Single Entry and Double Entry Accounting

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

BEHAVIORAL THEORIES OF MANAGEMENT

Behavioral Viewpoint:
Organizational behavior (OB) research has contributed much of what we know about behavioral views of management, human resources management, motivation, leadership, trust, teamwork, and conflict management.

Early Advocates:
Four people stand out as early advocates of the OB approach. These include Robert Owen, Hugo Munsterberg, Mary Parker Follett, and Chester Barnard.
 
1.  Robert Owen, a successful Scottish businessman, proposed a utopian workplace.
2.  Hugo Munsterberg created the field of industrial psychology—the scientific study of individuals at work to maximize their productivity and adjustment.
3.  Mary Parker Follett was a social philosopher who thought the manager’s job was to harmonize and coordinate group efforts.
4.  Chester Barnard, president of New Jersey Bell Telephone Company, saw organizations as social systems that required human cooperation.
 
a.  He believed that managers’ major roles were to communicate and stimulate subordinates to high levels of effort.
b.  He also introduced the idea that managers have to examine the environment and then adjust the organization to maintain a state of equilibrium.

Hugo Munsterbeg (1863-1916)is considered to be the “father of industrial psychology” and is regarded by students of psychology as an important figure asFrederick Taylor is by students of management.
 
Munsterberg attempted to develop practical applications of psychology. He argued that psychologists could
help industry in three major areas:
 
a.  Finding ways to identify individuals best suited to particular jobs.
b.  Identifying the psychological conditions for optimum efficiency.
c.  Finding ways to influence individual behavior to be congruent with management’s objectives

Mary Parker Follett (1868-1933) brought to management the perspectives of political science and social work. She identified:
a.  The importance of the functioning of groups, not just individuals, in organization.
b.  The principle of “power with” rather than “Power over” in management-employee relations.
c.  Conflict resolution through integration, i.e., finding a solution to a conflict that would satisfy both parties.
d.  The achievement of integrative unity, whereby the organization operates as a functional whole, with the various interrelated parts working together effectively to achieve organizational goals.

The Hawthorne Studies

Without question, the most important contribution to the developing Organization Behavior field came out of the Hawthorne Studies,a series of studies conducted at the Western Electric Company Works in Cicero, Illinois. These studies, started in 1924 and continued through the early 1930s, were initially designed by Western Electric industrial engineers as a scientific management experiment. They wanted to examine the effect of various illumination levels on worker productivity.

Control and experimental groups were set up with the experimental group being exposed to various lighting intensities, and the control group working under a constant intensity. If you were one of the industrial engineers in charge of this experiment, what would you have expected to happen? That individual output in the experimental group would be directly related to the intensity of the light? Seems perfectly logical, doesn’t it? However, they found that as the level of light was increased in the experimental group, output for both groups increased. Then, much to the surprise of the engineers, as the light level was decreased the productivity decrease was observed in the experimentalgroup only when the level of light was reduced to that of a moonlit night. What would explain these un-excluded that illumination intensity was not directly related to group productivity, and that something else must have contributed to the results. However, they weren’t able to pinpoint what that “something else” was.

In 1927, the Western electric engineers asked Harvard professor Elton Mayo and his associates to join the study as consultants. Thus began a relationship that would last through 1932 and encompass numerous experiments in the redesign of jobs, changes in workday and workweek length, introduction of rest periods, and individual versus group wage plans.For example, one experiment was designed to evaluate the effect
of a group piecework incentive pay system on group productivity.

Hawthorne studies reflected the scientific management tradition of seeking greater efficiency by improving the tools and methods of work—in this case, lighting.
1.  In the first set of studies, no correlation was found between changes in lighting conditions and individual work performance. In fact, performance nearly always went up with any change—brighter or darker—in illumination.
2.  In the second set of studies, the concept of theHawthorne effectemerged. The Hawthorne effect refers to the possibility that individuals singled out for a study may improve their performance simply because of the added attention they receive from the researchers, rather than because of any specific factors being tested in the study.
3.  The third set of studies centered on group production norms and individual motivation.
4.  Although simplistic and methodologically primitive, the Hawthorne studies established the impact that social aspects of the job (and the informal group) have on productivity.

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