UGC-NET Short notes: Have a quick glance......

Kinked Demand Curve

The kinked demand curve theory is an economic theory regarding oligopoly and monopolistic competition.

 Kinked demand was an initial attempt to explain sticky prices.

Note: sticky prices.

Sticky, in the social sciences and particularly economics, describes a situation in which a variable is resistant to change. For example, nominal wages are often said to be sticky in the short run. Market forces may reduce the real value of labour in an industry, but wages will tend to remain at previous levels in the short run. This can be due to institutional factors such as price regulations, legal contractual commitments (e.g. office leases and employment contracts), labour unions, human stubbornness, or self-interest. Stickiness normally applies in one direction.^{[citation needed]} For example, a variable that is "sticky downward" will be reluctant to drop even if conditions dictate that it should. However, in the long run it will drop to equilibrium level.

Similarities and differences between "Kinky" demand curves and traditional demand curves:

"Kinky" demand curves and traditional demand curves are similar in that they are both downward-sloping. 

The only distinction between the two curves is a hypothesized convex bend, with a discontinuity at the bend, known as the “Kink”. This means that the first undefined derivative at that specific point results into a jump discontinuity in the marginal revenue curve.

The idea of ‘kink’ is based on the concept of “full cost”. Full cost is nothing but the marginal cost of every unit, with a percentage of the overhead or fixed cost and an extra profit-making percentage added to it.

 Kinked demand curve generally represents demand under oligopoly.

The graphical representation of the Kinked Demand Theory made by the famous economists, Hitch and Hall facilitate a better understanding of this economic concept.

Figure 6.1 Kinked Demand Curve Model

If firms face such demand curves, the price, p*, is profit maximizing for any marginal cost curve (MC) that cuts the vertical section of the marginal revenue curve (MR). For example, p* is the profit-maximizing price for both MC₁ and MC₂ in Figure 6.1. The kinked demand theory of oligopoly behavior predicts that prices are likely to remain unchanged for small changes in costs.

Hall and Hitch's graphical illustration of kinked demand

The kinked demand theory of oligopoly behavior predicts that prices are likely to remain unchanged for small changes in costs.

Neoclassical Organization Theory

It addressed many of the problems inherent in classical theory. The most serious objections to classical theory are that it created overconformity and rigidity, thus squelching creativity, individual growth, and motivation. Neoclassical theory displayed genuine concern for human needs.
One of the first experiments that challenged the classical view was conducted by Mayo and Roethlisberger in the late 1920's at the Western Electric plant in Hawthorne, Illinois (Mayo, 1933). While manipulating conditions in the work environment (e.g., intensity of lighting), they found that any change had a positive impact on productivity. The act of paying attention to employees in a friendly and nonthreatening way was sufficient by itself to increase output. Uris (1986) referred to this as the "wart" theory of productivity. Nearly any treatment can make a wart go away--nearly anything will improve productivity. "The implication is plain: intelligent action often delivers results" (Uris, 1986, p. 225).
Classical Organization Theory
Classical organization theory evolved during the first half of this century. It represents the merger of scientific management, bureaucratic theory, and administrative theory.
Frederick Taylor (1917) developed scientific management theory (often called "Taylorism") at the beginning of this century. His theory had four basic principles: 1) find the one "best way" to perform each task, 2) carefully match each worker to each task, 3) closely supervise workers, and use reward and punishment as motivators, and 4) the task of management is planning and control.
Initially, Taylor was very successful at improving production. His methods involved getting the best equipment and people, and then carefully scrutinizing each component of the production process. By analyzing each task individually, Taylor was able to find the right combinations of factors that yielded large increases in production.
While Taylor's scientific management theory proved successful in the simple industrialized companies at the turn of the century, it has not faired well in modern companies. The philosophy of "production first, people second" has left a legacy of declining production and quality, dissatisfaction with work, loss of pride in workmanship, and a near complete loss of organizational pride.
Max Weber (1947) expanded on Taylor's theories, and stressed the need to reduce diversity and ambiguity in organizations. The focus was on establishing clear lines of authority and control. Weber's bureaucratic theory emphasized the need for a hierarchical structure of power. It recognized the importance of division of labor and specialization. A formal set of rules was bound into the hierarchy structure to insure stability and uniformity. Weber also put forth the notion that organizational behavior is a network of human interactions, where all behavior could be understood by looking at cause and effect.
Administrative theory (i.e., principles of management) was formalized in the 1930's by Mooney and Reiley (1931). The emphasis was on establishing a universal set of management principles that could be applied to all organizations.
Classical management theory was rigid and mechanistic. The shortcomings of classical organization theory quickly became apparent. Its major deficiency was that it attempted to explain peoples' motivation to work strictly as a function of economic reward.
Contingency Theory
Classical and neoclassical theorists viewed conflict as something to be avoided because it interfered with equilibrium. Contingency theorists view conflict as inescapable, but manageable.
Systems Theory
Systems theory was originally proposed by Hungarian biologist Ludwig von Bertalanffy in 1928, although it has not been applied to organizations until recently (Kast and Rosenzweig, 1972; Scott, 1981). The foundation of systems theory is that all the components of an organization are interrelated, and that changing one variable might impact many others. Organizations are viewed as open systems, continually interacting with their environment. They are in a state of dynamic equilibrium as they adapt to environmental changes.

A central theme of systems theory is that nonlinear relationships might exist between variables. Small changes in one variable can cause huge changes in another, and large changes in a variable might have only a nominal effect on another. The concept of nonlinearity adds enormous complexity to our understanding of organizations. In fact, one of the most salient argument against systems theory is that the complexity introduced by nonlinearity makes it difficult or impossible to fully understand the relationships between variables.

Human resource management

Human Resource Management (HRM, HR) is the management of an organization's employees.^[1] This includes employment and arbitration in accord with the law, and with a company's directives.

Features

Its features include:

• Organizational Management
• Personnel Administration
• Manpower Management
• Industrial Management

Industrial Relations

Industrial relations is used to denote the collective relationships between management and the workers. Traditionally, the term industrial relations is used to cover such aspects of industrial life as trade unionism, collective bargaining, workers’ participation in management, discipline and grievance handling, industrial disputes and interpretation of labor laws and rules and code of conduct. 

DIVIDEND DISTRIBUTION

·         The expression ‘dividend’ shall have the same meaning as is given in clause (22) of Section 2, except sub-clause (e) of clause (22) of Section 2.

·         The Section applies to dividend payments made either out of current or accumulated profits.

·         The dividend so paid will be eligible for exemption for the shareholders under Section 10(34).

·         The Dividend Distribution Tax is payable by a Domestic Company even if no income-tax is payable on its total income.

·         The aforesaid tax will be treated as the final payment of the tax in respect of the amount declared, distributed or paid as dividends and no further credit shall be claimed by the company or by any other person in respect of the amount so paid.

Net operating income approach to Capital Structure

he second approach as propounded by David Durand the net operating income approach examines the effects of changes in capital structure in terms of net operating income. In the net income approach discussed above net income available to shareholders is obtained by deducting interest on debentures form net operating income. Then overall value of the firm is calculated through capitalization rate of equities obtained on the basis of net operating income, it is called net income approach. In the second approach, on the other hand overall value of the firm is assessed on the basis of net operating income not on the basis of net income. Hence this second approach is known as net operating income approach.

The NOI approach implies that (i) whatever may be the change in capital structure the overall value of the firm is not affected. Thus the overall value of the firm is independent of the degree of leverage in capital structure. (ii) Similarly the overall cost of capital is not affected by any change in the degree of leverage in capital structure. The overall cost of capital is independent of leverage.

If the cost of debt is less than that of equity capital the overall cost of capital must decrease with the increase in debts whereas it is assumed under this method that overall cost of capital is unaffected and hence it remains constant irrespective of the change in the ratio of debts to equity capital. How can this assumption be justified? The advocates of this method are of the opinion that the degree of risk of business increases with the increase in the amount of debts. Consequently the rate of equity over investment in equity shares thus on the one hand cost of capital decreases with the increase in the volume of debts; on the other hand cost of equity capital increases to the same extent. Hence the benefit of leverage is wiped out and overall cost of capital remains at the same level as before. Let us illustrate this point.

If follows that with the increase in debts rate of equity capitalization also increases and consequently the overall cost of capital remains constant; it does not decline.

To put the same in other words there are two parts of the cost of capital. One is the explicit cost which is expressed in terms of interest charges on debentures. The other is implicit cost which refers to the increase in the rate of equity capitalization resulting from the increase in risk of business due to higher level of debts.

Optimum capital structure
This approach suggests that whatever may be the degree of leverage the market value of the firm remains constant. In spite of the change in the ratio of debts to equity the market value of its equity shares remains constant. This means there does not exist a optimum capital structure. Every capital structure is optimum according to net operating income approach.

Working capital

Working capital (abbreviated WC) is a financial metric which represents operating liquidityavailable to a business, organization, or other entity, including governmental entity. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. Net working capital is calculated as current assets minus current liabilities. It is a derivation of working capital, that is commonly used in valuation techniques such as DCFs (Discounted cash flows). If current assets are less than current liabilities, an entity has a working capital deficiency, also called a working capital deficit.

Factors Affecting Working Capital

  Nature of business: 

  Seasonality of Operation,   Production Policy,  Market Conditions, Conditions of Supply, Nature of Raw Material Used,  Process Technology Used, Nature of Finished Goods, Degree of Competition in the Market, Growth and Expansion,

Net Working Capital = Current Assets − Current Liabilities

Net Operating Working Capital = Current Assets − Non Interest-bearing Current Liabilities

Equity Working Capital = Current Assets − Current Liabilities − Long-term Debt

Green marketing

According to the American Marketing Association, green marketing is the marketing of products that are presumed to be environmentally safe.

Thus green marketing incorporates a broad range of activities, including product modification, changes to the production process, packaging changes, as well as modifying advertising. 

Unfortunately, a majority of people believe that ecological (green) marketing refers solely to the promotion or advertising of products with environmental characteristics. Terms like Phosphate Free, Recyclable, Refillable, Ozone Friendly, and Environmentally Friendly are some of the things consumers most often associate with green marketing. While these terms are green marketing claims, in general green marketing is a much broader concept, one that can be applied to consumer goods, industrial goods and even services. Thus, green marketing incorporates a broad range of activities, including product modification, changes of the production process, packaging changes, as well as modifying advertising. Green marketing came into prominence in the late 1980s and early 1990s, it was first discussed much earlier. The American Marketing Association (short: AMA) held the first workshop on “Ecological Marketing” in 1975.^[15] The proceedings of this workshop resulted in one of the first books on green marketing entitled “Ecological Marketing”. According to Dainora Grundey and Rodica Milena Zaharia Green or Environmental Marketing consists of all activities designed to generate and facilitate any exchanges intended to satisfy human needs or wants, such that the satisfaction of these needs and wants occurs, with minimal harmful impact on the natural environment .^[17]

Personality development basics

Personality Development

Abu Bashar

Can you disagree with the fact that you have experienced fear of anything or any kind at least once in a lifetime? Every single person on this earth has felt fear at a certain point of time in his life. Though fear is an emotion that we would best like to avoid, it creeps up every once in a while. It is true that you cannot avoid fear, but you can certainly follow tips that will help you to remain level-headed in situations that can otherwise make you scared. Fear is the natural response of every human being when he is placed in a situation that he has not been waiting for or has not experienced before. Sometimes, a sense of shame and insecurity also leads to development of fear within a person’s mind. Fear is often the result of aggravated tensions and an agitated mind. It is very important to know the reasons of your fear if you have to overcome it. So to kill fear you have to first identify the source of that fear. Here are some tips to overcome fear.

Overcoming Fear

Understand Your Fear

Try to understand why you fear or what causes you to fear. Only when you have identified the source of your fear can you start on the process of overcoming it. You can start by listing all your fears on your notepad and then striking them off once you have overcome them.

Breathe Deep

Taking deep breaths when you are scared or worried helps you relax to a great extent. Make sure that you exhale longer than you inhale. Fear will automatically reduce since you will also calm down. This can also help you to think things out effectively. Breathing exercises can be practiced during meditation.

Chalk Out A Plan & Be Positive

Always have a plan for situations which may not bring you certain results. For instance, you may be afraid to attend an interview in fear of being rejected. You may also fear a date for similar reasons or may feel scared about losing your job as you do not know how life will be after that. But in all these situations, you can chalk out a plan beforehand, a plan which will bring you favorable results and thus kill all fears. Though plans do not work always, a positive attitude always does, therefore think positive in every walk of life.

Confront Your Fears

Many people are scared of something specific, like being in the dark or driving or swimming. If you too fall in the same category, make it a point to learn the thing that you fear doing. Even if you fail once or twice, don’t give up on your hope and practice hard to overcome your fear. Switch off the lights when you are alone in a room and see what happens. You can be assured that nothing is going to attack you! Once when you have confronted your fear by actually performing the same thing that you fear, you will successfully kill your fear.

Boost Up Confidence

Sometimes, fear is the result of extreme low belief in oneself and low confidence. Practice exercises which help to boost self confidence. For example, you can stand in front of the mirror and pretend to speak to a stranger, so that you do not have to fear mingling with a new group of people the next time you come across one. This exercise can also help you overcome stage fright.

Seek Medical Help

If nothing seems to be working for you and you still feel intermittently scared, there is no harm in seeking medical help, for who knows, after a couple of sessions, you might actually be able to ward off your fear. Nowadays, there are psychiatrists who help people to overcome their fear and shortcomings. However, resort to this, only when all the above have failed.

Do not feel afraid; always know that there is an end to every fear. Keep the scary ghosts at bay and enjoy life the way it is meant to be enjoyed!

Self esteem is based on how much a person feels valued and appreciated. We all mentally construct a self image based on our abilities, achievements, looks, interaction with people and our experience. This self image contributes to our self esteem. Agree or disagree, all of us have been a victim of low self esteem at some point or another in our life. Low self esteem can affect the way we perceive ourselves and the world around us. Read the article to know how you can give a boost to your self esteem and live your life to the fullest.

Boosting Self Esteem

Groom Yourself

As clichéd as it may sound, there is no denying the fact that looking good definitely does make you feel good. Dress up with extra care and make an effort to look nice. A good reflection in the mirror will always make you feel good about yourself. However, be sure not to attach too much importance to your external appearance. Attributes like confidence, warmth and social skills are far more influential than looks.

Kill Negative Thoughts

Most people focus on their shortcomings than their positives. If you are also one amongst those, it is high time you start thinking about your positive aspects. Don’t be too critical of yourself. Steer clear of negative self talk. Putting yourself down as a loser or failure will only hamper your ability to achieve your goals. You may get upset when things don’t go your way. However, don’t let it stop you from achieving your goals. Each day is a new beginning. If you had a bad day, just go to bed and wake up next morning with a fresh and focussed mind.

Set Personal Goals

Living an aimless life will make you feel empty and confused. A personal goal defines who you truly are and what you intend to accomplish in life. Decide what you want to achieve at your personal and professional front and slowly work towards these goals. It will give a sense of purpose to your life. Pat yourself on the back every time you achieve a goal, no matter how minor it may be. Accomplishing these goals will give your self esteem a big boost.

Realize Your Limits

You may not become an Olympic medalist or a pop singer, but that doesn’t mean that you won’t be successful. Remember, everybody is good at something. Experiment with different activities that will help you get in touch with your talents. Invest some effort into developing your interests and skills into your strengths. Realize that nobody is perfect, everyone has strengths and weaknesses. The key to success is not to overcome your weakness, but to develop your strengths to an extent that they can outweigh your weakness completely.

Celebrate Achievements

Give yourself full credit for your achievements and reward yourself. Don’t write-off the achievement as minor, because it may be a part of your bigger plans. Also, know that with that achievement in your kitty, you are one step closer to achieving your goal. Tell yourself repeatedly that you have tackled this obstacle in an appropriate way and that you can deal with other bigger and more demanding projects as well.

Stand Up For Yourself

There may be times when other people misjudge you and let their own insecurities get in the way of their reaction. Don’t distort your self image based on other person’s negative belief. Never allow others to make you feel inferior. Stand up for what you believe in. Voice your opinion and thoughts.

Get Active

Doing something is always better than doing nothing. Keep yourself busy. Take out that list of resolutions you gave up on and start working on them. Take up new hobbies - learn to dance or take up painting lessons. Keeping yourself active will give you no time for negative self talk.

Socialize

People with high self esteem generally have a large social circle and a busy social life. Start off by keeping yourself involved in activities that interests you. Join clubs or groups of similar interests. Frequently plan outing with your friends and family members. Being part of a community big or small will give you a sense of belonging and acceptance, thereby giving a boost to your self esteem.

Volunteer

Make a contribution to the society. Join a volunteering organization to help the less privileged. Volunteering will give you a sense of being part of a noble cause. The feeling of being appreciated and valued can do wonders for your self esteem.  Volunteering will help you improve your perception of self-worth.

Be Thankful For What You Have

Attributing considerable importance to certain goals and aspirations may also pose a problem. There may be period of setbacks when everything will not work out the way you have planned. Remember that life is governed by factors which aren’t entirely in your control. Don’t fret over what you don’t have and what you haven’t accomplished. Appreciate and acknowledge what you do have and be thankful for it.

http://lifestyle.iloveindia.com/magazine/personality-development-10.html

How did Joe Girard sell 6 cars a day, everyday?

Joe Girard was born during the depression in one of the most deplorable ghettos in Detroit city. Joe had a difficult relationship with his father. At a very young age, Joe started shining shoes of people in saloons. He had a tough childhood. But even though Joe came from a poor background and had a hard start, he became really successful.

How successful did Joe become?

The Guinness Book of World Records listed Joe Girard as the "World's Greatest Retail Salesman" for 12 consecutive years.

People actually used to lineup to meet Joe, so that he could sell them cars. There would always be a queue in front of Joe Girard’s dealership on every Saturday morning. Joe Girard sold more cars individually than most dealers sell in total. He sold an average of 6 cars everyday, throughout his selling career. He sold 13,001 cars during his selling career… all at retail.

What's his secret?

He built and maintained relationships. Joe used to send 13 cards to all his prospects and clients every year. One every month and one for Christmas. He created a place for himself in the brains of his prospects and clients by keeping in touch with them.

He made sure that he was in peoples' minds when they had to buy a car. And that is how he sold 6 cars a day, everyday.
Checklist:

§  Keep in touch with people regularly.

§  Send them “Thank you” notes.

§  Send them season’s greetings.

§  Send them news and information that will be beneficial to them.

§  Send them free goodies. 

The Relationship between Marketing and Selling

The proper relationship between selling and marketing has always been a problem both for companies and for the marketing discipline. Are they distinct functions, or is selling part of marketing? We know that marketing originated as a form of support for sales force management, including the development of promotional materials and sales tools, the use of market research to plan and control field sales activity, and the development of strong brands to support the trade channels and related selling effort. However, it was a central part of Ducker’s (1954) thesis that marketing is more than selling and is distinct from it. Over time, sales management emerged as a separate field of study within the marketing discipline and was a major focus of academic research from the 1950s to the 1980s. A significant amount of the mathematical modelling of marketing activities that was published in the 1960s and 1970s addressed field sales management issues, such as call frequency, the design of sales territories, sales force size, sales compensation plans, and assignment of individual sales representatives to specific territories. Some observers estimate that as much as 80% of the total marketing communications budget is now spent on selling (including trade discounts in some cases), leaving only 20% for advertising and other communication and consumer sales promotion activities. Surprisingly, even as marketing dollars have shifted from other activities to the field sales force operation, academic interest in sales management has all but disappeared. Just as sales and marketing are distinct management activities in many companies, so it appears that many academics do not think of sales management when they think of marketing. Sales promotions, narrowly defined as short-term price reductions and other incentives such as additional merchandise, special packaging, or rewards for frequent patronage, have become a principal marketing tool, often accounting for the lion’s share of the consumer-marketing budget. There is a wide range of practice pertaining to the accounting for sales promotion expenditures: Are expenditures simply reductions in price that should be deducted from top-line sales revenue, or should they be a separate expense item within marketing or sales? There are two major attractions of sales promotions for marketers: First, they can produce more or less immediate results, thus enhancing short-term revenues and related measures of business performance. Second, these results can be tracked and measured relatively easily using point-of-purchase sales tabulations and other databases that are now widely available from retailers and service organizations. Given the academic field’s interest in empirical data, combined with the development of sophisticated statistical methodologies and database owners eager to maximize the value of their investments in these data, it is no surprise that sales promotion has become perhaps the most widely and rigorously studied area of marketing in recent times. There is undoubtedly a reinforcing feedback effect on the widespread use of sales promotion as a marketing tool, as managers under pressure to measure the effectiveness of their expenditures to support their budget requests allocate additional resources to the areas in which they can track and report results with a reasonable degree of validity and reliability. The large, low cost retailers have the ability to control access to the necessary data and thereby gain additional power in their relationships with their suppliers, thus diminishing the relative power of the manufacturer and the manufacturer’s brand while delivering lower prices to the consumer.

Tips to write answers in UGC NET

Here are some of the tips and techniques to score well in UGC NET examination. Follow them at the best. Good Luck.

1. Writing skills matter a lot in the NET Examination. Most of the candidates appearing for the NET examination have a lot of knowledge, but lack writing skills. You should be able to present all the information/knowledge in a coherent and logical manner, as expected by the examiner. For example: Quoting with facts and substantiating your answer with related concepts and emphasizing your point of view.

2. Preparations for NET examination should be done intensively.

3.After deciding the questions one should sort out the NET question papers according to the syllabus topics. If one analyses these questions, after sometime the questions are repeated in one form or the other.

4. Prepare a standard answer to the question papers of the previous years. This will also make your task easy at the UGC examination.

5. Do Not miss the concepts. Questions asked are of the Masters level examination. Sometimes the questions are ‘conceptual’ in nature, aimed at testing the comprehension levels of the basic concepts.

6. Get a list of standard textbooks from the successful candidates, or other sources and also selective good notes. The right choice of reading material is important and crucial. You should not read all types of books as told by others.

7. Always target for writing section even while preparing for objective questions. As there is much in common for study and there is little time for preparation for the wriiten part II examination.

8. While studying for the subjects, keep in mind that there is no scope for selective studies in UGC. The whole syllabus must be covered thoroughly. Equal stress and weight should be given all the sections of the syllabus.

9. Note that in the ultimate analysis both subjects carry exactly the same amount of maximum marks.

10. For subjects like Mathematics and Statistics and Geography maps etc, practice is very important. One should also practice other subjects and should not treat the same examination, as an “experience gathering” exercise to get a chance for writing mains is a great thing, which you may not get again.

11. Go through the unsolved papers of the previous papers and solve them to stimulate the atmosphere of the examination.

12. Stick to the time frame. Speed is the very essence of this examination. Hence, time management assumes crucial importance.

13. For developing the writing skills, keep writing model answers while preparing for the NET examination. This helps get into the habit of writing under time pressure in the Mains examination.

14. Never be over confident with your writing skills. It is too subjective and behavioral.

15. Develop and follow your own style of writing. Try not to be repetitive and maintain a flow in the style of your writing.
16. Never try to imitate others in the style of writing.

17. Sequential and systematic style of answering comes after a lot of practice and analysis of standard answers.

18. Try to stimulate the actual examination hours to judge the performance and to plug any loopholes.

19. Try not to exceed the word limit, as far as possible. Sticking to the word limit that will save time. Besides, the number of marks you achieve are not going to increase even if you exceed the word limit. It’s the quality that matters not the quantity.

20. Revision of subjects is very important. The reason is that you have been preparing for months or years together. It is a human tendency to forget something after some time.

21. Donot bother yourselves if you are unable to revise everything before examination. Write it legibly as it will simplify the evaluator’s task and he can read the answers easily.

22. Highlight the important points which are important.

23. Follow paragraph writing rather than essay form. A new point should start with a new paragraph.

24. If the question needs answer in point format give it a bullet format.

25. Keep sufficient space between two lines.

26. Try to maintain uniformity in your writing throughout the paper.

27. Under time pressure, the script should not go from bad to worse in the later stages of the answer sheets. This may irritate the evaluator.

28. Don’t count words after every answer. If you have practiced well you should reflexively know the approximate limit you made.

29. Give space and divide it by a dividing line between two questions.

30. Above all be patient and believe in God.