Concept of Investment – Investment is the employment of funds to get the return on it. In general terms, investment means the use of money in the hope of making more money. In finance, investment means the purchase of a financial product or another item of value with an expectation of favorable future returns. A study, PDF Reader with free Download PDF File.Also learn, Two Types: economic and financial investment, Difference between Saving and Investing, GST, What is the Concept of Investment?
Learn and Understand, What is the Concept of Investment?
What is Investment? An investment is an asset or item acquired to generate income or appreciation. In an economic sense, an investment is the purchase of goods that do not consume today but use in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will later sell at a higher price for a profit, mutual funds.
Investment of hard-earned money is a crucial activity of every human being. Also, Investment is the commitment of funds that have been saved from current consumption with the hope that some benefits will be received in the future. Thus, it is a reward for waiting for money. Savings of the people invest in assets depending on their risk and return demands. Also Importance, Industrial Relations!
Investment refers to the concept of deferred consumption, which involves purchasing an asset, giving a loan, or keeping funds in a bank account to generate future returns. Various investment options are available, offering differing risk-reward tradeoffs. An understanding of the core concepts and a thorough analysis of the options can help an investor create a portfolio that maximizes returns while minimizing risk exposure.
There are two concepts of Investment:
Economic Investment:
The concept of economic investment means an addition to the capital stock of the society. Also, The capital stock of the society is the goods that use in the production of other goods. The term investment implies the formation of new and productive capital in the form of new construction; and, producers of durable instruments such as plants and machinery. Also, Inventories and human capital include in this concept. Thus, an investment, in economic terms, means an increase in building, equipment, and inventory.
Financial Investment:
This is an allocation of monetary resources to assets that expect to yield some gain or return over a given period of time. It means an exchange of financial claims such as shares and bonds, real estate, etc. Financial investment involves contracts written on pieces of paper such as shares and debentures. People invest their funds in shares, debentures, fixed deposits, national saving certificates, life insurance policies, provident fund, etc. in their view investment is a commitment of funds to derive future income in the form of interest, dividends, rent, premiums, pension benefits and the appreciation of the value of their principal capital. In primitive economies, most investments are of the real variety whereas in a modern economy much investment is of the financial variety.
The economic and financial concepts of investment are related to each other; because, investment is a part of the savings of individuals; which flow into the capital market either directly or through institutions. Thus, investment decisions and financial decisions interact with each other. Also, Financial decisions are primarily concerned with the sources of money whereas investment decisions are traditionally concerned with the uses or budgeting of money.
Wise investing requires knowledge of key financial concepts and an understanding of your personal investment profile and how these work together to impact investing decisions. Here we will understand the difference between saving and investing. Illustrate the risk/rate-of-return tradeoff, the importance of the time value of money and asset allocation; your personal risk tolerance, recognize your financial goals, and in defining an appropriate investment plan and asset mix for you and your family
The Difference Between Saving and Investing:
Even though the words “saving” and “investing” are often used interchangeably, there are differences between the two.
Saving provides funds for emergencies and for making specific purchases in the relatively near future (usually three years or less). Also, the Safety of the principal and liquidity of the funds (ease of converting to cash) are important aspects of savings Rupees. Because of these characteristics, savings Rupees generally yield a low rate of return and do not maintain purchasing power.
Investing, on the other hand, focuses on increasing net worth and achieving long-term financial goals. Investing involves risk (of loss of principal) and is to consider only after you have adequate savings.
Savings v/s Investment Rupees
Savings
Investment
Safe
Involve risk
Easily accessible
Volatile in short time periods
Low return
Offer potential appreciation
Used for short-term goals
For mid- & long-term goals
What is the Concept of Investment? Saving and Investing,
The concept of industrial relations is explaining their scope and IR has a very wide meaning and connotation. In the narrow sense, it means that the employer, employee relationship confines itself to the relationship that emerges out of the day to day association of the management and the labor. In its wider sense, industrial relations include the relationship between an employee and an employer in the course of the running of an industry and may project it to spheres, which may transgress to the areas of quality control, marketing, price fixation and disposition of profits among others. Also, learn the Importance of Industrial Relations.
Learn and Study, What is the Scope of Industrial Relations?
The term industrial relations has a broad as well as a narrow outlook. Originally, industrial relations broadly define to include the relationships and interactions between employers and employees. From this perspective, industrial relations covers all aspects of the employment relationship, including human resource management, employee relations, and union-management (or labor) relations. Now its meaning has become more specific and restricted.
Accordingly, industrial relations pertains to the study and practice of collective bargaining, trade unionism, and labor-management relations, while human resource management is a separate, largely distinct field that deals with nonunion employment relationships and the personnel practices and policies of employers.
The scope of industrial relations is quite vast.
The main issues involved here include the following:
Collective bargaining.
Machinery for settlement of industrial disputes.
Standing orders.
Worker’s participation in management, and.
Unfair labor practices.
Definition and Scope of industrial relations:
The ultimate aim of any human activity at the socio-economic level should be the minimal use of available resources in achieving the maximum economic and social results, i.e. to be increasingly productive. The productivity of capital, machines, and resources other than human resources can be improved in various ways.
But improving the productivity of human resources is a complex and onerous task, for the simple reason that “labor” stands for both an individual human being and a group of individuals with different perceptions about productivity, motivation and attitudes, and with different needs. In organizations, individuals do not operate in isolation. They interact and react collectively to various issues in which management has an interest, including productivity.
Thus productivity improvement extends beyond the domain of the management of workers and becomes a labor-management or industrial relations issue to be negotiated, settled and implemented jointly by the management and the union. Productivity improvement as an industrial relations issue thus acquires a greater significance in all enterprises where the employees are organized.
“Industrial relations” broadly means the relations arising out of employment. In this broad sense, it covers the area of personnel management or human resources management and labor-management relations or labor relations. In its narrower sense, it refers only to the relations between management and the unions. And in its popular usage, it refers only to labor-management relations.
More things…
Industrial relations in organizations is the total of the management’s attitude to labor and of labor’s attitude to management’s policies and practices that affect the interests of the employees. Industrial relations are, basically, interactions between management and union(s). They involve continuous dialogue between the two sides on various issues of common interest; through such dialogues, the two sides shape each other’s attitudes.
The approach, methods, strategies, and techniques, etc., of management in achieving the desired objectives vary from one organization to another. This is especially true about productivity improvement through industrial relations. It is, therefore, primarily the responsibility of management to develop industrial relations with workers and the unions to promote productivity continuingly.
Another scope of Industrial Relations:
Based on the above definitions, the scope of Industrial Relations can easily be delineated as follows:
Labor relations, i.e., relations between labor union and management.
Employer-employee relations i.e. relations between management and employees.
The role of various parties’ viz., employers, employees, and state in maintaining industrial relations.
The mechanism of handling conflicts between employers and employees, in case of conflicts, arise.
The main aspects of industrial relations can be identified as follows:
Promotion and development of healthy labor-management relations.
Maintenance of industrial peace and avoidance of industrial strife.
Learn, What is the Concept of Financial Decisions?
Decisions concerning the liabilities and stockholders’ equity side of the firm’s balance sheet, such as a decision to issue bonds. Decisions that involve: (1) determining the proper amount of funds to employ in a firm. (2) selecting projects and capital expenditure analysis. (3) raising funds on the most favorable terms possible, and. (4) managing working capital such as inventory and accounts receivable. Also learn, Financial Management, What is the Concept of Financial Decisions?
Definition of Financing Decision:
The Financing Decision is yet another crucial decision made by the financial manager relating to the financing-mix of an organization. It is concerned with the borrowing and allocation of funds required for the investment decisions.
The financing decision involves two sources from where the funds can raise: using a company’s own money. Such as share capital, retained earnings or borrowing funds from the outside in the form debenture, loan, bond, etc. The objective of financial decision is to maintain an optimum capital structure, i.e. a proper mix of debt and equity, to ensure the trade-off between the risk and return to the shareholders.
The Debt-Equity Ratio helps in determining the effectiveness of the financing decision made by the company. While taking the financial decisions, the finance manager has to take the following points into consideration:
The Risk involved in raising the funds. The risk is higher in the case of debt as compared to the equity.
The Cost involved in raising the funds. The manager chose the source with minimum cost.
The Level of Control, the shareholders, want in the organization also determines the composition of capital structure. They usually prefer the borrowed funds since it does not dilute the ownership.
The Cash Flow from the operations of the business also determines the source from where the funds shall raise. High cash flow enables to borrow debt as interest can easily pay.
The Floatation Cost such as broker’s commission, underwriters fee, involved in raising the securities also determines the source of fund. Thus, securities with minimum cost must choose.
Thus, a company should make a judicious decision regarding from where, when, how the funds shall raise. Since, more use of equity will result in the dilution of ownership and whereas, higher debt results in higher risk. As the fixed cost in the form of interest is to pay on the borrowed funds.
The Concept of Financial Decisions:
Financial decisions refer to decisions concerning financial matters to a business concern. Decisions regarding the magnitude of funds to invest to enable a firm to accomplish its ultimate goal, kind of assets to acquire. The pattern of capitalization, the pattern of distribution of firm’s income and similar other matters are including in financial decisions.
These decisions are crucial for the well-being of a firm because they determine the firm’s ability to obtain plant and equipment. When needed to carry the required amount of inventories and receivables, to avoid burdensome fixed charges when profits and sales decline and to avoid losing control of the company.
Financial decisions are taking by a finance manager alone or in conjunction with his other executive colleagues of the enterprise. In principle, finance manager is held responsible to handle all such problems as involve money matters.
But in actual practice, he has to call on the expertise of those in other functional areas: marketing, production, accounting, and personnel to carry out his responsibilities wisely. For instance, the decision to acquire a capital asset is based on the expected net return from its use and on the associated risk.
These cannot give values to finance manager alone. Instead, he must call on the expertise of those in charge of production and marketing. Similarly, the decision regarding allocation of funds as between different types of current assets cannot take by a finance manager in the vacuum.
The policy decision in respect of receivables—whether to sell for credit, to what extent and on what terms is essentially financial matter and has to hand by a finance manager. But at the operating level of carrying out the policies. Sales may also involve in decisions to tighten up or relax collection procedures may have repercussion on sales.
Similarly, in respect of inventory, while determining, types of goods to carry in stock and their size are a basic part of the sales function. The decision regarding the quantum of funds to invest in inventory is the primary responsibility of the finance manager since funds must supply to finance inventory.
As against the above, the decision relating to the acquisition of funds for financing business activities is primarily a finance function. Likewise, finance manager has to take the decision regarding the disposition of business income without consulting. Other executives since various factors involving in the decision affect ability of a firm to raise funds.
Learned, explaining, the Development of Human Resource in an Organization!
What is Development? The systematic use of scientific and technical knowledge to meet specific objectives or requirements. As well as, An extension of the theoretical or practical aspects of a concept, design, discovery, or invention. The process of economic and social transformation that is based on complex cultural and environmental factors and their interactions. Also, The process of adding improvements to a parcel of land, such as grading, subdivisions, drainage, access, roads, utilities. Also learn, the Inductive Method of Economics, How to Development of Human Resource in an Organization?
Benefits/ Advantages of Human Resource Development:
Development of current employees reduces the company’s dependence on hiring new workers.
If employees are developed, the job openings are more likely to fill internally.
Promotions and transfers also show employees that they have a career, not just a job.
The employer benefits from increased continuity in operations and from employees who feel the greater commitment to the firm.
Increase the productivity of employees.
It helps in the career development of organization and employees too.
Human resource development is also an effective way to meet several challenges, includes:
1. Employee obsolescence!
Obsolescence results when an employee no longer possesses the knowledge or abilities needed to perform successfully.Or
It may result from a person’s failure to adapt to new technology, new procedures, and other changes. Also, The more rapidly the environment changes, the more likely it is that employees will become obsolete.
Employers are reluctant to take strong action and fire an obsolete employee, particularly employees who have been with the company a long time.
Proactively assessing the needs of employees and giving them programs to develop new skills can avoid employee obsolescence.
If these programs are designed reactively, after obsolescence occurs, they are less effective and more costly.
When an employee reaches a career plateau, obsolescence may be more likely.
A career plateau occurs when an employee does well enough no to be demoted or fired but not so well that s/he is likely to promote.
Motivation to stay current may reduce when an employee realizes that s/he is a career plateau.
2. International & Domestic Workforce Diversity:
Workforce diversity causes many organizations to redesign their development programs.
Role-playing and behavior modeling are more effective ways to train and develop employees for facing the challenges the workforce diversity.
3. Technological change:
Rapid changes in technology require the firms to engage in nearly continuous improvement.
Technological changes having a profound impact on training and development increases the need to assess the developmental requirements of current and future managers, professional and technical peoples.
Turnover – the willingness of employees to leave one organization for another.
Departures are largely unpredictable, development activities must prepare employees to succeed those who leave.
Some employer with excellent development programs finds that training programs contribute to employee turnover. Therefore, they are reluctant to invest money in workers who may then take their new skills to a new job at a higher-paying competitor.
After evaluating the importance of training and development programs, the organizations realize that it is better to have some trained employee who may leave than to have an untrained workforce that says.
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Organizational Values: An organization is an artifact, social entity, has structured activities, nominal boundaries and it is goal-directed. The Concept of Organizational Values: Definition of Organizational Values, Sources of Organizational Values, Advantages of Organizational Values, and Disadvantages of Organizational Values! Influence of Organizational Values on Organizational Practices and Processes. Values can explain in a few perspectives according to various sources.
Learn, Explain Organizational Values: Definition, Sources, Advantages, and Disadvantages!
In ethics, the value represents the importance of physical and abstract objects which is ideally accepted by individual or group. It can also define as qualities that are considering worthwhile that represent an individual’s highest priorities and deeply held driving forces. Values are often admixture with knowledge, norms, and beliefs. Also learned, What are the Participation and Organizational Climate? Organizational Values: Definition, Sources, Advantages, and Disadvantages!
Beliefs can prove right or wrong by one but not values. Beliefs may vary by cohort, time, geographical differences but values are universal, true for anybody at any time, whenever an individual is. Organizational values are ethical codes that guide behavior by putting assumptions into practice. It also serves as qualities that an organization appreciates and would require members of the organization to chase after.
Organizational values are the ideology of an organization and practiced by the organization from the employee treatment, technology development, customer or any other external environment interaction. It is part of the important element that forms an organization’s culture and it emanates deep from an organization’s soul.
Source and Origin of Organizational Values:
Organizational values are closely associated with human values. It can perceive as an extension of human values, which can categorize into two: instrumental and terminal value. Positive, honest, integrity, responsible, helping the needful are some examples of values. Terminal value relate to goals or desired stage, whereas instrumental values relate to what needs to apply to achieve a terminal value. Example: one’s terminal value being to provide a good life to family members, and instrumental value being to be hardworking and responsible in everything aspects.
Organization values that contradict with human values will leave the members of the organization uncertain and confused about their roles. Problems that plague the society will mirror in the organization. Values do not come from conscious intentions but rather, from the highest expression out of the free will. Some organizational values are not consciously created but are part of the fabric of the organization, as a result of founders’ views.
Values might discover and practice by founders during the early days. Values remain unchanged but evolved over the years unnoticeably until the organization decided to encapsulate it in words and lay as a fundamental part of the way the organization thinks.
Extra knowledge:
Some organizational values are creating consciously by the management team who decide to improve company’s performance systematically. Frameworks, methods might introduce to capture the organizational values to reveal findings. Values could derive from the organization’s goals. It is a set of principles that guide an organization to success and through difficult situations. It is not to compromise for short-term expediency or financial gain.
Organizational values are so special that it superseded corporate strategy, technological advantages or market presence to be the power that resides in shaping a successful organization. Organizational values define the acceptable standards which govern the behavior of individuals within the organization. Without such values, individuals will pursue behaviors that are in sync with their value systems, which may lead to behaviors that the organization doesn’t wish to encourage.
Advantages of Organizational Values:
Organizational values promote the healthy growth of an organization. According to Maslow’s hierarchy of needs, humans have a fundamental need to associate with something that they can feel proud. With the tight association, all members have with an organization, the individual’s membership defines and subsequently creates a committed workforce.
Organizational values also let members of the organizations stay motivated. The external motivation by managers is less effective than in a routine-based society and work process. Therefore organizational values should take into consideration to promote intrinsic motivation of the organization’s members.
The nature, role, and function of values are considering a central part of the organizational value foundation of a corporate brand. Organizations with good organizational values perceived as socially responsible corporate and generally well accepted by the public. Brand value increase and therefore drive good returns from the public, in terms of sales, as well as brand image. Organization identity is strong and helps differentiate the organization from competitors.
Organizational values are vital for continuity, consistency, and credibility in a value-creating process. As values ensure everyone in the organization is working towards the same goals by the same principles and adhering to the same standards. Organizational values foster the organization’s morale and protect an organization’s reputation. Values are cognitive, affective and provide directions. It drives organization groups towards the common target.
Disadvantages of Organizational Values:
Values are important to study organizational behavior because the value is the foundation of how people behave. Personal values might contradict with organizational values although values are typically good. Example some organizations’ reward system is based on seniority. People that value performance higher than seniority will tend to need to deal with disappointment when they are bounding by the reward system based on seniority.
Both seniority and performance are good values but in this case, people disappoint due to different value hierarchy. When there is a contradiction, the individual could either place personal values as a top priority against the organizational value and vice versa. When individual prioritized personal values, organizations’ benefits are at risk of sacrifice. Individuals might feel depressed as well when organizational values took over personal values.
Individuals might suffer imbalanced life from practicing organizational values, such as ‘hardworking’ as organizational value and member of the organization might require to practice it and slack in terms of personal life, which is not a good sign from society harmony point of view.
Organizational value somehow define organizations’ goals to a certain extent. It might limit the organization’s pursuit of other achievable goals due to principles and standards generated by the defined organizational values.
Organizational value makes an organization harder to change their existing reputation if an organization decided to change the public’s perception that has long formed. It makes a reputable organization’s journey to a breakthrough existing image, a hard one.
Influence of Organizational Values on Organizational Practices and Processes:
Personal values shape individuals’ attitude and impact an individual’s behavior. Similarly, organizational value also influences how an organization ‘behaves’ because it will then determine the destiny of that organization.
Organization Practices and Processes are then set up, to follow. Serve as guidebooks to ensure the organization is pursuing the right path towards common goals on a day to day execution perspective. These practices and processes served as written controls and guidelines for members of an organization to perform. Their day to day job to achieve common organizational goals.
Business processes are set of living documents although. There should not be frequent changes to review from time to time. Some organizations spend a huge amount of investment to review and redesign processes. The design teams tend to be ambitious to design processes that ‘work on paper’. Issues arise during the execution phase. Situations become more complicated if staffs are not governed by organizational value’s. Policies and practices are as good as the human that man many subsystems and sub-processes.
An organization can have the best-designed processes but still cannot be a world-class organization if humans. As part of the key factor is not behaving how they should be. Other than processes, policies, and practices also include organizational enablers. An enabler is a technical facility or resource that makes it possible to perform a task, activity or processes. Organizational value also influences the organizational enablers directly which consequently impact the organization’s policies and practices.
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Typical business processes involved in an invoice and servicing customers include billing the customer. Provide after-sales service and responding to customer inquiries. If an organization induce “trust and personal responsibility to every client’s success”. As an organizational value and this is being practiced across the organization including the invoice department. It is almost certain that customers will receive superb customer services and that organization can expect regular return customers without much of marketing effort. But if the invoice department does not practice the organizational value. It is most likely to be the pain point for customers to deal with, and the staffs do not feel their responsibility towards the organization’s success.
If an organization is sales-Oriente and take customers as the highest priority. The internal policies making would also align to support the organization’s values. This direction does not only apply to external customers but will also determine inter-departmental interaction mode. One department becomes another department’s internal clients and staffs take cross-departmental interaction seriously instead of having a bureaucracy attitude.
By Research;
World-famous technology leader, Sony’s core values are to be a leader, not the follower. The organizational value has been driving the company to be notable as the ‘first’ to introduce cutting-edge electronic devices, recording, and storage technologies to market all time. Sony refuses to stay in the position of adopting standards of other manufacturers set.
Sony spends millions of dollars in the Research and Development Department every year to sustain as the leader in new product introduction. ‘Walkman’ is a Sony brand trademark originally uses for the portable cassette player. It was invented by Sony’s audio division engineer Nobutoshi Kihara in 1979 and other electronic companies then followed the idea, innovatively. Sony also was the first to launch other electronic products such as Compact Disc players, gaming console, Play Station to name a few.
Organizational Values: Definition, Sources, Advantages, and Disadvantages!
Participation and Organizational Climate; Participation is based on the democratic value of organizational life. The basic feature of democracy as applying to organizational life can see by quoting Bennis. He observes that democracy is not permissive or laissez-faire, but the system of values – a climate of beliefs governing behavior – which people are internally compelled to affirm by deeds as well as words.
Explain are the Participation and Organizational Climate!
Full and free communication, regardless of rank and power.
A reliance on consensus rather than on the more customary forms of coercion of compromise, to manage conflict.
The idea that influence is based on technical competence and knowledge than on the vagaries of personal whims or prerogative of power.
An atmosphere that permits and even encourages emotional expressions as well as task-oriented acts, and.
A basic human bias, one which accepts the inevitability of conflict between the organization and individual but which is willing to cope with and mediate in this conflict on rational grounds.
Such values involve participative management in the organization which incorporates getting things done through other people by creating a situation in which subordinates may developmental and emotional involvement in a group situation which encourages them to contribute to group goals and shares the responsibility in them. There are important ideas in this concept of participation. Mental and emotional involvement, acceptance of responsibility and motivation to contribute.
To summarise, we can say that there are three important ideas in this concept of participation:
Mental and Emotional Involvement:
The basic feature of the participative system is that there should mental and emotional involvement of the employees in the administration of the organization. This involvement is psychological rather than physical. A person who participates is ego involve rather than mere task involves. If there is no psychological involvement of the employees, the participation is no participation but just a manipulation. In such a situation, the manager tries to make people think that they are participating and having an influence, while in reality, they are not.
Acceptance of Responsibility:
A second important characteristic of participation is that people are encouraged to accept responsibility. Since people are mentally and emotionally involving in decision making, they have to undertake responsibilities also. Thus, they become both decision makers and executors.
This is a social process by which people become involving in an organization and want it to work successfully. When people want to do something, they will find a way. Under participative conditions, people perceive managers as supportive contributors to the team. Employees are ready to work actively with managers, rather reactively against them.
Motivation to contribute:
The third feature of participation is that it motivates persons to contribute to the situation. They are given opportunities to release their win resources of initiative and creativity towards the objectives of the organization. Thus, it is different from consent in that the latter process only confirms what has already decided. A consenter does not contribute to decision – making rather he merely approves. Participation uses the creativity of all persons thereby all of them contributes something in decision making.
What are the Participation and Organizational Climate?
Developing a Sound Organizational Climate:
To develop a sound organizational climate is a long term proposition. The organizational climate depends upon the organizational behavior system. The organizational climate should represent the goals and philosophies of those who join together to create the organization. The type of climate that an organization seeks is contingent upon the type of people it has, the type of technology, level of education and expect actions of people in it.
The following techniques are generally helpful in improving the climate of the organization:
Effective Communication System:
There should be two-way communication in the organization so that the employees know what is going on and react to it. The manager can modify his decision on the basis of feedback received.
Concern for People:
The management should interest in human resource development. It should work for the welfare of employees and an improvement in their working conditions. For developing a sound organizational climate, the management should have show concern for the people.
Participative Decision Making:
The management should involve the employees in the decision-making process, particularly those decisions which are related to goal setting and affect them. Participative decision making will make the employees committed to the organization and more cooperative also.
Change in Policies, Procedures, and Rules:
The organizational climate can also change by making changes in the policies, procedures, and rules. It is a time-consuming process but the changes will also be long-lasting if the workers see the changes in policies, procedures, and rules as favorable to them.
Technological Changes:
Generally, workers and employees resist any innovative changes. But where technological changes improve the working conditions of the employees, the change will be easily accepted. The better climate will be there if the management adopts innovative changes in consultation with the employees.
But all the above factors are contingent upon the assumptions of the nature of people in general. For example, the ECONOMIC MAN is basically motivated by money and economic security and hence, economic factors may be used to attract and motivate him. For a SOCIAL MAN, positive social relations and interactions are a must. Thus, the creation of a climate where a happy family atmosphere prevails is appropriate for him. The self-actuating man seeks achievement, accomplishment, and meaning in what he does. The organizational climate with a certain degree of freedom is appropriate for him.
Thus, in order to build up a sound organizational climate, management must understand the people in the organization. The importance must be given to what motivates people’s performance in general and building an overall climate conducive to motivation, a keen insight into the individual in particular and tailoring a personal approach to leadership and job design to which the man will respond with commitment. The different types of people suggest that there cannot be any all-purpose organizational climate.
Reference
1. Participation and Organizational Climate – yourarticlelibrary.com/organization/organisational-climate and livinfo.blogspot.in/2012/10/participation-and-organisational-climate.html 2. Photo Credit URL – //npis.com/wp-content/uploads/2017/01/helping-hands-bg.png
Rational and Dynamic Approaches to Strategic Management; It is not a new concept. It has defined as a management system that links strategic planning and decision making with the day-to-day business of operational management. Strategic management is not a simple, step-by-step process, but a complex and iterative process. Which needs hard work and dedication from many people in an organization to implement it toward the objective.
Evaluation of the Rational and Dynamic Approaches to Strategic Management
It is the process for the leading members of an organization to forecast its future and develop the necessary procedures and operations to achieve its future. Also, Strategic management is usually found in high levels of management to help organizations gather, analyze and organize useful information to keep up with the industry and competitive trends. The rational and dynamic approaches to strategic management are two different schools of thought. Furthermore, The rational approach is well-plan and more prescriptive in strategy selection. However, the dynamic approach is the opposite.
What is Strategic management?
SM is the formulation and implementation of the major goals and initiatives taken by a company’s top management on behalf of owners, based on consideration of resources and an assessment of the internal and external environments in which the organization competes. Strategic management provides overall direction to the enterprise and involves specifying the organization’s objectives. Developing policies and plans designed to achieve these objectives, and then allocating resources to implement the plans. Academics and practicing managers have developed numerous models and frameworks to assist in strategic decision-making in the context of complex environments and competitive dynamics. Strategic management is not static; the models often include a feedback loop to monitor execution and inform the next round of planning.
Michael Porter identifies three principles underlying strategy: creating a “unique and valuable [market] position”, making trade-offs by choosing “what not to do”, and creating “fit” by aligning company activities with one another to support the chosen strategy. The corporate strategy involves answering a key question from a portfolio perspective: “What business should we be in?” Business strategy involves answering the question: “How shall we compete in this business?” In management theory and practice, a further distinction is often made between strategic management and operational management. Operational management is concerned primarily with improving efficiency and controlling costs within the boundaries set by the organization’s strategy.
Evaluation of the Rational and Dynamic Approaches to Strategic Management
The choice for any of the two approaches can indirectly or directly link to the environment in which the organization operates or certain organizational factors that affect the application of the strategic management approach. The favor is inclining to the dynamic approach because of the changing factors in the external environment. It is two of the Disadvantages of the Rational Approach and the Advantages of the Dynamic Approach.
The thought of rational strategic management supposes the environment of the organization facing is stable, small changes, and expectant. So, the organization can look forward to the market and the future. But today, the environment of the organization facing is not only complex but also less and less expectant. If the organization emphasizes the rational model, it may only concern with management efficiency and form strategic management excessively. Which will create a kind of logjam of strategic management? The option of the dynamic approach advance with the times and takes. The whole situation into account and plan accordingly.
The disadvantage of the rational approach does not mean this approach is useless. No one can say the dynamic approach is useful to all strategies. The rational model promotes considering the available alternatives. Evaluate all of the consequences of every alternative and choose the appropriate alternative. The positive impact on organization performance exists, but the organization can not only rely on the rational approach for positive performance. Therefore, some researchers suggest an integrated approach – hanging the rational approach and the dynamic approach together. Mintzgerg (1987) argues that realized strategy is always a combination of the rational approach and the dynamic approach. As strategic management is a complex synergy of strategy, the integration may result in a remarkable performance.
Strategic management is a science that is closely related to social science. The methodology of strategy formulation requires adapting to the nature of the scientific discipline. Only the organization that practices some form of strategic making can survive, anticipating the unpredictability of external influences in an environment. What are the Components of a Strategy Statement?
The Rational and Dynamic Approaches to Strategic Management
Concept of Career Planning; Career is viewed as a bunch or collection of jobs or positions. Generally, it describes an applicable career path within the structure of the organization. It shows the principal personnel development paths within the organization. The etymology of the term derived from the Latin word career, which means race. All the jobs, that are held together during one’s working life, constitute the career. It is also viewed as the sequence of positions held by an individual during his employment life. Edwin B. Flippo defined a career, as a sequence of separate but related work activities that provide continuity, order, and meaning in a person’s life.
The Concept of Career Planning: Definition, Objectives, Process, and Benefits.
A career may be viewed as the amalgamation of the changes in values, attitudes, and motivation an individual embraces, as he or she grows older. This constitutes a subjective element of the concept “career”.
Concept And Meaning Of Career planning:
Career planning is a process by which one selects career goals and the path to those goals. It involves a clear selection of career goals and career paths.
Career goals: Career goals are the desired future positions an employee strives to reach as a part of the career.
Career path: Career path is the sequential pattern of jobs during a career. It can cover 30 years or more until the retirement of the employee. It takes a long-term perspective of the job.
Career planning is a continuous process. HRM should facilitate it by providing career education, information, and counseling to employees for career planning purposes.
Career education: Career education increased employee awareness about career planning through a variety of educational techniques, such as:
Workshops and seminars about career planning
Memoranda and position papers about career planning
Speeches about career planning
Career information: Career information provides information to employees about career planning. Such information can be available through Human Resource Information System. HR specialists can advise about career goals and alternative career paths.
“A sequence of jobs that constitute what a person does for a living.”
According to Schermerborn, Hunt, and Osborn,
“Career planning is a process of systematically matching career goals and individual capabilities with opportunities for their fulfillment.”
Career planning is the process of enhancing an employee’s future value.
A career plan is an individual’s choice of occupation, organization and career path.
Career planning encourages individuals to explore and gather information, which enables them to synthesize, gain competencies, make decisions, set goals and take action. It is a crucial phase of human resource development that helps the employees in making the strategy for work-life balance. New Roles of Human Resource Management in Business Development.
Features of Career Planning and Career Development:
It is an ongoing process.
It helps individuals develop the skills required to fulfill different career roles.
Strengthens work-related activities in the organization.
Defines the life, career, abilities, and interests of the employees.
It can also give professional directions, as they relate to career goals.
Objectives of Career Planning:
The major objectives of career planning are as follows:
To identify the positive characteristics of the employees.
Develop awareness about each employee’s uniqueness.
To respect the feelings of other employees.
Attract talented employees to the organization.
To train employees towards team-building skills.
To create healthy ways of dealing with conflicts, emotions, and stress.
Benefits of Career Planning:
Career planning ensures a constant supply of promotable employees.
It helps in improving the loyalty of employees.
Career planning encourages an employee’s growth and development.
Discourages the negative attitude of superiors who interest in suppressing the growth of the subordinates.
It ensures that senior management knows about the caliber and capacity of the employees who can move upwards.
It can always create a team of employees prepared enough to meet any contingency.
Career planning reduces labor turnover.
Every organization prepares succession planning towards which career planning is the first step.
Career planning is the process by which one selects career goals and the path to these goals. The major focus of career planning is on assisting the employees to achieve a better match between personal goals and the opportunities that are realistically available in the organization. Career programs should not concentrate only on career growth opportunities. Practically speaking, there may not be enough high-level positions to make upward mobility a reality for a large number of employees. Hence, career-planning efforts need to pinpoint and highlight those areas that offer psychological success instead of vertical growth.
Career planning is not an event or end in itself, but a continuous process of developing human resources for achieving optimum results. It must, however, note that individual and organizational careers are not separate and distinct. A person who is not able to translate his career plan into action within the organization may probably quit the job if he has a choice.
What is the Concept of Career Planning? Image form Online.
The concept of Organizational Climate: Organizations are social systems. Organizations combine science and people, technology and humanity. It is not possible for every organization to have the same type of technology and people and so the organizations differ in their characteristics and internal environment. “Organizational climate (sometimes known as Corporate Climate) is the process of quantifying the “culture” of an organization, and it precedes the notion of organizational culture. It is a set of properties of the work environment, perceived directly or indirectly by the employees, that is assumed to be a major force in influencing employee behavior.”
Know and Understanding the Concept of Organizational Climate.
The internal environment of an organization may be called the organizational climate. OC, a guide for dealing with people serves as a major influence on motivation and productivity of individuals and total workforce. OC may note as the “personality” of an organization as conceived by its employees.
The organizational climate usually has a major influence on motivation, productivity and job satisfaction. The organizational climate is the major motivating factor responsible for satisfaction and dissatisfaction of employees in an organization and affects the quantum of employees’ turnover and satisfaction. It refers to the entire social system of a working group.
Campbell defines organizational climate as a,
“Set of attributes specific to a particular organization that may be deduced from the way that the organization deals with its members and its environment”.
Thus OC is the perceptional environment prevailing in an organization base on which employees do their work. It will have a major impact on the smooth flow in the management of an organization.
Six factors which can affect are:
Organization structure: Ideas on the extent of organizational constraints, rules, and regulations.
Individual responsibility: Having a sense of autonomy of being one’s own boss.
Rewards: Commensurate rewards to recognize performance.
Risk and risk-taking: The degree of challenge and risk to sustain by the incumbent.
Warmth and support: Feelings of general good fellowship and helpfulness prevailing in work settings.
Tolerance and conflict: Degree of confidence that the climate can tolerate differing opinions.
Influence of OC on Human Performance (Related Concept of Organizational Climate).
When the organizational climate is viable, the incumbent gets motivate and his performance is up to the expectation of the management. Consequently, he gets job satisfaction that reduces turnover. OC provides a type of work environment in which an individual feels satisfied or dissatisfied. Since the satisfaction of an individual determines his efficiency.
Organizational climate can say to be directly related to his performance in the organization. Organizational climate affects performance, satisfaction, and attitudes of people in the organization. What is an Organization? A sound climate is a long run proposition. Managers need to take an assets approach to climate. Meaning that they take the long run view of climate as an organizational asset.
The performance was more predictable for subjects, who work in a consistent climate than those. Who had to work in an inconsistent environmental climate. The inconsistent climate was having a negative impact on productivity. The organizational climate may be one of trust and confidence or one of fear and reprisal. Various organizational climates have different impacts on individual motivation, satisfaction, and attitudes. How Do You Know Your Company Wants Help From The Outside?
The climate of an organization derives originally from the philosophy and goals of those who join together to create it. The philosophy and goals of people are implementing by leadership working through the formal and informal organization. Formal and informal organization provide the structure to bind the institution together into a working team. Also learn, What is Planning?
International Advertising, generally speaking, is the promotion of goods, services, companies, and ideas, usually in more than one country performed by an identified sponsor. This article explains about Concept of International Advertising deeply discussion. Marketers see advertising as part of an overall promotional strategy. Other components of the promotional mix include publicity, public relations, personal selling, and sales promotion.
Study and Learn, the Concept of International Advertising.
Advertising is a cogent communication attempt to change or reinforce ones’ prior attitude that is predictive of future behavior. Also Learn, What is International Advertising? Meaning and Definition, the Concept of International Advertising!
It can view as a communication process that takes place in multiple cultures that differ in terms of values, communication styles, and consumption patterns. It is also a business activity involving advertisers and advertising agencies that create ads and buy media in different countries. The total of these activities constitutes a worldwide industry that is growing in importance. International advertising is also a major force that both reflects social values and propagates certain values worldwide.
Deeply Explain:
International advertising is becoming increasingly complex; more and more local and international companies are competing for consumers who are increasingly sophisticated and demanding. International advertising defines as the non-personal communication by an identified sponsor across international borders, using broadcast, print, and or interactive media.
It requires dissemination of a commercial message to target audiences in more than one country. Target audiences vary from country to country in terms of how they perceive or interpret symbols or stimuli; respond to humor or emotional appeals, as well as in levels of literacy and languages are spoken. How the advertising function is organized also varies.
International advertising can explain as the communication process that takes place in different cultures that varies in terms of values, communication styles, and consumption patterns. International advertising is also a business activity involving advertisers and advertising agencies that create ads and buy media in different countries. It is also a major force that both reflects social values and propagates certain values all over the world.
The International Communication Process:
The international communication process involves using the entire promotional mix to communicate with the final consumer. First, the appropriate message is determining the target audience by the advertiser. Next, the international sponsor (sender), usually representing by an advertising agency, encodes a message into words and images.
The message is then translating into the language of the target market and transmitting through a channel of media channels to the audience who then decodes and reacts to the message. Cultural barriers may hamper the effective transmission of the message at each stage in the process and result in miscommunication.
Art Direction:
Art direction is involving with the visual presentation- the body language of print and broadcast advertising. Some types of visual presentation are universally understood. Revlon, for example, has used a French producer to develop television commercials, English and Spanish for use in the international markets. These commercials, which are the film in Parisian settings, communicate the universal appeals and specific advantages of Revlon products.
By producing its ads In France, Revlon obtains effective television commercials at a much lower price than it would have to pay for similar –length commercials produce in the US. Pepsi Co has use four basic commercials to communicate its advertising themes. The basic setting of young people having fun at a party or on a beach has adapted to reflect the general physical environment and racial characteristics of North America, South America, Europe, Africa, and Asia. The music in these commercials has also adapted to suit regional tastes.
The international advertiser must make sure that visual executions are not inappropriately extending into markets. Benetton recently encounters a problem with its “United Colors of Benetton” campaign. The campaign appeared in 77 countries, primarily in print and on billboards. The art direction focused on striking, provocative interracial juxtapositions- a white hand a black hand handcuffed together, for example, another version of the campaign, depicting a black woman nursing a white baby, won adverting awards in France and Italy. However, because the image evoked the history of slavery in America, that particular creative execution was not in the U.S market.
Cultural Considerations:
Knowledge of cultural diversity, especially the symbolism associated with cultural traits, is essential when creating advertising. Local country managers will be able to share important information, such as when to use cautions in advertising creativity. Use of colors and man-women relationships can often be stumbling blocks. For example, white in Asia is associated with death. In Japan, intimate scenes between men and women are considered to be in bad taste; they are an outlaw in Saudi Arabia.
Advertising Communication System:
Advertising communication always involves a perception process and four of the elements shown in the model: the source, a message, a communication channel, and a receiver. Also, the receiver will sometimes become a source of information by talking to friends or associates. This type of communication is termed word-of-mouth communication, and it involves social interactions between two or more people and the important ideas of group influence and the diffusion of information.
An advertising message can have a variety of effects upon the receiver. It can
Create awareness,
Communicate information about attributes and benefits,
Develop or change an image or personality,
Associate a brand with feelings and emotions,
Forms group norms, and
Precipitate behavior.
Thus we see advertising has multiple layers to it. A lot more than what meets the consumer’s eye goes into creating a successful advertisement or an advertisement campaign. In today’s era of consumerism, the need for advertisements to break the clutter and stand out becomes imperative. Advertising has multiple media at its disposal with each having its respective strengths and limitations.
For instance, the radio still, has a reach to rural India like no other medium can. Also, it overcomes the barrier of illiteracy in a developing country like India. On the other hand mailers, pop-ups are an excellent way to remain visible to the urban techno-savvy Internet using consumers. Depending on the target audience the medium best suited should exploit to the hilt.
How to Explain the concept of International Advertising? #Pixabay
