Journaling and Business
We’re not talking accounting here. The art of journaling has been around since man made his first inscription on a cave wall. Over the centuries, some journals have made the annals of history and others are included in literary anthologies. People generally think of journal and diary as synonymous but there’s a big difference between keeping a diary and journaling. A diary is akin to a person’s “Day-Timer” where appointments and tasks are outlined for completion. A journal, on the other hand, is a means of discovery – writing, specifically designed, to gain a more intimate knowledge of self.
Journaling provides the means of probing feelings and emotions as they affect behavior. Since business is constructed of relationships, success or failure often has more to do with attitudes and beliefs. In the book, Close the Deal: Smart Moves for Selling, authors Sam Deep and Lyle Sussman discuss in detail the psychological principles affecting salespeople and buyers both. While Chapter 5 is titled “Analyze Buyers,” the authors enumerate the various attitudes and beliefs affecting potential customers. The chapter begins with a quote by Dale Carnegie: “When dealing with people, remember you are not dealing with creatures of logic, but with creatures of emotion, creatures bristling with prejudice and motivated by pride and vanity.” That goes for all of us.
After a failed sales presentation, a professional will go over every step of the program to determine where he or she lost the potential client – and how to change the outcome the next time. Journaling, asking what feelings surfaced during each step, is a good way of determining whether the problem lies with the presentation, the client or maybe with the salesperson.
An employee who challenges a supervisor at every possible turn may have their own issues or may simply be reacting to the supervisor. Journaling allows the supervisor to probe whether a different approach would be helpful with a troublesome employee. Or what may become clear by journaling is the possibility that the attitude is ingrained in his or her own personality in which case a change in the supervisor’s outlook may need an overhaul in order to garner a different reaction from the employee.
Journaling, taking a more intimate look at ourselves, allows us to see attitudes and beliefs, and to make changes if necessary to find different avenues of approaching challenges. When things don’t go as expected or desired, journaling allows each step to be dissected, helping to determine where the problems lie and what it will take to reach the solution.
Business Statistics – Use Them to Make Good Business Decisions
From a company and business standpoint, management should be able to get a feel of how business statistics work. This can help them advance and gain more knowledge. They will also be able to make better business decisions after looking at and analyzing the data they find. Learning the business statistics of the company can help managers make important decisions impacting the future of the company.
Business statistics are presented by different people who like to study facts and financial information. In order to understand what is being conveyed, managers should ask questions. They need to know what the data represents and why was it generated. Not only that, managers need to know where the data comes from and who covered the cost of the research to get the data.
It’s good to know the answers to these questions because managers never know when they may be called upon to explain the data and figures to others. If they know what it’s about, they will have an easier time explaining it.
It also helps if managers are familiar with the basic language that is used in business statistics:
- Mean – In business statistics, this is referring to a set of numbers with average values. Basically it is a value that is between two other values, such as an average.
- Mode – This is the number that is seen or shown the most within a group of other numbers.
- Median – The middle number within a set of numbers. It is looked at as if there were congruent sets of numbers before and after it.
With business statistics, it’s important to be able to understand how the numbers work in order to make good business decisions for the company.
About Spain – Some Business Statistics and Tendencies
According to the authority on Spanish statistics (INE), Spain accumulated 2.942.583 companies in January 2004. This represents about 7.2 companies for each 100 inhabitants (which is nearly double the amount of the number in the Netherlands, which is 4.0)
It is generally a known fact that in Spain the Small and Medium Enterprises (SME) or the Small & Medium Businesses (SMB) outnumber any other business. Much more than in Holland, although I cannot show you any information about it.
Less well known is another interesting figure:
51% of the companies are autonomous (no employees on the pay-roll). And 2,7% of the companies have more than 20 employees.
There are only a few large corporations, which shares are trades on the stock exchange. The most famous one is the stock exchange of Madrid, but there are three more; Barcelona, Bilbao and Valencia.
This information – especially about the large number of SMB’s (or Pymes as they are called in Spain) is not a surprise. Not in the last place because of the competitive Spanish Culture. A management buyout is rather a rule than an exception; if you do not agree and you have the possibility, you start a new company (or a new sports club if you cannot agree with current management).
There is also a tendency to go with the internal flow of joining the economies of scale game. Recently GasNatural (Gas) tried to takeover Endesa (Electricity) which didn’t succeed however. In the area of steel the Spanish Aceralia, the French Usinor and the Luxemburg Arbed will probably join forces shortly. And earlier, the Spanish largest bank Santander took over a British bank (Abbey National).
On a smaller scale, in the south of Spain there is the same tendency for certain banks (the “Caja” as they are called, originally saving banks) to merge. This process receives incentives from the government of Andalucia, but the process is slowed done by some key players in the area.
The large number of autonomous makes Spain a very flexible country, adaptive to changes in the world and local consumer markets…
Business Management – How to Be an Effective Leader
One of key essential skills of being a manager is the ability to lead your team. Effective leadership is the ability to persuade your team to co-operate with you to achieve a goal or end result.
Persuading people to go along with what you want to do is not an easy to achieve. To be able to do it a manager will first have to inspire and motivate their team. If they cannot get their team to buy into the aims and objectives that need to be achieved then it will be doomed to failure.
To enable a team to go along with their manager in taking action the manager must have the ability to be able to influence them. This can be achieved by getting to know each one of their team and gaining an understanding of what motivates them. This means a manager must have excellent listening skills as well as empathy. A managers ability to motivate and influence their staff will only be limited by the level that they can influence them.
There are many different styles that you can adopt however, not every leadership style will work in every situation. Effective managers will through awareness be able to adopt the most appropriate leadership style that will motivate their staff and team to excel at their job.
The following are a few tips to help you to get most out of your team:
1) Try not to be too dictatorial it is important to involve your staff by asking them questions about the project and how they can contribute.
2) It is important to identify any potential or real obstacles that could derail or hinder the progress of a project. This will need to be resolved immediately before anything moves forward.
3) You may find certain staff resistant to what is being proposed. You will need to find the root cause of this resistance and find a solution to resolve it.
4) Ensure you delegate tasks and give your staff ownership. This is an effective signal that you have confidence and trust in their abilities. In return they will be more motivated and enthusiastic to do a good job.
Basic Book of Accounting – Journal – Recording Debit and Credit in Accounting
Traders are required to maintain different books for keeping accounts relating to business which are as under:
(I) Journal
(2) Ledger (it shall be explained in another article)
Journal
In order to study the journal, certain related terms along with the procedure of accounting must be studied, which are as follows :
The Account
Transactions involving receipts and payments of cash affect the cash balance. Receipts increase the cash balance and payments decrease the cash balance. Instead of increasing or decreasing the balance after every transaction we may put all increases together in one column and all decreases together in another column and find the balance only when required. It will be much convenient and time saving.
In accounting, the device called an account is used for this purpose. The simple form of account is called a T account is shown below. Increases of cash have been listed on the left hand side and the decreases on the right hand side, the closing balance has been ascertained by deducting the total payments from the total of the left-hand side.
Debit and Credit in Accounting
As is clear from the form of account given above it is divided in two parts: Left-hand side is known as ‘debit side’ and right hand side is known as ‘credit side’.
Amounts entered on the debit side (left hand side) are called debits and amounts on the credit side right-hand side) are called credits. ‘To debit’ means to make an entity in the left-hand side of an account’ and ‘To credit’ means to make an entry in the right-hand side of an account.
The words debit and credit have no other meaning in accounting.
Abbreviation used for debit is Dr. and for credit Cr.
Rules of Debit and Credit (Equation Based)
Dual aspect concept in accounting implies that every accounting transaction would be expressed by a debit amount and an equal and opposite credit amount. Thus, the rule that for each transaction debit amount must equal the credit amount has absolutely no exception. The equality of debits and credits may be expressed in the form of an equation:
Debit = Credit
In the previous article we discussed accounting equation:
A-L = P
i.e., Assets-Liabilities = Proprietor’s Funds or Capital
If each account was to be considered in isolation it would make no difference whether increases were recorded on the debit side or on the credit side but since the accounts are inter-dependent therefore a system of recording increases and decreases on the two sides had to be fixed. Traditionally or conventionally increases in asset accounts are recorded on the debit side while increases in liabilities and capital are recorded on the credit side. The above rule ensures that when account balances are totaled will confirm to the accounting equation discussed above.
It gives rise to the following rules: .
1. Increases in asset accounts are debits, decreases are credits.
2. Increases in liability accounts are credits, decreases are debits.
3. Increases in Owner’s equity accounts are credits, decreases are debits.
Total classes of accounts maintained by any business will include the accounts relating to expenses, losses, revenues and profits in addition to assets, liabilities and proprietor’s funds. Rules of debit and credit regarding assets, liabilities and capital have been stated above and the rules for expenses / losses and revenues/ profits can be derived from the same.
4. Increases in expenses/ losses accounts are debits.
Since the expenses and losses when incurred and suffered lead to reduction in the capital and ecreases in owner’s equity accounts are debits, therefore increases in expenses and losses accounts are Debits.
5. Increases in revenues/ profit accounts are credits.
Since the revenues and profits when earned will lead to increase in the capital and increase in owner’s equity accounts are credits, therefore increases in revenue and profits accounts are credits.
The rules of debit and credit discussed above are based on accounting equation technique. Traditional rules of debit and credit are based on classification of accounts. These rules in practice give the same
results and operate in the same manner. These merely stale the position in a different way.
Using Business Statistics
Statistics are commonly used to measure performance of historical data and for a purpose of forecasting future events. Business managers or leaders will use business statistics for insight about performance goals and objectives. People use data to forecast trends in the marketplace and forecast possible future events. Statistics are used every day for planning purposes in any area of thought.
Trade and commerce use business statistics in almost every area. Policies are formulated by the government based on statistics of what types of policies are working and those policies that are not. Feedback from studies and surveys often provide enough information to alter business initiatives and make process changes to improve an organization.
Advertising companies use business statistics to look at the overall marketplace and competitors. Business statistics help them determine which methods of advertising are beneficial to the customers and which methods are a waste of money. Statistics help advertisers understand which audience is most likely to buy a product, which area is the best to sell a product, how to price a product, what the customers expect, and much more. This type of information can be gathered through surveying the customers and analyzing the overall data.
Online businesses must use business statistics so they can remain competitive in the marketplace. The web is a very competitive world and data must be gathered so these companies know which techniques work the best for website ranking, keywords, attracting the users, and more. There are so many issues that companies come up with on the web and they must do a lot of research before they can begin to compete. In addition, a web business’s competition is worldwide rather than focused on a small local community like a brick and mortar store.
Business statistics are used in almost every industry and organization to make decisions based on historical data or current data, and to help make future decisions and projections. Information can be gathered by sending out surveys to relevant people.
International Business – Franchising in Costa Rica?
If you’ve ever toured Costa Rica, you know it is one of the most beautiful countries in the world, and I cannot think of a more fun place to cruise a motorcycle all around Costa Rica. Luckily, it is a lot safer than it has been in prior decades. Now many Americans are discovering this country, and are now moving there to retire. With all these Americans coming in and bringing their money, there have been significant gains in the country’s GDP and employment rates, and that is a good thing.
So, good in fact it brings me to my next comment. And that is a US Based franchise concept there could do well and since the labor is less expensive and there are far fewer regulations it would really be easy to do and a nice place to do business. As a former Franchisor Founder, indeed, I have looked into it before, but I am retired now. Still, the value of doing business there and riding up on the increasing tide of prosperity has opportunity written all over it.
There are many “franchise concepts” that would do well there and probably a lot better than most emerging markets with similar demographics, and with the incredible growth in GDP it really makes sense now. Indeed, I have a few franchise business models in mind that could kick butt in Costa Rica. But one doesn’t have to search very far in online franchise directories to note all the possible types of businesses that would be a no-brainer in Costa Rica right now.
Because with the increased American Population so too comes American consumer taste, and that is where franchisors have a huge advantage, and thus, it is something you might wish to think about, so please consider this.
Business Ethics and Unethical Practices
The study of business ethics and its implications for different stakeholders have seen tremendous growth in the past few decades. There has also been a rise in the use and development of codes of ethics and announcements for ethical practices by many firms; however companies are still criticized for their unethical practices at different levels (Papers4you.com, 2006). Business ethics, according to the literature has been entrenched with the philosophical details of Ethics (Trevino & Nelson, 1999). Ethics has been defined as ‘the activity of examining the moral standards of a society, and asking how these standards apply to ones life and whether these standards are reasonable’ (Velasquez, 1998; p. 11).
The literature on business ethics is divided on its views about the motivation and reason for businesses to have an ethical dimension. Drawing upon Harrison (2001), there are two major schools of thoughts, firstly those who suggest that firms are profit generating institutions and therefore business ethics is yet another way to attract customers, secondly those who support corporate conscience and intrinsic motivation for the adoption of business ethics.
Business ethics has been considered very subjective in nature and according to Paul (2001) is considered a function of time and culture. It has been established that with the passage of time business ethics have evolved and also that the cultural values and norms drive business ethics within national and regional boundaries. One of the major studies regarding the national values has been conducted by Hofstede (1983). According to this research, which was only based on four indicators i.e. individualism, power distance, uncertainty avoidance and masculinity, there is a great deal of differences among values across different nations and consequently the business ethics. Globalization combined with standardization has made businesses financially efficient but at the same time poses questions regarding the standardized codes of business ethics across national boundaries.
Vinten (1991) has divided the business ethical issues at different levels i.e. international business, domestic business and professional ethics. At the international level ethical issues include free-masonry and socialism versus capitalism; at domestic level these include religious dimensions, social marketing and ethical education; and lastly at the individual level these include bribery, corruption and data protection (Papers4you.com, 2006).
There are many reasons and criticisms for the failure of adoption of ethics in the business world. Firstly, the concept is considered to be overly theoretical and it also negates the basic purpose of any business i.e. to create shareholder’s wealth. Secondly, it has lack of direction and unanimity across different cultures and academic groups. Lastly, it has many inherent unresolved dichotomies that according to Sternberg (1994) make it a case of rejected relativism.
References:
Harrison, J. (2001), Ethics for Australian Business, Prentice-Hall, French’s Forest
Hofstede, G. (1983), The Cultural Relativity of Organizational Practices and Theories, Journal of International Business Studies, Vol. 14, No. 2, pp.75-89
Papers For You (2006) “S/B/92. What distinguishes ethical from unethical business activity and how significant are the principles of business ethics in modern business?”, Available from http://www.coursework4you.co.uk/sprtbus21.htm [17/06/2006]
Papers For You (2006) “S/B/49. ‘Should businesses strive to be ethical?’ Critically Discuss”, Available from http://www.coursework4you.co.uk/sprtbus21.htm [18/06/2006]
Paul, S. (2001), Cultural and Business Ethics, Cross Cultural Management: An international Journal, Volume 8 No. 1, pp 22-35
Sternberg, E. (1994), Relativism rejected: the possibility of transnational business ethics, in Hoffman, W.M., Kamm, J.B., Frederick, R.E., Petry, E.S. Jr (Eds), National Conference on Business Ethics. Proceedings from the 9th Conference on Business Ethics Sponsored by the Centre for Business Ethics at Bentley College, Quorum Books, New York, NY, pp.143-50
Trevino, L.K., Nelson, K.A. (1999), Managing Business Ethics: Straight Talk about How to Do It Right, 2nd ed., J. Wiley & Sons, New York, NY
Velasquez, M.G. (1998), Business Ethics: Concepts and Cases, 4th ed., Prentice-Hall, Englewood Cliffs, NJ
Vinten, G. (1991), Business Ethics: Busybody or Corporate Conscience?, Managerial Auditing Journal, Volume 5, Number 2, pp. 123-144
Economic Basis for International Trade!
Trade is the exchange of commodity and services. International trade represents business transactions taking place at the global level, and it is fundamentally different from domestic trade. Trade at international level demands huge investments, network of franchisees and proficient people to run the show. Many corporate giants are trying to capture Asian markets, especially Indian market, which has become the industrial hub for such economic activities. Economic liberalization has been the focus of many developing countries for the past two decades and this has allowed multinational companies with huge investment potential to enrich the weaker economies.
International trade tries to generate more foreign exchange, which is always good for the economy. Say, if a country has rich resources of petroleum, naturally it will try to sell the surplus to countries not endowed with such natural resources. That is why Middle East nations are prosperous and economically independent. The diversity in productive possibilities in different countries is due to the presence of limited natural resources. When a country gets a head start in a particular product, it can become the high volume, low cost producer. The economies of scale give it a significant advantage over other countries, which find it cheaper to buy from the leading producers than to make the product themselves.
Every nation must try to specialize in the production and export of those commodities, which are available in plenty and must import such products in the production of which they have a resource deficiency. It should be remembered that there are severe man made barriers in international trade such as, export duties, quotas, exchange restrictions etc.,that hinder the free movement of products. Nevertheless, it is not also possible for a country to produce domestically every kind of product. In spite of all these restraining factors, global trade is thriving, thanks to the advanced technological aspects introduced in communication and faster means of transportation. Distance is no more a constraint and the world has become one small global village.
All domestic transactions, say in a country like India take place in rupees, which is the legal tender in the country. However, in its trade with other countries like USA, Germany, Japan, France and Britain, the payments have to be made in terms of dollars, marks, yens, francs and pound sterling respectively. The mechanism through which payments are effected between two countries having different currency systems is called foreign exchange. It may be also defined as the exchange of money or credit in one country for money or credit in another.
Foreign exchange rates can affect relative prices and net exports. A rise in the a nation’s foreign exchange will depress that nation’s net exports and output, while a fall in the foreign exchange rate will increase net exports and output. Because of the significant impact of exchange rates on national economies, countries have entered into agreements on international monetary agreements.
It is About Time We Use Business Statistics
Business statistics for the average businessman or the small company does not seem to have much bearing. Business statistics can basically be divided into general areas being financial and market. With business statistics your business can grow and avoid dangers while you operate in the market and thus ensure your survivability in the long run. Most businesses fail because of their failure to understand business statistics and how to apply this knowledge to their operations and strategies.
But first of all where can one get these business statistics? Most of what we need in terms of business information stares us right in the face every day on the newspapers and on television programs like the news and other related shows. Everyday business information is available to us to make short term to medium term decisions. We can also get long term data from government agencies that provide this sort of data. Data for business use is divided into financial and market data.
Financial data most of the time deals with financial information usually brought about by the banking sector, savings and loans associations and the Federal Reserve, if you are in the United States. If you are in another country, usually this type of data is reported by the Central Banks. Financial data deals with interest rates, whether it be savings or loans, inflation rates, overnight banking rates or time deposit rates.
It also covers data on financial instruments such as savings bonds, coupon bonds and government bonds. This data is extremely helpful for you and your business. With this you know where the cheapest place to borrow money from for your needs is and also where is the best option to store your money with the biggest returns.
Financial data also covers long term data such as inflation rates. This is a very important statistic for it shows you how your money, whether it be in dollars or otherwise, becomes weaker as the years and months progress. For example if the inflation rate in your country is ten percent, it means that what used to cost one dollar will now cost one dollar and ten cents.
It means that the spending power or purchasing power of your currency has weakened by ten percent. You need to spend ten percent more to buy what you need. Imagine countries that have inflation rates of thousands of percent, you can imagine the kind of chaos they deal with day to day!
Market data on the other hand deals with such things as the Dow Jones Index and the NASDAQ. The Dow Jones index is a measure of the top 500 companies in America and how they are doing. Thus it is a measure of confidence for these top performing companies. It is basically a benchmark of how the economy is doing based on how the market is doing. Thus if the index is high it means that the market is doing well, and if it falls it means it is not.
The NASDAQ on the other hand measures around thirty to two hundred companies that are involved in the technology sector. Thus like the Dow Jones it serves the same purpose. The NASDAQ shows the relative performance of key players in the technology and science field or sector.