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Human Capital

Human Capital

Human Capital is the skill sets, knowledge and experience of human resource put to effective use to increase productivity. The term capital indicates the resource value of humans in which organizations invest their time, energy and money. The much pondered subject in recent times in big corporate organizations is about managing human capital.

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Effective Decision Making

Effective Decision Making
Effective Decision Making A Process of Intelligence Effective Decision making is a process of Intelligence, Design and choice activities and “is a central part of the management process”. Decisions are hard to make but once decided there should be no second take. The following steps are involved in the process of Decision-making: 1. Recognizing the problem 2. Deciding priorities among problems 3. Diagnosing the problem 4. Developing alternative courses of action 5. Evaluating alternatives 6. Selecting the best alternative 7. Effective implementation and follow-up action. Recognizing the Problem– Herbert A Simon calls this step as an “intelligent activity“. It is important to find out whether there is any deviation from the past experience. For e.g. Sales might decrease, expense might decrease, sometimes there might be deviations from the plan, sales budget, and competitors may outperform by improved systems. Deciding priorities among the problems: A manager would face many problems at the same time. He should not be bogged down with small and unimportant problems. Some problems can be easily solved by the sub-ordinates. Some may not be important. A manager must see that – he selects carefully the most important problem. Peter Drucker says that “once the right problem is perceived then half of the problem is solved”. A manager must diagnose carefully by asking the following questions. a. What is the real problem? b. What are the causes and effects of the problem? c. Is this problem very important? d. Can they be solved by sub-ordinates? e. Which is the right and most important problem to be solved? Diagnosing the Problem: After choosing the right problem the manager must now start diagnosing the problem. There is no simple answer to the question of how to diagnose the problem, because every individual differs in his or her own way of diagnosing the problem depending on the different background orientations and training. A manager must systematically analyze the problem for identifying the alternative causes of action. Developing Alternative Courses of Action: This step is creative and innovative where a manager analyzes from all perspectives Sometimes a manager can also use a technique called “brainstorming” where a few individuals discuss at length the various possible available alternatives. First of all, a manager must be thoroughly familiar with the problem. This is called saturation. Later, he must think about the problem from several view-points which is called deliberation. Sometimes the manager may not get into the crux of the problem, i.e. there may not be any fruitful result of deliberation, and then the manager might temporarily switch off his conscious search and relax. This process of realization is called incubation. Then after sometime, a flash of light may occur, and the manager may get some insights and ideas. This stage is called illumination. In the last stage, which is called accommodation, the manager resynthesises his ideas into a usable proposal. Evaluating the Alternatives: The manager must now give proper weightage to the positive and negative aspects of the alternatives and evaluate by using some criteria like (a) time; (b) cost; (c) risk; (d) results expected; (e) deviations anticipated; (f) resources available for implementation. Selecting the Best Alternative: This is the most important step where the manager selects the best alternative that will yield maximum profits or results with minimum cost, input or resources. To put it in simple terms, the solution should be able to solve the problem in the best possible way. Effective Implementation and Follow-up Action: Any decision without proper implementation becomes futile and hence proper care must be taken by the manager to pool resources and start implementing the decision taken. In large organizations, follow-up procedures are available in...
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Budget Planning

Budget Planning
Budget Planning Quantification of Objectives in the form of Budgets Effective and efficient management of a business enterprise is facilitated, when a firm charts its course of action in advance. The management function also includes decision-making supported by various managerial techniques and tools that integrate the activities of the employees of the organization. One such systematic approach to profit planning is budgeting. The prime concern of budgeting is to make profits by regulating the flow of funds and allocating the controlling function to various responsibility centers. Don’t know how to start budgeting? Do you need to know how to make a budget ? This infographic will provide personal budget categories you can use to help you categorize expenses for budgeting purpose. This may or will save you time, money, and effort. What is a Budget? A budget is a comprehensive and coordinated financial plan, charted for a specific period of time in the future, but well in advance. It facilitates to compare the actuals with the standards established and review or revise the plans accordingly in case of any deviations or variances. A budget is a plan that is concerned not only about the resources of a firm, but also its operations. It involves the control and manipulation of relevant variables-controllable and non-controllable, and reduces the impact of uncertainty. Economic Constraints in Developing Countries The global economy has its imposing influence on the budget of developing countries, where it is always a deficit budget, the countries finding it difficult to allocate the meager resources available among the different sectors of economy competing for the same. Problems of unemployment, inflation and crude oil prices touching a dangerous high, these countries can offer only piecemeal measures to sustain the momentum of economic growth. Master Budget Talking about organizations going for the master budget at the start of the year, comprise budgets for various segments of the enterprise. The budget for a segment or department will not have much significance unless it is a part of the total budget-the master budget. If the budgets for various segments are not prepared jointly and in harmony with each other, the master budget will lose much of its importance and may even prove to be harmful in realizing the firm’s expectations. A budget is always expressed in financial terms, either in rupees, dollars or pounds, for operational purposes. Say, in a production budget, you talk about units of raw material and finished product. In a labor budget, you talk about men and labor hours. So there must be a common denominator, which can express all these variable quantities in a common language for the comprehensive budget to be meaningful. This purpose is solved by money, which undoubtedly serves as the common denominator. Budget Mechanism A budget is a mechanism to plan for the firm’s operations and activities. It allocates resources as well as responsibilities to different operational centers like, revenue, cost, profit and investment centres. Time dimension must also be added to a budget. For example, a production target of ten thousand units or a profit target of ten million dollars has no meaning unless and until it is related to a specific time period, in which these targets have to be met. A firm may have its long-range and broad objectives, such as maximum sales, maximum profits, customer satisfaction, social responsibilities, etc., But, to achieve these qualitative objectives, a firm has to quantify the same in the form of short-term objectives or goals with a time period precisely specified. A budget is basically a control technique which also facilitates to measure the performance of individuals on the basis of which, corrective action can be...
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Role of Training

Role of Training
Role of Training Some Definitions of Training: According to Flippo, “Training is the act of increasing the knowledge and skills of an employee for doing a particular job”. Training can also be defined as  as “any planned or structured activity or approach designed to help an individual or a group of people to learn as to do things differently or to do different things leading to more effective performance and results”.  Role of Training: Training is the best way to reach the enterprise goals in minimum time period with maximum efficiency. 1. Training unlike experience can reduce the time required to reach maximum efficiency. 2. Cost of training in much less than the cost of adding experience . 3. The results of experience sometimes can be accidental. 4. The expected results are very much assured in a well conceived and well conducted training program. 5. Its purpose is to achieve a change in the behaviour of those trained and to enable them to do their jobs better. 6. Training makes newly appointed employees fully productive in lesser time. Identifying Training Needs: There are three elements of training – purpose, place and time. Training without a purpose is useless because nothing would be achieved out of it. The purpose must be identified carefully and now there are a large number of techniques available for establishing training needs. Having identified the purpose of a training programme, its place must be determined i.e. whether it has to be on the job or off the job. Place would decide the choice of training method and also affect its effectiveness. The next element is the time. Training must be provided at the right time. A late training would provide obsolete knowledge, which would be useless for the employees.  1. Organizational Analysis: – Comprehensive analysis of organizational structure, objectives, culture, processes of decision – making, future objectives and so on. Analysis begins with an understating of short term & long-term goals of the organization. Is there  adequate manpower to fulfill organizational objectives? Whether the work-force  possess required skill & knowledge? Are the employees willing to learn?  2. Task analysis: Thorough analysis of various components of jobs and how they are performed has to be done. Task analysis would indicate whether tasks have changed over period of time & whether employees have adequate skill in performs their tasks. 3. Man Analysis: The focus is on individual, his skill, abilities, knowledge & attitude. Key Indicators are Meeting Deadlines Quality of performance Work behavior...
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