Tuesday, November 29, 2011

Trading procedure on a stock exchange

Prior to introduction of computer based online trading, trading used to be done in the trading hall of a stock exchange. This system was full of shortcomings,hence replaced by online trading. The ususal online trading procedure is as follows:

1. Contacting a broker: any investor, willing to invest in stock exchange is required to get itself registered with a broker and complete the required formalities. Depending upon the type of trading practice, the broker may provide him the trading facility, e.g. a combination of direct online service, through branch and phone calls.

2. Placing an order: after the type of facility is decided, an investor may place, buy or sell order as the case may be. An order may be placed in two forms, at market rate or desired rate. In case of market rate order is executed immediately. In case of desired rate, transation will be executed only when the desired rate comes.

3. Execution of order: When buy/sell orders are fed into a computer either by an investor or by a broker, the list of executed orders are prepared. The broler informs the investor by call or by mail and prepares a contract.

4. Settlement: all the transactions taking place in a day are settled by the stock exchange on the appointed day. Net results of all the transactions done by a broker are settled which shows how much money each broker will receive or deposit. The broker in turn settles his accounts with his individual investors.

The above settlement is relevent to cash segment of a stock exchange. Besides cash segment, NSEI and BSE have derivative segments in which securities do not exchange hands but only difference in prices of the securities is settled. This is called forward trading.

Important terms related to stock exchange

1. Dematerialisation: these days . securities like equity shares are not allotted in paper form. When records like ownershipof stocks is kept in electronic form instead of physical form(i.e. share certificates) it is known as dematerialisation of securities. It helps in overcoming the problem of theft, forgery, delays, misplaced certificates and unnecessary paper work.

2. Demutulisation: The purpose of demutulisation is to protect the interests of the investors and to reduce the chances of brokers using the exchange for their personel gains. It is the process that separates the trading rights of members or brokers in a stock exchange from its ownership and control.

Thursday, August 25, 2011

Staffing Process

Staffing Process

1. Manpower planning: The first step in the process of staffing is concerned with determining the number and type of individuals required for the organisation.

Manpower planning necessitates work load as well as work force analysis. Work load analysis means assessing the number 0f employees required for performance whereas work force means finding the number and type available. Such an exercise would also reveal if the organization is understaffed, overstaffed or normally staffed.

2. Recruitment: This involves attracting and stimulating qualified candidates to apply for the job. This refers to the identification of the different sources of manpower availability (internal or external) and making efforts to secure applications for various job positions.

3. Selection: It is the process of choosing the best candidate to fill in the job positions. It is said to be the negative process as more no. of candidates are rejected at each stage than the no. of candidates selected.

4. Placement and Induction: placement involves pitting the selected candidates at the right job after considering his ability and aptitude.

After placing the candidates on their jobs, induction begins. It includes introducing or orienting the employees to the organisaton and to their fellow employees. They are also informed about their working hours, tea breaks, leave rules, medical and transport facilities etc.

5. Training: it refers to the process of education the selected employees so as to increase their skill of handling the job efficiently. Various methods of training are used to enhance their skills.

6. Performance appraisal: it is a systematic way of measuring the performance of employees so that their training and promotion etc. can be decided.

7. Career planning and promotion: Employees these days have a lot of aspirations about their career. The orgnisations must plan clear cut promotional policies so that employees are motivated. Employees who show better performance consistently should be promoted to higher positions.

8. Compensation: It is the remuneration paid to employees in cash and in kind in exchange of the services. wages are fixed according to their level, nature of work, degree of risk involved etc. workers should be suitably rewarded to sustain and attract competent personnel.

Monday, August 22, 2011

Features of principles of management

Priciples of Management

Features

1. Evolutionary: Management principles are not developed overnight or they are not based on personal feeling of an individual. Proper observation and experimentation is done before making any concept a principle.

2. General Guidelines: Management pricniples are general guidelines to action and decision making. They are not readymade solutions to problems. Their applicability differ according to the nature, size and requirement of the organisation.

3. Influence human behaviour: principles of management are meant for regulating human behaviour and getting higher performance from individuals. However, due to complexity of human behaviour, its applicability is limited.

4. Universal: principles of management are applied to all types of organisaions irrespective of their nature and size and in all situations. E.g. priniple of unity of command is applied to all types of organisations.

5. Flexible: Principles can be applied differently in under different conditions. Some changes can be made in their application according to the requirement of the company. They can be easily modified by the managers who are using them. E.g. degree of centralisation and decentralisaton vary in different organisations according to their nature and size.

6. Contingent: This means thet management principles are dependent on the situations prevailing in the organisation. E.g. principle of team spirit is very important for organisarions where work is carried out by group of people whereas it of no use for the companies where work is performed by individuals and not by group.

7. Based on cause and effect relationship: Principles tell us clearly that if a particular principle is applied in a situation, what would be its effect. E.g. principle of division of labour leads to specialisation and increase in efficiency. Here division of labour is the cause and efficiency is the effect.

Friday, August 19, 2011

Chapter – 2

Principles of Management

Objective Questions

1. 1. Give any point of difference between management and scientific principles.

2. 2. Give any difference between management principles and values

3. 3. Give any point of difference between management principles and techniques.

4. 4. Give any two features of management principles.

5. 5. Are principles of management static?

6. 6. List any two principles of ‘scientific management’ formulated by Taylor for managing any organisation scientifically?

7. 7. How are management principles derived?

8. 8. Why is that management principles are universal?

9. 9. Which principle of management insists in orderly arrangement of men and material?

10. 10. An organisation is following the principle of scalar chain and principle of equity. What are the positive effects of these principles?

Conceptual Questions

1) Describe the meaning of “Replacement of thumb of rule with science”?

2) How do the techniques of time study and motion study help in improving the efficiency level?

3) Which principle of management is violated in the following situations :

  • a) When a worker receives order from more than one boss.
  • b) When an employee is given responsibility to achieve target production of 500 units with no authority to access over raw materials.
  • c) When worker is wasting time for search of tool box in the organisation.
  • d) When manager grants one month medical leave to a supervisor with pay and only one week medical leave to account.

4) Why does the principle of unity of command not hold good in an organisation using the technique of functional foremanship?

5) Taylor’s techniques of management are universally applicable. Do you agree? Give four reasons to support your answer

6) The production manager of Bharat Ltd. Instructs a salesman to go slow in selling the products whereas the marketing manager is insisting on fast selling to achieve the target. Which principle is being violated in this case? State any one consequences of violating this principle.

Very Short Answer Questions

1) What do you understand by principles of management?

2) What does scientific management mean?

3) State any two characteristics of principles of management.

4) What do you mean by universality of management principles?

5) What is meant by flexibility of management principles?

6) ‘Management principles are evolutionary’. Explain.

7) Distinguish between principle of unity of command and unity of direction on the basis of

  • a) Meaning
  • b) Aim

8) What are the aims of time and motion study?

9) ‘Fayol’s principles of equity and order can be applied in actual work situation.’ Do you agree?

10) How do the principle of scalar chain helps in solving the problems faster?

11) What is meant by work study?

12) What do you mean by simplification of work?

13) What is the basic difference between unity of command and foremanship?

14) State any three principles of Taylor.

15) Describe the principle of cooperation between the workers and the management.

16) Explain the principle of remuneration

17) Explain in brief the principle of Esprit De Corps

18) Give suitable examples for the principle of division of labour.

19) Why Henry Fayol is considered as the father of management?

Short answer questions

  1. 1. How do the principles of scalar chain and unity of command help in solving the problems faster?
  2. 2. Briefly explain the principles of scientific management
  3. 3. Explain five techniques which facilitate the application of scientific principles.
  4. 4. Explain with suitable example the technique of differential rate system
  5. 5. Write a note on functional foremanship
  6. 6. How do the techniques of scientific management improve the productivity of workers?
  7. 7. Explain the nature of management principles
  8. 8. Bring out the importance of management principles
  9. 9. Explain the method study and technique of simplification as developed by Taylor
  10. 10. Explain the principle of discipline and principle of subordination of individual interest to general interest

Long answer questions

1. 1. Develop a differential piece rate plan for a shirt manufacturing company.

2. 2. Taylor’s principle of scientific management and Fayol’s principles of management are mutually complementary. Do you agree with this view? Give any five reasons.

3. 3. It has been observed that the ‘prevailing situation’ in an organisation is due to violation of principle of order. What might have been the prevailing situation?

4. 4. Taylor’s techniques are universally applicable. Do you agree?

5. 5. An employee is asked to produce 100 units in one week’s time but he is not allowed to take out the raw materials from the store. At the end of the week the employee could not complete his target because of insufficient supply of raw material. Can we blame the employee? Which principle is associated with this condition? Explain it.

6. 6. Explain any five techniques of “scientific management”

7. 7. If any organisation does not provide for the right place for human and physical resources in an organisation then which principle is violated? What are the consequences of it?

8. 8. Mohan, a manager expects his sub-ordinates to adapt to the new environment and working conditions without giving them time to settle down. Which principles of management are being overlooked and why?1.

9. 9. Mohan a manager expects his subordinates to work for the happiness and pleasure of being in the organisation. Which principle is being related to this?

10. a manager does not distribute the work a=among his subordinates wither according to the capability or proportionately. Which principle of management is overlo

Differencie between policy and strategy