On Management

Technical analysis is concerned primarily with : Materials and inputs Production technology Plant capacity Location and site Machinery and Equipment Structures and civil works, project charts and layouts Work schedule An important aspect of technical analysis is concerned with defining the materials and inputs required,specifying their properties in some details and setting up their supply programmes.  Materials may be classified into four broad categories: Raw materials Processed industrial materials and components Auxiliary materials and factory supplies Utilities For manufacturing a product/service often two or more alternative technologies are available. The choice of technology is influenced by a vriety of considerations: plant capacity,principal inputs,investments outlay and production cost,use by other units,product mix,latest developments and ease of absorption. The acquisition of technology from some other enterprise may be by way of : Techn

The traditional form of organisation is not very suitable for project work because it has no means of integrating different departments at levels below the top management and it does not facilitate effective communication,coordination and control. Project Organisations may take one of the following three forms: Line and  Staff Organisation Divisional Organisation Matrix Organisation Line and  Staff  Organisation A Person is appointed with the primary responsibility of coordinating the work of the people in the functional departments. Divisional  Organisation A separate division headed by the project manager is set up to implement the project. Matrix Organisation The personnel working on the project have a responsibility to their functional superior as well as to the project manager. The line and functional form of organisation is conducive to an efficient use of resources but is not suitable for an effective realization of project objectives. The divi

Marketing Information Systems provide information for the planning and control of the marketing function. Marketing planning information assists marketing managers in product planning ,pricing decisions,planning advertising and sales promotion strategies and expenditures, forecasting the market potential for new and present products and determining the channels of distribution. Marketing control information supports the efforts of management to control the efficiency and effectiveness of the selling and distribution of products and services. The major types of marketing information systems are sales management, product management , advertising and promotion, sales forecasting, market research and marketing management systems. Computer based Manufacturing Information Systems use several major sub systems to achieve computer  aided manufacturing (CAM). Computers are automating many of the activities needed to produce products in manufacturing industries. For example, computers hel

Data Administration Data Bank Data Dictionary Data Modeling Data Planning Data Resource Management Data Base Administrator Database Development Database Management Approach Database Management System Database Structures: Hierarchical Network relational Database file organization and processing: Direct Sequential File processing limitations: Data Duplication Lack of data Integration Data Dependence Hypertext Logical data elements: Character Field Record File  Database Query Language Report Generator Types of Databases: Operational End User Distributed External Text

Areas of Information Systems Managerial end users need to have a knowledge of five major areas of information systems. They should understand: Several foundation concepts about information systems and their role in organizations. how information systems solution can be developed for business problems. Major concepts and developments in the technology of information systems. The major applications of information systems to end user activities and business operations and management. How to meet the major challenges of managing information system resources and activities  Conceptual Categories of Information systems : Operations Information systems Transaction processing systems Process control systems Automated office systems Information reporting systems Decision Support systems Executive Information Systems End user Computing systems Expert systems Strategic Information Systems Business Function Information Systems   In real world these conceptual classifica

Working Capital which is defined as all the short term assets used in daily operations. Net Working Capital may be defined as the difference between current assets and current liabilities. working capital management is the functional area of finance that covers all the current accounts of the firm. Working Capital comprises of two components: Permanent Working Capital Variable Working Capital    Goals of Working Capital Policies Adequate Liquidity Minimization of Risk Contribute to Maximizing Firm's Value Factors affecting the Need for Working Capital Sales Volume Seasonal and Cyclical Factors Changes to Technology Policies of the firm  Managing Working Capital It involves two processes: Forecasting Needed Funds Acquiring Funds Managing Working Capital requires the following actions: Monitoring Levels of Cash, Receivables and Inventory Knowing percentage of funds in Current Accounts Recording time spent managing Current Accounts H

In a globalised  business environment ,the top down analysis of the prospects of a firm must begin with the global economy. The government employs two broad classes of macroeconomic policies viz. demand -side policies and supply side policies. The former are meant to influence the demand for goods and services and the latter the supply for goods and services. Fiscal policy is concerned with the spending and tax initiatives of the government. Monetary Policy is concerned with the manipulation of money supply in the economy. To determine the intrinsic value of an equity stock the security analyst must forecast the earnings and dividends expected from the stock and choose a discount rate which reflects the riskiness of the stock. The earnings potential and riskiness of a firm are linked to the prospects of the industry to which it belongs. The prospects of various industries, in turn , are largely influenced by the development in the macroeconomic environment. The macroeconomy i

Investment decisions are a trade off between Risk and Return. Risk refers to the possibility that the actual outcome of an investment will differ from its expected outcome. Most investors are concerned about the actual outcome being less than the expected outcome. The wider the range of possible outcomes,the greater the risk. SOURCES OF RISK The three major sources of risk are: Business Risk Interest Rate Risk Market Risk   Business Risk As a holder of corporate securities (equity shares and debentures) you are exposed to risk of poor business performance. This may be caused by a variety of factors like heightened competition, emergence of new technologies, development of substitute products , shifts in consumer preferences, inadequate supply of essential inputs,changes in governmental policies and so on. The principal reason might be inept and incompetent management. Interest Rate Risk The changes in interest rate have a bearing  on the welfare of investors. As th

Two fundamental perspectives -strategic and operational control-provide the basis for designing strategy control systems. Strategic control systems are intended to steer the company toward its long term strategic direction. Four types of strategic controls Premise Controls Implementation controls Strategic surveillance Special alerts Each is designed to meet the top management's needs to track the strategy as its being implemented,detect underlying problems and make necessary adjustments. These strategic controls are linked to the environmental assumptions and key operating requirements necessary for successful strategy implementation.  Operational control systems identify the performance standards associated with allocation and use of company's financial,physical and human resources in pursuit of the strategy. Budgets,schedules and key success factors are the primary means of operational control. Operational control systems require systematic evaluation

Accounting is based on the following concepts: Entity Concept Money measurement Concept Going concern Concept Cost Concept Conservatism Concept Dual Aspect Concept Accounting Period concept Accrual Concept Realisation concept Matching concept Materiality Concept Entity Concept For purposes of Accounting the business firm is regarded as a separate entity.Accounts are maintained for this entity as distinct from the persons who are connected with it. Money Measurement Concept Accounting is concerned with only those facts which are expressible in monetary terms. Going Concern concept Accounting is normally based on the premise that the business entity will remain a going concern for an indefinitely long period and not concern which is likely to be wound up in near future. Cost Concept Assets acquired by a business are generally recorded at their cost. Conservatism Concept Anticipate no profit but provide for all possible losses. Dual Aspect C

FORMS OF BUSINESS COMBINATIONS MERGERS A merger is a combination of two or more businesses in which only one of the corporations survives. The other corporation ceases  to exist and its assets and debt are taken over by the surviving corporation. Thus in a merger of Companies X and Y , company X may continue while Y ceases to exist. The merger may occur in four ways: Purchase of assets Purchase of Common Stock Exchange of Stock for Assets Exchange of Stock for Stock Consolidations A consolidation is a combination of two or more businesses into a third entirely new corporation. The legal and financial characteristics of a consolidation are basically the same as those for a merger. KINDS OF MERGERS Horizontal Merger : This is the joining of two firms in the same areas of business. Examples  would be the combining of two book publishers or two manufacturers of toys. Vertical Merger : This is the joining of two firms involved in different stages of the production or

There are different aspects of control concepts for measurement of effectiveness and efficiency at three different levels of management. Similarly  there are different control concepts for measuring the effectiveness of various units/divisions of firm. One of the important ways of measuring performance of sub-functions,divisions and units is to treat them as separate responsibility centers. A Responsibility Center is an activity center of the corporation entrusted  with a special task. In modern budgeting and control, financial executives tend to develop responsibility centers for purposes of control. They can be classified into three categories: Cost Centers Profit Centers Investment Centers  COST CENTER In the cost center approach , efficiency is measured on the basis of costs incurred in relation to the standard or budgeted costs. Cost center is effective in case of operations such as production,maintenance and certain service departments, as it is not appropriate

Profitability projections are essential to judge the financial desirability of a project. Profitability analysis focuses on: Cost of Production Working Results Break even level   The major components of cost of production are: Material Cost Utilities Cost Labour cost Factory Overhead Cost The most single element of cost,material cost consists of price paid to suppliers, freight expenses and insurance charges. Utilities costs consists of cost of power,water and fuel. Labour costs includes the cost of manpower employed in the factory. Factory overhead cost represents expenses on repairs and maintenance ,light ,rent and taxes, insurance and miscellaneous factory expenses. The statement of working results may reflect the following: Cost of Production Total Administrative Expenses Total Sales Expenses royalty and know-how payable Total Cost of Production Expected Sales Gross Profit before Interest Total financial expenses Depreciation Operating Profit Othe