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TWO IMPORTANT CURVES IN ECONOMICS.

LORENZ CURVE

Lorenz Curve

The lorenz curve is a graphical representation of income inequality or wealth inequality develop by American economist Max Lorenz in 1905.

It represents the perfect equality, wealth distribution, inequality of income and wealth too. Because it can happen that a income is at high rate, where as the wealth or the net worth at a lower side. May happen like a population with low income and high net worth.

The area between straight line and curved Expressed as a ratio called Gini Coefficient.

The coefficient ranges from 0 (or 0%) to 1 (or 100%), with 0 representing perfect equality and 1 representing perfect inequality. Values over 1 are not practically possible as we don’t take into account the negative incomes. (Income can be 0 at its lowest but not negative)

Thus, a country in which every resident has the same income would have an income Gini coefficient of 0. A country in which one resident earned all the income, while everyone else earned nothing, would have an income Gini coefficient of 1.

LAFFER CURVE

Laffer Curve

Taxes, nobody can move and feel comfortable from the havoc of taxes in any nation.

The Laffer Curve is a representative of tax reports. This theory was developed by supply-side ( supply – side is a kind of economic theory for Deflation) economist Arthur Laffer of USA.

The Laffer Curve describes the relationship between tax rates and total tax revenue, with an optimal tax rate that maximizes total government tax revenue.

If taxes are too high along the Laffer Curve, then they will discourage the taxed activities, such as work and investment, enough to actually reduce total tax revenue. In this case, cutting tax rates will both stimulate economic incentives and increase tax revenue.

If the tax rates are at 0% means tax revenue would be zero too. As the tax rates increase, tax revenue of gov. Increases. It a income to them, Eventually, if tax rates reached 100 percent, shown as the far right on the Laffer Curve, all people would choose not to work because everything they earned would go to the government. Therefore it is necessarily true that at some point in the range where tax revenue is positive, it must reach a maximum point.

            MARKETING MIX

The marketing mix, from the name you can understand that this blog is all about PRODUCT, PLACE, PROMOTION AND PRICE. The 4 P’s of marketing, which are very important not just for the business expansion or for big revenue, it’s more about studying the market analysis the needs and wants, finding or targeting those strategies which creat a great market penetration.

E . Jerome McCarthy was the one who come up with, these 4 P’s of marketing mix.

Marketing mix it is something which focused upon the fields with increases the chances to hold and to sustain the shares with the competitors. There are additional P’s to included in marketing are PEOPLE, PROCESS AND PHYSICAL EVIDENCE. We are going to honour other 4 P’s.Let’s start with a little intro of MM ( marketing mix ).

PRODUCT MIX

Product mix is also known as product assortment or product portfolio. It gives you a idea what a individual company had in there product line, it means what they serve to people. The segment of quality, packaging, labelling, design and branding are the main areas in which you travel on path of product mix.

The levels of product

. The core level

. The basic level

. The expected level

. The augmented level

. The potential level

Take an example to understand it in a wide perspective.

Car, like any car:  audi, jaguar, BMW ( Bayerische Motoren Werke ) or anything like Royals rolls is my, now I will make you understand about the differentiation of product level in these cars.

Core product – transportation

Basic product – 4 wheels, steering, engine and break.

Expected product- speed and comfort.

Augmented product – intelligence and connectivity

Potential product – voice recognition and face recognition.

These are levels of product which divides them into small units.

The dimension of product break the concept into 4 parts:

1) Width –  it’s all the numbers or different product line a company carries.  Eg:- Colgate consists of three product lines: oral care, personal care and pet nutrition.

THOSE WHO DID NOT HAVE WIDTH IN PRODUCT?

. Small companies

. Start-ups

2) lenght – means total numbers of product a company have in a product line Eg:- like a company have 4 product line and each product line in consist of 5 products, then the lenght in product mix is 4 × 5 = 20. It’s means a company have 20 products.

3) Depth – total numbers of variants available in one product offering. Eg:- ford making different versions like ford eco, ford endeavour, ford figo, ford aspire and etc….. in among them they have petrol and diesel option, cars with different colors red, green, black and many more this is what depth.

4) Consistency – understanding the focus and pattern of product, who closely product lines are team with the end use, production requirements, distribution channels. Eg:- most of HUL products are household related and amul products are dairy related.

Product strategies

. Standardization

. Customization

. Changing product variants

. Adding new product in product line

. Strengthening product consistency

In the short these all the 4 P’s cannot be alter but in long they can.

In the next blog we’ll continue with next segments of marketing mix.

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SC OF BUSINESS

SOCIAL AND CULTURAL ENVIRONMENT

. Socio-cultural  environment is a sum total of society’s beliefs, taste, preferences, norms, manners and the behavior of groups.

. Across the globe the these all characteristics may differ, one society may have same taste, preference, need and wants but not others have it the same.

. Many businesses and organizations had chosen different market mix for different markets, marketing mix which is consist of 4 Ps ( PRICE, PLACE, PROMOTION AND PRODUCT the most important). Marketing and corporate strategies changes with the change of place for example you cannot sell Bandhej ki saree in saudia Arab market actually you sell but in reality the demand of bandhej ki saree is near 0, you have look upon taste and preference of that market.

. Business environment scene is of gokuldham society were people from gujarat, rajasthan, UP, sub of maharashtra, Punjab, MP and from Tamil nadu sharing their walls. Similarly in business environment a organizations handle information and market of different backgrounds and customs.

EXTERNAL ENVIRONMENT

. Business environment too have external and internal processes like we human have internal and external behavior. Organizations have the same structure.

. A business must grow with generations and with change in environment, adaptation is the only solution, like Nokia and BlackBerry didn’t change with environment but apple take it as a opportunity and rest is a history.

. It should well aware of society’s  social preferences, needs and wants that are in turn influenced by the population’s values, beliefs and practices.

. Best way to compete with this external environment is to made proper and effective marketing strategies, strong supply chain management, Public relations and health bonding with customers and with all stakeholders.

INTERNAL ENVIRONMENT

. A business also creates it’s own environment called internal environment. Consist of organizations norms, code of conduct, management values, rules, beliefs and culture.

. Business needs to operate like a cohesive unit, so it is important to build a strong and productive organization culture that is stable and positive.

. Business or corporate environment also affected by the current change in the contemporary workforce. Workforce of this era is more educated, better IQ, EQ, great logical understanding and hyper intensive behavior towards their goals. So, it become important for organizations to set their employees in the direction towards both their and organizational goals.

IMPACT OF CULTURE ON BUSINESS

Culture is a key component in business and has an impact on the strategic decisions of business. Culture influences managerial style, management decisions and all business functions from accounting to production.

Culture Affects:

– Consumer Behavior

– Brand Image

– Local Demand

– Buying Decisions

The interface between business and culture can be seen as under:

1) Culture Creates People – Organizations is just a empty building without skilled and smart employees and executives personal. Culture is any organization is just a reflection of the people who works their. CULTURAL is a integrated learn behavioral pattern which are characteristics of the members of the society. Culture determines the ethos of people.

2) Culture and Globalization – A business organization with the help of internationalization it’s become a routine work for organizations to deal with numerous international clients, they found new cultures with a new sence of thinking regarding the market functioning. They had to adopt it for their benefit.

3) Culture determines goods and services – At the time of analyzing the market most of the cessation revals that company need yawn knowledge to find out the best product to serve the society. As most of the research says company’s product is a gifted product of culture and society.

4) Culture and knowledge – it refers to the transmission of skills, ideas, creativity and attitudes as well as training in particular disciplines. Education on:

. Advertising programs and labelling.

. Conduct market research.

. Instructions to be mentioned on products.

. Relation with the distributors etc.

REMEMBER THESE 14 POINTS IN YOUR LIFE.

1) work for passion not money.

2) Made your work your first girlfriend or boyfriend.

3) Thing big ever awake hour, never feel suppress or weak.

4) Be your boss, and lead like lion.

5) Every morning pray worries like MAHARANA PRATAP, SHIVAJI and PRITHVI RAJ CHAUHAN because of these all we are living a life which are living.

6) Real heroes are Army man, Doctors, sweepers not SRK or Salman they are just cheater, they just act.

7) your mother bigger than God in status because once tridev too need a women to feed them and to give birth. Worship your mother more than god.

8) Respect each and every woman that’s a duty of a men and women should stand with their partners, that a duty for them.

9) Never give up, Remember the great war of saragadi when 21 Sikhs fought against 10,000 Afghans. Be bold.

10) Be a yogi from inside that would be better.

11) Holding emotion is a great skill of super human beings.

12) it doesn’t matter to punctual, the think matter is to be passionate.

13) Give your everything to those, who love and care emotions not money.

14) Serving to humanity is path to achieve supreme power.

VEDAS : RIG, SAMA, YAJUR, ATHARVA.

Vedas means knowledge in sanskrit, I get it from Google baba. Vedas are consist of four religious text books, which are written in vedic sanskrit. These are the oldest scriptures of Hinduism. Saga vyasa wrote vedas in 500 BCE.

THE RIG VEDA

The rig veda is a collection of over a thousand hymns known as suktas and well above ten thousand verses which have been created into ten mandalas or books.

The rig veda is a amalgamation of four major components. Samhitas, Brahmanas, Aryankas and The Upanishads.

Rig veda talk about the issues of morality and the right societal behaviour. It tackles important issues of the time like gambling and the right measure for hood governance.

THE SAMA VEDA

the Sama veda shares this divine status, and therefore a place of Honor in the Hindu tradition. Although the sama veda is often considered the third Veda after the Rig and yajur Vedas, in the Bhagavad , one of the great epics of the Hindu tradition, Krsna describes the Sama Veda as the most important of the Vedas .

THE YAJUR VEDA

The Yajurveda Samhita consists of archaic prose mantras and also in part of verses borrowed and adapted from the Rigveda. Its purpose was practical, in that, each mantra must accompany an action in sacrifice but, unlike the Samaveda, it compilation  apply to all sacrificial rites.. There are two major groups of recensions of this Veda, known as the “Black” (Krishna) and “White” (Shukla). Yajurveda (Krishna and Shukla Yajurveda respectively). While White Yajurveda separates the Samhita from its Brahmana (the Shatapatha Brahman), the  Black Yajurveda intersperses the Samhita with Brahmana commentary.

THE ATHARAVA VEDA

The Atharvaveda has some special features because of which it stands a little apart from the other three Vedas, especially the Rigveda Major portion of this Veda is concerned with the following :

  1. Diseases and their cure
  2. Rites for prolonging life
  3. Rites for fulfilling one’s desires
  4. Building construction
  5. Trade and commerce
  6. Statecraft
  7. Penances
  8. Propitiatory rites
  9. Black-magic

One by one we will go in each veda in detail in the next matter.

JOB MARKET

Job market is not a physical place, where employees are looking for job and employers are looking for employees for work. Kind of demand and supply system. It is also called labour market.

The growth and decline of labour market is depended on the demand of labour and the availability to maintain the supply of labour in the economy. Job market is one of the most important factor or component for any economy. It is directly tired with the demand and supply of goods and services.

UNEMPLOYMENT AND LABOUR MARKET

The labour market and unemployment both need help of each other. The more unemployment means more growth in job market, the lesser the unemployment means lesser the growth of job market.

At the time of interview the interviewer will look upon your skills, communication abilities, inter and inter personal skills, logical reasoning and the most common the gesture. They will choose the best among all which make the unemployment rate to move down and the job market become more narrow, it will create more competition.

In the time of Deflation and stagnation ( little or no growth in economy) the rate of unemployment are at zenith, as decreas in money supply means less spending, no demand decrease the supply segment, owner or the occupiers will fired the workers and employees because of less income.

Having a huge job market revals that the rate of unemployment is more. Countries like : india, china, Pakistan, Malaysia, Bangladesh and UAE had a big unemployment market.

TOTAL QUALITY MANAGEMENT IS NOT JUST A PHILOSOPHY.

Muchinsky said that ” Total quality management is a comprehensive approach to organizational development which not just embraces the behavioral concepts but also the business strategies, it also use statistic data for the aid on decision making.” Total quality management helps fund out the errors in the whole process of productivity.

There are some basics on which TQM stands:

1) Psychology : management use psychology strategies to involve employees in the discussion and in decisions making too. Research has shown that employees skills and abilities improves when they participate in leadership roles and in decision making. Decisions making is not top-down affair.

2) Statistics: TQM has stolen the concept of statistical quality control is the variable. There is not too much variation in the product across the organization that offers the high quality products or services.

One more concept too which was taken was mean quality of product. Organizations must seek to improve the mean quality of products and reduces the variables in them.

3) Marketing: From the marketing they understand that customers are the central focus of business houses. The value which a product creates in the market will write the future of firm in the business scenario. Customer satisfaction and service after the affair make a great sense.

4) Sharing of information: share ideas, information leads to innovation, transforming the organization as place of skilled, highly motivated, creative and intellectual personalities.

Without sharing information the routine job become a compelled to carry for the employees.

5) knowledge development: For meaningful participation in the team meeting and other discussions, group or team members must need good info of team building, coordination and of leadership.

6) Rewarding organizational performance: individual rewards and incentives often interfere with teamwork and problem solving. One way is to make sure that employees care about the performance of organizations by creating a link of rewards to organizational performance.

Profit share and stock ownership are some common strategies which help companies to link the growth of employees with the organizational growth.

7) Redistributing Power : Redistributing the power in few hands in the lower level help in better management.

a) job enhancement: this is for workers like clerks and for routine jobs.

b) Self – managed team: this method is good for variety of jobs

These things are important for smooth TQM.

OD is must

Modern organizations exists or performs in the world of rapid and speedy changes. The way of doing business or handling the environment ups and downs become a major issue and for some it becomes a opportunity. They had to work upon their structure and functional abilities to construct a smooth in this situation. OD which is nothing but organizational development helps them to find a better way, they assist organizations to make change that are rationally planned and implemented.

According to Newstrom and Davis OD means ” The systematic application of behavioral science knowledge at each and ever level of the organization to bring about planned change.”

The target aim of OD is to bring about planned change which leads to productivity, innovation, healthy work environment, efficiency, effectiveness, adaptability, approachability and competitiveness.

OD operates on certain guidelines and applications which determines how a organization will perform.

THE SYSTEMS ORIENTATION:-

OD is concerned with all the levels of the organization. It creates a interplay of structural ethics, technological advancements and employees behaviour towards the growth of organizational objectives.

It judge who employees creat relation with employees of different levels and of different departments.

UNDERSTANDING CAUSALITY

OD study organizational processes in these three variables:

1) Causal Variables :- These variables are those variables which are in direct control of management and also had effect on intervening and End-variables examples like: organizational structure, control, policies, training.

2) Intervening variables:- These variables gets the immediate effect of casual variables. Examples like: teamwork, employees attitude, motivation, perception, skilled behavior.

3) End- result variables: These variables are final objectives of the management and the OD process. Example like : profit, productivity, increase sale, lower cost, market share and more loyal customers.

Assumptions underlying OD

On employees are :-

1) people wants to grow and to be mature in the different stages.

2) people have great desire to contribute towards organizations objectives.

3) employees had great potential than what they actually used at work.

On groups are :-

1) groups and teams are very critical for success.

2) group creates dynamics in individual and change their vision.

3) skills should be developed to play vital role in the complex situations of the organization or group.

On organizations are:

1) Excessive rules, policies and control do more harm than goods.

2) Conflits are great when they channeled in right direction.

3) Goals of individual, groups and organizations should be compatible.

OD is one of the most important factor for the better organizational understanding and it help executives to rank their employees.

The six tint of thinking

The way we think is the way we build our cricumjacent. The famous psychologist Gilmer said ” Thinking is a problem-solving process in which we used ideas or symbols in place of overt activity”.

The process of thinking improves when we observe the situation and analyze the changes in a deep senses. So, while working in the organization it become prerequisite for the manager to know their employees in a better way, which help to deal and to motivate them for the organizational objectives. By knowing their thinking process and mentality for work, manager is able to distribute the work to the best. Thinking build our nature and performance ethics and these ethical principles make our value in the work place. In one of the research by Stanford University, says that nature and dealing with work is a way to find the personality of that person.

Dr Edward de bono in 1980’s find a sensational concept to unearth the way in which every individual or a team carries their thinking status. The “Concept of six hats”. The six round and colourful hats show different skills and behavioral traits of individual or a group.

The first is white hat. The one who had white hat on the peak of their structure, they carry a behavior similar to sleuth, the belive in data, facts, information, clues, hints, portfolios and concrete bases.

The second one is red hat which reflects the emotions more than intellectual ability of an individual. They are scared, threatened, excited, energized regarding the work. This hat provide opportunity to put forward feeling of team members without any explanation. Place your emotions strategy help the manager to discover the hidden emotions behind supporting the proposal and opposing the proposal of other members.

The black hat is a hat of judgments and caution. These masters of black hat always had a negative perspective apropos about ideas, opinions, values, beliefs, views and vision of there group. They are personality who also had a question and doubts in their mind. But some were this had stop us to do something harmful.

Optimistic and the positive hat “The Yellow Hat” of this concept. This hat show the sanguine face of idea. They find reason why this idea will work.

This hat is a favorite, as it follow the path of innovation and creativity. According to Dr Bono ” Green Hat is concerned with good and new ideas, and ways to look up at thinks. They the are pure visionary personalities like steve jobs and elon musk. We can call them idea machines.

The last hat, process hat or blue hat. This the overview and process control hat. These people who had blue hat are the one who guide the way to discussion, they used to check that the process is working well and efficiently or not, they make the overlook.

These are the six hats of Dr Edward De Bono, Which shows that the discussion in organizations or in a group should work on parallel thinking , the full-spectrum thinking and destroy or eliminate the ego between them. By following this method management find better understanding of their employees and employees find growth or advancement in their intra and inter personal skills.