Management Concepts Compendium topic
Journal
Accounting is the language of business. A business concern has to earn profits when its revenues and expenses are expressed as per the accounting priniciples to remain in business.
Accounting is based on documents that indicate that an asset is transferred to another party for cash or credit, or that a liability is incurred by the business, or that cash is paid for goods or services, or that goods or services are acquired on credit by the business. These accounting documents are called technically as vouchers. These vouchers are given serial numbers in the accounting department so that each and every documents is accounted for in the books of accounts.
Journal is a register kept by accountd department or accounting system. This register is called book of original entry. Every accounting document or voucher is first posted in this register. The posting is done chronologically, i.e., date wise.
In the journal posting, for each accounting transaction documented in the voucher, one account is specified for debit entry and one account is specified for credit entry.
What is the meaning of debit entry and credit entry.
Accounts for various liabilities assets, revenues and expenses are kept in ledger. Another register used in accounting system. All these accounts are classified into three categories.
1. Real accounts
2. Personal accounts
3. Nominal accounts
The meaning of debit and credit is better explained in terms of these different accounts.
For real accounts:
Debiting an account means there is an increase under the asset head.
The firm has acquired more of an asset category.
Crediting an account means there is a decrease under the asset head.
The firm has disposed off some portion of the asset in that category.
Popular rule for real accounts
Debit what comes in
Credit what goes out
Debit-Credit Meaning – Personal Accounts
Debiting a personal account means that person has received a benefit from the firm.
He has to pay the firm in future.
Crediting a personal account means that the person has given some benefit to the firm.
The firm has to pay him in the future.
Popular rule for personal accounts
Debit the receiver
Credit the giver
Debit-credit meaning for nominal accounts
Crediting a nominal account means that revenue is earned by the firm under that account head.
Debiting a nominal account means that an expenditure is incurred by the firm under that account head.
Normally revenue accounts receive credit.
Expenditure accounts receive debit
Popular rule for nominal accounts
Debit expenses and losses
Credit incomes and profits
Thursday, June 5, 2008
Wednesday, June 4, 2008
Attitude
Management Concept Compendium Topic
Attitude
An attitude can be defined as a persistent tendency to feel and behave in a particular way toward some object.
Attidues have three characteristics. They tend to persist unless something is done to change them. Second, attitudes can fall anywhere along a continuum from very favorable to very unfavorable toward specific objects. Third, attitudes are directed toward some object about which a person has feelings and beliefs.
Attitudes can be thought of as having three components - Informational, emotional and behavioral. The informational component consists of the beliefs and information the individual has about the object. The emotional component involves the person’s feelings – positive, negative, or neutral. The behavioral component consists of a person’s tendencies to behave in a particular way toward an object.
Out of the three components, the behavioral component can be directly observed. The other two components can either be inferred from observed behavior or brought out through specially designed questionnaires.
Changing attitudes
Attitudes of people can be changed. There are two basic barriers that can prevent people from changing their attitude. The first one is prior commitment. People feel commitment to a particular course of action and are unwilling to change their attitudes toward objects that are coming in the way of success of their committed course of action. The second barrier is a result of insufficient information.
Approaches to changing attitudes
Providing new information
Sometimes new information will change a person’s belief and in the process change his or her attitude.
Use of fear
A moderate degree of arousing fear may be of help in changing attitudes towards life threatening objects like cigarettes etc.
Influence of friends or peers
Persuasion by friends or peers can change attitudes.
The co-opting approach
In this method, persons with negative attitudes about an object are co-opted in efforts to improve the objects. The process of improvement may change the attitude of person.
Reference
Fred Luthans, Organizational Behavior, 10th edition, McGraw-Hill, New York, 2005
Chapter 7, “Personality and Attitudes”
Attitude
An attitude can be defined as a persistent tendency to feel and behave in a particular way toward some object.
Attidues have three characteristics. They tend to persist unless something is done to change them. Second, attitudes can fall anywhere along a continuum from very favorable to very unfavorable toward specific objects. Third, attitudes are directed toward some object about which a person has feelings and beliefs.
Attitudes can be thought of as having three components - Informational, emotional and behavioral. The informational component consists of the beliefs and information the individual has about the object. The emotional component involves the person’s feelings – positive, negative, or neutral. The behavioral component consists of a person’s tendencies to behave in a particular way toward an object.
Out of the three components, the behavioral component can be directly observed. The other two components can either be inferred from observed behavior or brought out through specially designed questionnaires.
Changing attitudes
Attitudes of people can be changed. There are two basic barriers that can prevent people from changing their attitude. The first one is prior commitment. People feel commitment to a particular course of action and are unwilling to change their attitudes toward objects that are coming in the way of success of their committed course of action. The second barrier is a result of insufficient information.
Approaches to changing attitudes
Providing new information
Sometimes new information will change a person’s belief and in the process change his or her attitude.
Use of fear
A moderate degree of arousing fear may be of help in changing attitudes towards life threatening objects like cigarettes etc.
Influence of friends or peers
Persuasion by friends or peers can change attitudes.
The co-opting approach
In this method, persons with negative attitudes about an object are co-opted in efforts to improve the objects. The process of improvement may change the attitude of person.
Reference
Fred Luthans, Organizational Behavior, 10th edition, McGraw-Hill, New York, 2005
Chapter 7, “Personality and Attitudes”
Personality
Management Concepts Compendium
Personality
Personality is interpreted by Fred Luthans in his textbook as sum of ‘how people affect others’, ‘how they understand and view themselves’ ‘their patterns of inner outer measurable traits’ and ‘their person-situation interaction’.
People’s attempts to understand themselves are called the self-concept in personality theory. The self is a product of many interacting parts. Some of them are self-esteem, multiple intelligences, emotion, optimism and efficacy.
Five-factor model of personality traits
In an article “Personality structure: Emergence of the Five-Factor Model,” published in Annual Review of Psychology, Vol. 41, 1990, Digman identified five personality traits as having significance for performance in the workplace.
They are:
1. Conscientiousness
2. Emotional stability
3. Agreeableness
4. Extraversion
5. Openness to experience
If groups rather than individuals are more important in organizational performance, do these traits have any relevance? It is interesting to note that a recent study found that the higher the average scores of team members on these traits, the better their teams performed.
Myers-Briggs Type Personality Indicator (MBTI)
MBTI is widely used in real world career counseling, team building, conflict management and analyzing management styles. The theory underlying this indicator was originated by Carl Jung. Katharin Briggs and Isable Briggs-Myers developed a 100-item personality test to categorise people into four pairs of traits yielding 16 distinctive types.
They are
Extraversion (E) ---- Introversion (I)
Judging (J) ------ Perceiving (P)
Sensing (S) ------ Intuiting (I)
Thinking (T) ------ Feeling (F)
Different careers are identified as suitable for different personalities.
For example ESTJ personality type extraverted, sensing, thinking and judging.
This type likes to interact with others, sees the world realistically, makes decisions objectively and like structure, schedules, and order, this would be a manager type.
Some more reference papers on Five factor model
M. Zucckerman, D.M.Kuhlman, J.Joireman, P.Teta and M. Kraft, “A Comparison of Three Structural Models for Personality: The Big three, The Big Five, and the Alternative Five,” Journal of Personality and Social Psychology, October 1993, pp. 757-768.
Gregory M. Hurtz and John J. Donovan, “Personality and Job Performance: The Big Five Revisited,” Journal of Applied Psychology, Vol. 85, No. 6, 2000, pp. 869-879.
M.R. Barrick, G.L. Stewart, M.J. Neubert and M.K. Mount, “Relating Member Ability and Personality to Work-Team Processes and Team Effectiveness,” Journal of Applied Psychology, Vol. 83, 1998, pp. 377-391.
Personality
Personality is interpreted by Fred Luthans in his textbook as sum of ‘how people affect others’, ‘how they understand and view themselves’ ‘their patterns of inner outer measurable traits’ and ‘their person-situation interaction’.
People’s attempts to understand themselves are called the self-concept in personality theory. The self is a product of many interacting parts. Some of them are self-esteem, multiple intelligences, emotion, optimism and efficacy.
Five-factor model of personality traits
In an article “Personality structure: Emergence of the Five-Factor Model,” published in Annual Review of Psychology, Vol. 41, 1990, Digman identified five personality traits as having significance for performance in the workplace.
They are:
1. Conscientiousness
2. Emotional stability
3. Agreeableness
4. Extraversion
5. Openness to experience
If groups rather than individuals are more important in organizational performance, do these traits have any relevance? It is interesting to note that a recent study found that the higher the average scores of team members on these traits, the better their teams performed.
Myers-Briggs Type Personality Indicator (MBTI)
MBTI is widely used in real world career counseling, team building, conflict management and analyzing management styles. The theory underlying this indicator was originated by Carl Jung. Katharin Briggs and Isable Briggs-Myers developed a 100-item personality test to categorise people into four pairs of traits yielding 16 distinctive types.
They are
Extraversion (E) ---- Introversion (I)
Judging (J) ------ Perceiving (P)
Sensing (S) ------ Intuiting (I)
Thinking (T) ------ Feeling (F)
Different careers are identified as suitable for different personalities.
For example ESTJ personality type extraverted, sensing, thinking and judging.
This type likes to interact with others, sees the world realistically, makes decisions objectively and like structure, schedules, and order, this would be a manager type.
Some more reference papers on Five factor model
M. Zucckerman, D.M.Kuhlman, J.Joireman, P.Teta and M. Kraft, “A Comparison of Three Structural Models for Personality: The Big three, The Big Five, and the Alternative Five,” Journal of Personality and Social Psychology, October 1993, pp. 757-768.
Gregory M. Hurtz and John J. Donovan, “Personality and Job Performance: The Big Five Revisited,” Journal of Applied Psychology, Vol. 85, No. 6, 2000, pp. 869-879.
M.R. Barrick, G.L. Stewart, M.J. Neubert and M.K. Mount, “Relating Member Ability and Personality to Work-Team Processes and Team Effectiveness,” Journal of Applied Psychology, Vol. 83, 1998, pp. 377-391.
Sunday, June 1, 2008
Knowledge Management
Management concepts compendium initiative
Knowledge management as an idea or practice in the business context must have been there ever since the first business man appeared in the universe.
But in the recent days, a subject of management by the name 'Knowledgement Management' appeared. Knowledge management (KM) is still a relatively young field, with new concepts emerging constantly.
KM is the process through which organizations generate value from their intellectual and knowledge-based assets. Knowledge based assets are to be identified. Most often, generating value from such assets involves codifying what employees, partners and customers know, and sharing that information among employees, departments and even with other companies in an effort to devise best practices. Knowledge management process naturally includes creating knowledge based assets in the first place also. It is important to note that the definition says nothing about technology.
What constitutes intellectual or knowledge-based assets?
Not all information is valuable. Individual companies have to determine what information qualifies as intellectual and knowledge-based assets. In general, however, intellectual and knowledge-based assets fall into one of two categories: explicit or tacit.
Included among the former are books, reports, journals and magazines that are generated by outside agencies. Companies themselves generate explicit knowledge assets such as patents, trademarks, business plans, marketing research and customer lists. As a general rule of thumb, explicit knowledge consists of anything that can be documented and archived.
Tacit knowledge is the know-how contained in people's heads. The challenge inherent in managing tacit knowledge (to make it useful to the organization on a larger scale) is figuring out how to recognize, share and manage it.
At this point of time two distinct categories of tools are available in KM. (i) knowledge management techniques and (ii) knowledge management technologies.
Some of the KM techniques are:
(i) Mentorship programs
(ii) Post mortem meetings
(iii) Regular intra-office or intra-division meetings
(iv) Story telling sessions
(v) Communities of practice
(vi) Centers of excellence
Some of the KM technologies are:
(i) Knowledge storage tools
(ii) Search and retrieval tools
(iii) Collarboration tools
(iv) Communication tools
Reseachers at Accenture find that many companies are not getting bottom line results after implementing knowledge management projects.
Researchers at the Accenture Institute for Strategic Change came out with a framework on knowledge management that aims to deliver results to the organization on implemention. This Knowledge Management Framework is based on the premise that the focus should be placed on the way knowledge is used to build the critical capabilities a company needs in order to succeed—on the core processes and activities that enable it to compete. Enhancing a bank's know-how in evaluating credit risk, for example, should result in reduced loan losses; improving a consumer products company's understanding of customer preferences should increase its percentage of successful new products.
References
http://www.cio.com/article/40343/ABC_An_Introduction_to_Knowledge_Management_KM_/1
http://www.accenture.com/Global/Research_and_Insights/Outlook/By_Alphabet/Knowledgevalue.htm
Sukhpreet Singh of PGDIM program of NITIE (13th batch) did a project on supporting knowledge management initiative of an automobile company and his report was also used in identifying references and in developing this article.
Knowledge management as an idea or practice in the business context must have been there ever since the first business man appeared in the universe.
But in the recent days, a subject of management by the name 'Knowledgement Management' appeared. Knowledge management (KM) is still a relatively young field, with new concepts emerging constantly.
KM is the process through which organizations generate value from their intellectual and knowledge-based assets. Knowledge based assets are to be identified. Most often, generating value from such assets involves codifying what employees, partners and customers know, and sharing that information among employees, departments and even with other companies in an effort to devise best practices. Knowledge management process naturally includes creating knowledge based assets in the first place also. It is important to note that the definition says nothing about technology.
What constitutes intellectual or knowledge-based assets?
Not all information is valuable. Individual companies have to determine what information qualifies as intellectual and knowledge-based assets. In general, however, intellectual and knowledge-based assets fall into one of two categories: explicit or tacit.
Included among the former are books, reports, journals and magazines that are generated by outside agencies. Companies themselves generate explicit knowledge assets such as patents, trademarks, business plans, marketing research and customer lists. As a general rule of thumb, explicit knowledge consists of anything that can be documented and archived.
Tacit knowledge is the know-how contained in people's heads. The challenge inherent in managing tacit knowledge (to make it useful to the organization on a larger scale) is figuring out how to recognize, share and manage it.
At this point of time two distinct categories of tools are available in KM. (i) knowledge management techniques and (ii) knowledge management technologies.
Some of the KM techniques are:
(i) Mentorship programs
(ii) Post mortem meetings
(iii) Regular intra-office or intra-division meetings
(iv) Story telling sessions
(v) Communities of practice
(vi) Centers of excellence
Some of the KM technologies are:
(i) Knowledge storage tools
(ii) Search and retrieval tools
(iii) Collarboration tools
(iv) Communication tools
Reseachers at Accenture find that many companies are not getting bottom line results after implementing knowledge management projects.
Researchers at the Accenture Institute for Strategic Change came out with a framework on knowledge management that aims to deliver results to the organization on implemention. This Knowledge Management Framework is based on the premise that the focus should be placed on the way knowledge is used to build the critical capabilities a company needs in order to succeed—on the core processes and activities that enable it to compete. Enhancing a bank's know-how in evaluating credit risk, for example, should result in reduced loan losses; improving a consumer products company's understanding of customer preferences should increase its percentage of successful new products.
References
http://www.cio.com/article/40343/ABC_An_Introduction_to_Knowledge_Management_KM_/1
http://www.accenture.com/Global/Research_and_Insights/Outlook/By_Alphabet/Knowledgevalue.htm
Sukhpreet Singh of PGDIM program of NITIE (13th batch) did a project on supporting knowledge management initiative of an automobile company and his report was also used in identifying references and in developing this article.
Team Building and Management
Management concepts compendium initiative
A team must be lead by an individual who has the right talent for the role.
Team work is a matter of belief, value or policy. Certain individuals have this knack, or talent, to put people together so that the whole is greater than the sum of the parts. Truly successful teams have a successful team leader at the top.
When each individual of the team believes that team members expect the best from me and the best for me, he responds in a successful manner.
Teams have to utilize members for what they are best at. They should not expose them to areas where their weaknesses are exposed and the probability of failure for the individual member and the team increase.
A good example is given by Luthans in his book. Some people love to get things started. They get bored with things long before they are completed and finished. These people are fire starters. They can be moved from project to project timing their arrival at the point where the analytical types have completed their positive feasibility analysis of a project. There are certain persons who are high-focus detail people. They are good at cleaning the messed up operations. Team leaders or mangers require the talent to spot the special inclinations or talents of team members and have to utilize them rather than seeking to thwart such inclinations.
In a great team, individuals are set up for success according to their strengths.
Reference
Fred Luthans, Organizational Behavior, Ninth Edition, McGraw-Hill Irwin, New York, 2002, page 327
A team must be lead by an individual who has the right talent for the role.
Team work is a matter of belief, value or policy. Certain individuals have this knack, or talent, to put people together so that the whole is greater than the sum of the parts. Truly successful teams have a successful team leader at the top.
When each individual of the team believes that team members expect the best from me and the best for me, he responds in a successful manner.
Teams have to utilize members for what they are best at. They should not expose them to areas where their weaknesses are exposed and the probability of failure for the individual member and the team increase.
A good example is given by Luthans in his book. Some people love to get things started. They get bored with things long before they are completed and finished. These people are fire starters. They can be moved from project to project timing their arrival at the point where the analytical types have completed their positive feasibility analysis of a project. There are certain persons who are high-focus detail people. They are good at cleaning the messed up operations. Team leaders or mangers require the talent to spot the special inclinations or talents of team members and have to utilize them rather than seeking to thwart such inclinations.
In a great team, individuals are set up for success according to their strengths.
Reference
Fred Luthans, Organizational Behavior, Ninth Edition, McGraw-Hill Irwin, New York, 2002, page 327
Industrial Engineering
Industrial engineering is a management discipline that focuses on human effort and efficiency. It emerged out of the management effort put in by engineers in manufacturing and construction fields. Frederick Taylor and Harrington Emerson are the pioneers in the field. Frederick Taylor concentrated on improving the output from human operators in various activities undertaken by him. In the process he developed the philosophy of scientific management. Management has to study the working processes employed by various operators and develop scientific theories about processes. These theories are then empirically verified and methods are designed by managers/engineers that incorporate these scientific theories. The scientific theories used in methods design include theories developed in various human sciences like anatomy, physiology, psychology and sociology. Concepts like fatigue, stress, occupational diseases are a part of industrial engineering theory. In this particular dimension industrial engineering can be referred to as human effort engineering.
Harrington Emerson focused on efficiency of business concerns as a whole as well as that of various functions.
Industrial engineering professional society as it exists today is developed by a merger between a society started by Taylor and a society started by Emerson.
Subjects like statistical quality control, value engineering and operations research became part of industrial engineering due to its efficiency focus.
www.nrao-ie-handbook.blogspot.com
Harrington Emerson focused on efficiency of business concerns as a whole as well as that of various functions.
Industrial engineering professional society as it exists today is developed by a merger between a society started by Taylor and a society started by Emerson.
Subjects like statistical quality control, value engineering and operations research became part of industrial engineering due to its efficiency focus.
www.nrao-ie-handbook.blogspot.com
Marketing
Kotler defines marketing as, “Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating, offering and exchanging products and services of value with others.”
The definition is understood better by having clarity on various terms use din the definition.
A human need is a state of deprivation of some basic necessity for existence. People require food, clothing, shelter, safety, belonging, and esteem. Maslow’s hierarchy of needs is a useful concept to think of in this content. The hierarchy is given as
1. Physiological needs
2. Security needs
3. Social needs
4. Need for power and esteem
5. Self actualization
Wants are desires for specific satisfiers of needs. People of different countries want different things for their lunch. While people’s needs are few, their wants are many. Human wants are continually shaped and reshaped by social forces and institutions that include family, religious organizations, educational institutions, and business firms.
A product is anything that can be offered to people to satisfy a need or want. A product includes in its meaning a tangible good, service or an idea.
People obtain what they want in many ways.
The first way is self production.
The second way is coercion
The third way is begging.
The fourth way is transfer by somebody
The fifth way is exchange.
In exchange two things of value are exchanged between two parties.
Marketing includes actions undertaken to grasp what each party expects to give and get from the transaction or exchange. Then, the business entity has to create products that the other party (consumer) is willing exchange or transact and then complete the exchange at the terms and location desired by the consumer.
Reference
Philip Kotler, Marketing Management: Analysis, Planning, Implementation and Control, Ninth Edition, Prentice Hall, New Jersey, 1997
The definition is understood better by having clarity on various terms use din the definition.
A human need is a state of deprivation of some basic necessity for existence. People require food, clothing, shelter, safety, belonging, and esteem. Maslow’s hierarchy of needs is a useful concept to think of in this content. The hierarchy is given as
1. Physiological needs
2. Security needs
3. Social needs
4. Need for power and esteem
5. Self actualization
Wants are desires for specific satisfiers of needs. People of different countries want different things for their lunch. While people’s needs are few, their wants are many. Human wants are continually shaped and reshaped by social forces and institutions that include family, religious organizations, educational institutions, and business firms.
A product is anything that can be offered to people to satisfy a need or want. A product includes in its meaning a tangible good, service or an idea.
People obtain what they want in many ways.
The first way is self production.
The second way is coercion
The third way is begging.
The fourth way is transfer by somebody
The fifth way is exchange.
In exchange two things of value are exchanged between two parties.
Marketing includes actions undertaken to grasp what each party expects to give and get from the transaction or exchange. Then, the business entity has to create products that the other party (consumer) is willing exchange or transact and then complete the exchange at the terms and location desired by the consumer.
Reference
Philip Kotler, Marketing Management: Analysis, Planning, Implementation and Control, Ninth Edition, Prentice Hall, New Jersey, 1997
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