'What Went Wrong With Niky Tasha?'
One day while cooking, Ritu Nanda (Raj Kapoor's daughter) ran out of gas. Since there was a shortage of LPG in the market, she had to use the electric stove. At that moment, an idea flashed across her mind- why not have a stove that runs on gas as well as electricity.Thus came into existence a short- lived mega brand called Niky Tasha.
She started the venture in 1975 with Rs.5000 and, in four years' time,turnover went up to Rs.32 crore. It was a sellers' market and there was no need to advertise the brand in a big way. But she was hyping the brand too much everywhere. This was an open invitation to trouble. Small-scale manufacturers jumped into the fray and readily came out with more cost-effective models. Big players started offering heavy discounts and the real battle for market share had just begun.
Even before she could gain a firm footing in the market, she diversified into television and thereafter trouble came in truckloads.She set up the TV manufacturing unit in Faridabad without looking into the rules governing electronics business closely. The Haryana government then charged octroi on the value of components going into the state, and by weight when were going out. This way both the components and the output were subject to duty. Of course, she sued the government and won the case subsequently. But by that time every thing was over. Starved of cash, the company could not take delivery of imported components lying with the customs. FERA officials, customs authorities meanwhile started grilling her on various counts. She was dragged to Tis Hazari court for late filing of income tax returns; for setting up an after-sales-service center in a residential colony, e.t.c. .She never knew that she could go out of business for commiting such silly mistakes. Meanwhile, Niky Tasha, slowly but steadily, slipped deeper and deeper into the red due to tough competition, paucityof funds, court battles and a host of other factors.
The moral of the lesson is very clear: when you lose control of even small details you are only asking for trouble. Remember a small leak will sink a great ship! the product was good, the market was there but- as rightly visualised by her later on- she should not have advertised and let the whole world know that she is a real winner. Unnecessary diversification multiplied her troubles in course of time and Niky Tasha got wiped out of the market quickly.
Sunday, December 27, 2009
Saturday, December 26, 2009
Fayol's 14 principles of management
Background and History of Fayol
Henry fayol was born in France in 1841. He got degree in Mining Engineering in 1860 and started working as engineer in a Coal Mining Company.In 1888 he was promoted as the managing director of the company. At that time the company was in the situation of situation of insolvency. He accepted the challenge and applied his managerial techniques to bring out the company from this situation and he succeeded. When he retired after 30 years the company was a leading coal-steel company with strong financial background.
Major Contributions of fayol
Henry Fayol became famous as "Father of Management Studies and Thoughts",because of the following contribution:
(a) He made clear distinction between technical and managerial skill.
(b) He identified the main steps in the process of management- planning, organising, staffing, directing, controlling.
(c) He developed fourteen principles of management which act as guidelines for mangers to perform managerial activities.
Fayol's Fourteen Universal Principles of Management
(i) Principles of Division of Work: Specialisation of labour is necessary for organisational success.
(ii)Authority:The right to give orders must accompany reponsiblity.
(iii)Discipline:Obedience and respect help an organisation run smoothly.
(iv)Unity of Command:Each employee should receive orders from only one superior.
(v)Unity of Direction:The efforts of Everyone in the organisation should be co-ordinated and focused in the same direction.
(vi)Subordination of Individual Interests to the general interest:Resolving the rug of war between personal and organisational interest in favour of the organisation is one of management's greatest difficulties.
(vii)Remuneration:Employees should be paid fairly in accordance with thier contribution.
(viii)Centralisation:The relationship between centralisation and decentralisation is a matter of proportion; the optimum balance must be found for each organisation.
(ix)Scalar chain:Subordinates should be paid fairly chain of command unless expressly authorised by their respective superiors to communicate with each organisation.
(x)Order:Both material things and people should be in teir proper places.
(xi)Equity:fairness that results from a combination of command of kindliness and justice will lead to devoted and loyal service.
(xii)Stability and tenure of personnel:People need time to learn their jobs.
(xiii)Initiative:One of the greatest satisfactions is formulating and carrying out a plan.
(xiv)Espirit de crops:Harmonious efforts among individuals is the key to organisational success.
Henry Fayol stated a set of 14 principles of management based on his practical experience as a manager. According to Fayol, these principles can be applied in all types, functions, levels and sizes of organisation. For a long time, Fayol's list was accepted as Complete and Comprehensive.
Henry fayol was born in France in 1841. He got degree in Mining Engineering in 1860 and started working as engineer in a Coal Mining Company.In 1888 he was promoted as the managing director of the company. At that time the company was in the situation of situation of insolvency. He accepted the challenge and applied his managerial techniques to bring out the company from this situation and he succeeded. When he retired after 30 years the company was a leading coal-steel company with strong financial background.
Major Contributions of fayol
Henry Fayol became famous as "Father of Management Studies and Thoughts",because of the following contribution:
(a) He made clear distinction between technical and managerial skill.
(b) He identified the main steps in the process of management- planning, organising, staffing, directing, controlling.
(c) He developed fourteen principles of management which act as guidelines for mangers to perform managerial activities.
Fayol's Fourteen Universal Principles of Management
(i) Principles of Division of Work: Specialisation of labour is necessary for organisational success.
(ii)Authority:The right to give orders must accompany reponsiblity.
(iii)Discipline:Obedience and respect help an organisation run smoothly.
(iv)Unity of Command:Each employee should receive orders from only one superior.
(v)Unity of Direction:The efforts of Everyone in the organisation should be co-ordinated and focused in the same direction.
(vi)Subordination of Individual Interests to the general interest:Resolving the rug of war between personal and organisational interest in favour of the organisation is one of management's greatest difficulties.
(vii)Remuneration:Employees should be paid fairly in accordance with thier contribution.
(viii)Centralisation:The relationship between centralisation and decentralisation is a matter of proportion; the optimum balance must be found for each organisation.
(ix)Scalar chain:Subordinates should be paid fairly chain of command unless expressly authorised by their respective superiors to communicate with each organisation.
(x)Order:Both material things and people should be in teir proper places.
(xi)Equity:fairness that results from a combination of command of kindliness and justice will lead to devoted and loyal service.
(xii)Stability and tenure of personnel:People need time to learn their jobs.
(xiii)Initiative:One of the greatest satisfactions is formulating and carrying out a plan.
(xiv)Espirit de crops:Harmonious efforts among individuals is the key to organisational success.
Henry Fayol stated a set of 14 principles of management based on his practical experience as a manager. According to Fayol, these principles can be applied in all types, functions, levels and sizes of organisation. For a long time, Fayol's list was accepted as Complete and Comprehensive.
Tuesday, December 15, 2009
Satyam Fraud- was the board sleeping!
SATYAM FRAUD
Was the board sleeping!
Satyam was ranked No.3 best company to work for Business Today; was awarded the top slot for corporate social responsiblity by Business World; won an International award the top slot for best financial disclosures procedures; and above all it won the Golden Peacock Award for excellence in Corporate Governanace (which has now been taken back by UK based World Council for Corporate Governance).
The question which comes in mind is that have been bestowed upon Satyam without proper checks, investigation and analysis of its records. If so, then who should be held responsible for all these and what should be held responsible for all these and what should be the penalty that be should be imposed! It is important because a common man takes decision whether of investment or any other mainly based on these reports and awards.
But the bigger, and more serious, issue pertains to the role of board of directors. It is bigger , more serious, because the directors are expected to act like judges and ask probing question to rein in the management and keep it on its toes. the Satyam fraud puts a question mark on the then nine member board of Satyam that included Krishna G. Paplepu (a professor at Harvard Business School), Vinod K. Dham (of Pentium fame), M. Rammohan Rao (Dean, India School of Business), T.R.Prasad (former cabinet secretary),etc. It forces one to think what these people were doing, if not sleeping, when this fraud was taking place. Or is there a basic flaw in the Corporate Governance systems being prevelent in India.
Sunday, December 13, 2009
Definition of management
MANAGEMENT
Management is necessary for all the organisation irrespective of its size, nature and functions.
Management is a vast subject. It is very extensive. It is, therefore, not possible to put all the essential features of management in a single formula.
(i) Management is concerned with human beings, who are behaviourally highly unpredictable.
(ii) Management is a young developing discipline whose concepts are continuously changing.It is a small wonder,writers like Allen remarked, that 'the manager is one of the great unknonws in the Business'.
To understand the concept of management we must know the meaning of management. Management is defined differently by different authors.
Traditionally Management was Defined as
1. "Management is the art of getting things done through others".
Mary Parker Follett
2."Management consists of getting things done through others".A manager is one who accomplishes organisational objectives by directing the efforts of others.
C.S.Goerge
The Traditional Viewpiont of management is considered inappropriate in the peresnt day environment where workers are educated and have higher level of aspirations. In present day environment it is not possible to direct the efforts of employees by force. It is necessary to create an environment so that employees perform in a desired manner; on the other hand, traditional definition does not define functions of management.
Definitions by Different Authers(Modern Concept)
1. "To manage is to forecast to plan to organise, to command, to coordinate and to control".
2."Management is the creation of an internal environment where individuals working in a group can perform effectively and efficiently for the achievement of organisational goal".
3."Management is establishing an effective environment for people operating in formal organistional group".
Koontz and O'Donnel
4."Management is the art of knowing exactly what you want you men to do and then seeing that they do it in the best and cheapest way".
James L.Ludney
5."Management is the co-ordination of all resources through the process of planning, organising,directing and controlling in order to attain stated objectives".
F.W.Taylor
6."Management is the process by which a co-operative group directs action of towards common goal".
Marrie and Douglas
Modern concept of management
According to modern concept management is a process of getting things done with the aim of achieving goals effectively and efficently.
Modern definitions insist on:Process, Effectively and Efficient performance, Achievement of group, common or organisational goal.
Management is necessary for all the organisation irrespective of its size, nature and functions.
Management is a vast subject. It is very extensive. It is, therefore, not possible to put all the essential features of management in a single formula.
(i) Management is concerned with human beings, who are behaviourally highly unpredictable.
(ii) Management is a young developing discipline whose concepts are continuously changing.It is a small wonder,writers like Allen remarked, that 'the manager is one of the great unknonws in the Business'.
To understand the concept of management we must know the meaning of management. Management is defined differently by different authors.
Traditionally Management was Defined as
1. "Management is the art of getting things done through others".
Mary Parker Follett
2."Management consists of getting things done through others".A manager is one who accomplishes organisational objectives by directing the efforts of others.
C.S.Goerge
The Traditional Viewpiont of management is considered inappropriate in the peresnt day environment where workers are educated and have higher level of aspirations. In present day environment it is not possible to direct the efforts of employees by force. It is necessary to create an environment so that employees perform in a desired manner; on the other hand, traditional definition does not define functions of management.
Definitions by Different Authers(Modern Concept)
1. "To manage is to forecast to plan to organise, to command, to coordinate and to control".
2."Management is the creation of an internal environment where individuals working in a group can perform effectively and efficiently for the achievement of organisational goal".
3."Management is establishing an effective environment for people operating in formal organistional group".
Koontz and O'Donnel
4."Management is the art of knowing exactly what you want you men to do and then seeing that they do it in the best and cheapest way".
James L.Ludney
5."Management is the co-ordination of all resources through the process of planning, organising,directing and controlling in order to attain stated objectives".
F.W.Taylor
6."Management is the process by which a co-operative group directs action of towards common goal".
Marrie and Douglas
Modern concept of management
According to modern concept management is a process of getting things done with the aim of achieving goals effectively and efficently.
Modern definitions insist on:Process, Effectively and Efficient performance, Achievement of group, common or organisational goal.
Friday, December 11, 2009
MONEY
Money
Money finds its origin in the need to facilitate exchange. Therefore money is generally defined as a thing that is commonly accepted as a medium of exchange.Exchange is the way of life.In fact, Hicks defines economy as a system of Mutual exchanges.It means people are depend on each other for the satisfaction of wants, and this interdependence implies exchange of goods and services.Means you do this thing for me and i do that thing for you.Otherwise, existence becomes imposssible in a world of multiplicity of wants.
When wants were not so multiple, goods are exchange for goods. This system of exchange was known as Barter system. But with the multiplicity of wants and greateneed for exchange, barter system proved to be an inefficient system of exchange.It is then that Man invented Money -thing that was commonly accepted as a Medium of exchange.Intially, Metals Coins of gold and silver were introduced,andsubsequentlly, Alloy
Metals came to be used for coinage ,besides the introduction of Paper Money.And, now is the age of Plastic Money in the form of debit cards and credit cards. Thus, money finds its origin in the need to facilitate exchange; hence, it came to be defined as "A thing that is commonly accepted as a medium of exchange."
Legally, money is anything proclaimed by law as a medium of exchange.
Currency(paper note and coins together called currency) ia also called Fiat money because it commands fiats of the government.
Functional definition of money refers to money as anrything that performs four basic functions, viz.(i) it serves as a medium of exchange
(ii)it serves as a standard unit of value
(iii)it serves as a means for future/contractual payments or standard of deferred payments, and(iv)it serves as a store of value.
Broadly money is classified as,
(i) Full bodied money
(ii) Representative full bodied money
(iii)Credit money.
Functions of money are classified into following three categories:
(ii)Measure of value or unit of value.
(ii)Store of value
(iii)Transfer of value
(ii)Measurement of maximum satisfaction
(iii)Distributon of maximum satisfaction
(iv)Bearer of option
(v)Guarantee of solvency
(vi)Increase in the Liquidity of capital
W.R.L. Coulborn and Pual Einzig have classified all the functions of money into Two broad categories, viz., Static functions and Dynamic function.
(i) Static function: Static function of money refers to coventional, fixed, technical, and passive functions of money.Such functions only help to regulate the economic system;they do not infuse any element of dynamism into the system.These basically include the primary and secondary functions of money, such as medium of exchange, measure of value, store of value, transfer of value, and standard for deferred payments.
(ii)Dynamic Function:Dynamic function of money refer to those functions of money which impart dynamism to the economy. By imparting dynamism, we mean to ensure stability of price level as well as to improve the level of income and employment. Dynamic functions also include such functions of money as increasing the liquidity of capital and serving as the basis of credit.
All such functions of money make it amply clear that money is a Dynamic force.
Indian Monetary System
Who Supplies Money
In the modern times,the sources of supply of money are Government, Central bank of the country and commercial banks. In India ,it is Ministry of finance that issues one-rupee notes and all the coins. Money is mainly supplied by the Reserve Bank Of India which is the central bank of the country. RBI issues currency on the basis of minimum reserve system. Under this system, Reserve Bank has to maintain a minimum reserves of Rs.200 Crore in the form of Gold and Foreign securities. Of this reserves,value of the gold must be Rs.115 crore.Commercial banks create credit on the basis of demand deposits. When the commercial banks provide credit to the peopleor buy the securities sold by the Rserve Bank Of India then they add to the suply of money.On the other hand, when they contract credit ,there is fall in the supply of money. Expansion or Contraction of money supply by the commercial banks is Governed by the monetary policy of the Reserve Bank Of India.
Money finds its origin in the need to facilitate exchange. Therefore money is generally defined as a thing that is commonly accepted as a medium of exchange.Exchange is the way of life.In fact, Hicks defines economy as a system of Mutual exchanges.It means people are depend on each other for the satisfaction of wants, and this interdependence implies exchange of goods and services.Means you do this thing for me and i do that thing for you.Otherwise, existence becomes imposssible in a world of multiplicity of wants.
When wants were not so multiple, goods are exchange for goods. This system of exchange was known as Barter system. But with the multiplicity of wants and greateneed for exchange, barter system proved to be an inefficient system of exchange.It is then that Man invented Money -thing that was commonly accepted as a Medium of exchange.Intially, Metals Coins of gold and silver were introduced,andsubsequentlly, Alloy
Metals came to be used for coinage ,besides the introduction of Paper Money.And, now is the age of Plastic Money in the form of debit cards and credit cards. Thus, money finds its origin in the need to facilitate exchange; hence, it came to be defined as "A thing that is commonly accepted as a medium of exchange."
Legally, money is anything proclaimed by law as a medium of exchange.
Currency(paper note and coins together called currency) ia also called Fiat money because it commands fiats of the government.
Functional definition of money refers to money as anrything that performs four basic functions, viz.(i) it serves as a medium of exchange
(ii)it serves as a standard unit of value
(iii)it serves as a means for future/contractual payments or standard of deferred payments, and(iv)it serves as a store of value.
Broadly money is classified as,
(i) Full bodied money
(ii) Representative full bodied money
(iii)Credit money.
Functions of money are classified into following three categories:
- Primary/Main function
(ii)Measure of value or unit of value.
- Secondary/subsidiary functions
(ii)Store of value
(iii)Transfer of value
- Contigent functions
(ii)Measurement of maximum satisfaction
(iii)Distributon of maximum satisfaction
(iv)Bearer of option
(v)Guarantee of solvency
(vi)Increase in the Liquidity of capital
W.R.L. Coulborn and Pual Einzig have classified all the functions of money into Two broad categories, viz., Static functions and Dynamic function.
(i) Static function: Static function of money refers to coventional, fixed, technical, and passive functions of money.Such functions only help to regulate the economic system;they do not infuse any element of dynamism into the system.These basically include the primary and secondary functions of money, such as medium of exchange, measure of value, store of value, transfer of value, and standard for deferred payments.
(ii)Dynamic Function:Dynamic function of money refer to those functions of money which impart dynamism to the economy. By imparting dynamism, we mean to ensure stability of price level as well as to improve the level of income and employment. Dynamic functions also include such functions of money as increasing the liquidity of capital and serving as the basis of credit.
All such functions of money make it amply clear that money is a Dynamic force.
Indian Monetary System
- MONEY SUPPLY
- The concept of money
Who Supplies Money
In the modern times,the sources of supply of money are Government, Central bank of the country and commercial banks. In India ,it is Ministry of finance that issues one-rupee notes and all the coins. Money is mainly supplied by the Reserve Bank Of India which is the central bank of the country. RBI issues currency on the basis of minimum reserve system. Under this system, Reserve Bank has to maintain a minimum reserves of Rs.200 Crore in the form of Gold and Foreign securities. Of this reserves,value of the gold must be Rs.115 crore.Commercial banks create credit on the basis of demand deposits. When the commercial banks provide credit to the peopleor buy the securities sold by the Rserve Bank Of India then they add to the suply of money.On the other hand, when they contract credit ,there is fall in the supply of money. Expansion or Contraction of money supply by the commercial banks is Governed by the monetary policy of the Reserve Bank Of India.
Monday, December 7, 2009
7 m's of management
Organisation have a variety of goals and to achieve it's goal managment is necessary.managment is very extensive. managment is a pervasive and universally accepted function.it is essential for business as well as non-business activitiesmanagement is the force that unifies human as well as non-human resources in the services of oganisational goals.
Management as a unifying force
- Money
- Manpower
- Materials
- Machinery
- Methods.
- Market.
- Mark
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