Ask any veteran who has spent his entire career managing workers in a factory and he will tell you that the principles of management outlined by Taylor, Fayol prove indispensable to running an organization. These management theories and especially the classical management theory lasted for a few decades after inception. History: In the medieval ages
Management articles
What is Scientific Management Theory?
Before the commencement of the first World War, imperialism had reached its zenith and there was the high focus on increasing economic efficiency from existing resources as new colonies were hard to find. Most of the colonies had been subjugated to control by some European power and the tussle to wrest territories from one another
What is the Stakeholder Theory?
Stakeholder Theory is a theory of management that concerns itself with matters related to morals and ethics in running a business. Ian Mitroff, in his 1983 book “Stakeholders of the Organizational Mind,” originally laid out the concept. R. Edward Freeman’s book “Strategic Management: A Stakeholder Approach” points out the groups which are the stakeholders of
What is Spillover Effect?
Spillover effects are events caused due to something in a seemingly unrelated context. It refers to events that occurred in one context affecting events in a different context. The term is usually used in a negative sense. Positive spillover effects do exist, but they are not focused upon to a similar degree. Apparently unconnected events
Administrative Management Theory
No discussion about administrative management theory is complete without a reference to Henri Fayol, the godfather of modern management principles. Henri Fayol was born in 1841AD and devoted his life to developing and advocating his 14 principles of management that we will discuss in the later part of this document. From 1841 to 1925 when
What is Disposable Income?
Salaried personnel receives a regular amount, which is their income. However, they don’t enjoy the freedom to spend the entire amount at their free will as they pay a small amount as Income Tax (IT). As a mandatory direct tax, income tax is charged upon a person’s annual earnings. There are many income tax slabs
Interpersonal roles in management
If you are reading this, chances are that you have a hunch that the roles we play in daily life at home are the same we play at the workplace in terms of decision-making, collaboration and offer thought leadership to the team. Interpersonal roles in management are increasingly being looked at with caution as slow
What is Cooling off period?
Cooling off period has two meanings. The first one happens in an agreement which allows the buyer to back out from the contract within a stipulated time, as mentioned in the agreement without paying any penalty. This stipulated time is known as cooling off period. It happens with all kinds of agreements be it with
What is Comparative Advantage?
If one country is able to produce a good or service at a lower opportunity cost than another good or product, then it is said to have the comparative advantage in the production of that goods. Since this implies that a country can produce a good that is relatively cheaper than other countries, David Ricardo,
The Ability to Pay Principle
Taxation is basically a disciplined process through which an imposing agency, especially government manages to levy taxes. Taxation is actually a strategy to generate revenue to meet the government expenditures and relevant affairs of the state. Taxation has a long history. Evolution of the Ability to pay principle Various policies have been implemented to meet
Abnormal profit explained
Everyone is after money and want to increase their bank balance. Multiple companies are running every second of twenty-four hours at the national and international level in order to gain profit and success. Almost every company and industry tend to increase their income via satisfying their customer’s need, they are always in a mood of
Importance of Leadership
A leader by definition is a person who leads a group, organization or a country. Leadership being the most influential element of any business has the greatest impact on the results. For any project to be successful the choice of a competent leader is important. Importance of leadership Leadership plays the most vital role in
The Market Demand Curve
The market demand is always varying due to various factors. One factor can be production and product availability. Another factor can be the price of the product. Because of the huge impact of price on the sale of a product, the market demand curve is generally plotted keeping price and quantity in mind. Individual demand
POSDCORB Concept
Fortune magazine, a financial magazine with worldwide acclaims, publishes the most prestigious list of the largest and the most successful corporations of the world every year. These 500 companies taken together account for some staggering financial statistics such as together they make up for two-thirds of the U.S. GDP, revenues of $12 trillion, profits of
Five Types of Communication
Communication is a very basic and fundamental process for human beings. However, when a brand wants to communicate with their customers, then the communication takes another form. Similarly, there is communication involved between teams as well. There are various types of communication between people as well as between teams. What is communication? Communication is the
4 Financial Statements Used In Accounting
Business financial reporting as periodically recommended is made possible by the four most important financial statements required by GAAP. These include; the Balance Sheet (a statement of financial position of a business at any given time), the Cash flow statement (a summary of sources and uses of cash, it shows whether sufficient cash is available