Month: September 2010

Management Functions and Skills

The word management is commonly used in several different ways. For example, you can refer to people handed in providing guidance and direction of the organization or it can refer to the method by which organizational goals are obtained. But actually the word management is the process by which organizational goals are achieved by working with and through people through the efficient use of limited resources. What are the functions of management? The following are the four major functions of management. Planning Planning is the essence of human labor, because no aspect of our life can work without any planning. Similar is the case of an organization that requires comprehensive planning for success and prosperity. Planning involves setting goals and deciding how best to achieve them. Therefore specific strategies are established to achieve those goals and develop new plans to integrate and coordinate activities.The purpose of planning is that the organization is successful in the near future, as well as in the distant future. Organize Organizing is a management function that refers to the process of assigning tasks to various individuals or groups within the organization. Organization function helps answer questions such as which tasks to do, to carry out these tasks and what process is used to group these tasks, etc. So basically, the organization provides a mechanism to implement place plans that ultimately contributes to the over...

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Reasons of Inflation

Inflation is a condition where the general price level is rising continuously indicating the imbalance between supply and demand of goods at current prices. The causes of inflation vary from one country to another, what different types of inflation existing in different places depending on the reasons that generate inflation. However, there are some common causes of inflation between the different countries listed below. Funding Gap The situation in which government spending exceeds its revenue is called deficit financing. Additional expenses in the budget deficit is met through deficit financing. Due to funding shortfalls in the money supply in the country increases, but the production does not increase at the same rate so the price starts to rise and triggering inflation. Increasing the money supply Huge increase in money supply is also a main reason of inflation. The money supply increases due to several reasons, such as bank rates low, financing the deficit, declining reserve ratio, etc. Because of the money supply increased the amount of cash with the people and banks increases. Thus commercial banks offer more loans to people of lower interest rates and on the other hand, the people will demand more goods and services due to the availability of cash. Due to increased demand for goods and services, prices start to rise and thus cause inflation. Increased Development Costs and Development Development expenditure and development...

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Inflation and Types of Inflation

The most simple and easy definition of inflation is reduction or drop in the value of money. Inflation is a comprehensive topics and it also have different types. Several economists have described inflation in different ways. For example Coulborn define inflation as “Too much money chasing too few goods.” According to Crowther “Inflation is a state of economy in which the value of money decreases, i.e, prices are rising.” In simple words we can say that inflation is the steady increase in overall prices over long period of time. This increase in the price usually indicates an imbalance between demand and supply of goods at current prices. What are the rates of inflation Cost Push Inflation Cost push inflation is an inflation rate that occurred due to increased costs of products and services. The basic phenomenon is that manufacturing companies buy goods and services at higher prices because they get fewer benefits. So to win the necessary amount of the profits of these companies pass their higher costs to consumers and therefore inflation arises. In general, costs of production increases due to factors such as increased demand for wages, increase the tax burden from the government, high raw material prices, etc. Demand Pull Inflation Another type of inflation is a demand pull inflation that occurred due to increased aggregate demand for goods and services. Due to increased aggregate demand,...

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Measures to Control Inflation

There are several steps to effectively control inflation before it gets out of hand. Given that inflation shows the imbalance between supply and demand of goods at current prices so that measures be taken to reduce demand or increase supply of goods and services. The following are some important steps you should take into demand and supply. The supply side Increased Production The supply of goods and services can be increased by increasing agricultural and industrial production. Agricultural production can be increased by providing an adequate supply of agricultural inputs at low prices, the modernization of agriculture and scientific farm management, adequate water supply for irrigation, industrial production etc similarly can be increased by increased foreign direct investment, industrial credit growth, fiscal concessions, etc. Control of illegal Activities There are some illegal activities that cause significant inflation in a country. It is hoarding, smuggling, profiteering, black markets, etc. In the case of smuggling of large quantities of staples like sugar, butter, wheat, rice, etc are exported abroad illegally in order to obtain higher prices. Similarly, the shortage in most cases artificial staples to create higher profits. All activities of this evil must be controlled through advertising, as well as punishment. Peace and Security Production and distribution of goods and services can be effected due to the existence of unease and insecurity in society. In such circumstances, investors hesitant to...

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