Tag: Process

  • What is Plant layout in Operations Management?

    What is Plant layout in Operations Management?

    Types of Plant Layout – what is plant layout in operations management? It begins with the design of the factory building and goes up to the location and movement of a work table. After discussing the objectives of plant layout, this article explains their types. The types of Plant Layout are the main three; process, product, and stationary layout, but in the modern world two extra types; combination and Fixed position Layout. All the facilities like equipment, raw materials, machinery, tools, futures, workers, etc. give a proper place.

    Here is explain the what is plant layout in operations management. Types: process layout, product layout, stationary layout, combination layout, and Fixed position layout.

    There are three main types of plant layout in operations management: 1) Functional or process layout, 2) product or line layout, and 3) stationary layout. Other types; are 4) Combination and 5) Fixed Position Layout. However, the choice of one or the other type of layout depends upon the machines and techniques used in the production.

    Process Layout:

    It knows as the functional layout and stands characterized by keeping similar machines or similar operations at one location (place). In other words, separate departments establishing for each specialized operation of production, and machines relating to that functions assemble there.

    For example, all lathe machines will be in one place, all milling machines in another, and so on. This type of layout is generally employed for industries to engage in job order production and non-standardized products.

    Advantages of Process Layout:

    The following advantages of Process Layout below are;

    • Wide flexibility exists as regards allotment of work to equipment and workers. The production capacity does not arrange in rigid sequence and fixed-rate capacity with line balancing. Alterations or changes in the sequence of operations can easily make as and when required without upsetting the existing plant layout types plan for operations management.
    • Better quality product, because the supervisors and workers attend to one type of machines and operations.
    • A variety of jobs, coming in different job orders make the work more interesting for workers.
    • Workers in one section do not affect by the nature of operations carried out in another section. e.g. a lathe operator does not affect the rays of welding as the two sections are quite separate.
    • Like product layout, the breakdown of one machine does not interrupt the entire production flow.
    • This type of layout requires lesser financial investment in machines and equipment because general-purpose machines, which are usually of low costs, are used and duplication of the machine avoids. Moreover, general-purpose machines do not depreciate or become obsolete as rapidly as specialized machines. It results in lower investment in machines.
    • Under process layout, better and more efficient supervision is possible because of specialization in operation.

    Disadvantages of Process Layout:

    The following disadvantages of Process Layout below are;

    • Automatic material handling is extremely difficult because fixed material handling equipment like conveyor belts cannot possibly use.
    • Completion of the same product takes more time.
    • Raw material has to travel larger distances for getting processed into finished goods. This increases material handling and associated costs.
    • It is not possible to implement group incentive schemes based on the quantity of the manufacturing of the product.
    • This type of layout requires more floor space than the product layout because a distinct department establishes for each operation.
    • Compared to line layout inventory investments are usually higher in the case of process layout. It increases the need for working capital in the form of inventory.
    • Under process layout, the cost of supervision is high because; 1) the number of employees per supervisor is less resulting in a reduced supervisory span of control, and 2) the work is checked after each operation.

    Product Layout:

    It is also known as line (type) layout. It implies that various operations on a product are performed in a sequence and the machines are placed along the product flow line i.e. machines are arranged in the sequence upon which a given product will operate. This type of product layout prefers continuous production i.e. involving a continuous flow of in-process material towards the finished product stage.

    Advantages of Product Layout:

    The following advantages of the Product Layout below are;

    Automatic material handling, lesser material handling movements, time, and cost.

    • Product completes in lesser time. Since materials are fed at one end of the layout and the finished product collects at the other end, there is no transportation of raw materials backward and forward. It shortens the manufacturing time because it does not require any time-consuming interval transportation until the completion of the process of production. Line balancing may eliminate idle capacity.
    • The smooth and continuous flow of work. This plan ensures a steady flow of production with the economy because bottlenecks or stoppages of work at different points of production is got to eliminate or avoid due to the proper arrangement of machines in sequence.
    • Less in-process Inventory. The semi-finished product or work-in-progress is the minimum and negligible under this type of layout because the process of production is direct and uninterrupted.
    • Effective quality control with reduced inspection points. It does not require frequent changes in machine set-up. Since the production process integrates and is continuous, Defective practices can easily discover and segregate. This makes inspection easy and economical.
    • Maximum use of space due to straight line production flow and reduced need for interim storing.

    Disadvantages of Product Layout:

    The following disadvantages of the Product Layout below are;

    • Since the specific product determines the layout, a product change involves major layout changes and thus the layout flexibility is considerably reduced.
    • The pace or rate of working depends upon the output rate of the slowest machine. This involves excessive idle time for other machines if the production line does not adequately balance.
    • Machines being scattered along the line, more machines of each type have to purchase for helping a few stand by, because if one machine in the line fails, it may lead to a shutdown of the complete production line.
    • It is difficult to increase production beyond the capacities of the production lines.
    • As the entire production is the result of the joint efforts of all operations in the line, it is difficult to implement individual incentive schemes.
    • Since there are no separate departments for various types of work, supervision is also difficult.
    • Under this system, labor cost is high because; 1) absenteeism may create certain problems because every worker is a specialist in his work or he specializes in a particular machine. To avoid the bottleneck, surplus workers who are generalists and can fit on several machines will have to employ; 2) monotony is another problem with the workers. By doing the work repetitive nature along the assembly line, they feel bored; 3) as machines play the dominant role in production under this system, workers have no opportunity to demonstrate their talent; 4) noise, vibrations, temperature, moisture, gas, etc. may cause health hazards. In this way, labor costs are high.

    Their clarification:

    It is now quite clear from the above discussion that both systems have their own merits and demerits. The Advantages of one type of layout are generally the disadvantages of other types. Thus to secure the advantage of both systems a combined layout may design.

    Static Product Layout or Project Layout or stationary Layout:

    The manufacturing operations require the movements of machines, and men materials, in the product layout and process layout generally the machines are fixed installations, and the operators are static in terms of their specified workstations.

    It is only the materials that move from operation to operation for processing. But where the product is large in size and heavy in weight, it tends to be static e.g. shipbuilding. In such a production system, the product remains static and men and machines move to perform the operations on the product.

    Advantages of stationary layout:

    The advantages of this stationary layout are as under:

    • Flexible: This layout is fully flexible and is capable of absorbing any sort of the change in product and process. The project can complete according to the needs of the customers and as per their specifications.
    • Lower labor cost: People are drawn from functional departments. They move back to their respective departments as soon as the work is over. This is economical if several orders are at hand and each one is in a different stage of progress. Besides, one or two workers can assign to a project from start to finish. Thus it reduces the labor cost.
    • Saving in time: The sequence of operations can change if some materials do not arrive or if some people are absent. Since the job assignment is so long, different sets of people operate simultaneously on the same assignment doing different operations.
    • Other benefits: Are; 1) It requires less floor space requirement because machines and equipment are in moving position and there is no need for fixing them. 2) This arrangement is the most suitable way of assembling large and heavy products.

    Disadvantages of stationary layout:

    The disadvantages of this stationary layout are as under:

    • Higher capital investment: Compared to the product or process layout, capital investment is higher in this type of layout. Since several assignments are taken, investment in materials, men, and machines makes at a higher cost.
    • Unsuitability: This type of layout is not suitable for manufacturing or assembling small products in large quantities. It is suitable only in cases where the product is big or the assembling process is complex.
    What is Plant layout in Operations Management? Types of Plant Layout Process Product and Stationary
    What is Plant layout in Operations Management? Types of Plant Layout: Process, Product, and Stationary.

    Combination Layout:

    A combination of process and product layouts combine the advantages of both types of plant layouts. Moreover, these days pure product or process layouts are rare. Most of the manufacturing sections are arranged in a process layout with manufacturing lines occurring here and there (scattered) wherever the conditions permit. A combination layout is possible where an item makes in different types and sizes.

    In such cases machinery arranges in a process layout but the process grouping (a group of the number of similar machines) then arranges in a sequence to manufacture various types and sizes of products. The point to note is that no matter whether the product varies in size and type, the sequence of operations remains the same or similar.

    Extra things:

    A combination layout is also useful when several items producing in the same sequence but none of the items are to produce in bulk and thus no item justifies an individual and independent production line. For example, files, hacksaws, circular metal saws, wood saws, etc. can manufacture on a combination type of layout.

    Nowadays in the pure state, any one form of layout discuss above stands rarely found. Therefore, generally, the layouts used in industries are a compromise of the above-mentioned layouts. Every layout has got certain advantages and limitations. Therefore, industries would to like use any type of layout as such.

    Flexibility is a very important factor, so the layout should be such that it can mold according to the requirements of the industry, without much investment. If the good features of all types of layouts connect, a compromise solution can obtain which will be more economical and flexible.

    Fixed Position Layout:

    These types of plant layout are the least important for today’s manufacturing industries for operations management. In this type of layout, the major component remains in a fixed location, other materials, parts, tools, machinery, manpower, and other supporting equipment are brought to this location.

    In other types of layouts discussed earlier, the product moves past stationary production equipment, whereas in this case the reverse applies; men and equipment are moving to the material, which remains at one place and the product completes at that place where the material lies.

    The major component or body of the product remains in a fixed position because it is too heavy or too big and as such it is economical and convenient to bring the necessary tools and equipment to work along with the manpower. This type of layout uses in the manufacture of boilers, hydraulic and steam turbines and ships, etc.

    Advantages of Fixed Position Layout:

    The advantages of Fixed Position Layout are as under;

    • Material movement reduces.
    • Capital investment minimizes.
    • The task stands usually finished by a gang of operators, hence continuity of operations ensures.
    • It is possible to assign one or more skilled workers to a project from start to finish to ensure continuity of work.
    • It involves the least movement of materials.
    • There is maximum flexibility for all sorts of changes in products and processes.
    • Several quite different projects can take the same layout.
    • Production centers are independent of each other. Hence, effective planning and loading can make. Thus the total production cost will reduce.
    • It offers greater flexibility and allows change in product design, product mix, and production volume.

    Disadvantages of Fixed Position Layout:

    The disadvantages of Fixed Position Layout are as under;

    • Highly skilled manpower requires.
    • It usually involves a low content of work-in-progress.
    • There appears to be low utilization of labor and equipment.
    • It involves high equipment handling costs.
    • The movement of machine equipment to the production center may be time-consuming.
    • Complicated fixtures may require for the positioning of jobs and tools. This may increase the cost of production.
  • Process Costing: Meaning, Characteristics, and Objectives

    Process Costing: Meaning, Characteristics, and Objectives

    Process Costing is a method of costing used to ascertain the cost of a product at each process or stage of manufacture. You will be able to understand the Process Costing based on the points given to them; 1) introduction, 2) meaning of process costing, 3) definition of process costing, 4) characteristics of process costing, 5) objectives of process costing, and 6) principles of process costing. In this method, the costs of materials, wages and overheads are accumulated for each process separately, for a gives period, and then carrying forward cumulatively from one process to the next process till the last process complete.

    This article explains the topic of Process Costing: Introduction, Meaning, Definition, Characteristics, Objectives, and Principles.

    Process costing is probably the most widely used method of cost ascertainment. Records are also maintaining to account for process losses. These losses may be normal or abnormal. Separate accounting is done for normal and abnormal losses, opening and closing work-in-progress and inter-process profits, if any. This method of costing used in those industries where mass production of identical units undertakes continuously and finish products are subject to several production stages call processes before completion.

    The system of process costing is suitable for industries involving continuous production of the same product or products through the same process or set of processes. It is in use in the plant producing paper, rubber products, medicines, chemical products. It is also very much common in flour mill, bottling companies, canning plants, breweries, etc.

    Meaning of Process Costing:

    They refer to a method of accumulating the cost of production by the process. It uses in mass production industries producing standard products like steel, sugar, chemicals, oil, etc. In all such industries, goods produced are identical and all factory processes are standardizing. Output in such industries consists of like units and every unit of the product undergoes a similar operation in the process.

    So it implies that the same cost of material, labor and overhead charges to each unit of the production process. Under this method, costing an individual unit is impossible. It so-calls because under process costing cost of the product ascertain process-wise.

    They also know as “Continuous Costing” because industries that adopt process costing undertake the production of goods continuously. They also know as “Average Costing” because the cost per unit of each process ascertains by averaging the expenditure incurred on that process during a period by the number of units produced in that process during the period.

    Definition of Process Costing:

    After their meaning, Process Costing defines by different scholars as under:

    According to Wheldon,

    “Process costing is a method of costing used to ascertain the cost of the product at each process, operation or stage of manufacture.”

    According to the Institute of Cost and Management Accountants, London,

    “Process costing is that form of operation costing which applies where standardized goods are produced.”

    Characteristics or Features of Process Costing:

    It is that aspect of operation costing which uses to ascertain the cost of the product at each process or stage of manufacture. Where processes are carrying on having one or more of the following characteristics of Process costing:

    • Production over having a continuous flow of identical products except. Where plant and machinery are shut-down for repairs, etc.
    • Clearly defined process cost centers and the accumulation of all costs (materials, labor, and overheads) by the cost centers.
    • The maintenance of accurate records of units and part units produced and cost incurred by each process.
    • The finished product of one process becomes the raw materials of the next process or operation and so on until the final product obtains.
    • Avoidable and unavoidable losses usually arise at different stages of manufacture for various reasons. Treatment of normal and abnormal losses or gains is to study in this method of costing.
    Extra characteristics:
    • Sometimes goods are transferring from one process to another process, not at cost price but transfer price just to compare this with the market price and to have a check on the inefficiency and losses occurring in a particular process. The elimination of the profit elements from stock is to learn in this method of costing.
    • To obtain accurate average costs, it is necessary to measure the production at various stages of manufacture. As all the input units may not convert into finish goods; some may be in progress. The calculation of effective units is to learn in this method of costing.
    • Different products with or without by-products are simultaneously producing at one or more stages or processes of manufacture. The valuation of by-products and apportionment of the joint cost before the point of separation is an important aspect of this method of costing. In certain industries, by-products may require further processing before they can sell.
    • The main product of one firm may be a by-product of another firm and in certain circumstances. It may be available in the market at prices which are lower than the cost to the first-mentioned firm. It is essential, therefore, that this cost knows so that advantages can take of these market conditions.
    • The output is uniform and all units are identical during one or more processes. So the cost per unit of production can ascertain only by averaging the expenditure incurred during a particular period.

    Process Costing Meaning Characteristics and Objectives
    Process Costing: Meaning, Characteristics, and Objectives, #Pixabay.

    Objectives of Process Costing:

    How do you know what cost you need? If you know the total cost of production of each process. The following are the main objectives of process costing:

    1. To Ascertain the Cost of Each Process: It is necessary to know the cost at every stage of production and this fulfills by the process costing method. On this basis, management can decide concerning the make or buy the required commodities.
    2. To Ascertain the Cost of Bye-Product: Bye-product is that which obtains with the main product in the course of the production. For example; while producing mustard oil, the cake also obtains. Which terms as bye-product and the cost of which is necessary to know the actual cost of the main product? Cost of bye-product ascertains by preparing bye-product Account, under process costing.
    3. To Know the Wastage in Each Process of Production: During the courage of production, different wastages, such as; loss in weight, normal wastage, and abnormal wastage, etc. may arise. Management of any concern may know about these wastages by Process Costing Account.
    4. To Ascertain the Profit or Loss of Each Process: The output or the part of output at the stage of every process can sell out either at profit or loss. Thus the management can know about the profit or loss at every process by preparing Processes Account.
    5. The base of the Valuation of Opening and Closing Stock of Each Next Process: If the total cost of production of any process divides by the number of units, we get the cost of production per unit of that particular process and on this basis opening and closing stock of next process value.

    Principles of Process Costing:

    The essential stages in principles of process costing are:

    The factory divide into several processes and an account maintains for each process. Each Process Account debit with material cost, labor cost, direct expenses, and overheads allocate or apportion to the process.

    The output of a process transfer to the next process in the sequence. In other words, the finished output of one process becomes input (materials) of the next process. The production records of each process are keeping in such a way as to show. The quantity of production and the wastage and scrap and the cost of production of each process for each period.

    Extra things:
    • In some cases, the whole output of one process not transfers to the next process. A part of the output may transfer to the next process. And, a certain portion of the output may sell in semi-finish form or may keep in stock and transfer to Process Stock Account. If the output of any process sells at a profit in semi-finish form. Then profit on that particular sale will show on the debit side of that concerning profit, as profit on goods sale or transfer.
    • In case there is loss or wastage of units in any process. The loss has to born by the good units produced in that process and as a result. The average cost per unit increases to that extent. It may note that, if there is loss or wastage in any process, the quantity of loss or wastage should enter on the credit side of the concerned Process Account in the quantity column. In case the wastage has some scrap value. It should appear on the credit side of the concerned Process Account in the value column against the entry for wastage. But, if the scrap value of the wastage does not specifically give in the problem. It should take as nil.

    The total cost of production of each process for a particular period divided by the number of units produced in that process during that period. And, the average cost per unit of production for a period obtain. The finished output of the last process transfer to the Finish Goods Account.

  • What is the importance and process of Decision-Making?

    What is the importance and process of Decision-Making?

    Importance and Process of Decision-Making; As a leader, you will make decisions involving not only yourself but the morale and welfare of others. Some decisions, such as when to take a break or where to hold a meeting, are simple decisions which have little effect on others. Other decisions are often more complex and may have a significant impact on many people. Therefore, having decision-making, the problem-solving process can be a helpful tool. Such a process can help you to solve these different types of situations.

    Here are explain; What is the importance and process of Decision-Making?

    Within business and the military today, leaders at all levels use some form of decision-making, problem-solving process. There are several different approaches (or models) for decision-making and problem-solving. We would briefly discuss it in this lesson as well. It is beyond doubt that decision making is an essential part of every function of management.

    According to Peter F. Drucker,

    “Whatever a manager does, he does through decision making.”

    Decision making lies deeply embedded in the process of management, spreads over all the managerial functions and covers all the areas of the organization. Management and decision making are bound up and go side by side in every activity performed by the manager. Whether knowingly or unknowingly, every manager makes decisions constantly. Right from the day when the size of the organization used to be very small to the present day huge or mega-size of the organization, the importance of decision making has been there.

    The significant difference is that in today’s complex organization structure, the decision making is getting more and more complex. Whatever a manager does, he does through making decisions.

    Importance of Decision-Making:

    Some of the decisions are of routine and repetitive in nature and it might be that the manager does not realize that he is taking decisions whereas, other decisions which are of strategic nature may require a lot of systematic and scientific analysis. The fact remains that management is always a decision making the process. The most outstanding quality of a successful manager is his/her ability to make sound and effective decisions.

    A manager has to make up his/her mind quickly on certain matters. It is not correct to say that he has to make spur of the moment decisions all the time. For taking many decisions, he gets enough time for careful fact-finding, analysis of alternatives and choice of the best alternative.

    Decision making is a human process. When one decides, he chooses a course alternative which he thinks is the best. Decision making is a proper blend of thinking, deciding and acting. An important executive decision is only one event in the process which requires a succession of activities and routine decisions all along the way.

    Decisions also have a time dimension and a time lag. A manager takes time to collect facts and to weigh various alternatives. Moreover, after decides, it takes still more time to carry out a decision and, often, it takes longer before he can judge whether the decision was good or bad. It is also very difficult to isolate the effects of any single decision.

    What is the process of Decision-Making?

    The following procedure should follow in arriving at a correct decision:

    Process of Decision-Making - List
    Process of Decision-Making – List

    Objectives of Setting:

    Rational decision-making involves concrete objectives. So the first step in decision-making is to know one’s objectives. An objective is an expected outcome of future actions. So before deciding upon the future course of efforts, it is necessary to know beforehand what we are trying to achieve. Exact knowledge of goals and objectives bring purpose in planning and harmony in efforts. Moreover, objectives are the criteria by which final outcome is to measure.

    Defining the Problem:

    It is true to a large extent that a problem well defined is half solving. A lot of bad decisions are made because the person making the decision does not have a good grasp of the problem. It is essential for the decision-maker to find and define the problem before he takes any decision. Sufficient time and energy should be spent on defining the problem as it is not always easy to define the problem and to see the fundamental thing that is causing the trouble and that needs correction.

    Practically, no problem ever presents itself in a manner that an immediate decision may take. It is, therefore, essential to define the problem before any action takes, otherwise, the manager will answer the wrong question rather than the core problem. Clear definition of the problem is very important as the right answer can find only to the right question.

    Analyzing the problem:

    After defining the problem, the next step in decision-making is analyzing it. The problem should thoroughly analyze to find out adequate background information and data relating to the situation. The problem should divide into many sub-problems and each element of the problem must investigate thoroughly and systematically. There can be a number of factors involving any problem, some of which are pertinent and others are remote.

    These pertinent factors should discuss in depth. It will save time as well as money and efforts. In order to classify any problem, we require a lot of information. So long as the required information is not available, any classification would be misleading. This will also have an adverse impact on the quality of the decision. Trying to analyze without facts is like guessing directions at a crossing without reading the highway signboards.

    Thus, the collection of the right type of information is very important in decision making. It would not be an exaggeration to say that a decision is as good as the information on which it is based. Collection of facts and figures also requires certain decisions on the part of the manager. He must decide what type of information he requires and how he can obtain this.

    Developing Alternatives:

    After defining and analyzing the problem, the next step in the decision-making process in the development of alternative courses of action. Without resorting to the process of developing alternatives, a manager is likely to guide by his limited imagination. It is rare for alternatives to be lacking for any course of action. But sometimes a manager assumes that there is only one way of doing a thing.

    Main Points;

    In such a case, what the manager has probably not done is to force himself to consider other alternatives. Unless he does so, he cannot reach the decision which is the best possible.

    • From this can derive a key planning principle which may term as the principle of alternatives. Alternatives exist for every decision problem. Effective planning involves a search for the alternatives towards the desired goal.
    • Once the manager starts developing alternatives, various assumptions come to his mind, which he can bring to the conscious level. Nevertheless, the development of alternatives cannot provide a person with the imagination, which he lacks. But most of us have definitely more imagination than we generally use.
    • It should also note that the development of alternatives is no guarantee of finding the best possible decision, but it certainly helps in weighing one alternative against others and, thus, minimizing uncertainties. While developing alternatives, the principle of limiting factor has to take care of.
    • A limiting factor is one which stands in the way of accomplishing the desired goal. It is a key factor in decision making. If such factors are properly identified, the manager can confine his search for an alternative to those which will overcome the limiting factors.
    • In choosing from among alternatives, the more an individual can recognize those factors which are limiting or critical to the attainment of the desired goal the more clearly and accurately he or she can select the most favorable alternatives.

    Selecting the Best Alternative:

    After developing alternatives one will have to evaluate all the possible alternatives in order to select the best alternative. There are various ways to evaluate alternatives. The most common method is through intuition, i.e., choosing a solution that seems to be good at that time.

    There is an inherent danger in this process because a manager’s intuition may be wrong on several occasions. The second way to choose the best alternative is to weigh the consequences of one against those of the others. Peter F. Drucker has laid down four criteria in order to weigh the consequences of various alternatives.

    They are:

    Risk:

    A manager should weigh the risks of each course of action against the expected gains. As a matter of fact, risks are involved in all the solutions. What matters is the intensity of different types of risks in various solutions.

    The economy of effort:

    The best manager is one who can mobilize the resources for the achievement of results with the minimum of efforts. The decision to choose should ensure the maximum possible economy of efforts, money and time.

    Situation or Timing:

    The choice of a course of action will depend upon the situation prevailing at a particular point of time. If the situation has great urgency, the preferable course of action is one that alarms the organization that something important is happening. If a long and consistent effort is needed, a slow start gathers momentum approach may be preferable.

    Limitation of Resources:

    In choosing among the alternatives, primary attention must give to those factors that are limiting or strategic to the decision involved. The search for limiting factors in decision-making should be a never-ending process. Discovery of the limiting factor lies at the basis of selection from the alternatives and hence of planning and decision making.

    There are three bases which should follow for the selection of alternatives and these are experience, experimentation and research and analysis which are discussed below:

    • In making a choice, a manager is influenced to a great extent by his past experience. He can give more reliance on past experience in case of routine decisions; but in the case of strategic decisions, he should not rely fully on his past experience to reach a rational decision.
    • Under experimentation, the manager tests the solution under actual or simulated conditions. This approach has proved to be of considerable help in many cases in test marketing of a new product. But it is not always possible to put this technique into practice, because it is very expensive.
    • Research and Analysis are considered to be the most effective technique of selecting among alternatives, where a major decision is involved. It involves a search for relationships among the more critical variables, constraints, and premises that bear upon the goal sought.

    Implementing the Decision:

    The choice of an alternative will not serve any purpose if it is not put into practice. The manager is not only concerned with making a decision, but also with its implementation. He should try to ensure that systematic steps are taken to implement the decision. The main problem which the manager may face at the implementation stage is the resistance by the subordinates who are affected by the decision.

    If the manager is unable to overcome this resistance, the energy and efforts consumed in decision making will go waste. In order to make the decision acceptable, it is necessary for the manager to make the people understand what the decision involves, what is expected to them and what they should expect from the management.

    What is the importance and process of Decision-Making - Treasure Map
    What is the importance and process of Decision-Making? Treasure Map #Pixabay

    Main Points;

    In order to make the subordinates committed to the decision, it is essential that they should allow participating in the decision-making process.

    • The managers who discuss problems with their subordinates and give them opportunities to ask questions and make suggestions find more support for their decisions than the managers who don’t let the subordinates participate.
    • The area where the subordinates should participate in the development of alternatives. They should encourage to suggest alternatives. This may bring to surface certain alternatives which may not be thought of by the manager. Moreover, they will feel attached to the decision.
    • At the same time, there is also a danger that a group decision may be poorer than the one-man decision. Group participation does not necessarily improve the quality of the decision, but sometimes impairs it.
    • Someone has described group decision like a train in which every passenger has a brake. It has also been pointing out that all employees are unable to participate in decision making. Nevertheless, it is desirable if a manager consults his subordinates while making a decision.

    Follow-up the Decisions:

    Kennetth H. Killer, has emphatically written in his book that it is always better to check the results after putting the decision into practice.

    He has given reasons for following up of decisions and they are as follows:

    • If the decision is a good one, one will know what to do if faced with the same problem again.
    • If the decision is a bad one, one will know what not to do the next time.
    • The decision is bad and one follows-up soon enough, corrective action may still be possible.

    In order to achieve proper follow-up, the management should devise an efficient system of feedback information. This information will be very useful in taking the corrective measures and in taking the right decisions in the future.

  • What is the behavioral implication of Control? Perfect Explanation

    What is the behavioral implication of Control? Perfect Explanation

    The behavioral implication of Control; The control system should make as fair and as meaningful as possible and must be clearly communicating to all employees. It will be easier for the employees to accept control if they have to participate in the formulation of the control system and process of implementation. Though control should aim at satisfying the needs of the members of the organization, they often take it otherwise. This may be either because of the adverse real impact of control on them or because of Misperception of the impact of control.

    What is the behavioral implication of Control? Perfect Explanation.

    Managers must recognize several behavioral implications in the process of control and its implementation. Although an effective control system should aid in employee motivation, it can also have negative effects on employee morale and performance. Thus, while designing the control system, it must keep in mind that almost everybody in the organization not only resents the idea of being controlling but also objects to being evaluated. It means the results of the control may not same as anticipated by those who are exercising control.

    Behavioral implication of Control - List
    The behavioral implication of Control – List

    What are the Essentials of Effective Control System? The major behavioral problems of control can analyze by taking the nature of control, perception of those who are controlling, and action taken by them.

    Nature or Control:

    Control often puts pressure for engaging in desirable behavior by those who are subject to control. The basic question is: will they not behave in a desirable way if there is no control? Though opinions may differ on this question, often it is recognized that people engage in that behavior, which provides them satisfaction whether control or no control.

    It means if the organizational processes are in tune with the needs of the organizational participants, they can perform well in the absence of control and not in the presence of control. Behavioral scientists have concluded that people try to self-actualize but the basic problem, which comes in the way, is providing by the organization itself. They are inherently self-motivating.

    For example, McGregor believes that more people behave according to the assumptions of Theory Y as compared to Theory X. In such a case, if their behavior is controlled, it may be counter-productive for the organization. The results may be against organizational interests. Thus, the basic nature of control itself against the very basic nature of the people.

    However, this is not true in all cases. Many people may still behave according to the assumptions of Theory X and they need rigid control, In fact, the best control system may be one which focuses attention on the individual needs also, as discussed earlier, otherwise, it will provide more behavioral problems and may be detrimental to the organization itself.

    People or Perception:

    Another behavioral implication of control is the perception of people who are controlling. Though perception may be that control is against the nature of people, it is further aggravated by the fact that people perceive it to be for benefit of the organization but against them. Thus perception may be right or otherwise, that control if brings a better result, is sharing by the organization alone whereas it may, be brought by the organizational members.

    The control in most of the cases is using as a pressure tactic for increasing performance. This is true also because people may produce more if they are aware that their performance is being evaluated. However, increase performance is also determining by several other factors, most important or them being how it is sharing between the organization and its members.

    Thus, if they have a positive perception of this aspect also, they will engage in higher performance. In an alternative case, they will take certain actions to thwart the control action. There is another implication of people’s perception of control. The manager may develop some plan for control, but there are many un-planning controls also necessitated by the organizational requirements. Thus un-plan control is also the part of the organizational control.

    It is this un-plan control that has more serious repercussion and is more counter-productive. The participants may feel that it is due to improper planning on the part of management. Thus they are controlled not because of their own shortcomings but for the shortcomings of others. Naturally, this may be more serious for those who are controlling.

    Actions by Participants:

    Participants in most of the cases resist control attempt. In the first case, people may try to overcome the pressure from control through fanning group. People can stand only to a certain amount of pressure. After this point is pass, it becomes intolerable to them and they will try to find out the alternatives.

    One of the alternatives is the formation of the group if people cannot reduce the pressure individually. The group helps them to absorb much of the pressure and thus relieves the individual personality. It gets rid of the tension generated by the control and people feel more secure by belonging to a group, which can counteract the pressure.

    They will try to escape from the purview of control and may take several actions:

    • Control may try to bring behavior which is satisfying to them but not necessarily satisfying to the organization.
    • They may engage in a behavior which may appear to be in conformity with organizational requirements but actually, it is not, and.
    • If these are not possible they may try to engage in behavior as required by the organization.

    Now the question is:

    Does the group disappear if the control pressure is off?

    The answer is generally in negative because, by the time, control pressure is oft, people have socialized and identify with a particular group and the group has become attractive to them in more than one respect. Thus, they are likely to continue to be the members of the group even after the control pressure is off. Another alternative of overcoming the pressure of control is that an individual solves it at his own level.

    This happens more so if control pressure affects only a few individuals. In such cases, the individuals may engage in a behavior, which on the surface seems to satisfy organizational needs but actually, it is not so. In such cases, they will try to camouflage the information meant for control like providing wrong information or coming in time at the work-place but not quite engaging in meaningful behavior or looking busy but without doing anything. This situation is also quite counterproductive.

    If the individuals are not able to go for any of these alternatives. They will fall in line with organizational control attempt. This situation may, however, not take as an ideal because it may be counter-productive in the logs run; People may develop alienation to the work and to the organization which may have an adverse effect on their efficiency. Organization in such cases may lose, not only the efficiency of their members but them also.

    What is the behavioral implication of Control Perfect Explanation
    What is the behavioral implication of Control? Perfect Explanation #Pixabay.

    Behavioral Implications in the Process of Control:

    Some of the behavioral implications of control are as follows:

    • Controls may influence the generation of invalid and inaccurate information. For example, if the top management habitually reduces budget requests when reviewing them (a control activity), then the lower management, when proposing a new budget or a new project may overstate the cost of resources needed. Similarly, managers may set objectives lower than what is attainable so that higher output will look better at performance appraisal time.
    • Controls can resent by employees if they have no control over the situation. For example, if a professor’s performance is appraising over the number of publication of books and research articles. But he is not affording the freedom of time to do so because of heavy teaching loads and excessive committee work. Then it can result in frustration which may be detrimental to the entire control system. Similarly, the manager will become highly frustrated. If his performance evaluation is based upon profits achieved by his department. But he does not have the authority and control to make operational changes such as hiring and firing of workers.
    • The control system must synchronize to create a balance among all affecting and inter-connected variables. The standards should complement each other and not contradict each other. For example, a control system which emphasizes increased sales as well as a reduction in advertising expenditure at the same time. May seem contradictory to the marketing manager and thus may be frustrating for him.
  • Capital Formation: Significances, Process, Stages, and also Meaning

    Capital Formation: Significances, Process, Stages, and also Meaning

    What does Capital Formation Mean? Capital formation means increasing the stock of real capital in a country. The following points highlight the Capital Formation: Significances, Process, Stages, and also Meaning; Significances of Capital Formation, Process of Capital Formation, Stages of Capital Formation, and Meaning of Capital Formation! Capital-formation refers to all the produced means of further production, such as roads, railways, bridges, canals, dams, factories, seeds, fertilizers, etc. Read and share the given article in English. Understand the Indian Capital Market!

    Explain and Introduction to Capital Formation.

    In other words, capital formation involves making more capital goods such as machines, tools, factories, transport equipment, materials, electricity, etc., which are all used for the future production of goods. For making additions to the stock of Capital, saving and investment are essential.

    #Meaning of Capital Formation:

    Capital-formation or accumulation plays a predominant role in all types of economics whether they are of the American or the British type, or the Chinese type. Development is not possible without capital-formation.

    According to Professor Nurkse,

    “The meaning of (Capital Formation) is that society does not apply the whole of its current productive activity to the needs and desires of immediate consumption, but directs a part of it to the tools and making of capital goods: tools and instruments, machines and transport facilities, plant and equipment— all the various forms of real capital that can so greatly increase the efficacy of productive effort. The essence of the process, then, is the diversion of a part of society’s currently available resources to the purpose of increasing the stock of capital goods so as to make possible an expansion of consumable output in the future.”

    Saving and investment are essential for capital formation. According to Marshall, saving is the result of waiting or abstinence. When a person postpones his consumption to the future, he saves his wealth which he utilizes for further production, If all people save like this, the aggregate savings increase which is utilized for investment purposes in real capital assets like machines, tools, plants, roads, canals, fertilizers, seeds, etc.

    But savings are different from hoardings. For savings to be utilized for investment purposes, they must be mobilized in banks and financial institutions. And the businessmen, the entrepreneurs, and the farmers invest these community savings on capital goods by taking loans from these banks and financial institutions.

    #The Top significance of Capital the Formation:

    Capital formation or accumulation is regarded as the key factor in the economic development of an economy. The vicious circle of poverty, according to Prof. Nurkse, can easily be broken in underdeveloped countries through capital formation.

    It is the capital formation that accelerates the pace of development with fuller utilization of available resources. As a matter of fact, it leads to an increase in the size of national employment, income, and output thereby the acute problems of inflation and balance of payment.

    The following top Significance below is:

    Use of Human Capital Formation:

    Capital formation plays an extraordinary role in the qualitative development of human resources. Human capital formation depends on people’s education, training, health, social and economic security, freedom and welfare facilities for which sufficient capital in needed.

    Labor force needs up-to-date implements and instruments is sufficient quantity so that with the increase in population there will be an optimum increase in production and increased labor is easily absorbed.

    Improvement in Technology:

    In underdeveloped countries, capital formation creates overhead capital and necessary environment for economic development.

    This helps to instigate technical progress which makes impossible the use of more capital in the field of production and with an increase of capital in production, the abstract form of capital changes.

    It is seen that present changes in the capital structure lead to changes in the structure and size of technique and public is thereby more influenced.

    High Rate of Economic Growth:

    The higher rate of capital formation in a country means the higher rate of economic growth. Generally, the rate of capital formation or accumulation is very low in comparison to advanced countries.

    In the case of poor and underdeveloped countries, the rate of capital formation varies between one percent to five percent while in the latter’s case, it even exceeds 20 percent.

    Agricultural and Industrial Development:

    Modern agricultural and industrial development needs adequate funds for the adoption of the latest mechanized techniques, input, and setting of different heavy or light industries.

    Without sufficient capital at their disposal, leads to a lower rate of development thus, capital formation. In fact, the development of these both sectors is not possible without capital accumulation.

    Increase in National Income:

    Capital formation improves the conditions and methods for the production of a country. Hence, there is much increase in national income and per capita income. This leads to an increase in the quantity of production which leads to again rise in national income.

    The rate of growth and the quantity of national income necessarily depends on the rate of capital formation.

    So, the increase in national income is possible only by the proper adoption of different means of production and productive use of the same.

    Expansion of Economic Activities:

    As there is an increase in the rate of capital formation, productivity increases quickly and available capital is utilized in a more profitable and extensive way. In this way, complicated techniques and methods are utilized for the economy.

    This results in the expansion of economic activities. Capital formation increases investment which effects economic development in two ways.

    Firstly, it increases the per capita income and enhances the purchasing power which, in turn, creates a more effective demand.

    Secondly, investment leads to an increase in production. In this way, by capital formation, economic activities can be expanded in underdeveloped countries, which in fact, helps to get rid of poverty and attain economic development in the economy.

    Less Dependence on Foreign Capital:

    In underdeveloped countries, the process of Capital formation increases dependence on internal resources and domestic savings by which dependence on foreign capital is declined.

    Economic development leaves the burden of foreign capital, hence to give interest to foreign capital and bear expenses of foreign scientists, the country has to be burdened by improper taxation to the public.

    This gives a setback to internal savings. Thus, by the way of capital formation, a country can attain self-sufficiency and can get rid of foreign capital’s dependence.

    Increase in Economic Welfare:

    By the increase in the rate of capital formation, the public is getting more facilities. As a result, the common man is more benefited economically. Capital formation leads to an unexpected increase in their productivity and income and this improves their standard of living.

    This leads to improvement and enhancement in the chances of work. This helps to raise the welfare of the people in general. Therefore, capital formations the principal solution to the complex problems of poor countries.

    Capital Formation Significances Process Stages and also Meaning
    Capital Formation: Significances, Process, Stages, and also Meaning! Image credit from #Pixabay.

    #The Top 3 Process of Capital Formation:

    The process of capital formation involves three steps:

    1. Increase in the volume of real savings.
    2. Mobilization of savings through financial and credit institutions, and.
    3. Investment of savings.

    Thus the problem of capital formation becomes two-fold: one, how to save more; and two, how to utilize the current savings of the community for capital formation. We discuss the factors on which capital accumulation depends.

    1. How to Increasing Savings?

    The following savings below are:

    Power and Will to Save: 

    Savings depend upon two factors: the power to save and the will to save. The power to save the community depends upon the size of the average income, the size of the average family, and the standard of living of the people.

    Highly progressive income and property taxes reduce the incentive to save. But low rates of taxation with due concessions for savings in provident fund, life insurance, health insurance, etc. encourage savings.

    The perpetuation of Income Inequalities: 

    A perpetuation of income inequalities had been one of the major sources of capital formation in 18th century England and early 20th century Japan. In most communities, it is the higher income groups with a high marginal propensity to save that do the majority of savings.

    Increasing Profits: 

    Professor Lewis is of the view that the ratio of profits to national income should be increased by expanding the capitalist sector of the economy, by providing various incentives and protecting enterprises from foreign competition. The essential point is that the profits of business enterprises should increase because they know how to use them in productive investment.

    Government Measures: 

    Like private households and enterprises, the government also saves by adopting a number of fiscal and monetary measures. These measures may be in the form of a budgetary surplus through an increase in taxation (mostly indirect), reduction in government expenditure, expansion of the export sector, raising money by public loans, etc.

    2. How to Mobilization can Savings?

    The next step for capital formations the mobilization of savings through banks, investment trusts, deposit societies, insurance companies, and capital markets. “The Kernal of Keynes’s theory is that decisions to save and decisions to invest are made largely by different people and for different reasons.”

    To bring the savers and investors together there must be well-developed capital and money markets in the country. In order to mobilize savings, attention should be paid to the starting of investment trusts, life insurance, provident fund, banks, and cooperative societies.

    Such agencies will not only permit small amounts of savings to be handled and invested conveniently but will allow the owners of savings to retain liquidity individually but finance long-term investment collectively.

    3. How to Investment can Savings?

    The third step in the process of capital formations the investment of savings in creating real assets. The profit-making classes are an important source of capital formation in the agricultural and industrial sectors of a country.

    They have an ambition for power and save in the form of distributed and undistributed profits and thus invest in productive enterprises, besides, there must be a regular supply of entrepreneurs which are capable, honest and dependable. To these may be added, the existence of such infrastructure as well-developed means of transport, communications, power, water, educated and trained personnel, etc.

    #The Top 3 Stages of Capital Formation:

    The following stages below are:

    Creation of savings:

    Capital formation depends on savings. Saving is that part of national income which is not spent on consumption goods. Thus, if national income remains unchanged more saving implies less consump­tion. In other words, in order to save more and more people have to curtail their consumption voluntarily.

    If people reduce their consumption savings will increase. If consumption falls some resources used in the production of consumption goods will be released. The creation of money-savings in a country depends mainly on the people’s ability to save and partly on their willingness to save.

    Conversion of savings into investment:

    However, generation of sav­ings is not enough. Often people save money but this saving largely goes waste because saving is held in the form of idle balance (as in rural areas), or to purchase unproductive assets like gold and jewelry. This is why society’s actual savings falls below its potential savings. Thus, the genera­tion of savings is just a necessary and not a sufficient condition of capital formation.

    The actual production of capital goods:

    This stage involves the con­version of money-savings into the making of capital goods, or what is known as investment. The latter, in turn, hinges on the existing technical facilities available in the country, existing capital equipment, entrepreneurial skill, and venture, the rate of return on investment, the rate of interest, govern­ment policy, etc. 

    Thus the third stage of capital formations concerned with the actual production of capital goods. The process of capital formation is not complete unless business firms acquire capital goods so as to be able to expand their production capacity.

  • Integrated Marketing Communications (IMC): Definition, Components, and its Process

    Integrated Marketing Communications (IMC): Definition, Components, and its Process

    What is IMC? Integrated Marketing Communications (IMC) is a marketing concept of the 1990s. It will be necessary for survival in the 21st century. It ensures that all forms of communication and messages are carefully linked together. The topic of this article: IMC Meaning, Definition, Components, and its Process. At its most basic level, Integrated Marketing Communications, or IMC, as we’ll call it, means integrating all the promotional tools, so that they work together in harmony. Read and share it in English!

    Introduction of Integrated Marketing Communications (IMC) Explanations!

    The advent of integration is causing marketers to take a fresh look at all the components of marketing, specifically the unique dimension that public relations bring to the marketing mix. Public relations people, in turn, are seizing the opportunity that integration offers them to make a difference where it counts most to their companies and clients – on the bottom line.

    IMC is the culmination of the shift that began in the post – World War II period, from selling what the companies make to making what the consumers want. IMC focused on what to know about products and services, not what the marketers want to tell them in order to sell them.

    Meaning and Definition of Integrated Marketing Communications (IMC):

    It is essential for organizations to promote their brands well among the end-users not only to outshine competitors but also to survive in the long run. Brand promotion increases awareness of products and services and eventually increases their sales, yielding high profits, and revenue for the organization.

    Integrated Marketing Communication defined as the coordination and integration of all marketing communication tools, avenues, and sources within a company into a seamless program that maximizes the impact on customers and other end-users at a minimal cost.

    This integration affects all firm business-to-business, marketing channels, customer-focused, and internally directed communications. It is a management concept that is designed so that all the marketing communication which consists of advertising, sales promotion, public relation, and direct marketing work together as a unified force rather than each of those marketing communication work in isolation.

    Besides, it acts as an aggressive marketing plan because it sets and tracks marketing strategy that captures and uses the extensive amount of customer information. It also ensures that all forms of communication and messages carefully linked together to achieve a specific objective.

    Definitions of Integrated Marketing Communications (IMC):

    The American Association of Advertising Agencies (AAAA), defines it as:

    “A concept of marketing communication planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines, e.g. general advertising, direct response, sales promotion and public relations – and combines these disciplines to provide clarity, consistency and maximum communication impact.”

    The Northwestern University’s Medill School of Journalism defines IMC as,

    “The process of managing all sources of information about a product/service to which a customer or prospect is exposed which behaviorally moves the customer toward the sale and maintains customer loyalty.”

    According to Kotler and Armstrong, Integrated Marketing Communications (IMC) is a concept in which a:

    “Company carefully integrates and coordinates its many communication channels—mass media advertising, personal selling, sales promotion, public relations, direct marketing, packaging, and others—to deliver a clear, consistent, and compelling message about the organization and its products.”

    Integrated Marketing Communication according to Schultz and Kitchen,

    “Is a strategic business process used to plan, develop, execute, and evaluate co-ordinated measurable, persuasive brand communication programs over time with consumers, customers, prospects and other targeted, relevant external and internal audience.”

    Tom Duncan defined IMC as,

    “A process for managing the customer relationships that drive brand value. More specifically, it is a cross-functional process for creating and nourishing profitable relationships with customers and other stakeholders by strategically controlling or influencing all messages sent to these groups and encouraging data-driven, purposeful dialogue with them.”

    In short, Integrated Marketing Communications (IMC) is:

    “Joint planning, execution, and coordination of all areas of marketing communication and also understanding the consumer and what the consumer actually responds to.”

    The Components of Integrated Marketing Communication:

    Let us go through various components of Integrated Marketing Communication:

    The Foundation:

    As the name suggests, the foundation stage involves a detailed analysis of both the product as well as the target market. It is essential for marketers to understand the brand, its offerings, and end-users. You need to know the needs, attitudes, and expectations of the target customers. Keep a close watch on competitor’s activities.

    Corporate Culture:

    The features of products and services ought to be in line with the work culture of the organization. Every organization has a vision and it’s important for the marketers to keep in mind the same before designing products and services. Let us understand it with the help of an example. Organization A’s vision is to promote a green and clean world. Naturally, its products need to be eco-friendly and biodegradable, in line with the vision of the organization.

    Brand Focus:

    Brand Focus represents the corporate identity of the brand.

    Consumer Experience:

    Marketers need to focus on consumer experience which refers to what the customers feel about the product. Also, a consumer is likely to pick up a product that has good packaging and looks attractive. Products need to meet and exceed customer expectations.

    Communication Tools:

    Communication tools include various modes of promoting a particular brand such as advertising, direct selling, promoting through social media such as Facebook, Twitter, Orkut, and so on (Note: Orkut is no longer use it).

    Promotional Tools:

    Brands are promoted through various promotional tools such as trade promotions, personal selling, and so on. Organizations need to strengthen their relationship with customers and external clients.

    Integration Tools:

    Organizations need to keep a regular track of customer feedback and reviews. You need to have specific software like customer relationship management (CRM) which helps in measuring the effectiveness of various integrated marketing communications tools.

    Integrated marketing communication enables all aspects of the marketing mix to work together in harmony to promote a particular product or service effectively among end-users.

    Integrated Marketing Communications (IMC) Definition Components and its Process
    Integrated Marketing Communications (IMC): Definition, Components, and its Process!

    IMC (Integrated Marketing Communications) Process:

    The following process below are;

    Identify target audience:

    The promotional process must start by identifying the target audience by using segmentation; which is defining buying preferences and characteristics of buyers and dividing them into segments. Also, the goal of identifying target audiences is to design promotional strategies that can meet customer expectations more accurately.

    Thus, IMC which integrating and coordinating all types of marketing promotional tools; that maximize the satisfaction of buyers will be very useful to the firm’s promotional strategies. This is because IMC can help the company by providing customer databases to sellers; and, marketers to identify information about the buyers precisely and accurately.

    Determine the communication objectives:

    In the second stage, the company needs to develop a clear objective and the goals of promotional strategies. As well as, the objectives of promotional strategies include creating products and services awareness in the buyers’ minds; developing competitive advantages against competitors; creating brand equity of buyers, retaining current buyers, and changing buyers’ behaviors.

    Meanwhile, Integrated Marketing Communication (IMC) develops different types of promotional tools; which have contained different functions to achieve the communication objectives of the promotional strategies effectively and efficiently.

    Design messages:

    An effective message will get the attention of buyers and maintain their interest in the messages about their brand of products. Therefore, the promotional team of a firm should implement IMC when designing the messages delivered to each segment in order for the messages to deliver effectively.

    Although a tailored message for each target segment designed by using several promotional tools in the IMC process; but, the messages of promotions must have the same meaning and theme. This is because each of the promotional tools must use to achieve the same communication objectives and goals within the firm.

    Implementation of a promotional strategy:

    Promotional channels can divide into two categories, which consist of personal communication and non-personal communication channels. So when incorporated IMC into the promotional strategy, it needs to select and implement the right marketing channels and methods.

    No single channel can dominate in all aspects; which means that the channels need to adjust based on the market’s needs and changes from time to time. This has proven that IMC which integrating and coordinating all types of marketing promotional channels can be very useful; when it comes to the implementation of the promotional strategy process.

    Collecting feedback:

    Finally, the firms will carry out some surveys in order to get some feedback from; the target audience as the final step in the IMC process. For example, the firm will ask how effectively the message was delivered to the target audience; such as how many times the audience saw the advertisement, or can the audience remember; what the message marketers are going to inform and etc.

    Based on that, the firm will conduct a report about the behavior resulting from the message, such as how many of the target audiences buy the product or visit the store after they saw the advertisement. This information could be very important to the firm promotional strategies as; it could directly affect the volume of sales, profits, and indirectly reflect; the success of the promotional strategies that had been implemented. Hence, all this information can get from the customer database to create more accurate and reliable feedback.

    References:

    • mbaknol.com/marketing-management/introduction-to-integrated-marketing-communications-imc/
    • managementstudyguide.com/integrated-marketing-communications.htm
  • How to Analysis of Capitalism in India?

    How to Analysis of Capitalism in India?

    What is Capitalism? In the capitalist economic system, all farms, factories and other means of production are the property of private individuals and firms. In the words of Loucks, “Capitalism is a system of economic organization featured by private ownership and use for private profit of man-made and nature-made capital”. So, what is the question we are going to discuss; How to Analysis of Capitalism in India?

    Here are explained; Capitalism in India: first Features, Growth, Process, and finally Social.

    Definition; According to Wright, “Capitalism is a system in which, on average, much of the greater portion of economic life and particularly of net new investment is carried on by private (i.e. non-government) units under conditions of active and substantially free competition and avowedly at the least, under the incentive of hope for profit”.

    The Features of Capitalism:

    In the broadest sense, capitalism may be defined as the economic system making the widest use of capital in the process of production. In the technical sense, capitalism may be defined as the economic system of production in which capital goods are owned privately by individuals or corporations.

    The principal features of capitalism are discussed below; key points.

    • Private Property.
    • Profit Motive.
    • Price Mechanism.
    • Role of the State.
    • Market Economy.
    • Consumer Sovereignty.
    • Freedom of Enterprise.
    • Large Scale Production, and.
    • Competition.

    The following are the economic bases of capitalism, now explain each below:

    Private Property:

    Capitalism thrives on the institution of private property. It means that the owner of a firm or factory or mine may use it in any manner he likes. He may hire it to anybody, sell it, or lease it at will in accordance with the prevalent laws of the country. The state’s role is confined to the protection of the institution of private property through laws.” The institution of private property induces its owner to work hard, to organize his business efficiently and to produce more, thereby benefiting not only himself but also the community at large. All this is actuated by the profit motive.

    Profit Motive:

    The main motive behind the working of the capitalist system is the profit motive. The decisions of businessmen, farmers, producers, including that of wage-earners are based on the profit motive. The profit motive is synonymous with the desire for personal gain. It is this attitude of acquisitiveness which lies behind individual initiative and enterprise in a capitalist economy.

    Price Mechanism:

    Under capitalism, the price mechanism operates automatically without any direction and control by the central authorities. It is the profit motive which determines production. Profit being the difference between outlay and receipt, the size of profit depends upon prices. The larger the difference between prices and costs, the higher is the profit. Again, the higher the prices, the greater are the efforts of the producers to produce the varied quantities and types of products. It is the consumers’ choices which determine what to produce, how much to produce, and how to produce. Thus capitalism is a system of mutual exchanges where the price-profit mechanism plays a crucial role.

    Role of the State:

    During the 19th century, the role of the state was confined to the maintenance of law and order, protection from external aggression, and provision for educational and public health facilities. This policy of laissez-faire—of non-intervention in economic affairs by the state—has been abandoned in capitalist economies of the West after the Second World War. Now the state has important tasks to fulfill. They are monetary and fiscal measures to maintain aggregate demand; anti-monopoly measures and nationalized monopoly corporations; and measures for the satisfaction of communal wants such as public health, public parks, roads, bridges, museums, zoos, education, flood control, etc.

    Market Economy:

    Under capitalism, there is no governmental control over the forces of production, distribution, and exchange. It is controlled by the forces operating in the market. There is no price control or regulated distribution by the government. The economy operates freely under the law of demand and supply. The capitalist economy is a liberalized or market economy.

    Consumer’s Sovereignty:

    Under capitalism, ‘the consumer is the king.’ It means freedom of choice by consumers. The consumers are free to buy any number of goods they want. Producers try to produce a variety of goods to meet the tastes and preferences of consumers. This also implies freedom of production whereby producers are at liberty to produce a vast variety of commodities in order to satisfy the consumer who acts like a ‘king’ in making a choice out of them with his given money income. These twin freedoms of consumption and production are essential for the smooth functioning of the capitalist system.

    Freedom of Enterprise:

    Freedom of enterprise means that there is the free choice of occupation for an entrepreneur, a capitalist, and a laborer. But this freedom is subject to their ability and training, legal restrictions, and existing market conditions. Subject to these limitations, an entrepreneur is free to set up any industry, a capitalist can invest his capital in any industry or trade he likes, and a person is free to choose any occupation he prefers. It is on account of the presence of this important feature of freedom of enterprise that a capitalist economy is also called a free enterprise economy.

    Large Scale Production:

    It is another important feature of capitalism. Capitalism arose as a result of the industrial revolution which made large-scale production possible. The installation of gigantic plants and division of labor increased production. More production means wider use of capital and led to more profits.

    Competition:

    Competition is one of the most important features of a capitalist economy. It implies the existence of a large number of buyers and sellers in the market who are motivated by self-interest but cannot influence market decisions by their individual actions. It is competition among buyers and sellers that determine the production, consumption, and distribution of goods and services. There being sufficient price flexibility under capitalism, prices adjust themselves to changes in demand, in production techniques, and in the supply of factors of production. Changes in prices, in turn, bring adjustments in production, factor demand, and individual incomes.

    How to the Growth of Capitalism in India?

    In primitive societies the usual system of exchanging goods vas barter system. At that time the idea of profit did not exist, ‘people accumulated goods not for making a profit during the days of scarcity but to gain prestige. The system of trading often consisted if giving and mutual rendering of services. Economic factors such as wages, investment; interest and profit were practically unknown preliterate societies. During the early Middle Ages, trade and commerce were little more advanced than they had been among the primitive peoples.

    While at first conducted largely on a barter basis, trading came gradually more and more to involve money as a medium of exchange. This gave a fillip to the development of trade and commerce which gave importance to money, gold, silver, and tokens thereof. Money is not property, it is a symbol of property; it has a profound influence on the uses to which productive properties are put. According to Simmel, the establishment of the institution of money in the economic system of modern western society has had far-reaching effects upon almost every phase of life.

    It resulted in greater freedom for both the employer and employee and for both the seller and buyer of goods and services since it makes for the depersonalized relationship between the two parties in a transaction. Simmel maintains that the institution of money has radically changed our whole philosophy of life. It has made us pecuniary in our attitudes so that everything is evaluated in terms of money, and as social contacts have become depersonalized, human relations have become superficial and cold.

    In the early part of the modern period, the economic activities were generally regulated by the governing powers. It was an economic reflection of the growing unification of European peoples under strong monarchical Governments. The interest of the secular rulers lay in internal unification and this necessarily meant economic as well as political integration. The mercantilist ideology dominated the period. The economic activities of the people were politically regulated to increase the profits of the king and to fill his treasury with wealth.

    The nation was looked upon by the mercantilist as an economic organization engaged in the making of profit. The ownership and use of productive properties were minutely regulated by mercantilist’s law. Then came the Industrial Revolution which changed the techniques of production. The policy of mercantilism also had failed to bring about the welfare of the people. To secure maximum production of usual goods the new do “trine of ‘Laissez-faire’ was propounded.

    The doctrine preached non- interference in economic matters. According to this doctrine, if individuals pursue their own interest, unhampered by restriction; they will achieve the greatest happiness of the greatest number. Its advocates, Adam Smith, J.S. Mill, Spencer, and Sumner contended that Government should remove all legal restrictions on trade, on production, on the exchange of wealth and on the accumulation of property.

    Adam Smith enunciated four principles:
    • The doctrine of self-interest.
    • Laissez-faire policy.
    • The theory of competition, and.
    • Profit motive.

    Upon these principles and in response to the changing techniques of production brought about by the Industrial Revolution, a new system of property ownership and ‘production’, capitalism developed. The Industrial Revolution replaced factories in place of households. In factories, the work was divided up into little pieces, each worker doing a little piece. Production increased. Large plants in -course of time were set.

    Corporations owning large plants came into being. All these developments of mass production, the division of labor, specialization, and exchange were accompanied by capitalism. In this new system of production and exchange, the ownership of productive properties was both individualized and divested of all social responsibility.

    The Property became private and was freed from all obligations to the state, church, family and other institutions. The owners of the factory were free to do as they pleased. Profit was the main motive for them. They were under no obligation to produce goods if they believed that they could not make the profit. The mode of production was profit-oriented and the Governments in adherence to the doctrine of Laissez-faire supported the owners in this right.

    How to understand Capitalism as a Process?

    With the growth of the capitalist system there was:

    • Extreme polarization of classes.
    • Pauperization.
    • Alienation.
    • Dehumanization of Labor.
    • The dictatorship of the proletariat, and.
    • Shift from Capitalism to Socialism.

    Marx’s sociology of capital in capitalist societies is not applicable to so many capitalist societies. This is the” case particularly with the Asiatic societies which do not show any class conflict in-spite of social stratification.

    In the words of Raymond Aron,

    “For one thing the Marxist conception of capitalist society and of society, in general, is sociological but this sociology is related to philosophy, and a number of interpretative difficulties arise from the relation of philosophy to sociology.”

    Hence Marx’s predictions about the downfall of capitalism have not come true everywhere. His idea of constant pauperization of Labour is wrong so far as Western societies are concerned. Neither is there any proof of Proletaization. The claim of the destruction of capitalism is inevitable is far from being scientific.

    How to Analysis of Capitalism in India
    How to Analysis of Capitalism in India? Old Two Rupees Coin, Image credit from #Pixabay.

    What do the Social Consequences of Capitalism?

    Capitalism or economic development has brought in some good consequences which are as follows:

    • Economic Progress: Capitalism has led men to exploit the natural resources more and more. The people exert themselves utmost for earning money. This had led to many inventions in the field of industry, agriculture, and business which have contributed to economic progress.
    • Exchange of Culture: Capitalism has led to international trade and exchange of know-how. People in different countries have come nearer to each other. The development of the means of transport and communication has facilitated contacts among the peoples of the world thereby leading to exchange of ideas and culture.
    • High Standard of Living: Capitalism is the product of industrialization. Industrialization has increased production. Now men do not have to toil for bread as they used to do in the primitive days. The necessities of life are easily available.
    • The progress of Civilization: Capitalism was instrumental in inventing new machines and increasing the production of material goods. Man is to-day more civilized than his ancestors.
    • Lessening of Racial Differences: Capitalism has also led to the lessening of differences based on race, creed, caste, and nationality. In the factory, the workers and officials belonging to different castes co-operate with one another and work shoulder to shoulder. Inter-mixing of castes is the off-shoot of capitalism.

    But in spite of the above good consequences capitalism has proved a curse instead of a blessing.

    Its bad effects are the following:
    • Imbalance in Social System: Capitalism has led to an imbalance in the social system. It has failed to adjust itself to the welfare of society. It has widened the gap between the haves and have-not’s and created insatiable greed for wealth among the people. It has changed the very outlook of human beings. Wealth has become an important criterion of status.
    • Artificiality: Capitalism has transformed modern culture into mere artificiality. Today there is a false courtesy. One does not find gentility and human touch. One can see false prestige, mere artificiality, and sheer advertisement even in art and literature, nothing to speak of diet, dress, and speech etc. Life today has become artificial.
    • Greed for Wealth: Capitalism is based on greed for wealth It has raised wealth to the pedestal of deity. Wealth has become the be-all and end-all of human life. The modern man is mad after wealth. He wants to earn more and more wealth by any means. The idea for morality does not enter into the means of earning. It has thus led to moral degeneration.
    • Destruction of Human Values: In a capitalist order, everything has come to be measured in terms of wealth. All values of human life such as love, sympathy, benevolence, love, and affection are evaluated in terms of silver coins. Every person wants to get the maximum. The sole criterion is wealth, not value.
    • Materialism: Capitalism manifests materialism in its extreme form. Religion and spirituality lose their force. Religion becomes the opium of people. Religion becomes hypocrisy. The big capitalists save lacs of rupees by way of tax through contribution to fictitious charitable institutions. While people are short of goods, the capitalists hoard them to soar the prices.
    • Emphasis on Sex: Capitalist culture lays emphasis on sex. Marriage has become a mere agreement for the satisfaction of sex hunger. The capitalists advertise their goods through the display of sex instincts. Literature and movies are based on sexual passion. Pre-marital and extra-marital sexual relations are on the increase. Man is lacking in self-control.

    It has led to the moral degeneration of man. Obviously, capitalism has failed to bring about the moral development of man. It is injurious both to society and the individual. In short, it has proved a curse to humanity instead of a blessing. Karl Marx was its bitter critic.

  • Meaning, Process, Definition, Concept of Financial Statement Analysis

    Meaning, Process, Definition, Concept of Financial Statement Analysis

    What is Financial Statement Analysis? Financial statement analysis is the use of analytical or financial tools to examine and compare financial statements to make business decisions. Financial statement analysis helps to highlight the financial performance of the company. It is the process of identifying the financial strength and weakness of a firm by properly establishing the relationship between the items on the Balance Sheet and those on the Profit and Loss Account. So, what we discussing is – Meaning, Process, Definition, Concept of Financial Statement Analysis.

    Cost Accounting is explains Meaning, Process, Definition, Concept of Financial Statement Analysis.

    In this article, we will discuss the Meaning and Process of Financial Statement Analysis, Definition of Financial Statement Analysis, and Concept of Financial Statement Analysis.

    So be it discuss:

    It is a general term referring to the process of extracting and studying information in financial statements for use in management decision making, for example, financial statement analysis typically involves the use of ratios, comparison with prior periods and budget, and other such procedures.

    The financial appraisal is a scientific evaluation of the profitability and strength of any business concerns. It seeks to spotlight the significant impacts and relationships concerning managerial performance, corporate efficiency, financial strength and weakness and creditworthiness of the company.

    Meaning and Process of Financial Statement Analysis and their Interpretation:

    The nature and importance of financial statements are explained in the preceding pages. It has been explaining that facts disclosed by financial statements are of outstanding significance to the various parties interested in the financial position of a business concern. The financial statements are helpful to the executives to assess the implications of their decisions, evaluate and review their performance and implement corrective action.

    Financial statements render invaluable service to owners, employees, customers, suppliers and the government in their respective fields of interest. The financial statements are useful and meaningful only when they are analyzed and interpreted.

    The scientific method has to adapt to analyze and interpret these statements as done in the case of preparation of these statements. The effort is taken to understand the implications of the statements is called interpretation. Some people call it ‘examination’, ‘criticism’ or ‘analysis’. Therefore, it is meaningful to call it ‘analysis and interpretation’.

    Purpose:

    The purpose of the financial analysis is to diagnose the information contained in financial statements to judge the profitability and financial soundness of the firm. Just like a doctor examines his patient by recording his body temperature, blood pressure, etc. before making his conclusion regarding the illness and before giving his treatment, a financial analyst analysis the financial statements with various tools of analysis before commenting upon the financial health or weaknesses of an enterprise.

    Definition of Financial Statement Analysis:

    Wood in his work “Business Accounting” has defined the term interpretation as follows:

    “To interpret means to put the meaning of a statement in simple terms for the benefit of a person”.

    In the words of Myers,

    “Financial statement analysis is largely a study of the relationship among the various financial factors in a business as disclosed by a single set of the statement and a study of the trend of these factors as shown in a series of statements.”

    Kennedy and Muller said,

    “Analysis and interpretation of financial statements are an attempt to determine the significance and meaning of the financial statement data so that forecast may be made of the prospects for future earnings, ability to pay interest and debt maturities (both current and long-term) and the probability of a sound dividend policy.”

    The balance sheet and profit and loss account are to interpret to convey a meaningful message to the layman who is still the typical shareholder in our country.

    Interpretation considers being the most important function of a management accountant because the management of today needs relevant data and information to conduct its function efficiently. The information is more valuable if it is presenting in an analytical form than in absolute form.

    Management Accountant is expecting to analyze and interpret the financial statements to perform his basic duty of “Communication to the management”. Interpretation in its widest sense includes many processes like the arrangement, analysis, establishing a relationship between available facts and finally making conclusions.

    The Concept of Financial Statement Analysis:

    Financial performance, as a part of financial management, is the main indicator of the success or failure of the companies. Financial performance analysis can consider as the heart of the financial decisions. Rational evaluation of the performance of the companies is essential to prepare sound financial policies and to attract potential investors. Shareholders are like in EPS, dividend, net worth and market value per share.

    Management interests in all aspects of financial performance to adopt a good financial management system and for the internal control of the company. The creditors are primarily interested in the liquidity of the company. Government interests from the regulatory point of view. Besides, other stakeholders such as economists, trade associations, competitors, etc are also interested in the financial performance of the company.

    Therefore, all the stakeholders are like in the performance of the companies but their perspective may be different. The objective of financial statement analysis is a detailed cause and effect study of the profitability and financial position.

    Process:

    Financial Analysis is the process of determining the significant operating and financial characteristics of a firm from accounting data and financial statements. The goal of such analysis is to determine the efficiency and performance of the firm’s management, as reflected in the financial records and reports.

    Financial statements are such records and reports, which contain the data required for performance management. It is therefore important to analyze the financial statements to identify the strengths and weaknesses of the company.

    The financial statements of a business enterprise are intending to provide much of the basic data used for decision making, and in general, evaluation of performance by various groups such as current owners, potential investors, creditors, government agencies, and in some instances, competitors.

    Financial statements are the reports in which the accountant summarizes and communicates the basic financial data. The financial statements provide the summary of an account of the company- the Balance Sheet reflecting the assets, liabilities, and capital as of a certain date. And, the Profit and Loss Account showing the results of operation during a period.

    The financial statements are a collection of data organized according to logical and consistent accounting procedures. The function of the financial statement is to convey an understanding of some financial aspects of the company.

    Financial statement analysis:

    Financial statement analysis involves appraising the financial statement and related footnotes of an entity. This may finish by accountants, investment analysts, credit analysts, management and other interested parties. Financial statements indicate an appraisal of a company’s previous financial performance and its future potential. The analysis of a financial statement finishes obtaining better insight into a firm’s position and performance.

    Analyzing a financial statement is a process of evaluating the relationship between parts of the financial statement to obtain. A better understanding of the firm’s position and performance. The financial analysis is thus the analysis of the financial statements. Which is finish to evaluate the performance of the company?

    Types of analysis:

    Ratio Analysis, Trend Analysis, Comparative Financial Statement Analysis, and Common Size Statement Analysis are the major tools of the financial analysis. Financial statement analysis involves the computation of ratios to evaluate a company’s financial position and results of operation. A ratio is an important tool for financial statement analysis.

    The relationship between two accounting figures expressed mathematically knows as the financial ratio. The ratio used as an index of yardstick for evaluating the financial position and performance of the firm. It helps analysts to make a quantitative judgment about the financial position and performance of the firm. It uses financial reports and data and summarizes the key relationship to appraise financial performance.

    Ratio analysis:

    Ratio analysis is such a powerful tool for financial analysis. That through it, the economic and financial position of a business unit can be fully x-ray. Ratios are just a convenient way to summarize largely. Quantities of financial data and to compare the performance of the firms. Ratios are exceptionally useful tools with which one can judge. The financial performance of the firm over some time. Performance ratio can provide insight into a bank’s profitability, return on investment, capital adequacy and liquidity.

    The above theories suggest that financial analysis helps to measure the performance of the companies. Different analysts desire different types of ratios, depending largely on whom the analysts are and why the firm is evaluating. Short-term creditors are concerning with the firm’s ability to pay its bills promptly. In the short run, the amount of liquid assets determines the ability to pay off current liabilities.

    They are like liquidity. Long-term creditors hold bonds or debentures; mortgages against the firm are like in the current payment of interest and the eventual repayment of the principal. The company must be sufficiently liquid in the short-term and have adequate profits for the long-term. They examine liquidity and profitability.

    Stockholders, in addition to liquidity and profitability, are concerned about the policies of the firm’s stock. Without liquidity, the firm could not pay the cash dividends. Without profits, the firm could not be able to declare dividends. With poor policies, the common stock would trade at a lower price in the market. Analysis of the financial statement of a company for one year or a shorter period would not truly reflect the nature of its operations. For this, it is essential that the analysis reasonably cover a longer period.

    Trend Analysis:

    The analysis made over a longer period is termed as Trend Analysis. Trend Analysis of the ratio indicates the direction of change. This method involves the calculation of the percentage relationship that each item bears to the same item in the base year. The trend percentage discloses the changes in the financial and operating data between specific periods and makes. It is possible to form an opinion as to whether favorable and unfavorable tendencies are reflecting by the data.

    Comparative Statement Analysis is another method of measuring the performance of the company. It uses to compare the performance and position of the firm with the average performance of the industry or with other firms. Such a comparison will identify areas of weakness that can then address to rectify the situation.

    Meaning Process Definition Concept of Financial Statement Analysis
    Meaning, Process, Definition, Concept of Financial Statement Analysis. Image credit from #Pixabay.

  • Meaning, Definition, Benefits, and Objectives of Career Planning

    Meaning, Definition, Benefits, and Objectives of Career Planning

    Career Planning; Career planning encourages individuals to explore and gather information, which enables them to syn­thesize, gain competencies, make decisions, set goals and take action. Meaning: Career is seen as a collection of bunch or jobs or posts. Generally, it describes an applies career path within the organization’s structure. It shows the development path of key personnel within the organization. The derivation of the word derived from the Latin word carrier, which means running. Do you study to learn: If Yes? Then read the lot. Let’s Study: Meaning, Definition, Benefits, and Objectives of Career Planning. Read this in the Hindi language: करियर योजना का अर्थ, परिभाषा, लाभ, और उद्देश्य। 

    The concept of Career Planning Discussing the topic: Meaning, Definition, Benefits, Process, Features, and Objectives of Career Planning.

    All the jobs, which are organized together during the working life of someone, make careers. It is also seen as a sequence of posts organized by a person during his employment. Edwin B. Flipo defined a career as a sequence of different but related work activities that provides continuity, order, and meaning in a person’s life. As well as, a career can be seen as the amalgamation of change in value, attitude, and motivation because it gets old. This concept constitutes the subjective element of “careers”.

    Definition of Career Planning:

    Career planning is the process of enhancing an employee’s future value. A career plan is an individual’s choice of occupation, organization and career path.

    A career may define as,

    “A sequence of jobs that constitute what a person does for a living.”

    According to Schermerborn, Hunt, and Osborn,

    “Career planning is a process of systematically matching career goals and individual capabilities with opportunities for their fulfillment.”

    Career planning encourages individuals to explore and gather information, which enables them to syn­thesize, gain competencies, make decisions, set goals and take action. It is a crucial phase of human resource development that helps the employees in making a strategy for work-life balance.

    Below described several themes underlying different definition of a career as:

    1] The property of occupation or organization:

    In this way, the career describes the occupation itself or an employee’s tenure within an organization.
    Advancement: It denotes the progression and increase in success an individual receives within an occupation or organization.

    2] Status of a profession:

    In this sense, a career uses to distinguish different professions. Such as engineering, the medical profession is different from other occupations like plumbing carpentry, etc. The former says to have a career where the latter does not have.

    3] Involvement in one’s work:

    Sometimes the career use in a negative sense to describe being extremely involved in the task or job one is doing.

    4] Stability of a person’s work pattern:

    Career describes a sequence of related jobs. While a sequence of unrelated jobs does not describe career.

    Career is often defined as both an external career and an internal career. External career is defined as objective categories used by a given society and different organizations to describe the progression of steps of the different occupations. Whereas an internal career involves the set of steps and stages that make up an individual’s concept of career progression in a given occupation.

    Due to two different approaches, in the organizational context, career is considered as an integrated pace of both vertical and lateral movements of an individual in occupation during the span of his employment. Such an integrated approach is intended to minimize diversity of hopes and expectations of employees by obtaining a match between individually perceived careers with that of organizational centered careers.

    Benefits of career planning:

    The following benefits are given below:

    • The career plan ensures the continuous supply of promotional employees.
    • It helps in improving employee loyalty.
    • Career planning encourages the development and development of the employee.
    • Discourages the negative attitude of senior officials who interest in suppressing the development of subordinates.
    • This ensures that senior management knows the capacity and capacity of those employees who can move upwards.
    • It can always make a team of employees ready to meet any contingency.
    • Career planning reduces the labor business.
    • Each organization prepares the successor plan on which the career plan is the first step.

    The process of career planning:

    Career plans involve different activities for successful organizations and generally include the following steps.

    1] Identifying personal needs and aspirations:

    Most individuals do not have a clear-cut about their career aspirations, anchors and goals. Therefore, human resources professionals should help an employee in this direction and provide as much information as possible. Keeping in mind their skills, experience, and ability, they are shown such work, which will make them the most suitable. Workshops, seminars can also arrange to enhance such support with psychological testing, simulation exercises. Such a practice is basically to help create a clear view of the career of a chosen business within a company.

    Workshops and seminars promote employee interest in career planning, as it helps employees to determine their career goals, identify career paths and highlight specific career development activities. Printed and other types of information can also provide to complement individual efforts. Also, helping employees better, organizations create data banks or skills and talent lists, which include career history, skill evaluation, and information about their employees’ career priorities.

    2] Analyzing career opportunities:

    Once you know the career requirements and the aspirations of the employees, the organization determines the career path for each situation, which clearly shows career progression prospects. It points to different situations, a good artist can catch in a period. Career paths change over time, according to the needs of the employee and organizational needs.

    3] Aligning needs and opportunities:

    After identifying the needs of the employees and their career opportunities, the next step is to align the former with the former. This process involves identifying the ability of employees and then starting a career development program. The efficiency of the staff can demonstrate a thorough evaluation.

    This will know the employees who need further training, who can take additional responsibilities, etc. Some development techniques are used to consider employee’s information and skills in an employee capacity. It includes special assignments, schematic position rotation, supervisory coaching, job enhancement, weak program, etc.

    4] Action plans and periodic reviews:

    After starting the above steps, it is necessary to review the whole items from time to time to highlight the gap. These intervals have to be a bridge through personal career development efforts and from time to time supported organizations.

    Periodic review will help employees know the direction in which it is moving, whether the change is sought, what kind of skills required to face new and emerging organizational challenges. Organizations also find out how employees are doing, their goals and aspirations, and what career paths are in line with personal needs and serve the whole corporate.

    Features of Career Planning:

    The following features of career planning are below:

    1] Process:

    Career planning is an ongoing process of developing human resources. It is neither an event nor a program.

    2] Upward movement:

    It involves upward movement in the organizational hierarchy. It could also be special assignments, completing a project that requires better skills and abilities to handle recurring problems.

    3] Mutuality of Interest:

    Career plans serve a mutuality of interest. It serves the individual’s interest by taking care of his needs and aspirations to the required extent. Simultaneously it serves the organization’s interest as the human resources of an organization provide the opportunity to develop and contribute to the organization’s goals for the fulfillment of its objectives to the best of their ability and confidence.

    4] Dynamic:

    The dynamic nature of career planning is to cope and adjust to the ever-changing environment.

    Objectives of Career Planning:

    Career planning aims at matching individual potential for promotion and individuals aspirations with organizational needs and opportunities. Career planning is making sure that the organization has the right people with the right skills at the right time. It opens avenues for growth to higher levels of responsibilities for every employee of the organization through the hierarchy of position, and training and development activities to equip the individuals with the requisites for succession.

    Generally, Career Planning aims at fulfilling the following objectives:

    • It provides and maintains appropriate human resources in an organization by offering careers, not jobs.
    • It creates an able environment of effectiveness, efficiency, and growth.
    • Maps out careers of different categories of employees, following their ability and willingness to “train and develop” to take the responsibility of higher positions.
    • It seeks to maintain a stable workforce within an organization by controlling absenteeism and reducing employee turnover.
    • Caters to the immediate and future human resource needs of the organization at the appropriate time.
    • Increases the proper utilization of managerial reserves within the organization.

    The major objectives of career planning are as follows:

    • To identify the positive characteristics of the employees.
    • Develop awareness about each employee’s uniqueness.
    • To respect the feelings of other employees.
    • To attract talented employees to the organization.
    • Train employees towards team-building skills.
    • To create healthy ways of dealing with conflicts, emotions, and stress.

    Understand career planning:

    Since both the person and the organization interest in one’s career, the career plan itself is an intentional process to be aware of the current obstacles with available opportunities, alternative options, and sequences. As well as, it involves identifying targets related to careers to provide the right direction, appropriate time and sequence for achieving a specific career goal and doing work education and related development practice.

    Essentially, career planning helps employees plan for their careers in terms of their capabilities and competencies in terms of organizational needs. It is related to developing the organizational system of career movement and development. This gives opportunities for any person to progressive and continuously from an entry point of his employment at the point of his retirement. It has also been described as the process of synthesizing and reconcile the organization’s needs with the innate aspirations of the employees so that afterward, realize the self-fulfillment and improve the effectiveness of the former.

    Extra Things:

    Career planning is an ongoing process by which a person determines their career goals and identifies the means and methods of achieving them. The way people plan their life’s work, they consider a career plan. It inspires someone to explore, choose and endeavor to achieve satisfaction with the purpose of a person’s career. Therefore a person’s life is important.

    The effective career plan is about finding a suitable job that corresponds to the life of a person. The Career Plan answers the question, where are the possibilities of going forward and growing in the organization for a person to be in the organization after five years or ten years or to build the realm of someone’s career. Career planning is neither an event nor an end. Also, it is a continuous process for human resources development and an essential aspect of managing people to achieve optimal results.

    Why is the need for Career planning for employees?

    The need to plan for employee careers is due to both economic and social power. In an ever-changing environment, the human resources of the organization should be in a constant state of development and should be there. A planned program of internal human resources development pays more than relieving external recruitment for recruitment. At the top, many employees retire at the job when there is no managerial concern for proper career progression.

    Apart from this, employees of Millennium Day insist and hope that their work expects to integrate effectively with human needs for personal development, together with family expectations, meet the ethical requirements of the society. However, it is most ironic that, as far as the work is concerned, what is the most valuable for the person, the career is, the organization gets the least attention. As well as, most organizations do not pay enough attention to this important aspect of actual practice for various reasons. As a result, the demand for employees does not match adequately with systematic arrangements.

    More knowledge:

    Career planning is an indispensable condition for effective human management to achieve optimum productivity, for organizational development and development, keeping in mind the increasing expectations and aspirations of changing scenarios of the social and economic environment and employees. Generally, a person applies for the job in the organization after making necessary inquiries about job prospects and after taking a job, he starts inquiring about job prospects and future potential situation.

    Disadvantaged of satisfactory answers, a person feels motivated and frustrated and starts looking out of the organization in search of any other possible job. Generally, this is a normal situation for individuals with senior supervisory, executive and managerial positions. As well as, employees holding such a position are curious to know that they can grow in their current positions, organization and when. To attract and maintain competent personnel for senior positions in an organization, they must be assured of a progressive career.

    Thus, career planning has become necessary to prevent such personnel from managing the organization with skilled supervisors, high technical and managerial personnel to manage an organization and the lack of promotional routes. Productive employees want to seek careers instead of short-term jobs. Also, a career scheme, if properly designed and implemented, benefits management and employees and its absence makes a big difference for both the employees and the organization. Read this in the Hindi language: करियर योजना का अर्थ, परिभाषा, लाभ, और उद्देश्य। 

    Meaning Definition Benefits and Objectives of Career Planning
    Meaning, Definition, Benefits, and Objectives of Career Planning.