Single Entry and Double Entry Accounting

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Single entry accounting/Cash accounting. This system records only cash movement of transactions and that too up to the extent of recording one aspect of the transactions. This means that only receipt or payment of cash is recorded and no separate record is maintained (about the source of receipt and payment) as to from whom the cash was received or to whom it was paid. Double entry book keeping/Commercial accounting. Double entry or commercial accounting system records both aspects of transaction i.e. receipt or payment and source of receipt or payment. It also records credit transactions i.e. recording of Electricity Bill or accruals of Salary payment etc. This concept will be explained in detail in the next lectures but for the time being it should be noted that in cash accounting date of receipt / payment of actual cash is important while in commercial accounting the date on which the expense is caused (whether paid or not) as well as the spreading of the cost of c...
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ANALYZING ORGANIZATIONAL ENVIRONMENT AND UNDERSTANDING ORGANIZATIONAL CULTURE

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This lecture discusses the components and complexities of an organization’s culture and the external /internal environment and how these may constrain managers. Managers are also responsible for improving stakeholder involvement in decisions making and actions taking. Managers must be aware that organizational culture and organizational environments will influence both the way an organization is managed as well as its effectiveness. How can an understanding of organizational culture and the external environment help the manager? Let us learn.

THE ENVIRONMENT:

The impact of the external environment on a manager’s actions and behaviors cannot be overemphasized. There are forces in the environment that play a major role in shaping managers’ endeavors. The environment is defined as outside institutions and forces outside the organization that potentially affect an organization’s performance.
 
Types of Environment:
1)  External Environment
2) Internal Environment

External Environment
‘Major forces outside the organisation with potential to influence significantly a product or service’s likely success is called its external environment.’
 
Types of External Environments:
The insights derived from systems theory have helped to highlight the importance of a managed interaction between an organization and its external environment. Two major divisions have been made in the external environment:
 
1)  The Mega Environment
2)  The Task Environment

The Mega Environment
The mega-environment,or general environment as it is sometimes called, is that segment of the external environment that reflects the broad conditions and trends in the societies within which an organization operates.

Major Elements of the Mega Environment
1.  The technological element of the mega-environment reflects the current state of knowledge regarding the production of products and services.

a.  Technology is a particular state of knowledge. It is not “things.” A computer, for instance, is an artifact or an example of technology and is not technology itself.
b.  Research indicates that technology tends to evolve through periods of incremental change punctuated by technological breakthroughs that either enhance or destroy the competence of firms in an industry.
c.  Numerous publications (such as Business Week, Forbes, etc.) and on-line services (such as LEXIS/NEXIS) provide information regarding technological and other environmental elements.

2. The economic element of the mega-environment encompasses the systems of producing, distributing, and consuming wealth. 

a.  In a capitalist economy, economic activity is governed by market forces and the means of production are privately owned by individuals, either directly or through corporations. 
b.  In a socialist economy, the means of production are owned by the state and economic activity is coordinated by state plan. 
c.  In practice, countries tend to have hybrid economies, incorporating elements of capitalism and socialism. d.  Organizations are influenced in any given economic system by a variety of economic conditions over which they have little control, such as inflation and interest rates.

3.  The legal-political element of the mega-environment includes the legal and governmental systems within which an organization must function.
 
a.  Organizations must operate within the general legal framework of the countries in which they do business.
b.  Organizations are subject to an increase inlawsuits filed by customers or employees.
c.  The political issues which affect organizations include those which influence the extent of government regulation.
 
4.  The socio-cultural element of the mega-environment includes the attitudes, values, norms, beliefs, behaviors, and associated demographic trends that are characteristic of a given geographic area.
 
a.  The socio-cultural element is of particular importance to multinational corporations.
b.  Socio-cultural trends can result in important shifts in demand for products.
 
5.  The international elementof the mega-environment includes the developments in countries outside an organization’s home country that have the potential impact to the organization. International factors far beyond the direct influence of a particular organization can have profound effects on its ability tooperate successfully.
 
a.  Fluctuations of the dollar against foreign currencies influence the ability of an organization to compete in international markets.
b.  Free-trade agreement, such as the NAFTA, GATT can affect an organization either positively or negatively.

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