TyroCity: Business Studies Notes

Concept of partnership firm and partners

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

Partnership is a form of business organization which as evolved to overcome the shortcomings of sole proprietor. As the size of business expands, one person is unable to provide the necessary capital and managerial skills. Therefore, two or more than two persons form a partnership to carry on business by pooling their financial resources and managerial skills. Thus, partnership is an extension of sole trading concern.

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.

Functions of managerial leader

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

Leader is true representative of the organization who represents the organization to those working for it as well as to the outside world. A leader functions as a chain between management and staff. S/he represents management before the workers and work before the management
A leader must establish organizational goals. It is the primary function of the leader. S/he also should participate with superior to get it done
When the skill and knowledge of the subordinates are not used properly a managerial leader must provide the guideline and effective path as motivational factor to them
A leader must act like a captain to the team, must win the confidence of most of the colleagues and encourage team work.
The leader must design proper system of communication and communicate authority and responsibility to its subordinates so that they can know about their work
A managerial leader must understand problems and feelings of the subordinates and try to solve them tactfully
A leader must maintain good relationship with subordinates and other people
A good managerial leader must facilitate change in the organization whenever and wherever necessary.
A leader has the responsibility to control, supervise and see different departments to achieve organizational goals
A leader should be able to evaluate the performance of subordinates. There must be provision of both reward and punishment.

Business Studies XI

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

Unit 1 and 2

Unit 1: Introduction to Business

Unit 2: Evolution of Business

Unit 3 Forms of Business Organizations

Sole trading concern

Partnership firm

Joint stock company

Cooperative organizations

Public enterprises

Multinational companies

Business support agencies in Nepal

Unit 4 to 8

Unit 4: Office Management

Unit 5: Filing and Index

Unit 6: Record Management

Unit 7: Office Machines and Furniture

Unit 8: Business Communication

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.

Incorporation of joint stock company in Nepal

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

Following things are to be observed for incorporation of Joint Stock Company in Nepal:

1. File an application
It is the first step. In any company registration, promoters have to file application in company registrar office. The application has to be signed by at least 1 promoter in case of private company and at least 7 in case of public company. Along with application, following document should be submitted,

Memorandum of association
Article of association
Copy of agreement (public company)
Copy of consensus agreement (private company)
License
Promoters certified copy of citizenship (Nepalese)
Permission letter obtained under law to make investment or run business in Nepal (foreigner)
Citizenship of concerned country

2. Submitting registration fee
Registration fee should be deposited in the Nepal Rastra Bank. Voucher is needed for the deposit of registration fee. It should be enclosed in application form

3. Certificate of incorporation:
After submitting the application form along with necessary document and registration fee, the office of the registration examines all these documents submitted by the promoters and it will register company name within 15 days the receipt of the application. After registering the office, the registrar issues the certificate of incorporation to the company. Now a private company can run its business.

4. Certificate of commencement of business
A report of proof about the full payment of shares by the promoters with signature by at least 1 director and 7 promoters must be filled. The registrar examines all the documents. If it gets satisfied then it issues certificate of commencement of business. Then only public company is legally able to run business and it can issue prospectus also.

5. Allotment of shares
After receiving certificate of commencement of business, public company can issue prospectus. It helps to attract investors for investing the money in the company. Then they send application with application money. Generally application form is attached with prospectus. The time of subscription must be kept open for at least 7 days. After receiving application shares are allotted. The BOD makes the allotment. There can be full allotment or pro-rata allotment. Shares must be allotted within 3 months after application is called. There must be more than 50% o share allotment. If allotment couldn’t be made within 3 months then promoters must apply application for extending time with reasons. The time is again extended for 3 months. If company couldn’t allot the share for extended period then the company must return all the money with interest.

Office accommodation and layout

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

Meaning of office accommodation
It is the process of selecting appropriate building in a favorable location, establishing different sections and departments, proving or arranging resources in a scientific way. The purpose of office accommodation is to create sound working environment and to bring efficiency and rapidness in office work. It is important for both employees and outsider. Office employees spend a long time office. Bad accommodation can cause boredom and frustration among employees. Bad environment also may cause bad impression to outsiders.

Selection of office building

1. Shape and size of office building
It is one of the major factors that should be considered while selecting office building. It should have adequate space to accommodate all machines, equipment, and employee with furniture and enough space for flexibility. It should be considered taking the base of both present and future needs.

2. Lighting and ventilation
An office building should have adequate lighting and ventilation. It helps a lot to increase efficiency and enhance worker’s morale. Well lighted and ventilated accommodation puts less pressure on the employees and also reduces the physical and mental strain and consequently the efficiency is higher.

3. Convenience to customers and employees
While selecting office building it should consider the convenience of customer and employees. It should not be far from the related trade center, must have proper toilet and canteen services and food hospitality and utilities.

4. Cost
The cost of building effects on total budget of organization. The building purchased or built must be within the budget of organization. There should be balanced between requirement of space, capacity of the organization and the cost for covering the expanses.

5. Flexibility
Flexibility of office building in its shape and size should be considered while selecting the office building. It must also match the nature of organization.

6. Layout facility
The efficiency of men and machine depend upon the layout. The proper layout makes office attraction. For this furniture, machine and other goods are necessary. This also helps in the internal arrangement of office.

Selection of office location:

Nearness to customer: The office should be accessible to customers. They do not like long distances to make business inquiries. The office should be accessible to other parties who are in regular contact.
Nearness to related business: It is desirable to locate the office near the offices of related business. It should be established in the same line of trade.
Availability of infrastructure: The infrastructure should be available in office location. It consists of transport, communication, power, water and parking facilities.
Nature of business: The nature of business affects location of office. Office of manufacturing business in located near the source of raw materials, labor and service facilities. Office of trading and banking business is located in commercial centers near the customers. Office of perishable goods business is located near the market for such goods.
Availability of human resources: Needed human resources should be available for office. They can be skilled, semi-skilled and unskilled. All facilities must be available for employees
Environment: The office location should have healthy environment. It should not be near polluted rivers or waste disposal sites. It should be free from noise, dust and pollution.
Cost of space: Sufficient space should be available at reasonable cost for the office. Space should be available for future expansion.
Government laws: The selection of location should comply with government laws and regulation at national and local levels.

Office layout

Meaning of office layout
It is systematic arrangement of office amenities. It is arrangement of staffs, machines, equipment, furniture and other physical facilities within the limit of available floor space. Its purposes are to utilize space in the best possible manners, to make the outlook of the office attractive and to increase efficiency of the staff. It is defined as arrangement and placing of men, material, machines and money to the optimum level.

Main aims are

To utilize the floor space properly
To run the office work smoothly
To help for the motivation of person.
To help for the minimization of physical hazards and accident
To make proper supervision
To maintain the attractiveness for impressing the customers and visitor.
To try for the provision of comfort and satisfaction of employees
To help to provide security

Principle of office layout

1. Principle of flow of work:
It is the layout which helps for smooth and effective flow of office works. Simple, easy and prompt work flow and essential for work progress

2. Principle of free movement and observation:
Office layout should allow the free movement of employees. There should also be proper supervision and observation of works of movement too

3. Principle of effective supervision:
There should be free supervision of flow of works, movement of personnel, cost, wastage, balance of budget, quality of office works etc.

4. Principle of departmental relationships:
For the office layout related departments are inter related and those inter related departments should be placed side by side.

5. Principle of flexibility:
Office should be flexible enough to facilitate the expansion in the future.

6. Principle of maximum utilization:
As the time flows, there is increase in cost of every thing as per the situation of the economy if the country and the area where office is established. There are very fewer cases of deflation basically in developing countries. Therefore, when office is set up then there must be maximum utilization of employees, materials, space, machines and resources. There should be reduction of wastage.

7. Principle of pleasing appearance:
Interior design, lighting, ventilation and cleanliness should be maintained. Office must be well furnished and pleasing enough to make it attractive to all the customers and visitors

8. Principle of good ventilation:
Office must have enough doors, windows, and ventilation for constant supply of fresh air.

9. Principle of good lighting:
Office should try to provide natural light that is sunlight. Dark places should be avoided for establishment of office.

10. Principle of safety:
An office layout must be based on the safety. It should reduce office accidents like theft, fire, damage and so on. Office machine must be implemented properly

11. Principle of service facilities:
There must be provisions of good canteen, lights, lifts, telephone, and toilets.

12. Principle of providing private offices:
In an office. Separate rooms should be provided to some important employees. If the work is confidential in nature then private room should be provided. It is better to use movable partition to provide privacy

Steps in designing office layout:

1. Securing the blue print of the organization
It is the first step to secure the blue print of office building to know about the space available of office works. It should be secured from top management. Its blueprint is not available then the space should be measured and the sketch of building should be made

2. Assessing the need of the organization
Need of all department should be identified. Managers should consult the department heads to access space requirement. Number of employees, method and nature of works, equipment and machines. Present and future requirement should be determined. It is the second step of designing the layout

3. Arranging templates:
It is the third step in designing the office layout. The manager should prepare model known as template. Templates are thin plates of board or metal that represents actual space with decorations. They provide tentative design of office space. Several adjustments, change might me made before final model is finalized.

4. Indicating the electric wiring:
While designing the office layout, electric wiring should be properly managed. The location should be properly wired to avoid the risk of short circuits and fluctuation of voltage.

5. Submitting the plan to top management for approval:
After making plans and policies, it is submitted to the various departments. The plans must be discussed with the departmental heads and supervisors. They check the plans and finally approve it. Then only the plans are ready to be implemented

Social responsibility of business

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

The major responsibilities of business are:

1. Employees

Provides better working environment to satisfy the employees
It provides salary, bonus, provident funds and job security.
It also provides financial and non-financial supports.
Enriches employees’ performance.
Provide training to develop their skills.
listen and handle their complaints and issues

2. Creditors:

Make duly payment
Satisfaction of creditors with proper relationship
Helping them to create their own market.
Entrusting the right of proper selling of goods and services of their goods
Copyright and other legal rights.

3. Customers/consumers:

Better quality of goods and services by charging reasonable price
Supply of commodities is also to be done according to needs of customer
Helps to achieve needs and wants
Provide right goods at right place in right time.
Provide proper pre-sale and post sale information
Provide proper information about new products

4. Investors:

True information about earning power of business
The objectives are to provide reasonable rate of return to shareholder.
Provide the information about plan of business.
Ensure safe investment
Promote utilization of resources without leakage
Ensure transparency of business activities

5. Government

Increase in tax i.e. Increase in government revenue
Fulfill demand of government
Non violation of rules and regulation of government.
Avoid unfair trade
Provide essential information to the government.
Solve national problems like natural calamities.
Avoid malpractice like black marketing, adulteration, smuggling

6. Society

Good environment
Employment opportunities generation.
Socio-cultural understanding
Apply anti pollution measures.

Components of direction

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

Aspects of direction
Direction is an integration of motivation, leadership, communication and coordination. It is an important function of management which is related to issue orders to staff.

1. Motivation: it is the process of inspiring and encouraging the people to do work. It is a skill of using the capability of manpower for the organization. It is a mental and physical presence of employee to do work. Effective motivation helps to raise the effective direction. Therefore, motivation is important aspect of direction.

2. Leadership: it is another important aspect of direction. It is defined as the process of influencing people to perform work effectively. In other words, it influences the behavior of employees or subordinate. According to time, situation and behavior of followers, a leader must conduct his followers. Therefore, it is an important aspect of direction.

3. Communication: communication means transferring information from one person to another. In other words when the information is transmitted from one person to another and information receiver easily take the information, it is known as communication. It includes sending message and receiving message. After sending message receiver receives the message and understands it. Therefore, message receiver responds and reacts about the message. In an organization manager must develop an effective communication system so that s/he may give instruction and guidance to the subordinates and motivate them to do the work to the best of their ability.

4. Coordination: it is also an important aspect of direction. When the coordination activity is not conducted effectively. Direction is not effective. Coordination is the process of linking activity of resources and various departments so that desired goal can be achieved easily. It is inter-related with all managerial function.

5. Supervision: it is another important aspect of direction. Direction is not only to issue order but also supervising job of subordinates. It is an important function of every manager. So the manager’s duty is to look after their work and examine that whether they have done according to the order issued or not and also help in solving their work problems.

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.

Office furniture : meaning and importance

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

Office furniture
Office furniture is an important part of office management; it is mostly used for indoor activity. Employees working in the office should be provided with comfortable and convenient furniture so that they can work efficiently. The major and most popular office furniture are chair, table, cabinets, cupboards, sofas, racks etc. office furniture are common in all offices. Office furniture should have good design which can help the office to look attractive ad pleasant. In a well furnished office, employees feel comfortable and are motivated for work

Importance of office furniture

It increases the efficiency of work
It makes the office more attractive and pleasant.
It helps to maintain the prestige of office
It provides better working environment for the employees
It helps in reducing the fatigue.
It helps in protection of documents from fire, dust, insects etc.
It helps in proper storage of files

Factors to be considered while selecting office machines and furniture

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

Factors to be considered while selecting office machines and furniture are listed below:

1. Need of machines: before selecting any machine its degree of need is to be checked thoroughly. The alternates available to the machine also should be analyzed

2. Cost: cost of machine is a very important factor to be considered before selecting any machine. The machine should be within the budget of an office

3. Operating cost: capital cost and operating cost should be taken into account. Similarly, maintenance cost, repair cost, and space required for the machine also should be analyzed

4. Durability: office machine should be original, durable and lost lasting. Office machines are very expensive and it is not possible to purchase new machine every year. Therefore, the machine to be purchased must be free from problem of frequent break down. This also saves in repair cost

5. Easy to operate and flexible: office machine should be easy to operate and flexible. There shouldn’t be need of any additional training and specialization for handling of office machine. Machine should be usable for numerous purposes too

6. Servicing: office machines require regular repair and maintenance. The spare parts of the machines should be easily available in the market. Likewise, the servicing facilities should be readily available.

7. Quality and speed: office machine should be of higher quality. It should be speedy in nature.

Factors to be considered for selecting office furniture

1. Cost: cost of furniture is a very important factor to be considered before selecting any machine. The furniture should be within the budget of an office.

2. Design: design of furniture relates with height and width, color, number of drawers, and so on. No matter what, furniture should support the space and must facilitate the works done.

3. Durability: office furniture should be made up of steel rather than wood because steel furniture is compatible and lost lasting. Office furniture can be expensive and it is not possible to purchase new furniture every year because it doesn’t even support the space. Therefore, the furniture to be purchased must be free from problem of breakage.

4. Multiple uses: furniture should be usable for numerous purposes in the office.

5. Uniform: furniture in the office must have uniform quality and cost. They must have lower cost of maintenance.

6. Safety: office furniture should be safe. Glass topped and sharp cornered furniture are relatively unsafe.

7. Saving space: choice of furniture also depends upon the space occupied by furniture. Such furniture should be selected which would occupy minimum office space. Bulky and space occupying furniture indirectly add office cost.

8. Comfort: office furniture should be comfortable. Comfortable furniture will result in increased efficiency of the employees

9. Portability: the furniture being portable can be easily shifted from one room to another, one building to another and form one location to another.