Modes of Strategic Planning - Entrepreneurial and Adaptive

Modes of Strategic Planning
There are three different modes of strategic planning. These are depicted in a diagram, listed and explained as follows:Image Credits © Moon Rodriguez.
1. Entrepreneurial Mode
In entrepreneurial mode, strategic planning is done by one person. He takes the full responsibility of planning for the production department. That is, he does production planning on behalf of

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What is Strategic Planning for Production? Definition Meaning

What is Strategic Planning for Production? Definition
The definition of strategic planning for production is quoted below."Strategic planning for production implies focusing on the alignment of production management within an organization with its corporate and business strategies to gain a strategic advantage."Image Credits © Motion media works.
Meaning of Strategic Planning for Production

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What are Different Types of Production Strategies ?

Different Types of Production Strategies
The different types of production strategies are grouped, listed and explained under following three categories, viz.,The types of production strategies under Business Strategies are as follows:Differentiation strategy
Cost leadership strategy
Market segmentation strategyThe production strategies under Competitive Priorities are as follows:Price or cost

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Developing and Implementing Production Strategy - Steps

Developing and Implementing Production Strategy
Steps for developing and implementing production strategies are as follows:Image Credits © Moon Rodriguez.Fixing organisational objectives
Developing production and other strategies
Selecting the production strategy to be used
Selecting the production process
Selecting production infrastructure
Implementing production strategiesNow let's discuss

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What are Production Strategies? Meaning

What are Production Strategies? Meaning
Production strategies are broad long-term action plans. They are made for achieving the main objectives of organisation. Production strategies tell us what the production department must do to achieve the top aims of the organisation. It provides a road map for the production department.Image Credits © Joey Ganoza.So, production strategies are long-term

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Functions of Production Management - Components

Functions of Production Management
Functions of production management are depicted, listed & explained below.The components or functions of production management are as follows:Selection of Product and Design,
Selection of Production Process,
Selecting Right Production Capacity,
Production Planning,
Production Control,
Quality and Cost Control,
Inventory Control, and
Maintenance and Replacement

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What is Production Management ? Meaning Definition Importance

What is Production Management? Meaning
Production management means planning, organising, directing and controlling of production activities.Production management deals with converting raw materials into finished goods or products. It brings together the 6M's i.e. men, money, machines, materials, methods and markets to satisfy the wants of the people.Image Credits © jovijovijovi.Production

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Importance Benefits of Financial Planning

Benefits of Financial Planning
Before you proceed, first do revise the meaning of term financial planning (FP). It is derived from two influential words, viz., Finance and Planning, which are briefly explained as follows:Finance is the management of money and other valuables, which can be easily converted into cash. It also deals with profits that adequately compensate for the cost and risks

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What are the Rights of Shareholders?

What are the Rights of Shareholders?
First let's understand the meaning of words, rights and shareholders.Rights represent something that is due to an individual or any government body by nature, law, tradition, etc.
Shareholders are those people who invest funds in the share capital of a company.
In a company, the ownership is separated from the management. The shareholders are the owners of a

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Canons Basic Principles of Financial Planning

Canons Basic Principles of Financial Planning
First let us revise the meaning of words Canons and Financial Planning.Canons are the basic (fundamental) principles (rules or standards) laid down by an authoritative entity (either by an authoritative individual or institution, etc.) on something (may be either a concept or theory or procedure or practice, etc.) with an intention to refine, improve

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What is Financial Planning? Meaning Types of Financial Plans

What is Financial Planning? Meaning
Financial planning means to prepare the financial plan.A financial plan is also called capital plan.A financial plan is an estimate of the total capital requirements of the company. It selects the most economical sources of finance. It also tells us how to use this finance profitably. Financial plan gives a total picture of the future financial activities of

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What is Finance? Meaning Definition Features of Finance

What is Finance? Meaning
Before we begin, first let’s understand the origin of word “FINANCE.”If we trace the origin of finance, there is evidence to prove that it is as old as human life on earth. The word finance was originally a French word. In the 18th century, it was adapted by English speaking communities to mean “the management of money.” Since then, it has found a permanent place in the

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Evaluation of Foreign Investment Proposal

Evaluation of Foreign Investment Proposal
Before evaluation, let's revise the basics and meaning of Foreign Investment.Investment is a thing, which is worth buying because it is profitable or useful in the near future.
Proposal is an offer and / or invitation to do some business or trade.
Statutory compliance are well-specified and documented obligations (duties and responsibilities) that are

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What is Portfolio Management? Meaning, Objectives in Finance

What is Portfolio Management? Meaning
First let's understand the meaning of terms Portfolio and Management.Portfolio is a group of financial assets such as shares, stocks, bonds, debt instruments, mutual funds, cash equivalents, etc. A portfolio is planned to stabilize the risk of non-performance of various pools of investment.
Management is the organization and coordination of the activities of

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Price Differentials in Financial Management

Price Differentials in Financial Management
First let's understand the meaning of terms Price and Differential.Price : The literal meaning of the word 'PRICE' is the amount of money expected, required or given by one party to another party in return of some goods and / or services.
Differential : Whereas, the word 'DIFFERENTIAL' means something pertaining to diversity (difference) between

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Features of Corporate Governance - Characteristics

Features of Corporate Governance
The characteristics or features of corporate governance are listed below.Imgage Credits © Sameer Akrani.Transparency : This means that the Board of Directors must release all relevant information to the stakeholders. They must show all the necessary financial and operational data to the stakeholders. They must not hide any important information or maintain any

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Importance of Corporate Governance - Need Significance

Importance of Corporate Governance
The need, significance or importance of corporate governance is listed below.Imgage Credits © Sameer Akrani.Changing Ownership Structure : In recent years, the ownership structure of companies has changed a lot. Public financial institutions, mutual funds, etc. are the single largest shareholder in most of the large companies. So, they have effective control on

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Merchant Banking Meaning - Functions of Merchant Banking

Merchant Banking Meaning
Merchant Banking is a combination of Banking and consultancy services. It provides consultancy to its clients for financial, marketing, managerial and legal matters. Consultancy means to provide advice, guidance and service for a fee. It helps a businessman to start a business. It helps to raise (collect) finance. It helps to expand and modernize the business. It helps

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Universal Banking - Meaning Advantages Disadvantages

Universal Banking - Meaning
Universal banking is a combination of Commercial banking, Investment banking, Development banking, Insurance and many other financial activities. It is a place where all financial products are available under one roof. So, a universal bank is a bank which offers commercial bank functions plus other functions such as Merchant Banking, Mutual Funds, Factoring, Credit

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What is Credit Rating? Meaning Explained Lucidly

What is Credit Rating? Meaning
Credit rating is done for debt instruments such as debentures, fixed deposits, commercial papers, bonds, etc.Image credits © Anvrecife.The company which issues debt instruments is called an issuer or issuing company. The issuer, issues instruments to collect finance from investors.Investor looks at the credit rating of instrument and issuer before investing.If the

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Benefits of Credit Rating to Investors and Company

Benefits of Credit Rating to Investors
The advantages, importance or benefits of credit rating to the investors are:-Imgage Credits © Sameer Akrani.Helps in Investment Decision : Credit rating gives an idea to the investors about the credibility of the issuer company, and the risk factor attached to a particular instrument. So the investors can decide whether to invest in such companies or not.

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Demerits of Credit Rating - Disadvantages Limitations

Demerits of Credit Rating
The disadvantages, limitations or demerits of credit rating are listed below.Imgage Credits © Sameer Akrani.Possibility of Bias Exist : The information collected by the rating agency may be subject to personal bias of the rating team. However, rating agencies try their best to provide an unbiased opinion of the credit quality of the company and/or instrument. If not,

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What are Business Ethics? Meaning Definition Features

What are Business Ethics? Meaning
Ethics is a branch of social science. It deals with moral principles and social values. It helps us to classify, what is good and what is bad? It tells us to do good things and avoid doing bad things.Image Credits © Malc H.So, ethics separate, good and bad, right and wrong, fair and unfair, moral and immoral and proper and improper human action. In short, ethics

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Rules or Principles of Business Ethics, the Code of Conduct

Rules or Principles of Business Ethics
Rules or principles of business ethics are the code of conduct for businessmen. It tells us how businessmen should do business for social good. These principles are related to consumers, employees, investors, local community and the society as a whole.Image Credits © Hasloo.The important rules or principles of business ethics are as follows:-Avoid

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Need or Importance of Business Ethics

Need or Importance of Business Ethics
These twelve points below discuss the need, importance of business ethics.Image Credits © Sameer Akrani.Stop business malpractices : Some unscrupulous businessmen do business malpractices by indulging in unfair trade practices like black-marketing, artificial high pricing, adulteration, cheating in weights and measures, selling of duplicate and harmful

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Concept of Risk and Return in Investment Management

Concept of Risk and Return in Investment
Investment management is a game of money in which we have to balance the risk and return.Image Credits © Kees van Duyn.The risks associated with investment are:-Inflation risk : Due to inflation, the purchasing power of money gets reduced.
Interest rate risk : Due to an economic situation prevailing in the country, the interest rate may change.
Default

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Concept of Cost of Capital - Importance and Calculation

Concept of Cost of Capital
Capital refers to the funds invested in a business. The capital can come from different sources such as equity shares, preference shares, and debt. All capital has a cost. However, it varies from one sources of capital to another, from one company to another and from one period of time to another.Cost of capital may be defined as the company's cost of collecting funds.

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What is Corporate Finance? Meaning, What it Includes?

What is Corporate Finance? Meaning
Corporate finance means only the finance of joint-stock companies. It is a narrow term.Corporate finance is different from business finance. Business finance refers to the finance of all types of business, i.e. sole traders, partnership firms, joint-stock companies, etc. It is a broad term.
What Corporate Finance Includes?
Corporate finance includes planning,

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Characteristics or Features of Corporate Finance

Characteristics or Features of Corporate Finance
The points below discuss the characteristics or features of corporate finance.Image Credits © Sameer Akrani.Financial Activity : Corporate finance is a financial activity. It includes planning, raising, investing and monitoring the finance of the company. In short, it includes all the financial aspects of the company. This work is done by the

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Need and Importance of Corporate Finance

Need of Corporate Finance
Finance is the life blood of business. It is required by all types of companies. It is required for starting a company. It is required for running a company. It is required for the survival, stability and growth of a company. It is required for expansion and diversification of a business. Finance is also required for closing down the company.So, a company cannot survive

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What is Financial Management? Meaning Definition Scope Articles

What is Financial Management? Meaning
The financial management means:To collect finance for the company at a low cost and
To use this collected finance for earning maximum profits.Thus, financial management means to plan and control the finance of the company. It is done to achieve the objectives of the company.Image credits © Shyam.
Definition of Financial Management
According to Dr. S. N.

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Executive and Routine Functions of Financial Management

Functions of Financial Management
Functions of financial management can be broadly divided into two groups.Executive functions of financial management, and
Routine functions of financial management.This division of functions of financial management is depicted below.Image Credits © Sameer Akrani.
Executive Functions of Financial Management
The executive functions of financial management are

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Objectives of Financial Management

Objectives of Financial Management
The objectives of financial management are depicted and discussed below.Image Credits © Sameer Akrani.The main objectives of financial management are:-Profit maximization : The main objective of financial management is profit maximization. The finance manager tries to earn maximum profits for the company in the short-term and the long-term. He cannot guarantee

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Productivity Improvement Techniques Methods Measures

Productivity Improvement Techniques
Measures, methods or techniques to improve productivity are listed below.Image Credits © Sameer Akrani.These twelve productivity improvement techniques are explained as follows:Value Engineering (VE) : Value Engineering (VE) is the process of improving the value of a product at every stage of the product life cycle. At the development stage, VE improves the

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Operations Research - Definition Meaning Features Limitations

Operations Research - Definition
According to Philip McCord Morse and George E. Kimball,"Operations research is a scientific method of providing executive departments with a quantitative basis for decisions regarding the operations under their control."According to Russell L. Ackoff and C. West Churchman,"Operations research is the application of scientific methods to arrive at the optimal

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Advantages of Operations Research OR in Decision Making

Advantages of Operations Research (OR)
The role, importance or advantages of Operations Research (OR) are:-Picture or Image depicting the Advantages of Operations Research (OR).
1. Effective Decisions
Operations Research (OR) helps the managers to take better and quicker decisions. It increases the number of alternatives. It helps the managers to evaluate the risk and results of all the

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What is MBO? Meaning, Definition and Articles

What is MBO? Meaning
Management By Objectives (MBO) was introduced by Peter Drucker in 1954. In MBO, the subordinate (junior or lower level) managers are allowed to participate in planning and controlling activities. They are allowed to participate in the decision-making process. In MBO, the superior and subordinate managers jointly fix the objectives of the organisation. They collectively make

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Four Stages or Steps in the MBO Process

Four Stages or Steps in the MBO Process
Generally, there are four stages or steps in the MBO process.
Stage 1. Collectively fixing objectives
The superior and subordinate managers collectively fix the objectives. The objectives are fixed for the Key Result Areas (KRAs). KRAs are those areas which are very important for the long-term success of the organisation. For e.g. R & D, Production,

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Benefits or Advantages of MBO Process

Benefits or Advantages of MBO Process
The benefits or advantages of MBO process are depicted in the picture below.
1. Better utilisation of resources
In MBO, there is optimum utilisation of physical, financial and human resources for achieving the objectives.
2. Development of personnel
MBO helps to train and develop the subordinate managers. It improves their skills in planning, decision

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How to Make Premising Effective?

How to Make Premising Effective?
The premising can be made effective by adapting following suggestions:-
1. Selection of premises
In order to make premising effective, it is important to select the premises correctly. Selection of premises depends on the environmental factors.
2. Collection of information
There are many methods of collecting information. There are simple oral methods and even

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Meaning and Types of Planning Premises in Management

Meaning of Planning Premises
Planning premises are the basic assumptions about the environment.Image Credits © Connectirmeli.These assumptions are essential to make plans more realistic and operational. Planning premises provide a framework. All plans are made within this framework. There are many environmental factors, which influence the plan. Assumptions are made about these factors. These

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What is Job Design? Meaning, Importance, Factors Affecting

What is Job Design? Meaning
Job design means to decide the contents of a job. It fixes the duties and responsibilities of the job, the methods of doing the job and the relationships between the job holder (manager) and his superiors, subordinates and colleagues.Image Credits © sitara.Job design also gives information about the qualifications required for doing the job and the reward (financial

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Evaluation of Alternatives in Decision Making - Techniques

Evaluation of Alternatives in Decision Making
After making all the alternatives, the next step in planning or in decision making is to evaluate these alternatives. Evaluation is required in order to select the best alternative for implementation. Image Credits © Delios.While evaluating alternatives, the managers must compare the alternative plans or decisions. For this, the manager must consider

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Managerial Functions in MNC Multinational Corporation

Managerial Functions in MNC
The managerial functions in MNC, i.e. of a Multinational Corporation are:-
1. Planning in the MNC
Planning involves analyses of international and external environment to find out the strengths, weaknesses, opportunities and threats. After conducting the SWOT analysis, the management sets the objectives. It is very difficult to analyse the external environment. This

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Importance of International Business for Economy

Importance of International Business
The economic importance of international business is discussed below.Image credits © Sameer Akrani.The points below highlight the importance of international business:-Earn foreign exchange : International business exports its goods and services all over the world. This helps to earn valuable foreign exchange. This foreign exchange is used to pay for imports.

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What is International Business? Meaning, Features and Article

What is International Business? Meaning
International Business conducts business transactions all over the world. These transactions include the transfer of goods, services, technology, managerial knowledge, and capital to other countries. International business involves exports and imports.International Business is also known, called or referred as a Global Business or an International

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Global Theory of Management from Management Theory Jungle

Global Theory of Management
Today, there are many schools of management. There are also many management experts. Each school and each expert gives their own theory about management. They say that their theory is right, and the theories of the other experts are wrong. There are so many management theories. We cannot say, which one right and, which one is wrong. This has caused a lot of confusion

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Business Objectives - Meaning Types Nature Characteristics

Business Objectives - Meaning
Business objectives are the goals, aims or purpose of the business. The business tries to achieve these goals. Profit is the main objective of business. However, the business cannot have only one objective. This is because it has to satisfy different groups such as shareholders, employees, customers, creditors, etc. So, it has to fix objectives for each group.Image

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What is Job Enrichment? Meaning Features Advantages

What is Job Enrichment? Meaning
According to Robert N.Ford, Job enrichment means to make jobs which:-Have a greater variety.
Requires higher level of knowledge and skills.
Give workers more autonomy.
Give workers more responsibility.
Give workers opportunities for personal growth, and
A meaningful work experience.The meaning of Job enrichment is depicted in the following image or picture.Job

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Factors Affecting or Influencing Decentralisation

Factors Affecting Decentralisation
The ten important factors affecting or influencing decentralisation are:-
1. Size of the organisation
Large organisation makes a lot of decisions. Their decisions are taken at different levels. So large organisations are more decentralised. Small organisation makes few decisions. All their decisions are taken at the top level. So small organisations are less

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How To Make Matrix Organisation Effective?

How To Make Matrix Organisation Effective?
The matrix organisation can be made effective by adapting following points:-
1. Clarity of Roles
The roles of the functional managers and project managers must be clearly defined. The functional manager has authority for technical matters. The project manager has authority for coordinating and controlling the job.
2. Proper Team Selection
The matrix

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Five Bases of Power by John French and Bertram H. Raven

Five Bases of Power
In 1959, social psychologists John R. P. French and Bertram H. Raven identified five sources or forms of power from which a person gets power. These sources are now known as French and Raven's Five Bases of Power.The French and Raven's five bases of power are briefly explained as follows:-
1. Referent Power
Referent power is also called as personal power, chairismatic power,

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Difference Between Authority and Power in Management

Difference Between Authority and Power
The terms Authority and Power have different meanings in management.Image Credits © x3nomik.Authority is the right given to a manager to achieve the objectives of the organisation. It is a right to get the things done through others. It is a right to take decisions. It is a right to give orders to the subordinates and to get obedience from them. A manager

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What is Functional Authority? Meaning Features Advantages

What is Functional Authority? Meaning
In an organisation, there are three types of authority.Line Authority is given to line managers for achieving the objectives of the organisation.
Staff Authority is given to staff managers for giving advice and service to the line managers.
Functional Authority is given to a line or staff manager to do a specific job. When the job is completed, the authority

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What is Forecasting? Meaning Features Steps Importance

What is Forecasting? Meaning
Forecasting is a process of predicting or estimating the future based on past and present data. Forecasting provides information about the potential future events and their consequences for the organisation. It may not reduce the complications and uncertainty of the future. However, it increases the confidence of the management to make important decisions.

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What is Decision Making? Meaning Definition Articles

What is Decision Making? Meaning
The English word 'Decision' originated from the Latin word 'decisio' which means "to cut from."
'To decide' means "to come to a conclusion" or "to pass a resolution."
Image Credits © Vasi.
Decision making means to select a course of action from two or more alternatives. It is done to achieve a specific objective or to solve a specific problem.
Definition of

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Importance of Decision Making in Management

1. Better Utilisation of Resources
Decision making helps to utilise the available resources for achieving the objectives of the organisation. The available resources are the 6 Ms, i.e. Men, Money, Materials, Machines, Methods and Markets. The manager has to make correct decisions for all the 6 Ms. This will result in better utilisation of these resources.
Image Credits © Sameer Akrani.
2.

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Systems Approach To Management by Bertalanffy

Systems Approach To Management
The word System is taken from a Greek language which means to bring together or to combine. A system is a set of inter-related parts, which work together to achieve certain goals.
Image Credits © Pablo Alfieri.
Ludwig von Bertalanffy is called the Father of the Systems Approach.According to Ludwig von Bertalanffy, "In order to understand an organised whole, we must

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Non-Programmed Decisions in Management - Techniques

Non-Programmed Decisions in Management
Non-programmed decisions are used for new, unstructured and badly defined problems, which are non-recurring. These decisions require subjective judgement. The top-level of management makes these decisions.Modern Approaches / Techniques for making non-programmed decisions.Figure 1. Non-Programmed Decision Making in Management.
1. Brainstorming Technique
The

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Modern Techniques For Making Programmed Decisions

Modern Techniques for Programmed Decisions
A programmed decision is used to solve routine, repetitive but complex problems. These techniques are also called as Quantitative Techniques. The managers working at lower-level of management make these decisions.Various Approaches or Techniques for making programmed decisions are:-
Figure 1. Programmed Decision Making Techniques.
1. Linear Programming

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What is Span of Control? Meaning Definition Articles

What is Span of Control? Meaning
The term "Span of Control" is made of two words, viz., "Span" and "Control".Span's literary meaning says, it is the distance between the tip of a thumb and small finger when palm of hand is fully stretched out. However, in terms of management and administration, it means the maximum extend or the number of people that can be reached by.Control in literary means

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Advantages of Selecting an Appropriate Span of Control

Advantages of Appropriate Span of Control
The Span of Control should not be too wide (large) or too narrow (small). If the span is too wide, then the personal supervision is difficult and the control will be ineffective. On the other hand, if the span is too narrow, then there will be excessive (too much) supervision of the subordinates. This will affect their work. So it is desirable to select

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Factors Affecting Span of Control or Span of Management

1. Qualification and Qualities
If the superiors and subordinates are well-qualified, trained, experienced, and if they are experts in their jobs then the span of control will be wide and vice-versa.
Image Credits © Heinz College
2. Level of Management
If the superiors are working at the top-level of management, then they have more responsibilities. Therefore, their span of control will be

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Graicunas Theory of Span of Control - Example and Formula

Graicunas Theory of Span of Control
Vytautas Andrius Graiciunas (1898-1952) was a Lithuanian french management consultant, management theorist and engineer.Image Credits © Verslo Naujienos.In 1933, he published a paper called "Relationship in Organisation." In this paper, he mentioned three types of Superior-Subordinate relationships, viz.,Direct Single Relationships,
Direct Group Relationships,

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What is Organising? Meaning Definition Process Articles

What is Organising? Meaning
Organising or Organizing in management refers to the relationship between people, work and resources used to achieve the common objectives (goals).
Image Credits © 401 Forester.
Definition of Organising
According to Theo Haimann,"Organising is the process of defining and grouping the activities of the enterprise and establishing the authority relationships among them

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Steps in Organising Process - Organisation as a Process

The stages or steps in the process of organisation are explained below:-
1. Fixing the objectives of the organisation
At the top level, administrative management first fixes the common objectives of organisation. At the middle level, executive management fix the departmental objectives. Lastly, at the lower level, supervisory management fix the day-to-day objectives. All the objectives of the

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Importance of Organisation in Building Management Structure

1. Facilitates Efficient Management
A good organisation avoids confusion, delays and duplication of work. It increases the promptness and efficiency, and it motivates the employees to do their best. All this results in efficient management. Thus, we can say, good organisation facilitates efficient management.Image Credits © UNHCR
2. Optimum Utilisation of Human Resources
A good organisation

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Principles of Organisation in Management for Designing

Principles of Organisation In Management
A principle is a rule which is generally accepted by all. It is a guideline for solving problems and difficulties. The principles of organisation are called as "Classical Principles" because they are old and some of them are adopted from Henry Fayol's principles of management. The most common principles of organisation are Objectives, Specialisation,

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Distinguish Difference Between Formal and Informal Organisation

Formal Organisation differs from Informal Organisation in the following ways:-Image Credits © Sameer Akrani.
1. Meaning
Formal Organisation is formed when two or more persons come together. They have a common objective or goal. They are willing to work together to achieve this similar objective.Formal Organisation has its own rules and regulation. These rules must be followed by the members (

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What is Job Specification? Meaning, Information it Contains

What is Job Specification? Meaning
Job Analysis consists of Job Description and Job Specification.Job Description describes the information about the job.Job Specification specifies information about the skills or qualities required for doing the job.Job Specification is also called as Man or Employee Specification.Job Specification is prepared on the basis of Job Description.
Image Credits ©

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Assessment Centre - Meaning, Advantages and Disadvantages

Assessment Centre - Meaning
Assessment center is an important tool in the selection process. It is used to find out how a candidate will act in typical management situations.Image Credits © Moscow Business School.Here, the candidate has to take part in many management related exercises (tests). Some of these common exercises or tests:Different types of Psychological tests.
Management games.

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Importance of Scientific Recruitment and Selection Policy

Meaning of Scientific Recruitment and Selection
A scientific recruitment and selection process involves job analysis, advertisements, written tests, personal interviews, medical examination, final selection, etc. It is conducted by different types of experts. It involves a lot of time, energy and money (cost). Even then most organisations use a scientific selection policy to select their

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What are the Steps in Scientific Selection Process?

1. Recruitment
Recruitment involves the following steps :-Job Analysis : The Personnel department first does job analysis. It is a process of collecting, analysing information about the job (Job Description) and qualities required for doing the job (Job Specification).
Determining the Sources of Manpower : After this, they search for all possible sources of manpower. Advertising in leading

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Difference Between Recruitment and Selection Process

1. Definition
According to Edwin Flippo, "Recruitment is the process of searching for prospective employees and stimulating them to apply for jobs in the organisation."According to O. Donnell, "Selection is the process of choosing from among the candidates, from within the organization or from the outside, the most suitable person for the current position or for the future poistion."
Image

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Electronic Funds Transfer EFT - Electronic Clearing Service ECS

In the global market, the technology is becoming the driving force for bringing in the operational efficiency in banking industry. Several RBI committees on computerisation, in the recent past have recommended for adopting such technologies merged with the faster communication technology for the growth, development and profitability. Some of these electronic services in banking, which have come

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Internal and External Sources of Recruitment - Merits Demerits

Sources of Recruitment
The different sources of recruitment are classified into two categories, viz.,Internal : sources of recruitment are from within the organisation.
External : sources of recruitment are from outside the organisation.
Internal Sources of Recruitment
The internal sources of recruitment are:-Promotions : Promotion means to give a higher position, status, salary and

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What is Staffing? Meaning Definition Factors Affecting

Meaning of Staffing
The term Staffing in management consists of:
Selecting the right person for the right post.
Training and development.
Giving proper remuneration and motivation.
Performance appraisal of employees.
Proper promotions, transfers, etc.Image credits © Mike O'C.
Definition of Staffing
According to Harold Koontz, staffing is defined as follows:“Staffing means filling and keeping

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Scope of Marketing Research (MR) - Branches / Areas of MR

Branches / Areas / Scope of Marketing Research
The scope of marketing research is very wide and comprehensive. It includes
1. Product Research
Product means the goods and services which are sold to the consumers. It includes consumer products and industrial products. Product research studies the individual product. It studies the making and marketing of the product. It studies the colour, size,

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What is Marketing Research? Meaning Definition Features

What is Marketing Research? Meaning
Marketing Research has two words, viz., marketing and research.Marketing means buying and selling activities.
Research means a systematic and complete study of a problem. It is done by experts. It uses scientific methods.
Thus, we can say, “Marketing Research is a systematic method of collecting, recording and analyzing of data, which is used to solve

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What is Money? Meaning Definition Functions of Money

What is Money? Meaning
Money is one of the greatest inventions of mankind. According to Walker,"Money is what Money does."
Image Credits © Mark Morgan.In a wider sense, Money includes all mediums of exchanges like Gold, Silver, Copper, Paper, Cheques, and Bills of exchange, etc.
Definition of Money
According to Crowther,"Anything that is generally acceptable as a means of exchange and which at

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Importance or Significance of Theory of Effective Demand

Importance of Theory of Effective Demand

The Importance or Significance of Theory of Effective Demand is as follows:-
1. Determinants of Employment
Effective Demand determines the level of employment. When effective demand increases employment also increases and when it decreases employment also decreases. According to Keynes, involuntary unemployment can be removed by raising consumption

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Keynes General Theory of Income and Employment

Keynes General Theory of Income and Employment

(a) Total Employment depends on Total output, which is equal to total income. So National Income = Total Employment.
(b) Total Value of employment depends on Effective Demand.
(c) Effective Demand is composed of Aggregate Demand Function (ADF) and Aggregate Supply Function (ASF). The Effective demand at the equilibrium price where ADF = ASF.
(d)

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What is Trade Cycle? Meaning Definition Features and Types

What is Trade Cycle? Meaning
The alternating periods of expansion and contraction in the economic activity has been called business cycles or trade cycles.Image Credits © Havayolu101.The period of high income, high output and high employment is called as the Period of Expansion, Upswing or Prosperity.The period of low income, low output and low employment is called as the Period of Contraction,

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Limitations of Credit Creation by Commercial Banks

What are the limitations of credit creation?
Commercial Banks though have the power to create credit, their powers are not unlimited. Certain points affect the process of credit creation. They are termed as limitations to credit creation by commercial banks.
Image Credits © Deutsche Bank.
The limitations of credit creation by commercial banks are as follows :-
1. Amount of Deposit
The most

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Capital Adequacy Norms - CAR, Introduction, India and Concepts

Introduction to Capital Adequacy Norms
Along with profitability and safety, banks also give importance to Solvency. Solvency refers to the situation where assets are equal to or more than liabilities. A bank should select its assets in such a way that the shareholders and depositors' interest are protected.
Image Credits © light_breeze2010.
1. Prudential Norms
The norms which are to be followed

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Importance of Interview for Employers and Job Seekers

Personal interviews are used by all employers and companies for selecting their staff. Interview is one of the most important step in the staff selection procedure. Interview proves important because it connects both the employers as well as job seekers. It assists employers in selecting a right person for a right job. It also helps job seekers to present their job skills and acquire a desired

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Measures to Solve the Problems of Non-Performing Assets NPA

Measures to Solve Problems of NPA
The problems of NPA have been receiving greater attention since 1991 in India. The Narasimham Committee recommended a number of steps to reduce NPA. In the 1990's the Government of India (GOI) introduced a number of reforms to deals with the problems of NPA.
Image Credits © monojussi.
Major steps taken to solve the problems of Non-Performing Assets in India :-

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Non Performing Assets (NPA) - Meaning Types Provision Causes

Non-Performing Assets (NPA) - Meaning
Non-Performing Assets are popularly known as NPA. Commercial Banks assets are of various types.All those assets which generate periodical income are called as Performing Assets (PA).While all those assets which do not generate periodical income are called as Non-Performing Assets (NPA).If the customers do not repay principal amount and interest for a certain

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Types of Inflation in Economics With Examples and Diagram

Types of Inflation in Economics
This article briefly explains different types of inflation in economics with examples, wherever necessary. Following article is also supplemented with a hierarchical diagram (given below this paragraph) to help readers summarize and quickly assimilate various types of inflation. Click on the following diagram (figure) listing different types of inflation to get a

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What is Inflation? Meaning Definition Features Terms

What is Inflation? Meaning
Inflation refers to a continuous rise in general price level which reduces the value of money or purchasing power over a period of time.Statistically speaking, inflation is measured in terms of a percentage rise in the price index (i.e. percentage rate per unit time) usually for an annum (a year) or for 30-31 days (a month).
Definition of Inflation
According to

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4 Phases of Business Cycle in Economics with Diagram

Four Phases of Business Cycle
Business Cycle (or Trade Cycle) is divided into the following four phases :-Prosperity Phase : Expansion or Boom or Upswing of economy.
Recession Phase : from prosperity to recession (upper turning point).
Depression Phase : Contraction or Downswing of economy.
Recovery Phase : from depression to prosperity (lower turning Point).

Diagram of Four Phases of Business

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What is Investment ? Meaning and Types of Investment

Meaning of Investment
In simple terms, Investment refers to purchase of financial assets. While Investment Goods are those goods, which are used for further production.Investment implies the production of new capital goods, plants and equipments. John Keynes refers investment as real investment and not financial investment.Investment is a conscious act of an individual or any entity that

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Limitations of Decision Making in Management - Shortcomings

Limitations of Decision Making
Shortcomings / limitations of a decision making process in management :-Image Credits © cole007.
1. Time Consuming
A lot of precious time is consumed for decision making. Individual decisions take a lot of time because the manager has to study the merits and demerits of all the alternatives. He also has to take advice from many people before making a decision. All

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Steps in the Decision Making Process of a Manager

Steps In Decision Making Process
Six steps in the decision making process with diagram are discussed below.
1. Defining and Analysing the real problem
The manager should first find out what is the real problem. The problem may be due to bad relations between management and employees, decrease in sales, increase in cost, etc. After finding out the true problem manager must analyse it carefully.

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Administrative Management Theory School - Henri Fayol

Fayol's Administrative Management Theory
According to the Administrative Management Theory / School, management is the process of getting things done through people. Here importance is given to groups and not to individuals.
The first expert of Administrative Management Theory was Henri Fayol (1841-1925). Fayol is called the "Father of Modern Management". Henri Fayol was a French industrialist

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Criticism of Taylor's Scientific Management - Limitations

Taylor's Scientific Management Theory has been criticised by the workers, trade unions and even employers.
Taylor's Scientific Management is criticised on the following main grounds :-
1. Exploitation of Workers
Taylor's Scientific Management put unnecessary pressures on the employees to perform the work faster. Importance was given to productivity and profitability. This resulted in

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Frederick Taylor's Principles of Scientific Management Theory

F. W. Taylor's Scientific Management Theory
Frederick Winslow Taylor (1856-1915) is the father of Scientific Management.Image Credits © Cristianmillos_0526.Scientific Management tries to increase productivity by increasing efficiency and wages of the workers. It finds out the best method for performing each job. It selects employees by using Scientific Selection Procedures. It provides

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Flat Organisation Structure - Advantages and Disadvantages

Flat Organisation Structure
If the span of control is wide, then there will be fewer levels of management. In other words, there will be fewer managers. This organisation structure is called Flat Organisation Structure.Diagram below gives a sample visual preview of how a flat organisation structure must look like. Click on the following image for an enlarged preview.Image Credits © Sameer

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Tall Organisation Structure - Meaning Diagram Advantages

Meaning of Tall Organisation
If the span of control is narrow, then there will be many management levels. That is, there will be many managers. This organisation structure is called "Tall Organisation Structure."
Diagram of Tall Organisation
Following diagram gives a sample visual preview of how a Tall Organisation Structure looks like. Click on following image for a zoomed or enlarged view.

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Difference Between Tall and Flat Organisation Structure

The Difference Between Tall (Narrow Span of Control) and Flat (Wide Span of Control) Organisation Structure is based on following twelve points :-
1. Meaning
If the span of control is narrow, then there will be many management levels. That is, there will be many managers. This organisation structure is called "Tall Organisation Structure".If the span of control is wide, then there will be fewer

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Gandhian Concept Principle of Trusteeship - Limitations

Gandhian Principle of Trusteeship
The Gandhian Principle of Trusteeship is closely related to the "Social Responsibility of Business".According to the Gandhian Concept of Trusteeship, "All business firms must work like a Trust."Image Credits © Mahatma Gandhi's photo by Seaskyclay.All assets of the firm must be held by a 'trust' and must be used for the welfare of the society. The firm must keep

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Is Management a High Class Profession or Not?

Management as a Profession
A Profession is an Occupation. It is performed by Professionals such as Doctors, Engineers, Lawyers, etc.Image Credits © Rose ZhangWe can find out whether Management is a profession or not by examining the following important points :-
1. Formal Education
A Professional must have a formal education from an accredited institution. For example, a Lawyer must have a

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Importance of Management - Significance of Management

Importance of Management
According to Peter Drucker,"Management is what the modern world is all about."This statement means that all the development that has taken place in the world is due to efficient management.The points below bring out the significance or importance of management.
1. Encourages Initiative
Management encourages initiative. Initiative means to do the right thing at the right

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Managerial Skills - Conceptual, Human Relations and Technical

Managerial Skills
Management is a challenging job. It requires certain skills to accomplish such a challenge. Thus, essential skills which every manager needs for doing a better management are called as Managerial Skills.According to Professor Daniel Katz, there are three managerial skills, viz.,Conceptual Skills,
Human Relations Skills, and
Technical Skills.According to Prof. Daniel Katz, all

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Difference Between Delegation of Authority and Decentralisation

Delegation of Authority differs from Decentralisation in the following ways :-
1. Meaning
Delegation of authority means giving work to others and giving them the authority to do this work. Delegate means to hand over or give. In Decentralisation, the authority is distributed to all the levels of management.

2. Cause and Effect
Delegation is the cause of decentralisation.Decentralisation is the

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Matrix Organisation - Meaning Features Advantages Limitations

Matrix Organisation - Meaning
Matrix Organisation was introduced in USA in the early 1960's. It was used to solve management problems in the Aerospace industry.Matrix Organisation is a combination of two or more organisation structures. For example, Functional Organisation and Project Organisation.The organisation is divided into different functions, e.g. Purchase, Production, R & D, etc. Each

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Qualities of a Good Leader - Traits of a Successful Leader

Leadership is an influential art that affects human behaviour. The art of leadership is an activity performed by a person called Leader. Every leader has some followers or subordinates. The leader and his followers work together for achieving the objectives of the organisation. The leader solves the difficulties / problems of his followers and takes the responsibility for all their actions.

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Control Controlling - Elements Steps in the Control Process

Definition of Control
According to Allen, "Control means to guide something in the direction it is intended to go."
Definition of Controlling
According to James Stoner, "Controlling is the process of ensuring that actual activities conform to the planned activities."
5 Steps In Control Process
Five main steps in the control process with diagram are discussed below :-
1. Fixing the Control

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Advantages of Controlling in the Organisation - Need Importance

1. Control improves Goodwill
Quality control improves the quality of the products. Cost control decreases the cost of the products. Therefore, the organisation can supply good quality products at lower prices. This increases the goodwill of the organisation.
Image Credits © Gaelsapori - Advantages of Controlling.
2. Control minimises Wastage
Control helps to reduce the wastage of human,

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Essential Requirements of a Good Control System

1. Focus on Objectives
The control system should always focus on objectives. It should aim to achieve the objectives of the organisation.
Image Credits © Cycloptography - Good Control System.
2. Suitability
The control system should be suitable to the needs of the organisation.
3. Promptness
The control system should be prompt. That is, it should find out the deviations quickly. This will help

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Control Techniques - 10 Types of Techniques of Controlling

10 Types of Traditional Control Techniques
The ten types of traditional techniques of controlling are discussed below :-
1. Direct Supervision and Observation
'Direct Supervision and Observation' is the oldest technique of controlling. The supervisor himself observes the employees and their work. This brings him in direct contact with the workers. So, many problems are solved during supervision

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What is Coordination? Meaning and Articles on Co-ordination

What is Coordination?
In the organisation, there are many individuals, groups and departments. They perform many different activities. Co-ordination means to integrate (i.e. bring together) these activities for achieving the objectives of the organisation.Image Credits © Catholic Church (England and Wales)
Meaning of Coordination
"Co-ordination means integration of activities."Coordination is

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Why Coordination is called the Essence of Management ?

Co-ordination is the Essence of Management
"Co-ordination is the Essence of Management." The meaning of this sentence implies, Co-ordination affects all the functions of management. In other words, Co-ordination affects Planning, Organising, Staffing, Directing, Communication, Leading, Motivating and Controlling.

1. Planning and Coordination
According to Harold Koontz and Cyril O'Donnell, "

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Importance of Coordination - Why Co-ordination is Necessary?

Why Co-ordination is Necessary?
Co-ordination means to integrate (bring together) all the activities of an organisation. It is done for achieving the goals of the organisation. There must be proper co-ordination throughout the organisation.According to management experts, co-ordination is necessary because :-"Co-ordination is the Essence of Management." i.e. co-ordination effects all the

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Four Principles of Coordination Given By Mary Parker Follett

Follett's Four Principles of Coordination
Mary Parker Follett gave four main Principles of Coordination. These four principles of co-ordination are called are Follett's Principles of Coordination. These four principles must be followed to make co-ordination effective.
Mary P. Follett's four main principles of coordination are discussed below :-
1. Principle of Early Stage
According to this

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Human Resource Accounting HRA - Meaning Advantages

Human Resource Accounting HRA - Meaning
Human Resource Accounting (HRA) means to measure the cost and value of the people (i.e. of employees and managers) in the organisation. It measures the cost incurred to recruit, hire, train and develop employees and managers.HRA also finds out the present economic value of its employees and managers. After measuring the cost and value of its employees and

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Performance Appraisal of Employees - Definition Meaning

Performance Appraisal of Employees
Performance appraisal is a systematic evaluation of the employee's performance at work. It is done by the superiors or other experts.Image Credits © Joakim K. E. Johansson.Performance appraisal has many other names. It is also called as Merit Rating or Employee Rating or Service Rating.
Definition of Performance Appraisal
According to the Professor of

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Old Methods of Performance Appraisal - Traits Approach

The Old / Traditional Methods of Performance Appraisal Traits Approach are :-
1. Ranking Methods
Ranking method is the oldest and simplest method of rating the employees. Here, all the employees who are doing the same job are compared with each other. Then, each employee is given a particular rank, i.e. First Rank, Second Rank, etc. The best employee is given the first rank, and the worst

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Modern Methods of Performance Appraisal by Results

1. Management by Objectives (MBO)
MBO is used to measure the performance of the managers.Here the following process is used :-The superior and subordinate managers jointly fix common objectives.
The superior and subordinate managers jointly make plans for achieving the objectives.
The subordinate manager implements the plans.
Then the actual performance of the subordinate manager is compared

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Importance of Performance Appraisal - Advantages Uses

Importance of Performance Appraisal
The main advantages or importance of performance appraisal are :-
1. Performance Feedback
Most employees are very interested in knowing how well they are doing at present and how they can do better in a future. They want this information to improve their performance in order to get promotions and merit pay. Proper performance feedback can improve the

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Limitations of Performance Appraisal Techniques

1. Halo Effect
The rater may base the full appraisal on the basis or one positive quality which was found out earlier. For e.g. If a person is evaluated on one quality i.e. emotional stability and if he scores very high in the case of emotional stability, then the rater may also give him high scores (marks or grades) for other qualities such as intelligence, creativity etc., even without judging

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360 Degree Appraisal - Meaning and Six Parties Involved In It

Meaning of 360 Degree Appraisal
An appraisal made by top management, immediate superior, peers, subordinates, self and customers is called 360 Degree Appraisal. Here, the performance of the employee or manager is evaluated by six parties, including himself. So, he gets a feedback of his performance from everyone around him. This method is very reliable because evaluation is done by many

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Levels of Management - Top, Middle and Lower Level

Meaning of Levels of Management
Many managers work in an organisation. However, these managers do not work at the same level. They work and operate at different positions. Hierarchy of these managerial positions is called Levels of Management.
Three Levels of Management
Generally, there are Three Levels of Management, viz.,Administrative or Top Level of Management.
Executive or Middle Level of

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Steps In Human Resource Planning HRP Process

HRP is done by the HRD manager. He is supported by the HRD department. He takes following Steps in the process of Human Resource Planning HRP.
1. Review of Organisation's Objectives
The HRD Manager first studies the objectives of the organisation. Then he prepares a list of all the activities (jobs) that are required to achieve the objectives. He also does Job's analysis.Image Credits ©

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Human Resource Planning HRP - Manpower Personnel Planning

Meaning of HRP / Manpower / Personnel Planning
Human Resource (Manpower or Personnel) Planning (HRP) involves :-Forecasting (Estimating) the Manpower requirements and recruitment.
Manpower Allocation
Manpower Motivation
Manpower Development
Image Credits © CIPD.
Need / Advantages / Role / Importance of HRP
Now-a-days organisations are fully dependent on human resources. Thus, they are giving

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Human Resource Development HRD - Definition Features

Human Resource Development HRD - Definition
According to American Society for Training and Development (ASTD),"HRD is the integrated use of :-training and development,
organisational development, and
career development to improve individual, group and organisational effectiveness."Image Credits © CIPD.
Features of Human Resource Development HRD
The nature / scope / characteristics or features

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Human Resource Management HRM - Meaning Features Scope

Meaning of Human Resource Management HRM
HRM means to Select, Develop, Motivate and Maintain human resources, in the organisation. It first selects the right human resources or staff (i.e. managers and employees). It trains and develops them. It motivates them by giving them recognition and rewards. It also provides them with the best working conditions.Image Credits © HRM At WORK.HRM is

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Group Discussion GD Meaning, Qualities Judged, Videos

Meaning of Group Discussion (GD)
Group Discussion is an important tool in the selection process. It is mostly used for selecting candidates for management posts. Here, the candidates are divided into small groups. Each group contains six to eight candidates. Each group is given a topic for discussion. They are also given a time limit for discussing this topic. The topic may be a general or

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Types of Employment Tests used for Selecting Employees

Types of Employment Tests
Many large companies use employment tests for selecting appropriate employees. These employment tests help companies to find out the intelligence, maturity, skills, etc., of the candidates or prospective employees.Image Credits © domesticat.The types of employment tests used for selecting employees:Intelligence Test,
Interest Test,
Performance Test,
Personality Test,

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Different Leadership Styles or Types of Leaders

Different Leadership Styles
Different leadership styles or types of leaders are listed and explained below.Image Credits © Fitness 360.The various styles of leadership are as follows:Autocratic Style,
Consultative Style,
Participative Style,
Laissez-Faire Style
Bureaucratic Leader,
Neurocratic Leader,
Paternalistic Style,
Sociocratic Style, and
Situational Style.
Types of Leaders
Above

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What are Different Types of Interview? 10 Interview Types

What are Different Types of Interview?
The 10 different types of an interview are discussed in this article.Image Credits © Perform Impact.
1. Structured Interview
Here, every single detail of the interview is decided in advance. The questions to be asked, the order in which the questions will be asked, the time given to each candidate, the information to be collected from each candidate, etc.

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Behavioural Science Approach To Management

Behavioural Science Approach or School
Behavioural Science Approach is an extension of the Human Relations Approach. Elton Mayo and his team used simple research methods. However, researchers, like Abraham Maslow, Douglas McGregor, etc., used more complex research methods. Thus are called "Behavioural scientists."Image Credits © Iain Farrell.The behavioural science approach is also called "Human

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Principles of Human Relations Approach to Management

Human Relations Approach to Management
The classical school did not give importance to the human aspects of the workers. Therefore, they did not achieve a high level of production efficiency and co-operation between the management and workers. The failure of the classical approach led to the human relations movement.Image Credits © Pixmac-com.The human relations experts tried to integrate (

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Bureaucratic Theory of Management by Max Weber

Bureaucratic Theory by Max Weber
Bureaucratic Theory was developed by a German Sociologist and political economist Max Weber (1864-1920). According to him, bureaucracy is the most efficient form of organisation. The organisation has a well-defined line of authority. It has clear rules and regulations which are strictly followed.Image Credits © gatoconbotas_fc.According to Max Weber, there are

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Hawthorne Studies Experiments - 4 Parts, Conclusions, Criticism

The Human Relations Movement began with the Hawthorne Experiments. They were conducted at Western Electrical Works in USA, b/w 1924-1932.
Four Parts of Hawthorne Studies / Experiments
Image Credits © Harvard Business School.
Part I - Illumination Experiments (1924-27)These experiments were performed to find out the effect of different levels of illumination (lighting) on productivity of labour.

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Henri Fayol 14 Principles of Management Year 1916

Fayol's 14 Principles of Management
Henri Fayol, a French industrialist, is now recognised as the Father of Modern Management. In year 1916 Fayol wrote a book entitled "Industrial and General Administration". In this book, he gave the 14 Principles of Management. These 14 principles of management are universally accepted and used even today. According to Henri Fayol, all managers must follow

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What is Management? Definitions Meaning and Features

What is Management? Definitions
According to Harold Koontz,"Management is the art of getting things done through and with people in formally organised groups."Harold Koontz gave this definition of management in his book "The Management Theory Jungle".According to Henri Fayol,"To manage is to forecast and to plan, to organise, to command, to co-ordinate and to control."Henri Fayol gave this

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Franchise Meaning, Definition and Features of Franchise

Franchise Meaning
Franchise is a local representative of any organization who markets and conducts the entire marketing activity under complete guideline and support of franchisor in the area allotted to the franchisee. It is a kind of authorization granted to an individual or corporation by a franchisor to sell its goods or services in a defined way. The concept of a franchise was originated in

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Advantages and Disadvantages of Supermarket or Super Bazaar

Advantages of Supermarket
The benefits or advantages of a supermarket or super bazaar are as follows:Image Credits © Eleventh Earl of Mar.Saving in labour cost due to self-service system.
Supermarket has large turnover.
Reasonable or low prices of goods.
Low cost of operation.
Freedom of selection.
Shopping is very easy and quick.
Due to adequate parking space, shopping becomes easy and pleasing

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Supermarket Super Bazaar - Meaning Definition Features

Supermarket Super Bazaar Meaning
Supermarket is also called as Super Bazaar in India.Bazaar is a Hindi word, which means a market in English.Supermarket is a large-scale retail organization, selling a wide variety of consumer goods on the principle of self-service. They are rightly called as Self-Service Stores as customers have to serve themselves and there are no counter salesmen to help the

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Functions of Banks - Important Banking Functions and Services

What are the Functions of Banks? Diagram ↓
The functions of banks are briefly highlighted in following Diagram or Chart.These functions of banks are explained in following paragraphs of this article.
A. Primary Functions of Banks ↓
The primary functions of a bank are also known as banking functions. They are the main functions of a bank.These primary functions of banks are explained below.
1.

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Distinguish Between Saving Account and Fixed Deposit

1. Meaning ↓
Saving account is a bank account which is opened by persons in order to save a part of their income.Fixed Deposit (FD) account is that type of account where a fixed sum of money is deposited for a fixed period. 2. Purpose for Depositors ↓
The main purpose of savings account is to save a part of the income.The main purpose of fixed deposit account is to get a lump sum amount on the

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Distinguish Between Saving and Current Account

Difference Between Saving and Current Account
The difference between saving and current account is discussed as follows:
1. Meaning
Saving account is opened by individuals for the purpose of saving a part of their income.Current account is maintained by businessman and others who have to do regular bank transactions.
2. Purpose
The main purpose of opening a saving account is to save a part of

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Distinguish Between Fixed Deposit and Current Account

1. Meaning ↓
In fixed deposit, a fixed sum of money is deposited for a fixed period.Current account is operated by businessmen and others who have to do regular business transactions. 2. Purpose ↓
The main purpose of fixed deposit is to earn higher interest rate and get a lump sum amount on maturity.The main purpose of current account is to facilitate regular transactions.
3. Who Operates?

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Difference Between Cheque and Demand Draft DD - Distinguish

1. Meaning
A cheque is an unconditional order directing the banker to pay a certain sum of money only to or to the order of a certain person.A draft is an order to pay money drawn by one office of a bank upon another office of the same bank for a sum of money payable to order on demand.Image credits © Moon Rodriguez.
2. Facility
The current account and saving account holders get a cheque

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Difference Between Commercial Bank and Industrial Bank

1. Nature of Banking ↓
Commercial Bank is a bank which primarily provides financial facilities to commercial activities.Industrial Bank is a bank which primarily provides financial facilities to industrial or productive activities. 2. Types of Loans Offered ↓
Commercial Banks generally provides short-term loans for meeting working capital needs.Industrial Banks generally provides long-term loans

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Distinguish Between Commercial Bank and Co-operative Bank

1. Registration ↓
In India, the Commercial Banks are required to be registered under Banking Regulation Act, 1949.In India, the Co-operative Banks are required to be registered under the Co-operative Societies Act, of the concerned state. 2. Main Objective ↓
The main objective of a Commercial Bank is to accept deposits from public for the purpose of lending to industry and commerce.The main

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Distinguish Between Commercial Bank and Central Bank

1. Function ↓
The main function of a Commercial Bank is to accept deposits from public for the purpose of lending to industry and others.The Central Bank regulates money supply in the country. It also acts as a banker to the government and to the other banks operating in a country. 2. Printing of Currency ↓
The Commercial Banks cannot print currency notes and make coins.The Central Bank of India

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Compare Maslow and Herzberg Theory of Motivation - Difference

1. Meaning ↓
Maslow's theory is based on the concept of human needs and their satisfaction.Hertzberg's theory is based on the use of motivators which include achievement, recognition and opportunity for growth. 2. Basis of Theory ↓
Maslow's theory is based on the hierarchy of human needs. He identified five sets of human needs (on priority basis) and their satisfaction in motivating

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Difference Between Invoice and Delivery Note - Distinguish

1. Meaning ↓
Invoice is a bill of a sale transaction showing the amount to be paid by the buyer.Delivery note is a note sent by the seller to the buyer informing about the despatch and delivery of goods. 2. Contents ↓
Invoice gives details of a sale transaction i.e. description of goods supplied, rate, expenses, amount payable, etc.Delivery note only gives details of quantity supplied.
3. When

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Difference Between Cash Memo and Invoice - Distinguish

1. Meaning ↓
A cash memo is a document stating cash received for the goods sold. It is a paid bill for cash sales.An invoice is a document showing the amount due from the buyer or the debtor it is a bill for credit sale. 2. When Issued?
Cash memo is issued in the case of a cash transaction.Invoice is issued in the case of a credit transaction.
3. Proof ↓
Cash memo serves as an evidence of cash

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Distinguish Between Trade and Cash Discount - Difference

1. Meaning ↓
Trade Discount is a discount allowed by the seller to the buyer in case of bulk purchases made by him.Cash Discount is a reduction in the net amount payable by the buyer when prompt payment is made by the buyer. 2. When Allowed?
Trade discount is usually allowed when bulk purchases are made.Cash discount is usually allowed if payment in cash is made promptly i.e. within a short

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Distinguish Between Debit and Credit Note - Difference

Difference Between Debit and Credit Note
The difference between debit and credit note is explained as follows:
1. Meaning
Debit note is a note sent by one party to another informing him that his account is debited in the sender's book.Credit note is a note sent by one party to another informing him that his account is credited in the sender's book.
2. Details
Debit note contains details as to

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Distinguish Between Proforma Invoice and Invoice - Comparison

1. Meaning ↓
Proforma Invoice is a quotation given in the form of invoice.Invoice is a bill of a sale transaction showing the amount to be paid by the buyer. 2. When Sent?
Proforma Invoice is sent at the request of the buyer before he places the order.Invoice is sent after the goods being despatched by the seller.
3. Purpose ↓
Proforma Invoice enables buyer to decide whether to place the order

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Distinguish Between Loco and Franco Price - Comparison

1. Meaning ↓
Loco price includes the cost of goods at the factory or godown of the seller.Franco price includes the cost of goods plus all expenses upto the buyer's warehouse. 2. Preference ↓
The seller normally prefers Loco price.The buyer normally prefers Franco price.
3. Seller's Liability ↓
In case of Loco price, normally, the liability of the seller ceases once the goods leave his

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Debit Note Credit Note Helps In Adjusting Books of Account

On receipt of goods, the buyer compares with the particulars in the invoice and/or order. On a comparison, the buyer may notice some discrepancies. In such a case, he will lodge a complaint with the seller. On receipt of the complaint, the seller verifies the nature of a complaint and then promptly makes necessary adjustments.Necessary adjustments are made in respect of claims arising out of

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What are the Steps Involved in Execution of an Order?

1. Entry in order received book
Once the order is received, it is stamped with date of its receipt and is given a certain reference number. Entry is made in the Order Received Book. Such entries help to expedite the timely execution of the order.
2. Intimation to the warehouse keeper
The order slip is sent to the warehouse keeper. The goods are then packed as per buyer's requirements. Necessary

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What are the Essentials of an Order? Made by Buyer to Seller

1. Acknowledgement of Quotation from Buyer
The buyer should make a reference to the quotation or proforma invoice received from the seller and also indicate his acceptance of the terms offered. 2. Buyer must indicate Types of Goods Ordered
The buyer should clearly indicate the type of goods ordered in respect of quality, brand, size, shape, colour, etc.
3. Buyer must state Quantity of Goods

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What is Proforma Invoice? When Proforma Invoice is Prepared?

What is Proforma Invoice? Meaning
Proforma invoice is sent by a seller to the buyer before receiving the order. At times, the buyer may like to know the exact amount which he would have to pay in case he places an order. He would request the seller to give him a clear idea about the payment. In such a case, the seller prepares an invoice and sends it to the buyer. Such invoice is called Proforma

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Enquiry is a Request by Buyer to the Seller in Trade

Enquiry In Trade Transaction ↓
Simple english meaning of word enquiry means to ask questions. An enquiry is a request by buyer to the seller, asking for questions i.e information about the goods. The seller may advertise his goods or services. He may also depute a sales representative to the potential buyers. If the prospective buyer is interested in purchasing the goods, he may obtain as much

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What is Trade Transaction? Steps in Trade Transactions

What is Trade Transaction? Meaning
Trade transaction means the activity of buying and selling in between two parties, namely Buyer and Seller.The consideration for which a trade transaction takes place is called Price.Image Credits © Brendan ReynoldsSuch trade transaction would materialise only when one party is willing to buy and another party is willing to sell. Such parties have to take a

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Quotation - Meaning, Contents and Types of Quotations

What is Quotation? Meaning of Quotation ↓
A Quotation is a business offer made by a seller to an interested buyer to sell certain goods at specific prices and on certain terms and conditions.Image Credits © Stefan DanIt is a reply by the seller to the prospective buyer. Hence, the quotation letter should be prepared carefully by the seller. It should contain information on all points mentioned

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What is Discount ? Meaning and Types of Discounts Cash Trade

What is Discount ? Meaning
In simple terms, Discount is an allowance or concession in price. Discount is given so that the buyer is induced (lured) to place an order and later to make payment in time.Discount can be also referred to as a deduction in price. The seller deducts the discount from the gross or total price, and the buyer is supposed to pay the net amount.
Types of Discounts

The two

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Various Types of Invoice - Different Kinds of Invoices

1. Inland Invoice ↓
An invoice which is used in internal trade transaction is called as an Inland Invoice. When the goods are sold within a country, the invoice relating to such a transaction is called as an Inland Invoice.

2. Foreign Invoice ↓
An invoice which is prepared for covering an international trade transaction is called as a Foreign Invoice. A number of copies are prepared, maybe

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Different Modes of Payment - What are Types of Payment?

Different Modes or Types of Payment ↓
The payment can be made in many different ways like by giving Cash, doing Telegraphic Transfer or Mail Transfer, via Money Order or Postal Order, Bill of Exchange, Promissory Note, Cheque, Bank Draft, etc. 1. Cash Payment
This is one of the oldest modes of payment. In this case, the buyer pays money in the form of notes and coins to the seller. The seller on

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What is Invoice ? Meaning, Contents and Functions

Meaning of Invoice ↓
Invoice is a bill which indicates the amount that is to be paid by the buyer to the seller. There is no standard form or style of invoice and as such it can be designed as per the requirements of the seller. It can be prepared in three or more copies as required by the parties concerned. The invoice may be sent along with the goods or at a later date. When cash is paid at

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What are the Disadvantages of Departmental Store?

Along with advantages, the departmental store also have certain drawbacks or limitation which both customers as well as the owners have to endure.
1. Departmental store needs higher operating costs
The cost of running a departmental store is very high. Since a departmental store is centrally located the rent for the building is very high. It also offers personal services and facilities, spends

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What are the Advantages of Departmental Store ?

The departmental store offers many advantages to the customer as well as to its owners. The important advantages of a departmental store are as follows.
1. Departmental store gives shopping convenience
A departmental store enables a customer to purchase all his requirements under one roof. Time is saved as there is no need to visit several shops.
Image Credits © Ran Han
2. Departmental store

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What is Departmental Store? Meaning and Features

Meaning of Departmental Store ↓
A departmental store is a large retail trading organization. It has several departments, which are classified and organized accordingly. Departments are made as per different types of goods to be sold. For example, individual departments are established for selling packed food goods, groceries, garments, stationery, cutlery, cosmetics, medicines, computes, sports

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Direction of India's Foreign Trade - Changes in Import Export

Introduction to Direction of India's Foreign Trade ↓
By direction of trade we mean the countries with which India keeps international trade relations. It also helps us to understand the diplomatic relations maintained by India with other countries in direction of trade.For the purpose of direction of trade, the countries to which India exports are broadly divided into following five groups.The

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Composition of India's Foreign Trade - Import and Exports

Introduction to India's Foreign Trade ↓
Foreign Trade is one of the significant macro fundamental variable of an economy. India till recently was predominantly a primary goods exporting and mainly an industrial goods importing country.In 1950s, India's share in the world trade was 1.78% which was decline to 0.59% in 1990 and continues to remain around 0.60% till now. India's share in world

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GATT Rounds - Emergence of World Trade Organisation WTO

The Second World War ended in Europe in May 1945. After its end, some countries in the world soon realised the importance and need of international trade. Later, after a period of two years, these countries finally came together and started discussing important plans with an intension to promote global trade. As a result, the General Agreement On Tariff and Trade (i.e GATT) was first signed by 23

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Factors That Determine Stress Vulnerability of the Employees

Factors Deciding Stress Vulnerability of Employees
Some employees are more vulnerable to stress as compared to others. Stress Vulnerability of employees depends upon three main factors like stress threshold, type of person they are and their control on work methods.Image Credits © Anhtu
1. Stress Threshold - Low and High ↓
Stressors are the factors that cause stress. Stress Threshold is the

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Relationship Between Stress and Job Performance

Stress can be either helpful or harmful to job performance, depending upon its level. When stress is absent, it limits job challenges and performance becomes low. As stress increases gradually, job performance also tends to increase, because stress helps a person to gather and use resources to meet job requirements.Image Credits © Wilson BantaConstructive stress inculcates encouragement among

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Frustration - Types of Reaction and Causes of Frustration

Meaning of Frustration ↓
Frustration is one of the causes of stress. It arises when one's motivation to achieve a desired goal is blocked. For example, an employee wants to finish a report before the end of the day but finds that something or the others keep interrupting him at work. This can lead to his frustration.Image Credits © Sybren A. Stüvel
Types of Reactions to Frustration ↓
The

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What is Stress? Meaning, Definition and Causes of Stress

What is Stress? Meaning
Stress is a general term applied to various mental and physiological pressures experienced by people feel in their lives.
Image Credits © Queen Roly
Definition of Stress
Stress may be defined as "a state of psychological and / or physiological imbalance resulting from the disparity between situational demand and the individual's ability and / or motivation to meet those

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WTO TRIPs - Trade Related Intellectual Property Rights

The importance of intellectual property rights (IPRs) in international trade is increasing day by day. The agreement on Trade Related Intellectual Property Rights (TRIPs) establishes standards for the protection of intellectual property rights including patents, industrial designs, trademarks and copyrights. The Trips agreement is an important aspect of the WTO.Image Credits © World Trade

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Management Is An Innovative Art That Inculcates Creativity

According to Harold Koontz, Mary Parker Follett and other notable thinkers, "Management is an art of getting things (i.e work, task) done through people."So, Is Management really an innovative Art that inculcates Creativity?Image Credits © CMI ManagersBefore we arrive at our conclusion, let's find out whether management is really an art or not by discussing and analysing following important

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Insurance Terms, Glossary and Dictionary - Terms of Insurance

1. Insurer
The company which issues insurance policy is called insurer. Insurance company is also called assurer or underwriter. Insurer agrees to pay compensation on the happening of uncertain and unfortunate event.Image Credits © Alan Cleaver
2. Insured
The person who is protected against uncertain losses and who is paid a compensation by the insurance company is called insured or assured. He

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Principles of Insurance - 7 Basic General Insurance Principles

Understanding Principles of Insurance
The main objective of every insurance contract is to give financial security and protection to the insured from any future uncertainties. Insured must never ever try to misuse this safe financial cover.Seeking profit opportunities by reporting false occurrences violates the terms and conditions of an insurance contract. This breaks trust, results in

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Ohlin's Modern Theory Vs Classical Ricardian Theory

Comparison - H.O Theory Vs Ricardian Theory ↓
The advantage or superiority of Ohlin's Modern Theory over the Ricardian Classical Theory of international trade gets highlighted from the following important points of comparison. 1. No difference among internal and international trade
According to the Classical economists, there is a need for a separate theory of international trade because of the

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Ohlin's Factor Price Equalization Theorem with Diagram

Ohlin's Factor Price Equalization Theorem
In International Trade, commodities move instead of factors.According to Bertil Ohlin,"Commodity movement acts as a substitute for factor movement in bringing about factor price equalisation."Image Credits © Butler University.In a two country model with relatively large differences in their endowments (capital and labour), prior to trade the prices of

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Heckscher Ohlin's (HO) Modern Theory of International Trade

Introduction To Heckscher Ohlin's H-O Theory ↓
The Modern Theory of international trade has been advocated by Bertil Ohlin. Ohlin has drawn his ideas from Heckscher's General Equilibrium Analysis. Hence it is also known as Heckscher Ohlin (HO) Model / Theorem / Theory.According to Bertil Ohlin, trade arises due to the differences in the relative prices of different goods in different countries.

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Fiscal Responsibility and Budget Management FRBM Act 2003

Concerned over the worsening of fiscal situation, in 2000, the Government of India had set up a committee to recommend draft legislation for fiscal responsibility. Based on the recommendations of the Committee, Government of India introduced the Fiscal Responsibility and Budget Management (FRBM) Bill in December 2000. In this Bill numerical targets for various fiscal indicators were specified.

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Scope of Commerce means Coverage of Commerce

Scope of Commerce
Scope of commerce means or implies the coverage of commerce.The scope of modern commerce has become very wide, perhaps it has no boundary at all, because it has crossed the boundaries of nations, and it has acquired an international status.Scope of commerce includes the role played by trade and aids to trade, banks and insurance companies; transport and advertising agencies

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Fiscal Crisis In India - Indicators, Causes and Consequences

What is Fiscal Crisis ?
The fiscal imbalance takes place when the government expenditure exceeds government revenue. This fiscal imbalance is also refered as the fiscal crisis.In 1980, the growing burden of non-development expenditure caused deterioration in the fiscal situation of India. Later this resulted in a fiscal crisis at the beginning of 1991-1992.
Indicators of Fiscal Crisis ↓
The

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Measures To Overcome Fiscal Imbalance In India - Fiscal Policy

Measures To Overcome Fiscal Imbalance In India ↓
Fiscal imbalance takes place due to excess of government expenditure over revenue. To overcome the deficit, government resort to borrowings. This further aggravates the situation of debt servicing.Therefore there is a need to correct and overcome the fiscal imbalance.The fiscal imbalance can be corrected by adopting following two methods:-Reducing

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Fiscal Policy Meaning - Its Main Objectives In India - Conclusion

Meaning of Fiscal Policy ↓
The fiscal policy is concerned with the raising of government revenue and incurring of government expenditure. To generate revenue and to incur expenditure, the government frames a policy called budgetary policy or fiscal policy. So, the fiscal policy is concerned with government expenditure and government revenue.Image Credits © Center for American Progress.Fiscal

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What is Commerce ? Meaning and Importance of Commerce

Meaning of Commerce
Commerce is a branch of business. It is concerned with the exchange of goods and services. It includes all those activities, which directly or indirectly facilitate that exchange.Image Credits © Senator Mark Begich.Commerce looks after the distribution aspect of the business. Whatever is produced it must be consumed, to facilitate this consumption there must be a proper

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What Are Aids To Trade In Commerce ? Meaning and List

What are Aids To Trade in Commerce ? Meaning ↓
Trade or exchange of goods involves several difficulties, which are removed by auxiliaries known as aids to trade. It refers to all those activities, which directly or indirectly facilitates smooth exchange of goods and services.Aids to trade includes Transport, Communication, Warehousing, Banking, Insurance, Advertising, Salesmanship, Mercantile

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What is Trade? Meaning and Nature - Different Types of Trade

What is Trade? Meaning and Nature
Trade refers to buying and selling of goods and services for money or money's worth. It involves transfer or exchange of goods and services for money or money's worth. The manufacturers or producer produces the goods, then moves on to the wholesaler, then to retailer and finally to the ultimate consumer.Image Credits © Sophie Atkinson.Trade is essential for

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What is Industry ? Meaning - Classification Types of Industries

What is Industry ? Meaning ↓
The production side of business activity is referred as industry. It is a business activity, which is related to the raising, producing, processing or manufacturing of products.Image Credits © Barrie Caveman.The products are consumer's goods as well as producer's goods. Consumer goods are goods, which are used finally by consumers. E.g. Food grains, textiles,

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What is Business? Meaning Definitions Features of Business

What is Business? Meaning
Human beings are continuously engaged in some activity or other in order to satisfy their unlimited wants. Every day we come across the word 'business' or 'businessman' directly or indirectly. Business has become essential part of modern world.
Image Credits © Mohddeeb.
Business is an economic activity, which is related with continuous and regular production and

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What Are Economic Activities ? Types of Economic Activities

What are Economic Activities ? Meaning ↓
Economic activities are related to production, distribution, exchange and consumption of goods and services.The primary aim of the economic activity is the production of goods and services with a view to make them available to consumer.Image Credits © Chigmaroff."Human activities which are performed in exchange for money or money's worth are called

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How To Export Goods From India? Steps for Exporting Goods

Step 1. Receipt of an order
The exporter has to get himself registered with various authorities like RBI, income tax authorities, etc. In addition, he has to appoint agents or distributors for collection of orders from foreign countries. Exporter receives an order from importer directly or through Indent House.
Step 2. Obtaining License and Quota
After obtaining order, exporter has to secure

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How To Import Goods In India ? Procedure For Importing Goods

Procedure of importing goods means the orderly steps to be taken for importing goods from aboard. This import procedure is quite lengthy and time consuming as various formalities are required to be completed.

Step 1. Obtaining import license and quota
In all countries there are many government regulations to be followed. Sanction of government is necessary. Importer has to apply to the

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What is Foreign Trade ? Types and Importance of Foreign Trade

What is Foreign Trade ? External Trade Meaning ↓
Foreign trade is nothing but trade between the different countries of the world. It is also called as International trade, External trade or Inter-Regional trade. It consists of imports, exports and entrepot. The inflow of goods in a country is called import trade whereas outflow of goods from a country is called export trade. Many times goods are

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Documents Used In Foreign Trade Transactions - Shipping

The Shipping Documents Used In Foreign Trade ↓
Following is a list of various types of documents used in foreign trade transcations. The documents are related to either export trade or import trade.
Image Credits © Whitecat Singapore.
1. Indent
Indent is an order placed by the importers to the exports. It contains the essential information regarding the goods to be imported i.e. quality,

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Reserve Bank of India Bankers Bank - RBI Lender of Last Resort

Reserve Bank of India Works As A Bankers' Bank ↓
The Reserve Bank of India i.e RBI is the central bank of our country. It was established in the year 1935, under the Reserve Bank of India Act, 1934.
Being a central bank, RBI has control over the entire currency and banking system in India. It acts as a banker to both the state and the central government in India. It has the exclusive right to

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Why A Crossed Cheque is Safer Than A Bearer Cheque?

A Crossed Cheque is Safer Than A Bearer Cheque
When a cheque is crossed, the holder thereof cannot encash it at the counter of the bank. Encashment at the counter of the bank is possible only in the case of an open cheque, i.e. a bearer cheque or an uncrossed cheque.
Image Credits © Investing Thesis.
The holder of a crossed cheque has to present the same to his bank for collecting its amount

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Bank's Demand Draft - Mail & Telegraphic Transfer - Overdraft

1. What is a Bank Draft or Demand Draft ?
Bank Draft is also called as Demand Draft, in short, DD. DD is a special type of cheque. It is drawn by a bank on any of the branches of the same bank. It is used for remitting money from one place to another place. It is the cheapest mode of sending money. It is an order to pay money on demand.Image Credits © Tuxedo Travels.The person who wants to send

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What is Budget Deficit ? Types of Budgetary Deficit - India Trends

What is a Budget Deficit ? Meaning ↓
When the government expenditure exceeds revenues, the government is having a budget deficit. Thus the budget deficit is the excess of government expenditures over government receipts (income). When the government is running a deficit, it is spending more than it's receipts.Image Credits © Alex Grech.The government finances its deficit mainly by borrowing from

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The Budgetary Trends In India Budget - 1990-91 and 2005-06

Image Credits © Soumik Kar.
A. Trends in Revenue Budget ↓Revenue Receipts : They consist of tax and non tax revenue. Revenue receipts have increased from Rs. 54,954 crores in GDP in 1990-91 to Rs. 3,43,833 crores in 2005-06. Revenue receipts were 9.7% of GDP in 1990-91 and 9.6% in 2005-06. The share of tax revenue in the total revenue receipts was 81% in 2006-07.
Tax Measures and Reforms :

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Types of Government Budget - Balanced and Unbalanced

Different Types of Government Budget - Diagram ↓ A. Balanced Budget ↓
Balanced budget is a situation, in which estimated revenue of the government during the year is equal to its anticipated expenditure.Government's estimated Revenue = Government's proposed Expenditure.For individuals and families, it is always advisable to have a balanced budget.Most of the classical economists advocated

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What is a Budget ? Components of Government Budget

What is a Budget ? Meaning and Concept
Government has several policies to implement in the overall task of performing its functions to meet the objectives of social & economic growth. For implementing these policies, it has to spend huge amount of funds on defence, administration, and development, welfare projects & various other relief operations. It is therefore necessary to find out all

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How To Manage Debt ? India's Public Debt Management

The Solutions To Manage Public Debt In India ↓
The increase in Public debt puts a burden on the citizens of the country. The burden of public debt adversely affect the growth and development of the economy. Therefore there is a need to effectively manage public debt.Image Credits © Zimri Smith.Management of public debt involves; repayment of public debt, controlling the amount of borrowings and

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Public Debt In India - Debt Obligation of the Government

Introduction To The Public Debt In India ↓
During recent years, public debt in India has been growing at an alarming rate. The under developed nature of the economy & institutional credit deficiencies makes the financing of economic development a complicated problem.Image Credits © Frank Tiemann.Hence the government has to play a key role in stimulating the rate of capital formation & in

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Various Methods of Public Debt Redemption - Repayment of Loan

What is Redemption ? Meaning ↓
Redemption means repayment of a loan. Redemption refers to escaping from the burden of public debt.Image Credits © Friends of the Earth International.
Various Methods of Public Debt Redemption ↓
The various methods of public debt redemption are as follows :-
1. Sinking fund method
The Government creates a fund called sinking fund by accumulating a part of the

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Burden of Internal and External Public Debt - Shifting of Burden

Introduction To The Burden of Public Debt ↓
Over the years, the public debt of the India's Central and that of State government has increased considerably during the planning period. The Government borrows funds by way of public debt to meet the various development and non-development expenses.Table below indicates composition of public debt of the Central Govt. of India.Apart from internal debt

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Public Debt - Classification Types of Public Debt Borrowing

What is Public Debt ? Meaning ↓
Public debt or public borrowing is considered to be an important source of income to the government. If revenue collected through taxes & other sources is not adequate to cover government expenditure government may resort to borrowing. Such borrowings become necessary more in times of financial crises & emergencies like war, droughts, etc.Public debt may be raised

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Causes for the Growth of Public Expenditure In India

Introduction - Rise in Government Expenditure ↓
Public expenditure is also referred as Government expenditure. It is incurred by the government to provide public goods & services, and to service debts.The expansion in government activities during the planning period has resulted in a huge rise in the public expenditure.
Growth of the Public Expenditure ↓
Before independence, there was no

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What is Public Expenditure ? Meaning and Classification

What is Public Expenditure ? Meaning, Definition
Public expenditure refers to Government expenditure i.e. Government spending. It is incurred by Central, State and Local governments of a country.Public expenditure can be defined as, "The expenditure incurred by public authorities like central, state and local governments to satisfy the collective social wants of the people is known as public

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Wagner Law of Increasing State Activity - Public Expenditure

Introduction - Public Expenditure is Increasing ↓
Adam Smith wrote in the 'Wealth of Nations' that the government should restrict their activities to;Defence against foreign aggression.
Maintenance of internal peace and order.
Public development work.All other functions besides these were considered beyond the scope of the state & expenditure on them was treated as unjust & wasteful.
But there

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Effects of Public Expenditure On Economy Production Distribution

1. Effects on Production
The effect of public expenditure on production can be examined with reference to its effects on ability & willingness to work, save & invest and on diversion of resources.Image Credits © UK in Brazil.Ability to work, save and invest : Socially desirable public expenditure increases community's productive capacity. Expenditure on education, health, communication,

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E-Banking - Online Banking - Advantages of the Ebanking

What is E-Banking ? Online Banking ↓
E-banking refers to electronic banking. It is like e-business in banking industry. E-banking is also called as "Virtual Banking" or "Online Banking".E-banking is a result of the growing expectations of bank's customers.
Image Credits © Jochem Koole.
E-banking involves information technology based banking. Under this I.T system, the banking services are

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Automated Teller Machine ATM - Advantages of ATM

What is ATM ? Automated Teller Machine ↓
ATMs are electronic machines, which are operated by a customer himself to deposit or to withdraw cash from bank. For using an ATM, a customer has to obtain an ATM card from his bank. The ATM card is a plastic card, which is magnetically coded. It can be easily read by the machine.
Image Credits © lord_h8r.
To operate an ATM card, the customer has to inset

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Crossing of Cheque - Different Types of Check Crossing

What is Crossing of Cheque ?
A cheque is a negotiable instrument. During the process of circulation, a cheque may be lost, stolen or the signature of payee may be done by some other person for endorsing it. Under these circumstances the cheque may go into wrong hands.
Crossing is a popular device for protecting the drawer and payee of a cheque. Both bearer and order cheques can be crossed.

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What are Features of Cheques ? Characteristics of Checks

1. Cheque is an instrument in writing
A cheque must be in writing. It can be written in ink pen, ball point pen, typed or even printed. Oral orders are not considered as cheques.

2. Cheque contains an unconditional order
Every cheque contains an unconditional order issued by the customer to his bank. It does not contains a request for payment. A cheque containing conditional orders is

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What is a Cheque ? Definition - Kinds and Types of Cheques

What is a Cheque ? Meaning ↓
Cheque is an important negotiable instrument which can be transferred by mere hand delivery. Cheque is used to make safe and convenient payment. It is less risky and the danger of loss is minimised.
Image Credits © one take movie
Definition of a Cheque ↓
"Cheque is an instrument in writing containing an unconditional order, addressed to a banker, sign by the person

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What is a Bank ? Introduction, Definition and Features of Bank

What is a Bank ? Introduction ↓
Finance is the life blood of trade, commerce and industry. Now-a-days, banking sector acts as the backbone of modern business. Development of any country mainly depends upon the banking system.The term bank is either derived from old Italian word banca or from a French word banque both mean a Bench or money exchange table. In olden days, European money lenders or

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Different Types of Banks - What are Various Kinds of Banks ?

Type 1. Saving Banks
Saving banks are established to create saving habit among the people. These banks are helpful for salaried people and low income groups. The deposits collected from customers are invested in bonds, securities, etc. At present most of the commercial banks carry the functions of savings banks. Postal department also performs the functions of saving bank.
Image Credits ©

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Recurring Deposit Account In Bank - Meaning and Features

What is Recurring Deposit Account ? Meaning ↓
Recurring deposit account is generally opened for a purpose to be served at a future date. Generally opened to finance pre-planned future purposes like, wedding expenses of daughter, purchase of costly items like land, luxury car, refrigerator or air conditioner, etc.Image Credits © pamelalongRecurring deposit account is opened by those who want to

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What is Current Bank Account ? Its Features and Advantages

Meaning of Current Bank Account ↓
Current bank account is opened by businessmen who have a higher number of regular transactions with the bank. It includes deposits, withdrawals, and contra transactions. It is also known as Demand Deposit Account.Image Credits © stefanrechsteinerCurrent account can be opened in co-operative bank and commercial bank. In current account, amount can be deposited

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Fixed Deposit Account of Bank - Meaning, Features, Advantages

Meaning of Fixed Deposit Account - Bank ↓
The account which is opened for a particular fixed period (time) by depositing particular amount (money) is known as Fixed (Term) Deposit Account.The term 'fixed deposit' means that the deposit is fixed and is repayable only after a specific period is over.
Image Credits © goh-wz.livejournal.com
Under fixed deposit account, money is deposited for a fixed

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Saving Account in Bank - Meaning, Features, Advantages

Meaning of Saving Account in Bank ↓
Commercial banks (like ICICI, HDFC, etc.), co-operative banks (like Saraswat, Cosmos, etc.), public sector banks (like State bank of India, Bank of India, etc.) and postal departments accept deposits by way of opening saving bank account with them.The 'saving account' is generally opened in bank by salaried persons or by the persons who have a fixed regular

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What are the Advantages of Opening Bank Account ?

1. Bank account facilitates a safe custody of money
The bank is the custodian of cash. As and when the account holders needs the money can withdraw the same depending upon the type of account.
Image Credits © Randall Blaum
2. Bank account helps in making payments
The bank account holder can make payment to third parties through the savings and current account. The payment may be regarding

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How to Open Bank Account ? 7 Steps To Open Bank Account

Open Bank Account In 7 Simple Steps - Banking ↓
Today Banks have emerged as important financial institutions. Banks provide a safe environment and helps us manage our financial transactions. To avail professional banking service it is mandatory for every individual to open a bank account. Opening a bank account is not a difficult task. It takes only seven easy steps to open a bank account. This

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Criticism Limitations of Ricardian Comparative Cost Theory

Limitations of Ricardian Comparative Cost theory ↓
For considerable period the theory of comparative costs formulated by David Ricardo was the most acceptable explanation of the international trade. However, Ricardo's theory was subjected to number of criticisms.
Following are the important limitations of Ricardian Comparative Cost Theory.
1. Restrictive Model
Ricardo's Theory is based on only

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Practical Applicability Ricardian Theory of Comparative Cost

Applicability of Ricardian Theory in Real World ↓
Comparative cost theory inspite of all limitations has remained as a basic principle of international trade. Today when the world is moving towards greater liberalisation and globalisation each country specialises in production of goods and services on the basis of comparative cost advantage and enters into international trade.
Image Credits ©

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Most Memorable Day of My Life I've Ever Enjoyed - Essay Story

Most Memorable Day of My Life
Yesterday evening, I was too bored and annoyed to follow my daily monotonous chores. I felt my body was demanding some spiritual recreation which I kept it deprived for many long days. It urgently needed a serene calmness to get fully energized and feel fresh once again. After thinking of my options, I finally decided to plan and enjoy an evening ride by visiting

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Ricardo's Theory of Comparative Advantage - International Trade

Intro - Classical Theory of International Trade ↓
In 1817, David Ricardo, an English political economist, contributed theory of comparative advantage in his book 'Principles of Political Economy and Taxation'. This theory of comparative advantage, also called comparative cost theory, is regarded as the classical theory of international trade.According to the classical theory of international

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Hugh Dalton Objective Tests To Estimate Social Advantage

Reason ↓ Why Dalton suggested Objective Tests ?
Dalton himself has realised the practical difficulties in the accurate measurement of social sacrifice and social benefit. Hence he has suggested some objective tests which are helpful in judging social advantage arising out of the financial operations of the state.
Objective Tests To Estimate Social Advanatge ↓


1. Maintenance of peace and

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Limitations of the Principle of Maximum Social Advantage

Criticism - Principle of Maximum Social Advantage ↓
The principle of maximum of social advantage has been criticised on various grounds. The ten main practical difficulties in following the principle of maximum social advantage are discussed in the article. 1. Difficulties in measuring social benefit
The principle of maximum social advantage is theoretically explained with the help of the

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Musgrave Maximum Welfare Principle - Budget Determination

Introduction To Maximum Welfare Principle ↓
Richard Musgrave designates Dalton's Principle of 'Maximum Social
Advantage' as the 'Maximum Welfare Principle of Budget Determination'.
According to Musgrave, Dalton has proposed two principles of budget policy.The first is that resources should be distributed among different directions in such a way as to equalize the marginal return of

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Dalton's Principle of Maximum Social Advantage Public Finance

Introduction ↓
The 'Principle of Maximum Social Advantage' was introduced by British economist Hugh Dalton.According to Hugh Dalton, "Public Finance" is concerned with income & expenditure of public authorities and with the adjustment of one with the other.Image Credits © Motoyen.
Budgetary activities of the government results in transfer of purchasing power from some individuals to others.

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