TyroCity: Business Studies Notes

Qualities of good indexing

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Some qualities of good indexing:

1. Simple: It should be easy and simple to be understood by the entire employees.

2. Economy: Indexing should be cheap and must come under the budget of the organization. The installation and operation cost should be low.

3. Flexible: It should be flexible enough. It must be dynamic and changeable according to the needs of an organization

4. Compactness: It should be compact and should not take unnecessary space

5. Safety: A good indexing system must preserve all the necessary documents from insects, dust, fire, water and so on.

6. Accessibility: Files and folders must be preserved for future and must be easily accessible.

Component of Business

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Scope of business
Business covers wide area and all economic activities. It also includes all types of industry and commerce. Industries are related to the activities of production of goods and services and commerce is related to distribution of goods and services from producers (industries) and customers.

Types of industries

1. Genetic industries:
Genetic industries are also called heredity industries that involve in production of goods from plants and animals to earn profit. Those industries which produce medicines from herbs, perfume from flowers, milk and meat form animals are called genetic industries

2. Extraction industries:
Industries that are involved in extracting the resources from the sources of nature are called extraction industries. It supplies the raw material to other industries. These types of industries are generally based in mining, fishing etc.

3. Construction industries:
Those types of industries which are related to construction of different infrastructures are called construction industries. They basically construct road, bridges, houses and so on . It helps in development of country

4. Manufacturing industry:
It is related to produce finished goods. It processes raw materials into finished goods. There are mainly 4 types of manufacturing industry they are:

Analytical industry:
It is an industry which produces goods by analyzing raw materials in scientific way. In this industry various goods ate purchased by single material. For example dairy product (milk, ghee, butter, ice cream from milk)
Processing industry:
The industry which is involved for production of goods and services by using different steps or stage is called processing industry. For example for processing cotton into thread the processes of spinning, weaving, dying, bleaching is used.
Synthetic industry:
The industry which is involved for using various raw materials to produce a single good is called synthetic industry. For example to produce cement limestone, red soil, chemicals etc are used.
Assembling industry:
The industry which is involved for production of goods by combining different parts which are already manufactures by different industries is called assembling industry. For example TV, computer, mobile, watch manufacturing industries.

Commerce:
It is related with buying, selling and exchanging of goods and services. It is related to economic activities to earn profit. The role of bridge between manufacturer and customer is played by commerce

Types of commerce

Trade:
Trade is related to buying and selling goods and services for earning profit. It supplies quality goods with reasonable price. Those activities which are related to buying, selling and distributing goods in market is known as trade

Types of trade

1. Home trade:
Home trade means national, domestic or internal trade i.e. Buying and selling within a nation. In home trade both buyer and seller are from the same nation. In home trade task is simple than foreign trade. It is classified into two types they are.

Wholesale trade:
When trader buy goods in bulk amount and resell to retail in small volume is called whole sale trade. In this trade goods are bought from manufacturer and are sold to retail. It acts as a middleman between manufacturer and retailer. It deals with special product
Retail trade:
When trader buy goods in bulk amount and resell to customer in small volume is called retail trade. In this trade goods are bought from wholesaler and are sold to customer. It acts as a middleman between wholesaler and customer. It deals with various types of product.

2. Foreign trade:
Foreign trade means international, global, external trade i.e. Buying and selling is between two or more nation. In foreign trade buyer and seller are from different nation. In foreign trade task is difficult than home trade. It is classified into three types they are.

Import:
A good or service brought into one country from another is called import. Along with exports, imports form the backbone of international trade. The higher the value of imports entering a country, compared to the value of exports, the more negative that country’s balance of trade becomes. Buying goods from India, china is called import.
Export:
A good or service sold to another country from one is called export. Along with imports, exports form the backbone of international trade. The higher the value of exports exiting a country, compared to the value of imports, the more positive that country’s balance of trade becomes. Exporting herbs, garments to Germany, India is the example of export
Entry port:
The trade in which a country purchases the goods from one country and sells it to another country is called entry port trade. The goods bought from a country is not used for self benefit but is rather exported to another country. For example India buys herbs from Nepal and sells it to china.

Auxiliaries of trade:
It supports or assists the trade activities. It helps to run business smoothly. It helps for transfer goods from production area to consumption area. It creates time and place utility.

1. Transportation:
It transfers goods from one place to another. There are many means of transportation that can assist business and trade activities. They are air travel. Bus route, sea route, rope route etc. It delivers right product and right time in right place. It creates time utility

2. Warehouse:
It is one of the auxiliary of trade. It helps to protect and store goods until customers uses them. It provides the goods then demand is created. It also helps to provide unseasonal goods.

3. Insurance:
It acts as nutrition to trading activities. It helps to reduce risk and uncertainties. It is a contract between organization and their future. The system that takes the responsibility of compensation of certain risk is called insurance system.

4. Banking:
Banks are the financial institution that supports for traders. It provides loan, investment, credits facilities to the trading companies. It helps for expansion and flexibility of trade.

5. Advertising:
It is a supporter to trade. It provides information to customer about goods and services. Its aim is for creation of demand. It also acts as a promotional tool.

Defects of multinational companies

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

1. Outflow of foreign exchange: It uses local capital for their industrial development. They earn industrial development. They earn huge amount of dividend too. The foreign currencies from host countries also go out in the form of royalty and technical fees.

2. Negative effect on local industries: Multinational companies have huge market in national as well as international market. This has negatively effected on local industries. They have increased competition on local industries and are slowly replaced by multinational companies.

3. Economic exploitation: The main aim of multinational companies is to earn maximum profit. They use unused natural resources and labor, . They produce goods and services at lower cost but the market price is very high. They earn maximum profit by unfair exploitation of host country

4. Exploitation of consumers: Multinational companies produce goods and services at lower costs by using cheap local resources and labor in the host country. Due to the high cost of royalties of these commodities they charge higher price to the local consumers. As a result, local consumers are exploited.

5. Inequality of employment: There is distinction on employee between parent and host country. They provide minimum employment to local people. They provide minimum wages to the local people. They use advanced technology for the production of goods so that only highly skilled manpower which may not be available in the host countries are employed. They appoint low level employee from host countries and give low salary and high level employees from their own country and give high salary. This creates inequality in employment.

Importance of public enterprises

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Planned development: Its main aim is to promote economic and social development in the weaker section. It helps to run all the works of development in an efficient manner. It follows government plans and policies. It generally focuses on private sector. It also earns profit. It provides planned development by setting up industries too.

Balanced development: Development works are done in planned and balanced way. It also provides decentralization of industries. It tries to develop all regions in harmonious ways. Balanced development is the main aim of public enterprise.

Accelerating the rate of economic growth: In developing countries, increasing the rate of economic growth always gets the first priority. It tries to remove deficiency of economy. It provides infrastructural facilities for economic development. It provides employment opportunities. Government invests the money. Amount of capital, technical empowerment and other facilities can be easily arranged by the government.

Public utilities: Public enterprises provide the utility of transportation, water supply, irrigation, electricity, communication, education, health facilities and so on to the general public.

Supply essential goods and services: public enterprise provides goods and services to the public at reasonable price. The government helps in manufacture and distribution of goods. These types of services are not done for earning profit.

Provide job opportunities: They help to create the employment opportunities in the society and work as the model employer. They help in uplifting the living standard of the people.

Reducing economic inequality: It removes economic inequality. It helps to develop different regions of the country. Therefore, it maintains living standard of the public.

Establishment of social welfare: They help in planned development and balanced development of the country. They also try in accelerating the rate of economic growth. They are also established for supply essential goods and services. They help in providing job opportunities to many people. They further help in reducing economic inequality. Thus, they establish social welfare.

Concept of public enterprises

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Public enterprise is an organization which is owned, managed and controlled by the government. It is necessary for the active participation of government in individual and commercial level. It is financed and operated by the government. It provides service to the public. It provides goods and services to the public at reasonable price. It is guide by service motive but it can earn nominal profit. It helps in maintaining the state of ownership and operation of industrial, agricultural, financial and commercial undertaking. It is one autonomous body which is managed and owned by government and which provide goods/ services for public.

Leadership Qualities

Business Studies XII — Sun, 18 Aug 2013 05:41:42 +0000

Qualities of leadership

Personal qualities

1. Self-confidence: a good leader must have self-confidence, must have sufficient enthusiasm and must be cheerful enough to enjoy the trust of his subordinates.

2. Dynamic personality: a leader should be dynamic, cheerful and charming, must have sound health, cool temperament, conversational ability and decent behavior with tremendous stamina and vigor for hard work

3. Intellectual capacity: a leader should have the ability to think logically, analyze accurately and interpret the problems clearly.

4. Take lead and initiative: a leader should have the ability to take lead and initiative in times of risk, uncertainties and complexities for prompt decision

5. Emotional stability: a leader should have balanced temperament to overcome moodiness, disappointment and inconsistency.

6. Flexibility: A leader should be flexible enough to accommodate other’s viewpoint and alter his decisions. Rigidity is only required in autocracy, change in decisions must be made with change in macro and micro environment.

7. Responsibility feeling: A leader must feel or should bear responsibilities of all his decisions himself.

8. Communication skill: The leader must be able to communicate with subordinates. The leader must communicate the information from his level to the down level. Communication must be two way. Sop that both leader and subordinates will exchange Ideas freely

9. Far sightedness: A leader should develop organizational planning and policies. When the leader is not far-sighted all efforts may be worthless.

Managerial qualities

1. Technical knowledge: A leader must have technical knowledge to provide the guidelines about the work of the subordinates which helps the leader to take right decisions at right time.

2. Organizing abilities: all the resources, employees, people, business environment, methods, capital, manpower should be arranged properly by a leader to achieve organizational goals in a proper way.

3. Power of judgment: a leader should have the power of judgment which comes from self-confidence and self-control. Even if there are several followers and several decisions the leader must judge and decide the case.

4. Enthusiasm: the leader must be devoted towards the organization. A devoted leader can conduct the activities successfully.

5. Ability to guide and teach: it is the task of leader to get the best from others. A leader must know how to guide and teach the followers to make them convinced.

6. Human relations: leadership is related to inspire and encourage the people when there is good relation between leader and follower. The followers are easily influenced. So, a leader must be able to win the confidence and loyalty of people.

Characteristics of Business

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

1. Human activities:
Business cannot be performed without human efforts. The main aim of business is to produce goods and services to fulfill the requirement of human being internally associated in the production or the consumers.

2. Economic activities:
It is concerned with earning profits and generating wealth, which are measured in terms of money. Economic activities include production of goods and services, distribution of goods and services and the benefits generated from them.

3. Production of goods and services:
The main feature of business is to produce goods and services. Business is concerned with the production of goods and services to the society. In this process we get goods from shopkeeper, shopkeeper gets from wholesaler. The wholesaler gets from manufacturers. The shopkeeper, the wholesaler, the manufacturer are doing business to earn profit.

4. Risk and uncertainty:
There is no business if there is no risk but accidents never knock the door. In future anything may happen. So risk is a possibility that losses may occur. Introduction of new product, change in government policies, change in customer taste and preference etc are the risks.

5. Profit motive:
Business has the main aim to earn profit. To get maximum profit revenue of business should be maximized. Profit generation is vital for business survival and expansion. However, profit should be earned through legal and fair means and in ethical manner. Profit is the reward for the investors.

6. Continuous process:
Continuous process means to provide goods and services by the business to the customers continuously and regularly. In business, the exchange of goods and services is a regular feature. A businessman regularly deals in a number of transactions and not just one or two transactions.

7. Satisfaction of customers:
The aim of business is to satisfy human demands by producing quality of goods and also to supply right product in right time at right place to meet the right needs. Quality goods should be provided at reasonable price.

8. Finance:
Finance is known as “life blood” of business. Business needs investment of capital and to run smoothly. For regular and continuous business finance is needed, finance includes purchase of raw materials, payment of wages, assets of business and so in.

9. Organizing:
It means integration of all activities. Co-ordination is very important for organizing. Allocation of limited resource, assigning job, authority and responsibility also comes under organizing.

Qualities of good filing system

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Some qualities of good filing system:

1. Simple: It should be easy and simple to be understood by the entire employees.

2. Economy: Filing should be cheap and must come under the budget of the organization. The installation and operation cost should be low.

3. Compactness: It should be compact and should not take unnecessary space

4. Accessibility: Files and folders must be preserved for future and must be easily accessible.

5. Suitable: It should be suitable for any kind of organization. It should meet the requirement of business

6. Flexible: It should be flexible enough. It must be dynamic and changeable according to the needs of an organization

7. Safety: A good filing system must preserve all the necessary documents from insects, dust, fire, water and so on

8. Indexing: A good filing system must have proper indexing

9. Classification: The files should be classified in a proper way so that it helps in easy location.

Requisites of business success

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Establishment of objectives:
There must be proper establishment of objectives. Objectives are the aim of business. It determines the scope of future work. Objectives must be clearly defined. It provides guidelines for doing work. Objectives are defined for long term and short term.

Proper planning and policy:
Proper planning classifies the works done. Planning and policy formation should be done in efficient way. There must be clear set of policies and programs to complete the work. It helps in minimizing risk and maximizing profit.

Proper location layout and size of business:
Proper location layout and size of business is needed for progress of business. Layout means planting the business in such a way that production work can be carried out with efficiency and true manner. It helps in determination of proper size of business. Location also should be suitable. It must attract the market.

Sound organization:
There must be division of work among employees. There must be effective use of human sills and knowledge. Organization should help to answer various business problems. It ensures team work. It must ensure the best communication channels for proper decision-making.

Separate finance:
Finance is the blood of business. Business can’t be established without sufficient capital. Volume of capital to be invested is dependent upon size of business firm. Source of capital must be properly taken into consideration. It must be flexible. It should be suitable for both long term and short term business.

Efficient management:
Its main objective is to manage all activities of human and other resources. It must perform right job at right time in right place. It must use effective management technique.

Employees morale:
The success of business depends upon employee’s morale. The business should be used with intensity of employees. Employee should be encouraged, motivate. They could complete their work heatedly.

Modern technology:
It brings/ uses modern technology. It provides new idea and methods in production process. There should be proper labor and capital adjustment.

Research:
It helps in improvement of product. It works under the taste, desire and preference of the customers. In it various marketing, strategies, skills, knowledge and experts are used. Research and development is the main way to achieve profit with customer satisfaction.

Concept and purpose of filing

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Meaning of filing
It is the process of classifying, arranging and storing record so that they can be located when required. It is also the process o collecting and arranging records or their copies in such a way so that whenever it is needed it could be found very easily. All office receives letters and dispatches that are kept for the future use. They are to be stored in a safe place. For that filing is required. It is an important part of management that helps to decide about anything in a legal and systematic way. It is the process of arranging and protecting records so that they may be found and delivered easily when needed for future.

Purposes:

It helps to keep all records together so the history of office can be understood.
It helps to provide safety place for storage of necessary documents in order to use and locate them when required.
To make records readily and easily available.
It can be used as evidence in case of dispute
It helps in some legal formalities.
It is shown as profit or legal evidence.
It can be presented as a legal document in court.
It helps to make future plans. Past records are the base of future records

Importance of direction

Business Studies XII — Sun, 18 Aug 2013 05:41:42 +0000

1. Integrative force: direction integrates the activities of employees. It is mainly concentrated about what, when, where and who to do the work. Without integration none of the activities can be fulfilled. Effective operation can be achieved only when the efforts of all employees are integrated.

2. Initiate the action: in direction, a manager motivates the subordinates to perform the activities. When an employee receives the direction, his or her initiative will be started to do work.

3. Improves efficiency: direction consists of motivation, leadership and communication. When all these managerial tools are implemented the potentiality of employees is fully utilized from which they perform high performance.

4. Facilitates change: change always comes in an organization. Healthy change is important. Some people do not want the condition of change. But change is inevitable. Direction is an important function of management that gives the orders and motivates the personnel for change.

5. Helps in stability and growth: direction is an integrated activity of motivation, leadership and communication. These activities help in stability of the organization. When these activities are used, the capabilities are utilized which helps in flexibility and growth of the organization.

6. Helps to achieve the organizational goals: the manager gives the direction to do work and it gives knowledge, information and goals of the organization. When all people know about the goals it helps on achieving the organizational goals effectively.

7. Means of motivation: when direction is effective and meaningful, the employees are properly motivated. Direction works for motivating people to contribute maximum efforts. It brings positive feeling towards the organization.

Dissolution of partnership firm in Nepal

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Existing partners can dissolve the firm by another agreement
Dissolution by notice, any partner can dissolve the firm by giving notice to all the partners
If any partner is unable to take responsibility of partnership deed.
If partner do not pay the amount payable to the firm
If shares are transferred without consent of other partners
If right of partners is taken over by the court of compensation
Liable for negligence
Death of partner
Dissolved by concerned department
Commits illegal work or violate the rules of the firm
If not renewed in given time.