Tag: Nature

  • Explain are the Nature and Features of Planning in Business!

    Explain are the Nature and Features of Planning in Business!

    Learn and Understand, Explain are the Nature and Features of Planning in Business!


    Modern managers are facing the challenge of designing a sound action plan for their organizations to achieve their organizational goals. Planning gives a scientific direction to managers as to where the firm has to move to attain its objectives. A good organizational plan minimizes risk, reduces uncertainties surrounding business conditions, and it classifies the consequences of related action. Also learn, Concepts of Management, Explain are the Nature and Features of Planning in Business!

    Planning increases the degree of success and establishes co-ordinated effort in the organization. It makes the managers future-oriented and their decisions co-ordinated. Good planning makes the organizations reach their objectives. In this backdrop, various issues of planning are narrated in the following paragraphs.

    A careful analysis of the above definitions of planning reveals that:

    • Planning is concerning with future and its essence is looking ahead.
    • It involves thinking and analysis of information.
    • It involves a predetermined course of action.
    • It’s concerning with the establishment of objectives to attain in the future.
    • It’s fundamentally a problem of choosing after a careful study of alternative courses.
    • It involves decision-making.
    • Its objectives are to achieve better results, and.
    • It is a continuous and integrated process.

    For instance, we find that the head of the family plans his expenditure, the housewife plans her daily chores, the teacher plans his teaching work, the student plans his studies and the farmer plans his agricultural activities. In the business field, the need for planning is all the more because of various factors such as fluctuations in demand, growing competition, the introduction of new products, scarcity of resources, changing technology, change in prices, government policy, etc. Organisational activity without a plan is likely to be ineffective and will drift without achieving success. Hence, planning is a must for business organizations.

    Few Main Nature and Features of Planning in Business!

    The following facts come to light about its nature and features:

    (1) It is Focuses on Achieving Objectives:

    Management begins with planning and planning begins with the determining of objectives. In the absence of objectives, no organization can ever think about. With the determining of objective, the way to achieve the objective is deciding in the planning.

    In case, it is necessary to change the previously decided course of action for the attainment of objectives, there is no hesitation to do so. It is thus clear that planning is helpful in the attainment of objectives.

    For example, a company decides to achieve annual sales of? 12 crores. After deciding upon this objective, planning to achieve this objective shall immediately come into force. It was thought to achieve this objective by giving advertisement in the newspapers.

    After some time it comes to know that the medium of advertisement appeared to be incapable of achieving the target. In such a situation the medium of advertisement can change and it can shift from newspapers to television in this way, every possible change is made through the planning activities for the purpose of achieving the objective.

    (2) Planning is Primary Function of Management:

    Planning is the first important function of management. The other functions, e.g., organizing, staffing, directing and controlling come later. In the absence of planning, no other function of management can perform.

    This is the base of other functions of management. For example, a company plans to achieve a sales target of 112 crores a year. In order to achieve this target the second function of management, i.e., organizing comes into operation.

    Under it, the purchase, sales, production and financial activities are deciding upon. In order to complete these activities, different departments and positions are deciding upon. The authority and responsibility of every position are deciding upon.

    After the work of organizing, information about the number of different people at different levels require to achieve the objective shall have to provide. This job will perform understaffing. Similarly, planning is the base of other functions like directing and controlling.

    (3) It is Pervasive:

    Since the job of planning is performing by the managers at different levels working in the enterprise, it is appropriate to call it all-pervasive. Planning is an important function of every manager; he may be a managing director of the organization or a foreman in a factory.

    The time spent by the higher-level managers in the process of planning is comparatively more than the time spent by the middle-level and lower-level managers. It is, therefore, clear that all the managers working in an enterprise have to plan their activities.

    For example, the decision to expand the business is taken by the higher-level managers. The decision to sell products is taken by the middle-level and lower-level managers. Also read, The Theory of Human Relationship Management!

    (4) It is Continuous:

    Planning is a continuous process for the following reasons:

    (a) Plans are preparing for a particular period. Hence, there is the need for a new plan after the expiry of that period.

    (b) In case of any discrepancy, plans are to revise.

    (c) In case of rapid changes in the business, environment plans are to revise.

    (5) Planning is Futuristic:

    Planning decides the plan of action what is to do, how is it to do, when it to do, by whom is it to do all these questions are related to future. Under planning, answers to these questions are found out.

    While an effort is making to find out these answers, the possibility of social, economic, technical and changes in the legal framework is kept in mind. Since planning is concerning with future activities, it is called futuristic.

    For example, a company is planning to market a new product. While doing so it shall have to keep in mind the customs and the interests/tastes of the people and also the possibility of any change in them.

    (6) Planning Involves Decision Making:

    Planning becomes a necessity when there are many alternatives to do a job. A planner chooses the most appropriate alternative. Therefore, it can assert that planning is a process of selecting the best and rejecting the inappropriate. It is, therefore, observed that planning involves decision making.

    For example, Mr. Anthony lives in a town where only commerce stream is taught in schools. His daughter has passed matrix and wants to get admission in 10 + 1. It is evident that there is only one option for her, i.e., commerce. Do you know about, What is Financial Management?

    She doesn’t have to think or plan anything. On the other hand, if all the three faculties’ art, science & commerce were available in the schools, she would have to definitely think and plan about the subject of study. It would have been nothing but decision making in this case.

    (7) It is a Mental Exercise:

    Planning is known as a mental exercise as it is related to thinking before doing something. A planner has mainly to think about the following questions:

    (i) What to do? (ii) How to do it? (iii) When to do it? (iv) Who is to do it?

    Explain are the Nature and Features of Planning in Business - ilearnlot
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  • Discussion of the main Nature of Planning!

    Discussion of the main Nature of Planning!

    Learn and Understand, Discussion in the Nature of Planning!


    A plan is a predetermined course of action to achieve a specified goal. It is an intellectual process characterized by thinking before doing. It is an attempt on the part of the manager to anticipate the future in order to achieve better performance. Also learn, Planning is the primary function of management, now get Discussion of the main Nature of Planning!

    First, Discussing Definitions of Planning: Different authors have given different definitions of planning from time to time.

    The main definitions of planning are as follows:

    • According to Alford and Beatt, “Planning is the thinking process, the organized foresight, the vision based on fact and experience that is required for intelligent action.”
    • According to Theo Haimann, “Planning is deciding in advance what is to do. When a manager plans, he projects a course of action for further attempting to achieve a consistent co-ordinate structure of operations aimed at the desired results.
    • According to Billy E. Goetz, “Planning is fundamentally choosing and a planning problem arises when an alternative course of action is discovered.”
    • According to Koontz and O’ Donnell, “Planning is an intellectual process, conscious determination of course of action, the basing of the decision on purpose, facts and considered estimates.”
    • According to Allen, “A plan is a trap laid to capture the future.”

    The following are the essential characteristics of planning which describe the main nature of planning:

    1. Planning is the primary function of management:

    The functions of management are broadly classified as planning, organization, direction, and control. It is thus the first function of management at all levels. Since planning is involving in all managerial functions, it is rightly called as an essence of management.

    2. Planning focuses on objectives:

    Planning is a process to determine the objectives or goals of an enterprise. It lays down the means to achieve these objectives. The purpose of every plan is to contribute to the achievement of objectives of an enterprise.

    3. Planning is a function of all managers:

    Every manager must plan. A manager at a higher level has to devote more time to planning as compared to persons at the lower level. So the President or Managing director of a company devote more time to planning than the supervisor.

    4. Planning as an intellectual process:

    Planning is a mental work basically concerning with thinking before doing. It is an intellectual process and involves creative thinking and imagination. Wherever planning is done, all activities are orderly undertaken as per plans rather than on the basis of guesswork. Planning lays down a course of action to follow on the basis of facts and consider estimates, keeping in view the objectives, goals, and purpose of an enterprise.

    5. Planning as a continuous process:

    Planning is a continuous and permanent process and has no end. A manager makes new plans and also modifies the old plans in the light of information received from the persons who are concerning with the execution of plans. It is a never-ending process. Explain are What is the Importance of Planning in Management?

    6. Planning is dynamic (flexible):

    Planning is a dynamic function in the sense that the changes and modifications are continuously done in the planning course of action on account of changes in business environment.

    As factors affecting the business are not within the control of management, necessary changes are made as and when they take place. If modifications cannot include in plans it is said to be bad planning.

    7. Planning secures efficiency, economy, and accuracy:

    A prerequisite planning is that it should lead to the attainment of objectives at the least cost. It should also help in the optimum utilization of available human and physical resources by securing efficiency, economy, and accuracy in the business enterprises. Planning is also economical because it brings down the cost to the minimum.

    8. Planning involves forecasting:

    Planning largely depends upon accurate business forecasting. The scientific techniques of forecasting help in projecting the present trends into future. “It is a kind of future picture wherein proximate events are out-line with some distinctness while remote events appear progressively less distinct”.

    9. Planning and linking factors:

    A plan should formulate in the light of limiting factors which may be any one of five M’s viz., men, money, machines, materials, and management.

    10. Planning is realistic:

    A plan always outlines the results to attain and as such, it is realistic in nature. Also read, Definition, Importance, and Affected Factors of Manpower Planning!

    Another, main Nature of Planning also helps fully!

    Planning is an Intellectual Process!

    Planning is an intellectual process of thinking in advance. It is a process of deciding the future on the series of events to follow. Planning is a process where a number of steps are to take to decide the future course of action. Managers or executives have to consider various courses of action, achieve the desired goals, go in details of the pros and cons of every course of action and then finally decide what course of action may suit them best.

    Planning Contributes to the Objectives!

    Planning contributes positively to attaining the objectives of the business enterprise. Since plans are there from the very first stage of operation, the management is able to handle every problem successfully. Plan try to set everything right. A purposeful, sound and effective planning process knows how and when to tackle a problem. This leads to success. Objectives thus are easily achieving. Don’t forget to read, the Features, Nature, Characteristics of Planning!

    Planning is a Primary Function of Management!

    Planning precedes other functions in the management process. Certainly, the setting of goals to achieve and lines of action to follow precedes the organization, direction, supervision, and control. No doubt, planning precedes other functions of management. It is primary requisite before other managerial functions step in. But all functions are inter-connect. It is mixing in all managerial functions but there too it gets precedence. It thus gets primary everywhere.

    A continuous Process!

    Planning is a continuous process and a never ending activity of a manager in an enterprise based upon some assumptions which may or may not come true in the future. Therefore, the manager has to go on modifying revising and adjusting plans in the light of changing circumstances. According to George R. Terry, “Planning is a continuous process and there is no end to it. It involves the continuous collection, evaluation and selection of data, and scientific investigation and analysis of the possible alternative courses of action and the selection of the best alternative”.

    Planning Pervades Managerial Activities!

    From primary of planning follows pervasiveness of planning. It is the function of every managerial personnel. The character, nature, and scope of planning may change from personnel to personnel but the planning as an action remains intact. According to Billy E. Goetz, “Plans cannot make an enterprise successful. The action is requiring, the enterprise must operate managerial planning seeks to achieve a consistent, coordinated structure of operations focus on desire trends. Without plans, action must become merely activity producing nothing but chaos”.

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  • Explain are the Features, Nature, Characteristics of Planning!

    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.

  • How to explain the Nature of Business Economics?

    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 - ilearnlot
    How to explain the Nature of Business Economics?
  • What are Objectives of Financial Management?

    What are Objectives of Financial Management?

    What are Objectives of Financial Management? with Describe Definition, Meaning, Nature and Scope!


    Financial management is one of the functional areas of business. Therefore, its objectives must be consistent with the overall objectives of the business. The overall objective of financial management is to provide maximum return to the owners on their investment in the long- term. This is known as wealth maximization. Maximization of owners’ wealth is possible when the capital invested initially increases over a period of time. Wealth maximization means maximizing the market value of investment in shares of the company. Also learn, Definition with What are Objectives of Financial Management?

    Financial Management means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise. It means applying general management principles to financial resources of the enterprise. In simple terms objective of Financial Management is to maximize the value of the firm, however, it is much more complex than that. The management of the firm involves many stakeholders, including owners, creditors, and various participants in the financial market.

    Effective procurement and efficient use of finance lead to proper utilization of the finance by the business concern. It is the essential part of the financial manager. Hence, the financial manager must determine the basic objectives of the financial management. How to Explain Nature and Scope of Financial Management?

    Objectives of Financial Management explain to the Simple point

    • Profit maximization happens when marginal cost is equal to marginal revenue. This is the main objective of Financial Management.
    • Wealth maximization means maximization of shareholders’ wealth. It is an advance goal compare to profit maximization.
    • Survival of company is an important consideration when the financial manager makes any financial decisions. One incorrect decision may lead the company to be bankrupt.
    • Maintaining proper cash flow is a short run objective of financial management. It is necessary for operations to pay the day-to-day expenses e.g. raw material, electricity bills, wages, rent etc. A good cash flow ensures the survival of the company.
    • Minimization on capital cost in financial management can help operations gain more profit.
    • It is vague:- There are several types of profits before interest, depreciation and taxes, profit before taxes, profit after taxes, cash profit etc.

    What are Objectives of Financial Management - ilearnlot


  • How to Explain Nature and Scope of Financial Management?

    How to Explain Nature and Scope of Financial Management?

    Learn, Explanation of Nature and Scope of Financial Management


    Financial management is one of the important aspects of finance. Nobody can ever think to start a business or a company without financial knowledge and management strategies. Finance links itself directly to several functional departments like marketing, production, and personnel. Here we will list out some of the major scopes of financial management notes which will help you in your decision-making process. Also learn, Types of Financial Decisions, How to Explain Nature and Scope of Financial Management?

    Financial management has a wide scope. According to Dr. S. C. Saxena, the scope of financial management includes the following five A’s.

    • Anticipation: Financial management estimates the financial needs of the company. That is, it finds out how much finance is requiring the company.
    • Acquisition: It collects finance for the company from different sources.
    • Allocation: It uses this collected finance to purchase fix and current assets for the company.
    • Appropriation: It divides the company’s profits among the shareholders, debenture holders, etc. It keeps a part of the profits as reserves.
    • Assessment: It also controls all the financial activities of the company. Financial management is the most important functional area of management. All other functional areas such as production management, marketing management, personnel management, etc. depend on Financial management. Efficient financial management is required for survival, growth, and success of the company or firm.

    Key Scope of Financial Management!

    The major scope of financial management is dividing into four categories. Let’s learn and understand the nature and scope of financial management through the below details notes.

    Investment Decision:

    Evaluating the risk involve, measuring the cost of fund and estimating expected benefits from a project comes under investment decision. It is one of the important scopes of financial management. The two major components of investment decision are Capital budgeting and liquidity. Capital budgeting is commonly known as the investment appraisal. It deals with the allocation of capital and funds in such a manner that they will yield earnings in future. Capital budgeting determines the long-term investment which includes replacement and renovation of old assets. It is all about maintaining an appropriate balance between fix and current assets in order to maximize profitability and to maintain desired liquidity in the firm for its smooth functioning.

    Working Capital Decision:

    Decisions related to working capital is another crucial scope of financial management. Decisions involving around working capital and short-term financing are known as a working capital decision. It also manages the relationship between short-term assets and its liabilities. Short-term assets include cash in hand, receivables, inventory, short-term securities, etc. Creditors, bills payable, outstanding expenses, bank overdraft, etc are a firm’s short-term liabilities. Short-term assets can exchange for cash within one calendar year. Similarly, the liabilities are to settle within an accounting year.

    Dividend Decision:

    The Dividend Decision plays a crucial role in today’s corporate era. It determines the amount of taxation that stockholders pay. A good dividend policy helps to achieve the objective of wealth maximization. Distributing the entire profit in the form of dividends or distributing only a certain percentage of it is decided by dividend policy. It is known as deciding the optimum dividend payout ratio i.e. proportion of net profits to be paid out to shareholders. Stability of cash dividends and stock sets the parameter which determines the number of investment opportunities. Expansion of an economic activity depends on the effectiveness of dividend decisions and scope of financial management.

    Financing Decision:

    Financing Decisions focuses on the accountabilities and stockholders’ equity side of the firm’s balance sheet, for example, the decision to issue bonds is a kind of financing decision. The main aim of financing decision is to cover expenses and investments. The decision involves generating capitals by various methods, from different sources, in relative proportion and considering opportunity costs, with respect to time of flotation of securities, etc.

    The scope of financial management is to meet the expenses of the firm, a suitable capital structure for the enterprise should develop by the finance manager. Only an optimum finance mix can maximize the market price of the company’s shares in the long run. To decrease the risk, a stable equilibrium is requiring between debt and equity. Return and risk to the equity shareholders depend on how optimally the debts and financial leverages are using. Only when the risk and return are in synchronization, the market value per share is maximizing. The apt timing for raising funds is to decide by the financial manager time to raise the funds.

    Nature of Financial Management!

    Finance management is a long-term decision-making process which involves a lot of planning, allocation of funds, discipline and much more. Let us understand the nature of financial management with reference to this discipline.

    • Finance management is one of the important education which has to realize worldwide. Now a day’s people are undergoing through various specialization courses of financial management. Many people have chosen financial management as their profession.
    • The nature of financial management is never a separate entity. Even as an operational manager or functional manager one has to take responsibility for financial management.
    • Finance is a foundation of economic activities. The person who Manages finance is called the financial manager. An important role of a financial manager is to control finance and implement the plans. For any company financial manager plays a crucial role in it. Many times it happens that lack of skills or wrong decisions can lead to heavy losses to an organization.
    • Nature of financial management is multi-disciplinary. Financial management depends upon various other factors like accounting, banking, inflation, economy, etc. for the better utilization of finances.
    • An approach to financial management is no limit to business functions but it is a backbone of commerce, economic and industry.

    Scope & Elements of Financial Management!

    • Investment decisions: Include investment in fixed assets (call as capital budgeting). Investment in current assets is also a part of investment decisions call for working capital decisions.
    • Financial decisions: They relate to the raising of finance from various resources which will depend upon the decision on the type of source, the period of financing, cost of financing and the returns thereby.
    • Dividend decision: The finance manager has to take a decision with regards to the net profit distribution. Net profits are generally divided into two: 1) The dividend for shareholders- Dividend and the rate of it has to decide. 2) Retained profits- Amount of retained profits has to finalize which will depend upon expansion and diversification plans of the enterprise.

    How to Explain Nature and Scope of Financial Management - ilearnlot

    Reference

    1. Key Scope of Financial Management – http://wikifinancepedia.com/finance/financial-management/nature-and-scope-of-financial-management
    2. The scope of Financial Management – http://kalyan-city.blogspot.in/2011/09/what-is-financial-management-meaning.html
    3. Scope & Elements – http://www.managementstudyguide.com/financial-management.htm


  • What are Nature and Characteristics of Leadership?

    What are Nature and Characteristics of Leadership?

    Here are Following Characteristics of Leadership


    What is a Leadership? Leadership is a process by which an executive can direct, guide and influence the behavior and work of others towards accomplishment of specific goals in a given situation. The ability of a manager to induce the subordinates to work with confidence and zeal. Leader is the potential to influence behavior of others. It is also define as the capacity to influence a group towards the realization of a goal. Leaders are require to develop future visions, and to motivate the organizational members to want to achieve the visions. Meaning and Essence of Leadership in the Business.

    Good Characteristics of Leadership

    • It is a inter-personal process in which a manager is into influencing and guiding workers towards attainment of goals.
    • Denotes a few qualities to be present in a person which includes intelligence, maturity and personality.
    • A group process. It involves two or more people interacting with each other.
    • A leader is involve in shaping and molding the behavior of the group towards accomplishment of organizational goals.
    • Leadership is situation bound. There is no best style of leadership.
    • It all depends upon tackling with the situations.

    Nature and Characteristics of Leadership

    An analysis of the definitions cited above reveals the following important characteristics of leadership:

    1. Leadership is a personal quality.

    2. It exists only with followers. If there are no followers, there is no leadership?

    3. It is the willingness of people to follow that makes person a leader.

    4. Leadership is a process of influence. A leader must be able to influence the behaviour, attitude and beliefs of his subordinates.

    5. It exists only for the realization of common goals.

    6. It involves readiness to accept complete responsibility in all situations.

    7. Leadership is the function of stimulating the followers to strive willingly to attain organizational objectives.

    8. Leadership styles do change under different circumstances.

    9. Leadership is neither bossism nor synonymous with; management.

    What are Nature and Characteristics of Leadership - ilearnlot


  • A Tale of Jerusalem

    A Tale of Jerusalem

    A Tale of Jerusalem


    Dear Learner! The Short Story is Written by Edgar Allan Poe.

    LET us hurry to the walls,” said Abel-Phittim to Buzi-Ben-Levi and Simeon the Pharisee, on the tenth day of the month Thammuz, in the year of the world three thousand nine hundred and fortyone–let us hasten to the ramparts adjoining the gate of Benjamin, which is in the city of David, and overlooking the camp of the uncircumcised; for it is the last hour of the fourth watch, being sunrise; and the idolaters, in fulfilment of the promise of Pompey, should be awaiting us with the lambs for the sacrifices.”

    Simeon, Abel-Phittim, and Duzi-Ben-Levi were the Gizbarim, or sub-collectors of the offering, in the holy city of Jerusalem.

    “Verily,” replied the Pharisee; “let us hasten: for this generosity in the heathen is unwonted; and fickle-mindedness has ever been an attribute of the worshippers of Baal.”

    “‘That they are fickle-minded and treacherous is as true as the Pentateuch,” said Buzi-Ben-Levi, “but that is only toward the people of Adonai. When was it ever known that the Ammonites proved wanting to their own interests? Methinks it is no great stretch of generosity to allow us lambs for the altar of the Lord, receiving in lieu thereof thirty silver shekels per head !”

    “Thou forgettest, however, Ben-Levi,” replied Abel-Phittim, “that the Roman Pompey, who is now impiously besieging the city of the Most High, has no assurity that we apply not the lambs thus purchased for the altar, to the sustenance of the body, rather than of the spirit.”

    “Now, by the five corners of my beard!” shouted the Pharisee, who belonged to the sect called The Dashers (that little knot of saints whose manner of dashing and lacerating the feet against the pavement was long a thorn and a reproach to less zealous devotees-a stumbling-block to less gifted perambulators)–“by the five corners of that beard which, as a priest, I am forbidden to shave !-have we lived to see the day when a blaspheming and idolatrous upstart of Rome shall accuse us of appropriating to the appetites of the flesh the most holy and consecrated elements? Have we lived to see the day when—“‘

    “Let us not question the motives of the Philistine,” interrupted Abel-Phittim’ “for to-day we profit for the first time by his avarice or by his generosity; but rather let us hurry to the ramparts, lest offerings should be wanting for that altar whose fire the rains of heaven can not extinguish, and whose pillars of smoke no tempest can turn aside.”

    That part of the city to which our worthy Gizbarim now hastened, and which bore the name of its architect, King David, was esteemed the most strongly fortified district of Jerusalem; being situated upon the steep and lofty hill of Zion. Here, a broad, deep, circumvallatory trench, hewn from the solid rock, was defended by a wall of great strength erected upon its inner edge. This wall was adorned, at regular interspaces, by square towers of white marble; the lowest sixty, and the highest one hundred and twenty cubits- in height. But, in the vicinity of the gate of Benjamin, the wall arose by no means from the margin of the fosse. On the contrary, between the level of the ditch and the basement of the rampart sprang up a perpendicular cliff of two hundred and fifty cubits, forming part of the precipitous Mount Moriah. So that when Simeon and his associates arrived on the summit of the tower called Adoni-Bezek-the loftiest of all the turrets around about Jerusalem, and the usual place of conference with the besieging army-they looked down upon the camp of the enemy from an eminence excelling by many feet that of the Pyramid of Cheops, and, by several, that of the temple of Belus.

    “Verily,” sighed the Pharisee, as he peered dizzily over the precipice, “the uncircumcised are as the sands by the seashore-as the locusts in the wilderness! The valley of the King hath become the valley of Adommin.”

    “And yet,” added Ben-Levi, “thou canst not point me out a Philistine-no, not one-from Aleph to Tau-from the wilderness to the battlements—who seemeth any bigger than the letter Jod!”

    “Lower away the basket with the shekels of silver!” here shouted a Roman soldier in a hoarse, rough voice, which appeared to issue from the regions of Pluto—“lower away the basket with the accursed coin which it has broken the jaw of a noble Roman to pronounce! Is it thus you evince your gratitude to our master Pompeius, who, in his condescension, has thought fit to listen to your idolatrous importunities? The god Phoebus, who is a true god, has been charioted for an hour-and were you not to be on the ramparts by sunrise? Aedepol! do you think that we, the conquerors of the world, have nothing better to do than stand waiting by the walls of every kennel, to traffic with the dogs of the earth? Lower away! I say–and see that your trumpery be bright in color and just in weight!”

    “El Elohim!” ejaculated the Pharisee, as the discordant tones of the centurion rattled up the crags of the precipice, and fainted away against the temple -“El Elohim!–who is the god Phoebus?–whom doth the blasphemer invoke? Thou, Buzi-BenLevi! who art read in the laws of the Gentiles, and hast sojourned among them who dabble with the Teraphim!–is it Nergal of whom the idolater speaketh?—-or Ashimah?–or Nibhaz,–or Tartak? –or Adramalech?–or Anamalech?–or Succoth-Benith?—or Dagon?—or Belial?—or Baal-Perith? -or Baal-Peor?—or Baal-Zebub?”

    “Verily it is neither-but beware how thou lettest the rope slip too rapidly through thy fingers; for should the wicker-work chance to hang on the projection of Yonder crag, there will be a woful outpouring of the holy things of the sanctuary.”

    By the assistance of some rudely constructed machinery, the heavily laden basket was now carefully lowered down among the multitude; and, from the giddy pinnacle, the Romans were seen gathering confusedly round it; but owing to the vast height and the prevalence of a fog, no distinct view of their operations could be obtained.

    Half an hour had already elapsed.

    “We shall be too late!” sighed the Pharisee, as at the expiration of this period he looked over into the abyss-“we shall be too late! we shall be turned out of office by the Katholim.”

    “No more,” responded Abel-Phittim—-“no more shall we feast upon the fat of the land-no longer shall our beards be odorous with frankincense–our loins girded up with fine linen from the Temple.”

    “Racal” swore Ben-Levi, “Racal do they mean to defraud us of the purchase money? or, Holy Moses ! are they weighing the shekels of the tabernacle ?”

    “They have given the signal at last!” cried the Pharisee—–“they have given the signal at last!pull away, Abel-Phittim!-and thou, Buzi-Ben-Levi, pull away!-for verily the Philistines have either still hold upon the basket, or the Lord hath softened their hearts to place therein a beast of good weight!” And the Gizbarim pulled away, while their burden swung heavily upward through the still increasing mist.

    “Booshoh he!”-as, at the conclusion of an hour, some object at the extremity of the rope became indistinctly visible-“Booshoh he!” was the exclamation which burst from the lips of Ben-Levi.

    “Booshoh he!–for shame!-it is a ram from the thickets of Engedi, and as rugged as the valley of jehosaphat!”

    “It is a firstling of the flock,” said Abel-Phittim, “I know him by the bleating of his lips, and the innocent folding of his limbs. His eyes are more beautiful than the jewels of the Pectoral, and his flesh is like the honey of Hebron.”

    “It is a fatted calf from the pastures of Bashan,” said the Pharisee, “the heathen have dealt wonderfully with us —-let us raise up our voices in a psalm –let us give thanks on the shawm and on the psaltery-on the harp and on the huggab-on the cythern and on the sackbut!”

    It was not until the basket had arrived within a few feet of the Gizbarim that a low grunt betrayed to their perception a hog of no common size.

    “Now El Emanu!” slowly and with upturned eyes ejaculated the trio, as, letting go their hold, the emancipated porker tumbled headlong among the Philistines, “El Emanu!-God be with us—it is the unutterable flesh!”

    A Tale of Jerusalem


  • A Descent Into the Maelstrom

    A Descent Into the Maelstrom

    A Descent Into the Maelstrom


    Short Story by Edgar Allan Poe

    WE had now reached the summit of the loftiest crag. For some minutes the old man seemed too much exhausted to speak.

    “Not long ago,” said he at length, “and I could have guided you on this route as well as the youngest of my sons ; but, about three years past, there happened to me an event such as never happened to mortal man – or at least such as no man ever survived to tell of – and the six hours of deadly terror which I then endured have broken me up body and soul. You suppose me a very old man – but I am not. It took less than a single day to change these hairs from a jetty black to white, to weaken my limbs, and to unstring my nerves, so that I tremble at the least exertion, and am frightened at a shadow. Do you know I can scarcely look over this little cliff without getting giddy ?”

    [ctt template=”9″ link=”NaBpC” via=”yes” nofollow=”yes”]The ways of God in Nature, as in Providence, are not as our ways ; nor are the models that we frame any way commensurate to the vastness, profundity, and unsearchableness of His works, which have a depth in them greater than the well of Democritus. – Joseph Glanville.[/ctt]

    The “little cliff,” upon whose edge he had so carelessly thrown himself down to rest that the weightier portion of his body hung over it, while he was only kept from falling by the tenure of his elbow on its extreme and slippery edge – this “little cliff” arose, a sheer unobstructed precipice of black shining rock, some fifteen or sixteen hundred feet from the world of crags beneath us. Nothing would have tempted me to within half a dozen yards of its brink. In truth so deeply was I excited by the perilous position of my companion, that I fell at full length upon the ground, clung to the shrubs around me, and dared not even glance upward at the sky – while I struggled in vain to divest myself of the idea that the very foundations of the mountain were in danger from the fury of the winds. It was long before I could reason myself into sufficient courage to sit up and look out into the distance.

    “You must get over these fancies,” said the guide, “for I have brought you here that you might have the best possible view of the scene of that event I mentioned – and to tell you the whole story with the spot just under your eye.”

    “We are now,” he continued, in that particularizing manner which distinguished him – “we are now close upon the Norwegian coast – in the sixty-eighth degree of latitude – in the great province of Nordland – and in the dreary district of Lofoden. The mountain upon whose top we sit is Helseggen, the Cloudy. Now raise yourself up a little higher – hold on to the grass if you feel giddy – so – and look out, beyond the belt of vapor beneath us, into the sea.”

    I looked dizzily and beheld a wide expanse of ocean, whose waters wore so inky a hue as to bring at once to my mind the Nubian geographer’s account of the Mare Tenebrarum. A panorama more deplorably desolate no human imagination can conceive. To the right and left, as far as the eye could reach, there lay outstretched, like ramparts of the world, lines of horridly black and beetling cliff, whose character of gloom was but the more forcibly illustrated by the surf which reared high up against its white and ghastly crest, howling and shrieking forever. Just opposite the promontory upon whose apex we were placed, and at a distance of some five or six miles out at sea, there was visible a small, bleak-looking island; or, more properly, its position was discernible through the wilderness of surge in which it was enveloped. About two miles nearer the land, arose another of smaller size, hideously craggy and barren, and encompassed at various intervals by a cluster of dark rocks.

    The appearance of the ocean, in the space between the more distant island and the shore, had something very unusual about it. Although, at the time, so strong a gale was blowing landward that a brig in the remote offing lay to under a double-reefed trysail, and constantly plunged her whole hull out of sight, still there was here nothing like a regular swell, but only a short, quick, angry cross dashing of water in every direction – as well in the teeth of the wind as otherwise. Of foam, there was little except in the immediate vicinity of the rocks.

    “The island in the distance,” resumed the old man, “is called by the Norwegians Vurrgh. The one midway is Moskoe. That a mile to the northward is Ambaaren. Yonder is Islesen, Hotholm, Keildhelm, Suarven, and Buckholm. Farther off – between Moskoe and Vurrgh – are Otterholm, Flimen, Sandflesen, and Stockholm. These are the true names of the places – but why it has been thought necessary to name them at all, is more than either you or I can understand. Do you hear anything? Do you see any change in the water ?”

    We had now been about ten minutes upon the top of Helseggen, to which we had ascended from the interior of Lofoden so that we had caught no glimpse of the sea until it had burst upon us from the summit. As the old man spoke, I became aware of a loud and gradually increasing sound, like the moaning of a vast herd of buffaloes upon an American prairie; and at the same moment I perceived that what seamen term the chopping character of the ocean beneath us, was rapidly changing into a current which set to the eastward. Even while I gazed, this current acquired a monstrous velocity. Each moment added to its speed – to its headlong impetuosity. In five minutes the whole sea, as far as Vurrgh, was lashed into ungovernable fury; but it was between Moskoe and the coast that the main uproar held its sway. Here the vast bed of the waters, seamed and scarred into a thousand conflicting channels, burst suddenly into phrensied convulsion – heaving, boiling, hissing – gyrating in gigantic and innumerable vortices, and all whirling and plunging on to the eastward with a rapidity which water never elsewhere assumes except in precipitous descents.

    In a few minutes more, there came over the scene another radical alteration. The general surface grew somewhat more smooth, and the whirlpools, one by one, disappeared, while prodigious streaks of foam became apparent where none had been seen before. These streaks, at length, spreading out to a great distance, and entering into combination, took unto themselves the gyratory motion of the subsided vortices, and seemed to form the germ of another more vast. Suddenly – very suddenly – this assumed a distinct and definite existence, in a circle of more than a mile in diameter. The edge of the whirl was represented by a broad belt of gleaming spray ; but no particle of this slipped into the mouth of the terrific funnel, whose interior, as far as the eye could fathom it, was a smooth, shining, and jet-black wall of water, inclined to the horizon at an angle of some forty-five degrees, speeding dizzily round and round with a swaying and sweltering motion, and sending forth to the winds an appalling voice, half shriek, half roar, such as not even the mighty cataract of Niagara ever lifts up in its agony to Heaven.

    The mountain trembled to its very base, and the rock rocked. I threw myself upon my face and clung to the scant herbage in an excess of nervous agitation.

    “This,” said I at length, to the old man – “this can be nothing else than the great whirlpool of the Maelstrm.”

    “So it is sometimes termed,” said he. “We Norwegians call it the Moskoe-strm, from the island of Moskoe in the midway.”

    The ordinary accounts of this vortex had by no means prepared me for what I saw. That of Jonas Ramus, which is perhaps the most circumstantial of any, cannot impart the faintest conception either of the magnificence or of the horror of the scene – or of the wild bewildering sense of the novel which confounds the beholder. I am not sure from what point of view the writer in question surveyed it, nor at what time; but it could neither have been from the summit of Helseggen nor during a storm. There are some passages of his description, nevertheless, which may be quoted for their details, although their effect is exceedingly feeble in conveying an impression of the spectacle.

    “Between Lofoden and Moskoe,” he says, “the depth of the water is between thirty-six and forty fathoms ; but on the other side, toward Ver (Vurrgh) this depth decreases so as not to afford a convenient passage for a vessel, without the risk of splitting on the rocks, which happens even in the calmest weather. When it is flood, the stream runs up the country between Lofoden and Moskoe with a boisterous rapidity ; but the roar of its impetuous ebb to the sea is scarce equalled by the loudest and most dreadful cataracts ; the noise being heard several leagues off, and the vortices or pits are of such an extent and depth, that if a ship comes within its attraction, it is inevitably absorbed and carried down to the bottom, and there beat to pieces against the rocks ; and when the water relaxes, the fragments thereof are thrown up again. But these intervals of tranquility are only at the turn of the ebb and flood, and in calm weather, and last but a quarter of an hour, its violence gradually returning. When the stream is most boisterous, and its fury heightened by a storm, it is dangerous to come within a Norway mile of it. Boats, yachts, and ships have been carried away by not guarding against it before they were within its reach. It likewise happens frequently, that whales come too near the stream, and are overpowered by its violence; and then it is impossible to describe their howlings and bellowings in their fruitless struggles to disengage themselves. A bear once, attempting to swim from Lofoden to Moskoe, was caught by the stream and borne down, while he roared terribly, so as to be heard on shore. Large stocks of firs and pine trees, after being absorbed by the current, rise again broken and torn to such a degree as if bristles grew upon them. This plainly shows the bottom to consist of craggy rocks, among which they are whirled to and fro. This stream is regulated by the flux and reflux of the sea – it being constantly high and low water every six hours. In the year 1645, early in the morning of Sexagesima Sunday, it raged with such noise and impetuosity that the very stones of the houses on the coast fell to the ground.”

    In regard to the depth of the water, I could not see how this could have been ascertained at all in the immediate vicinity of the vortex. The “forty fathoms” must have reference only to portions of the channel close upon the shore either of Moskoe or Lofoden. The depth in the centre of the Moskoe-strm must be immeasurably greater; and no better proof of this fact is necessary than can be obtained from even the sidelong glance into the abyss of the whirl which may be had from the highest crag of Helseggen. Looking down from this pinnacle upon the howling Phlegethon below, I could not help smiling at the simplicity with which the honest Jonas Ramus records, as a matter difficult of belief, the anecdotes of the whales and the bears; for it appeared to me, in fact, a self-evident thing, that the largest ship of the line in existence, coming within the influence of that deadly attraction, could resist it as little as a feather the hurricane, and must disappear bodily and at once.

    The attempts to account for the phenomenon – some of which, I remember, seemed to me sufficiently plausible in perusal – now wore a very different and unsatisfactory aspect. The idea generally received is that this, as well as three smaller vortices among the Ferroe islands, “have no other cause than the collision of waves rising and falling, at flux and reflux, against a ridge of rocks and shelves, which confines the water so that it precipitates itself like a cataract ; and thus the higher the flood rises, the deeper must the fall be, and the natural result of all is a whirlpool or vortex, the prodigious suction of which is sufficiently known by lesser experiments.” – These are the words of the Encyclopdia Britannica. Kircher and others imagine that in the centre of the channel of the Maelstrm is an abyss penetrating the globe, and issuing in some very remote part – the Gulf of Bothnia being somewhat decidedly named in one instance. This opinion, idle in itself, was the one to which, as I gazed, my imagination most readily assented; and, mentioning it to the guide, I was rather surprised to hear him say that, although it was the view almost universally entertained of the subject by the Norwegians, it nevertheless was not his own. As to the former notion, he confessed his inability to comprehend it; and here I agreed with him – for, however conclusive on paper, it becomes altogether unintelligible, and even absurd, amid the thunder of the abyss.

    “You have had a good look at the whirl now,” said the old man, “and if you will creep round this crag, so as to get in its lee and deaden the roar of the water, I will tell you a story that will convince you I ought to know something of the Moskoe-strm.”

    I placed myself as desired, and he proceeded.

    “Myself and my two brothers once owned a schooner-rigged smack of about seventy tons burthen, with which we were in the habit of fishing among the islands beyond Moskoe, nearly to Vurrgh. In all violent eddies at sea there is good fishing, at proper opportunities, if one has only the courage to attempt it ; but among the whole of the Lofoden coastmen, we three were the only ones who made a regular business of going out to the islands, as I tell you. The usual grounds are a great way lower down to the southward. There fish can be got at all hours, without much risk, and therefore these places are preferred. The choice spots over here among the rocks, however, not only yield the finest variety, but in far greater abundance ; so that we often got in a single day, what the more timid of the craft could not scrape together in a week. In fact, we made it a matter of desperate speculation – the risk of life standing instead of labor, and courage answering for capital.

    “We kept the smack in a cove about five miles higher up the coast than this ; and it was our practice, in fine weather, to take advantage of the fifteen minutes’ slack to push across the main channel of the Moskoe-strm, far above the pool, and then drop down upon anchorage somewhere near Otterholm, or Sandflesen, where the eddies are not so violent as elsewhere. Here we used to remain until nearly time for slack-water again, when we weighed and made for home. We never set out upon this expedition without a steady side wind for going and coming – one that we felt sure would not fail us before our return – and we seldom made a mis-calculation upon this point. Twice, during six years, we were forced to stay all night at anchor on account of a dead calm, which is a rare thing indeed just about here ; and once we had to remain on the grounds nearly a week, starving to death, owing to a gale which blew up shortly after our arrival, and made the channel too boisterous to be thought of. Upon this occasion we should have been driven out to sea in spite of everything, (for the whirlpools threw us round and round so violently, that, at length, we fouled our anchor and dragged it) if it had not been that we drifted into one of the innumerable cross currents – here to-day and gone to-morrow – which drove us under the lee of Flimen, where, by good luck, we brought up.

    “I could not tell you the twentieth part of the difficulties we encountered ‘on the grounds’ – it is a bad spot to be in, even in good weather – but we made shift always to run the gauntlet of the Moskoe-strm itself without accident ; although at times my heart has been in my mouth when we happened to be a minute or so behind or before the slack. The wind sometimes was not as strong as we thought it at starting, and then we made rather less way than we could wish, while the current rendered the smack unmanageable. My eldest brother had a son eighteen years old, and I had two stout boys of my own. These would have been of great assistance at such times, in using the sweeps, as well as afterward in fishing – but, somehow, although we ran the risk ourselves, we had not the heart to let the young ones get into the danger – for, after all is said and done, it was a horrible danger, and that is the truth.

    “It is now within a few days of three years since what I am going to tell you occurred. It was on the tenth day of July, 18-, a day which the people of this part of the world will never forget – for it was one in which blew the most terrible hurricane that ever came out of the heavens. And yet all the morning, and indeed until late in the afternoon, there was a gentle and steady breeze from the south-west, while the sun shone brightly, so that the oldest seaman among us could not have foreseen what was to follow.

    “The three of us – my two brothers and myself – had crossed over to the islands about two o’clock P. M., and had soon nearly loaded the smack with fine fish, which, we all remarked, were more plenty that day than we had ever known them. It was just seven, by my watch , when we weighed and started for home, so as to make the worst of the Strm at slack water, which we knew would be at eight.

    “We set out with a fresh wind on our starboard quarter, and for some time spanked along at a great rate, never dreaming of danger, for indeed we saw not the slightest reason to apprehend it. All at once we were taken aback by a breeze from over Helseggen. This was most unusual – something that had never happened to us before – and I began to feel a little uneasy, without exactly knowing why. We put the boat on the wind, but could make no headway at all for the eddies, and I was upon the point of proposing to return to the anchorage, when, looking astern, we saw the whole horizon covered with a singular copper-colored cloud that rose with the most amazing velocity.

    “In the meantime the breeze that had headed us off fell away, and we were dead becalmed, drifting about in every direction. This state of things, however, did not last long enough to give us time to think about it. In less than a minute the storm was upon us – in less than two the sky was entirely overcast – and what with this and the driving spray, it became suddenly so dark that we could not see each other in the smack.

    “Such a hurricane as then blew it is folly to attempt describing. The oldest seaman in Norway never experienced any thing like it. We had let our sails go by the run before it cleverly took us ; but, at the first puff, both our masts went by the board as if they had been sawed off – the mainmast taking with it my youngest brother, who had lashed himself to it for safety.

    “Our boat was the lightest feather of a thing that ever sat upon water. It had a complete flush deck, with only a small hatch near the bow, and this hatch it had always been our custom to batten down when about to cross the Strm, by way of precaution against the chopping seas. But for this circumstance we should have foundered at once – for we lay entirely buried for some moments. How my elder brother escaped destruction I cannot say, for I never had an opportunity of ascertaining. For my part, as soon as I had let the foresail run, I threw myself flat on deck, with my feet against the narrow gunwale of the bow, and with my hands grasping a ring-bolt near the foot of the fore-mast. It was mere instinct that prompted me to do this – which was undoubtedly the very best thing I could have done – for I was too much flurried to think.

    “For some moments we were completely deluged, as I say, and all this time I held my breath, and clung to the bolt. When I could stand it no longer I raised myself upon my knees, still keeping hold with my hands, and thus got my head clear. Presently our little boat gave herself a shake, just as a dog does in coming out of the water, and thus rid herself, in some measure, of the seas. I was now trying to get the better of the stupor that had come over me, and to collect my senses so as to see what was to be done, when I felt somebody grasp my arm. It was my elder brother, and my heart leaped for joy, for I had made sure that he was overboard – but the next moment all this joy was turned into horror – for he put his mouth close to my ear, and screamed out the word ‘ Moskoe-strm! ‘

    “No one ever will know what my feelings were at that moment. I shook from head to foot as if I had had the most violent fit of the ague. I knew what he meant by that one word well enough – I knew what he wished to make me understand. With the wind that now drove us on, we were bound for the whirl of the Strm, and nothing could save us !

    “You perceive that in crossing the Strm channel, we always went a long way up above the whirl, even in the calmest weather, and then had to wait and watch carefully for the slack – but now we were driving right upon the pool itself, and in such a hurricane as this! ‘To be sure,’ I thought, ‘we shall get there just about the slack – there is some little hope in that’ – but in the next moment I cursed myself for being so great a fool as to dream of hope at all. I knew very well that we were doomed, had we been ten times a ninety-gun ship.

    “By this time the first fury of the tempest had spent itself, or perhaps we did not feel it so much, as we scudded before it, but at all events the seas, which at first had been kept down by the wind, and lay flat and frothing, now got up into absolute mountains. A singular change, too, had come over the heavens. Around in every direction it was still as black as pitch, but nearly overhead there burst out, all at once, a circular rift of clear sky – as clear as I ever saw – and of a deep bright blue – and through it there blazed forth the full moon with a lustre that I never before knew her to wear. She lit up every thing about us with the greatest distinctness – but, oh God, what a scene it was to light up!

    “I now made one or two attempts to speak to my brother – but, in some manner which I could not understand, the din had so increased that I could not make him hear a single word, although I screamed at the top of my voice in his ear. Presently he shook his head, looking as pale as death, and held up one of his finger, as if to say ‘listen! ‘

    “At first I could not make out what he meant – but soon a hideous thought flashed upon me. I dragged my watch from its fob. It was not going. I glanced at its face by the moonlight, and then burst into tears as I flung it far away into the ocean. It had run down at seven o’clock! We were behind the time of the slack, and the whirl of the Strm was in full fury!

    “When a boat is well built, properly trimmed, and not deep laden, the waves in a strong gale, when she is going large, seem always to slip from beneath her – which appears very strange to a landsman – and this is what is called riding, in sea phrase. Well, so far we had ridden the swells very cleverly ; but presently a gigantic sea happened to take us right under the counter, and bore us with it as it rose – up – up – as if into the sky. I would not have believed that any wave could rise so high. And then down we came with a sweep, a slide, and a plunge, that made me feel sick and dizzy, as if I was falling from some lofty mountain-top in a dream. But while we were up I had thrown a quick glance around – and that one glance was all sufficient. I saw our exact position in an instant. The Moskoe-Strm whirlpool was about a quarter of a mile dead ahead – but no more like the every-day Moskoe-Strm, than the whirl as you now see it is like a mill-race. If I had not known where we were, and what we had to expect, I should not have recognised the place at all. As it was, I involuntarily closed my eyes in horror. The lids clenched themselves together as if in a spasm.

    “It could not have been more than two minutes afterward until we suddenly felt the waves subside, and were enveloped in foam. The boat made a sharp half turn to larboard, and then shot off in its new direction like a thunderbolt. At the same moment the roaring noise of the water was completely drowned in a kind of shrill shriek – such a sound as you might imagine given out by the waste-pipes of many thousand steam-vessels, letting off their steam all together. We were now in the belt of surf that always surrounds the whirl ; and I thought, of course, that another moment would plunge us into the abyss – down which we could only see indistinctly on account of the amazing velocity with which we wore borne along. The boat did not seem to sink into the water at all, but to skim like an air-bubble upon the surface of the surge. Her starboard side was next the whirl, and on the larboard arose the world of ocean we had left. It stood like a huge writhing wall between us and the horizon.

    “It may appear strange, but now, when we were in the very jaws of the gulf, I felt more composed than when we were only approaching it. Having made up my mind to hope no more, I got rid of a great deal of that terror which unmanned me at first. I suppose it was despair that strung my nerves.

    “It may look like boasting – but what I tell you is truth – I began to reflect how magnificent a thing it was to die in such a manner, and how foolish it was in me to think of so paltry a consideration as my own individual life, in view of so wonderful a manifestation of God’s power. I do believe that I blushed with shame when this idea crossed my mind. After a little while I became possessed with the keenest curiosity about the whirl itself. I positively felt a wish to explore its depths, even at the sacrifice I was going to make ; and my principal grief was that I should never be able to tell my old companions on shore about the mysteries I should see. These, no doubt, were singular fancies to occupy a man’s mind in such extremity – and I have often thought since, that the revolutions of the boat around the pool might have rendered me a little light-headed.

    “There was another circumstance which tended to restore my self-possession ; and this was the cessation of the wind, which could not reach us in our present situation – for, as you saw yourself, the belt of surf is considerably lower than the general bed of the ocean, and this latter now towered above us, a high, black, mountainous ridge. If you have never been at sea in a heavy gale, you can form no idea of the confusion of mind occasioned by the wind and spray together. They blind, deafen, and strangle you, and take away all power of action or reflection. But we were now, in a great measure, rid of these annoyances – just us death-condemned felons in prison are allowed petty indulgences, forbidden them while their doom is yet uncertain.

    “How often we made the circuit of the belt it is impossible to say. We careered round and round for perhaps an hour, flying rather than floating, getting gradually more and more into the middle of the surge, and then nearer and nearer to its horrible inner edge. All this time I had never let go of the ring-bolt. My brother was at the stern, holding on to a small empty water-cask which had been securely lashed under the coop of the counter, and was the only thing on deck that had not been swept overboard when the gale first took us. As we approached the brink of the pit he let go his hold upon this, and made for the ring, from which, in the agony of his terror, he endeavored to force my hands, as it was not large enough to afford us both a secure grasp. I never felt deeper grief than when I saw him attempt this act – although I knew he was a madman when he did it – a raving maniac through sheer fright. I did not care, however, to contest the point with him. I knew it could make no difference whether either of us held on at all ; so I let him have the bolt, and went astern to the cask. This there was no great difficulty in doing ; for the smack flew round steadily enough, and upon an even keel – only swaying to and fro, with the immense sweeps and swelters of the whirl. Scarcely had I secured myself in my new position, when we gave a wild lurch to starboard, and rushed headlong into the abyss. I muttered a hurried prayer to God, and thought all was over.

    “As I felt the sickening sweep of the descent, I had instinctively tightened my hold upon the barrel, and closed my eyes. For some seconds I dared not open them – while I expected instant destruction, and wondered that I was not already in my death-struggles with the water. But moment after moment elapsed. I still lived. The sense of falling had ceased ; and the motion of the vessel seemed much as it had been before, while in the belt of foam, with the exception that she now lay more along. I took courage, and looked once again upon the scene.

    “Never shall I forget the sensations of awe, horror, and admiration with which I gazed about me. The boat appeared to be hanging, as if by magic, midway down, upon the interior surface of a funnel vast in circumference, prodigious in depth, and whose perfectly smooth sides might have been mistaken for ebony, but for the bewildering rapidity with which they spun around, and for the gleaming and ghastly radiance they shot forth, as the rays of the full moon, from that circular rift amid the clouds which I have already described, streamed in a flood of golden glory along the black walls, and far away down into the inmost recesses of the abyss.

    “At first I was too much confused to observe anything accurately. The general burst of terrific grandeur was all that I beheld. When I recovered myself a little, however, my gaze fell instinctively downward. In this direction I was able to obtain an unobstructed view, from the manner in which the smack hung on the inclined surface of the pool. She was quite upon an even keel – that is to say, her deck lay in a plane parallel with that of the water – but this latter sloped at an angle of more than forty-five degrees, so that we seemed to be lying upon our beam-ends. I could not help observing, nevertheless, that I had scarcely more difficulty in maintaining my hold and footing in this situation, than if we had been upon a dead level ; and this, I suppose, was owing to the speed at which we revolved.

    “The rays of the moon seemed to search the very bottom of the profound gulf ; but still I could make out nothing distinctly, on account of a thick mist in which everything there was enveloped, and over which there hung a magnificent rainbow, like that narrow and tottering bridge which Mussulmen say is the only pathway between Time and Eternity. This mist, or spray, was no doubt occasioned by the clashing of the great walls of the funnel, as they all met together at the bottom – but the yell that went up to the Heavens from out of that mist, I dare not attempt to describe.

    “Our first slide into the abyss itself, from the belt of foam above, had carried us a great distance down the slope ; but our farther descent was by no means proportionate. Round and round we swept – not with any uniform movement – but in dizzying swings and jerks, that sent us sometimes only a few hundred yards – sometimes nearly the complete circuit of the whirl. Our progress downward, at each revolution, was slow, but very perceptible.

    “Looking about me upon the wide waste of liquid ebony on which we were thus borne, I perceived that our boat was not the only object in the embrace of the whirl. Both above and below us were visible fragments of vessels, large masses of building timber and trunks of trees, with many smaller articles, such as pieces of house furniture, broken boxes, barrels and staves. I have already described the unnatural curiosity which had taken the place of my original terrors. It appeared to grow upon me as I drew nearer and nearer to my dreadful doom. I now began to watch, with a strange interest, the numerous things that floated in our company. I must have been delirious – for I even sought amusement in speculating upon the relative velocities of their several descents toward the foam below. ‘This fir tree,’ I found myself at one time saying, ‘will certainly be the next thing that takes the awful plunge and disappears,’ – and then I was disappointed to find that the wreck of a Dutch merchant ship overtook it and went down before. At length, after making several guesses of this nature, and being deceived in all – this fact – the fact of my invariable miscalculation – set me upon a train of reflection that made my limbs again tremble, and my heart beat heavily once more.

    “It was not a new terror that thus affected me, but the dawn of a more exciting hope. This hope arose partly from memory, and partly from present observation. I called to mind the great variety of buoyant matter that strewed the coast of Lofoden, having been absorbed and then thrown forth by the Moskoe-strm. By far the greater number of the articles were shattered in the most extraordinary way – so chafed and roughened as to have the appearance of being stuck full of splinters – but then I distinctly recollected that there were some of them which were not disfigured at all. Now I could not account for this difference except by supposing that the roughened fragments were the only ones which had been completely absorbed – that the others had entered the whirl at so late a period of the tide, or, for some reason, had descended so slowly after entering, that they did not reach the bottom before the turn of the flood came, or of the ebb, as the case might be. I conceived it possible, in either instance, that they might thus be whirled up again to the level of the ocean, without undergoing the fate of those which had been drawn in more early, or absorbed more rapidly. I made, also, three important observations. The first was, that, as a general rule, the larger the bodies were, the more rapid their descent – the second, that, between two masses of equal extent, the one spherical, and the other of any other shape , the superiority in speed of descent was with the sphere – the third, that, between two masses of equal size, the one cylindrical, and the other of any other shape, the cylinder was absorbed the more slowly. Since my escape, I have had several conversations on this subject with an old school-master of the district ; and it was from him that I learned the use of the words ‘cylinder’ and ‘sphere.’ He explained to me – although I have forgotten the explanation – how what I observed was, in fact, the natural consequence of the forms of the floating fragments – and showed me how it happened that a cylinder, swimming in a vortex, offered more resistance to its suction, and was drawn in with greater difficulty than an equally bulky body, of any form whatever.

    “There was one startling circumstance which went a great way in enforcing these observations, and rendering me anxious to turn them to account, and this was that, at every revolution, we passed something like a barrel, or else the yard or the mast of a vessel, while many of these things, which had been on our level when I first opened my eyes upon the wonders of the whirlpool, were now high up above us, and seemed to have moved but little from their original station.

    “I no longer hesitated what to do. I resolved to lash myself securely to the water cask upon which I now held, to cut it loose from the counter, and to throw myself with it into the water. I attracted my brother’s attention by signs, pointed to the floating barrels that came near us, and did everything in my power to make him understand what I was about to do. I thought at length that he comprehended my design – but, whether this was the case or not, he shook his head despairingly, and refused to move from his station by the ring-bolt. It was impossible to reach him; the emergency admitted of no delay ; and so, with a bitter struggle, I resigned him to his fate, fastened myself to the cask by means of the lashings which secured it to the counter, and precipitated myself with it into the sea, without another moment’s hesitation.

    “The result was precisely what I had hoped it might be. As it is myself who now tell you this tale – as you see that I did escape – and as you are already in possession of the mode in which this escape was effected, and must therefore anticipate all that I have farther to say – I will bring my story quickly to conclusion. It might have been an hour, or thereabout, after my quitting the smack, when, having descended to a vast distance beneath me, it made three or four wild gyrations in rapid succession, and, bearing my loved brother with it, plunged headlong, at once and forever, into the chaos of foam below. The barrel to which I was attached sunk very little farther than half the distance between the bottom of the gulf and the spot at which I leaped overboard, before a great change took place in the character of the whirlpool. The slope of the sides of the vast funnel became momently less and less steep. The gyrations of the whirl grew, gradually, less and less violent. By degrees, the froth and the rainbow disappeared, and the bottom of the gulf seemed slowly to uprise. The sky was clear, the winds had gone down, and the full moon was setting radiantly in the west, when I found myself on the surface of the ocean, in full view of the shores of Lofoden, and above the spot where the pool of the Moskoe-strm had been. It was the hour of the slack – but the sea still heaved in mountainous waves from the effects of the hurricane. I was borne violently into the channel of the Strm, and in a few minutes was hurried down the coast into the ‘grounds’ of the fishermen. A boat picked me up – exhausted from fatigue – and (now that the danger was removed) speechless from the memory of its horror. Those who drew me on board were my old mates and daily companions – but they knew me no more than they would have known a traveller from the spirit-land. My hair which had been raven-black the day before, was as white as you see it now. They say too that the whole expression of my countenance had changed. I told them my story – they did not believe it. I now tell it to you – and I can scarcely expect you to put more faith in it than did the merry fishermen of Lofoden.”

    A Descent Into the Maelstrom


  • What are Levels of Management?

    What are Levels of Management?


    An enterprise may have different levels of management. Levels of management refer to a line of demarcation between various managerial positions in an enterprise. The levels of management depend upon its size, technical facilities, and the range of production. We generally come across two broad levels of management, viz. (I) administrative management (i.e., the upper level of management) and (II) operating management (i.e., the lower level of management). Administrative management is concerned with “thinking” functions such as laying down policy, planning and setting up of standards. Operative management is concerned with the “doing” function such as an implementation of policies and directing the operations to attain the objectives of the enterprise.

    But in actual practice, it is difficult to draw any clear-cut demarcation between thinking function and doing function. Because the basic/fundamental managerial functions are performed by all managers irrespective of their levels or, ranks. For instance, wage and salary director of a company may assist in fixing wages and salary structure as a member of the Board of Directors, but as head of wages and salary department, his job is to see that the decisions are implemented.

    The real significance of levels is that they explain authority relationships in an organization.

    Considering the hierarchy of authority and responsibility, one can identify three levels of management namely


    (I) Top management of a company consists of owners/shareholders, Board of Directors, its Chairman, Managing Director, or the Chief Executive, or the General Manager or Executive Committee having key officers.

    (II) Middle management of a company consists of heads of functional departments viz. Purchase Manager, Production Manager, Marketing Manager, Financial controller, etc. and Divisional and Sectional Officers working under these Functional Heads.

    (III) Lower level or operative management of a company consists of Superintendents, Foremen, Supervisors, etc.

    1) Top management: Top management is the ultimate source of authority and it lays down goals, policies and plans for the enterprise. It devotes more time on planning and coordinating functions. It is accountable to the owners of the business of the overall management. It is also described as the policy making group responsible for the overall direction and success of all company activities.

    The important functions of top management include:

    (A) To establish the objectives or goals of the enterprise.

    (B) To make policies and frame plans to attain the objectives laid.

    (C) To set up an organizational framework to conduct the operations as per plans.

    (D) To assemble the resources of money, men, materials, machines and methods to put the plans into action.

    (E) To exercise effective control of the operations.

    (F) To provide overall leadership to the enterprise.

    2) Middle management: The job of middle management is to implement the policies and plans framed by the top management. It serves as an essential link between the top management and the lower level or operative management. They are responsible for the top management for the functioning of their departments. They devote more time on the organization and motivation functions of management. They provide the guidance and the structure for a purposeful enterprise. Without them, the top management’s plans and ambitious expectations will not be fruitfully realized.

    The following are the main functions of middle management:

    (A) To interpret the policies chalked out by top management.

    (B) To prepare the organizational set up in their own departments for fulfilling the objectives implied in various business policies.

    (C) To recruit and select suitable operative and supervisory staff.

    (D) To assign activities, duties, and responsibilities for timely implementation of the plans.

    (E) To compile all the instructions and issue them to supervisor under their control.

    (F) To motivate personnel to attain higher productivity and to reward them properly.

    (G) To cooperate with the other departments for ensuring a smooth functioning of the entire organization.

    (H) To collect reports and information on performance in their departments.

    (I) To report to top management.

    (J) To make suitable recommendations to the top management for the better execution of plans and policies.

    3) Lower or operative management: It is placed at the bottom of the hierarchy of management, and actual operations are the responsibility of this level of management. It consists of foreman, supervisors, sales officers, accounts officers and so on. They are in direct touch with the rank and file or workers. Their authority and responsibility are limited. They pass on the instructions of the middle management to workers.

    They interpret and divide the plans of the management into short-range operating plans. They are also involved in the process of decision-making. They have to get the work done through the workers. They a lot various jobs to the workers, evaluate their performance and report to the middle-level management. They are more concerned with direction and control functions of management. They devote more time in the supervision of the workers.