory, the emphasis being more on the former than the latter.

Understanding the Characteristics or Nature of Business Economics

The following nature are below;
1. Microeconomic nature: Business Economics is Microeconomics in nature because it deals with the matters of a particular business firm only.
2. Use of economic theories: Business Economics uses all economic theories relating to the profits, distribution of income, etc.
3. Realistic one: Business Economics is real science. It studies all matters concerning business organization by considering the real conditions existing in the business field.
4. Normative Science: Business Economics is a normative science. It studies the matters concerning the aims and objectives of a business firm. Determines the methods to be adopted for achieving such objectives. It also makes an inquiry into the good and bad in decision making. Hence it is a normative science.
5. Use of Macroeconomics: Even though Business Economics has the nature of Microeconomics, it also uses Macroeconomics approaches frequently. Certain matters in Macroeconomics like business cycles, national income, public finance, foreign trade, etc. which are essential for Business Economics. So, Business Economics uses the Macro Economics phenomenon for taking business decisions.
Another five Main Characteristics of Business Economics

Some of the main characteristics of business economics are as follows:

Micro in Nature:

Business economics is microeconomics in nature. This is due to the study of business economics mainly at the level of the firm. Generally, a business manager is concerned with the problems of his business unit. He does not study the economic problems of an economy as a whole.

The basis of Theory of Markets and Private Enterprises:

Business economics largely uses the theory of markets and private enterprise. It uses the theory of the firm and resource allocation of the private enterprise economy.

Pragmatic in Approach:

Business economics is pragmatic in its approach. It does not involve itself with the theoretical controversies of economics. Yet it does not relegate the realities of business decision-making to the background by bringing in abstract assumptions. While economic theory abstracts from realities of the individual business units to build up its theories, managerial economics takes proper note of the particular economic environment in which a firm works.

Normative in Nature:

Business economics is also called normative economics which prescribes standards or norms for policymaking. Business economics is prescriptive rather than descriptive. Economic theory, we try to explain economic behavior: Business economics, we try to prescribe policies for a business manager which are most likely applied to achieve his objectives. In economic theory, we build ‘laws’ such as the law of Demand and the Law of Diminishing Returns. In business economics, we apply these laws for policy planning at the level of a firm.

Macro Analysis:

Macroeconomics which deals with the principles of economic behavior for the economy as a whole is also useful for business economics. A business unit operates within some economic environment which is in turn shaped by the behavior of the economy as a whole. Therefore, a business manager must know the external forces working in his business environment.

How to explain the Nature of Business Economics?
February 9, 2018