Friday, July 31, 2009

Price Management

New product pricing strategy, Product mix pricing strategy, responding to price change.
Price is the one element of the marketing mix that produces revenue, the other element produce cost. Pricing also communicates to the maker the companies intended value positioning of its product or brand.Price is usually expressed in terms of money. It can also be a combination of money and other items of value. Price is generally closely guarded business secret. It is an important positioning variably.

The firm has to consider many factors in setting its pricing policy. Following are the six steps of pricing policy.

1. Selecting the Pricing Objective
2. Determining Demand
3. Estimating Costs
4. Analyzing Competitors cost, price, and others
5. Selecting a pricing method
6. Selecting the final price

Pricing Strategy

Pricing strategies usually change as the product passes through its life cycle. Hence, organization used different price in different stage of product life cycle. We can differentiate between pricing a product that imitates existing product and pricing an innovative product.

Product Mix pricing Policy;

1. Product Line Pricing
2. Optional Feature Pricing
3. Product Bonding Pricing:
Salver offer bundle product and features. Pure Bundling, if one company sign Bhusan Dahal, they had to use all other talent associated with Mr. Dahal and company, such as cameraman, graphic, editing etc. and In mix bundling, the seller offers goods both individually and in bundle.

4.Captive Product: Some product require captive product to use, such as razor and camera. Hence, company charge less on razor and camera but price high for blade and film. Similarly, if you buy one year secretion form Mere mobile, they will offer one mobile free.

5.By Productive Pricing
6.Product Bundle Pricing
7.Two Part Pricing

Service firm and organization often charge two part pricing. Take example of Nepal Telecommunication, any sorrier of Nepal Telecommunication Post paid mobile or Land line has to pay certain fixed charge on monthly basis and additional if they used any more. Similarly, if you visit Doctors, you have to pay fix charge for each visit and if you need any other facility you have to pay extra as two part pricing.

Initiating and Responding to Price Change:

Company often has to go through various problems, it may have to cut the price or increase the price as per the requirement of environment.

Initiating the Price Cuts:
Company has to use price cut as the pricing strategy to gain market share or hold more volume and build possible traps.

• Low Quality Trap
• Fragile Market share trap
• Shallow pocket trap

Initiating Price Increase:

If a company increase price, it may get good margin of profit if it is able to raise price as required or it may face a big trap that lead to end of organization.

Why company has to increase price?

• Cost Inflation
• Anticipatory Pricing
• Over Demand

Reaction to price change:
Any change in pricing will bring some reaction among customers, competitors and distributors.Customer often questions the motivation behind the price change. If they cut the price customer may say, that the product is of low quality, unsold product, financial treble .In similar manner, if price is hiked, sale may detour but carry positive message such as product is hot.Competitor may react differently, hence company has to understand, how the competitors are take the price change.

Responding to competitors price change:

It needs to know

Whey competitor changes the price?
Does the competitor plan to make change temporary or permanent?
What will happen to companies market and market share?
What are competitors and other firm’s response likely to be to each passable action?

What it can do?

1. Maintain Price
2. Maintain price and add value
3. reduce Price
4. Increase price and improve quality
5. Launch a low price fighter line

Place Management

Marketing channel are set of interdependent organization involved in the process of making a product or service available for use of consumption. Marketing channel decision is among the most critical decision facing management. The Channel chosen intimately affect all the other marketing decisions. Marketing channel make the product available to the customer. Physical distribution makes the product accessible to the channel members and customers. Organization often goes through tough time while deciding about channel. Hence, it has to properly designed the channel decision.

Channel Design Decision:
A new firm often starts with as a local operation selling in a limited market, using existing intermediaries. All the intermediaries must be local and linked with the manufacturer. Deciding about best channel might not be a problem.If the firm is successful, it might branch into few markets. It might have to use different channel in different markets. In small market, the firm might sell directly to retailers, in large market, it might sell through distributors.

While managing intermediaries, company uses push and pull marketing. A Push strategy manufacture uses its sales force and promotion budget to induce intermediaries. Push strategy is approximate where brand loyalty is low; brand choice is made at store etc. A Pull strategy manufacture uses the promotion and advertising to induce consumers to ask intermediate is for the product. This strategy is appropriate when there is high brand loyalty and when people choose the brand before go the shopping.

Designing a channel system involves four steps

1. Analyzing Customers desired service output levels
2. Establish objective and constraints
3. Identifying major channel alternative
4. Evaluating major channel alternative

Analyze Customers desired service output levels:

In designing the marketing channel, the marketer must understand the service output levels desired by target customers. Channel produce five service output

a) Lot Size
b) Waiting time
c) spatial Convenience
d) Product Variety
e) Service backup

A) Establishing Objective and Constraints

Channel objective vary with product characteristics. Base on product design and its use and sales, organization has to establish the channel objective. In same manner, channel design must take in account the strength and weakness of different type of intermediaries.

B) Identify major Channel alternative

Organization can use various channel intermediaries, sales force, wholesaler, dealers, agent, direct mail etc. Each channel has it own strength and weakness. Hence, it can decide by using three step while deciding abut channel

Type of Intermediaries:

Number of intermediaries:
Exclusive distribution, Selective distribution, Intensive distribution

Terms and responsibility of channel member:

Price policy, Condition of sales, Distributors territorial right

c) Evaluate the major alternatives:
Each channel alternative needs to be evaluated against economics, control and adaptive criteria. To evaluate, we can use two major criteria, which are Economics and Control Adaptive Criteria.

Economic Criteria:

Each channel alternative will produce a different level of sales and cost. As indicated on below mention figure. Seller would try to replace high cost channels with low cost channels when the value added per sales was sufficient. When seller discovers a continent lower cost channels they try their customer to use it.

Channel Management:

After a company has chosen alternative, individual intermediaries must be selected, trained, motivated and evaluated. Channel arrangement must be modified over time.

Selecting channel members:

Channel members are the key player between manufacturer and customer. To customer, the channel member is the company. Any negative impression by channel member toward manufacturer will affect the consumers buying decision. While deciding about recruit intermediaries, they should at least determine what characteristic distinguish the better intermediaries.
They should evaluate the number of years in business, other lines carried, growth and profit record, financial strength, cooperativeness and service reputation. If the intermediaries are sales agents, producer should evaluate the number and character of other line carried and the size and quality of sales force.

Training Channel Member:

Manufacturer need to plan and implement careful training program for their intermediaries, because they will viewed as the company by the end users. Channel intermediaries consist of Distributors, distributor’s sales force, Sales Agent, Sales Representative, Sale Person, manufactures sale force etc. Proper presentation by this group to end user will reflect the real impact or mirror of the manufacture to the end user. Hence, proper training to channel member is necessary to bring product close to reality.

Motivating Channel Member:

Manufacturer need to understand that channel intermediaries as important as the end users. The manufacturer needs to provide training program, market research program and other capability building program to improve intermediary’s performance. The company must communicate its vies that the intermediaries are partners in a joint effort to satisfy end user of the product.

Evaluating Channel members:

Manufacturer need to evaluate its channel member periodically , it can manage it evaluation base performance against such standards as sales quota attainment, average inventory levels, customers delivery time, treatment of damaged and lost goods and cooperation in promotion and training program.
Channel Dynamics

Product innovation developments are the key reason for the channel dynamics. New wholesaling and retailing institutions emerge, and new channel systems evolve.

Component of Business Environment

Business environment refers to forces that influence the performance and outcomes of business organization. The component of business environment can be broadly divided into:-

1. Internal environment ( Micro environment )
2. External environment ( Macro environment )

Both the internal and external environment are interrelated and interdependent.


Internal environment consist of conditions and forces within the business organization that affect its performance and outcomes. It is located in the organization. It provides strengths and causes weakness to the organization. It is controlled by organization.
Strength is inherent capacity which organization can use to gain strategic advantage over the competitors where as weakness is inherent limitation which creates a strategic disadvantage for the business organization in relation to competitors.
An organization’s internal environment has the following components.

1. Employees
2. Structure
3. Corporate culture
4. Shareholders
5. Unions

External Environment:
It is the outer environment of business.It is uncontrollable by the business management. The external environment of business are as follows:
Political and legal Environment
Sociological and cultural Environment
Economic Environment
Technological Environment

Wednesday, July 29, 2009

Importance of Sound Organization

As we are of management field, sound organizations the backbone of management. It is establishing authority-responsibility relationship among various positions. It is cycle through which management directs, coordinates and controls business. World famous industrialist of USA Mr. Andrew Carnegie “Take away all our money, our mines, and cook ovens, but leave us our organization and a few years, I shall have re-established myself”. It means there is no alternate or substitute for a good organization. If we have our organization we can again re-establish it and can take the organization in higher position than it was.

1) Specialization:
It promotes the specialization, speedy performance of tasks and efficiency. The activities are divided and subdivided into compact and convenient jobs and are also grouped on the basis of similarity.

2) Avoids omissions and duplications of works :
In organization process specific jobs are assigned to individuals and work-groups so that to avoid omission and duplication of works or overlapping of works.

3) Clear-cut authority and responsibility relationship:
A sound organization structure clearly separate or defines the authority and responsibilities of various position and this helps employees to know their role in jobs and how is he/she related to others and when will direct to whom.

4) Facilitates coordination and communication :
A sound organization facilitates coordination and communication among the various departments within the organization. Smooth coordination is one of the process which leads to smooth organizational activities.

5) Facilitates growth and diversification :
A sound organization is flexible in nature so it facilitates the scope for growth of the organization through creating more departments, enlarging existing department, widening span of control, etc.

6) Scope for technological innovations :
Sound organization is not rigid. It is flexible and provides some space for adoption of new technology. It helps in introducing charge in the enterprise by modifying the authority and responsibility relationships in the wake of new development.

7) Better industrial relations :
An effective organization coordinates the group effort. If the organization have group effort than the team spirit will be developed and make the confidence level high. Moreover systematic fixation of authority, responsibility and adequate training and development leads to better industrial relations.

8) Facilitates staffing :
The total requirement of employees at various departments and section such as need of manager, employees and workers facilitates staffing

9) Facilitates ‘management by exception’ :
This principle suggests that the higher level manager should attend to exceptional matters only and rest matters should be taken at lower levels. So, they can concentrate themselves on that matter.

Concept and Meaning of Leadership/Leading

Leader is a person who is capable of influencing and shaping the behavior of people in the group. Thus, leadership is a quality or ability of a person to influence and guide the attitude and behavior of the people in a group or an organization to achieve some common goals.

According to the encyclopedia of social sciences, “Leadership is the relation between an individual and a group around some common interest and behaving in a manner directed or determined by him.”

According to Hodge and Johnson, “Leader is the ability to shape the attitude and behavior of others whether in formal or informal situations.”

Qualities of good leadership

Leadership is the key to making organizational life not only more productive but also more humane. Effective leaders have some qualities. Such leaders are truly trans formative. An effective leader should have these qualities:

1.A clear sense of purpose or the ability to define and share the vision and mission with subordinates. The leaders must be clear about the purpose of the organization of what it wants to achieve.

2.Good judgment or the ability to understand the effect of one’s action on coworkers, on the organization, and on customers, suppliers, and the community at a large.

3.Self-knowledge or the ability to be aware of one’s own strengths and abilities, and know how to maximize and use them.

4.Objectivity or the ability to see all sides of a situation, and be impartial in reaching conclusions.

5.Emotional maturity or the ability to acknowledge the importance of individuals and their opinion.

6.Initiative or being a self-starter and overcoming obstacles to achieve organizational goals.

7.A perpetual desire for learning or the ability to continue their own professional development, learning about their own organizations and developing the skills necessary to their own organizations, and developing the skills necessary to their organization’s continued success.

8.Cooperativeness or the ability to work well with others and foster teamwork to achieve goals.

9.Integrity or the ability to be honest, trustworthy, and fair in implementing organizational policies and decisions.

10.Adaptability or the ability to adapt quickly to new situations. The leader must have the stability to adjust to changing situations.

Other qualities like Intelligence, Communication skills, Physical features, and Technical skills are also some of the important qualities of leadership.

Sales Promotion

Sales promotion consists of diverse collection of incentive tools, mostly short term designed to stimulate quicker and or greater purchase of particular product / service by consumers or the trade. These days, sales promotion has been increasingly popular tool for marketing experts. Marketers are using it aggressively. A decade ago, the advertising to sale promotion ration was about 60:40 .Today, in many consumer packaged goods companies, sales promotion accounts for 65 to 75 percent of the combined budget.

Features of Sales Promotion

1. It is short term
2. It provides incentives
3. It aims at quicker response
4. It is directed at target audience

Objective of Sales Promotion

Normally, the basic objective of any sales promotion is to increase sales and achieve faster and higher sales. Thus, the specific objective varies with the target audience which can be consumer, channel members and sales force. Seller use incentive type promotions to attract new tiers, to reward loyal customers, and to increase the repurchase rater of occasional users. Sales promotion often attracts brand switcher, who is primarily looking for low price, good value, or premiums. Sales promotion is unlikely to turn them into loyal users.

Objective for Consumer promotion
a) Encourage greater purchase volume
b) Attract new customers
c) Introduce New Products

Objective of Trade Promotion:

a) Carry and push new items
b) Increase resellers inventories
c) Attract New channels members
d) Offset competitive promotion
e) Better Store Display

Objective of Sales Force Promotion

a) Motivate Sales Force
b) Support New Products

Advertising Message

Advertising message selection is the key part of an ad ad agency job, since we consider advertising people as the creative people, they use four steps while developing advertising message.

1. Message Generation
2. Message Evaluation and Selection
3. Message Execution
4. Social Responsibility Review

Message Generation:
While making advertising message, there are different way to make message more attractive such as Linking the brand directly to a single benefit and other is create a character that expressed the product benefit .Whatever the method is used, creative people should talk to consumer , dealers and experts. In depth interviewing where I come realistically face to face with the people I am trying to sell.
One can take buyer, who expect four type of rewards form product, Rational, Social, sensory and ego satisfaction.

Message Evaluation and Selection:
A good ad normally focuses on one core selling proposition. A message must be rated on Desirability, Exclusiveness and Believability. Advertiser should conduct marketing research to determine which appeal works best with its target audience.

Deciding Advertising Budget

Thus, it is a controversy that how does a company know if it is spending the right amount on advertising .It is been assumed that large consumer good company spend more on advertising as a form of insurance and bank. Organization often understated the power of company and product image building and tends to under spend. Organization often considers advertising as expense rather investment.
There are five specific factors to consider when setting the advertising budget.

1.Stage of the product life cycle
2.Marketing share and consumer base
3.Competition and Culture
4.Advertising frequency
5.Product Inscrutability

However, the organization can use various model to select their ad spending which are as follows:

•Affordable Method

•Percentage of Sales Method

•Competitive Parity Method

•Objective and task Method


Advertising is any firm of non personal presentation and promotion of ideas goods or services by an identified sponsor. Advertising include not only business form but also charitable organization and government agencies.
In small companies, advertising is handled by some one in the sales or marketing department, who will be responsible for advertising. However, globule companies use large number of ad agencies, such as Unilever use Thompson and Coca Cola uses Macon for their ad agencies.

Objectives of Advertising
a) Information
b) Persuasion : Influence, Usage
c) Remainder
d) Reinforcement: Support , Back up
e) Image Building
f) Aid other promotion tools

Macro Economics

Macroeconomics attempts to explain how the economy's total output of goods and services and total employment of resources are determined and what explains the fluctuations in the level of output and employment.
"Macroeconomics examines the forest not the trees. It gives us a bird's eye view of the economy"


1.To Understand the working of the Economy
Nowadays, the economic system has become more complex. National economy is affected by the various economic variables such as total income, output, employment and general price level which are independent. All of these variables are statistically measurable. Therefore, the study of macroeconomics helps to get correct and clear picture of the functioning of the economy.

2.Formulation of Economic Policies
The study of macroeconomics becomes indispensable for formulation and successful execution of economic policies of government. Macroeconomics contributes a lot in the determination of government economic policies which affect the level of national income, general price level and employment.

3.Business Decision
The concept of macroeconomics can be used in making business decisions. Macroeconomics helps to answer the questions; what is the general trend in economy? What will be the consumption pattern of the society? Will it be profitable to expand the business? It also helps to determine the trend in international trade.

4.Economic Planning
The developed and the developing countries are making use of economic planning for their economic development. Economic planning is concerned with aggregate variables.

5.To Understand the working of the Economy
Nowadays, the economic system has become more complex. National economy is affected by the various economic variables such as total income, output, employment and general price level which are independent. All of these variables are statistically measurable. Therefore, the study of macroeconomics helps to get correct and clear picture of the functioning of the economy.

6.Formulation of Economic Policies
The study of macroeconomics becomes indispensable for formulation and successful execution of economic policies of government. Macroeconomics contributes a lot in the determination of government economic policies which affect the level of national income, general price level and employment.

7.Business Decision
The concept of macroeconomics can be used in making business decisions. Macroeconomics helps to answer the questions; what is the general trend in economy? What will be the consumption pattern of the society? Will it be profitable to expand the business? It also helps to determine the trend in international trade.

8.Economic Planning
The developed and the developing countries are making use of economic planning for their economic development. Economic planning is concerned with aggregate variables (e.g. annual rate of Economic growth, rates of saving and investment) and therefore it comes under macroeconomics analysis.

9.Development of Microeconomics Theories
Price of commodity will be influenced by the prevailing general price level in the economy. In the situations of inflation, generally the prices will increase, while in the years of depression the prices will go down. Thus no macroeconomic laws and theories can be formulated without per-study of macroeconomics.

10.International Comparisons
Macroeconomics provides necessary information for international comparisons. For example, a comparative study of average national income, consumption and saving between different countries requires macroeconomic informing and investment) and therefore it comes under macroeconomics analysis.

11.Development of Microeconomics Theories
Price of commodity will be influenced by the prevailing general price level in the economy. In the situations of inflation, generally the prices will increase, while in the years of depression the prices will go down. Thus no microeconomics laws and theories can be formulated without per-study of macroeconomics.

12.International Comparisons
Macroeconomics provides necessary information for international comparisons. For example, a comparative study of average national income, consumption and saving between different countries requires macroeconomic information.

Tuesday, July 28, 2009

Organizational Effectiveness

Organizational Effectiveness is the concept of how effective an organization is in achieving the outcomes the organization intend to produce or in achieving organizational goals.

In other words, Organizational effectiveness is a degree to which the organization becomes successful to achieve its both (pre-determined / Contingent) goals/objectives.

Unfortunately, there can't be single goal/objective of organization. So, the organizational effectiveness should be measured on the basis of several factors/Criteria. Some of them are;






Job Satisfaction,




Overall Efficiency, etc

Monday, July 27, 2009


· Strategic business unit (SBU) a division, product line or other profit centre within a parent company.
· A specific profit centre within an organization.
· An autonomous division within a company, usually a large multi product company, responsible for planning the marketing of one of the company’s major product ranges.
· This plan is aimed at individual products and product lines; however, it can be adopted fairly easily for use in planning one or more strategic business units (SBU).

BCG Growth-Share Matrix
v Cash Cow: Kantipur Daily
v Star: Kathmandu Post
v Question Mark : Saptahik
v Dog: Nari

Resources are allocated to business units according to where they are situated on the grid as follows:
· Cash Cow
- Has a large market share in a mature, slow growing industry.
- Requires little investment and generate cash that can be used to invest in other business units.
· Star –
- Has a large market share in a fast growing industry.
- May generate cash, but since the market is growing rapidly they require investment to maintain their lead.
- If successful, a star can become a cash cow when its industry matures.
· Question Mark-
- Has a small market share in a high growth market.
- Require resources to grow market share, but it is unknown if it can turn out to become a star.
· Dog –
- Has a small market share in a mature industry.
- May not require substantial cash, but it ties up capital that could better be deployed elsewhere.
- Unless a dog has some other strategic purpose, it should be liquidated if there is little prospect for it to gain market share.

Organizing, Implementation and Controlling Market plans.

Market is organized by following ways:

1) Functional Organization
It is the most common form of marketing organization, consists of functional specialists reporting to a marketing vice president, who co-ordinates their activities.
According to the function of the departments the structure is designed, that is functional organization.

2) Geographic organization/specialization.
Perhaps most widely used method of specializing selling activities is on the basis of geographic organization.
Each sales person is assigned a specific territory in which to sell. These sales people are placed under district or regional sales manager as shown in the figure.
These district or regional managers are called territorial supervisors who report directly to general sales manager.
Companies can pinpoint on the local problems and opportunities of different territories to which the products are being sold. Customers can be serviced quickly.

3) Product Management organization/specialization
Another basis for organizing sales force is product specialization. The organization is done on the basis of product lines or brands.
As shown in the figure, company has two product lines i.e. product 1 and product 2. One group of sales representative sell only product 1 and another group sells product 2.
Each group reports to its own product's Sales manager who, in turn, reports to the general sales manager. This type of organization is well suited for companies that are marketing several electronic products, unrelated or dissimilar products.
The main advantage of it is the attention each line will get from the sales force.

4) Market (Customer) management organization/ specialization
In recent years, many companies have divided their sales departments on the basis of customer specialization.
In this arrangement, the customers are grouped by type of industry or channel of distribution
As in figure, Oil Company has categorized its market by industry such as Railroad industry, Farm equipment industry and Auto industry.
This sort of organization of marketing departments emphasizes on customers and markets rather than on product.
The main advantage is that it focuses on customer- oriented philosophy that under lies the marketing concept.


· A business firm is an open system. It gets resources from the environment and supplies its goods and services to the environment. There are different levels of environmental forces. Some are close and internal forces whereas others are external forces. External forces may be related to national level, regional level or international level. These environmental forces provide opportunities or threats to the business community. Every business organization tries to grasp the available opportunities and face the threats that emerge from the business environment.

· Business organizations cannot change the external environment but they just react. They change their internal business components (internal environment) to grasp the external opportunities and face the external environmental threats. It is, therefore, very important to analyze business environment to survive and to get success for a business in its industry. It is, therefore, a vital role of managers to analyze business environment so that they could pursue effective business strategy.

· A business firm gets human resources, capital, technology, information, energy, and raw materials from society. It follows government rules and regulations, social norms and cultural values, regional treaty and global alignment, economic rules and tax policies of the government. Thus, a business organization is a dynamic entity because it operates in a dynamic business environment.

Emergence of Behavioral Science

1596 – 1650, Rene Descares, a French philosopher suggested that mind and body are distinct entities and that they interact through the pineal gland, found deep within the brain. This vie is also known as dualism.

Early 18th Century, Carolus Linnaeus, Classified plants and animals in a systematic order which place humans in the same order as apes and monkey.

In 1830’s, Comte, coined the term sociology and began outlining the discipline which from the core of the behavioral science.

At the end of 1830’s, William James at Harvard & Wilhelm Wundt at Leipzig, were opening the laboratories & commencing the systematic attack on problems within the areas of the human behavior.

Mid 18th Century, Jean Lamarck, acquired characteristics could be inheritated and therefore species could evolve.

1860 -1880, Johannes Muller, described how electrical signals were conducted by nerves within the body and how it functions as human behavior.

Late 18th Century, Charles Darwin, Evolution of species through mechanism of natural selection.

Late 18th Century, Karl Marx, Societies as being shaped by struggle between those who owned the means of production and those who did not – Theory of dynamics of this struggle in emerging industrial capitalists’ societies of his time.

Late 18th Century, Max Weber, focus on potential benefits recognized by Marx but emphasize on problems of new industrial order.

In 1890’s, Ivan P. Pavlov, a Russian psychologist, tested the effects of training by measuring the amount of saliva that flowed when he rang the bell and did not present food.

In 1936, Lasswell, illustrates the differences between the “science of politics which calls for the systematic statement of theory & the use of empirical methods of gathering and processing data & the philosophy of politics which justifies preferences.”

In 1947, Von Neumann & Morganstern, provided the stimulus for the growth of the game theory which relates to the strategy employed in “games” that may be the war or play based on rational and statistical decision process.

In 1948, Weiner, who was the first to develop the concepts to any extent or i.e. cybernetics. The science of communication and control has been called cybernetics.

In 1949, Von Mises, Economics as the branch of the more general theory of human action deals with all human action, i.e., with man’s purposive aiming at the attainment of the ends chosen, whatever these ends may be.

In 1949, Shannon and Weaver, This is a mathematical approach to questions of communication stemming primarily from the pioneering work of these scientists. Probabilities of selection of symbols in the communication process remain the crux of the area.

1954 – 1956, Edwards(1954), Cyert, Simmon & Trow (1956), gives framework on decision theory which incorporates more concepts to consider many of the difficult points arose under game theory.

In 1957, Fichter, defined the sociology as the scientific study of patterned, shared human behavior, the ways in which people act toward one another.

In 1959, Koch, The difference, heatedly argued in the past, are no longer crucial though the flavor of psychology today shows some influences of the differentiations.

In 1960, Rubenstein and Haberstroh, The functioning of individual in organizations is now being studied from a systems standpoint as a move toward equilibrium and a pattern of role and relationships, and from many other vantage points, but the underlying developments in these indicate an eventual convergence of views on what an organization is and how it functions.

In 1963, Galileo and Merton, states that behavioral sciences comprised “a very new science of a very ancient subject.”

Category of the Business Environment

Generally, Environment is classified into two broad categories i.e. Internal Environment and External Environment. Similarly the business environment is also classified into two categories
i.e. a) Internal Business Environment
b) External Business Environment

First, what is internal business environment? As the name suggests, the internal business environment refers to the factors and the forces within the business that affect in the business and the business activities. E.g. Capital, Human resources, information form the various financial statements, workers, etc. This sort of business environments helps in finding out the strengths and the weaknesses of the business.

Next category is External Business Environment. External business environment is the factors and the forces outside of the business that may be related to the national level, regional level or international level. For E.g. Political environment, Economic environment, Social Environment, Technological Environment can be taken as the external business environment. These sorts of business environments provide opportunities or threats to the business.

Business organizations cannot change external environment but they can just react. They can change their internal business environment to grasp the external opportunities and face the external environmental threats.

Meaning of Business Environment

The factors and the forces that affect in the business and business activities can be taken as the business environment. Business environment plays an important role in day to day workings of the business.
A business firm is an open system. It gets resources from the environment and supplies the goods and services to the environment. In simple words, the environment where the business runs and the business activities are done is known as business environment.
Proper analysis of the business environment is needed for the effective business strategy so that the business could survive for long period in this dynamic environment. Environment is dynamic because time to time it keeps on changing.

What is Environment and Business?

In general understanding, Environment is surrounding factors or circumstances that affects to the person’s life. Simply, Environment is the Surroundings. Business has large numbers of meanings but here business means commercial organization or a company or a shop.

Thursday, July 23, 2009

Why should you apply Knowledge Management?

To serve customers well and remain in business companies must: reduce their cycle times, operate with minimum fixed assets and overhead (people, inventory and facilities), shorten product development time, improve customer service, empower employees, innovate and deliver high quality products, enhance flexibility and adoption, capture information, create knowledge, share and learn.

What is Knowledge Management?

Knowledge management is an audit of "intellectual assets" that highlights unique sources, critical functions and potential bottlenecks which hinder knowledge flows to the point of use. It protects intellectual assets from decay, seeks opportunities to enhance decisions, services and products through adding intelligence, increasing value and providing flexibility.
Knowledge management complements and enhances other organizational initiatives such as total quality management (TQM), business process re-engineering (BPR) and organizational learning, providing a new and urgent focus to sustain competitive position.

What is knowledge?

Knowledge is the full utilization of information and data, coupled with the potential of people's skills, competencies, ideas, intuitions, commitments and motivations.
In today's economy, knowledge is people, money, leverage, learning, flexibility, power, and competitive advantage. Knowledge is more relevant to sustained business than capital, labor or land. Nevertheless, it remains the most neglected asset. It is more than justified true belief and is essential for action, performance and adoption. Knowledge provides the ability to respond to novel situations.
A holistic view considers knowledge to be present in ideas, judgments, talents, root causes, relationships, perspectives and concepts. Knowledge is stored in the individual brain or encoded in organizational processes, documents, products, services, facilities and systems.
Knowledge is the basis for, and the driver of, our post-industrial economy. Knowledge is the result of learning which provides the only sustainable competitive advantage. Knowledge is the next paradigm shift in computing following data processing 1945-1965 and information management 1966-1995. Knowledge is action, focused innovation, pooled expertise, special relationships and alliances. Knowledge is value-added behavior and activities. For knowledge to be of value it must be focused, current, tested and shared.

Wednesday, July 22, 2009


Many people think what is marketing? Marketing is done by selling goods and buying goods.
What exactly is marketing and why is it important to you as an entrepreneur? Simply stated, marketing is everything you do to place your product or service in the hands of potential customers.
It includes diverse disciplines like sales, public relations, pricing, packaging, and distribution. In order to distinguish marketing from other related professional services, S.H. Simmons, author and humorist, relates this anecdote.
"If a young man tells his date she's intelligent, looks lovely, and is a great conversationalist, he's saying the right things to the right person and that's marketing. If the young man tells his date how handsome, smart and successful he is -- that's advertising. If someone else tells the young woman how handsome, smart and successful her date is -- that's public relations."
You might think of marketing this way. If business is all about people and money and the art of persuading one to part from the other, then marketing is all about finding the right people to persuade.
Marketing is your strategy for allocating resources (time and money) in order to achieve your objectives (a fair profit for supplying a good product or service).
Yet the most brilliant strategy won't help you earn a profit or achieve your wildest dreams if it isn't built around your potential customers. A strategy that isn't based on customers is rather like a man who knows a thousand ways to make love to a woman, but doesn't know any women. Great in theory but unrewarding in practice.
If you fit the classic definition of an entrepreneur (someone with a great idea who's under-capitalized), you may think marketing is something you do later -- after the product is developed, manufactured, or ready to sell.
Though it may feel counter-intuitive, marketing doesn't begin with a great idea or a unique product. It begins with customers -- those people who want or need your product and will actually buy it.

Forex and Trade

Fore x trade represents the trade done by the currency. Many people goes from one country to another country to earn money. They even get low income of that country but to their home country the money costs high.Lets, talk an example of Nepal, from Nepal many people goes to foreign country to earn money. the go to Dubai and Qatar to earn money. They even get low income in that country but according to Nepal they really get high income. This is one of the part of fore x trade.Some people make their home made products and sell to the foreigners ti is also the fore x trade. The income of the currency from another country is fore x trade.

Wednesday, July 1, 2009

Financial Accounting

Accounting is the common language used to communicate financial information from one person to another person in the world of industry and commerce. Accounting is often called the language of business. Accounting provides information that is useful in making business and economic decisions for making reasoned choices among alternatives uses of scarce resources in the conduct of business and economic activities.

Accounting is the principal means of communicating financial information to owners, lenders, managers, and others who have interest in an enterprise.

American Accounting Association defines accounting as an information system which converts inputs into outputs. The accounting system processes business transactions to provide information to various interested parties. There are external and internal users of the information produced by the accounting system of a firm. Users of accounting information are as follows:
  • Investors
  • Lenders
  • Security analysts and advisers
  • Management
  • Employees and trade unions
  • Suppliers and other trade creditors
  • Customers
  • Government and Regulatory Agencies
  • The public

Behavioral Science

In simple meaning behavior defines any action and reaction of human beings and science refers various experiment and methodology. So we can define behavior science is the study of human behavior with experiment. How human beings are communicate to other which is also related with the behavioral science.

Behavior can be conscious or unconscious, overt or covert and voluntary or involuntary. Human behavior is the collection of the activities which are influenced by culture, emotions, norms, values, perception etc. Science is the broadest sense which refers systems of knowledge with verifiable means.

So Behavior Science is the systematic analysis and investigation of various dimensions behavior of human as well as animals through experimental observations and rigorous formulation. There are several behavioral disciplines, which are as follows:
  • Anthropology
  • Psychology
  • Sociology
  • Political Science
  • Economics
  • History
  • Education
  • Psychiatry
  • Marketing
  • Management
  • Administration
  • Game Theory
  • Decision Theory
  • Organization Theory
  • Information Theory
  • Communication Theory
  • Cybernetics
So the behavioral science is broader as well as practicable.

Values and Norms

Values may be defined from the perspective of rightness. It advocate the judgments related to what is desired and what is not. values are broader and some what external from an individual point of view. There are preferred options with moral or desirable things. Values are closely related to the norms, attitude, opinion, and beliefs. It represents something more than just a person's acceptance of the validity of a view of facts. It is not only belief but one with a judgment of rightness attached. Values represents what is thought to be desirable, not what may be desired.

Norms are group rules, standards, directions, or guidelines established to govern the behavior of the members. It tend to advocate on what is permitted and what is prohibited. Norms are dependent on values. Norms are rules governing the behavior of the members of a group. It not only indicate to members of the group what they should or should not do, also provide for a system of built-in rewards and punishments for the behavior. Norms is a rule or guide for the behavior established by a consensus in the social order. Consensus represents the feelings of a group as to what is desirable or what ought to be. Norms are guidelines or directions as to what is accepted or prohibited.

Business Communication

The word "communication" is derived from the Latin word "comm unis" which means common. There is much similarly in the definitions given by various writers. A few definitions of communication are given below:
According to Bergson & Steinem's "Communication is the transmission of information, ideas, emotions, skills etc by the use of symbols, words, pictures, graphs, etc. It is the act or process of transformation that is usually called communication."

According to Keith Dav's(1975), "Communication is the transfer of information and understanding from one person to another person."

According to the Engels, Warship and Kinney(1994), "Communication is a transactional process between two or more parties where by meaning is exchanged through the international use of symbols."

To sum up, Communication is described as a process through which one person transmits information to another persons through appropriate medium. Above definition implies that a communication is transactional where two of more parties are involved in exchanging their thoughts and ideas with a deliberate effort to bring about a response. The parties involved in communication use symbols such as words, pictures, music and other sensory stimulants to convey their thoughts and ideas. There are several purpose of communication. They are as follows:
  • Information Sharing
  • Decision making
  • To organize
  • Evaluation and control
  • Team management
  • Managerial implementation
  • To provide feedback
  • To persuade
  • To deliver news, notice etc.
  • To coordinate
  • To direct


An organization is formed whenever people join hands to accomplish some tasks. Different people have viewed the term 'organization' in different ways. Organizations make possible the complex activities. Organizations are the integral part of modern societies. We find organizations in every sphere of modern life. In one-way or the other, we are also a part of these organizations. A family, a community, club, school, factory, municipality, hospital are all examples of an organizations.

The term 'organization' derives from the Greek word 'org anon' meaning a 'tool' or an 'instrument'. An organization is built around systems, policies, procedures and technology, which create conditions of precision, efficiency and reliability of performance.

The term 'organization' has been defined in various ways by different authors.

According to Chester Barnard(1938), " An organization is a system of consciously coordinated activities of two or more persons."

According to Amitai Etzioni(1964), " Organizations are planned units, deliberately structured for the purpose of attaining specific goals."

To sum up, organization may be defined as an entity that has distinct purpose, includes people or members and has some type of deliberate structure. Also from the above definitions, we came to know that organizations have stated goals, communication networks and others coordinating system. The people who are involved in organizational tasks are willing to cooperate with one another to meet the organizational goals.