On Financial & Management AccountingSubmitted To : Submitted By :Raja Agrawal MBA first semester Mobile No 9893142423Signature of TeacherSignature of StudentEvery work, however big or small is a result of joint effort a lot of peoples. This Project is also the same. First of all I would like to thanks our Principal for her efforts provided us a harmonious Environment. My thanks go to HOD literature & books at the time of crisis. Last but the least I would like to thanks our friends for
On Financial & Management Accounting
Submitted To : Submitted By :
Raja Agrawal MBA first semester Mobile No 9893142423
Signature of Teacher
Signature of Student
Every work, however big or small is a result of joint effort a lot of peoples. This Project is also the same. First of all I would like to thanks our Principal for her efforts provided us a harmonious Environment. My thanks go to HOD literature & books at the time of crisis. Last but the least I would like to thanks our friends for providing proper direction & fruitful criticism in completing the Project report. In the end I am also thankful to _____________________ for their guidance & kind cooperation. It would have been impossible for me it complete this project without his help and valuable suggestion for providing me useful
Project Title Business Communication Abstract Communication is neither transmission of message nor message itself. It is the mutual exchange of understanding, originating with the reciever. Communication needs to be effective in business. Communication is essence of management. The basic functions of management (Planning, Organizing, Staffing, Directing and Controlling) cannot be performed well without effective communication. Business communication involves constant flow of information. Feedback is integral part of business communication. Organizations these days are verly large. It involves number of people. There are various levels of hierarchy in an organization. Greater the number of levels, the more difficult is the job of managing the organization. Statistical survey is a method used to collect in a systematic way information from a sample of individuals. Although most people are familiar with public opinion surveys that are reported in the press, most surveys are not public opinion polls (such as political polling), but are used for scientific purposes (HRM) is the strategic and coherent approach to the management of an organization's most valued assets - the people working there who individually and collectively contribute to the achievement of the objectives of the business Managerial economics (sometimes referred to as business economics) is a branch of economics that applies microeconomic analysis to decision methods of businesses or other management units. As such, it bridges economic theory and economics in practice. It draws heavily from
STATISTICS FOR MANAGEMENT
Human Resource Management
quantitative techniques such as regression analysis and correlation, Lagrangian calculus (linear). If there is a unifying theme that runs through most of managerial economics it is the attempt to optimize business decisions given the firm's objectives and given constraints imposed by scarcity, for example through the use of operations research and programming. Management Process and Organization Behavior Organizational Behaviour studies encompasses the study of organizations from multiple viewpoints, methods, and levels of analysis. For instance, one textbook divides these multiple viewpoints into three perspectives: modern, symbolic, and postmodern. Another traditional distinction, present especially in American academia, is between the study of "micro" organizational behavio Management accounting or managerial accounting is concerned with the provisions and use of accounting information to managers within organizations, to provide them with the basis to make informed business decisions that will allow them to be better equipped in their management and control functions.
Financial and Management Accounting
Table of contents
Oral Communication Written Communication
Online Presentation Introduction Steps to Improve Online Presentation The New Concept of Virtual Meeting Ways to Perform Effectively on a Virtual Team
Table of contents
Statistics for management Statistical survey Modes of Data Collection Online surveys Personal in-home survey
Personal mall intercept survey
Rules of Probability Rule of Addition
General Description Statistical error: Type I and Type II
Table of contents
Introduction Features Policy Statement Reason for Policy competence - defining the concepts Predictive competency Listen to Employee Concerns Provide Feedback Expectancy theory Theory Developer
Table of contents
Introduction Price/Output Determination Numerical Example Marginal revenue Explicit cost Price elasticity of demand Point-price elasticity Arc elasticity
Table of contents
Management Process and Organization Behavior Introduction Methods Of Shaping Behavior In Detail Managerial Roles Learning styles
Table of contents
Financial and Management Accounting Introduction CONCEPTS & PRINCIPLES BUSINESS ENTITY CONCEPT GOING CONCERN CONCEPT
Errors revealed by (the preparation of) trial balance Trial Balance Limitations - Shortcomings of trial balance Errors not revealed by (the preparation of) trial balance Regulation and standardization
Business Communication Communication is neither transmission of message nor message itself. It is the mutual exchange of understanding, originating with the reciever. Communication needs to be effective in business. Communication is essence of management. The basic functions of management (Planning, Organizing, Staffing, Directing and Controlling) cannot be performed well without effective communication. Business communication involves constant flow of information. Feedback is integral part of business communication. Organizations these days are verly large. It involves number of people. There are various levels of hierarchy in an organization. Greater the number of levels, the more difficult is the job of managing the organization. Communication here plays a very important role in process of directing and controlling the people in the oragnization. Immediate feedback can be obtained and misunderstandings if any can be avoided. There should be effective communication between superiors and subordinated in an organization, between organization and society at large(for example between management and trade unions). It is essential for success and growth of an organization. Communication gaps should not occur in any organization. Business Communication is goal oriented. The rules, regulations and policies of a company have to be communicated to people within and outside the organization. Business Communication is regulated by certain rules and norms. In early times, business communication was limited to paper-work, telephone calls etc. But now with advent of technology, we have cell phones, video conferencing, emails, satellite communication to support business communication. Effective business communication helps in building goodwill of an organization. Business Communication can be of two types:
1. Oral Communication - An oral communication can be formal or
informal. Generally business communication is a formal means of communication, like : meetings, interviews, group discussion, speeches etc. An example of Informal business communication would be - Grapevine. 2. Written Communication - Written means of business communication includes - agenda, reports, manuals etc.
This is Muralidharan Kuppuswami Iyer from India. Public relations is relatively a narrow one compared to Corporate Communication, which is very broad. In fact, the time has evolved to an extent that the word "public relations" is no more there at least in the corporate areana. Corporate communication encapsulates the functions of public relations. Even today, you can see a lot of Government offices and Public sector companies speaking a lot about "public relations". Mostly they serve locally. For example, if you go to universities, you will find a board hanging right under the head of a person "Public Relations Officer", where he serves the students by answering their questions and clarify doubts etc. So, you can very well assume it as a "local" flavour, an old term. The world has fast changed. The technologies are at their vibrant best. The world has shrinked so much that you can have the entire world brought right at your desktops. Thanks to internet revolution. Business is not local anymore. You find only multi national corporations, where global business is done throgh global presence. It goes without saying that these companies have to deal externally more than internally. A company might communicate with their share holders, place itself in high esteem through best branding globally and so on. Therefore, all these sorts of things necessitated for a new name, which is "corporate communication", which is of course unlike "public relations" really bigger and wider with respect to its roles they play, responsibilities they have towards different segments, the audience they address both locally and globally.
It seems like just about everyone that has a web presence has some sort of product that they want to advertise and promote. They key to advertising and marketing products is to increase the exposure of your product to its target audience. We provide just one more great place for people to get the word out about their products, services, and other stuff that they want to advertise to other people. We started this product advertising site to give people from around the world a great place to advertise products online. All that you need to do is register as a member of our friendly community and you can start advertising your products. You can advertise almost any product on our
website as long as it is in good taste and complies with our rules and posting guidelines. Perhaps you have something that you are selling or a service you are wanting to tell everyone about. Maybe your company needs a place to promote itself and tell everyone about all of your great products.
Brand is the personality that identifies a product, service or company (name, term, sign, symbol, or design, or combination of them) and how it relates to key constituencies: Customers, Staff, Partners, Investors etc. Some people distinguish the psychological aspect, brand associations like thoughts, feelings, perceptions, images, experiences, beliefs, attitudes, and so on that become linked to the brand, of a brand from the experiential aspect. The experiential aspect consists of the sum of all points of contact with the brand and is known as the brand experience. The psychological aspect, sometimes referred to as the brand image, is a symbolic construct created within the minds of people and consists of all the information and expectations associated with a product or service. People engaged in branding seek to develop or align the expectations behind the brand experience, creating the impression that a brand associated with a product or service has certain qualities or characteristics that make it special or unique. A brand is therefore one of the most valuable elements in an advertising theme, as it demonstrates what the brand owner is able to offer in the marketplace. The art of creating and maintaining a brand is called brand management. Orientation of the whole organization towards its brand is called brand orientation. Careful brand management seeks to make the product or services relevant to the target audience. Brands should be seen as more than the difference between the actual cost of a product and its selling price they represent the sum of all valuable qualities of a product to the consumer. There are many intangibles involved in business, intangibles left wholly from the income statement and balance sheet which determine how a business is perceived. The learned skill of a knowledge worker, the type of mental working, the type of stitch: all may be
without an 'accounting cost' but for those who truly know the product, for it is these people the company should wish to find and keep, the difference is incomparable. Online Presentation Introduction In the modern world we have a special tool to where we can communicate with a person or party within a significantly short time, this tool is called the internet. Since modern technology has moved its way in to our modern world we are able to work business with the internet, allowing us to perform business with employees overseas and with clients overseas. Sponsored Links With business conducted over the internet this brings the need of online presentations. In this article you will learn how to propose an online presentation for you overseas clients. Online Presentation Tools Tools are meant to help you to do a certain thing, and fortunately there are tools that help you propose an online presentation. Power Point is considered to be very effective in business presentations is. Using Power Point you can design slides without a limit, such as you may put pictures, animation, sound affects, etc. Proposing an Online Presentation Though a Power Point presentation can be a successful tool when proposing an online presentation for an oversea client, the technique to propose a presentation does not fall in the place. To have well online presentation you must propose a good story, now that’s where the technique falls in. How do I tell a good story? A presentation either online or not it is like a story, it haves a setting, plot, characters, conflict, and a solution. Steps to Improve Online Presentation
Use a font that is readable as well as a font size that is visible.
Elegant and blocky fonts are many times difficult to read so it is important for you to avoid such fonts. • A suggestion on the font size is to keep your font size 32 if not greater, if you use a smaller font size your presentation will be too small for the person to see. • Avoid overdoing your transitions, the Venetian blinds, Wagonwheel, and the checkerboard transitions can be rather amusing but it is difficult to look between slides.
When you are proposing an online presentation for the oversea client, you are doing it with the purpose to persuade the client. Thus is important you have the skills to persuade a client. In order to propose a persuasive message, you want to start by studying the person or audience. Then you want to, with the knowledge of the gathered information, to guide you to present your persuasive message. After you use that strategy begin with citing important information that is relevant to the topic, such as facts, this will then make the person meditate. Then you want to use the opportunity of explaining the reasons of why should the person do such thing and how will it benefit the person. Sponsored Links If you are planning to use the Power Point software do not do overdo your presentation. If you attend to present a lot of data, maybe of a weeks, months, or even a years work information then it will be difficult for the client to analyze the data if it where in a written format, instead use charts, charts will help your client view the data with much ease, charts will certainly summarize your work and make much simpler to visualize. What is Business Communication Service? You have a company, you begin a day's work with a brief meeting with your employees. Later on that day you hang visual graphs of production rates of the past few weeks, where everyone can see. After lunch you get an e-mail concerning a complaint from the customer stating that the product isn’t working properly, so then, you
notify your employees and explain the case after apologizing to the customer about the inconvenience. By the end of the day a shipment has finally arrived from the vendors, containing parts that you’ve been waiting for to finish assembling your product, once again you notify your employees so they can begin preparing. Finally at the end of the day, you receive a call; it turns out to be a customer who is interested in buying your product. What you practically did for a day’s work was communicating, beginning with the brief meeting you had with your employees to the customer you spoke to at the end of the day. The way you communicated at work is what you call “service”. When you had your meeting you communicated with your employees, which is considered to be an internal communication, as when you notified them about the product failure, the arrival of the shipment, and when you hung the Productivity Graphs, all these actions you made are considered internal communication. Not only did you use internal communication but you used external communication also, for instance when you received the e-mail and apologized to the complaining customer, also when you spoke to the client who was interested in purchasing your product. Communication is used so frequently in business, but why would communicating properly be of any importance? In this article you will be notified of the truth to the importance of having good communication service, which is, good communication service will help lead the company to success, the truth because it will bring positive results to the table. Take for example of a father and son, if the father is thinking about his son’s future and how his son could achieve great accomplishments along the way, in order for this to happen, the father must first be a part his son’s life to guide him. The best tool to guide a child is without doubt communication; if the father provides good communication service to his own son the results will indeed be positive.
Another example, of when good communication service is used is when dealing with an angry customer complaining about a defect on the product. You take action by dealing with the customer with patience, and using soothing words with a calm attitude. The results can be dramatic, because you will convert the customer’s negative attitude into a positive attitude and satisfy the customer’s needs, simply because your skills used in communicating with customer made the customer feel more tranquil about the problem, giving you the opportunity to fix the issue. That is why it is very important to provide good communication service internal and external, since you will always end with great results. The New Concept of Virtual Meeting Many times in a business people have stalled in there work simply because of communication glitches. Sometimes communication can’t be successfully performed for the reason being that people can’t communicate because they’re always on the move. In the modern world to achieve and accomplish a set goal people must be sift in operating a job or task, due to the demands of the clients. Sponsored Links Take for example of a case of a person who depended on a certain information that a person from the other side of the world obtained, only that person form the other side of the world is able to send that important information but the person is in the run, simply because the job demands for him to be always in the move. Now it is certain that many have experienced situations like these in which they needed to communicate but couldn’t get to the person or party to meet on time or couldn’t even find the person or party because the person or party was on the run. What can be done as a solution for communication to be performed though these obstacles? Ways to Perform Effectively on a Virtual Team To become successful in working with a virtual team you may want to consider applying the following.
• Use instant messaging • Use a virtual conference • Set up a sharing website • Keep in touch Instant Messaging: Use instant when proposing a meeting. This will allow opinions and answers to be given at a rapid pace. You may also use instant message for training sessions, beneficial and easy especially if you wish to train someone from a distant place. Pretend you are attending a meeting to where you are to be present, and you are sitting in a table where everyone debates there opinions and respond with answers to questions, well instant messaging isn’t different at all. In instant messaging is like if everyone where gathered around a table where everyone exploit their opinions and answers. Instant messaging is also a great tool since it allows you to share files and won’t find the need to wait for a file through e-mail. Virtual Conference: A virtual conference room will be beneficial when you are presenting a formal meeting. If you thought you can only present a power point presentation by being present at a meeting, well think again. In a virtual conference room you are able to make a slide presentation. With a virtual meeting you are also able to perform training session where you can train as many as you want since everyone can see the same information you expose.
STATISTICS FOR MANAGEMENT
Statistical survey is a method used to collect in a systematic way information from a sample of individuals. Although most people are familiar with public opinion surveys that are reported in the press, most surveys are not public opinion polls (such as political polling), but are used for scientific purposes. Surveys provide important information for all kinds of research fields, e.g., marketing research, psychology, health professionals and sociology. . A survey may focus on different topics such as preferences (e.g., for a presidential candidate) , behavior (smoking and drinking behavior), or factual information(e.g., income), depending on its purpose. Since survey research is always based on a sample of the population, the success of the research is dependent on the representativeness of the population of concern (see also sampling (statistics)). Modes of Data Collection There are several ways of administering a survey. The choice between administration modes is influenced by several factors, including 1) costs, 2) coverage of the target population, 3) flexibility of asking questions, 4) respondents’ willingness to participate and 5) response accuracy. Het e the most common modes of administration are listed : Telephone
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use of interviewers encourages sample persons to respond, leading to higher response rates. interviewers can increase comprehension of questions by answering respondents' questions. fairly cost efficient, depending on local call charge structure good for large national (or international) sampling frames some potential for interviewer bias (e.g. some people may be more willing to discuss a sensitive issue with a female interviewer than with a male one) cannot be used for non-audio information (graphics, demonstrations, taste/smell samples) unreliable for consumer surveys in rural areas where telephone density is low three types: o traditional telephone interviews o computer assisted telephone dialing
computer assisted telephone interviewing (CATI)
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the questionnaire may be handed to the respondents or mailed to them, but in all cases they are returned to the researcher via mail. An advantage is, is that cost is very low, since bulk postage is cheap in most countries long time delays, often several months, before the surveys are returned and statistical analysis can begin not suitable for issues that may require clarification respondents can answer at their own convenience (allowing them to break up long surveys; also useful if they need to check records to answer a question) no interviewer bias introduced large amount of information can be obtained: some mail surveys are as long as 50 pages response rates can be improved by using mail panels o members of the panel have agreed to participate o panels can be used in longitudinal designs where the same respondents are surveyed several times
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can use web or e-mail. Web is preferred over e-mail because interactive HTML forms can be used often inexpensive to administer very fast results easy to modify response rates can be improved by using Online panels - members of the panel have agreed to participate honesty of responses can be an issue if not password-protected, easy to manipulate by completing multiple times to skew results data creation, manipulation and reporting can be automated and/or easily exported into a format that can be read by PSPP, DAP or other statistical analysis software data sets created in real time some are incentive based (such as Survey Vault or YouGov)
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may skew sample towards a younger demographic compared with CATI often difficult to determine/control selection probabilities, hindering quantitative analysis of data used in large scale industries.
Personal in-home survey
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respondents are interviewed in person, in their homes (or at the front door) very high cost suitable when graphic representations, smells, or demonstrations are involved often suitable for long surveys (but some respondents object to allowing strangers into their home for extended periods) suitable for locations where telephone or mail are not developed skilled interviewers can persuade respondents to cooperate, improving response rates potential for interviewer bias
Personal mall intercept survey
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shoppers at malls are intercepted - they are either interviewed on the spot, taken to a room and interviewed, or taken to a room and given a self-administered questionnaire socially acceptable - people feel that a mall is a more appropriate place to do research than their home potential for interviewer bias fast easy to manipulate by completing multiple times to skew results
Questionnaire can be sent via mail but schedule is done only personally2. Questionnaire is cheaper method than schedule (for schedule you have to move everywhere3. Questionnaire can be returned without answering all the questions but, in schedule, enumerator ensures the filling all the questions.4. Questionnaire can be filled by anyone but schedule is always filled by enumerator.5. Respondent should be literate & co-operative in Questionnaire but schedule can be filled by illiterate.6. Risk of incomplete & wrong information is more in Questionnaire.7. Physical appearance of Questionnaire has to be
attractive but not such case is necessary with schedule.8.Success of Questionnaire depends on its design but in case of Schedule it depends on honesty & competency of Enumerator. The table shows the data of Expenditure of a family on food, clothing, education, rent and other items. Items Food Clothing Education Rent Others Expenditure 4300 1200 700 2000 600
Depict the data shown in the table using Pie chart.
Food Clothing Education Rent Others
Rules of Probability Often, we want to compute the probability of an event from the known probabilities of other events. This lesson covers some important rules that simplify those computations.
Definitions and Notation Before discussing the rules of probability, we state the following definitions:
Two events are mutually exclusive if they have no sample points in common. The probability that Event A occurs, given that Event B has occurred, is called a conditional probability. The conditional probability of A, given B, is denoted by the symbol P(A|B). The probability that event A will not occur is denoted by P(A').
Probability Calculator Use the Probability Calculator to compute the probability of an event from the known probabilities of other events. The Probability Calculator is free and easy to use. It can be found under the Stat Tools tab, which appears in the header of every Stat Trek web page. Probability Calculator Rule of Subtraction In the previous lesson, we learned two important properties of probability:
The probability of a sample point ranges from 0 to 1. The sum of probabilities of all the sample points in a sample space equals 1.
The rule of subtraction follows directly from these properties.
Rule of Subtraction The probability that event A will occur is equal to 1 minus the probability that event A will not occur. P(A) = 1 - P(A') Rule of Multiplication The rule of multiplication applies to the following situation. We have two events from the same sample space, and we want to know the probability that both events occur. Rule of Multiplication If events A and B come from the same sample space, the probability that both A and B occur is equal to the probability the event A occurs times the probability that B occurs, given that A has occurred. P(A ∩ B) = P(A) * P(B|A) Example 1 An urn contains 6 red marbles and 4 black marbles. Two marbles are drawn without replacement from the urn. What is the probability that both of the marbles are black? Solution: Let A = the event that the first marble is black; and let B = the event that the second marble is black. We know the following:
In the beginning, there are 10 marbles in the urn, 4 of which are black. Therefore, P(A) = 4/10. After the first selection, there are 9 marbles in the urn, 3 of which are black. Therefore, P(B|A) = 3/9.
Therefore, based on the rule of multiplication: P(A ∩ B) = P(A) P(B|A) P(A ∩ B) = (4/10)*(3/9) = 12/90 = 2/15 Example 2 Suppose we repeat the experiment of Example 1; but this time we select
marbles with replacement. That is, we select one marble, note its color, and then replace it in the urn before making the second selection. When we select with replacement, what is the probability that both of the marbles are black? Solution: Let A = the event that the first marble is black; and let B = the event that the second marble is black. We know the following:
In the beginning, there are 10 marbles in the urn, 4 of which are black. Therefore, P(A) = 4/10. After the first selection, we replace the selected marble; so there are still 10 marbles in the urn, 4 of which are black. Therefore, P(B|A) = 4/10.
Therefore, based on the rule of multiplication: P(A ∩ B) = P(A) P(B|A) P(A ∩ B) = (4/10)*(4/10) = 16/100 = 4/25 Rule of Addition The rule of addition applies to the following situation. We have two events from the same sample space, and we want to know the probability that either event occurs. Rule of Addition If events A and B come from the same sample space, the probability that event A and/or event B occur is equal to the probability that event A occurs plus the probability that event B occurs minus the probability that both events A and B occur. P(A ∪ B) = P(A) + P(B) - P(A ∩ B) Note: Invoking the fact that P( A ∩ B ) = P( A )P( B | A ), the Addition Rule can also be expressed as P(A ∪ B) = P(A) + P(B) - P(A) * P( B | A )
Example 1 A student goes to the library. The probability that she checks out (a) a work of fiction is 0.40, (b) a work of non-fiction is 0.30, , and (c) both fiction and non-fiction is 0.20. What is the probability that the student checks out a work of fiction, non-fiction, or both? Solution: Let F = the event that the student checks out fiction; and let N = the event that the student checks out non-fiction. Then, based on the rule of addition: P(F ∪ N) = P(F) + P(N) - P(F ∩ N) P(F ∪ N) = 0.40 + 0.30 - 0.20 = 0.50 Example 2 A card is drawn randomly from a deck of ordinary playing cards. You win $10 if the card is a spade or an ace. What is the probability that you will win the game? Solution: Let S = the event that the card is a spade; and let A = the event that the card is an ace. We know the following:
There are 52 cards in the deck. There are 13 spades, so P(S) = 13/52. There are 4 aces, so P(A) = 4/52. There is 1 ace that is also a spade, so P(S ∩ A) = 1/52.
Therefore, based on the rule of addition: P(S ∪ A) = P(S) + P(A) - P(S ∩ A) P(S ∪ A) = 13/52 + 4/52 - 1/52 = 16/52 = 4/13 Conditional Probability Problem: A math teacher gave her class two tests. 25% of the class passed both tests and 42% of the class passed the first test. What percent of those who passed the first test also passed the second test? Analysis: This problem describes a conditional probability since
it asks us to find the probability that the second test was passed given that the first test was passed. In the last lesson, the notation for conditional probability was used in the statement of Multiplication Rule 2. Multiplication Rule 2: When two events, A and B, are dependent, the probability of both occurring is:
The formula for the Conditional Probability of an event can be derived from Multiplication Rule 2 as follows: Start with Multiplication Rule 2.
Divide both sides of equation by P(A).
Cancel P(A)s on right-hand side of equation.
Commute the equation. We have derived the formula for conditional probability. Now we can use this formula to solve the problem at the top of the page. Problem: A math teacher gave her class two tests. 25% of the class passed both tests and 42% of the class passed the first test. What percent of those who passed the first test also passed the second test? P(First and 0.2 Solution: P(Second| = Second) = 5 = 0.6 = 60 First) P(First) 0.4 0 % 2
Let's look at some other problems in which we are asked to find a conditional probability. Example 1: A jar contains black and white marbles. Two marbles are chosen without replacement. The probability of selecting a black marble and then a white marble is 0.34, and the probability of selecting a black marble on the first draw is 0.47. What is the probability of selecting a white marble on the second draw, given that the first marble drawn was black? Solution: P(Black and 0.3 P(White| = White) = 4 = 0.7 = 72 Black) P(Black) 0.4 2 % 7 Example The probability that it is Friday and that a student is absent 2: is 0.03. Since there are 5 school days in a week, the probability that it is Friday is 0.2. What is the probability that a student is absent given that today is Friday? Solution: P(Friday and 0.0 P(Absent| = = = 0.1 = 15 Absent) 3 Friday) 5 % P(Friday) 0.2 Example At Kennedy Middle School, the probability that a student 3: takes Technology and Spanish is 0.087. The probability that a student takes Technology is 0.68. What is the probability that a student takes Spanish given that the student is taking Technology? Solution: P(Technology and 0.08 P(Spanish| = = = 0.1 = 13 Spanish) 7 Technology) 3 % P(Technology) 0.68 Summary: The conditional probability of an event B in relationship to an event A is the probability that event B occurs given that event A has already occurred. The notation for conditional probability is P(B|A), read as the probability of B given A. The formula for conditional probability is:
The Venn Diagram below illustrates P(A), P(B), and
P(A and B). What two sections would have to be divided to find P(B|A)? Answer
General Description There are two types of statistical inferences: estimation of population parameters and hypothesis testing. Hypothesis testing is one of the most important tools of application of statistics to real life problems. Most often, decisions are required to be made concerning populations on the basis of sample information. Statistical tests are used in arriving at these decisions. There are five ingredients to any statistical test : (a) Null Hypothesis (b) Alternate Hypothesis (c) Test Statistic (d) Rejection/Critical Region (e) Conclusion In attempting to reach a decision, it is useful to make an educated guess or assumption about the population involved, such as the type of distribution. Statistical Hypotheses : They are defined as assertion or conjecture about the parameter or parameters of a population, for example the mean or the variance of a normal population. They may also concern the type, nature or probability distribution of the population. Statistical hypotheses are based on the concept of proof by contradiction. For example, say, we test the mean ( of a population to ) see if an experiment has caused an increase or decrease in . We do this by proof of contradiction by formulating a null hypothesis. Null Hypothesis : It is a hypothesis which states that there is no difference between the procedures and is denoted by H0. For the above example the corresponding H0 would be that there has been no increase or decrease in the mean. Always the null hypothesis is tested, i.e., we
want to either accept or reject the null hypothesis because we have information only for the null hypothesis. Alternative Hypothesis : It is a hypothesis which states that there is a difference between the procedures and is denoted by HA. Table 1. Various types of H0 and HA Case 1 2 3 Null Hypothesis H 0 = Alternate Hypothesis H A
Test Statistic : It is the random variable X whose value is tested to arrive at a decision. The Central Limit Theorem states that for large sample sizes (n > 30) drawn randomly from a population, the distribution of the means of those samples will approximate normality, even when the data in the parent population are not distributed normally. A z statistic is usually used for large sample sizes (n > 30), but often large samples are not easy to obtain, in which case the tdistribution can be used. The population standard deviation is estimated by the sample standard deviation, s. The t curves are bell shaped and distributed around t=0. The exact shape on a given t-curve depends on the degrees of freedom. In case of performing multiple comparisons by one way Anova, the F-statistic is normally used.It is defined as the ratio of the mean square due to the variability between groups to the mean square due to the variability within groups. The critical value of F is read off from tables on the F-distribution knowing the Type-I error and the degrees of freedom between & within the groups. Rejection Region : It is the part of the sample space (critical region) where the null hypothesis H0 is rejected. The size of this region, is determined by the probability ( ) of the sample point falling in the critical region when H0 is true. is also known as the level of significance, the probability of the value of the random variable falling
in the critical region. Also it should be noted that the term "Statistical significance" refers only to the rejection of a null hypothesis at some level .It implies only that the observed difference between the sample statistic and the mean of the sampling distribution did not occur by chance alone. Conclusion : If the test statistic falls in the rejection/critical region, H0 is rejected, else H0 is accepted. Statistical error: Type I and Type II Statisticians speak of two significant sorts of statistical error. The context is that there is a "null hypothesis" which corresponds to a presumed default "state of nature", e.g., that an individual is free of disease, that an accused is innocent. Corresponding to the null hypothesis is an "alternative hypothesis" which corresponds to the opposite situation, that is, that the individual has the disease, that the accused is guilty. The goal is to determine accurately if the null hypothesis can be discarded in favor of the alternative. A test of some sort is conducted and data are obtained. The result of the test may be negative (that is, it does not indicate disease, guilt). On the other hand, it may be positive (that is, it may indicate disease, guilt). If the result of the test does not correspond with the actual state of nature, then an error has occurred, but if the result of the test corresponds with the actual state of nature, then a correct decision has been made. There are two kinds of error, classified as "type I error" and "type II error," depending upon which hypothesis has incorrectly been identified as the true state of nature. Type I error Type I error, also known as an "error of the first kind", an α error, or a "false positive": the error of rejecting a null hypothesis when it is actually true. Plainly speaking, it occurs when we are observing a difference when in truth there is none, thus indicating a test of poor specificity. An example of this would be if a test shows that a woman is pregnant when in reality she is not, or telling a patient he is sick when in fact he is not. Type I error can be viewed as the error of excessive credulity.
In other words, a Type I error means that a positive inference is actually false. Type II error Type II error, also known as an "error of the second kind", a β error, or a "false negative": the error of failing to reject a null hypothesis when in fact we should have rejected it. In other words, this is the error of failing to observe a difference when in truth there is one, thus indicating a test of poor sensitivity. An example of this would be if a test shows that a woman is not pregnant, when in reality, she is. Type II error can be viewed as the error of excessive skepticism. In other words, a Type II error means that a negative inference is actually false.
Human Resource Management
Human resource management (HRM) is the strategic and coherent approach to the management of an organization's most valued assets the people working there who individually and collectively contribute to the achievement of the objectives of the business. The terms "human resource management" and "human resources" (HR) have largely replaced the term "personnel management" as a description of the processes involved in managing people in organizations. In simple words, HRM means employing people, developing their capacities, utilizing, maintaining and compensating their services in tune with the job and organizational requirement. Features Its features include:
• • • •
But these traditional expressions are becoming less common for the theoretical discipline. Sometimes even employee and industrial relations are confusingly listed as synonyms, although these normally refer to the relationship between management and workers and the behavior of workers in companies. The theoretical discipline is based primarily on the assumption that employees are individuals with varying goals and needs, and as such should not be thought of as basic business resources, such as trucks and filing cabinets. The field takes a positive view of workers, assuming that virtually all wish to contribute to the enterprise productively, and that the main obstacles to their endeavors are lack of knowledge, insufficient training, and failures of process. Human Resource Management(HRM) is seen by practitioners in the field as a more innovative view of workplace management than the traditional approach. Its techniques force the managers of an enterprise to express their goals with specificity so that they can be understood and undertaken by the workforce, and to provide the resources needed for them to successfully accomplish their assignments. As such, HRM techniques, when properly practiced, are expressive of the goals and
operating practices of the enterprise overall. HRM is also seen by many to have a key role in risk reduction within organisations. Synonyms such as personnel management are often used in a more restricted sense to describe activities that are necessary in the recruiting of a workforce, providing its members with payroll and benefits, and administrating their work-life needs. So if we move to actual definitions, Torrington and Hall (1987) define personnel management as being: “a series of activities which: first enable working people and their employing organisations to agree about the objectives and nature of their working relationship and, secondly, ensures that the agreement is fulfilled" (p. 49). While Miller (1987) suggests that HRM relates to: ".......those decisions and actions which concern the management of employees at all levels in the business and which are related to the implementation of strategies directed towards creating and sustaining competitive advantage" Salary and wage administration is the process of compensating an organization's employees in accordance with accepted policy and procedures. An important component of a successful organization's salary and wage administration policy is monitoring and evaluating all employees' compensation to ensure that they're being paid appropriately, both with respect to others in the same organization and to the marketplace as a whole. Salary and wage administration is often an integral function of the organization's human resources department, but in general, the larger the organization, the more likely is is that it will be handled by a separate department. Policy Statement The University System of Georgia recognizes the importance of employees to the mission of the System and its member’s institutions. Therefore, the USG authorizes institutions to develop and administer wage and salary administration programs to ensure fair and equitable
pay among their employees. Such a program shall provide guidance on an employee’s salary at the time of hire, performance based increases, and other salary adjustments when necessary and warranted. Such a program will also recognize that all salaries are subject to budgetary authorization and funding limitations. Reason for Policy To provide institutions with the authority to develop and administer a wage and salary administration program and to ensure fair and equitable pay. competence - defining the concepts The concept of competence has different meanings. It is not always immediately clear which of the many forms of competence is being used or discussed. Four influential (but confusing) definitions during the last decade can be summarised as:
1. predictive competency - i.e. testing the characteristics and
aptitudes that are likely to differentiate superior performers. 2. organisational core competencies - i.e. aggregates of capabilities, where synergy is created that has sustainable value and broad applicability for an organisation. 3. proven competence - i.e. a real and demonstrated ability to successfully carry out some activity which is totally identified. 4. adaptive competence - i.e. 'metacompetence' or the ability to read a new situation and adapt/apply appropriate competences. Predictive competency Predictive competency derived largely from the work of David McClelland, a Harvard psychologist involved in psychometric testing, (and founder of the McBer consultancy). His 1973 article Testing for Competence Rather Than for Intelligence stimulated interest, and a former student, Richard Boyatzis, popularised the term competency
in his 1982 book The Competent Manager. Many large companies apply the concepts in one form or another but usually only for their high-potential personnel. "As a job becomes more complex the less excellence is a function of task mastery and more a function of other, less tangible qualities" [Hunter, Schmidt & Judiesch, Journal of Applied Psychology, 1990]. Most corporate systems, however, do not use the sophisticated tests envisaged by McClelland, but rely on assessment (or self-assessment) against 'competency statements.' One major company, for example, has a Group 'Competency Framework' which describes in detail by corporate function "the things that people need to be good at if they are to be effective in the jobs and meet the needs of the organisation." Organisational core competencies In the second definition, organisational core competencies are characteristics of the organisation as a whole, not of individuals. Prahalad and Hamel, two business academics, introduced the concept in a 1990 Harvard Business Review article. A core competency is "an area of specialised expertise that is the result of harmonising complex streams of technology and work activity." The example used was Honda's expertise in engines. Core competencies provide a set of unifying principles for the organisation, they are pervasive in all strategies, they provide access to a variety of markets, they are critical in producing end products, and they are rare or difficult to imitate. The concept became highly fashionable in the mid-1990s. Proven competence Both the above definitions were widely used in hazardous industries in the period following the Cullen Report, but they concerned probability rather than proof of competence. Duty holders needed proven competence, and therefore turned to the third definition. In most cases, they borrowed from the VQ structure to define competence as: "the ability of people to perform work to a set standard in employment."
In this definition, competence is judged by what people produce in the course of their work, not what they put into it. This means that competence focuses on the outputs from activities, not inputs. It is not what they know or have learned about, but what they implement when they do the job. It means that what the workers produce is considered and compared with a standard, to check that it exceeds the minimum acceptable level of performance. Managers are often concerned with employee morale and finding ways to improve it. According to an article on the Entrepreneur website, morale in the workplace is the final result of factors present in the work environment including salary, working conditions, status and job satisfaction. Employers may notice symptoms of low morale, such as apathy, low productivity, decreased quality and more absenteeism. To combat low employee morale, employers must be willing to make lasting, positive changes. Listen to Employee Concerns If you detect employee morale is slipping, try talking about it with individual workers. If employees are willing to be open and share their concerns, ask them for their ideas to improve the work environment. If the workforce greets your inquiries with suspicion, consider asking them to complete an anonymous job satisfaction questionnaire. Motivate Your Employees SnapDeal.com/Motivational-Ideas Gift Vouchers for Every Interest, Every Occasion & Everyone. Buy Now! Sponsored Links Give Employees Clear Expectations If workers do not understand the expectations of their job, morale will suffer. Make sure that training materials and job descriptions are upto-date and accurate. Try to give employees plenty of advance notice regarding changes in policy or work volume that will affect them.
Set Mutually Acceptable Goals Morale should start to rise if employees are working toward goals they helped set. Give every employee the opportunity to participate in setting work-related goals. Find out if they need additional training or resources to be successful, and encourage them in their efforts. Provide Feedback Take the time to let employees know how they are doing. If they are under performing, find out if they need more training or have personal problems that are affect their work. Be sure to recognize exceptional performance and show your appreciation. Show Concern Spend a few moments each day speaking individually to employees. Speak to them by name and ask them how things are going. Show genuine concern if employees share problems or struggles. Be Persistent in Efforts Turning around low employee morale does not happen overnight. In fact, a short lived, half-hearted effort to improve the work environment will likely make things worse. Some employees may view your attempts to improve morale with cynicism, but if you persist, you can prove you are sincere. Expectancy theory Expectancy Theory proposes that a person will decide to behave or act in a certain way because they are motivated to select a specific behavior over other behaviors due to what they expect the result of that selected behavior will be. In essence, the motivation of the behavior selection is determined by the desirability of the outcome. However, at the core of the theory is the cognitive process of how an individual processes the different motivational elements. This is done before making the ultimate choice. The outcome is not the sole determining factor in making the decision of how to behave.
Expectancy theory is about the mental processes regarding choice, or choosing. It explains the processes that an individual undergoes to make choices. In the study of organizational behavior, expectancy theory is a motivation theory first proposed by Victor Vroom of the Yale School of Management. "This theory emphasizes the needs for organizations to relate rewards directly to performance and to ensure that the rewards provided are those rewards deserved and wanted by the recipients."  Victor H. Vroom (1964) defines motivation as a process governing choices among alternative forms of voluntary activities, a process controlled by the individual. The individual makes choices based on estimates of how well the expected results of a given behavior are going to match up with or eventually lead to the desired results. Motivation is a product of the individual’s expectancy that a certain effort will lead to the intended performance, the instrumentality of this performance to achieving a certain result, and the desirability of this result for the individual, known as valence. (S.E. Condrey, 2005, p. 482) Theory Developer In 1964, Victor H. Vroom developed the Expectancy theory through his study of the motivations behind decision making. He wanted to better understand why people chose to behave in a certain way. Vroom’s theory is relevant to the study of management and has become even more important as managers try to gain a better understanding of what motivates their employees to behave in certain ways. Vroom has written nine books, however his book Work and Motivation (1964) is regarded as a breakthrough in the study of leadership and decision making within organizations. Currently, Vroom is a John G. Searle Professor of Organization and Management at the Yale University School of Management.
Introduction (sometimes referred to as business economics) is a branch of economics that applies microeconomic analysis to decision methods of businesses or other management units. As such, it bridges economic theory and economics in practice. It draws heavily from quantitative techniques such as regression analysis and correlation, Lagrangian calculus (linear). If there is a unifying theme that runs through most of managerial economics it is the attempt to optimize business decisions given the firm's objectives and given constraints imposed by scarcity, for example through the use of operations research and programming. Almost any business decision can be analyzed with managerial economics techniques, but it is most commonly applied to:
Risk analysis - various models are used to quantify risk and asymmetric information and to employ them in decision rules to manage risk. Production analysis - microeconomic techniques are used to analyze production efficiency, optimum factor allocation, costs, economies of scale and to estimate the firm's cost function. Pricing analysis - microeconomic techniques are used to analyze various pricing decisions including transfer pricing, joint product pricing, price discrimination, price elasticity estimations, and choosing the optimum pricing method. Capital budgeting - Investment theory is used to examine a firm's capital purchasing decisions.
At universities, the subject is taught primarily to advanced undergraduates and graduate business schools. It is approached as an integration subject. That is, it integrates many concepts from a wide variety of prerequisite courses. In many countries it is possible to read for a degree in Business Economics which often covers managerial economics, financial economics, game theory, business forecasting and industrial economics. Price discrimination is the practice of one retailer, wholesaler, or manufacturer charging different prices for the same items to different customer. This is a widespread practice that does not necessarily imply negative discrimination. Early forms of price discrimination certainly existed in Jim Crow law states, where a black consumer might very
likely pay more for the same quantity and items than a white consumer would. In general, this type of price discrimination is very rare today Price discrimination, as it is now understood, is separated into degrees. First, second and third degree price discrimination exist and apply to different pricing methods used by companies. Much depends on the understanding of the market in segments, and also the consumer’s ability to pay a higher or lower price, called elasticity of demand. A person who might pay more for an item is thought to have a low elasticity of demand. Another person who will not pay as much has a high elasticity of demand. First-degree price discrimination occurs when identical goods are sold at different prices to each individual consumer. Obviously, the seller is not always going to be able to identify who is willing to pay more for certain items, but when he or she can, his profit increases. You can see this type of price discrimination in the sale of both new and used cars. People will pay different prices for cars with identical features, and the salesperson must attempt to gauge the maximum price at which the car can be sold. This type of price discrimination often includes a bargaining aspect, where the consumer attempts to negotiate a lower price. Second-degree price discrimination refers to companies charging lower prices for higher quantities. In companies where a client orders in bulk and is able to purchase a high number of the same items at once, the client may get a discounted rate. This rate would not apply to a client who only orders a few items at a time. In retail stores, second-degree price discrimination often exists. A reduced price may be offered if you buy two t-shirts instead of just one. This form helps to get rid of merchandise and generate more revenue for a company. Third degree price discrimination is based on understanding the market, and occurs with great frequency. This type takes many different forms, but in all cases attempts to derive the most sales from each segmented “group” of consumers. For example, senior citizens are considered a group, and are often offered discounts at movie theaters, for transportation, in restaurants, and even in retail stores where seniors may have a “senior day” each week that allows them to take a discount on merchandise. “Students” are another segmented
group that may be offered lower prices. Both seniors and students have a higher elasticity of demand and can generally afford to pay less than the average worker. Market segmentation may also evaluate the socio-economic aspects of an area when considering elasticity of demand. It’s not uncommon to see retail grocery stores offer differing prices in an area where the retailer knows he can get more money for a product. Alternately, where only one chain store exists in a certain location, retail grocery stores might offer higher prices because people have no alternative place to shop. Price/Output Determination Price/Output Determination. Tallahasse Cars Unlimited, Inc., a rapidly expanding new entrant to this area, is considering two proposals for the provision of its cosmetic detailing of cars (washing, waxing, polishing, engine cleaning, etc.). First, a large janitorial agency with some experience in the detailing of cars has offered to purchase the business detailing equipment in return for an exclusive francise. A second proposal would allow several small contractors to enter the business without any exclusive franchise agreement or competitive restrictions. Under this plan, individuals would bid for the right to provide service on groups of cars as they were delivered to the lot, presumably based on how busy they were at the time. The car lot would then allocate business to the lowest bidder. TCU has conducted a study of its past sales records and the amount of detailing spent on each car, and the premium over book value recouped in the sale to estimate the amount they would be willing to pay for various amounts of detailing. The car lot has also estimated the total cost of service per car. Service costs are expected to be the same whether or not an exclusive franchise is granted. To instigate bidding, TCU guarantees the winner of any bid a minimum per car, whether or not the service is used Total revenue From Wikipedia, the free encyclopedia Jump to: navigation, search
Total revenue is the total money received from the sale of any given quantity of output. The total revenue is calculated as the selling price of the firm's product times the quantity sold, i.e. total revenue = price × quantity; or letting TR be the total revenue function, TR(Q) = P(Q) × Q where Q is the quantity of output sold, and P(Q) is the inverse demand function (the demand function solved out for price in terms of quantity demanded). Numerical Example A promoter has properly estimated the demand curve for seats at an event to be Q = 40,000 − 2000P where P is the price of a seat. The inverse demand curve, which determines price as a function of quantity, is therefore represented by P(Q) = 20 − Q / 2000. We therefore have TR(Q) = 20Q − Q2 / 2000 Marginal revenue From Wikipedia, the free encyclopedia Jump to: navigation, search In microeconomics, marginal revenue (MR) is the extra revenue that an additional unit of product will bring. It is the additional income from selling one more unit of a good; sometimes equal to price. It can also be described as the change in total revenue divided by the change in the number of units sold.
Definition More formally, marginal revenue is equal to the change in total revenue over the change in quantity when the change in quantity is equal to one unit. This can also be represented as a derivative when the units of output are arbitrarily small. (Total revenue) = (Price that can be charged consistent with selling a given quantity) times (Quantity) or . Thus, by the product rule:
For a firm facing perfectly competitive markets, price does not change with quantity sold ( ), so marginal revenue is equal to price. For
a monopoly, the price received will decline with quantity sold ( ), so marginal revenue is less than price. This means that the profitmaximizing quantity, for which marginal revenue is equal to marginal cost (MC) will be lower for a monopoly than for a competitive firm, while the profit-maximizing price will be higher. When demand is elastic, marginal revenue is positive, and when demand is inelastic, marginal revenue is negative. When the price elasticity of demand is equal to 1, marginal revenue is equal to zero. First numerical example A promoter has properly estimated the demand curve for seats at an event to be Q = 40,000 − 2000P where P is the price of a seat. The inverse demand curve, which determines price as a function of quantity, is therefore represented by P(Q) = 20 − Q / 2000. We therefore have TR(Q) = 20Q − Q2 / 2000.
Marginal revenue is the slope of total revenue: MR(Q) = 20 − Q / 1000. Second numerical example Assume the inverse demand function has the form P = 120 - .5Q. Total revenue equals price times quantity. Multiplying the inverse demand function by Q to derive the total revenue function gives: TR = (120 0.5Q) x Q = 120Q - 0.5Q². The marginal revenue function is the first derivative of the total revenue function or MR = 120 - Q. Note that the MR function has the same y-intercept as the inverse demand function, the x-intercept of the MR function is one-half the value of the inverse demand function and the slope of the MR function is twice that of the inverse demand function. This relationship holds true for all linear demand equations. The importance of being able to quickly calculate MR is that the profit maximizing condition for firms regardless of market structure is to produce where marginal revenue equals marginal cost (MC). To derive MC you take the first derivative of the total cost function, and then equate MR to MC and solve for Q. Thus assume that the firm's cost function is C = 420 +60Q +Q² 2. The first derivative of the cost function is MC = 60 +2Q. Equating MR and MC gives 120 - Q = 60 +2Q. Solving for Q gives Q = 20. To find the profit maximizing price simply plug Q into the price equation: P = 120 -.5Q = 120 = .5(20) = 120 - 10 = 110. Implicit cost In economics, an implicit cost, also called an imputed cost, implied cost, or notional cost, is the opportunity cost equal to what a firm must give up in order to use factors which it neither purchases nor hires. It is the opposite of an explicit cost, which is borne directly. In other words, an implicit cost is any cost that results from using an asset instead of renting, selling, or lending it. The term also applies to forgone income from choosing not to work. Implicit costs also represent the divergence between economic profit (total revenues minus total costs, where total costs are the sum of implicit and explicit costs) and accounting profit (total revenues minus only explicit costs). Since economic profit includes these extra
opportunity costs, it will always be less than or equal to accounting profit. Lipsey (1975) uses the example of a firm sitting on an expensive plot worth £10,000 a month in rent which it bought for a mere £50 a hundred years before. If the firm cannot obtain a profit after deducting £10,000 a month for this implicit cost, it ought to move premises (or close down completely) and take the rent instead. In calculating this figure, the firm ought to ignore the figure of £50, and remember instead to look at the land's current value. Explicit cost An explicit cost is a direct payment made to others in the course of running a business, such as wage, rent and materials, as opposed to implicit costs, which are those where no actual payment is made. It is possible still to underestimate these costs, however: for example, pension contributions and other "perks" must be taken into account when considering the cost of labour. Explicit costs are taken into account along with implicit ones when considering economic profit. Accounting profit only takes explicit costs into account. LAW OF VARIABLE PROPORTIONS In short-period when the output of a production is sought to be increased by way of additional application of the variable factor to a given quantity of fixed factors, law of variable proportions comes into operation. The law of variable proportions is that law which predicts the consequences of varying the proportions in which the fixed and variable factors of production are used. When the number of one factor is increased while all other factors remain constant, then the proportion between the fixed and variable factors is altered. Supposing there are two factors of production i.e. land and labour. Land is fixed factor and labour is a variable factor. Suppose you have a land
measuring 2 hectares. You grow tomatoes on it with the help of a labourer. Accordingly the proportion between labour and land will be 1:2. If the number of labourers is increased to 2 then the new proportion between labour and land will be 2:2, in other words, if there were 2 hectares of land per labourer previously, now there will be 1 hactare of land per laborer. On account of change in the proportion of factors there will also be a change in total output at different rates. In Economics, this tendency is called Law of Variable Proportions. The law of variable proportions stats that as the proportion of factors is changed, the total production at first increases more than proportionately, then equalproportionately and finally less than proportionately. The classical economists called it the Law of Diminishing Returns. They derived it by applying more and more labour to a fixed acreage of land, and thought of it as associated particularly with agriculture. But it is a general principle that can be applied to any production operation. It is now usually called the Law of Variable Proportions. It can also be called the Law of Diminishing Marginal product or Diminishing Marginal Returns or simply as Diminishing Returns.
Price elasticity of demand (PED or Ed) is a measure used in economics to show the responsiveness, or elasticity, of the quantity demanded of a good or service to a change in its price. More precisely, it gives the percentage change in quantity demanded in response to a one percent change in price (holding constant all the other determinants of demand, such as income). It was devised by Alfred Marshall.
Price elasticities are almost always negative, although analysts tend to ignore the sign even though this can lead to ambiguity. Only goods which do not conform to the law of demand, such as Veblen and Giffen goods, have a positive PED. In general, the demand for a good is said to be inelastic (or relatively inelastic) when the PED is less than one (in absolute value): that is, changes in price have a relatively small effect on the quantity of the good demanded. The demand for a good is said to be elastic (or relatively elastic) when its PED is greater than one (in absolute value): that is, changes in price have a relatively large effect on the quantity of a good demanded. Revenue is maximised when price is set so that the PED is exactly one. The PED of a good can also be used to predict the incidence (or "burden") of a tax on that good. Various research methods are used to determine price elasticity, including test markets, analysis of historical sales data and conjoint analysis. Point-price elasticity One way to avoid the accuracy problem described above is to minimise the difference between the starting and ending prices and quantities. This is the approach taken in the definition of point-price elasticity, which uses differential calculus to calculate the elasticity for an infinitesimal change in price and quantity at any given point on the demand curve: 
In other words, it is equal to the absolute value of the first derivative of quantity with respect to price (dQd/dP) multiplied by the point's price (P) divided by its quantity (Qd). In terms of partial-differential calculus, point-price elasticity of demand can be defined as follows: let be the demand of goods as a function of parameters price and wealth, and let be the demand for good . The elasticity of demand for good with respect to price pk is
However, the point-price elasticity can be computed only if the formula for the demand function, Qd = f(P), is known so its derivative with respect to price, dQd / dP, can be determined. Arc elasticity A second solution to the asymmetry problem of having a PED dependent on which of the two given points on a demand curve is chosen as the "original" point and which as the "new" one is to compute the percentage change in P and Q relative to the average of the two prices and the average of the two quantities, rather than just the change relative to one point or the other. Loosely speaking, this gives an "average" elasticity for the section of the actual demand curve—i.e., the arc of the curve—between the two points. As a result, this measure is known as the arc elasticity, in this case with respect to the price of the good. The arc elasticity is defined mathematically as:
This method for computing the price elasticity is also known as the "midpoints formula", because the average price and average quantity are the coordinates of the midpoint of the straight line between the two given points. However, because this formula implicitly assumes the section of the demand curve between those points is linear, the greater the curvature of the actual demand curve is over that range, the worse this approximation of its elasticity will be. The marginal efficiency of capital (MEC) is that rate of discount which would equate the price of a fixed capital asset with its present discounted value of expected income. The term “marginal efficiency of capital” was introduced by John Maynard Keynes in his General Theory, and defined as “the rate of discount which would make the present value of the series of annuities given by the returns expected from the capital asset during its life just equal its supply price”.
Management Process and Organization Behavior
Organizational Behaviour studies encompasses the study of organizations from multiple viewpoints, methods, and levels of analysis. For instance, one textbook divides these multiple viewpoints into three perspectives: modern, symbolic, and postmodern. Another traditional distinction, present especially in American academia, is between the study of "micro" organizational behavior—which refers to individual and group dynamics in an organizational setting—and "macro" strategic management and organizational theory which studies whole organizations and industries, how they adapt, and the strategies, structures and contingencies that guide them. To this distinction, some scholars have added an interest in "meso" -- primarily interested in power, culture, and the networks of individuals and units in organizations—and "field" level analysis which study how whole populations of organizations interact. In Europe these distinctions do exist as well, but are more rarely reflected in departmental divisions. Whenever people interact in organizations, many factors come into play. Modern organizational studies attempt to understand and model these factors. Like all modernist social sciences, organizational studies seek to control, predict, and explain. There is some controversy over the ethics of controlling workers' behavior, as well as the manner in which workers are treated (see Taylor's scientific management approach compared to the human relations movement of the 1940s). As such, organizational behaviour or OB (and its cousin, Industrial psychology) have at times been accused of being the scientific tool of the powerful.  Those accusations notwithstanding, OB can play a major role in organizational development, enhancing organizational performance, as well as individual and group performance/satisfaction/commitment. One of the main goals of organizational theorists is, according to Simms (1994) "to revitalize organizational theory and develop a better conceptualization of organizational life." An organizational theorist should carefully consider levels assumptions being made in theory, and is concerned to help managers and administrators Methods Of Shaping Behavior In Detail 1 . Explain managerial roles and managerial skills?
Management roles and skills. Managerial Roles According to Mintzberg (1973), managerial roles are as follows: 1. Informational roles 2. Decisional roles 3. Interpersonal roles 1. Informational roles: This involves the role of assimilating and disseminating information as and when required. Following are the main sub-roles, which managers often perform: a. Monitor-collecting information from organizations, both from inside and outside of the organization. b. Disseminator-communicating information to organizational members c. Spokesperson-representing the organization to outsiders 2. Decisional roles: It involves decision making. Again, this role can be subdivided in to the following: a. Entrepreneur-initiating new ideas to improve organizational performance b. Disturbance handlers-taking corrective action to cope with adverse situation c. Resource allocators-allocating human, physical, and monetary An instrument for measuring a person's preferences, using four basic scales with opposite poles. The four scales are: (1) extraversion/introversion, (2) sensate/intuitive, (3) thinking/feeling, and (4) judging/perceiving. "The various combinations of these preferences result in 16 personality types," says Consulting Psychologists Press, Inc., which owns the rights to the instrument. Types are typically
denoted by four letters--for example, INTJ (Introversion, Intuition with Thinking and Judging)--to represent one's tendencies on the four scales. According to CPP, the MBTI® is "the most widely used personality inventory in history." According to the Center for Applications of Psychological Type, approximately 2,000,000 people a year take the MBTI. CPP claims that it "helps you improve work and personal relationships, increase productivity, and identify leadership and interpersonal communication preferences for your clients."* Many schools use the MBTI® in career counseling. A profile for each of the sixteen types has been developed. Each profile consists of a list of "characteristics frequently associated with your type," according to CPP. The INTJ, for example, is frequently insightful, conceptual, and creative rational, detached, and objectively critical likely to have a clear vision of future possibilities apt to enjoy complex challenges likely to value knowledge and competence apt to apply high standards to themselves and others independent, trusting their own judgments and perceptions more than those of others seen by others as reserved and hard to know The people at CPP aren't too concerned if the list doesn't seem to match your type. They advise such persons to see the one who administered the test and ask for help in finding a more suitable list by changing a letter or two in your four-letter type. (See the report CPP publishes on its Web site.) Furthermore, no matter what your preferences, your behavior will still sometimes indicate contrasting behavior. Thus, no behavior can ever be used to falsify the type, and any behavior can be used to verify it Perception is our sensory experience of the world around us and involves both the recognition of environmental stimuli and action in response to these stimuli. Through the perceptual process, we gain information about properties and elements of the environment that are critical to our survival. A number of factors operate to shape and sometimes distort perception These factors can reside: i) In the perceiver
ii) In the Object or target being perceived or iii) In the context of the situation in which the perception is made. 1. Characteristics of the Perceiver: Several characteristics of the perceiver can affect perception. When an individual looks at a target and attempts to interpret what he or she stands for, that interpretation is heavily influenced by personal characteristics of the individual perceiver. The major characteristics of the perceiver influencing perception are: a) Attitudes: The perciver's attitudes affect perception. For example, Mr. X is interviewing candidates for a very important position in his organization - a position that requires negotiating contracts with suppliers, most of whom are male. Mr. X may feel that women are not capable of holding their own in tough negotiations. This attitude with doubtless affect his perceptions of the female candidates he interviews. b) Moods: Moods can have a strong influence on the way we perceive someone. We think differently when we are happy than we do when we are depressed. In addition, we remember information that is consistent with our mood state better than information that is inconsistent with our mood state. When in a positive mood, we form more positive impressions of other. When in a negative mood, we tend to evaluate others unfavourably. c) Motives: Unsatisfied needs or motives stimulate individuals and may exert a strong influence on their perceptions. For example, in an organizational context, a boss who is insecure perceives a sub ordinate's efforts to do an outstanding job as a threat to his or her own position. Personal insecurity can be translated into the perception that others are out to "get my job", regardless of the intention of the subordinates. d) Self - Concept: Another factor that can affect social perception is the perceivers self-concept. An individual with a positive self-concept tends to notice positive attributes in another person. In contrast, a negative self-concept can lead a perceiver to pick out negative traits in another person. Greater understanding of self allows us to have more accurate perceptions of others. e) Interest: The focus of our attention appears to be influenced by our interests. Because our individual interests differ considerably, what one person notices in a situation can differ from what other perceive. For example, the supervisor who has just been reprimanded by his boss for coming late is more likely to notice his colleagues coming late tomorrow than he did last week. f) Cognitive structure: Cognitive structure, an individual's pattern of
thinking, also affects perception. Some people have a tendency to perceive physical traits, such as height, weight, and appearance, more readily. Cognitive complexity allows a person to perceive multiple characteristics of another person rather than attending to just a few traits. g) Expectations: Finally, expectations can distort your perceptions in that you will see what you expect to see. The research findings of the study conducted by Sheldon S Zalking and Timothy W Costello on some specific characteristics of the perceiver reveal i) Knowing oneself makes it easier to see others accurately. ii) One's own characteristics affect the characteristics one is likely to see in other. iii) People who accept themselves are more likely to be able to see favourable aspects of other people. iv) Accuracy in perceiving others is not a single skill. These four characteristics greatly influence how a person perceives other int he environmental situation. 2) Characteristics of the Target : Characteristics in the target that is being observed can affect what is perceived. Physical appearance pals a big role in our perception of others. Extremely attractive or unattractive individuals are more likely to be noticed in a group than ordinary looking individuals. Motions, sound, size and other attributes of a target shape the way we see it. Verbal Communication from targets also affects our perception of them. Nonverbal communication conveys a great deal of information about the target. The perceiver deciphers eye contact, facial expressions, body movements, and posture all in a attempt to form an impression of the target. 3) Characteristics of the Situation: The situation in which the interaction between the perceiver and the target takes place, has an influence on the perceiver's impression of the target. The strength of the situational cues also affects social perception. Some situations provide strong cues as to appropriate behaviour. In this situation, we assume that + i.e individual's behaviours can be accounted for by the situation, and that it may not reflect the individual's disposition. Learning styles are various approaches or ways of learning. They involve educating methods, particular to an individual, that are presumed to allow that individual to learn best. Most people prefer an identifiable method of interacting with, taking in, and processing stimuli
or information. Based on this concept, the idea of individualized "learning styles" originated in the 1970s, and acquired "enormous popularity". Proponents say that teachers should assess the learning styles of their students and adapt their classroom methods to best fit each student's learning style, which is called the 'meshing hypothesis. The alleged basis and efficacy for these proposals has been extensively criticized. Although children and adults express personal preferences, there is no evidence that identifying a student's learning style produces better outcomes, and there is significant evidence that the widespread "meshing hypothesis" (that a student will learn best if taught in a method deemed appropriate for the student's learning style) is invalid. Well-designed studies "flatly contradict the popular meshing hypothesis".
Financial and Management Accounting
Introduction is concerned with the provisions and use of accounting information to managers within organizations, to provide them with the basis to make informed business decisions that will allow them to be better equipped in their management and control functions. In contrast to financial accountancy information, management accounting information is:
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designed and intended for use by managers within the organization, instead of being intended for use by shareholders, creditors, and public regulators; usually confidential and used by management, instead of publicly reported; forward-looking, instead of historical; computed by reference to the needs of managers, often using management information systems, instead of by reference to general financial accounting standards
According to the Chartered Institute of Management Accountants (CIMA), Management Accounting is "the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan, evaluate and control within an entity and to assure appropriate use of and accountability for its resources. Management accounting also comprises the preparation of financial reports for non-management groups such as shareholders, creditors, regulatory agencies and tax authorities" (CIMA Official Terminology). The American Institute of Certified Public Accountants(AICPA) states that management accounting as practice extends to the following three areas:
Strategic Management—Advancing the role of the management accountant as a strategic partner in the organization. Performance Management—Developing the practice of business decision-making and managing the performance of the organization. Risk Management—Contributing to frameworks and practices for identifying, measuring, managing and reporting risks to the achievement of the objectives of the organization.
The Institute of Certified Management Accountants(ICMA), states "A management accountant applies his or her professional knowledge and skill in the preparation and presentation of financial and other decision oriented information in such a way as to assist management in the formulation of policies and in the planning and control of the operation of the undertaking." Management Accountants therefore are seen as the "value-creators" amongst the accountants. They are much more interested in forward looking and taking decisions that will affect the future of the organization, than in the historical recording and compliance (scorekeeping) aspects of the profession. Management accounting knowledge and experience can therefore be obtained from varied fields and functions within an organization, such as information management, treasury, efficiency auditing, marketing, valuation, pricing, logistics, etc. CONCEPTS & PRINCIPLES
THE DEVELOPMENT OF CONCEPTS AND PRINCIPLES The development of accounting concepts and principles is closely related to the economic growth of the United States, as businesses grew in size, and outsiders increased their demand for financial information. Accounting principles focus on the users of accounting information. Principles have developed over a long period of time, and are continuously subject to revision as information needs change. It is the responsibility of accounting professionals, teachers and accounting organizations to keep accounting principles up-to-date, relevant and useful. FINANCIAL ACCOUNTING STANDARDS BOARD The FASB was set up with the purpose of developing accounting principles in 1973. Today it is the most influential accounting organization. The FASB is involved in solving reporting problems and developing solutions. When Statements of Financial Accounting Standards are released by the FASB, they quickly become gerenally accepted accounting principles (GAAP) pertaining to standards, assumptions, conventions or concepts. When it is difficult to understand accounting principles, interpretations are released which have the same authority as the standards.
INFLUENTIAL ACCOUNTING ORGANIZATIONS The FASB is the most influential accounting organization, but many other organizations exist that affect accounting practices. The Securities and Exchange Commission is the most influential government agency that regulates financial statement reporting. The IRS is involved in regulations related to income tax. IRS regulations often conflict with accounting principles, and as a result many businesses maintain two sets of records. Other organizations affecting accounting principles have less importance, and tend to specialize in a certain area of accounting.
BUSINESS ENTITY CONCEPT The business entity concept states that each business entity should conduct its own separate accounting. Only assets, liabilities, and owner's equity specifically related to a given business should be reported in the financial statements of that business. It should be noted, however, that in some circumstances the investors or owners of a business are legally liable for debts or damages. This liability depends upon the legal form of the business. In the event an individual owns more than one unrelated business, each business must also be treated as a separate entity. GOING CONCERN CONCEPT The going concern concept is based on the belief that a business will operate indefinitely. Assets purchased for long-term use,should be recorded at historical cost even if the market value is above or below the original cost. When expenses are prepaid, they should be listed as assets. In the event a business is near the end of its life, this information should be disclosed in the financial statements of a company. Accounting procedures should change to reflect the special needs of a business in liquidation. Errors revealed by (the preparation of) trial balance If trial balance does not agree, the disagreement may be due to : (1) Omission to post an amount into ledger: If an item is not posted from journal or subsidiary book to ledger, two sides of trial balance shall not agree, e.g., if goods sold on credit to A are recorded properly in
sales book but not debited to A's account' in ledger, the debit side of trial balance shall fall short. (2) Omission to post an amount in trial balance: It is natural if balance 'of an account is not recorded in trial balance the two sides of trial balance shall not agree which is an indication of error in accounts. (3) Wrong totaling or balancing of ledger account: If any account in the ledger is wrongly totaled or balanced, then also the trial balance shall not agree. (4) Wrong totaling of subsidiary books: If the total of any subsidiary book is wrongly cast, it would cause a disagreement in the trial balance, e.g., if purchase book totaled Rs. 2,500 instead of 2,050, the debit side of the trial balance shall exceed the credit side by Rs. 450. (5) Posting on the wrong side: When an item is by mistake posted on the wrong side of the ledger account it would cause disagreement in the trial balance, e.g., if Rs. 200 have been allowed as discount and while posting into discount account the amount has been credited to discount account. It will result in a difference of Rs. 400 in two sides of trial balance. (6) Posting of wrong amount: If wrong amount is posted in one of the two accounts while posting, it would immediately cause disagreement of trial balance e.g. goods worth Rs. 690 have been sold to 'X' but 'X's account has been debited with Rs. 960. It will increase the debit side of trial balance by Rs. 270. Trial Balance Limitations - Shortcomings of trial balance An agreed trial balance does not prove by itself that : 1. All transactions have been correctly analyzed and recorded in proper accounts. For example wages paid for installation of fixed asset might have wrongly been debited to wages account. 2. All the transactions have been recorded and nothing has been omitted. 3. Certain types of .errors (listed below) remain undetected even after the preparation - of trial balance.
Thus it is quite well known and said that "agreement of trial balance is not the conclusive proof of the accuracy of the books maintained." Errors not revealed by (the preparation of) trial balance Normally four types of errors are not revealed by mal balance. So two sides of trial balance will although agree, even then our accounts may not be free from errors. Such errors are : (1) Errors of omission If a transaction is not recorded in books of original entry then both debit and credit effects of the transaction will be omitted and trial balance shall not be effected, e.g. goods sold to John worth Rs. 1,000. The entry is not recorded in the books at all, it means neither John's account is debited nor sales account has been credited. As both sides have been effected by equal amount so the mal balance shall agree. (2) Errors of commission These errors are the result of carelessness of accounting staff and in some of the cases such errors do not effect the totals of mal balance, e.g. wrong recording in the books of original entry or posting to wrong account with correct amount and correct side e.g. goods sold for cash worth Rs. 1,000 but Cash Nc debited with Rs. 100 and sales credited with identical amount. (3) Compensating errors Such errors neutralize the effect of the errors committed earlier. When one error is committed which affects the total of mal balance but in the mean time another error of opposite effect is committed which neutralizes the effect of earlier error, e.g. forgetting to post Rs. 500 on the debit side of a certain account may be compensated by under posting of Rs. 500 on the credit side of some other account or by over posting of Rs. 500 in debit side of some other account. (4) Errors of Principle Whenever any income or expenditure is not properly allocated between capital and revenue, the mistake so made is called a mistake of
principle, e.g. if furniture purchased is debited to purchases account, building sold is credited to sales account, wages paid for installation of machinery debited to wages account, then the error of principle is committed; the trial balance shall remain unaffected by such errors. Managerial accounting is used primarily by those within a company or organization. Reports can be generated for any period of time such as daily, weekly or monthly. Reports are considered to be "future looking" and have forecasting value to those within the company. Financial accounting is used primarily by those outside of a company or organization. Financial reports are usually created for a set period of time, such as a fiscal year or period. Financial reports are historically factual and have predictive value to those who wish to make financial decisions or investments in a company. Management Accounting is the branch of Accounting that deals primarily with confidential financial reports for the exclusive use of top management within an organization. These reports are prepared utilizing scientific and statistical methods to arrive at certain monetary values which are then used for decision making. Such reports may include:
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Sales Forecasting reports Budget analysis and comparative analysis Feasibility studies Merger and consolidation reports
Financial Accounting, on the other hand, concentrates on the production of financial reports, including the basic reporting requirements of profitability, liquidity, solvency and stability. Reports of this nature can be accessed by internal and external users such as the shareholders, the banks and the creditors. Regulation and standardization While financial accountants follow [[Generally Accepted Accounting Principles set by professional bodies in each country, managerial accountants make use of procedures and processes that are not regulated by a standard-setting bodies. However, multinational companies prefer to employ managerial accountants who have passed the Certified Management Accountant certification. The CMA is an examination given by the Institute of Management Accountant, a
professional organization of Accounting professionals. This certification is different and distinct from the CPA or Chartered Accountant certificate. Time Period Managerial Accounting provides top management with reports that are future-oriented, while Financial Accounting provides reports based on historical information. There is no time span for producing managerial accounting statements but financial accounting statements are generally required to be produced for the period of 12 previous months. Other differences
There is no legal requirement for an organization to use management accounting but publicly-traded firms (limited companies or whose shares are bought and sold on an open market) must, by law, prepare financial account statements. In management accounting systems there is no requirement for an independent external review but financial accounting annual statements must be audited by an independent CPA firm. In management accounting systems, management may be concerned about how reports will affect employees behavior whereas management concerns are about the adequacy of disclosure in financial statements. (BAC)