Before embarking on the subject let us find out what delegation is and how the process occurs in an organization. What is Delegation: A manager or a superior cannot think of doing all the jobs by himself. It becomes therefore necessary to delegate some of the jobs to his subordinates to ease the pressure and assign the required authority to carry on with those tasks. This downward pushing of authority is called delegation of authority. Art of Delegation Delegation takes place when one person gives another person the right to perform work on his behalf and in his name. It is the process of entrusting part of the work by the superior to his subordinates. How to Master the Art of Delegation? PROCESS OF DELEGATION 1. Step one is Assigning Responsibility: The superior directs the subordinate to perform a task with due assistance and training. 2. Step two is Granting Authority: To accomplish the task some authority has to be given to the subordinate to procure the essential resources from the organization like materials, equipment, labor etc., 3. Step three is Creating Accountability: The subordinate is expected to accomplish the task within the stipulated time period and report to the manager regarding the acquisition, use and replacement of resources. ADVANTAGES OF DELEGATION   It reduces the work pressure of the manager  Leads to better decisions  Speeds up decision making  It improves the morale of the employees  Creates a feeling of mutual trust between the superior and subordinates  Helps to create a formal organization structure BARRIERS TO EFFECTIVE DELEGATION  Fear of being exposed: Some superiors fear that their weaknesses might be exposed Difficulty in briefing the actual requirement- depends on the quick wit of the employees Lack of confidence in subordinates Fear of loss of power“I am OK you are OK “ attitude of the managers PRINCIPLES OF DELEGATION OF AUTHORITY Principle of Delegation by Results Expected: The authority assigned to the subordinates should be sufficient enough to ensure their ability to accomplish the results expected.Principle of Absoluteness of Responsibility: One has to understand that responsibility can never be delegated and that the superiors are responsible for the activities of their employees and the performance of the employees has to be absolute towards their superior’s expectations.Principle of Parity for Authority and Responsibility: There should be a perfect balance between assigned authority and responsibility. One cannot be held responsible for a task where he has limited authority and too much of authority with too little responsibility can prove to be dangerous.Principle of Unity of Command: If there is a single superior to listen to, conflicts will be greatly reduced and it will be easy for the subordinate to have a personal rapport with the superior.Authority Level Principle: A manager who has the authority to make certain decisions must necessarily use his discretion and should not try to overlook or pass it on to the top management.Principle of Functional Definition: The objectives, tasks, responsibility and authority must be clearly stated to the individuals involved to facilitate improved performance to accomplish enterprise objectives. Managers fail because of poor delegation. Their personal attitude comes to the forefront which makes things quite difficult. Lack of receptiveness: Some managers are not open to ideas and suggestions from the other endWillingness to let go: A superior must have the willingness to delegate authority for positions which he had left long ago.Willingness to trust subordinates: A trustful attitude makes the proceedings smoothWillingness to establish and use broad controls: The superior must establish some standards to which the objectives or tasks can be compared to and control mechanisms must be installed for evaluation purposes. Feedback from subordinates is the most important criterion that determines the effective functioning of the organization. HOW TO MAKE DELEGATION EFFECTIVE? Right person for the right jobGive sufficient authorityFree flow of informationEstablish proper controlsReward the subordinatesMake the nature and scope of the tasks clearMake the subordinate understand...

Venture Capital and Traditional Financing- Comparison of Advantage Venture capital is a new form of financing that has come as a boon for young entrepreneurs and it plays a strategic role in financing small scale enterprises and high technology and risky ventures. In all the developed and developing nations it has made its mark by providing equity capital, so, they are more like equity partners rather than financiers and they are benefited through capital gains. Don Valentine is known as "the grandfather of Silicon Valley Venture Capital". He was one of the original investors in Apple, Atari, LSI Logic, Cisco Systems, Oracle, and Electronic Arts back in the 1970s. So he has a top notch track record. Here are some of his quotes:— Lion (@Lion_Investor1) July 27, 2021 Venture capitalists evaluate the risk using the following factors: Management TeamCompetitive AdvantageMarket PotentialBarriers to entryExit Strategy Banks’ Stand Towards First Generation Entrepreneurs Young and growing businesses need capital at the right time, not only to float their company in the market but also to survive in the long run. When financial institutions like banks and other private financial organizations hesitate to take the risk of early stage financing, since the credibility of the budding firm is not established, venture capital firms comes into the foray to fund the project in the form of equity which can be termed as “high risk capital”. Venture Capitalist is like an Equity Partner Although there is a misconception that the interest of venture capital firms is mainly driven by cutting edge technology in the industry, it is not always the case with all venture capital firms. A venture capitalist associates high risk with huge profits; of course after thoroughly analyzing the prospects and consequences and the viability of the project. The venture capitalist becomes a partner with the entrepreneur in his business. True venture capital financing need not confine itself to high end technology products. Any risky idea with great potential can be financed and venture capital is an all powerful mechanism to promote and institutionalize entrepreneurship. Focus on Growth Mainly venture capital focuses on growth. A venture capitalist is very much interested to see a small business growing into a larger one. He assists in setting up the business, funding it and travels all along to see the firm grow. If it is potential equity participation, the venture capitalist can come out of the partnership once the company becomes profitable and take back his money by selling the shares or convertible securities. If the firm opts for a long term investment from the venture capital finance, the financier has to develop an investment attitude for a long term, say five or ten years to allow the company to make large profits. Active Participant in the Operations of the Firm Another form of financing is that the venture capitalist has his hands on management by which he becomes an active participant in the operations of the firm and his thinking is streamlined as to how to multiply and make quick money which is a win-win situation for both sides. Not only finance, the venture capitalist also contributes to marketing, technology upgradation and management skills to the benefit of the new firm. Venture Capitalist- Banker, stock market investor and an entrepreneur in one. The venture capitalist’s management approach is significantly different from that of a banker whose prime concern is collaterals and securities in the form of assets. He keeps his hands off the management and plays safe. The venture capitalist can also not behave like a stock market investor who invests money without having thorough knowledge about the company’s business and management. He combines the qualities...

What is Budget Planning and Why is it Important? 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 technique is having a budget planned that which is essential for a healthy future. The 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 budget planning ? 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. Getting Your Budget Approved 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 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. Pic Courtesy: Avail Talking about organizations going for the master budget at the start of the year, it comprises budgets for various segments of the enterprise and it forms the primary step in budget planning. Master Budget 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 taken. The crux...

Motivation- Process and Theories “We can take a horse to water but cannot make it to drink”, so goes a saying. A motive is the inner drive or desire that causes a person to act. What is the importance of motivation in management? Well, I will say motivation is “the thing” and understanding human motivation is crucial in managing people. Abraham Maslow’s Hierarchy of Needs Theory with 10 Free Motivational Quotes Some definitions on motivation: 1. This is a total system of study which analyses human needs, motives, drives which cause a person to act or behave in a particular manner he/she does. 2. It is the stimulation of any emotion or desire operating upon one’s will and prompting or driving it to action-Guillerman 3.”Motivation represents a satisfied need which creates a state of tension or dis-equilibrium causing the individual to move in a goal directed pattern towards restoring a state of equilibrium by satisfying the needs.”-Herzberg It has been accepted by psychologists world over that all behavior is motivated and revolves around a desire for satisfying certain needs. Motivation process:   NEEDS->DRIVES->GOALS THEORIES OF MOTIVATION:  Theories of Motivation are classified into · Content theories and · Process Theories CONTENT THEORIES: A. Maslow’s hierarchy of needs B. Herzberg two factor theory C. Theory ‘X’ and Theory ‘Y’ D. McClelland’s achievement motivation theory E. Clayton Alderfer’s ERG theory PROCESS THEORIES: A. Vroom’s expectancy model B. Porter-Lawler’s model C. Adam’s equity theory Content theories seek to determine what motivates people at work. Priorities are taken into consideration backed up by incentives or goals. Maslow Need Hierarchy Theory (1943) Abraham Maslow postulates that human needs can be organized into a hierarchy of prepotency with the physiological needs at the bottom and self-actualization at the top. He states that as each need gets satisfied the person gets motivated to reach the next higher level. As the person moves up the hierarchy, one finds that esteem needs and self-actualization are more of internal in nature and it solely depends on the individual’s drive. Basic needs -85 % Security or safety needs-70% Social needs- 50% Esteem needs-40% Self-actualization-mere 10% This is the statistics that represents the percentage ratio of satisfaction and once a need is satisfied it “CEASES TO BE A MOTIVATOR.” · PHYSIOLOGICAL NEEDS-Basic needs for the maintenance of body processes such as hunger, thirst, sex and sleep. When these are satisfied, the higher order needs emerge, which dominate a person’s behavior. · SAFETY NEEDS– Needs like freedom from physical harm, need for orderly life and economic security · SOCIAL NEEDS– These emerge when the basic needs are satisfied and denote love, affection and belongingness. · ESTEEM NEEDS– Needs referring to strength, achievement, adequacy and also needs which pertain to recognition, appreciation and achievement. Man values self esteem based on one’s own abilities on one hand, and recognition and reputation on the other. · NEED FOR SELF–ACTUALISTION– When all the above mentioned needs are satisfied the need for self actualization arises. This need is described as the need to become everything that one is capable of becoming. CRITICISM: · There is little empirical evidence to support this theory though it is very popular. · This theory talks only about the needs from an individual’s perspective and does not link it with organizational...

Who is an entrepreneur? An entrepreneur is one with long term vision, creativity, uniqueness and the most conspicuous feature is undoubtedly his risk taking ability. He embarks on uncertain investments and also possesses an unusually minimal level of uncertainty aversion. He always comes out with brilliant business ideas since he is open to new information available in the rapidly changing business environment; this also facilitates self-directed and independent decisions aiding in quick growth maximization of the business enterprise. Attention Bloggers! Sponsor a post on Managementguru to boost your visibility, drive traffic, and build authority with our engaged business community! #SponsoredPosts #BloggingCommunity Contact Us Concept of Entrepreneurship Entrepreneurship is all about action that involves opportunity exploitation and venture creation. The concept of entrepreneurship is becoming increasingly popular in developing countries as it tends to promote economic growth of a nation. “No entrepreneur, no development,” is the kind of significance attached with entrepreneurialism. Who is an Entrepreneur Though entrepreneurship is an individual’s free choice activity, it emerges and functions in a social and cultural setting. An entrepreneur must be prudent in choosing a business activity that will be supported and valued by the society and that which improves his economic standards. Consumers are always on the look-out for a product or a service that is different but unique. This proves to be an advantage for an entrepreneur to exploit the unexplored niches of the market segment. An entrepreneur has to observe and act upon opportunities that are unusual but promising. He has to study the pros and cons of a project in terms of capital investment, plant layout, production facility, labor availability, market proximity, demography, people’s preference and economic viability. The distinct features of an entrepreneur for a better understanding: Persistence and perseverance Resourcefulness to take the business activity to the next level Eternal quest for knowledge Quality conscious Systematic planning Self-confidence Daring Crisis management with ease Persuasion –capability to convince the customers and others Strategy king Excellent communication skills Proficiency in a variety of subjects and disciplines To them , work is passion Nonchalance and the like. It is the combination of body of knowledge, set of skills and cluster of appropriate motives that makes an entrepreneur a star performer. He is the pivot about which all other factors of production, productive resources and techniques revolve. Innovativeness, risk taking ability and proactiveness are the three dimensions fundamental to the concept of entrepreneurship. Entrepreneurship is a way of thinking, reasoning and acting that is opportunity obsessed (Timmons). Lakshmi Mittals and Warren Buffets belong to this category where in they have created value through recognition of business...