Category: Commerce Notes PPT

Human Resource Management is the management of the workforce and organisation. It is responsible for recruitment, training, assessment and recognizing employees while administering organisation surveillance and work culture. HRM also ensures abidance with labour laws. In simple words, Human Resource Management is defined as the organising, planning and governing of the development, procurement of the human resources to the edge that a person, organisation and social goals are supported. HRM pertains to the overall skill, attitude and knowledge that a firm requires to perform. It comprises interest and effort to manage the workforce. The everyday chores of HRM are to select, train employees and develop good relations with them.

 

1. Substantial Existence

HRM is a universal component in every organisation. Even small enterprises need a human resource team to evaluate the requirement and recruit people accordingly. The implication of principles remains the same irrespective of the nature, size and purpose of the firm. Human resources can be an individual or a team depending on the expansion and complexity of a firm. Majority of the firms deploy a team of experts that can regulate the entire organisation’s workforce and position them as per their capabilities.

 

2. A Component of Management Domain

HRM plays a vital role in an organisation’s discipline. It is not regarded as a whole discipline but is certainly a field of study. However, HRM lies under the management process; it brings out management strategies, principles and concepts and utilises it to regulate human resources of any firm. An HRM builds a communication channel between the top management and employees to strengthen a firm’s financial and professional roots.  Companies with efficient HR professionals are more likely to expand than firms with weak HR skills. 

 

3. An Action-Oriented Sector

The vital role of HRM is to take action according to the company’s policy. It means the HR department is not all about record-keeping and written rules. They take action to solve employees’ problems as soon as possible. To solve problems that require the involvement of top management authorities, the HR department communicates with them and solves the crisis. 

 

4. Development-Oriented 

HRM looks at the capability of each employee and positions in order to utilise the skills. It changes the compensation structure as per the employee requirements. The HR department also caters to training to enhance the worker’s skills to boost productivity. It helps in determining work responsibilities and discover employees’ hidden abilities to serve the organisational goal.  

 

5. Presided Towards the Fulfilment of Goals 

Human Resource Management works for fulfilling a company’s set of objectives. It empowers an organisation through tools and strategies for effective management.  

From hiring to rewarding to resigning, HRM manages and keeps a record of every employee. It helps an organisation to grow exponentially by handling resources efficiently. Mishandling of resources can lead to bankruptcy, mismanaged manpower and violation of company discipline. 

 

6. People-Centred

HRM is all about people at work as a solo worker and a group. It strives to support employees to develop their potential and be productive. It deals with the people-oriented job and manages functions like training, hiring working performance and more. Human Resources has the capacity of building human capital. Humans are important for achieving organisational goals and the performance is based on the virtue of employees.

Managers in every hierarchy need to manage people in a way or another. From workers to managers, every individual in an organisation has to deal with human resource management. 

 

7. HR Philosophy

HRM is a philosophy that does not assume a human being as a facet of production like capital or labour. HRM acknowledges employees’ qualities and utilises their skills according to the company’s requirements.

Every manager should have the necessary social skills to interact and establish a bond with the employees. If an employee has a good relationship with the HR department, s/he is more likely to sustain in the organisation.

 

8. Functions Continuously

The process of HRM is steady and has to run all the time without halts. An organisation requires effective workforce management for functioning smoothly. 

It requires constant efforts instead of one-shot actions. HRM is a permanent process and managers at every level deal with people. They need to regulate paychecks without any error and calculate incentives for OT and medical reimbursement. Human resources primarily work for managing the workforce to complete a project.

 

9. Extensive Range of Activities

HRM involves various processes concerned with the management of the workforce. It comprises HR planning, placement, employment, appraisal, compensation and maintenance of workers. 

For performing these activities, an organisation needs an individual or group of people known as HR or Human Resource Department. The HR department tracks the productivity index of each employee and provides appraisal to the employee as per his/her efforts.

The actual abbreviation of HRM or HR is Human resource management. It is the strategic and structured approach to the effective and efficient management of people in an organisation such that they help their business gain a competitive advantage over the others in the market. It is designed to maximise the level of employee performance by serving in a company according to an employer’s strategic objectives.

It is the practice of recruiting, hiring, deploying, and managing an organisation’s employees. HRM is an art of managing the employees with significant importance treating them as assets of the business.

Features

The 9 most important features of HRM are as follows

• An HR should be Decision Oriented and deal with the employees accordingly. Some of the most important decisions an HR might have taken will be with respect to performance improvement through further training programs arranged or a promotion decision based on satisfactory performance by an employee without any bias.

• An Hr should always be on the employee side and be Employee Oriented but not foregoing the company policies as well. 

• They should continuously plan and develop a structure in order to Provide Opportunities from the organisation’s end.

• Rather than getting stuck in one place, effective management should be an active Continuous Process.

• The company should be Development-Oriented by drawing and framing various rewards and incentive structures in order to boost the employee to work well. On the other hand, Multidisciplinary in the sense that an HR should practice selecting and drawing the knowledge and inputs from various employees from different disciplines and backgrounds like those of psychology, sociology, anthropology, political science, etc.

• Integration of Goals is a policy where the employee’s goals and the organisational goals are not different and everyone works towards it in order to attain success.

• Dynamic Function where the management is expected to perform necessary changes to the goal and organisation according to the social, economic, technical, and political environment outside. 

• Challenging, Comprehensive, and Pervasive Function 

• Performance and of course Future-Oriented 

Fixed assets can be defined as substantial pieces of property or equipment owned by a company. These tangible things are used to accumulate income. However, fixed assets cannot be converted into liquid cash and cannot be consumed within one year.

Fixed assets generally appear as ‘Property’, ‘Plant’, and ‘Equipment’ (PP&E) on a balance sheet of an enterprise. They are also termed capital assets.

How does Fixed Asset work?

The balance sheet of a company contains statements of its assets, shareholders’ equity and liabilities. Assets are commonly divided into two subparts – noncurrent assets and current assets. The difference between them lies in their usage. Noncurrent assets are properties and assets of a business that are not easily transformed into hard cash. The meaning of current assets will be discussed later, on this page. The various kinds of noncurrent assets cover:

Generally, a fixed asset is purchased for the supply and manufacturing of commodities and services. Production may be done for rental purposes, third parties or a company’s personal use.

The phrase fixed asset means that these holdings are not supposed to be utilised within the financial year. Fixed assets have a materialistic form and are shown on a balance sheet in the form of PP&E.

 

Advantages of Fixed Assets

Details and particulars of a business’s holdings help in creating accurate accounting reports, valuations of trade and extensive financial analysis. Investors and beneficiaries make use of these reports to decide an organisation’s economic status. Moreover, the reports are also necessary to determine whether to lend money or purchase shares in that company.

An enterprise may use different trusted methods to record, depreciate and dispose of its assets. Hence, financial analysts are required to learn about the notes on a company’s account statements to understand how the figures are calculated.

Fixed assets are specifically vital to industries which demand a considerable sum of money. An example may be manufacturing, which needs expenditure on PP&E. However, if a business shows continuous negative total cash flow due to the acquisition of fixed holdings, this is a reliable indication that the enterprise is expanding or in an investing position.

Some Common Examples of Fixed Assets

Common types of fixed assets can be constructions, computer devices, software, real estate properties, machine equipment, furniture and vehicles. For instance, an organisation builds a car parking area for its usage, that parking space is considered a fixed asset.

Keep in mind that a fixed asset does not mean it has to be an immovable property in all senses of the term. Some fixed holdings like furniture and computer hardware can be moved from one place to another.

Now, let’s move on to current assets.

 

What is a Current Asset?

Current assets of an enterprise are all the holdings that can be easily sold, utilised and consumed and converted into cash through proper trade operations in one fiscal year. This type of asset is visible on an organisation’s balance sheet. Balance sheets are essential accounts statements that are necessary to be furnished every year.

Comprehending Current Assets

One major fixed and current assets difference is that fixed holdings cannot be feasibly converted into cash in less than a year. Whereas current holdings are vital for businesses as they can be utilised to meet regular economic demands and existing operational outlays. Seeing that the term is described as a dollar worth of all holdings and resources that can be conveniently turned into hard cash within a short span, it determines an enterprise’s liquid holdings.

Nevertheless, it must be noted that only the eligible assets that have the capability of being turned into liquid money within a one-year duration are included.

For example, a strong perception prevails that many fast-moving consumer goods manufactured by a company can be effortlessly sold over the coming year. Current assets include inventories, but selling land properties and large machines can be difficult. So machines and pieces of land are excluded from current holdings.

The types of current assets ranging from gallons of crude oil, manufactured products, progressing inventories, raw goods or foreign money is dependent on the type of trade and commodities it produces.

Do It Yourself

Classify the following between fixed and current assets:

(a)machinery (b)inventory (c)bills receivables (d)insurance (e)copyright

Important Constituents of Current Assets

Inclusions of current holdings are hard cash, equivalents of cash and liquid expenses in saleable securities like short duration treasury bills and bonds. Furthermore, the following components also fall under current assets:

1. Accounts Receivable

Accounts receivables are the money of an enterprise that is due for manufacturing services and products. This money is yet to be paid by the consumers and is considered as a current holding, provided that it is expected to be paid within one year. But, if a business is making a profit by presenting long term credit to its customers, then a fraction of account receivables are not granted as current assets.

2. Inventory

Inventories comprise raw products, materials and finished goods and fall under the category of current assets. However, one thing that needs to be noticed is inflation of inventory can be made using various accounting techniques, and sometimes it may not be quickly convertible in liquid cash compared to other current holdings. This depends on the goods and the type of industry.

3. Prepaid Outlays

These are advance expenses made by an organisation with regards to products and services, and they are to be secured in near future. Prepaid outlays cannot be turned into liquid money as they are payments that have already been done. These elements unbound the capital amount, which is required for other necessities. Prepaid outlays can be payments made to insurance organisations or contractors.

The current holdings of a company are listed according to liquidity order. This means that the components which can be easily converted into cash are given higher ranks. Therefore, the formula for evaluating current assets is an aggregate of all feasible cash convertible holdings. For example:

Current Assets = C + CE + I + AR + MS + PE + OLA

Where: C= Cash, CE= Cash Equivalents, I= Inventory, AR= Accounts Receivables, MS= Marketable Securities, PE= Prepaid Expenses and OLA= Other Liquid Assets

Now, let’s understand the difference between fixed assets and current assets.

Important Fixed Assets and Current Assets Difference

• The noncurrent assets owned by a company to utilise continuously for income are termed as fixed assets. On the other hand, the items that can be sold within twelve months are known as current assets.

• Transforming a fixed asset into real cash is difficult. Whereas current holdings can be effortlessly converted into real cash.

• Fixed holdings are utilised by an enterprise to generate products and services. They are kept for more than a year. On the contrary, current assets like cash and cash equivalents are kept by a company and can be easily obtained as cash. This is why current assets are detained for less than twelve months.

• The value of fixed assets is the complete value, which means the actual price without any depreciation. Conversely, the valuation of current holdings is the value or market price, whichever is minimum.

• Another difference between fixed and current assets is that the former requires a lump sum amount of investment, so long-term capital are utilised for obtaining it. The latter demands short duration investments for acquiring those assets.

• Current assets can be kept as mortgages as collateral for availing loans, while fixed holdings cannot be mortgaged.

• Current holdings are subjected to a floating charge, whereas fixed assets denote fixed costs.

• When an organisation sells its fixed assets, the loss suffered or profit earned is on that company’s capital. On the other, when current holdings are sold, loss and profit experiences are of an earnings nature.

• When there is an appreciation in the price of a fixed asset, a revaluation reserve is formed. But, in the case of appreciation of worth related to current assets, no revaluation reserve is created.

If a holding is kept by a company for selling purposes, it is considered a current asset. Conversely, if an asset is obtained to support a firm for its operations, it is a fixed asset.

For more understanding about distinguishing between current assets and fixed assets, go through the study materials available on our website. You can also install ’s app on your smartphone to take your notes with you.

The key difference between these two types of assets which are fixed assets and current assets is how liquid the assets are. It means if they can be converted into cash within one year, then they are termed as current assets. While when the asset is kept by the firm for the period of more than one accounting year, then it is known as fixed assets. It is also termed a non-current asset.

In accounting, we often deal with assets. Assets are those which indicate those items or resources owned by the firm. It is supposed to provide monetary benefits in the future. Benefits can be in the form of cash flows. Assets are classified into two categories. Which are fixed assets and current assets.

So, let’s read here for a better understanding of the topic of fixed and current assets.

Fixed Assets

Ans. Fixed Assets are the type of non-current assets. These assets are owned by the company with the aim of productive use by the firm rather. Companies do not own them with the objective of resale. They are expected to provide economic benefits to the company for more than one accounting year. These assets are held by the company for carrying out business operations. So On the balance sheet, fixed assets are reported at their net book value. It is the purchase price less depreciation or amortisation as the case may be.

It consists of tangible fixed assets, intangible fixed assets, capital work in progress and intangible assets under development. Its examples are land, building, plant, machinery, computer, vehicles, leasehold property, furniture, fixtures, software, copyright, patent, goodwill, etc.

Current Assets

Ans. An asset is said to be a current asset when it is considered to be sold within one year or the company’s normal operating cycle. Companies generally held the current asset in the form of cash. Also, it can be their conversion into cash or for using it in providing goods and services.

These are generally acquired for trading. It includes current investments, inventory, short-term loans and advances etc.

Franchising is one of the key concepts and emerging trends in the business sector. If you are into business or want to get into it, you must understand the franchise business meaning and features of franchising. It has been around for a while now and can help your business achieve heights. To put it simply, It is an arrangement between two parties where one party, called the franchisor, provides the rights or licenses to the other party, called a franchisee. It is also a widely known marketing strategy amongst successful businessmen. This article will explore franchising in further detail, including franchise business meaning and franchise examples. So, let us start by looking at what is meant by Franchise?

What is meant by Franchise?

So, what do you mean by Franchise? Well, franchising is a contract based agreement between two parties where one party provides the rights or licenses to another party. Businesses or manufacturers provide these rights to a third party. The party providing the rights is called the franchisor, and the party receiving the rights is called a franchisee. These rights can authorize the other party to sell the franchisor’s goods, products and services by paying a one-time fee. The franchisee will be able to use the brand name and trademark of the franchisor. Franchisor gets to benefit in the form of commission or a one-time fee paid by the franchisee. They also benefit from the marketing of their brand name that helps in their business expansion.

How Does a Franchise Function?

It is easy to understand how a franchise functions. To start with, two parties enter into a franchise agreement or contract. This contract enables the franchisee to use the franchisor’s trademark or brand name and also enable them to sell their products and services. The franchisor gets a commission or a fee from the franchisee in return. The franchisee can also operate their company as a subsidiary or a branch of the parent company and sell their products. They can also use the parent company’s rights and sell their products as its branch in their own business.  

Furthermore, the franchisor can choose to grant these rights to one or more companies or people. So, if only one person holds the rights, they can be the exclusive seller of their products. The parent company provides all trade secrets, products, services, technical workings, etc. They will also offer any form of assistance and training to the franchisee. Let us look at franchise meaning with examples. 

Concepts involving Franchise

Features of Franchising

There are several critical features of franchising. If you understand what is meant by the Franchise, you can easily understand these features. First, if you are a franchise, you can use all your franchisor’s intellectual properties such as trademarks, patents, etc. Second, the franchisor provides all the products, goods, services, and assistance to the franchisee, so they do not have to do anything except selling these products. On the other hand, the franchisor gets a commission or a fee and can sometimes also receive some profits according to the agreement. Lastly, a legal agreement or contract is signed between both parties stating all the Franchise’s terms and conditions. 

Pros and Cons of Franchising

There are several pros and cons of franchising for both franchisor and franchisee. Some of them are listed below:-

Pros

• Franchisors get to expand their business without investing a lot of money since the franchisee handles all the selling. It also helps build their brand names and reputation in the market.

• Franchisee gets to start its business on an already established brand name, which reduces the risk of failure and increases profit margins. 

• Also, franchisees do not need to spend extra money on training or products since the franchisor can provide them. On top of that, they learn the trade secrets and business techniques at the top levels. 

Cons

• If the franchisors do not maintain the products’ quality, the franchisee can suffer heavy losses since they depend entirely on them for goods. 

• The franchisor’s secrets are also at risk since there is always a chance that the franchisee will risk their trade secrets to the competitor. 

• For franchisees, they do not have complete control over their business and must act according to the policies or terms. 

Franchise Examples

You can see several food chains around your location. Not all of them are directly operated by the main company branch, in fact, most of them are operated by a franchise. Some of the best Franchise examples of food companies are listed below:-

• Domino’s

• KFC

• McDonald’s

• Subway

• Pizza Hut

Fun Facts

Over 750,000 franchises currently operate in the United States, which employ a vast number of people every year.

Globalization (or globalization) refers to the process by which regional economies, societies, and cultures are integrated through a global network of communications, transportation, and commerce. The term is sometimes used to refer specifically to economic trade: the integration of the world economy into the international economy through trade, direct foreign investment, inflows, migration, and the spread of technology. The initiated economic reforms have had a profound effect on overall economic growth. It also announced the integration of the Indian economy into the global economy. India’s economy was in dire straits in 1991 when foreign exchange rates plummeted to $ 1 billion. International trade has had an impact on various sectors including Agriculture, Industry, Finance, Health and many more. It is only after the LPG policy of liberation, private trade and international trade that was established by then-Finance Minister Manmohan Singh that India saw its progress in various fields.

What is Globalization? What Do You Mean by Globalization?

Globalization is a term used to describe the interdependence of economies, populations, and cultures. Although the term connotes cross border trade mainly, it can also refer to cross border assimilation of cultures, identities, and philosophies. In the context of commerce and economics, globalization purely refers to a global economy, where a product created in a country can be sold across the world. In such an economy, a customer has access to products made in their country and has access to products made in other countries.

Key Features of Global Trade

• Release: It represents the freedom of the entrepreneur to establish any industry or trade or business, in their own country or abroad.

• Global Trade in Economic Activity: Economic activity is dominated by the domestic market and the global market. It represents the process of integrating the local economy with the global economy.

• Export Export-Export Program: It represents liberating the function of export and protecting the free flow of goods and services across borders.

• Privacy: Keeping the state away from owning production and distribution systems and allowing free movement of industry, trade and economic activities across borders.

• Enhanced Collaboration: Promoting a partnership program for entrepreneurs with the aim of achieving rapid modern development, advancement and technological advancement.

• Economic Transformation:Promoting financial and financial transformation with a view to empowering free real estate, free businesses, and market forces.

• Several components of Globalization: growth and Effective Social, Economic and Cultural Relationships between people. Globalization has social, economic, political, cultural and technological dimensions. Includes all communication between all the people of the world.

Free flow of information, technical goods and people services to all communities is its key feature. It tries to soften local boundaries, allowing everyone to improve their relationships and links.

Salient Features of Globalization

Interconnected Societies

In a highly transparent economy, where all commodities are openly traded, no society exists in a silo. Globalization and the Indian economy is a classic example to cite in this regard. The barriers to trade across countries are becoming more and more obscure. Societies and communities are becoming interconnected now more than ever. The growth of the internet, high internet penetration, thriving e-commerce ecosystem, and growing prosperity in developing countries have contributed to this upsurge in globalization.

Economic Integration

Global production of manufactured goods and local production of goods have been integrated. When a product is made, its parts are manufactured and supplied by various vendors, where these vendors could be from different geographies. A streamlined manufacturing process across geographies creates uniformity and standardization of manufacturing principles and techniques. Product quality is also consistent – this aspect enables a product to retail across countries.

Global Consumerism

Growth of media, the proliferation of digitization, and an ever-expanding information era have created more awareness. Globalization’s impact on the Indian economy and many developing countries is directly proportional to commerce’s digitization. Consumers understand what to purchase and how. They have multiple options before them. All of this creates competition in the market. Different product manufacturers across the globe create products for the global consumer. Global competition creates global consumerism – which in turn feeds the burgeoning globalization even more.

Global Tourism

An after-effect or side effect of globalization is global tourism. With more expendable income in the hands of the middle class in developing and developed countries, tourism has taken off. More people are traveling across borders. The growth of tourism creates more international trade and more demand for products that cater to an international consumer market.

Transnational Corporations

The days of nationalized corporations are slowly phasing out. In a globalized economy, corporations want to become globalized. They want to tap into a global consumer market. Hence, global conglomerates have a global workforce in manufacturing, verification, sales, pre-sales, and post-sales. The growth of transnational corporations or global companies has contributed to the establishment of globalization as a bare minimum for economies’ sustenance.

Globalization’s Impact on India

India is one of the countries that has reaped considerable benefits from globalization’s inception and execution. Foreign investment in the corporate, retail, and scientific sectors has increased dramatically in the country. It had a significant social, monetary, cultural, and political impact as well. Globalization has accelerated in recent years as transportation and information technologies have improved. Global trade, doctrines, and culture are all growing as global synergies improve.

How has the Indian Economy benefited from Globalization?

Urbanization and globalization have had a significant impact on Indian society. Economic policies have had a direct impact on the formation of the economy’s core foundation. The government’s economic policies also played an important role in determining the levels of savings, employment, income, and investments in society. One of the most significant effects of globalization on Indian society is cross-country culture. It has had a tremendous impact on the country’s cultural, social, political, and economic dimensions. However, economic unification is the most important factor in transforming a country’s economy into a global economy.

Globalization KOF Index

This index measures the social dimensions and effects of and on globalization and measures political impacts on globalization. The following set of graphs show the globalization indices of each globalization factor.

Ways to measure Globalization

There are four methods to measure globalization:

The flow of products and services can include merchandise as well as services trade. 

The quantity and quality of foreign direct investment that is percolating throughout the money markets.

The amount of information consumed across the world and the quantum of information technology consumed by consumers. 

The number of people traveling to other countries, be it in immigration, tourists, students, etc.

Tabular Example for Ways to Measure Globalization

Types of Globalization

In this type of globalization, the number of cooperating countries contributes to the rise of political globalization. If political relations are not convenient or favorable between countries, then the global economy is not truly politically globalized.

When countries share ideas and information, then this gives rise to social globalization. Societies can develop relationships with each other irrespective of the geographical distance or geopolitical or geophysical dissimilarities.

When economies are interconnected through trade and commerce, then economic globalization increases. There are currently very few national economies that operate in isolation with no dependency on the outside world. Therefore, economic globalization is generally higher than the other types of globalization.

Did you know? 

Transnational corporations control more than two-thirds of the world economy. Their grip over national economies is higher than the national governments of countries in which they operate. These organizations’ substance becomes critical for the job market, employment, and economic success of many countries.

Global Trade Results:

The effects of globalization on the global economy are many. Globalization has strengthened trust and competitiveness within the global economy. This is reflected in the dependence on trade in goods and services and the flow of funds. As a result local economic development is not entirely determined by domestic policies and market conditions. Rather, they are influenced by both domestic and international economic policies and conditions. It is clear, then, that the global economy, while developing and evaluating its domestic policy, cannot afford to ignore potential actions and global policy and development responses. This has hampered the policy option available to the government which means the loss of policy independence to some degree, in decision-making at the national level.

Benefits of Globalization:

• There is an international corporate market and for consumers there is a wide range of products to choose from.

• Increased investment from developed countries to developing countries, which could be used to rebuild the economy.

• The rapid and rapid flow of information between countries and the great interdependence of cultures have helped to overcome cultural barriers.

• Technological advances have caused some brainstorming in developing countries.

Global Trade Issues (Challenges):

• Unemployment in developing countries has led to job losses in developed countries.

• There is a serious threat of the spread of infectious diseases.

• There is a fundamental threat to multinational corporations.

• In small developing countries where it is acquired, it can indirectly lead to a more subtle form of colonization.

• The number of landless rural households increased from 35% in 1987 to 45% in 1999, to 55% in 2005. Farmers are destined for starvation or suicide. The Indian Economy.

Fun Facts about Globalization

• The first multilateral global trade agreement was called the General Agreement on Tariffs and Trade (GATT), which was signed in 1948. In 1995, it was replaced by a more structured World Trade Organization. Essentially, the function of WTO is to set a treaty that restricts countries from imposing high import tariffs for globally competing products, thus allowing the growth of economic globalization.

• Globalization was first referred to as comparative advantage, a phrase created by David Ricardo in the 19th century. Ricardo was a prominent economist. This phrase implied the use of land, capital, and labor to labor activities in which one gets a competitive advantage over others. An organization has a competitive advantage if it has access to natural resources, labor, labor capital, low-cost power source, low-cost energy source, attractive and highly connected geographic location, politically stable geographic location, low barriers for entry, access to the latest technology, etc.

• There are anti-globalization movements named as Movement of Movements and the Global Justice Movement, to name a few. These entities do not believe in the concept of globalization and being part of the global economy.

Conclusion:

India benefited most from the LPG model as its GDP rose 9.7% in 2007-2008. In terms of market capitalization, India is ranked fourth in the world. But even after global trade, the agricultural climate is far from ideal. The agricultural share in GDP is only 17%. The number of landless families has increased and farmers are still committing suicide. But given the positive effects of globalization, it can be said that India will soon overcome these barriers and march firmly on its development path. The lesson from recent experience is that a country should carefully choose a combination of policies that better allow it to take advantage – while avoiding pitfalls. For more than a century the United States has been the largest economy in the world but major developments have taken place in the global economy since then, which has led to a shift in focus from US and rich European countries to two major Asian countries – India. and China. Economists and various studies conducted around the world predict that India and China will rule the world in the 21st century. India, now the fourth largest economy in terms of purchasing power, could surpass Japan and become the third largest economy in 10 years. In conclusion we can say that the modernity we see all the time in our daily lives is a contribution of Globalization. Global trade has both positive and negative implications for various sectors of the Indian Economy. Globalization has therefore come a long way since 1991 which has resulted in the development of our country.

A shareholder, also known as the stockholder, is a person, a company, or an institution who or owns at least one share of a company’s stock, known as equity. Shareholders are required as the owners in a company, as they reap the benefits of a business’ success. The rewards of the company come in the form of increased stock valuations, or as the financial profits that are being distributed as dividends. In contrast to this, when a company loses money, the share price invariably drops, this can lead the shareholders to lose money, or they might suffer declines in their portfolios’ values as well. 

How do You become a Shareholder in a Company?

A corporation issues stock to represent an ownership interest in the company, for making the owner a shareholder. This news often depicts fluctuations of the stock market, it shows the daily results of the stock market.  This is a collection of stocks that are based on size or industry as a measure of how the overall investment world performed. 

Becoming a shareholder with any public company means buying the stock of the company with the help of a brokerage firm. On the other hand, becoming a shareholder in a private corporation involves directly contacting the company with an offer to invest.

To invest in companies and be a shareholder of the same we will share some important points which will give us an idea about ‘how to become a shareholder of a company’. 

1. Buying Stocks from Brokerage Firms

The brokerage firms buy and sell stocks along with other financial instruments. These firms have different levels of service depending on the type of information and service one needs from them.

2. Full-Service Brokers

It all depends upon the need of the service required. For instance, if an individual wants to invest in a company, he needs to hire a full-service broker to analyze the companies and give market analysis, and no other details as well. But, if the share is being purchased for any future time, like for example for one’s grandchildren, then one can ask for discounted information from the full-service broker to provide only the required information without digging into the details. 

 

3. Types of Stocks

Not all stocks are created equally. There are types of stocks that the investor needs to be aware of. After total knowledge of the stock, he can invest in the company with his adequate type of stocks. 

4. Making the Purchase

After a good analysis, one can buy the stock. This requires a “buy” order. This is done through the broker or the online brokerage platform. Generally, the new accounts require a minimum balance to ensure that one can pay the price of the stock before its purchase. 

After calculating their own budget, one can buy the stock. Here the investor is required to know the market price of the stock and the currently fluctuating rate.

Investing in Private Companies

In order to buy shares from private companies, there is a different process altogether. Most small businesses are these private corporations that are owned by a small group of owners and investors. Private corporations manage their stocks in a ledger that is being maintained by the Corporate Secretary.

An interested party needs to call the secretary or the president, stating his desire to buy into the company. Next, he needs to negotiate the price per share and the number of shares. The owners are reluctant to give up a majority shareholder control so that their ownership is not at stake.

Once the number of shares and their value is established, the pay is remitted to the company. Notes are then made in the ledger of the new ownership, and a paper stock certificate is signed by the president and the corporate secretary, which is being issued to the new shareholder as proof of ownership.

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Cheatsheet for the Students to score High Marks in the Exam with Ease

1. Read. Revise. Repeat.

If a student wishes to excel in any subject, then he/she should read the NCERTs like their favorite comic books. That’s right. Read!!! Reading NCERTs is the basic requirement for the students. After that, reference books like S Chand, Poonam Gandhi, and VK Ohri can be referred to to understand the difficult topics of commerce. Lastly, Revision is the best way to ensure that the learning is fed to the subconscious mind. In this regard, students can get free access to the incredible Revision notes and keynotes provided by the exquisite team of teachers at and important questions along with the answers for the students to get the last minute preparation, at its best.

2. Solve Question papers and track your progress

To master the art of learning more in less time students are required to solve the previous year’s question papers solved by the experienced teachers at . Students can also refer to the Sample question papers available at the website of for free.

3. Practice writing again and again

Students who wish to excel in exams are required to excel in writing. That’s right. It is ultimately how well you are able to present your ideas by writing. So write your notes every day, again and again. 

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The best way to dive into online quality learning is to apply for the free trial of at the website of . In this way, students can get access to the ocean of unlimited learning in no time. So why wait? Go and apply for the 7-day free trial now!

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Incentives can be said as a strategy of the company to encourage the employees to work better. With the attraction of the incentives, the employees achieve the organizational goal in the process. The incentives can be in monetary form or non-monetary form. They are nothing but a push to the employees to make them work harder with efficiency.

In this context itself we will delve further on the topic of ‘Incentive’. It includes the true meaning, types of incentives and its usefulness to the employees in our discussion.

Incentive Meaning

An incentive is such a factor that motivates or has a driving force upon someone to do something or behave in a certain way of fulfilling the task. In a company, human decision is affected by two major types of incentives – Intrinsic and Extrinsic Incentives. 

Intrinsic incentives motivate a person to do something based on their own self-interest or own desires, this is void of any outside pressure. While, extrinsic incentives are the ones which are motivated by rewards like the increase in payment for achieving a certain result or avoiding the disciplinary actions punishments for not doing any wrong. Or not being criticised is another extrinsic motivation. 

Some examples of extrinsic incentives are appreciation letters, monetary bonuses, or even withholding a pay for less work done. While the intrinsic motivation is learning a new language to be able to speak in the foreign countries.

In Personnel Economics, incentives are the most studied area where the HRM team evaluates and analyses the investment scheme done by the firm to its employees.

Financial Incentives

A financial incentive deals with money, which is given by the company, or organization to encourage certain behaviors or actions of the employees. This financial incentive or monetary benefit, motivates certain positive behaviors or actions. A financial incentive may also be a monetary benefit that a company offers its customers or employees. 

The term ‘incentive’ may mean also to encourage members to cooperate or to provide information. In a financial incentive, money is offered to encourage actions or behaviors that would not be possible without these incentives. The law dictionary states the exact definition of the term: “A benefit given to customers or companies to get them to do something they normally wouldn’t. It is money offered to get them to try something new. The event might not have happened without the incentive.”

Financial Incentive Programs are also held that encourages great productivity among the employees. Financial Incentives can be in the form of – Stock Options, Profit Sharing, Raises, Bonuses and Commissions 

Monetary Incentives

Monetary Incentives are used by employers to motivate employees towards meeting their targets. As Money is the symbol of power, status and respect, monetary incentives play a big role in satisfying the social–security of the employees and physiological needs of a person. But monetary incentives seize to be an incentive when the psychological and security needs are satisfied. 

This is to be understood by the business owners that monetary incentives are only the mere motivators that encourage the employees to meet their goals but this does not guarantee quality out-come nor it guarantees loyalty and dedication of work by the employees.

Some Monetary Incentives Are As Follows: 

1. Piece Rates

2. Pay Rise

3. Bonuses

4. Sharing profit

5. Contests 

Incentives for Employees

For an employee incentive is an object, item of value, that is pleasured by him. This incentive is achieved by acting in predetermined actions. Incentive motivates the employees to work and achieve the goals, they follow the direction of the employer for achieving the target and this is pushed by the incentives only. There are four kinds of incentives available for the employees are –

1. Compensation – Incentives such as raises or bonuses. These are basically the monetary incentives.

2. Recognition – Popularity at work gained due to appreciation of quality work will feed the ego of an employee. 

3. Rewards – Such as gifts, monetary awards, or items such as gift certificates.

4. Appreciation – Social parties of work place, family events paid by the company, ice cream socials and sponsored sports team 

Incentive Motivation 

Being motivated is totally a human behavior, this will depend from employees to employees. This is basically the human behavior that responds to various kinds of motivation. Incentive is a way to keep the employees motivated and through which they can achieve the target of the company. 

Interestingly, there is a whole theory about the Incentive Motivation which is known as – Incentive Motivation Theory.

The theory of Incentive Motivation tells that people get motivated with the driving force of the incentives that they receive by working hard in order to achieve their target. Incentive Motivation makes the people believe that if they work in a determined way, they will gain reward while if they work in an opposite way, they will attract punishments. 

Thus, Incentives can be both negative and positive as well. It all depends upon the policy of the HR team of the company.