Category: Commerce Notes PPT

Every business is partially dependent on effective business communication skills. Without proper understanding, customers wouldn’t know about corporate and corporations. The need for business communication cannot be expressed in words. They will be doubtful of your approach to the purchasers, and that can damage the company easily. Thus it has become a necessity to build up great communication skills among the employees to make the consumers believe the company and the product.

The guidelines for effective business communication care may be lengthy but very simple. For effortless and compact communication, it has to be error-free, the verbal exchange process shouldn’t be confusing and shouldn’t create any misunderstanding by any means. Thus, proper guidelines for developing effective communication skills is very much needed.  

Need for Communication 

In business, one deals with a lot of individuals and interacts with them via various media. Therefore, it is vital to acquire effective verbal exchange skills. English is the common language in every field of commerce and business; it’s of sheer importance that one should work on the English language, both in writing and speaking, for improving communication. A person’s ability to speak and write fluently in English is one of the core criteria that every company demands from the beginning. 

Communication: Characteristics 

1. The purpose of effective verbal exchange skill is to offer and serve knowledge. It is not only about dry facts and figures, but it must include ideas and emotions. The communicator must understand the consumers’ emotions and work by that. It helps to influence them, and communication is often done through gestures, signs and symbols. Every mode of communication skill is important in this field, and in each mode, it is very much important that you know how to get the attention of the customer.

2. Communication is never a single-side conversation. It’s always a process where both the parties communicate. The knowledge and therefore, the objectives that the communicator conveys should be listened to and understood by the receiver. If there’s no reply, it is challenging to understand their reaction. Therefore, feedback is, additionally, a crucial element of communication. Feedbacks not only help to know the reaction of the consumers but also help the company to keep a track on customers’ demands and requirements which helps the company grow. 

3. There are many scientific developments which are attached to communication to form it more and more simply. The experts must know the techniques and tips.

4. The communication should be aim-oriented. If compact ideas are being transformed amongst the sender and therefore the receiver, then the communication becomes simpler. There is no need to make the message complex and lengthy. 

How to Enhance Your Communication Skills? 

It is important to know the significance of communication, its requirements and characteristics. You should acknowledge how vital communication is in business in present days. Therefore, you must improve your communication skill. 

Here are Some Useful Tips to Improve Your Communication: 

Communication in a Non-verbal Manner 

A report states that about 55% of communication is more straightforward when it’s together with this type of communication. To communicate in a non-verbal way, you must start with a correct posture and must maintain it. Avoid the uncomfortable and unconfident postures like holding hands. Check out and maintain the attention, don’t get distracted, give them the importance and listen to what they say sincerely.

Key Points 

To communicate effectively, the message should always be clear and concise. For clear communication, make some guidelines and strictly follow them. Use the key points both in the beginning and at the end, for a clear understanding of the customers. It’s important to specify the key points beforehand and at the end of the discussion for better understanding. It may also confirm the achievement of the goal.

Feedback 

Feedback is additionally vital for enhancing communication. Getting the right feedback from the readers, families, friends, and peers are often a crucial part but make use of it and become an honest communicator.

Interact with Your Audience

Communication should always be goal-oriented; it should have a purpose to involve everyone within the conversation. The discussions have to be more interactive and engaging so that people can have the chance to present their ideas and thoughts. It helps to point out many new tips and strategies that nobody may have stated previously and can be beneficial for the company.

Business management requires several aspects to be taken care of in order to gain profits. One such important department of management that has a significant contribution to the growth of an organisation is human resource management. Let us have a look at the importance of HRM and how it helps in the expansion and development of a business. 

The basics of human resources management should be well known by all the managers of an institution. It is essential because it helps the manager understand how to handle people in a better way. The knowledge about HRM is therefore highly essential for successful operation in a business setting and most importantly for effective management. However, there are also certain limitations in human resource management which have been discussed below. The following article is all about the importance and limitations of HRM. 

Importance of Human Resource Management

In simple words, Human Resource Management (HRM) is a management function that helps line managers to select, hire, train and develop employees for an organization. The following constitutes the core of HRM:

1. An organization is not mere brick and mortar, inventories or machinery. It is people who make it run. 

2. HRM involves acquiring, training and developing, maintaining and remunerating best talents for an organization.

3. HRM’s decisions relating to employees must be integrated. 

4. Decisions should influence the effectiveness of the organizations which is manifested in the form of good-quality products and services.

5. HRM functions are not restricted to business entities only. These are applicable to education, recreation, healthcare, etc.

HRM aims to achieve justice and efficiency in terms of management as stated by Indian Institute of Personnel Management regarding the importance of performance management in HRM. This means that there should be a certain amount of coordination and understanding between employees which is only achieved by efficient management of the team by the human resource management department. Such coordination among employees enables an organization to have a smooth flow of operations and promotion of healthy work culture. Further, they also build a comfortable work relationship by working together. 

The importance of human resource management in an organization is in laying down strategies that not only benefit the future objectives of the company but it also attracts the interest of the employees. Such management is required for all kinds of organisations, big or small so that they can generate the optimum amount of productivity from these satisfied workers which ultimately contributes to gaining profit for the organisation. This also states the importance of HRM planning. Therefore, it can be stated that the achievement of objectives by HRM is based on strategies that facilitate a company’s employees in achieving their collective goals. 

Explain the Importance of Human Resource Management 

The significance of human resource management is myriad. The most important role of HRM is to manage people in an organization. It helps in development, utilisation, acquisition and most importantly maintenance of human resources. It is an oriented approach of involving the employees in the operations of the company by elevating their performance standard with the right activities and approach. This not only helps in the individual growth of the employee but also helps in the growth of the organisation. The importance of HR management lies in the fact that it is getting increasingly popular, having a significant contribution towards producing a team of experts and maintaining them. Here lies the significance of HRM and the importance of the HR department. 

Limitations of HRM

Like any other management functions in an organization, HRM also has its limitations. There is no denying the importance of HRM in the organization but many times, it fails to fulfil the objectives of the enterprise by hiring the wrong person for the wrong job role. Also, the job of HR is largely non-quantifiable; hence, the cost and ROI associated with it cannot be calculated accurately. 

The five major limitations of human resource management are as follows:

• It has originated recently. So, the domain is still evolving.

• It often receives little support from the top management. 

• Non-availability of information is a constraint. 

• Improper actualisation

• Developmental programmes are often inadequate. 

The future of all business organizations cannot be predicted because it largely depends upon financial, technological, political and social factors. If any of these factors are affected, the future of the business is likely to get affected. This means that there is a certain amount of uncertainty, difficulties of surplus staffing, expense and time. To know more about the limitations of HRM, one can refer to the solved questions on limitations of HRM. 

When someone acts in the name of or on behalf of another, he or she is professionally known as an agent representing the main authority. In most cases, they have some degree of authority to perform specific tasks. Most of the organized human activity of Indian Contract Act 1872 – classes of agents and almost all commercial prospectuses run through an agency. No corporation is possible without the concept of agents. If we say, for example, Extensive Motors is manufacturing vehicles in Russia, we can’t shake hands with Extensive Motors. Therefore, Extensive Motors works and exists under agents. 

Similarly, business organizations and partnerships rely on agents for conducting their businesses. It is not an overstatement to say that agency is the base of any enterprise organization. This is the reason, understanding the concept of classification of agents is crucial.

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What is an Agent in Business? 

To make it simpler, let us consider the roles in a business partnership. When it comes to partnership, each partner plays the role of a general agent. Similarly, if we consider a corporation law, all the officers and employees are agents of the corporation. There are different types of agents, but we will cover this part later. The agent’s existence is based on a new set of contracts that depends on the situation or business type. In terms of an agent negotiation, a tort is no less harmful, and a contract is no less binding. 

What are the Types of Agents? 

There are different kinds of agents. However, to know this clearly, one needs to understand the functions of agents in business. An agent is intermediary acting on behalf of a principal. He or she will be an authorized person to make connecting agreements between the principal and the customers. Therefore, the types of agents are as follows.

Selling Agents

Selling agents are types of agents who are responsible for having contractual authority for selling a service or product of the principal. They are usually appointed when the principal is not that keen to approach customers directly due to a lack of qualification or resource. Selling agents are kinds of agents who together form a powerful source for making sales as they know the market standards better than the principal. They are responsible for influencing pricing and terms & conditions of sales. 

Mercantile Agents

There are different types of agents, and mercantile is one of them. Mercantile agents play an important role when it comes to the transfer of goods from the producer to the consumer. They are kinds of agents who stand responsible for taking the goods directly from the producers and delivering them to the consumer end. Sometimes, a producer fails to reach the consumer, and thus, the requirement of such agents arises. This process of transferring goods requires efficient and skilled hands to be formal. 

Mercantiles are kinds of agents who are appointed on behalf of a business and represent the same when dealing with the services and products to other people. Here, the business is a principal, and the mercantile is an agent. Some of the important characteristics of the mercantile agents are as follows.

1. They have the authority of buying and selling goods on behalf of the principal or consign them for sale.

2. They are not indulged in personal business, but certainly represent the business for all the dealings. 

Auctioneer

Auctioneer is the kind of agent who is mainly appointed by sellers to sell the goods (not services in most cases) in the form of an auction. The auctions are held for a reward in the form of a commission. Therefore, an auctioneer is an agent on behalf of the seller. However, there is a twist when the items are sold; the auctioneer becomes the agent of the purchaser when the item is sold. When discerning the facts of classification of agents, make sure to pay special attention to the part of auctioneers as most students become prone to mistakes while answering.

An auctioneer has the right to keep possession of the items for the charges. He or she has the right to claim for the commission from both sides. Auctioneers also have the right to sue the price to own the name on the instructions of the principal. However, in this case, the principal becomes liable to the third parties when auctioneers act staying within the scope of the apparent authority. 

For any kind of economic growth, the basic investment needs to be infrastructural development. Without this, there can be no scope for any economy progressing beyond the traditional model. It is important to understand how big of a role infrastructural growth can play in accelerating economic development, particularly for countries such as India. 

India has shown very promising results in investments in infrastructure, due to the vast resources both in labor and capital format. Therefore, there has been a steady growth in industrial and business infrastructure in India that has been giving significant returns and contributing to the economic growth of the country. 

One of the key drivers for the Indian economy is the Infrastructure Sector.  To create world-class infrastructure in the country it is crucial to look into India’s overall development in respect to how the government helps in the growth of this sector and the way in which it ensures time-bound creation. This infrastructure includes bridges, dams, roads, power, and urban infrastructure development. According to World Banks, Logistics Performance Index India ranked 44 out of all the countries in the world. In 2019, it ranked 2nd in the Agility Emerging Markets Logistics Index.

What is Infrastructure Development?

Infrastructure provides the most basic facilities that help serve different economic activities and thereby help in the facilitation of the growth of the country, development of the country, education, communication, transport, banking and insurance, health, technology. The example just provided are some of the basic needs that are required to fuel the growth of the economy. For the economy, these do not produce services or goods for the economy but help in inducing the production of the industry, agriculture, and trade by creating an external economy. The best examples of economic infrastructure are the railway line or the national highway. They help induce external investment and generate economies.

Infrastructure and Development

For the basic development of the most basic goods in the economy, it is required as it does not help in the direct production of any goods or services but it does help in the facilitation of the various goods and services in different sectors of the economy ie. the primary, secondary and tertiary sectors. It is a fact that the level of economic development is dependent on the infrastructure development of the country. If we are to look at the most developed countries in the world it is easily seen that there is a tremendous amount of growth in terms of economic and social infrastructure.

With communication and transport, there has been revolutionary progress in these countries.  The financial sector in these countries is also doing well because of the best planned and organized banking and insurance. In terms of technology and science, there is a tremendous amount of progress as well. But in counties like India, we do not have such high standards of qualitative infrastructure and because of this, the level of economic development is slow and low. 

Infrastructure in Indian Economy 

To facilitate production and investment in the economy we need the best infrastructure in terms of quality and also should be sufficient. The bigger infrastructure facilities pave the way for bigger investments in that sector. But the problem with underdeveloped countries is the shortage of these facilities because of less economic development. The Indian economy was really behind by the time it got its independence with respect to the rest of the world.  So once we got independent the first priority for the planners of the country was infrastructure development. 

Out of the total planned expenditure about 50 percent was devoted to infrastructure. In the first plan, thirteen percent was spent on power, ten percent on flood and irrigation control, and twenty-seven percent was given to transport and communication.  Because of all the infrastructure development we have done since independence, we have caught up with the rest of the world and the country has become one of the most promising countries in terms of development and growth.

Public-Private Partnership and Infrastructure

As the government focuses on the vitality of infrastructure in terms of growth and development it is at the same time cutting down the investment in the infrastructure sector. In recent years, the Public-private partnership is gaining a lot of momentum and an economic survey found the PPP projects to be highly impactful for the country. The survey talks about how India is getting a lot of foreign direct investments and also it attracts a lot of private capital to take on a lot of infrastructure projects. The PPP has also found ways to cut down on irrelevant expenditures and make infrastructure development more efficient.

The Public-Private Partnerships can help in sharing various risks, cost recovery, accountability, and also help in infrastructure management. The various steps the government has taken over the years are as follows- 

• Increasing tax rebates on debentures and shares so the flow of savings and infrastructural growth will be better oriented. 

• Increasing direct investment from international markets in order to get more capital and accelerate economic and infrastructural growth. 

• Tax holidays are remitted to companies and these can be used to maintain various infrastructural facilities. Among the long-term capital gains that are earned by any company, there are tax exemptions on interest and dividends. 

• The Infrastructure Development Finance Company was established by the government in 1997. This body authorized the capital of 5,000 crore rupees.

When did Private Infrastructure Investment Begin?

After independence, it was the job of the government of India to capitalize and process all investment with reference to structural and economic growth in the country. However, there was a certain limit to the investment that the government could provide, as well as the returns generated since there were many different back channels that allowed for corruption and malpractice in various forms. This is why the government opened up private investments for infrastructural projects aimed at economic growth. This also meant opening this market to international investors. 

With the advent of the internet and the worldwide web that connects us, we can honestly say that humanity’s outlook will never be the same. While the internet is mainly composed of an unending chain of servers and access points, many organizations use something called the intranet, meaning a slightly closed network. An intranet typically holds information specific to an organization and can usually be accessed by an employee with the appropriate credentials. The uses of the intranet are many: from accessing files to even chatting with other members. 

Intranet Definition

The intranet is the prime method of saving and sharing files that aren’t meant for the public eye in a way that only members of the organization can see. The intranet is known for being a highly connective web of information that is only shared between those with appropriate access credentials. One will find that they are usually unable to find the same information on the traditional internet as it is company-specific. This is why it is referred to as intranet as it is primarily an internal communication network. 

If anyone in an organization is curious about what is an intranet in a computer, the answer is simple! The intranet can be many things, one among them is an organization-wide server which serves as a storage for files that can be accessed by anyone in the organization. The best part is that with the appropriate setup, one can even access the intranet via a stable internet connection as long as they have the necessary credentials for access. This method of contact allows for greater mobility and speed of organization if done right. The intranet also has its security measures to maintain the privacy of any data stored within. The intranet serves as a central source of information and communication. While the advantages and disadvantages of the intranet are many, one can safely mention the advantages and disadvantages of intranet with a little research. 

Why Use the Intranet?

While the internet is a vast interconnected network, the sheer vastness of this worldwide network makes it difficult to have the kind of connection that intranets offer. An intranet can be used in tandem with other tools like corporate directories and CRM tools. Thanks to the hierarchy of privacy of files, even payroll software can be integrated into a company’s intranet. The key is to increase efficiency and save time during productivity hours. This combination of openness coupled with privacy makes it possible for the business application of intranet. 

The intranet of each company or organization is quite different in the sense that each intranet is tailored to meet a specific requirement based on the culture of each organization. Intranet can even be a forum where multiple employees can voice their ideas on anything from basic company policy to product launch details. 

The intranet doesn’t necessarily have to be only usable by members of the organization either. One can find that some organizations make parts of their intranet access to the public for communication or dissemination of information. In such cases, safety measures are put in place to reduce the probability of leaking confidential information. 

Advantages of Intranet

Increased Efficiency and Mobility

The intranet will be accessible from almost anywhere in the world as long as one has a stable internet connection and credentials. This allows for almost immediate access of any important files uploaded into the intranet. This increases productivity and allows for instant feedback as well. 

Better Use of Time

If company policy is sound, all vital files will be uploaded to the secure intranet where they will be available for anyone to access almost instantly. This ensures that information transfer takes much less time and reduces the overall time required for people to read and process files. 

Saves Money

The idea of having a file room where all documents are carefully stored is entirely novel. However, the advent of the intranet has made it much easier to store documents which need to be reviewed daily. Having such information on hand at any time removes the time necessary to search for such files physically. This reduction in time spent, coupled with the abolishment of actual physical storage spaces, is a much more cost-effective method. 

When it comes to running a business or a company, inventory is one of the most important parts of it. So, for the students who need to gain some insight into this chapter on inventory valuation, this is definitely the right place to be. 

What Is Inventory? 

Stock or more commonly known as inventory can be defined as the resourceful and yet idle assets which are left lying with the business or the company even after an accounting period is over. This type of asset is very significant to the company and is supposed to be marked in the balance sheet for sure. When it comes to valuing inventory, there is no doubt that it is a very crucial factor when there is a need for accounting in the company. Hence, students will have to read this chapter really carefully so that they know what it means and what its significance is. 

Significance of Inventory Valuation

In case there is a talk about inventory, there is a mention of the stock-in-trade which is done for the raw materials of the company, finished goods, semi-finished goods, and the other spare parts. So, in order to get the closing stock, there is a need to calculate the inventory for sure. However, just the counting of inventory is not enough, it needs to be valued as well. This is known as the method of valuation of closing stock. This particular process helps in determining the particular value at which the inventories will be recorded in the company accounting statements. There are so many other inventory valuation methods that students can get to know about. 

We have no doubts about the significance of inventory valuation. However, in order to clear out the concept to the students, we are going to provide the benefits in detail. 

1. It Helps In Determining Income 

With the help of the average cost method of inventory valuation, there is no doubt that people will be able to calculate the gross profit or the loss that happened that particular year. This in turn helps in further calculating the income. This can be done with a basic formula 

COGS = Opening Inventory + Purchases + Direct Expenses – Closing Inventory

Students can further get to know about the average cost method formula from the different notes that are provided to them. 

2. It Helps In Ascertaining The Company’s Financial Position 

When companies understand the inventory valuation meaning and how to calculate it, they can use the information to determine whether the company is in a strong financial position or a weak one. This can be done with the help of proper inventory valuation in the best way. 

More information on the 10 methods of inventory valuation can be found in the chapter. 

3. Liquidity Analysis 

In other words, inventory can also be considered as a proper current asset since the company or the firm is not really expected to hold that for a very long time period. In such cases, there are a lot of different turnovers when there is a question of the stock. That is why inventory forms a very important part of the company’s working capital. Hence, it is essential that the inventory valuation happens properly so the liquid ratios and the current ratios can be accurately calculated without any hassle. These ratios play a very important role when it comes to checking the liquidity of any particular company. 

The Main Principles of Inventory Valuation

If we go according to the AS 2 inventory valuation facts there is just one basic principle that is used in the valuation of inventory. In a general sense, the inventory of the firm is supposed to be valued at a lower net or cost realizable value. This is a principle that is generated from certain conservative systems regarding accounting. According to this principle, we are supposed to value all the stock or inventory either at the net realizable value or the inventory cost. The lower amount is recorded between the two and that too is done according to the conservative accounting approach. This principle is also known as the IFRS Inventory valuation process.