Wednesday, September 29, 2010

Merchandised Trade

Merchandised Trade can also be referred to as the mercantilist approach. The theory of international trade emerged in England. In the first century trade practices were referred to as merchandised trade or mercantilism. In this period a country’s wealth was measured by the amount of gold or silver stocks the country had accumulated. This was because gold and silver were used in international trade settlements. When a country exported goods it receded payment in gold and silver and when it imported it paid for them using gold and silver. Mercantilists who engaged in the Merchandised Trade believed that it was in their country’s interest to maintain a trade surplus by exporting more than it imported. A trade surplus led to gold flowing out of the country.

Supportive Policies of the Merchandised Trade

The supportive policies of the Merchandised Trade explains that the mercantilists supported policies to limit import using tamits and quotas and encouraged export using subsidies. Under this system if a country had a surplus in the balance of payment, i.e. it exported more than it imported, the resulting inflow of gold and silver would the domestic money supply and lead to an increase in price or inflation. Similarly if the country had deficit in its balance of payment i.e. imports more than exports there would be a gold and silver outflow. There would be a rise in exports in market structure leading to a decline in price and inflation. This means that if one of the two countries. Prices in the deficit country would fall, leading to increased exports while prices in the surplus country would increase, leading to a fall in exports. This process of adjustment was expected to continue until the exports were equal to imports and there was a balance of trade in each country. This process was called self – adjustment.

Weakness of the Merchandised Trade

The weakness of the Merchandised Trade was that it viewed trade as a zero – sum game. In this kind of game, one person gained and the other lost. This means that a gain by the country result to a loss in a country. It was left to Adam Smith and Ricardo David to ensure that trade is a five zero sum game for a situation where all trading countries can benefit from the production and exchange of goods and service but mercantilist doctrine of gaining a surplus in trade. Jarl Kagelstan a director of the Finland Ministry of Finance in the Merchandised Trade observed that in most trade negotiation countries, both industrialized and developing countries have been to press for trade liberalization in areas where their own comparative advantages are strongest and to resist liberalization in areas where they are less competitive and fear that imports would replace domestic production. He attributes this strategy by negotiating countries to a mercantilist belief held by politicians of most countries. This belief equates political power to economic power with the balance of payment surplus so that trade strategy of most countries is designed to simultaneously boost exports while at the some time limiting imports.

Conclusion on the Merchandised Trade

The Merchandised Trade has helped evolve the previous old age systems of trade to the more modernized systems of trade that we have today. This is possible due to the development of Merchandised Trade

Friday, September 24, 2010

Business Law: Sources of Business Law

Law refers to a set of roles and principles that govern a contract of affairs in a given communication. It is a general role of external human action and forced by a sovereign political authority. Law is also a body of principles recognized and applied by state in the administration of justice role of human contact imposed and enforced among the members of a given state
Sources of Business Law
Business Law has different sources. They include;
·         Mercantile/Commercial Law,
·         English Law,
Mercantile/Commercial Law
Mercantile/Commercial law is one of the Sources of Business Law. It is the branch of law that comprises law concerning trade industry and commerce. It includes law relating to contracts like sale of goods partnership companies, negotiable instruments, insurance, insolvency carriage of goods and arbitration.

English Law
This is the second of the Sources of Business Law. The bulk of the Kenya commercial law is based in the English mercantile law, which is the principle source of common law of England. English Law as one of the Sources of Business Law is divided into six different subsections. They include;
·         Common Law,
·         Equity,
·         Maritime Usages,
·         Case Law,
·         Statute Law,
·         Customs and Usages.
Common Law
Common Law as one of the Sources of Business Law refers to a system of law based upon English customs usages and traditions, which were developed over centuries by the English coups. It is written and its principles are applied. Whenever disputed of similar nature arrives. This practice is known as deciding cases by precedence.
Equity
  Equity as one of the Sources of Business Law also refers to the branch of English law, that developed separately from the common law. It is based on concepts of justice developed by the judges whose judgment became precedents.
Maritime Usages
This is another of the Sources of Business Law. Maritime usages were based on customs and usages among traders developed during the 14th and 15th Century.
Case Law
Case Law is referred to as one of the Sources of Business Law. It is what has been added in a earlier case and is binding is a later case and is binding in a similar case.
Statute Law
Statute law as one of the Sources of Business Law is in this accordance with laws passed by parliament and they include sales of goods at companies act etc.
Customs and Usages
Customs and usages are the last but not least of the Sources of Business Law. This are habits established long ago and constantly put into practice so that they become binding to the practicing parties entering into contract.
Our article in Business Training in Kenya has more information on the same.
Conclusion on the Sources of Business Law
Sources of Business Law include Mercantile Law and English Law which is later divided into six subsections and they include; Common Law, Equity, Maritime Usages, Case Law, Statute Law and Customs and Usages.

Wednesday, September 22, 2010

Strategic Management

Strategic Management is the art and science of formulating, implementing and evaluating cross functional decisions that enables an organization to achieve its objectives. Business Training in Kenya has more articles

Classification of Strategic Management
Strategic Management is classified into three stages that is;
·         Strategic formulation,
·         Strategic implementation,
·         Strategic evaluation.
               
Strategic formulating
This is the first step of Strategic Management. It  includes developing a business mission, identifying an organization external opportunities and threats determining internal strength and weaknesses, establishing long term objectives, generating alternative strategies and choosing a particular strategy to pursue.
·         Mission which identifies the scoop of an organization operation in product and market turns.
·         External opportunities and threats are factors beyond the control of an organization like economic, social, political, technological and competitive trends.
·         Internal strengths and weakness are controllable activities within an organization. They include information, operations, research and development, marketing and finances.
·         Long term objectives should be challenging, measurable, achievable, reasonable and clear.
·         Strategy is the means by which long term objectives will be achieved. They include geographical expansion, product development, market penetration, diversification, retrenchments, acquisitions, joint ventures.

Strategic implementation
Strategic implementation is another step of Strategic Management. This requires an organization to establish annual objectives, policies, resource allocation so that strategies can be executed. This is an action stage. It involves formulating the following;
·         Objective should be established at the cooperate level and functional level in large organizations.
·         Policies are a guide to decision making and repetitive or recurrent situations.
·         Resource allocation is a central management activity that allows for strategy, implementation or execution. It enables resources to be allocated according to priorities, established by annual objectives.

Strategic evaluation
Strategic evaluation is the last but not least step of Strategic Management. This monitors the results of formulation and implementation of activities. It includes measuring individual and organization performance and taking corrective actions when necessary. All strategies are subject to future modification because external and internal factors are constantly changing. The three fundamental strategy evaluation activities are;
·         Reviewing external and internal factors that are the basis for carrying strategies.
·         Measuring performance of done work.
·         Taking corrective action when needed.
Conclusion on Strategic Management
Strategy formulation implementation and evaluation activities occur in three levels of management, corporate levels, strategic business, and functional levels thus they are of great importance for every organization.

Tuesday, September 14, 2010

Aims of Human Resource Planning

Human Resource Planning is the process of determining and ensuring that the organization would have adequate number of qualified persons available at the proper times; performing jobs which meets the needs of the organization and provides satisfaction for individual employees.Engineering in Kenya has more articles.
Manpower planning is also a process of focusing an organization demand and supply of the  right type of manpower the number and the right qualifications.Business Training in Kenya has more articles

Nature of Human Resource Planning

Human Resource Planning should be in line with the overall planning of the organization. It leads to improvement in productivity and helps in obtaining the organization goals.
It enables management to place right people in the right positions and at the right time thus it should be integrated in the organization function.
Human Resource Planning aims at short term medium and long term plans.  Its adaption depends on the stage where the organization is.
Human Resource Planning is a decision making process regarding procurement development, compensation, information welfare, safety of human resource etc. 
It is a process of visualizing human resource plans of an organization by providing quantitative and qualitative human resource requirements through their proper utilizations.
Formulization of Human Resource Planning depends upon the type and the kind of organization. It also depends on the strategy adopted by the organization.
Importance of Human Resource Planning
Human Resource Planning is important to the organization in the following ways:
Effective Human Resource Planning fulfills the organization needs for a quality workforce.
A proper HR reduces labor costs substantially by maintaining a balance between demand for and supply of Human Resource.
It facilitates comparison and evaluation of alternative human resource policies.
It also facilitates the rise in skills, abilities and potential of the workforce through training and development.
Provides multiple gains to the employee by way of promotions, increase in salary and other fringe benefits.
Provides for welfare, health and safety of its employees thus leads to an increase in productivity.
Human Resource Planning clears way for effective motivation of the employee in the organization.

Factors affecting Human Resource Planning
Type and strategy of the organization
Organization growth cycles and planning
Time orizons
Environmental uncertainties
Type and quality of focusing information
Nature of job being build
Offloading the work
Government policies  
Essentials of Human Resource Planning
For these concepts to go on effectively:
We must integrate Human Resource Planning with organizational plans -These will help in meeting the organizational objectives through formulation of policies.
 We must also get support of top management- Top management is those that decide on major decisions concerning the organization.
There must be an existence of a fully pledged Human Resource department
The organization should formulate policies touching on formulation, recruitment, planning, etc.
Human Resource Planning Process
Human Resource Planning Process involves the following:
Designing the long range objectives and plans
Estimate the future org structure and focusing manpower requirement. Future plans help one to organize structures.
Auditing Human Resource.  This is determining the presence of Human Resource by using inventory skill concept. This concept contains data about each employee.
Net Human Resource requirement.  This involves taking record details of training needs, skills required, qualifications relevant to a particular position, experience.
Developing Human Resource action plan. Having a plan is having a policy on various Human Resource functions.
Evaluation and control process. Evaluating how effective the Human Resource process is while control is done in departmental level where the employees can be controlled effectively.
More reading on this topic is in Business Review Kenya

Conclusion on Human Resource Planning

Human Resource Planning is very essential for successful running on businesses in Kenya