Your business guide

  Bounded rationality Making rational decisions is the process of choosing the best alternative that gives the maximum value. A rational decision maker would understand all the alternatives available, the steps that should be followed to attain the goal.  Bounded rationality is the decision-making approach which says that individuals have limited cognitive ability, resource, and time to make a restricted amount of information on which they try to make rational choices in a complexed organizational environment . Bounded rationality is one of the tools which Herbert A. Simon used to explain the administrative model of decision making. This model portrays how managers face complexed, non-programmed situations by making spontaneous decisions, it also helps to understand human and natural limits on rational decisions of a manager. Bounded rationality is explained as the logical way of describing how rational decisions are made by managers as rational decisions are made with less...

  Barriers to effective communication Communication is a process of transmitting, and understanding of information. A communication can be effective only when the receiver understands the exact information that the sender is willing to convey.  An effective communication should increase commitment in managers, and employees, should reduce misunderstanding in the organizational structure, should help them achieve the organizational goals efficiently.  There could be various barriers that obstruct an effective communication. A barrier can arise in any element of the communicational process, they provide the organization an opportunity to become more effective with the communicational process.  Information being filtered, the receiver being emotionally unstable while receiving the information, excessive information, defensiveness, language, and cultural barricades in the working environment, lack of feedbacks from the receiver, physical disabilities, lack of technolog...

  The Delphi method The Delphi method is one of the commonly used group decision making methods in an organization . The Delphi technique is a research-based iterative cycle that gathers individual opinions, helps with identifying a consensus of expert opinion using a set of questionnaires. This method  is also known as a qualitative forecasting method. The Delphi method was introduced by Norman Dalkey in the 1950’s. This was a project sponsored, used by the military of the U.S.A . The classical Delphi method was developed in order to allow participants express their ideas freely, to distil the perspectives of the members, to give participants a chance to explain, changing their view points with regards to the other members point of view, to quantitatively investigate on the gathered information . The questionnaires for this method are designed to understand complications, discover opportunities, solutions, and for predicting the future of the organization. The questionnai...

Skills and roles of a manager It is important that every manager is skilled to handle dynamic situations, to achieve  organizational goals and objectives by using the scarce resources efficiently.  Robert  L. Katz introduced 3 basic abilities a manager should essentially hold. They are: Technical skills Human skills Conceptual skills  1.Technical skills Technical skills are the skills of a  particular field which can be gained through education, and experience.  These abilities will  generally be more significant for the first-line workers as they directly supervise non-managerial  staffs.  2.Human skills  Human skills are the capability of working together with  people, motivating, coaching, and facilitating them.  All managerial levels of the organizational  structure should hold the human skills because all the levels of managers work with people  3.Conceptual skills Conceptual skills  are the skills to make l...

 BUSINESS ENVIRONMENT It is the surrounding of a business which affects, influences the operations of an organization.  A business environment can be classified into 2 types as the Internal environment, External environment. The internal environment The internal environment of an organization is the factors that are within the firm. These components can directly influence the business, is mostly controllable by the enterprise. The internal environment includes owners, managers, staffs, structure, culture, and resources of the organization. These factors of the internal environment create the strengths, and weaknesses of the firm . The external environment External environment consists external factors which are uncontrollable, influences on the operation of an organization. This environment generates opportunities, threats to the enterprise .   External environment can be divided into 2 types as  Micro/ immediate environment  Macro/ general environment....

    Mission, vision, goals, and objectives Mission, vision, goals, and objectives are the components of a proper business plan .   Vision is the destination that an organization wants to achieve in the remote future. Vision: A vision should be very motivating, realistic, and achievable in long term .  A vision statement is created by the owners or the heads of organizations. This statement guides the entire organization towards its purpose. Mission: Mission expresses the vison of an organization in a broader way. It explains the purpose of an  organization, helps to identify the target markets, the operations of a firm plan.   A mission statement is generated to bring uniformity among the staffs who hold different skills and  opinions, to share the scarce resources effectively . A business should focus on the factors like the  product that they produce, their customers, technology, public image while preparing a mission  statement.  Go...

 CHAIN OF COMMAND This is one of the principles that can be explained through an organizational structure. It shows the unbroken way of authority that flows from the top-level management to the low-level management of an organization.  A chain of command should be effective for communicating with the employees. It should give a clear picture to the workers on what decisions they can make on their own, the situations they should follow the commands of their supervisors.  The chain of command helps us to understand that every employee should be accountable to their immediate supervisor.  This is also used for creating specialized workers as it helps to separate works according to the  organizational structure and assigning, commanding the workers to do certain tasks. A good chain of  command also improves the responsibilities of workers as it exhibits the order of authority  and power  of a certain position in the organizational structure. 

 EFFICIENCY AND EFFECTIVENESS Efficiency and effectiveness are the main tools of measuring the success of organizations or inter-organizations.  Efficiency: Efficiency can be easily defined as “doing things right”. It alludes the function of getting the maximum output out of minimal inputs. Efficiency can be classified into 2 types 1. Input efficiency- it can be obtained by reducing the amount of input to get the same level of output. 2. Output efficiency- increasing the amount of output produced with maintaining the same level of inputs Example: A baker who bakes fresh bakery products always worked with the objective of earning profits  by  increasing the quality of his products to retain the customers, to increase the customer satisfaction continuously. He normally bakes 50 buns in an hour and is thinking of ways to improve is efficiency and effectiveness in order to increase his productivity. Efficiency: 50 buns – output one hour- input Input efficiency: He produ...