Tag: Office Organization and Management

For debating the essentials for small business success, but looking at the commonalities of successful businesses can help bring focus. While some businesses can achieve success on the strength of a product, lack of competition or cheap labour or materials, in most instances, a successful business requires a solid foundation built on a good product idea, sound business plan, adequate capital, good management and proper accounting.

1. Setting Objectives:

The setting up of business objectives is the first thing to be done by the management. One must know as to what is to be done. Only after deciding the objective, the ways and the means will be determined to achieve the objectives. If it is a producing business, the nature of product to be produced, whether to produce the whole product or part of it should be decided. In case of service business the nature and type of service to be provided should be decided. It is not only the management which should be conversant with the business objectives but every person in the concern should know the aims and goals of the business.

2. Planning:

After determining, the objectives, the work should be planned in all its perspectives. Planning involves forecasting and laying down the course of action. It involves planning for both present and future. What is to be achieved and how it is to be achieved is of primary significance for the present. Future is always uncertain and the estimation of future happenings is very difficult. In planning for the future, an effort is made to estimate the future uncertainties and determine the possible course of action for the coming period. Thus, planning also helps the management to prepare itself for facing the uncertainties of tomorrow.

3. Dynamic Organisation:

Organisation is an arrangement by which tasks are assigned to employees so that their individual efforts contribute effectively to the achievement of clearly defined purposes. The duties and responsibilities of all person’s arc defined and they should know what they arc to do.

An effective organisation system is essential for the success of a business. Firstly, a decision should be taken about the form of ownership, i.e., sole trade, partnership, Joint Stock Company. Then a suitable internal organisation should be developed. No work should be left unassigned. The supervisors and subordinates should know their roles in the business.

4. Financial Planning:

The requirements of finance and its possible sources should be decided at the time of starting the enterprise. The purpose of financial planning is to make sure that adequate funds are raised at the minimum of cost. The required capital should be made available at all times, otherwise, it will hamper the work. The scarcity of capital and too much of it both will be bad for the concern.

The availability of excess capital may tempt the management to spend more money on inventory and on fixed assets. A proper plan is necessary for providing funds for the present needs and future developmental plans.

A financial plan will determine:

(a) The needs of capital

(b) Sources for collecting funds

(c) Administration of capital structure

5. Location and Layout of Plant:

One of the important decisions to be made by the management at the time of starting a concern is regarding the location of the plant. The plant should be located at a place where all factors of production arc available at lowest costs. The aim of reaching an optimum point will be achieved only if the place of location of the businesses is suitable. Raw materials, labour, power and markets for the finished products should be available near the place of location.

After deciding about location, a decision is made about layout of the plant. The setting up of the machinery and equipment should be systematic so that the flow of production should be smooth and uninterrupted. The office building and warehouse etc., should be located near the factory. Proper layout will enable the economical use of available space. Proper location and layout of the business are necessary for the success of a business.

6. Marketing Environment:

The marketing aspects of a business are more important than even production. There is no use of producing a thing if it cannot be sold. Marketing management is essential for earning profits. Management should decide about the channels of distribution. Whether to sell directly to consumers or to sell through wholesalers? It should be decided after taking into consideration various aspects of goods.

7. Research Team:

In the changing technological world, it is essential to use latest devices for production and marketing of goods. Change is the essence of business. Every day, new production methods are found. Consumers’ needs and preferences should be taken into consideration in devising production and marketing policies. Research and development should be given due place in the business.

One can compete with changing business world only through research programmes. If attention is not given to research work then it will become difficult to stay in business for a large period. So, research activities are necessary for the success of an enterprise.

8. Dynamic leadership:

The success of an enterprise will depend upon the efficiency of its management. The task of management is to plan, organize, co-ordinate and direct various activities for achieving business objectives. This will be possible only if the leadership is dynamic. The operation managing the concern should have foresight, initiative, courage and aptitude for a change. These qualities are necessary in the leadership to take the concern on the road of progress.

A Government company is one in which not less than 51% of the paid-up share capital is held by the Central Government or a State Government or jointly by both.

A Government company may either by wholly owned by the Government, in which case 100% capital is provided by Government; or may be owned by the Government (holding minimum of 51% share-capital) and private concerns/individuals (holding maximum of 49% share capital).

Features of Government Companies

1. Government companies are governed by the provisions of the Companies Act, 1956.
2. The whole of the capital or 51% or more is owned by the government.
3. Its employees excluding those on deputation are not civil servants.
4. The Government Company employs its own staff, and they do not become the employees of the government
5. Its personnel policies are subject to its Articles of Association.
6. In case it is fully owned by the government, government provides the funding and it derives income from sales of its goods and services.
7. In case it is partly funded by the government, it derives funds from the government as well as its shareholders.
8. All or a majority of directors are appointed by the Government depending on the shareholding pattern.
9. It is a body corporate and can enter into contracts in its own name.
10. It can sue and be sued in its own name.
11. The Memorandum and Articles of Association lays down its objectives, scope of activities and rules of internal management. These are prepared by the Government, and once prepared they cannot be changed without proper permission from the Company Law authorities.
12. It is generally exempt from many of the accounts and audit laws. Constant parliamentary scrutiny, budgetary, administrative and legislative controls are absent.

Advantages of Government Company:

(i) Internal Autonomy:

A government company can manage its affairs independently. It is relatively free from ministerial control and political interference, in its day-to-day functioning.

(ii) Easy Formation:

A Government company can be easily formed under the Companies, Act, just by an executive decision of the government.

(iii) Private Participation:

Through Government company device, the government can avail of the management skills, technical know-how and expertise of the private sector and foreign countries. For example, the Hindustan Steel Limited has obtained technical and financial assistance from the U.S.S.R., West Germany and the U.K. for its steel plants at Bhilai, Rourkela and Durgapur.

(iv) Discipline:

The Government Company is subject to provisions of the Companies Act; which keeps the management of the company active, alert and disciplined.

(v) Easy to Alter:

Objectives and powers of the Government Company can be changed by simply altering the Memoranda of Associating of the company, without seeking the approval of the Parliament.

(vi) Professional Management:

A Government company can employ professionally qualified managers; because it has its own personnel policies.

(vii) Public Accountability:

The Annual Report of a Government company is presented to the Parliament/ State Legislature. These reports can be discussed and debated there.

Demerits:

• There is less freedom and flexibility. It cannot modify its business or change its policies and practices in tune with the changes in the environment.
• Lack of autonomy is a serious drawback of government companies. It is subject to the interference of the Minister and bureaucrats who run the department.
• There is no incentive for individual interest and initiative. Employees who run the company are paid a fixed salary. They are not going to benefit if the company does well nor is their pay and benefits affected if the company incurs losses. Therefore, employees do not display drive and enthusiasm to make the company successful.
• Due to red-tapism, decisions are delayed. It would not be able to capitalize on new opportunities. Sometimes decisions are de1ayed for fear of making mistakes.
• Since employees enjoy job security there is no serious attempt to increase efficiency of operations. Further, the top management might be transferred if a new government comes to power. Therefore, there is not much interest is putting in dedicated efforts.
• Government companies are free from parliamentary scrutiny, budgets audits etc. Therefore, there might be a tendency to conduct its business in an inefficient and reckless manner. This might eventually lead the company to losses.

The Federation of Indian Chambers of Commerce & Industry (FICCI) is a non-governmental trade association and advocacy group based in India. Established in 1927, on the advice of Mahatma Gandhi by Indian businessman Mr. G.D. Birla and Purshottamdas Thakurdas. It is the largest, oldest and the apex business organisation in India. It is a non-government, not-for-profit organisation. FICCI draws its membership from the corporate sector, both private and public, including SMEs and MNCs. The chamber has an indirect membership of over 250,000 companies from various regional chambers of commerce. It is involved in sector-specific business building, business promotion and networking. It is headquartered in the national capital New Delhi and has a presence in 12 states in India and 8 countries around the world.

FICCI is India’s sole national issuing & guaranteeing association for ATA Carnets ATA Carnets are used by TV/Film crews, journalists, engineers, musicians and industry for temporary moving equipment across borders. FICCI issues and endorses carnets, guarantees the payment of duties and taxes to customs (both domestic and foreign) authorities.

Functions:

Jointly works with similar associations of foreign countries:

Works with joint business councils and private industrial alliances situated across the globe in the areas of trade enhancements, industry partnerships to voice the opinion of the Indian industry on global forum.

Role in policy making:

FICCI plays a pivotal role in formulation of economic and finance policies. By engaging with the policy makers, government and civil society Federation of Indian Chambers of Commerce and Industry influences the policies by way of articulating the views and suggestions of industry.

Provides guidance and education:

Provides guidance and education to its member organizations by way of publishing informative journals useful to the business community. And acts a conflict resolver among them by way of mutual discussion on the problems.

Assistance to government:

Assist the government in the areas of the trade negotiations with foreign countries and sends their experienced personnel to the abroad to study the economy and business environment.

Conducts various programs and events:

Conducts workshops, seminars, business meets and conferences to discuss, debate various upcoming and existed policies of the government.

Assists its members:

Assist its members in the areas of policy improvement, suggestions to the management.

Invites and arrange the talks with foreign business delegates:

Plays crucial role in inviting foreign business delegations of public and private levels which are very vital in improving the foreign trade and foreign investment.

Provides information on exports:

Provides credible and valuable information on potentials and new developments in foreign trade by studying the trade environment and imports regulations of many foreign countries.

Accounting Standards simply refers to guidelines to be followed in the accounting system. It means rules & regulation that are to be followed while recording accounting & financial transactions. It governs the manner in which financial statements are prepared & presented.

As a business owner, you understand that accounting has to be accurate, but you may not know why accounting standards the rules with acronyms such as GAAP and IFRS are such a big deal. If you were the only one who ever needed to see your accounting, they wouldn’t be, but investors and regulators may go over your ledgers, too. When you follow accounting standards, outsiders can understand what they’re reading.

The main aims of accounting standards are to bring uniformity & reliability in the whole accounting system. Accounting standards standardize the whole accounting procedure of the economy. All companies after adopting these accounting standards follow the same manner of recording transactions.

Significance:

Determining Managerial Accountability

The accounting standards help measure the performance of the management of an entity. It can help measure the management’s ability to increase profitability, maintain the solvency of the firm, and other such important financial duties of the management.

Management also must wisely choose their accounting policies. Constant changes in the accounting policies lead to confusion for the user of these financial statements. Also, the principle of consistency and comparability are lost.

Assists Auditors

Now the accounting standards lay down all the accounting policies, rules, regulations, etc in a written format. These policies have to be followed. So, if an auditor checks that the policies have been correctly followed, he can be assured that the financial statements are true and fair.

Improves Reliability of Financial Statements

There are many stakeholders of a company and they rely on the financial statements for their information. Many of these stakeholders base their decisions on the data provided by these financial statements. Then there are also potential investors who make their investment decisions based on such financial statements.

So, it is essential these statements present a true and fair picture of the financial situation of the company. The Accounting Standards (AS) ensure this. They make sure the statements are reliable and trustworthy.

Attains Uniformity in Accounting

Accounting Standards provides rules for standard treatment and recording of transactions. They even have a standard format for financial statements. These are steps in achieving uniformity in accounting methods.

Prevents Frauds and Accounting Manipulations

Accounting Standards (AS) lay down the accounting principles and methodologies that all entities must follow. One outcome of this is that the management of an entity cannot manipulate with financial data. Following these standards is not optional, it is compulsory.

So, these standards make it difficult for the management to misrepresent any financial information. It even makes it harder for them to commit any frauds.

Comparability

This is another major objective of accounting standards. Since all entities of the country follow the same set of standards their financial accounts become comparable to some extent. The users of the financial statements can analyze and compare the financial performances of various companies before taking any decisions.

Also, two statements of the same company from different years can be compared. This will show the growth curve of the company to the users.

A chamber of commerce, or board of trade, is a form of business network, for example, a local organization of businesses whose goal is to further the interests of businesses. Business owners in towns and cities form these local societies to advocate on behalf of the business community. Local businesses are members, and they elect a board of directors or executive council to set policy for the chamber. The board or council then hires a President, CEO, or Executive Director, plus staffing appropriate to size, to run the organization.

A chamber of commerce may be a voluntary or a mandatory association of business firms belonging to different trades and industries. They serve as spokespeople and representatives of a business community. They differ from country to country.

Characteristics

Membership in an individual chamber can range from a few dozen to well over 800,000, as is the case with the Paris Île-de-France Regional Chamber of Commerce and Industry. Some chamber organizations in China report even larger membership numbers. Chambers of commerce can range in scope from individual neighborhoods within a city or town up to an international chamber of commerce.

In the United States, chambers do not operate in the same manner as the Better Business Bureau in that, while the BBB has the authority to bind its members under a formal operation doctrine (and, thus, can remove them if complaints arise regarding their services), the local chamber membership is either voluntary or required by law. Some chambers are partially funded by local government, others are non-profit, and some are a combination of the two. Chambers of commerce also can include economic development corporations or groups (though the latter can sometimes be a formal branch of a local government, the groups work together and may in some cases share office facilities) as well as tourism and visitor bureaus.

Some chambers have joined state, national (such as the United States Chamber of Commerce and the British Chambers of Commerce) and even international bodies (such as Eurochambres, the International Chamber of Commerce (ICC), Worldchambers). Currently, there are about 13,000 chambers registered in the official Worldchambers Network registry, and the chamber of commerce network is the largest business network globally. This network is informal, with each local chamber incorporated and operating separately, rather than as a chapter of a national or state chamber.

Chambers of commerce plays a vital role by rendering useful services to businessmen and the Government. Services to businessmen

Chambers of commerce serves as friends, philosophers and guides to the business commu­nity. Businessmen derive the following advantages from chambers of commerce:

(i) Businessmen get valuable information free of cost.

(ii) They can expand their business activities with the help of suggestions and advice from chambers of commerce.

(iii) Chambers of commerce creates markets for the products of their members by organising fairs and exhibitions.

(iv) Businessmen get a common forum at which they can discuss problems and exchange views on matters of common interest.

(v) Differences and disputes among businessmen can be solved amicably and economically with the help of chambers of commerce.

(vi) Members take advantage of educational and training facilities offered by chambers of commerce.

(vii) Chambers of commerce undertakes research on behalf of their members.

(viii) Chambers of commerce fosters a sense of cooperation’s among businessmen.

Chambers of Commerce in India

In India, chambers of commerce have been organised at both regional and national levels.

1. Regional Chambers of Commerce

(i) Indian Chamber of Commerce (Kolkata)

(ii) Bengal Chamber of Commerce (Kolkata)

(iii) Indian Merchants Chamber (Mumbai)

(iv) Mawari Chamber of Commerce (Mumbai)

(v) Madras Chamber of Commerce (Chennai)

(vi) Punjab, Haryana and Delhi Chamber of Commerce (New Delhi).

2. National Chambers of Commerce

(i) Federation of Indian Chambers of Commerce and Industry (FICCI)

(ii) Confederation of Indian Industry (CII)

(iii) Associated Chambers of Commerce and Industry (ASSOCHAM)

(iv) All India Organisations of Employers (AIOE)

Businesses that take a proactive stance toward understanding and complying with federal agencies and regulatory acts will minimize their chance of fines, prosecution, or other action. Therefore, it is in the best interest of businesses to maintain healthy relationships with regulatory agencies at all levels of government. Among the business activities regulated by government are competitive practices, industry-specific activities, Internet activities, general issues of concern, and monetary regulations.

Government: Regulator of Business:

The entire regulatory legislation and policies stand covered under this segment. On the one hand, there is a very large indirect area of government control over the functioning of private sector business through budgetary and monetary policies.

But against this there is also a fast-expanding area of direct administrative or physical controls through which the government seeks to ensure that private investment and production in industry and the use of scarce resources conform to government’s basic socio-economic objectives.

Government’s regulatory functions with regard to trade, business and industry aim at laying down the limits for the private enterprise. The regulatory functions of the Government include:

(i) Restraints on private activities.

(ii) Control of monopoly and big business.

(iii) Development of public enterprises as an alternative to private enterprises to ensure competitive dualism.

(iv) Maintenance of a proper socio-­economic infrastructure.

Government: Promoter of Business:

The promotional role of the government in relation to industries can be seen as providing finance to industry, in granting various incentives and in creating infrastructure facilities for industrial growth and investment.

For example, our government has identified certain backward areas as ‘No Industry Districts’. To promote development of such areas, Government provides subsidies and tax holiday to attract investment in backward areas.

In this way the government will help the process of balanced development and thereby remove regional disparities. The government is assisting the development of small scale industries.

The District Industrial Centers are assisting the development of small industries. The government is actively helping the industrial development of the country by providing finance to them through the development banks.

Government as an Entrepreneur:

The impressive growth of the public sector in India from a small beginning bears testimony to the role of the government as an entrepreneur.

Private investors are solely guided by private profit motive and hence they are not interested in developing products of common public use and social services which yield relatively lower returns. But as a “Social entrepreneur” the government does not hesitate to take them up.

Government as the Planner:

In its role as a planner, the government indicates various priorities in the Five Year Plans and also the sectoral allocation of resources. Mixed economies are democratically planned economies.

The government tries to manage the economy and its business activities through the exercise of planning. Planning is the most important activity in a modern mixed economy. The idea of economic planning can be traced to three different sources: Rationalism, Socialism and Nationalism.

Economists advocate a planned economy on the ground that it can be a rational economy which can utilize the available resources in an optimal manner.

The Government’s responsibilities towards business are as follows:

Maintaining Law and Order

Maintaining law and order and protecting persons and property is another responsibility of the Government of the country. It would be impossible to carry on business in the absence of a peaceful atmosphere.

Enacting and Enforcing Laws

Enacting and enforcing laws is the prime responsibility of the Government of each country. This is because laws and regulations only enable the businesses to function smoothly. Further, Government provides a system of court for adjudicating differences between firms, individual or Government agencies.

Providing Monetary System

The Government has to provide monetary system so that business transactions can be affected. Further, it is also the responsibility of the Government to regulate money and credit, and protect the money value of the currency in terms of other currencies.

Provision of Basic Infrastructure

Government should provide basic infrastructural facilities such as transportation, power, finance, trained personnel and civic amenities, which are indispensable for the effective functioning of business concerns.

Balanced Regional Development and Growth

It is the responsibility of the Government to make sure that there are balanced regional developments and growth.

Supply of Information

It is the responsibility of the Governments to provide information, which is useful to businessmen in carrying out their business activities. Government agencies publish and provide a large volume of information, which is used extensively by business firms. This information normally relates to economic and business activity, specific lines of business, scientific and technological developments, and many other things of interest to business houses or business leaders.

Transfer of Technology

It is the responsibility of the Government to transfer to private industries whatever discoveries are made by the Government owned Research Institutions so that they can be used for commercial production.

Assistance to Small-scale Industries

It the responsibility of the Government to provide the required facilities and encourage the development of small-scale industries to overcome the problem faced by them.

Conducting Inspections

It is the responsibility of the Government to inspect the private business concerns in order to make sure that they produce quality products, and also to prevent the production and sale of sub-standard goods.

Incentives to Home Industries

It is the responsibility of the Government to encourage the development of home industries by providing them various incentives and subsidies.