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The Formation of Cooperative Society is a simple matter and there is no complicated procedure for its registration. The formation of the cooperative society is governed by the provision of the cooperative society Act 1925 in our country. It can be formed with limited or unlimited liability.

To get a cooperative society registered, an application on the prescribed form must be submitted to the Registrar of the cooperative societies in which the society’s office is t be located.

8 Pre-Registration Conditions for Formation of Cooperative Society

1. There must be at least 10 members above the age of 18 years. But there is no restriction on the maximum number of members.
2. The member must be resident of the same town or village or in the same group of villages.
3. There must be an in name of the society.
4. Every society with limited liability must have the word “limited” after the name of society.
5. The application must be signed by the promoters/secretary/officers. Moreover, such an application must be accompanied by the following documents:
   1. Memorandum of the Society.
   2. Articles of the Society.
   3. Two copies of the by-laws (internal working rules) proposed to be adopted by society.

After proper verification of the application according to law, the Registrar will give his approval to the formation of the society and will record the name of the society in the register. Generally, Registrar issues a certificate of registration which is conclusive evidence that the society is duly registered.

After its registration, the cooperative society can invite new members and can conduct the particular business for which it has been organized and registered.

18 Features of Cooperative Societies

Elimination of Middlemen

The management of the consumer cooperative society directly purchases the finished goods from the manufacturer and producer. Producer Cooperative society procures the raw material from the producer. Thus they try to free themselves from the grip of the middlemen and make the goods available to consumers at lower prices.

Saving in Management Expenses 

A cooperative society enjoys some economics in the field of management due to voluntary services performed by the members themselves. Thus, it is possible to minimize the expenses of management and supervision.

Minimum Stock 

Society Purchases the same goods which are actually demanded by its members. Thus there is a need to have minimum stock at hand due to constant and regular demands.

Economy in Distribution and Production Expenditure 

Society is saved from any distribution and production expenses. It has got its regular customers, therefore society has not to face any trouble for marketing its goods. Thus it has not to incur any expenditure for publicity and advertisement, which is a big item in the budget of the capitalist producer.

Integration 

Under this type of organization, complete integration between producers, wholesalers, and retailers is always possible. This is thus a clear advantage over a capitalist economy.

Employment Opportunities 

Thousands of people are engaged in different types of cooperative small scale and cottage industries. Most of them are not familiar with writing a perfect job application, Thus it removes the problem of jobless persons in developing countries.

Equal Distribution of Wealth 

With the growth of the cooperative society, wealth has not been concentrated into a few hands. Thus this factor tends to equalize the distribution of wealth in society.

Educative and Social Value 

Spirit of sacrifice, sense of mutual help, and self-help are developed among the members. They are able to adopt the principles of honesty and unity. It thus creates the economic and social aspects of human life among the members.

Financial Services 

It renders financial services for its members for the purchase of seeds, manures, implements, and houses, etc. It thus removes the financial problems of the member of the society.

Taxes Facilities 

The government provides certain concessions to this class of organization i.e. exemption from stamp duty, super tax, income tax, and business registration fees.

Improvement of Standard of Living 

Its main aim is to bring about greater benefit for its members. It supplied daily necessities of life to its members at the lowest prices. Thus it is helpful for the improvement and progress of standard of living.

Equal Status 

It is a democratic organization where members enjoy an equal voice in the management of the cooperative business.

Extensive Market 

As the goods are supplied to its members at cheaper rates, the general public is attracted to become the shareholders of the society.

Rural Development 

Cooperative organization renders public utility services such as village communications, sanitation, water supply, drainage, education and undertakes the supply of various implements to the farmers.

Encouragement of habit of Saving 

A cooperative society supplies the goods to its members at cheaper prices. It thus creates the attraction in the general public for becoming shareholders of the society. This tendency encourages the habit of saving and investment.

Miscellaneous Advantages 

• It helps to eliminate the evils of capitalism from the society. 
• It increases the business and economic activities in the country. 
• It promotes the welfare of the community.

Seven Types of Cooperative Societies

1. Producer Cooperative Societies

These are formed to eliminate the middlemen and capitalist groups from industrial production. Its main purpose is to produce goods for the requirements of its members. Surplus productions are also supplied to outriders in the open market at profit.

All the necessary activities as production, management, and marketing are performed by the members themselves. Its members get dividends on the basis of the capital invested by them.

Objectives of Producer Cooperative Society

• To purchase the raw materials and other factors at most economical prices.
• To produce the goods at the most economical level. 
• To supervise the production most efficiently and effectively. 
• To dispose of the surplus production to non members at maximum prices.
• To eliminate the middlemen and capitalists. 
• To remove the worker’s grievances in respect of working conditions, wages etc. 
• To arrange for the democratic control of the industrial unit.

2. Consumer Cooperative Societies

Society is the voluntary association of ordinary people formed with the object of obtaining the daily requirements of the members. It directly purchases the goods at a large scale from the producer or wholesalers at wholesale price.

It thus eliminates capitalists, retailers, and other middlemen from the channel of distribution and members are in a position to make their purchase at a cheaper rate.

Anyone can become a member by purchasing one share of the society.

Sometimes goods are also supplied to non-members but they do not share in the profit of the society. Profit earned by the store is distributed among the members according to the value of the purchases conducted by the manager who is elected by the members. Generally, its two types are popular in the world.

• Retail cooperative store
• Wholesale cooperative store

Objectives of Consumer Cooperative Society

• To eliminate the retailers, capitalists and wholesalers.
• To promote the welfare of the members. 
• To supply the daily necessities of life to its members at market price. 
• To increase the purchasing power an standard of living of the members of the society. 

3. Marketing Cooperative Society

It is the voluntary association of producers formed for the object of arranging the disposal of their output. It pools together the output of the individual members and arranges to supply the product at the highest possible price.

The profit of the sale of the ~ products is distributed among the contributing producers according to their individual contribution to the pool. This kind of society is particularly useful for small producers and agriculturists. It can be formed in two organizations according to the local condition of the country i.e.,

• Single purpose society
• Multi purposes society

Objectives of Marketing Cooperative Society

• To eliminate the middlemen who are liable of the high cost of marketing.
• To pool together the output of the individual members. 
• To grade and process of the pooling products of the members.
• To dispose of the product at the maximum price.
• To adjust supply to demand. 
• To provide storage facilities to its members. 
• To procure the information relating to market for the member’s product.
• To provide the financial facilities to its members

4. Insurance Cooperative Society

This type of cooperative society is formed for the objects of providing group insurance facilities to its members. It makes the contract with the sound insurance company on collective terms and conditions and thus pays a lower premium rate to the insurance company as compared with ordinary policyholders.

2 Forms of cooperative Insurance

Mutual Office

In the Mutual office, the policyholders are the owners and the profit of the insurance company is utilized in the following ways:

• To strengthen the financial position of the company.
• To decrease true amount of premium.
• To distribute bonus to its members.

Self concern

A cooperative society is organized to provide insurance facilities like the private insurance company and issued policies to its members for a reasonable amount.

Objectives of Insurance Cooperative Society

• To provide insurance facilities to its members.
• To charge the low rate of premium. 
• To promote the welfare of the members. 
• To encourage the habit of thrift and investment.
• Housing Cooperative society

It is an association of middle and low-income groups of people. Generally, it is formed in urban areas. The main purpose of this form of society is to protect its members against exploitation by landlords. It not only grants financial assistance to its members but also achieves the economics of the purchase of building material in bulk.

In order to become a member of society, one must buy at least one share of the society. The liability of the member is limited to his capital contributed. It is also called “Building Society” and may be divided into three types i.e.

• Housing Building Society
• Land Society
• Finance Society

Objectives of Building Society

• To receive deposits from its members. 
• To make loans to its members for the construction of house at low rate of interest. 
• To render technical services for its members. 
• To purchase building materials at economical rate. 
• To perform the welfare activities as water supply, roads, sewerage, electricity etc.
• Cooperative Farming Society

This form of Society is formed with the object of obtaining the benefits of large-scale farming and maximizing agricultural products. It is basically an agricultural cooperative that is confined to agricultural countries. Its members generally relate to the former including those owning land.

The Cooperative Forming are of the following types

• Cooperative collective farming Society.
• Cooperative joint farming society. 
• Cooperative better farming society.
• Cooperative tenant farming society.

Objectives of Cooperative Forming

• To consolidate holding.
• To introduce new technique of cultivation.
• To improve the irrigating system.
• To increase the area under agricultural operations.
• To make necessary steps for the improvements of the standard of living of the farmers. 
• To increase the production per acre. 
• To provide seeds manures and implements to its members.
• To dispose of agricultural output.

7. Credit Cooperative Society

Credit cooperative society is the voluntary association of the financially weak persons organized with the object of providing short-term financial requirements to them.

This society performs an important role in the rural areas where the dishonest money lenders have been exploiting simple villagers by charging a high rate of interest.

The Funds of the Society Consist of 

• Membership fees
• Dispose of shares
• Deposits from members and non-members
• Loan from govt. and semi govt.

The liability of members is unlimited. This assists society in raising funds and ensures that every member will take a keen interest in the activities of the society.

Society prefers the poorer members in granting loans and charges a low rate of interest from them. Generally, society advances the amount for productive purposes but some loans are also given to members for unproductive purposes. Credit cooperative society may be divided into two types:

• Agricultural Credit Society
• Non-agricultural credit Society

Objectives of Credit Society

• To get rid of the pressure of money lenders. 
• To provide the financial facilities for short term to its members.
• To keep the minimum rate of interest on loan.
• To develop the habit of thrift and saving among the members.
• To encourage the habit of mutual aid.

You write, speak, or show from your gesture and postures. You are communicating but Why do you communicate? The reasons and styles of communication may be different depending upon sender and receiver but everyone is communicating.

Even birds do by whistling and animals by roaring. According to recent researches, Plant communicates too. But here, we are not talking about who communicates to whom and how do they do this.

Communication is the process of passing information and understanding from one person to another. It is a two-way process of exchanging ideas or information between two human beings.

Communication Objectives

• To initiate some action
• To impart information (ideas, attitudes, beliefs or feelings
• To establish, acknowledge or maintain links or relations with other people

Initiating Action

The basic purpose of communication is to initiate some action. It is used to express the needs and requirements of a person. Firstly, you communicate to change the attitudes and behaviors of others. Then you persuade them to carry out the desired action.

Imparting Information

Information gathering is a constant activity of human beings. Much of the knowledge you learn comes from communicating with others. Teachers most often make a speech to impart information. Feedback from other people shows your strengths and weaknesses. You impart information through news bulletins, bank statements, gossip, business information, discussion, etc. Imparting information may have the following specific purposes:

• Creating awareness 
• Creating understanding 
• Persuading others 
• Influencing others

Establishing Relations

Establishing and maintaining relations with other people is a vital function of communication.

Aristotle says, “Man is a social animal”. Being a social animal, he cannot live alone. To fulfill his needs in life, he has to communicate with others. Similarly, you communicate with others to fulfill your needs in life. You can communicate with others in the following ways.

• You can nod or wave to show that you recognize some one you have met before.
• You can make eye contact while speaking.
• Keep in touch by telephone, letter or making a visit.
• You can use his/ her name while speaking or writing.

Communication is the act of sharing or imparting information between two persons or parties.

The word communication has been derived from the Latin word “communis” which means common. So communication means sharing of ideas in common.

Literally, communication means to inform, to tell, to show, or to spread information.

It is a two-way process in which a speaker must have a listener and a writer must have a reader to share his ideas. So communication is the process by which a message evokes a response.

Communication Defined As & By

Communication is the process of conveying messages (facts, ideas, attitudes and opinions) from one person to another so that they can be understood 

M. W. Cumming

Communication is an exchange of facts ideas, opinions, or emotions by two or more persons.

George Terry

We define communication as the process by which message affects response. 

Harold Janis

The search for all available means of persuasion 

Aristotle

The flow of material information, perceptions and understanding between various parts and members of an organization.

Fred Luthans

Communication enables organizations to function. Organizations cannot function without open and effective communication. So it can be said that communication is the lifeblood of every organization.

7 Basic Elements of Communication

Sender

The process of communication begins when the sender is struck by an idea. Firstly, let us see who is a sender? A sender is a person who sends the message. The sender may be a single person or a group. He acts as a speaker, writer, or encoder.

When a sender conceives an idea and wants to share it, he finds certain codes to express his message and creates the desired response. While preparing the message he keeps in mind the receiver’s culture, viewpoint, needs, status, mental ability, experience, and expectations.

Encoding

The second component is encoding. Encoding means converting the idea into a message by using different words, gestures, symbols, or body movements. He uses words and non-verbal signals that the receiver is familiar with so that the message will be well understood.

Message

The message is the information that the sender wants to transmit. It is the actual physical thing that the sender encodes. It creates a connection between sender and receiver. It consists of both verbal symbols and non-verbal symbols. When you write, your writing is the message. When you gesture, the movements of your arms and the expression of your face are the message.

Channel

After framing the message, the sender selects a channel or medium. The channel is the medium through which the message flows from the sender to the receiver. It may be a letter, e-mail, voice mail, fax, telephone call, conversation, or a television program. The choice of medium is influenced by the relationship between the sender and the receiver, the situation, or the urgency of the message. 

Written communication should be used when the situation is formal, official, and long-term. The oral channel is effective when immediate feedback is important. 

Receiver

When the message is transmitted, a person receives it. The receiver is the person who receives, interprets, and decodes the message. The message receiver is your reader or listener. Many of your messages may have more than one decoder. For communication to occur, your receiver must first get the message. 

Decoding

The next element is decoding. The act of understanding the message is known as decoding. It is the reverse of encoding. Your receiver must decode (absorb or understand) your message.

His decoding of the message depends upon his past experience, knowledge of the language, understanding viewpoint, and relations with the sender. Successful decoding is the correct understanding of the intent of the message as transmitted by the sender.

Feedback or Response

After decoding the message the receiver gives feedback to the sender. Feedback is the reaction of the receiver, which indicates to the sender that the message has (or has not) been successfully received, understood, and interpreted. After decoding the message, the receiver responds in the same way and signals that respond to you. This feedback helps in evaluating the success or failure of your message.

Barriers of Communication

People in the world are not exactly alike. Cultures or countries are not the same. Each person has a unique filter of the mind. These differences cause problems in conveying and receiving the meaning of the message. These problems are called barriers as they block the communication process. Following are the barriers in communication

Language/Semantic Barrier

The choice of the words or language in which a sender encodes a message affects the quality of communication. Some words have a variety of meanings. Miscommunication occurs when the sender and the receiver have different meanings of the symbols used. For example: Consider the word “value” 

• What is the value of this laptop? 
• I value our relation
• What is the value of learning technical skills? 

Value means different in different sentences. Similarly, LIFO (last in, first out) FIFO (first in, first out), people who are not accountants cannot understand such acronyms. So the problem that occurs due to the difference in meaning is called the semantic barrier. To overcome the semantic barrier we should use simple language and common symbols.

Restrictive Environment

Communication climate is influenced by an authoritarian and directive style of management. In this style, information in the form of command moves down but not up. This blocks the free and open exchange of information. To avoid climate barriers, the manager should spend more time listening than issuing orders.

Distractions

Your audience receives your message accurately if nothing physical interrupts or distorts the message. 

Physical distractions such as bad connections block effective messages. Poor lighting, uncomfortable chair, noise, passing traffic, or some other irritating conditions might distract your receiver. 

Emotional distractions also get in the way of our message. When we are upset, hostile, or fearful, we have a hard time shaping (framing) our message effectively. If our receivers are emotional, they may ignore or distort our message. 

To communicate effectively, we should try to fight physical and emotional distractions.

Closed Minds

Some people hold rigid views on certain subjects. They are not ready to accept new ideas or facts. Such close-mindedness becomes a hindrance to ineffective communication. To overcome this, we should be open-minded to the ideas of others and should attempt to understand others. 

Information Overload

Managers are surrounded by a pool of information. It is essential to control this information flow otherwise, they tend to ignore, pass over, forget, or selectively choose information. In any case, the result is lost information and ineffective communication. 

Poor Retention

Human memory cannot function beyond a limit. One cannot always retain what is being told especially if he is not interested or not attentive. This leads to communication breakdown.

Perceptual Difference

Perception means how each person looks at the world around him. People perceive reality in their own way. Even when two people have experienced the same event, their mental images of that event will not be identical (same). It is because the perception of each person is unique, the idea he wants to express differs from other people. 

Lack of Interest

One of the greatest problems of communication is the receiver’s lack of interest in your message. We should always be alert to this. Where lack of interest is obvious, we must work hard to mold our message according to the interests and needs of the receiver. 

Jumping to Conclusion

Sometimes the receivers jump to conclusions beforehand. They close their minds to get additional information. This causes problems in communication. To overcome this, we should reserve judgment until the speaker has finished. 

Sender’s Credibility

Often people react more according to their attitudes toward the source of information (sender) than to the information itself. The sender’s credibility is important in getting a favorable reaction. When the sender is incredible, he becomes a barrier in communication. To overcome this barrier, we should not judge the message by the speaker but by the argument (information)

8 Benefits of Communication

Good communication skills have always been important in the workplace. They are even more vital today. Effective communication helps in the technology and globalization of the marketplace.

Following are the benefits of effective communication.

Increase Productivity

Your ability to communicate effectively increases productivity, both your and your organization. You can get the maximum product at minimum cost and make a profit with the help of good communication.

Co-ordinate with Flow

Organizational communication establishes a pattern of formal channels to carry information. Information is passed in three ways: upward, downward and horizontal. Suggestions, complaints, and problems flow upward from employees to supervisors.

Instructions relating to the policies of conducting business are conveyed downward. At the horizontal level, information is exchanged between the employees of an organization.

Strong Business Relationships

Communication is the most vital means by which people are connected together in society. A communication skill is a key to establish strong business relationships. Without effective communication, people misunderstand each other and misinterpret information.

Build Professional Image

Effective communication makes difference to your organization in the international market. The ability to speak and write help in dealing with national and international business people. So this ability promotes the image of your organization.

Making Prompt Decisions

Communication helps to make prompt decisions. For making prompt decisions, a fact-collecting process is necessary which results from effective communication.

Building Goodwill

In this age of competition, for excellence and success, organizations need to develop goodwill and sound status. Effective communication assists organizations to maintain goodwill and credibility.

Career Building

Anyone who is able enough to communicate effectively possesses a high-value skill. So communication skills are the main requirement for getting a good job. Your job promotion and success often depend on doing well in a written and oral presentation. Your ability to communicate well is a valuable asset that leads you to success.

Job Satisfaction and Good Morale

Morale is the human element that motivates a man to work in the right spirit and is a major productivity influencing factor. Good communication removes the possibility of misunderstanding among the employers and employees. It increases the morale of the workers and each worker feels job satisfaction.

“Political economy is perhaps the only science of which it may be said that the ignorance of it is not merely a deviation of good but produces great positive evil.”

In the words of Malthus,

“Economics is the intellectual religion of the day.”

Durbin

“The study of Economics is a practical necessity and a normal obligation.”

Sir Henry Clay

All of it reflects that Economics has prime importance in social sciences which can be discussed in two parts

Theoretical Importance of Economics

Intellectual Development

The study of Economics widens the mental horizon of people because it increases their mental capacity to understand various problems of life.

Spirit of Co-operation

The study of Economics realizes that we are interdependent to meet our economic and social wants. It leads to the spirit of cooperation.

Critical Analysis

An economist critically analyses the situation and then draws conclusions that provide a guideline for a successful life.

Rationality

The study of Economics teaches rationality, i.e. to avail the best possible situation within the given conditions.

Sense of Responsibility

Economics teaches us that we have to meet our unlimited wants with limited resources. It creates a sense of responsibility which in turn makes a person a better citizen.

The vision of the Economic System

The study of Economics not only enables us to understand different economic systems, i.e. capitalism, socialism, and Islamic economic system but it also creates a vision to look into the working of a particular economic system.

Source of Unavoidable Information

Understanding some problems like inflation, exchange rate, shares, BOP, deficit financing, etc. has become unavoidable for a successful life. Economics is the major source of all this inevitable information

Practical Importance of Economics

To Understand Other Subjects

The study of Economics is very useful to understand other subjects like history, sociology, psychology, etc.

Solution of Economic Problems

The study of Economics provides the solution to critical economic problems like poverty, inflation, monopolies, unemployment, environmental pollution, etc.

Government

Planning and development strategies, budget, monetary policy, fiscal policy, etc. are major concerns of the government. The government depends heavily upon economists for policy decision-making.

Producers

The ultimate objective of a producer is to maximize profit in case of profit and minimize the loss in case of loss. It is the study of Economics that provides guidelines to hit the target.

Consumers

Consumers are always in search of maximization of satisfaction. It is Economics that provides basic principles to maximize satisfaction.

Bankers

Banking is the most challenging part of the present era. A successful banking system is based on the knowledge of Economics. It helps in designing & managing banking services and products.

Speculators

Speculation, i.e. purchase and sale of shares, bonds, certificates, etc. are a major feature of the present business world. It is Economics that provides outlines for speculation done by speculators

Rulers

Economic tactics are the most effective tactics to win the favor of the masses. Hence it is a must for a successful ruler to have the awareness of at least basic knowledge of Economics.

Labour

Laborer enriched with the knowledge of Economics can realize their role and importance to the employer in the production process. Hence Economics enables them to enjoy higher wages.

Citizen

Knowledge of Economics is indispensable for a good citizen. Wooten has rightly remarked that:

“You cannot be a citizen in the real sense unless you are at least in some degree an economist.”

Global Supremacy

Global supremacy is possible only on the basis of advanced studies in Economics. For instance, G-8 countries are enjoying global supremacy on the basis of the literature on Economics.

Optimum Allocation of Resources

The optimum allocation of resources is key to economic development and the study of Economics confirms the best allocation of resources.

Equitable Distribution of Wealth

Inequitable distribution of wealth has been a crucial problem, especially LDCs. It is the study of Economics that provides guidelines for the equitable distribution of wealth.

Gateway to Economic Development

Economic development has been the dream of all nations. It is the knowledge of Economics that serves as a gateway to economic development.

Importance of Economics in Daily Life

Economics plays a crucial role in our daily life. Each decision like making a purchase of something represents the economic implications. The importance of economics in daily life can be analyzed by seeing its implications among its different branches. The important branches of economics are Micro, Macro, Managerial, Monetary and International economics, etc.

Importance of Microeconomics in Daily Life

Microeconomics is a branch of economics that deals with small units of an economy like consumer, producer, monopolist, oligopolistic, and consumer welfare decisions.

Certain consumer analysis depends on the nature of products like basic goods, inferior goods, and luxury goods. After seeing the importance of these goods in his daily life he makes purchases.

For example, the consumer spends his limited income in such a way that he obtains maximum satisfaction from it. If a person wants to purchase a bike or car. Firstly, he estimates its cost and benefits then makes a decision. So, all economic decisions are based on cost-benefit analysis.

Importance of Macroeconomics in Daily Life

Macroeconomics is a branch of economics that deals with aggregate parts of an economy like Income, Inflation, Unemployment, Growth rate, and Business Cycles. Macroeconomics deals with how disturbance in one term or sector might affect the whole economy.

Example: Inflation in one sector simultaneously influences the other sectors of an economy. In our daily life if the cost of shoe-making factories increases then how does it affect demand for labor, product price, product demand, and quality?

Macroeconomics plays a significant role to analyze how disturbance in one sector transforms its impacts on other sectors of an economy.

Importance of International Economics in Daily Life

International economics is a crucial branch of economics that deals with the trade of goods and services. The term trade is the ratio of export price to import price and all trade decisions depend on this ratio.

If the export price decreases then TOT decrease and this ratio become helpful to make the decision not to export a specific quantity of that commodity. Similarly, if the price of imported goods increases then it is easy for Govt. to make policies that restrict the import of these goods.

Example: If the price of luxury imported cars increases then Govt. makes those policies that restrict the imports of these cars. Similarly, the appreciation of domestic currency enhances the export of certain goods.

Importance of Development Economics in Daily Life

Development economics is the most important branch of economics that deals with qualitative terms, not quantity. Development economics is helpful to make decisions regarding the development of certain sectors like education, health, infrastructure and living standard, etc.

Govt. used different strategies to analyze the performance of current development policies and obtained results of these also helpful for making effective policies in the future.

For example, If Govt. wants to reduce poverty then those policies would be made which enhance employment, and social security benefits for workers, control the labor market and bring stability to the wage rate. All these steps directly or indirectly become helpful to reduce poverty.

Read more about wages in different states of the US

• https://businessfinancearticles.org/minimum-wage-in-georgia
• https://businessfinancearticles.org/minimum-wages-in-illinois
• https://businessfinancearticles.org/minimum-wage-in-louisiana
• https://businessfinancearticles.org/minimum-wage-in-tn
• https://businessfinancearticles.org/minimum-wage-in-indiana
• https://businessfinancearticles.org/minimum-wage-in-virginia
• https://businessfinancearticles.org/what-is-the-minimum-wage-in-texas

Importance of Managerial Economics in Daily Life

Managerial economics is to some extent similar to microeconomics, in this branch of economics managerial decisions are made on the basis of cost-benefit analysis. Producers used these analyses to make certain decisions regarding the production of goods, cost of production, and minimum price of produced well.

Producers aim to produce more quantity of a good at a minimum cost and gain maximum profit. The producer used different strategies to achieve the desired goals.

For example, If a producer’s goal is to enhance sales then he would be made those strategies that enhance good production at the least cost and set reasonable prices. Mostly break-even analysis is used to make those strategies.

Importance of Monetary Economics in Daily Life

Monetary economics is the most crucial branch of economics that deals with the monetary policies of an economy. Monetary economics discusses how fluctuations in the money market might influence other sectors.

There are two kinds of monetary policy first Easy Monetary Policy (When money supply increases and interest rate decreases) while the second is Tight Monetary Policy (When money supply decreases interest rate increases). State Govt. make decisions about which kind of monetary policy is suitable to the current economic scenario.

For example, If Govt. wants to enhance the employment level then an easy monetary policy is adopted which increases in money supply and decreases the interest rate. Reduction in interest rates encourages investors to take loans and extend their business which further generates employment opportunities. While the reverse happens if Govt. wants to control the inflation rate.

Finally, The above – mentioned facts reveal that human welfare is the direct and primary concern of Economics. Hence Economics is an extremely important and useful subject for all times and for all nations.

Every running business is backed up by various shown and hidden functions helping it generate sales and earn revenues. These Business functions or tasks usually vary in different businesses but overall they are the same from production to qualify sales.

10 Different Types of Business Functions

If you are new to the business world and thinking to start a profit-generating business in your area or somewhere in the world, there are many but 10 most important things to consider when starting a new business. Once it is started, the next step is to perform functions.

Creation and Distribution of Utilities

Business involves the creation and distribution of goods with the object of earning profit. A businessman conducts this process for his own interest. It also includes the mining, communication process, and transportation functions.

Planning and Controlling Function

It is one of the most difficult business functions in the business undertaking. It is largely concerned with the determination of policies for plants and following them through production. Any divergence from the target may affect the function to be performed at the next stage. 

Technology and Engineering Function

The engineering department in large technical industries advises the supervisors on technical matters. Research, development, and designing of the product function are often performed under the engineering department.

Finance Function

You do everything to be Financially Independent and this is the most important function in the private enterprise by which all the activities are conducted. The funds are in the custody of the treasurer who is liable for all types of payments belonging to money. Credit control, purchase discounts, wages, and loans are also financial functions.

Manufacturing Function

Manufacturing is primarily concerned with the conversion of raw material into finished or intermediate. In other words, it is the creation of form utility. The manufacturing process may only involve the changing of the nature of the material, as this function is done in refining or chemical industry, But really it includes both the changing of the nature of the material and its form as it is conducted in the steel industry.

Personnel Function

The personnel function is conducted by the personnel department which is also categorized into 3 subcategories and named as Human Resources Department, Personnel Management Department, and Industrial Relation Department. Usually, the following functions are centralized by this department:

• Organization
• Establishing policies
• Staff development as promotion policies, training program
• Remuneration (i.e. job evaluation, grading, merit rating, the establishment of wages, and salary structure.)
• Relationship scheme through trade unions, counseling, etc.
• Casting and budgeting
• Record Keeping

Accounting Function

Businesses understand accounting importance, So, they hire an accounting department to perform professional service. The accountant or chief accountant is in charge of this department who conducts and supervises the financing, accounting, budgeting, and costing activities; regarded as one of the tools of administration.

Purchasing Function

It is one of the highly important functions in a manufacturing organization. There are several specialists in their respective fields in the purchasing department who also increase the efficiency of work and help to maintain reasonable prices of the product. The purchasing function is closely related to sales.

Sales Function

It is the productive function of business that is generally performed by the sales department. It involves the transfer of ownership of goods from one hand to another in exchange for money.

Sales function also includes grading, where housing, transporting, sorting, collecting, and packaging matters. These sales functions are performed with Modern & Traditional Selling Techniques.

Organization

The organization is generally regarded as the grouping of activities in a coordinated manner with a view to obtaining maximum benefits. In the words of Richard “Organization is the structural relationship between the various factors in an enterprise”.

According to this concept three factors of an enterprise i.e. Men, Material and Management are combined to attain the objects of the business. So the organization is the relationship between the various objectives and factors.

Some writers prefer to the word ‘organization’ to the individuals functioning within an organizational unit as well as to the whole functioning. However, it is advisable that organizational changes should be made according to changed circumstances in order to meet the present environment.

Thinking to start a business in your town, city or country? Its your first try and have no experience on it? Failure fear? Market Trends? and lots of other questions you may have in your head.

No worries! Every successful entrepreneur was once a striving for success. The same way you can be successful. If you have any of Entrepreneur Characteristics in you, you can brand yourself either today or tomorrow.

10 Most Important Things to Consider When Starting a Business

Let’s dive into the discussion of what things to consider when you are going to start up your own business. These may be more or less depending upon your business plan and idea.

However, these 10 factors are essential when starting a business. People from the United Kingdom may get benefit from starting any of these Small business Ideas.

Product Demand

Before starting a business, the market is surveyed to know which goods are in demand. The businessman also selects a business which is suitable to him and which he can organize well.

Size of Business

The businessman must keep in view the volume of business. He decides whether he has to do business at small scale or large scale. He may limit his business at the local level; and by adopting the business of a wholesaler, he can extend his business to other market.

Form of Organization

After deciding the size of the business, the businessman has to plan the form of organization. He decides whether he has to start the business as a sole proprietor, or as a partnership, or in form of Company.

Suitable Location

Suitable location facilitates business and guarantees its success. The premises where following facilities are available are considered best for business: with sufficient supply of raw material, an easy approach to the market for the sale of goods, water, power and quick means of transportation and protection against risks and accidents.

Concession from Govt

In some enterprises Govt. allows some concession or rebate income to X or in excise duty. In some kinks of business import and export policies are lenient. All these concessions are kept in view before starting a business.

The Arrangement of Capital

Capital is arranged according to the size and bulk of the business. Even after the business has Started capital is required for the purchase of raw material and for the payment of wages and taxes and for miscellaneous, purposes. Capital is arranged keeping in view all these requirements.

Business Policy

Policy is framed before the actual commencement of business. Determination of method of payment and receipts, formula and technique of production are most essentials for the successful business. Future prospects are to be regarded according to the rate of growth. Anyhow policy generally depends upon the nature of business, rate of profit and situation of market.

Availability of a Administrative Personnel and Skilled Workers

If machinery is arranged in business, skilled personnel are also employed to run the machinery and the administration. The owner should be capable of personnel management to adjust Qualified persons engaged in right part of a business which is to be conducted on the right lines.

Availability of Labor

Laborers are the back-bone of a business. Before starting a business the area is surveyed to know whether sufficient labor is available or not; In order to reduce the cost of production, the local rate of wages of labor is also kept in view. It is better to start business in an area where the wages are low.

Means of Transportation

Developed means of communication and transportation are essential for business. These means help to bring raw-material to the factory and also help to transport finished goods to the local and other markets. If these facilities are not available the cost of production will increase, and the business will suffer.

A warehouse is a place where different goods are stored or accumulated for a temporary period. It created time utility for supply chain management. The need for warehouses arises out of the lack of adjustment between times of production and times of consumption of goods.

At present time the goods are produced for in advance of demand. So before the goods are short in the market, they should be stored.

It is the warehouse that stores the goods from the time of production to the time they are sold. In this way, through proper warehouse management to take maximum advantage of it. Businesses remove the hindrance of time between the places of production and consumption.

Uses and Importance of Warehousing

Many goods are not produced regularly at the point where they are wanted for consumption and they must be stored from the time of production until they are wanted by the consumer if they are to be used in satisfying human wants. Goods produced at a distance from the consumer must be transported to the consumer.

In order to ensure an even supply, a stock of such goods must be maintained near the consumers as protection against delays and uncertainties of transport and to permit transport in economical units.

Many agricultural goods produced seasonally are supplied to consumers more or less evenly throughout the year. Grain, Cotton, Tobacco, and Sugar furnish can be stored for several years without any deterioration. The demand for some products is irregular. In such cases, storage may be called into use so that production can be more regular.

If factories producing such goods are to be operated throughout the year, the goods produced in the “off months” must be stored until they are wanted by 1he consumers. Storage involves expense, but much expense is often less than the extra cost of providing buildings, machinery, and labor to produce seasonal products as needed.

Moreover, production and transport may be interrupted by fire, flood, strike, cold, or storm. Storage is a safeguard against such risks. It offers facilities to the traders or merchants to get loans from the credit agencies on the goods stored in the warehouse. The credit agencies will be in a position to give loans by the transfer of warehouse receipt, which is a negotiable instrument of title.

It offers goods facilities for the transfer of ownership of goods warehoused therein without the actual transfer of goods simply by transfer of warehouse warrants with the endorsement of the owner thereon. It removes the hindrance of time which would otherwise be involved in obtaining possession of the goods from the places of their production

Types of Warehouses

Public Warehouse 

It is operated in accordance with the law for the purpose of storing goods for other people at profit. Sometimes a large arrives in part when it is not convenient for the importer to take it into his custody.

During such periods these goods have to be stored somewhere. Similarly, even in trade, they have to be stored between the time they are made and the time they are required for use. A public warehouse provides facilities for storing all such goods. It thus renders many useful services to the trade.

It enables smaller sellers to carry regional stocks. This factor is very important in competitive markets.

Private Warehouse

This type of warehouse belongs to the owner of goods, usually a wholesaler, who stored his goods. There in order to supply to retailers in future. Goods are produced in large quantities in anticipation of future demand and for unknown customers. The ultimate wholesaler finds it necessary to purchases goods in advance in large bulk and to store them for future supply.

Bonded Warehouses

It is one that is licensed to accept imported goods for storage before payment of customs duties. By storing his goods in a bonded warehouse the importer gains some control without paying the duty. The goods in bonded warehouses are under the strict supervision of customs officers and before the owner can interfere with them, previous permission is necessary.

Government Warehouse

This type of warehouse is mainly located at the important seaports and in most cases is owned by the Dock Authorities. The general public can also use this group of the warehouse on payment of fixed charges.

If a customer cannot pay the rent within the specified period of time, then the authority can recover the rent by disposing of the goods.