MBO BY PETER DRUCKER Peter Ferdinand Drucker was an influential writer, management consultant, and self-described “social ecologist. Harvard Business Review honored Drucker in the June 2004 with his seventh McKinsey Award for his article, “What Makes an Effective Executive”, the most awarded to one person. The Concept of MBO: Management by objectives was a concept introduced by the doyen of management, Peter Drucker. This concept involves formulation of objectives for the entire organization and which are then broken down into divisional, departmental and finally individual objectives. Objectives are decided on the basis of mutual consultation between managers and employees at the departmental and divisional levels and thus it can be appropriately called an integration of top down and bottom up approaches in management. The specific aim is to make the employees participate in decision making and thus motivate them to perform better. Management by objectives follows a step-by-step procedure that ensures the feasibility of the action plans decided upon. Realistic and achievable plans are set. Activities to be preformed are identified. Logical relationship between the sequences of activities is laid down. Time frame and cost frame are fixed. Resources to be allocated are decided upon. Salient features of the process: Self control and Self direction: The workers exhibit keen self control in that, they self appraise their performance that results in intrinsic motivation. Setting short goals and periodical review to match the current performance with the expected standards greatly boosts the performance of each and every individual and gives him the necessary drive to accomplish the assigned tasks. Periodic progress review: This helps to correct errors and deviations if any. This review is done by managers of higher levels in a constructive way and adequate counseling and guidance can be given to the subordinates to bridge the shortfall if any, in performance. This is possible only when there exists a mutual understanding between the superior and subordinates to find reasons and solve problems together. Reviews need not necessarily pinpoint errors but also revise future plans and actions. The major emphasis of management by objectives lies in its result oriented approach. What is the relationship between management by objectives and motivation? Motivation of an employee can be brought about by financial incentives such as bonus, increments, pay and perks or non-financial incentives such as recognition, appreciation and additional responsibilities. But nothing can equal self-motivation which makes an employee perform with aplomb. As management by objectives is directly linked with goal-setting, performance becomes better and better as the goals are set at a higher level. It involves complete participation from the employees’ end and when specific goals are set by mutual consent of workers and management, the results are magnificent. Many firms practice management by objectives to promote harmony and sense of belonging in the minds of employees as a result of which there is remarkable improvement in performance and productivity. The focus is on improving the job design and work module to make the jobs more meaningful, interesting and...

Double Entry System of Book Keeping Accounting is not to be feared Accounting is a subject that is intertwined with our day-to-day lives yet people think it is quite a complicated subject to deal with. The fancy of the subject is such, that many of us fail to understand that it is quite simple, un-complicated and all it talks about is balance. Rather than barging into equations that make us grip with fear, let us start with the basic question of WHAT=WHO? “What” deals with whatever we have in hand or otherwise ASSETS and “Who” deals with the claims, both other’s claims and our own claims on the product we have in hand. Other people’s claims are known as LIABILITIES and our own claim on the product is called Owner’s equity. Now if we take “WHAT=WHO”, it can be translated into the following equation ASSETS= LIABILITIES+OWNER’S EQUITY Accounting: Get Hired Without Work Experience UNDERSTAND WHAT = WHO What = Who Stuff = Who Assets = Who Assets = Who Has Claim Assets = Claims Assets = Other People’s Claims + My Claims Assets = Liabilities + My Claims Assets = Liabilities + My Equity Assets = Liabilities + Owner’s Equity Simple Equation to Remember There are two types of claims: other people’s claims and my claims. Assets = Other People’s Claims + My Claims Claims are also referred to as equities. Assets = Other People’s Equities + My Equity. Accountants have a fancy word for other people’s equities. These are known as liabilities. Assets = Liabilities + My Equity Because I am the owner, we will call My Equity Owner’s Equity. Assets = Liabilities + Owner’s Equity This is the formal equation of accounting. The structure of accounting is based on this one perspective. Accounting students memorize it. And try to decipher it. You are way ahead of the game because you understand that what = who! WHAT ARE ASSETS AND LIABILITIES Assets are on the left of the Big T. Asset accounts increase with debits. Liabilities and Owner’s Equity are on the right of the Big T. They increase with credits. Income ultimately increases owner’s equity so it behaves like owner’s equity: it increases with a credit. Expenses increase with debits. The best way to improve your expertise in accounting procedure is to practice; in due course your hand movement and thought process start synchronizing. Examples of Asset accounts – Vehicles, Furniture, Cash Examples of Liabilities accounts- Accounts payable, Owner’s equity Purchasing a TV- Example ASSETS (what) =  LIABILITIES + OWNER’S EQUITY (who) Say if you invest Rs.5,000 as down payment from your end and take a loan of Rs.20,000 from the bank to purchase the product. Now, the bank has a claim on your asset to the extent of Rs.20,000 and your claim is Rs.5000. Here liability is Rs.20,000 and Owner’s equity is Rs.5,000. On the asset side we have a TV worth Rs.25,000 You can see that the value of the asset is equal to the value of liabilities, i.e., what = who. ASSETS = LIABILITIES + OWNER’S EQUITY 25,000    =       20,000    +     5,000 Just how you see a hand with five fingered palm on one side and five fingered nails on the other side, this accounting equation has two different perspectives to strike a balance between assets and liabilities. The Big Balancing ‘T’ The Big Balancing ‘T’ BIG “T” FOR PRODUCT  PURCHASE WHAT (ASSET) VEHICLES (Rs.25,000)  = WHO (LIABILITIES) ACCOUNTS PAYABLE (Rs.20,000) +  PAID IN CAPITAL (Rs.5,000)    Do I Debit or Credit? When we receive cash for completing a consulting job we know that cash has increased so we debit cash. The corresponding account...