Category: Commerce Notes PPT

The process of hiring suitable or eligible candidates in any organization for particular positions is called staffing. In this process, the education, skills, knowledge of the candidate is assessed for particular job roles in a company. 

Definition of Staffing

Staffing is referred to as one of the crucial functions of management. It includes the entire process of assessing a candidate to fill in a vacant position in an institution for a particular position at a particular time. In any form of organization, the Human Resource team plays an important role in the utilization of machines, money, and material of the company in a judicious way. With the recruitment or right employees for the right job role, any company can expand and succeed. 

Therefore, it is the effort of the Human Resource department to bring in efficiency inside a company. The process of staffing greatly depends on the aptitude, ability, talent, and specialization of a candidate. It is important because, with the right employee, the pre-set goals of the company can be achieved with the hundred per cent manpower contributions. 

Functions of Staffing

The most important function of staffing is to get suitable candidates for different job positions in an organisation. It helps in recruiting the right person for the right job which results in delivering a higher level of performance and maximum amount of productivity. Also through various aspects, it helps in promoting the maximum utilization of the human resource department. 

When the human resource department is able to recruit the right person for the right job there is job satisfaction amongst workers. Moreover, this factor also helps in increasing the morale of the workers. Not only it helps in the better utilization of the human resource but it also helps in the continuation and expansion of the organization through improvement managers.  

Importance of Staffing

As stated earlier that staffing is one of the important functions of the management department in an organization. To achieve efficient performance in the management, staffing should be given importance. It is necessary because if an organization does not have employees who are competitive and skilful in nature then the company is likely to face hurdles or failure in the long run. The management is able to function better, plan better, become more organized, and have better control with the help of the right employee assigned in the right job. All these cater to efficient performance in the organization. 

Only the right kind of employee with the right set of skills will be able to utilize the latest technology, material, and capital. Hence, by performing the staffing function the management will be able to make efficient use of technology. Unavoidable is the fact, that a significant amount of money is invested in the recruitment, training, and development of the candidates. Therefore, to achieve the maximum amount of output, the staffing procedure should be carried out carefully keeping in mind the objective. This is known as the optimum utilization of Human Resources. 

Moreover, there is also a need for the development of human capital. It is important for the human resource department to assess the requirement of manpower. According to that, they can train the existing employees for their career and advancement and bring in new employees who can justify their recruited position. By these approaches, understanding, and implication, the company is ought to have a better prospect in the future. 

The increase in private sector companies has also increased the need for a good working culture that can keep the employees motivated. This is the reason why the Human Resource department looks out for employees who have suitable education, needs, and socio-cultural factor and can increase the efficiency of the organization. This makes the human aspect of the organization crucial. The employees of an organization tend to work better with non-financial and financial incentives and achieve their objectives. By building an environment that has higher morale the employees will be able to achieve their objective in a better manner. 

The characteristics of staffing are that it is a people-oriented function and is also the basic function of management. Moreover, it requires human skills and is a continuous function. All form of organization requires staffing. The managers are involved in various staffing activities. Hence, he or she is highly responsible for all the existing and new employees who are working in the organization. The managers manage them to get the work done efficiently and accomplish the goals of the organization righteously.

A stock exchange is a market operating to sell and purchase securities and bonds that are issued by government bodies as well as public and municipal bodies. There are predefined rules and regulations that play an active role in the purchases and selling of such products.

Since this market does not directly deal with money, instead conducts exchanges pertaining to securities, this type of market is termed as a capital market. The stock exchange meaning is often associated with the term shares. You might have heard about buying or selling shares at a specific price, or even that the price of shares is either increasing or plummeting.

Features of a Stock Exchange

To understand the stock exchange, students should know the characteristics of the same. Having a clear idea of the workings will aid in getting an overall comprehension of the topic.

The features of the stock exchange can be listed in the following ways –

It is the capital market that deals with the sales and purchase of securities of the government, government organizations, and corporate companies. It also engages in the procurement and sales of debentures, bonds issued by various organizations.

Though the exchange does not necessarily involve the direct trade of bonds and debentures, there are brokers and members of the exchanges who facilitate such trade.

The stock exchange definition says that it has to deal with only the organizations or companies that are listed under its ambit. Even the securities to be traded must be registered with the stock exchange.

The members of the stock exchange or even the brokers are to be authorized in order to carry out the trading activities, failing which the trade might not be considered valid.

Among the functions of the stock exchange, the trading activities directly impact the growth of an organization or business. Therefore, it acts as a measuring tool for businesses in terms of assessing their overall growth.

The functioning of all the stock exchanges in India is regulated by SEBI or the Securities and Exchange Board of India. Therefore, every stock exchange is meant to oblige and abide by the pre-fixed rules and regulations of SEBI.

Altogether, stock exchanges make up for the effective functioning of a business. Commerce students have to be aware of the importance of the stock exchange in the Indian marketplace. 

In addition, they should also know how the trading of bonds and debentures can directly impact business growth. A deeper insight into these topics will help them in understanding the topic closely.

Task for you: Find out the merits and demerits of investing in the stock market.

What is the Role of a Stock Exchange?

The functional report of the stock exchange reveals that it is one of the integral parts of an economy. Irrespective of whether the economy is growing or not, a stock exchange acts as a barometer to gauge the growth of organizations, both governmental and non-governmental.

The functions of a stock exchange can be understood through the following pointers –

The stock is responsible for assessing the rise and fall in demand for the securities of the organizations and business. After that, they fix the prices of the same accordingly; the securities in most demand are priced higher than others.

It also ensures the safety of trading activities. Since only the indexed and authorized members can list their securities with the stock exchanges, one can rest assured of the security these exchanges provide.

The listing of multiple organizations in the stock exchange leads to effective investment and disinvestment of the securities. Likewise, people can invest in higher productive investment schemes. Therefore, it will lead to the overall economic growth of the organization.

Another role of the stock exchange is to provide a market where investors can readily buy and sell securities. As a result, the investors can rest assured that their investments are secured and can be liquidated as and when required.

The stock exchanges value the organizations whose share prices are significantly higher than others. It is due to the profit-making capabilities of those companies, hence capital allocation is also carried out in a convenient manner by them.

Stock exchanges encourage the habit of saving and investing among the common people. These are secured and offer remarkable benefits with comparison to other options such as gold or silver. Purchasing shares of profitable companies are among the most lucrative options as an investment, as one can earn profit by selling the same share later at a higher price.

Task for You: Find out the names of some of the largest stock markets in the world.

However, to complete the stock exchange project, students need to have an appropriate understanding of how it functions. It is a multi-faceted domain and requires a student to be dynamic in his/her approach to be able to comprehend the same quickly.

It is thus advised that you study the subject carefully before delving into the projects or assignments. A clearer understanding is likely to help you sail through even the difficult topics easily.

To know more about these stock exchanges, you can take a look at our online learning programs. You can develop an in-depth knowledge of stock exchanges functions and their relevant features. Also, you can gain access to high-quality study material for your reference.

Importance of Learning about Stock Market

Having a brief understanding of the stock market might help you have your basics cleared in business studies. This is an important topic to study not only from an exam’s point of view but also to know about how the market functions.

Understanding the various trading techniques is essential to know the practical approaches that help in the actual marketplace. . The trader can play the business better if he or she understands it. Some exchanges, for instance, will use algorithms alongside order-driven markets, and understanding this will help a trader get the most out of their deals. As a result, understanding the differences between quote and order-driven trading processes is quite beneficial.

Start of the Stock Market System

Though stock trading started very long back ago in the 1500s in Antwerp. However, it is generally acknowledged that modern stock trading began with the exchange of stocks in the East India Company in London. Several businesses with the name East India were granted licenses by the British, French, and Dutch governments all through the 1600s. All products returned from the East were conveyed by water, which involved perilous journeys frequently beset by violent weather and pirates. Owners of the ships routinely looked out for investors to provide financial security for a journey to offset these dangers. In exchange, investors earned a share of the financial profits if the ship returned safely, packed with products for trade.

 

The First Stock Exchange Market

When the Dutch East India Corporation became the earliest openly marketed company in Amsterdam, it pioneered modern stock trading. The corporation chose to sell shares and pay returns to shareholders in order to obtain funds. The Amsterdam stock exchange was then officially established in the year 1611.

Professional management involves the administration of an organization in a well-reasoned way. A professional manager must not possess only professional skills, but technical and administrative skills as well. If a professional manager has long experience of business affair management, it acts as an added advantage for successful professional management. The task of a professional manager is to ensure employee success and in turn, the success of the organization as a whole. Efficient teamwork and motivating the workforce are among the number of management tasks a manager needs to perform.

 

What are the Professional Manager Roles and Responsibilities?

A professional manager has quite a lot of tasks. Expertise in management tasks makes them an inevitable part of an organization. The must-have skills for professional managers to perform their manager responsibilities are excellent communication skills, ability to make decisions, leading from the front if needed, an efficient delegation of jobs, supervision, performance analysis and implementation of strategies. Also, people skills and conceptual skills are equally important. Armed with these skills, the management roles and responsibilities are performed duly. So, what are the manager’s responsibilities? They are listed below:

 

1. Defining Your Objectives

As a manager, provide a clear direction to the organization as the first and foremost task. Establish visions and missions for the organization.

A manager should not delegate this task to anyone else, but must complete it himself. When the company’s objectives are defined, employees work towards a common purpose and are unified.

2. Growth Management

In addition to managing growth and ensuring the survival of the firm, a manager has other responsibilities. Growth and survival of this firm are threatened both internally and externally.

The factors related to the firm’s internal functions (such as selecting the correct technology, hiring the right people, etc) are mostly under the company’s control. The manager must deal with external factors like government policy and economic conditions.

3. Keeping Efficiency High and Improving it

In order for a firm to operate efficiently, managers possess a variety of roles and responsibilities. First of all, he must check to ensure that the firm is efficient, i.e. there is no waste of resources. Secondly, he must make sure that this efficiency is properly maintained.

4. Creativity

Management is a job that requires innovation on the part of the manager. In order for the firm to successfully solve its problems, innovative solutions must be found. Not only are new ideas necessary, but they must also be nurtured and implemented. Managers are responsible for doing both of these on an ongoing basis.

5. Be on the Lookout for Competitors

Market competition is something that needs to be planned for and prepared for by the manager. Keeping up with changes and/or increased competition can never be taken for granted.

6. Leading by Example

It is usually the leadership that determines an organization’s future. The manager must also have good leadership qualities. In order to achieve the company’s goals, he must inspire and motivate employees.

A leader leads from the front, as well as a manager who demonstrates the qualities and work ethic that other members of a team can learn from.

7. Management of Change

Change is a fact of life in every company and organization. Managers are responsible for bringing this sweeping change about. Among his responsibilities, he must ensure that the company’s transformation is smooth and uneventful.

8. Selecting the Right Technology

Managing in the 21st century is a challenging task for all managers. A wide variety of IT processes are available today.

You face challenges in using the most suitable technology for your organization. In essence, this means choosing the right software, communication system, and networking system.

Contracts of sale are those contracts that act as proof of the transfer of ownership of any object from one person to another in exchange for a price. The Sale of Goods Act India came up amidst the British Raj. The Sale of Goods Act 1930 was a law enacted in colonial, pre-Independence India for the benefit of merchants in India. The act relates to contracts for the sale of goods for all the states of India except for Jammu & Kashmir. Contracts of sale include the agreement on the part of the buyer as well as that of the seller.

 

Elements of the Sales of Goods Act India 1930

While trying to understand the Sale of Goods Act, it is imperative to understand the key terms used in the Act. These include the two parties (i.e., the buyer and the seller), the mercantile agent, goods, price, and the transfer of general property.

Let’s discuss these various elements to understand better.

 

Two Parties

As mentioned before, the two parties in the Sale of Goods Act 1930 are the buyers and the sellers.

1. A buyer is a person who is willing to or has agreed to buy a good.

2. A seller is a person who is willing to or has agreed to sell a good.

There has to be an agreement between these two parties for there to be a sale as per the Sale of Goods Act 1930. You can note here that a sale need not have gone through for the contract to designate a buyer as a buyer, and a seller as a seller; the contract is enough to assign these roles to the parties.

 

Mercantile Agent

Rather than the buyer and supplier negotiating between themselves, a third-party agent can be used to coordinate the specifics of the contract on behalf of these parties. This third-party agent is called the mercantile agent, and they come in the form of brokers, auctioneers, and others.

 

Goods

The primary purpose of establishing a buyer and a seller is so that there is an agreement about the good which is supposed to be for sale. These goods need to be clearly defined in the sale contract as per the Sales of Good Act.

 

In differing words, the contract states that any movable property which is listed within a contract, which is to go through the transfer of ownership as per the contract (except for money and actionable claims), is considered a good.

 

The Act only recognises movable property like growing crops, stocks, shares, vehicles, among others. Immovable property such as land is not under the jurisdiction of this particular Act.

 

The goods for sale may be either existing, future goods, or contingent goods. Existing goods are those which are already in existence when the contract is formed. Future goods refer to goods that will be produced after the creation of the contract. Contingent goods are an extension of future goods, but they have contingency clauses within the contract of sale.

 

Price

The price must most certainly be included in the contract; otherwise, the contract is deemed redundant. A sale is defined by the exchange of ownership of a good between two parties at a specific price, and thus it is a critical element of the Sale of Goods Act India. A transfer of ownership of goods can only be done with the payment or promise of fulfilment of the price mentioned in the contract.

 

There are two ways in which the price can be paid by the sales contract. The Sale of Goods Act 1930 says that the payment must be made either in the form of full cash, or part of it with the promise to pay the rest of it later.

The price mentioned in the contract should be pre-decided by the parties at hand.

 

Transfer of General Property

The transfer of general property is differentiated from the transfer of specific property. General property refers to any property owned by a seller, whereas specific property refers to the property the seller is transferring the ownership of to someone else through a sales contract. The Sale of Goods Act 1930 looks only at the transfer of general property.

 

Important Topics covered Under the Sales of Goods Act 1930

The Sale of Goods Act of 1930 governs contracts or agreements relating to the sale of goods. Except for the state of Jammu & Kashmir, this act took effect on July 1, 1930, throughout India. provides you with complete guidance to study. The Sale of Goods Act 1930 – Elements and Transfer of General Property. Let’s go through some of the act’s key terminology and sections.

• Important Term Definitions

• Sale and Purchase Agreement

• Calculation of the Price

• Condition and Warranty Concept

• Conditions (Express and Implied)

• Warranties, both express and implied

• The Caveat Emptor Doctrine

• Part 1 of the property transfer process

• Part 2 of Property Transfers

• Risk passing

• Transfer of Ownership

• Performance of a Sales Contract

• Unpaid Seller’s Rights Against Goods

• Unpaid Seller’s Rights Against Buyer

• Auctioneering

The Traditional Approach distinguishes the accounts while the modern approach implements the accounting equation required for accounting. Under the traditional approach, the ledger accounts are then classified into – Personal and Impersonal accounts. The rules of debit and credit that are directed in this traditional approach are the golden rules.

The traditional Approach classifies accounts while the Modern approach uses the Accounting equation for accounting. All the ledger accounts are classified as ‘Personal’ and ‘Impersonal accounts’ under the Traditional approach.

Certain rules apply for Debit and Credit in the Traditional approach, such as 

1. Debit is what comes in whereas credit is what goes out. 

2. Debit refers to the expenses and the losses, and

3. Credit refers to the income and gains.

 

Traditional Approach of Financial Accounting

The financial accounts are to be classified into two types of approaches. First, according to the traditional approach also known as the British approach. The other is the Modern approach also known as the American approach. The Key factors under the Traditional approach are the personal and impersonal accounts which we will further illustrate in the prevailing sections.

Financial Accounts are Classified into:

1. The Traditional Approach to Financial accounting is also referred to as the British approach

2. The Modern approach, or also referred to as the American approach.

Traditional account, accounts are classified into

1. Personal Accounts, and

2. Impersonal Accounts.

Personal Accounts

These accounts are accounts that belong to human beings or natural persons and even artificial persons. Personal accounts are further classified into:

Natural persons, Artificial persons, Representative persons.

 

We will understand the mentioned in detail.

1. Natural Persons 

Natural persons are human beings. In this case, we include accounts belonging to humans, meaning respective accounts are owned by individual persons. So, Debtor’s A/c., then the Creditor’s A/c., Proprietor’s A/c., Proprietor’s Capital A/c., Proprietor’s Drawings A/c. all fall under this category.

2. Artificial Persons

These are the persons who are not human beings but legally can act and work like humans. As mentioned, artificial persons, possess a separate identity in the eyes of law. Thus, they can enter into any contractual agreements. With this, they qualify to be penalized too. HUF also known as the Hindu undivided families, partnership firms, the co-operative societies, associations of persons, companies, the municipal corporations, even the hospitals, baking sectors, government bodies, etc all are artificial persons under the eyes of the law.

3. Representative Persons 

As suggested by the name, these accounts merely represent the accounts of the persons. These persons may be natural and even artificial. The nominal accounts of expenses and incomes which are outstanding, pre-paid, accrued, or unearned, fall under this representative person’s category. Thus, Wages Outstanding A/c, Prepaid Rent A/c, Accrued Interest A/c, Unearned Commission A/c, etc. come into this category.

Impersonal Accounts

Accounts that are not included in the Personal Accounts, Impersonal Accounts fall under two categories.

1) Real accounts and 2) Nominal accounts.

1. Real Accounts

Real Accounts are related to all the assets and liabilities of a business and these accounts are not closed at the end of the accounting year. They continue to appear in the financial statement of a company, in the Balance Sheet and carried forward to the upcoming accounting year. 

These are permanent accounts and they fall into the following categories :

1. Tangible Real Account are those assets, properties, or possessions that can be touched, seen or measured. Some examples of this are the Building A/c, Furniture A/c, Cash A/c.

2. Intangible Real Account comprises all assets and possessions which one cannot touch, see or measure, and these have a monetary value. These can be bought and sold even. Certain examples are Goodwill, Patents, Copyrights, Trademark, etc.

2. Nominal Accounts 

Nominal Accounts are accounts that are related to the expenses, the losses, the incomes, and the gains, and these are temporary accounts. The balances of these are transferred to the Trading and Profit and Loss A/c at the end of the accounting year. These accounts don’t have a balance that needs to be carried forward to the next year. 

A capital market is a financial market in which investors buy and sell financial securities, such as stocks and bonds. These transactions take place through various exchanges. A stock market, for example, is an exchange where stock brokers and traders buy and sell stocks of public companies. A bond market is an exchange where traders buy and sell bonds issued by corporations, governments, or other entities.

The primary function of the capital market is to bring together investors who buy securities with those who sell them. The three main participants of the capital markets are savers (also known as investors), borrowers, and stockholders.

The term capital market includes the stock market, bond market, and related markets. The term is frequently used with reference to banks and banking in both a narrow and broad sense. In the United States, the term is sometimes used to include markets for saving and loans as well as bonds. The units invested may be of any country.

Characteristics of Capital Market 

As the capital market is the primary source where the finance is raised for financing the activities of any business, the following characteristics must be present in the capital market to make it effective.

The various characteristics of capital market are as follows:

Some of the important characteristics of a capital market are following:

Security is the basic requirement for any kind of investment to make a profit. Securities are the financial instruments that carry all the information about the underlying assets, liabilities, income, and expenses.

Brokers and dealers play an important role in the capital market. They act as middlemen, that is, they buy and sell securities for their customers. The brokers and dealers make their profit by collecting the brokerage fees, which is a small percentage of the overall transaction value.

Competition among the market players is a key factor in the capital market.    

An active and competitive market is very important as it ensures that the buyers and sellers get the best price for their investment. There must be a proper system of transfer of ownership of securities so that they can easily change hands.

What are the Different Instruments of the Capital Market? 

The types of capital market instruments are broadly classified into two types –

1. Equity Security

1. Equity Shares

These shares are the prime source of finance for a public limited or joint-stock company. When individuals or institutions purchase them, shareholders have the right to vote and also benefit from dividends when such an organization makes profits. Shareholders, in such cases, are regarded as the owners of a company since they hold its shares.

2. Preference Shares

These are the secondary sources of finance for a public limited company. As the name suggests, holders of such shares enjoy exclusive rights or preferential treatment by that company in specific aspects. They are likely to receive their dividend before equity shareholders. However, they do not typically have any voting rights. 

2. Debt Security

It is a fixed income instrument, primarily issued by sovereign and state governments, municipalities, and even companies to finance infrastructural development and other types of projects. It can be viewed as a loaning instrument, where a bond’s issuer is the borrower. 

1. Bonds

Bondholders are considered as creditors concerning such an entity and are entitled to periodic interest payment. Furthermore, bonds carry a fixed lock-in period. Therefore, issuers of bonds are mandated to repay the principal amount on the maturity date to bondholders. 

2. Debentures 

Unlike bonds, debentures are unsecured investment options. Consequently, they are not backed by any asset or collateral. Here, lending is entirely based on mutual trust, and, herein, investors act as potential creditors of an issuing institution or company.

All these four instruments are parts of the capital market. Since each is unique and has distinguishing features, they are useful in different ways for a company. Therefore, it is crucial to understand the different types of capital market instruments so that you can acknowledge their purposes.

What are the Functions of the Capital Market?

Irrespective of the capital market and its types, their functions are similar. These are listed below –

• Enhance trading of securities

• Provides a common platform to both investors and savers

• Accumulation of capital for companies that need them

• Stimulates economic growth

• It improves the process of allocation of capital

• Prepares for continuity of funds availability

• It reduces information and transaction charges significantly.

• Faster valuation of securities.

• Provides proper channeling of funds to be used productively.

Therefore, the capital market is an effective medium for mobilizing funds between investors and sellers. With the functions listed above, it is evident that the capital market is not only a platform for fund transfer but also has its long-term advantages. 

It is useful in boosting national incomes, thereby enhancing the overall economic growth of a nation as a whole. As a result, you will need to understand the concepts from the grassroots to get an in-depth idea of a capital market meaning and types, functions, and significance.

What are the Types of Capital Market?

The types of the capital market – primary and secondary are essential to understand for Commerce students. Additionally, there are other divisions of the capital market based on the traded security type – bond market and the stock market. 

Herein, we will focus on the former division of capital market types – primary and secondary markets.

Herein, the trading takes place for new securities. Companies go public for the first time in this market allows entities outside the locus of an organization to purchase their shares. This phenomenon is called Initial Public Offering or IPO.

Between the types of capital markets, it deals with securities that have already been traded in the primary market. New York Stock Exchange (NYSE), Bombay Stock Exchange (BSE), National Stock Exchange (NSE), etc. are secondary markets. 

To understand these clearly, students should grow an understanding of the types of capital in business as well. 

For more information on capital markets, look into our online learning programs. They consist of high-quality study materials that are drafted by our subject experts. Besides they are written in lucid language to facilitate a clear understanding of the same. So, avail of our study materials and also live online classes now and enhance your academic experience.