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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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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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RECORD KEEPING AND SOME BASIC CONCEPTS

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We can maintain a diary of transactions and note the daily transactions like sale, purchase etc. in it. Problems Faced in Maintaining Diary of Transactions • How will we come to know the income and expenses from various sources? • We only have a sheet / page on which daily transactions are listed. • We do not know which product is selling better and which is not. Available Alternate One can go through all the transactions at the end of the month and note different types of transactions on different pages. So that every page gives complete detail for a different type of transaction like sales of different products and expenses of different types now try to go through these transactions and separate transactions of different types.   But what if the number of transactions is large? Is it really possible to go through hundreds or thousands of transactions at the month end and analyse them to obtain required results.  Sales and purchase are not always for cash...
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Cash and Credit Transactions

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Translating every transaction in terms of money does not always mean that the money changes hands, the same time at which the transaction takes place. It may be paid before or after the goods are exchanged. When the money value of an item being purchased is paid, at the same time when the item is exchanged. The transaction is said to be a cash transaction or in other words, if the value of transaction is met in cash at the time of the transaction such kind of transaction is said to be cash transaction.
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Money Measurement Concept

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In accounting, every transaction that is worth recording is recorded in terms of money. In other words any event or item that cannot be translated in terms of money is not recorded in books of accounts.   With the passage of time, the trading volumes and types of commodities available in the market are increased and it became difficult to exchange commodity with other commodity. That is why the concept of cash / money is introduced and people started valuing all goods / services in terms of a common commodity called money. Now the price of 10 kg wheat would be Rupees 60 instead of 2 meters of cloth. Similarly, the price of 2 meters of cloth and 5 litres of milk would also be Rupees 60.
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Barter Trading and Barter Transactions

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Trading one commodity or service for another commodity or service is called ‘ Barter trading’ . Since every person cannot produce every thing that he needs. Therefore, he needs to give / sell what he produces in order to get / buy what he wants? In early days when ‘money’ was not introduced, people used to exchange goods for goods. This kind of trade, where goods are exchanged for goods, is called barter trade . In fact, in barter trade, value of one commodity is quoted in terms of other commodity, for example the price of 10 kg of wheat may be equal to 2 meters of cloth or 5 liters of milk. Although, there is no involvement of money but still every commodity has a value, which means that you have to give a specific quantity of one commodity to buy a specific quantity of another commodity.
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BASIC CONCEPTS OF ACCOUNTING

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Financial accounting is the maintenance of daily record of All financial transactions in such a manner that it would help in the preparation of suitable information regarding the financial affairs of a business or an individual. The need for recording financial transactions arises because the individual or business wants to know the  performance of the business and to assist the person in making decisions related to the business. Transactions In accounting or business terms, any dealing between two persons involving money or a valuable thing is called transaction .   Human beings are social animals and are bound to adopt a community living style. Living in a community, essentially means that people interact with other people and are dependent on each other to fulfill their needs. Every person cannot fulfill all his needs like food, clothing, housing etc. on his own. He, therefore, depends on other people for his needs, in return to this providing others with some of t...
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Types of Strategies

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CORPORATE STRATEGY  The corporate strategy question is, How many and what kind of businesses should we be in? For example, PepsiCo doesn t just make Pepsi-Cola. Instead, PepsiCo is comprised of four main businesses: Frito-Lay North America, PepsiCo Beverages North America, PepsiCo International, and Quaker Oats North America.    PepsiCo therefore needs a  corporate-level strategy. A company s  corporate-level strategy identifies the portfolio of businesses that, in total, comprise the company and how these businesses relate to each other. * For example, with a  concentration (single business) corporate strategy, the company offers one product or product line, usually in one market. WD-40 Company (which makes a spray hardware lubricant) is one example. * A  diversification corporate strategy implies that the firm will expand by adding new product lines. PepsiCo is diversified. Over the years, PepsiCo added chips and Quaker Oats. Such  ...
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Human Resource Management Strategy and Analysis

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Strategic Planning A strategic plan is the company s plan for how it will match its internal strengths and weaknesses with external opportunities and threats in order to maintain a competitive advantage. The essence of strategic planning is to ask, "Where are we now as a business, where do we want to be, and how should we get there?"  The manager then formulates specific (human resources and other) plans to take the company from where it is now to where he or she wants it to be. When Yahoo! tries to figure out whether to sell its search business to Microsoft, it s engaged in strategic planning. A  strategy is a course of action. If Yahoo! decides it must raise money and focus more on applications like Yahoo! Finance, one strategy might be to sell Yahoo! Search. Strategic management is the process of identifying and executing the organization s strategic plan, by matching the company s capabilities with the demands of its environment. Figure below sums up the strategi...
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Strategic Human Resource Management Tools

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Managers use several tools to translate the company s broad strategic goals into human resource management policies and activities. Three important tools include the strategy map, the HR Scorecard, and the digital dashboard. STRATEGY MAP  The strategy map provides an overview of how each department s performance contributes to achieving the company s overall strategic goals. It helps the manager understand the role his or her department plays in helping to execute the company s strategic plan. Figure below presents a strategy map example, in this case for Southwest Airlines. Recall that Southwest has a low-cost leader strategy. The strategy map for Southwest succinctly lays out the hierarchy of main activities required for Southwest Airlines to succeed. At the top is achieving company-wide, strategic financial goals. Then the strategy map shows the chain of activities that help Southwest Airlines achieve these goals. For example, as we saw earlier in this chapter, to boost...
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Human Resource Strategies and Policies

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Managers call the specific human resource management policies and practices they use to support their strategic aims  human resource strategies. The Shanghai Portman's human resource strategy aimed to produce the service-oriented employee behaviors the hotel needed to improve significantly the hotel s level of service. Its HR policies included installing the Ritz-Carlton Company s human resource system, having top management personally interview each candidate, and selecting only employees who cared for and respected others. The accompanying HR as a Profit Center feature presents another example. HR AS A PROFIT CENTER Several years ago, Albertsons Markets had to improve performance, and fast. With 2,500 stores and 230,000 workers, it faced competition not only from grocery chains, but also from Walmart and online sites. Albertsons overall strategic aims included reducing costs, maximizing financial returns, becoming more customer-focused, and energizing employees. Albertsons...
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STRATEGIC HUMAN RESOURCE MANAGEMENT

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Once a company decides how it will compete, it turns to formulating functional departmental strategies to support its competitive aims. One of those departments is human resource management. Its functional strategies are  human resource management strategies. Defining Strategic Human Resource Management Every company needs its human resource management policies and activities to make sense in terms of its broad strategic aims. Strategic human resource management means formulating and executing human resource policies and practices that produce the employee competencies and behaviors the company needs to achieve its strategic aims. Figure shows the link between human resource strategy and the company s strategic plans. The basic idea behind strategic human resource management is this: In formu-lating human resource management policies and activities, the aim must be to produce the employee skills and behaviors that the company needs to achieve its strategic goals. Figure ...
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Human Resource Management Strategy and Analysis

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THE STRATEGIC MANAGEMENT PROCESS Goal-Setting and the Planning Process Whether the manager is planning to boost a hotel s profitability or something more mundane, the basic planning process is the same. It involves setting objectives, making basic planning forecasts, reviewing alternative courses of action, evaluating which options are best, and then choosing and implementing your plan. A  plan shows the course of action for getting from where you are to where you want to go in other words, to the goal. Planning is always  goal-directed (in this case, to improve the hotel s level of service significantly). THE HIERARCHY OF GOALS In companies, it is traditional to view the goals from the top of the firm down to front-line employees as a chain or hierarchy of goals. At the top, the president sets long term or strategic goals (such as  Double sales revenue to $16 million in fiscal year 2011). His or her vice presidents then set goals, such as  add one prod...
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THE TRENDS SHAPING HUMAN RESOURCE MANAGEMENT

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Globalization and Competition Trends; Globalization refers to the tendency of firms to extend their sales, ownership, and/or manufacturing to new markets abroad. Examples surround us. Toyota produces the Camry in Kentucky, while Dell produces PCs in China. Free trade areas agreements that reduce tariffs and barriers among trading partners further encourage international trade. NAFTA (the North American Free Trade Agreement) and the EU (European Union) are examples. Companies expand abroad for several reasons. Sales expansion is one. Walmart is opening stores in South America. Dell, knowing that China will soon be the world's biggest market for PCs, is aggressively selling there. Firms go abroad for other reasons. Some manufacturers seek  new foreign prod-ucts and services to sell, and to  cut labor costs. Thus, some apparel manufacturers design and cut fabrics in Miami, and then assemble the actual products in Central America, where labor costs are relatively low. S...
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Human Resource Manager s Duties

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In providing this specialized assistance, the  human resource manager carries out three distinct functions: 1. A line function.   The human resource manager directs the activities of the people in his or her own department, and perhaps in related areas (like the plant cafeteria). 2. A coordinative function.  The human resource manager also coordinates personnel activities, a duty often referred to as functional authority (or func-tional control). Here he or she ensures that line managers are implementing the firm s human resource policies and practices (for example, adhering to its sexual harassment policies). 3. Staff (assist and advise) functions. Assisting and advising line managers is the heart of the human resource manager s job. He or she advises the CEO so the CEO can better understand the personnel aspects of the company s strategic op-tions. HR assists in hiring, training, evaluating, rewarding, counseling, promoting, and firing employees. It a...
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Line Managers Human Resource Duties

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However, line managers still have many human resource duties. This is because the direct handling of people has always been part of every line manager s duties, from president down to first-line supervisors. For example, one major company outlines its line supervisors respon-sibilities for effective human resource management under these general headings: 1. Placing the right person in the right job 2. Starting new employees in the organization         (orientation) 3. Training employees for jobs that are new to          them 4. Improving the job performance of each person 5. Gaining cooperation and developing smooth         working relationships 6. Interpreting the company s policies and                 procedures 7. Controlling labor costs 8. Developing the abilities of each person 9. Creating and maintaining department morale 10. Protecting employees healt...
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HR FOR ENTREPRENEURS

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Finally, another reason to study this course is that you might end up as your own human resource manager. More than half the people working in the United States about 68 million out of 118 million work for small firms. Small businesses as a group also account for most of the 600,000 or so new businesses created every year. Statistically speaking, therefore, most people graduating from college in the next few years either will work for small businesses or will create new small businesses of their own. Especially if you are managing your own small firm with no human resource manager, you ll have to understand the nuts and bolts of human resource management. We ll specifically address HR for entrepreneurs in upcoming posts.
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Why Is Human Resource Management Significant to All Managers?

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AVOID PERSONNEL MISTAKES; First, having a command of this knowledge will help you avoid the sorts of personnel mistakes you  don t want to make while managing. For example, no manager wants to: * Hire the wrong person for the job * Experience high turnover * Have your people not doing their best * Waste time with useless interviews * Have your company taken to court because of your discriminatory actions * Have your company cited under federal occupational safety laws for unsafe practices * Have some employees think their salaries are unfair relative to others in the organization * Allow a lack of training to undermine your department s effectiveness * Commit any unfair labor practices IMPROVE PROFITS AND PERFORMANCE Similarly, effective human resource management can help ensure that you get results through people. Remember that you can do everything else right as a manager lay brilliant plans, draw clear organization charts, set up world-class assembly line...
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Introduction to Human Resource Management

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An organization consists of people with formally assigned roles who work together to achieve the organization s goals. A  manager is the person responsible for accomplishing the organization s goals, who does so by managing the efforts of the organization s people. Managing involves five functions: planning, organizing, staffing, leading, and controlling. In total, these functions represent the management process. Some of the specific activities involved in each function include: *Planning. Establishing goals and standards; developing rules and procedures; developing plans and forecasting. * Organizing. Giving each subordinate a specific task; establishing departments; delegating authority to subordinates; establishing channels of authority and communication; coordinating subordinates work. * Staffing. Determining what type of people you should hire; recruiting prospective employees; selecting employees; training and developing employees; setting performance standards; ev...
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CONTROLLING FOR ORGANIZATIONAL PERFORMANCE

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What Is Organizational Performance? Performance is the end result of an activity. Managers are concerned with organizational performance— the accumulated end results of all the organization’s work processes and activities. Measures of Organizational Performance Employees need to see the connection between what they do and the outcomes. The most frequently used organizational performance measures include organizational productivity, organizational effectiveness, and industry rankings. 1.  Organizational productivity is the overall output of goods or services produced divided by the inputs needed to generate that output. It’s the management’s job to increase this ratio. 2.  Organizational effectiveness is a measure of how appropriate organizational goals are and how well an organization is achieving those goals. TOOLS FOR MONITORING AND MEASURING ORGANIZATIONAL PERFORMANCE Managers might use any of the following types of performance control tools: financial contr...
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CONTROLLING ORGANIZATIONAL PERFORMANCE THROUGH PRODUCTIVITY AND QUALITY

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Types of Controls A.  Controls can be classified according to their timing or place in the productive cycle. 1.  Feed forward control focuses on the regulation of inputs to ensure that they meet the standards necessary for the transformation process. a.  The emphasis is upon preventing problems. b.  Other names for feed forward control are “preliminary control,” “pre-control,” “preventative control” and “steering control.”   2.  Concurrent control involves the regulation of ongoing activities that are part of the transformation process to ensure that conform to organizational standards. a.  Checkpoints are in place to determine whether to continue the process, take corrective action, or stop worked altogether. b.  Other names for concurrent control are “screening” and “yes-no control.” c.  This type of control is not appropriate for work that requires creativity or innovation.   3.  Feedback control is regulation exercised a...
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HISTORICAL OVERVIEW OF MANAGEMENT

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Major objective of treating “Principles of Management” in a concise, interesting, and understandable manner will be to present management history and theory with an emphasis on the future. Most students will be applying the concepts learned here over a period of next many years. Another objective shall be to identify several areas where management concepts are applicable to the personal and professional goal setting and also to apply the management skills to the challenge of managing the most difficult peer or subordinate – the one that may confront you in the mirror each morning in your professional career. In any treatment of a basic subject like this, there is little that the resource/anchor person can claim to be uniquely his own except his/her tacit knowledge and the presentation style. The write-ups from chapters of recommended text books for this course have also been included and are highly acknowledged. The Intellectual Heritage of Management Organized endeavors dir...
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UNDERSTANDING GROUP DYNAMICS IN ORGANIZATIONS

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INTRODUCTION Work groups are a common arrangement within today’s business organizations. Work is being restructured around groups of all kinds and in all sizes of organizations. Managers need an understanding of group behavior and the concept of teams in order to appreciate what groups can and cannot do within organizations and how groups function. Any one member in group can influence the behavior of the individuals in the group and teamwork. We will examine some basic characteristics of groups including the types of work groups, the development of informal groups, and the manner in which groups operate. UNDERSTANDING GROUP BEHAVIOR Groups exhibit different behavior—more than just the sum total of each group member’s individual behavior. In this section, we’re going to look at various aspects of group behavior. What is a Group? A group is defined as two or more interacting and interdependent individuals who come together to achieve particular objectives. 1.  Groups diffe...
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ORGANIZATIONAL DESIGN AND ORGANIC VS. MECHANISTIC VS. VIRTUAL STRUCTURES

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1.  Job rotation is the practice of periodically shifting workers through a set of jobs in a planned sequence. a.  One purpose of job rotation is to combat boredom, but its success is short-lived if tasks are too simple. b.  Another purpose of job rotation is cross training so that there is maximum flexibility in job assignments. c.  A related purpose is employee development so that employees increase their capabilities and understanding of various aspects of the organization. d.  A potential problem is that rotating individuals may be treated as temporary helps and their loyalty perceived as questionable. 2.  Job enlargement is the allocation of a wider variety of similar tasks to a job in order to make it more challenging. a.  Job enlargement broadens job scope, the number of different tasks an employee performs in a particular job. b.  The problem is that if additional simple tasks are added, worker boredom may persist. Too, lower efficiency...
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