Shuchita Times June 2016 - Shuchita Prakashan(P)Ltd

ISSN : 0972-7124
June 2016
Volume 17 No. 6
Impact of Manufacturing and Business Cycle on Working Capital of
Micro Enterprises
3
& Prosperity of Self Finance Courses Running Institutes in
6 GrowthMumbai
Region
9 Security Exchange Board of India (SEBI)
11 Emergence of MIS in Business Organization
ISSN : 0972-7124
June 2016
Volume 17 No. 6
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majority of people do.
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defeat, known suffering, known struggle, known loss, and
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Dr. K. K. Patra
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COVER UP
Impact of Manufacturing and Business Cycle
on
Working Capital of Micro Enterprises
Dr. Arvind S. Luhar
HOD, Accountancy & Research Guide
Government of Maharashtra
Ismail Yusuf College of Arts,
Science & Commerce
Jogeshwari (E), Mumbai - 60
Mr. Hitesh G. Suthar
Ph. D. Research Scholar in Accountancy
KPB Hinduja College,
University of Mumbai
Abstract:
Working Capital is not only affect due to nature of
business, taxation policy, dividend policy, production policy
& others but it also affect due to Manufacturing and business
Cycle. In this study researcher cover only manufacturing cycle
and business cycle to understand impact on working capital.
firms will find that the economic level of working capital is no
more than a few firms will find that the economic level of
working capital is no more than a few months supply. This
relatively short planning horizon in working capital decisions
contrasts sharply with the much longer planning horizon in
fixed capital decisions.
The second implication of divisibility, which follows
logically from the first, concerns the appropriate methods for
financing working capital investments. The fact that working
capital only amounts to a few months supply means that the
working capital cycle, a cycle running from cash to
inventories, inventories to receivables, and receivables to
cash, is measured in months rather than in years. This liquidity
of working capital allows the management a corresponding
flexibility in its financing decisions. Whereas fixed capital
should generally be financed with long-term sources of funds,
working capital can be appropriately financed with either
long-term funds, or short-term funds, or some combination of
the two.
In the management of working capital, therefore the firm
is faced with two key questions. First, given the level of sales
and the relevant cost considerations, what are the optimal
amounts of cash assets, accounts receivable, and inventories
that a firm should choose to maintain? Second, given these
optimal amounts, what is the most economical way to finance
these working capital investments? To produce the best
possible returns, firms should keep no unproductive assets and
should finance with the cheapest available sources of funds.
Why? In general, it is often advantageous for the firm to invest
in short-term assets and to finance with short-term liabilities.
Introduction:
Working capital management is the process of planning
and controlling the level and mix of the current assets of the
firm as well as financing these assets. Specifically, working
capital management requires financial managers to decide
what quantities of cash, other liquid assets, accounts
receivable, and inventories the firm will hold at any point in
time. In addition, financial managers must decide how there
current assets are to be financed. Financing choices include
the mix of current as well as long-term liabilities.
This high degree of divisibility has two important
implications for the management of working capital, first, if
the management so chooses, working capital can be acquired
piecemeal to meet immediate needs as they arise. Such handto-mouth policy has advantage of reducing the average
investment in working capital, thereby minimizing the interest
charges, insurance expenses, and storage fees necessary to
carry the investment. However, a hand-to-mouth policy has
these disadvantages: there will be increased ordering costs
associated with greater likelihood that the firm may
experience a shortage in working capital, because there is no
buffer stock to absorb unexpected fluctuations in requirement.
By balancing the savings in carrying costs against the cost of
shortage and of more frequent procurement, the management
of a firm will generally find it profitable to maintain its Definitions:
Working capital is an important tool for growth and
working capital at a level higher than the needed to meet its
immediate needs. However, the relationships among carrying profitability for Enterprises. If the levels of working capital
costs, shortage costs, and procurement costs are such that most are not enough, it could lead to shortages and problems with
3
SHUCHITA TIMES June 2016
ARTICLE
the day-to-day operations.
Reductions of working capital can increase profitability
of a company. There are results from several researchers that
working capital and profitability are linked together. The
results indicate that efficient working capital management can
increase profitability and add a larger cash flow to the
company. Companies have to ensure the liquidity and not only
profitability by reasonable working capital management in
order to keep the company running. The company may fail in
to problems if they do not have enough cash and they have
poor profitability.
Manufacturing Cycle:
Manufacturing cycle also affects the working capital
needs. Manufacturing cycle refers to the time gap between the
purchase of raw materials and the production of finished
goods. Larger the manufacturing cycle, larger will be the
firm’s working capital requirements. Shorter the
manufacturing cycle, smaller will be the firm’s working
capital requirements. For example, a distillery, which has long
manufacturing cycle due to ageing process, requires heavy
investment in inventory, whereas a bakery having shorter
manufacturing cycle, requires low investment in inventories.
Objectives of the Study:
To understand Manufacturing Cycle
To understand Business Cycle
Business Cycle:
The working capital requirements depend upon the
demand and sale of goods. The demand and sale of goods
usually increase when the economy is going through a boom
phase and decrease when the economy is going through a
recessive phase. The effect of business cycle and business
cycle affect working capital.
Importance of Working Capital:
The following point will highlight the importance of
working capital:
(a) Enables a company to meet its short term obligations;
(b) Ensures the solvency of a business;
(c) Ensures the credit standing of a business;
(d) Facilitates obtaining credit from banks without much
difficulty.
(e) Enables a business to make prompt payments to its
creditors and thereby take advantage of cash and
quantity discounts offered by them;
(f) Enables an organisations to tide over difficult periods
successfully.
(g) Enhances the goodwill of a organisation as it can meet its
operational expenses and maturing liabilities in time;
and
(h) Improves the prospectus of prosperity and progress of a
business.
Thus, adequate working capital is an important factor
behind the prosperity of a business organisation. It is rightly
called ‘the backbone of the financial structure of a business
organisation’.
SHUCHITA TIMES June 2016
4
Conclusion:
1.
Manufacturing
Requirement of
Cycle
Working Capital
Larger Period
High
2. Shorter Period
Low
Business Cycle
1. High Demand of
Goods (Boom Phase )
2. Recessive phase
3. Seasonal
Business
(Umbrella
Manufacturer)
Requirement
of Working Capital
High
Low
In
Season
high
requirement.
No season, not much
requirement of working
capital.
BODY & BRAIN
Commerce Quiz
1.
2.
3.
Preparation of Trial Balance helps, mainly, in–
4.
(a) Summarising business transactions
(b) Verifying that ‘generally accepted accounting
principles’ have been observed
(c) Finalizing the ‘sources and uses of funds’
statement
(d) Locating errors, if any, in books of accounts.
If opening stock = Rs. 2, 45,000; purchases = Rs. 15, 5.
00,000; sales = Rs. 17, 40,000 and rate of gross profit =
20% on cost of goods sold, then the closing stock would
be at–
(a) Rs. 3, 53,000
(b) Rs. 2, 95,000
(c) Rs. 2,45,000
(d) Rs. 1,95,000
‘A’ and ‘B’ are partners in a firm sharing profits and
losses in the ratio of 2– 3. ‘C’, a new partner is admitted
for 1/4th share. ‘A’ and ‘B’, old partners share C’s profit
into their profit sharing ratio. The new profit sharing
ratio of ‘A’, ‘B’ and ‘C’ would be–
(a) 1– 1– 1
(b) 2– 3– 4
(c) 1– 2– 2
(d) 6– 9– 5
If an auditor does something wrongfully in the
performance of his duties resulting in financial loss to
the company, he will be held guilty of–
(a) Civil Negligence
(b) Misfeasance
(c) Criminal Negligence
(d) Financial Irregularity
Which of the following relating to Audit Programme is
not correct?
(a) The auditor cannot defend himself on the basis of
audit programme if there is a charge of negligence
against him
(b) It is useful basis for planning the programme for
the subsequent year
(c) It helps in the final review before the report is
signed
(d) It simplifies the allocation of work amongst the
audit staff
Stay Hydrated
Y
our body depends on water to survive. Every cell,
tissue, and organ in your body needs water to work
correctly. For example, your body uses water to maintain its
temperature, remove waste, and lubricate joints. Water is
needed for good health.
Water makes up more than half of your body weight.
You lose water each day when you go to the bathroom, sweat,
and even when you breathe. You lose water even faster when
the weather is really hot, when you are physically active, or if
you have a fever. Vomiting and diarrhea can also lead to rapid
water loss. If you don’t replace the water you lose, you can
become dehydrated.
Symptoms of dehydration include the following:
•
Little or no urine, or urine that is darker than usual
•
Dry mouth
•
Sleepiness or fatigue
•
Extreme thirst
•
Headache
•
Confusion
•
Dizziness or lightheaded feeling
5
•
No tears when crying
Don’t wait until you notice
symptoms of dehydration to
take action. Actively prevent
dehydration by drinking plenty
of water. Drink enough water to
prevent thirst. Monitor fluid loss by checking the color of
your urine. It should be pale yellow and not dark yellow, too
smelly or cloudy.
Consider all fluids, including tea, coffee, juices, milk,
and soups (though excluding alcohol, which is extremely
dehydrating). The amount of caffeine in tea and coffee does
not discount the fluid in them, even if they have a slight
diuretic effect, according to the most recent report by the
National Research Council's Food and Nutrition Board.Eat
at least five cups of fruits and vegetables per day for
optimum health, as they all contain various levels of water
and the all-important nutrient potassium.
SHUCHITA TIMES June 2016
ARTICLE
Growth & Prosperity of Self Finance Courses
Running Institutes in Mumbai Region
Mr. Ashok Luhar
M.Com., M.A., MBA, PGDMM, UGC-NET, M.Phil., Ph.D.
In-Charge Principal
Anandibai Damodar Kale Degree College of Arts & Commerce
Borivali-West, Mumbai
Abstract:
Self Finance courses play an outstanding role for the
growth and prosperity of higher education in India. In current
period students are choosing Self Finance courses instead of
Traditional B.Com courses because of better career prospects,
100% placement opportunities and availability all modern
facilities during study. Main reason behind for the growth and
prosperity of Self Finance courses are best infrastructure,
placement, industrial visit, lectures through PPT presentation,
syllabus etc. In this article we will find out the reason behind
growth and prosperity of Self Finance Courses in India subject
to commerce education.
Keyword:
Self Finance Courses, Growth & Prosperity of Self
Finance Courses
1.1 Introduction :
Self-Finance courses are unaided courses. In such kinds
of courses government do not provides any financial benefit to
colleges or institutes. The first Self-Finance course has been
started in University of Mumbai was B.M.S. In this course
student has given very good response and they made this
course popular. Now a days there is massive growth of SelfFinance courses over Traditional B.Com courses. Maximum
numbers of students are taking admission in Self-Finance
courses due to better profession opportunities in the market.
Fees charged on Self-Finance courses are very high as
compare to Traditional B.Com courses. Students are getting
all the benefit and facilities in the institutes like library, audio
visual room, gym and canteen etc.
University of Mumbai started verities of Self-Finance
course in B.Com i.e. Bachelor of Accounting and Finance
(B.A.F), Bachelor in Banking and Insurance (B.B.I), Bachelor
of Mass Media (B.M.M), Bachelor of Management Studies
(B.M.S), and Bachelor of Financial Market (B.F.M) etc.
Sampling Frame
Sr.
Types of
No. Respondents
1 Students
2 Teachers
3 Principal
Grand Total
Traditional
SelfB.Com
Financing
425
790
110
125
20
SHUCHITA TIMES June 2016
Total
1215
235
20
1470
6
1.2 Objectives of the Study
1. To find out the growth and prosperity of Self
Finance Courses
2. To find out the review of literature in related area.
1.3 Hypothesis of the Study
1. There is a significant difference in growth of Selffinanced courses over traditional B.Com courses in
the last ten years.
1.4 Review of Literature
1.4.1 According to Tripathi, (1998), this article is based
on the future prospects of commerce education in India.
Commerce is a branch of business. All the business empires
are running on the foundation of commerce education. In India
there is different charm of commerce education. After S.S.C
students joins commerce education. Every year it is seen that
in commerce highest number of students are taking admission.
After graduation or with graduation students can select
different career options in commerce.
Students are having verities of career options like to do
C.A, C.S, and I.C.W.A or to do preparation of banking and
civil examinations. In commerce students learn managerial
and entrepreneur knowledge. Commerce is highly job oriented
course in market. In commerce education Self-Finance
courses are the major centre of attraction for the students. Now
a days it is seen that parents are ready to pay higher amount or
donation to fix admission in Self-Finance courses. In current
period there is a massive demand for Self-Finance courses in
India and the same will continue in future.
1.4.2 According to Das S. N. (1998), this article is based
on Scope of Employment in Commerce Education. Commerce
education is one of highest employment oriented source in
India. Every year thousands of people get passed from
commerce education and get the job in corporate, insurance,
banking and teaching etc. In commerce there are two types of
courses i.e. Aided courses i.e. government funded courses and
unaided courses i.e. Self-Finance course. In India there is a
huge demand of Self-Finance courses as compared to aided
courses.
Self-Finance schemes are really very beneficial not only
for the educational institute but also for the students, because
Self-Finance courses improved the level of education. In Self
ARTICLE
Finance courses institutes are charging the fees as per their
infrastructures. In Self-Finance courses colleges can stand
only when they provide best education and infrastructural
facilities to the students, otherwise it would be difficult for the
management to run their institutes. Students studied from
Self-Finance courses are having better career options as
compare to Traditional B.Com courses. In future there would
be a great demand for Self-Finance courses over Traditional
B.Com courses.
1.5 Hypothesis testing of the study
There is a significant difference in growth of Selffinanced courses over traditional B.Com courses in the last ten
years.
Null Hypothesis:
There is a no significant difference in growth of Selffinanced courses over traditional B.Com courses in the last ten
years.
Alternative Hypothesis:
There is a significant difference in growth of Selffinanced courses over traditional B.Com courses in the last ten
years.
For testing purpose respondents (students) are asked to
give their opinion on five point agreement scales regarding
different characteristics related institutional growth due to
both types of courses. The codes were as follows
1. Strongly Disagree
2. Disagree
3. Neither agree nor disagree
4. Agree
5. Strongly Agree
Normality test
Before selecting statistical test we test normality of data
as follows:
We use Kolmogorov-Smirnov test for testing normality and
results of which are tabulated below
Table No. 1.5.1
Hypothesis No. 1: Kolmogorov-Smirnov Test
Observations and interpretations:
Kolmogorov-Smirnova
Self-Finance
Traditional B.Com
Statistic
0.276
0.193
df
790
425
Sig.
0.000
0.000
From the above table it is observed that significant p
values for k-s test are both 0.000 less than 0.05 clearly
indicates that data for different characteristics related
institutional growth due to both types of courses is not normal.
Further two groups are independent. Hence we use nonparametric Mann-Whitney Test for testing significance of
data. Details are as follows.
Table No. 1.5.1(1)
Hypothesis No. 1: Mann-Whitney Test
Method
Self-Finance
Traditional B.Com
Total
Ranks
N
790
425
Mean Rank Sum of Ranks Mann-Whitney U
747.18
590271.50
347.25
147233.50
57133.5
Z
P value (1-tailed Sig.)
-19.141
0.000
1215
Observations and interpretations:
As p value is 0.00 which is less than á = 0.01 (1 %
significant level). It is also observed that calculated ‘z’ value
is -19.141 is less than – 1.65 (table value of at 1 % significant
level). Hence we reject null hypothesis Ho.
Finding:
From the above we may infer that there is a significant
difference in growth of Self- financed courses over traditional
B.Com courses in the last ten years.
1.6 Growth & Prosperity of Self-Finance courses
Now a days Self-Finance courses are highly attracted
courses for the students to make their carrier paramount. It is
7
seen that in University of Mumbai thousands of people every
year are taking admission in Self-Finance courses to gain
better knowledge over Traditional B.Com courses and make
them fit suitable in any business organization in future. Some
of the vital benefits of Self-Finance courses for the students as
well as for the educational institutes are as follows.
•
Self-Finance courses are highly employment oriented
courses in the market.
•
In Self-Finance courses students are getting practical as
well theoretical knowledge which is helpful for the
students to survive in any business organization.
•
Seating capacity in Self-Finance courses is only 60
students in each class, this creates better concentration
SHUCHITA TIMES June 2016
ARTICLE
•
•
•
•
•
•
•
for the students as well as for the teachers during study.
Self-Finance institutes provide industrial visit facilities
to students to gain practical working knowledge of
industry.
Institutes provide best infrastructural facilities to
students like library, gym, audio visual room and canteen
etc.
Teachers taking viva and arranging seminar for the
students to remove their stage fear as well groom them as
per the industry standard.
In Self-Finance courses institutes provide best
placement opportunities to the students.
Self-Finance courses are highly profit oriented courses
because fees charged by institutes are comparatively
higher than Traditional B.Com courses.
Self-Finance institutes hire professional staff for the
students to give practical knowledge.
Self Finance courses are the main pillar for the
educational institutes to run their working capital and
cash flow cycles effectively.
SHUCHITA TIMES June 2016
8
•
There is a huge growth and popularity of Self Finance
courses in market over Traditional B.Com courses.
1.7 Conclusion
It is clear that with the help of Self-Financed Courses
educational institutes smoothly run their institutes with better
working capital, Fund Flow and cash flow cycle. Student’s
attention also plays important role in education. In SelfFinance courses students’ teacher ratio in each classroom is
very less i.e. 1 -60 means one teacher for sixty students.
Institutes also provides all the modern facilities to students
and teachers during study like library facility, audio visual
room, industrial visit, campus recruitment, gymkhana and
many more. These all things creates the growth and prosperity
of self finance course running institutes in Mumbai.
1.8 References
1. Tripathi S. D. (1998), Commerce Education in India:
Contours and Perspectives, Report of the Special
Committee For Commerce Education, Chapter 4.
2. Das S. N. (1998), Scope of Employment of Commerce
Education, Indian Journal of Commerce, Vol.51, No. 4.
ARTICLE
Security Exchange Board of India (SEBI)
Prof V.H. Koppar
M.Com., LLB
Chiplun, Mumbai
With the liberalisation of the economy and speedy
economic development of the country, the middle class
moved on to upper middle class. Their income improved
considerably and they started thinking about investment of
their savings before Post Office and Bank Deposits. They
started slowly entering the share market for getting rich
quickly. These people did not have proper knowledge of the
functioning of the share market and the unscrupulous brokers
and other operators in the Stock Exchange took advantage of
their ignorance. There was widespread rumour mongering in
the stock market and insider trading was prevailant. Insider
trading means directors and others who had inside knowledge
of the state of affairs of the company started operating on the
Stock Exchange and took undue advantage of their inside
knowledge. Outside investors did not have this knowledge
and they purchased and sold their investments at wrong time
and lost their hard earned money on the stock exchange. Stock
Exchanges are called the economic barometers of the country.
So, the government had to step in to regulate the operations on
the Stock Exchange and protect the interests of the small
investors. So, the Central Government established Securities
and Exchange Board of India (SEBI) in 1988. SEBI is playing
an important role in the development of the India Stock
Exchanges on right lines.
To begin with the SEBI found it very difficult to
effectively control the operations on the Stock Exchanges as it
had no legal status. So, it was granted legal status in 1992.
Now it is a body corporate having an independent legal status.
Like all other joint stock companies, it has perpetual
existence. Stock Exchanges in India faced innumerable
problems like price rigging, unofficial premium on new
issues, delay in delivery of shares, violation of rules of the
exchange and listing requirements etc. As a result, customers
started loosing faith and confidence in the Stock Exchanges.
To curb these malpractices Central Government had to
established a regulatory authority like SEBI.
Thus, SEBI had the twin objectives of regulating the
activities of the stock 1markets and protecting the interest of
investors. Today SEBI functions for the three parties viz.
Issuers Investors and intermediaries. For the issuers it
provides a market place to raise finance easily.
9
It protects the interests of the investors by supplying
them accurate and correct information in time. For the
intermediaries like brokers and subbrokers, it provides a
professional markets to conduct their operations. Thus, SEBI
regulates the operations on the stock markets, protects the
interests of the investors and prevents malpractices. It has
developed a code of conduct for the intermediaries like
brokers underwriters etc.
Functions of SEBI
The functions performed by SEBI can be described in
brief as follows:
SEBI performs three fold functions viz. Protective functions,
Development functions and Regulatory functions. Let us
consider them one by one.
1. Protective Functions.
These are performed by the SEBI to protect the interests
of the common and specially the small investors. It checks
price rigging. Price rigging means the artificial manipulation
of the prices of the shares on the Stock Exchanges by the
unscrupulous operators like brokers etc. They inflate and
deflate prices of securities and the gullible investors are
deceived.
SEBI arranges lectures and seminars to educate the
common man in the working of the stock exchanges. In other
words it tries to improve the financial literacy amongst the
educated people. SEBI also conducts a grievances cell to solve
the problems of the investors promptly and without much has
sell. Any investor can just write an ordinary letter to this cell
about this complaints against the companies like late or non
receipt of dividend, share certificates, annual reports etc. and
SEBI directly contacts the concerned company’s authorities
and immediatelysolves the problem. SEBI also prohibits and
prevents insider trading. It keeps a check on insider trading
and takes prompt and strict action against the same. SEBI has
issued a code of conduct for fair practices on the stock
exchanges. It also protects the interests of the
Debentureholders. Companies are not allowed to change the
terms of 2. issue of debentures midway. They should be paid
reasonable rate of interest regularly and their principal amount
should be returned on the schedule date.
SHUCHITA TIMES June 2016
ARTICLE
SEBI tries to increase the volume of business on the
Stock Exchanges. It conducts training courses for the brokers
and sub-brokers operating on the exchange. To lower the cost
of issue of capital, SEBI has made underwriting optional. To
quicker the speed of the transactions on the exchange
internettrading is made compulsory on the Stock Exchanges.
SEBI regulates the business on the stock exchange. It has
prepared rules and regulations for the intermediaries like
merchant bankers, brokers, underwriters etc. These days there
are number of restrictions on private placement. It conducts
enquiries and audit of stock exchanges. The different
authorities like brokers, sub brokers, share transfer agents
transfers and merchant bankers have now to register with
SEBI and meticulously follow orders and instructions issued
by it from time to time. Without registration, nobody is
allowed to operate on the exchange. SEBI also regulates the
functioning of Mutual Funds which are more popular with the
investors these days. It also regulates the takeover of one
company by the other. In such cases SEBI will ensure that full
justice is done to the shareholders of both the companies.
Organisational Structure
The head office of the SEBI is in Mumbai and it has its
branches at Chennai, Delhi and Kolkata. It works just like any
other company in the private sector. It has five major
departments each headed by an executive director. There are
two advisory committees one for primary markets and the
second for the secondary markets. These committees consist
of representatives of investors associations, market players
and some eminent persons. These above two committees
advise SEBI to regulate intermediaries operating on these
markets. They also advise SEBI on the issue of securities in the
primary markets. The information to be disclosed by the
companies in their respective prospectuses is decided by these
committees. Committees also advise SEBI on changes in the
legal frameworks to bring more and more transparency in the
working of the stock exchanges committees also 3advise on
the matters of regulation and development of secondary
markets on the Stock Exchanges.
However, it should be remembered that the advice given
by these two committees is not binding on SEBI. SEBI can
take different decisions independently on its own.
SEBI is managed by its members. It consists of the
chairman nominated by the Central Government and two
members, who are officers of the Ministry of Finance Reserve
Bank of India also has its nominee other members are also
nominated by the Central Government. Atleast three such
members are wholetime members.
SEBI performs three types of functions viz. quasi
judicial, quasi legislative and quasi executive. In its legislative
capacity, it drafts regulations, it conducts investigation and
enforcement in its executive functions. It also passes rulings
and orders in its judicial capacity.
There is Securities Appellate Tribunal of three members
headed by a former judge of the High Court. Appeal against the
decision of the SEBI can be made to this tribunal. There is also
a provision for a second appeal which can be done directly to
the Supreme Court.
In short, SEBI has been playing an important role in the
economy of the country. The disclosure norms prescribed by
SEBI are of international level. SEBI approves the by-laws of
the Stock Exchanges. SEBI can direct the exchanges to amend
their by-laws. It can inspect books of accounts of the
Exchanges and ask them to file periodical returns.
ISBN-978-93-5034-793-5
Price : ` 250
This Book is....
* A curtain raiser. The curtain hiding Common Sense being common practice.
* A free conversation with you; involving you to flow with the issue; facilitating you to connect your
behaviour with Common Sense.
* A tool to sketch the need and methods of cultivating Common Sense to your ultimately finish
with a dynamic portrait of Common Sense of your own and for your own.
This Book is not...
* A quick fix.
* A two hour journey read out.
This Book is for :
Being used as a gearwheel that grows smaller with gradual readings for bringing deep and
permanent transform to live a happier and healthier life.
This Book is not for: Get and forget.
SHUCHITA TIMES June 2016
10
ARTICLE
Emergence of MIS in Business Organization
Babita A. Kanojia
(M.com, B.Ed, M.Phil, NET)
Asst. Prof. at: Clara’s College of Commerce
Versova Andheri (W), Mumbai
Abstract:
As we all are aware that all managerial functions are
performed through decision-making. It is common
assumption that for taking rational decision, timely and
reliable information is essential and is procured through a
logical and well structured method of information collecting,
processing and disseminating to decision makers. Such a
method in the field of management is widely known as MIS. In
today’s world of ever increasing complexities of business as
well as business organization, in order to service and grow ,
must have a properly planned, analyzed, designed and
maintained MIS so that it provides timely, reliable and useful
information to enable the management to take speedy and
rational decisions. Hence, to understand the concept and
emergence of MIS the researcher has selected this topic. It is
totally based on conceptual research work done by researcher.
The study is focused on importance and role of MIS in today’s
business entities.
Key Words:
Management Information System, Decision-Making,
Business Operation, Fundamental Prerequisite
Introduction:
MIS plays a very important role in the organization. It
creates an impact on the organization’s functions,
performance and productivity. It helps in taking managerial
decisions in an organization. Without information
management won’t in position to come on conclusion hence it
very important to have proper link to collect essential
information on time to take the decisions. Hence the
objectives of the study are:
1. To understand the concept of MIS
2. To study the role of MIS in business organization
3. To study the impact of MIS
Concept of MIS:
The MIS is an idea which is
associated with 4Ms i.e man, machine,
marketing and methods for collecting
info-rmation’s from the internal and
external source and processing this
information for the purpose of
facilitating the process of decision-making of the business.
MIS is not new, only the computerization is new , before
computers MIS techniques existed to supply managers with
the information that would permit them to plan and control
business operations. The computer has added on more
dimensions such as speed, accuracy and increased volume of
data that permit the consideration of more alternatives in
decision-making process.
THE COMPONENT OF MIS
MANAGEMENT: Management has been define in
process or activities that describe what managers do in the
operation for their organization plan, organize, initiate and
control operations. They plan by setting strategies and goals
and selecting the best course of action to achieve the goals.
They organize the necessary tasks for the operational plan, set
these tasks up into homogenous groups and assign authority
delegation; they control the performance standards and
avoiding deviation from standard
Components of
MIS
Management
Information
System
INFORMATION: Data must be distinguished from
information and the distinction is clear and important for
present purpose. Data are facts and figures that are not
currently being used in a decision-making process and usually
are taken from the historical records that are recorded and
filled without immediate intent to retrieve for decisionmaking.
Information consists of data that have been retrieved,
processed or otherwise used for information or interference
purpose, argument or as a basis forecasting or decisionmaking regarding any business unit. Information is knowledge
that one derives from facts for effective functioning of systems
placed in the right context with the purpose of reducing
uncertainty regarding the alternative courses of action as they
are based on description and measurement of attributes of
various entities associated with the enterprise.
SYSTEM: The system can be described as a set of
elements joined together for a common objective. A subsystem
is a part of a larger system with which one is concerned. The
organization is the system and the parts (divisions,
departments, functions, unit etc) are the subsystem. The
system concept of MIS is, therefore one of optimizing the
output of the organization by connecting the operating
subsystems through the medium of information exchange.
11
SHUCHITA TIMES June 2016
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SHUCHITA TIMES June 2016
12
PREPARING FOR THE REAL WORLD
Amit Jain and Anurag Jain
A
mit Jain and Anurag Jain launched CarDekho in
2008 and bootstrapped till 2013. They exclaim
that bootstrapping for the first three to five years gave
us a chance to dilute less and negotiate better with
investors on own terms.
The duo was making decent profit through the IT
outsourcing business unit of Grinar Soft. They started
as an IT outsourcing company in late-2006 and were
generating substantial revenue. This revenue helped
them not to raise VC capital early and bootstrap cars. Delhi, Mumbai, and Bengaluru are top three
CarDekho for five years. Despite the global economic markets for Cardekho.
slowdown during 2008-2009, Cardekho remained
Amit and Anurag are IIT-Delhi alumni. Amit
unaffected without VC backing.
worked for Austin-based Trilogy for over eight years
The six-year-old company claims to enable 25 while Anurag had a brief stint at Sabre Holdings before
percent of the sales of organized, dealer-driven used Girnar Soft.
The Dog and the Dog-Dealer
A
DOG was standing by the cottage of a peasant.
A man who dealt in dogs passed by the way. The
dog said, "Will you buy me?"
The man said, "Oh, you ugly little thing! I would
not give a farthing for you!"
Then the dog went to the palace of the king and
stood by the portal. The sentinel caressed it, and said,
"You are a. charming little creature!"
Just then the dog-dealer came by. The dog said,
"Will you buy me?"
"Oh," said the man, "you guard the palace of the
"Ah!" said the dog, "how place and position affect
king, who must have paid a high price for you. I cannot people!"
afford to pay the amount, else I would willingly take
you.
13
SHUCHITA TIMES June 2016
SHUCHITA TIMES June 2016
14
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SHUCHITA TIMES June 2016
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AIR: 20 (CS Foundation, December 2015)
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