Factors of Production


Each business has its own mix of the four factors of production, vis-à-vis, natural resources, labor, capital, and entrepreneurship.

Natural resources refers to everything useful in its natural state as a productive input including agricultural land, building sites, forests, mineral deposits, and so on. Natural resources are basic resources required in any economic system.

Labor is critically important. It refers to everyone who works for a business, from the company president to the production manager, the sales representative, and the assembly line worker.

Capital is defined as the funds necessary to finance the operation of a business. These funds can be provided in the form of investments, profits, or loans. They are used to build factories, buy raw materials, hire workers, and so on.

Entrepreneurship is the taking of risks to set up and run a business. The entrepreneur is the risk taker in private enterprise system. In some situations the entrepreneur actively manages the business; in others this duty is handed over to a salaried manager.

All four factors of production must receive a financial return if they are to be used in a private enterprise system. These payments are in the form of rent, wages, interest, and profit. The specific factor payment received varies among industries, but all factors of production are required in some degree for all businesses.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Direct Sales Calls


  • Do sufficient research to identify potential customers who appear to need your product. This means pulling together names, addresses, and telephone numbers of companies in your market area that use the types of products you are trying to sell. Calling on companies that do not use your products only wastes time, energy, and money.
  • Get the name, address, and telephone number of the specific individual responsible for purchasing the  types of products you are selling. It won’t do much good to talk to the marketing manager if you’re trying to sell computer programs, or the general manager if you’re selling machine tools.
  • Know your sales pitch before calling. No one has time to chit-chat about superfluous subjects. No one cares about how you feel, nor do they care to tell you how they feel. One sentence describing your product and why the listener should buy it is all you’ve time for. If you continue beyond one sentence, either you’ll be thrown out or you’ll lose the interest of your  potential customer. When buyers want to hear more, they ask questions. If there are no questions, there’s no interest.
  • Don’t attempt to close an order at the first contact—either by phone or in person. If the person is interested, ask what would be convenient time and place for you to return and elaborate on your product offering, including prices, delivery schedules, and quality guarantees.
  • Focus on the benefits to be gained from using your product, not on its price. Explanations of product pricing and delivery options should wait for second contact. If you’re forced to the wall, try to keep your description of your pricing structure general.
  • Follow up all potential leads with another call, a letter, or a sample of your product. The scret to building a first-stage business base through direct sales is to continually follow up with any potential customer that seems the least bit interested in your product.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Sentence Making


Words are like building blocks—we can put them together in all sorts of different ways in order to make many different kinds of sentences. When we write, it is very important to make complete sentences. It is a common goof  to write incomplete sentences—also called sentence fragments.

Punctuation marks do the same thing for a sentence that road signs o for a highway. Punctuation marks tell the reader when to speed up, when to slow down, when to stop, and what to expect up the road.

The ultimate separator is the period. It says, “Stop here.”  Question marls and exclamation marks are usually periods with special missions. The comma is then most common separator. It says “slow down.” Without commas we wouldn’t know when to pause. There are five other separators: colons, semicolons, parentheses, dashes, and brackets.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Tangible and Intangible Property


Tangible property has a physical existence; land, buildings, and furniture are examples. Property that has no physical existence is called intangible property; patent rights, easements, and bonds are intangible property. The distinction between tangible and intangible property is important primarily for tax and estate planning purposes. Generally, tangible property is subject to tax in the state/province in which it is located, whereas intangible property is usually taxable in the state where its owner lives.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Flow of Communication Messages


  • Despite computer manufacturers’ promises of the paperless office,  shipments of office paper have risen 51 percent.
  • In less than 10 years, people in the US added almost 135 million information receivers—email addresses, cellular phones, fax machines, voice mailboxes, answering machines—up 265 percent.
  • In one year, 11.9 billion messages were left on voice mailboxes.
  • Even though people are clamoring  to get on the Internet, they are sending even more messages through the postal services, and they are talking on their telephones more than ever.

All companies can hold down costs and maximize the benefits of their communication activities if they just follow three simple guidelines:

  1. Reduce the number of messages;
  2. Speed up the preparation of messages;
  3. Train the writers and speakers.

Even though you may ultimately receive training on the job, you can start mastering business communication skills right now. Begin with an honest assessment of where you stand. In the next few days, watch how you handle the communication situations that arise. Then in the months ahead, try to focus on building your competence in areas where you need the most work.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Beyond Customer Satisfaction


Satisfying the customer is no longer the ultimate business virtue. Companies need to look for ways to create and increase customer loyalty. The key to this new loyalty-centered approach to customer relationships is creating and managing the customer value package – the combination of factors (price, product quality, innovation, and company image) that creates what the customer perceives as superior value. Five steps are recommended:

  1. Clearly define and communicate your objectives. The company needs to make sure that every stakeholder clearly understands the importance of  creating and delivering customer loyalty and knows how to make it possible.
  2. Let customers define, in their own words, their criteria for quality, price, image, and value. The company needs to distinguish between basic requirements and loyalty builders. Meeting the basic requirements will get the company on the approved vendor list, but generating loyalty will encourage a customer to stick with the company during difficult times.
  3. Conduct a critical need and value assessment. The company must set priorities among important customer requirements and determine the relative importance of these aspects of the customer value package.
  4. Develop an action plan and move to implementation. This turns management of customer loyalty into a way of doing business. The company must make sure that the voice of the customer becomes the principle around which the business processes are organized.
  5. Monitor the marketplace and organization results. Managing customer value is not a one-time effort, so all the loyalty-building components of customer value have to be monitored regularly with a focus on the relationship between customer value, customer loyalty, and financial performance.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

Losers’ Description of Capabilities


Corporate losers describe their capabilities in terms of the physical and financial resources they own and control and the individuals whom they employ and can manage. Their markets are places. Their people are more comfortable with tangible assets that can be seen, smelt and touched, and easily counted, measured and valued.

Because their activities depend on the availability of physical resources some losers can operate only in certain geographical areas. It may be difficult for people living elsewhere to access them and work with them. Buildings become prisons and those excluded from participation become outsiders.

In general, losers prefer more rather than less. Some consider the accumulation of resources as an end in itself. Recruiting more staff and moving to a larger property is viewed as evidence of progress. Losers focus upon the individual items of capital rather than their relevance use, and the flow of benefits that they provide. The more losers succeed in accumulating fixed overheads, the more vulnerable they become to economic forces, commercial constraints and financial pressures.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

Good Maintenance


Good maintenance is fundamental to productive manufacturing system; try running a production line with faulty equipment. Total productive maintenance is keeping the current plant and equipment at its highest productive level through cooperation of all areas of the organization. Generally, the first task is to break down the traditional barriers between maintenance and production personnel so they are working together. Individuals working together without regard to organizational structure, using their skills and ingenuity, have common objective—peak performance or total productivity.

This approach does not mean that such basic techniques as predictive and preventive maintenance are not used; they are essential to building a foundation for successful total productive maintenance environment. Productive maintenance is the process of using data and statistical tools to determine when a piece of equipment will fail, and preventive maintenance is the process of periodically performing activities such as lubrication on the equipment to keep it running.

The total maintenance function should be directed towards the elimination of unplanned equipment and plant maintenance. The objective is to create a system in which all maintenance activities can be planned and not interfere with the production process. Surprise equipment breakdowns should not occur. Before the advent of computer-aided manufacturing, operators in some organizations were responsible for their machines and took a certain pride of ownership. With the help of maintenance technicians, operators spent part of their work time keeping their equipment in good running order. Recent technical advances have given us more tools to perform the maintenance function.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

Maintaining Accounting Records


Firms must maintain accounting records. The most important number in these records is the one at the bottom—the “bottom-line” net profit or loss. To compute this number, the firm keeps track of the number of products sold and the amount of money spent on production, salaries, rent, insurance, interest on loans, building repairs, and other items.

Large firms produce a tremendous amount of accounting information. Managing this information and using it wisely are great challenges. All business firms—large and small alike—produce accounting information for three basic purposes: internal decision-making, financial reporting to lenders and investors, and tax reporting to government.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

Cardinal versus Ordinal


What do we mean when we say that a variable is “quantitatively measurable”?We do not necessarily mean that there is only a single way of measuring or scaling it. Temperature is certainly quantitatively measurable, but there are alternative ways of doing so. For example, 320 Fahrenheit is 00 Celsius, and each degree up or down of Celsius corresponds to 1.8 degrees up or down of Fahrenheit. The two scales differ, but only in zero point and unit interval. Similarly, altitude could be measured from sea level or from the center of the earth (shift of zero point) and in feet or meters (shift of unit interval). Both temperature and altitude are more technically called cardinal magnitudes, variables which have the following property: that, regardless of shift of zero-point and unit interval, the relative magnitudes of differences remain the same. In case of altitude, for example, there’s a bigger difference between the heights of the base and crest of Mount Everest than between the ground floor and roof of even the tallest building. This remains true whether we scale altitude in feet or meters or whether we measure it from sea level or from the center of the earth. If people can state that they prefer two million to one million—but not by how much—their utility is said to be an “ordinal” magnitude. Put another way, if Total Utility is an ordinal magnitude we cannot say anything about the  size of Marginal Utility but we can still say whether Marginal Utility is positive or negative.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

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