Characteristics of Diversified Farming

Characteristics of Diversified Farming

Characteristics of diversified farming have been briefly explained below. These characteristics include the cultivation of cash crops, use of technology, limited profitability, labor employment and access to credit facilities.

1.   Cash Corps Cultivation

First characteristic of diversified farming is cultivation of Cash crops like vegetable, tobacco etc. in subsistence farming only few staple are cultivated for family use. Thus we can say that diversified farming is a profit based farming, while subsistence farming was need based farming.

2.   Diversification of Risk

Diversification of risk associated with staple product failure is another important characteristic of diversified farming. In diversification farming farmer can bear the losses incurred in a particular cultivation, because they have chance to earn profit in other corp. cultivation (risk is diversified).

3.   Use of Technology & Fertilizers

Second characteristic of diversified farming is use of technology and fertilizer in the farming. Tractor and other basic machinery are used in diversified farming tractor, it is to be noted that high capital investment is not feature of diversified farming.

4.   Profits

Profitability is another characteristic of diversified farming. However, these profits are lower than corporate farming. Thus profitability is important aspect to divide farming into different categories.

a)    Subsistence farming- no profit objectives.

b)   Diversified farming – limited profitability objectives.

c)    Corporate farming- profit maximization is objective.

5.   Labor is employed

Another important characteristic of diversified farming is the employment of labour during the whole year. We know that in subsistence farming labour was employed only during the season of cultivation.

6.   Access to Credit Facilities

Another key characteristic of diversified farming is access to credit facilities. In subsistence farming the farmer were not interested to take credit from the market.

7.   Step to Corporate Farming

Diversified farming is said to be first step toward corporate farming.

We have briefly explained the characteristics of diversified farming. These characteristics clearly indicate that diversified farming is quite different from the subsistence and corporate farming.

Characteristics of Corporate Farming

Characteristics of Corporate Farming

Characteristics of corporate farming have been briefly explained below. These characteristics include production of various corps, capital investment, use of premium quality fertilizer, profit maximization etc.

1.   Range of Corps

First characteristic of corporate farming is cultivation of range of products. In corporate farming a range of crops are produced. These corps includes the staple corps (wheat, rice etc) and cash corps (Vegetable, Tobacco etc).

2.   Capital Investment

Second characteristic of corporate farming is huge investment in the business of farming. Advanced machinery is used in corporate farming to improve productivity & efficiency.

3.   Premium Fertilizers & biological techniques.

One of the important characteristics of corporate farming is use of premium quality fertilizer and biological techniques in farming. This type of farming heavily rely on the improved seeds.

4.   Economies of Scale

Third important characteristic of corporate farming is Economies of scale. Large output result in economies of scale. This is one of the fundamental characteristic of corporate farming.

5.   Big Farms

One of the important characteristic of corporate farming is use of big farms for the cultivation to attain economies of scale. It is to be noted that large farms can only be acquired by a corporate entity.

6.   Organized Business

Corporate Farming is managed as organized business. Professional manager and agriculture expert is part of management team. All decisions are made by the professional in professional manner. Organized management is a key characteristic of corporate farming.

7.   High profitability

Reasonable profit or high profit from the farming is another important characteristic of corporate farming. Profitability is one of the important characteristic of corporate farming.

8.   Products are properly marketed

In corporate farming marketing of product is an important aspect, because marketing has direct linkage with profitability. Products are sold at right place and at right price. Product marketing is another important characteristic of corporate farming.

Ethnocentrism Concept

Ethnocentrism Concept

Ethnocentrism is an approach for managing the international business. Under this approach local market is primary market and consider for policies making and strategies formulation. Culture differences are not considered for policy making and whole world is considered as one market. Characteristics of ethnocentrism approach has been explained below

1.    Local Market is Focused

In ethnocentrism the local market is focused, and local market is given primary consideration for policy making and local market strategies are applied all over the world.

2.    No Culture Difference

Ethnocentrism gives little value to culture differences, and there is no change in the rules of games for international market.  Ethnocentrism sees world with one eye and standard policies are implemented all over the world.

3.    Centralization Concept

Ethnocentrism approach is basically a centralized approach of doing the business. It means that business is controlled from one point i.e. Head Quarter and policies of Head Quarter are implemented all over the world,

4.    Local Market Research

Ethnocentrism does not offer space for local market research, rather head quarter market strategies are followed in local market. It means marketing department work cannot device the market strategies.

5.    Effective Controls

Ethnocentrism approach or strategy helps in managing the organization more effectively. Due to standard policies and procedures, there is no confusion, and controls are well defined and more effectively implemented.

6.    Standardization

In Ethnocentrism approach, there is   standardization of product and polices. There are number of associated advantage with standardization are achieved by organization. These advantages include clarity, integration of organization etc.

Characteristics of a Good Planning Process

Characteristics of a Good Planning Process

Planning deals in future of the organization. Therefore organization must appropriately plan the future. Characteristic of a good planning process has been explained below;

1.    Based on Facts & Analyses

Planning must be supported by the fact & figures. It means that a details study of the data is essential for setting appropriate future objective /target (plans). This is utmost critical that realistic and implementable plans are set for the organization.

2.    Effective Participation

Planning is a question existence for the organization; therefore an effective participation is required at all level of the organization. It is not possible to frame good plans in absence of effective participation & inputs of stakeholders /Department.

3.    Objective & Goals are well Defined

Final Objective and goal should be well define and documented. There must not be any ambiguity about the future direction & destination. Such goal and objective should not be in the mind of the management, but on the paper.

4.    Role  & Responsibility

Plan should identify the roles and responsibilities for implementation the plans. Planning is done for implementation and implementation is done through people. Therefore people must know their implementing roles for timely and effectively execution of plans.

5.    Communication

Plans should be well communicated to the staked holder or concerned. It is not all about defining the roles and responsibility, but important thing is to communicate them to concerned individuals. Communication also includes development an understanding of the role by the concerned.

6.    Review & Up dating

Planning is not a static process and requires a regular review and updating. There must be a system of regular review of the plans and based on such review the plans are required to be updated.

Characteristics of Strategic Planning
Characteristics of Vision Statement
Characteristics of Good Planning Process

Characteristics of Strategic Planning

Characteristics of Strategic Planning

1.    Long Term Objective

Strategic planning primarily set the long term objectives for the organization. Strategic planning is done to place the organization on a desired position in the future.

2.    Structures & Documented

A good strategic plan is well structured & documented. The roles and responsibilities for achieving the long term objectives are well defined & communicated to the stakeholders. There is no ambiguity of roles & responsibilities.

3.    Based on Depth Analyses

Strategic planning is based on the depth analyses of business and its environment. This analysis helps management to understand the business and its environment in more details & depth.

4.    Set Future Direction

Strategic planning is basically setting a future direction of the organization. Strategic direction is really helpful to device corporate & operational strategies for the organization. This direction also facilitates decision making process within organization.

5.    Integration & Team Building

Strategic planning is helpful for integration & team building within organization. Everyone is working in the same direction set by the management. This is one of the major advantages of strategic planning.

6.    Short Term & Medium Term plans

Strategic plan are achieved by implementing the short term and medium term plans. Therefore strategic planning primarily is future position of the organization, which is achieved through short term & medium term planning.

7.    Monitored & Updated Regularly

Business is dynamic in nature; therefore a static strategic plan is not suitable. Strategic plan is regularly updated to accommodate the changes in the environment of business. There must be a proper mechanism of monitoring the strategic plan implementation.

Characteristics of Strategic Planning

Characteristics of Vision Statement

Characteristics of Good Planning Process

Characteristics of TQM

Characteristics of TQM

Characteristics of TQM may be explained in terms of Customer is important, System of controls, Prevention than detection, roles & responsibilities defined, Zero defect, Wastage & Losses, and right at first time.

1.    Customer is most Important

Customer is placed at highest priority in the Total Quality management. It means that there is no compromise on customer satisfaction under TQM concept. Entity shall made all effort to achieve customer satisfaction.

2.    System of Controls

TQM requires a proper system of control within organization. It is important to note that without such system total quality is not achievable. An effective system of control is required at each level within organization.

3.    Prevention than Detection

Prevention is focused in the Total Quality Management (TQM). Product defect should be prevented rather than detected and corrected. There are a lot of costs associated with detection & correction; therefore organization should not incur those costs.

4.    Roles & Responsibilities Defined

Roles & responsibilities are well defined in Total Quality management. The quality responsibilities are well define & communicated to concerned persons. The roles of responsible persons for quality management are also well communicated to responsible person.

5.    Zero Defect is Possible

Total Quality Management speaks for Zero defect in the product. It means that organization will provide the promised product to the customer without defect and as per customer satisfaction. All efforts are made by entity to achieve the defect free product.

6.    Wastage & Losses not Desirable

Total Quality management system says about the minimum possible wastage (normal loss) and there are no reasons acceptable for abnormal losses & wastage. it is important to note that some losses are unavoidable in nature (normal losses), these losses are acceptable under TQM.

7.    Right at First Time

Total Quality Management strongly believes in right product at first time. There is no concept to detect and correct the defect under the total quality management. It means that there should not be a haste to launch the product on the assumption that defect may be removed later on.

8.    Poor Quality is Costly

There are number of cost associated with poor quality, therefore poor quality is not acceptable under any circumstances in Total Quality Management

Characteristics of Vision Statement

Characteristics of Vision Statement

Vision statement primarily explains the reason of existence or core objective of the organization. In practice only one core aspect of organization is targeted or explained in the Vision statement.

1.    Real & Reflective

Vision statement should reflect the reality of the entity. Vision statement tells reality, for example if vision statement says “We Provide Quality”. Then product quality should be premium objective of the organization.

2.    Brief & Comprehensive

Vision should be brief & comprehensive in nature. Normally vision statement consists of one to two lines and explain core objective of the organization. In most cases vision statement vision statement consist of one line.

3.    Original & Unique

Vision statement should be unique in nature. Vision statement should be originally designed / framed by the entity and wording of statement should be original and fresh. A copied concept or wording is not recommended under any circumstances.

4.    Easy Language

Vision statement should be easy to read & understand. It means that vision statement should be written in easy language. This will help reader to remember the vision statement.

5.    Should Leave Impact

Vision statement should leave an impact on the reader of the statement. Vision statement should have artistic value. Vision statement should remain in the mind of the customer /reader.

6.    Relevant to Industry

Vision statement should be relevant to industry. For example in case of service industry the customer may be focused like “we value our customer”, while in case of manufacturing industry product may be focused “Our product itself speaks about Quality”.

Characteristics of Strategic Planning

Characteristics of Vision Statement

Characteristics of Good Planning Process

Characteristics of Preference Shares

Characteristics of Preference Shares

1.    Different from Ordinary Shares

Preference Share is quite different from ordinary shares, and these shares are issued as long term financing for a fixed divided.

2.    Cumulative Preference Share

In case of cumulative preference shares, the dividend is guaranteed, and may be paid in future, if company could not pay dividend for a particular year. it means that dividend does not lapses for nonpayment , rather accumulates.

3.    Non Cumulative Preference Share

In case of non cumulative preference share divided is only paid, where company can pay the divided, (otherwise it lapses).

4.    Not Traded in Stock Exchange

Preference shares are not traded in stock exchange; therefore they have no marketability. These shares are normally redeemed at particular date (buy back by company).

5.    Form of Loan

Preference shares may be regarded as form of long term loan, where fixed amount of dividend is paid to preference share holder for a particular period of time, and then shares are redeemed by the investor (preference share holder).

6.    Dividend is Fixed

Divided is normally fixed in case of preference shares, while in case of ordinary share dividend varies each year.

7.    No Voting Rights

Preference shares carry no voting rights, as already described that it is kind of long term loan arrangement by the company, therefore preference share does not carry voting rights.

Characteristics of Keynes Theory of Money

Characteristics of Keynes Theory of Money

1.    Money can Store Value

Keynes theory of money put light on another function of money i.e. money can store value. Keynes explained that due to this quality of money, there is linkage between current & future demand of money.

2.    Speculative Demand of Money

Keynes also explained that in addition to transaction demand, money also has speculative demand, which depend on the rate of interest.

3.     Supply of money & interest rate

Keynes establishes a link between supply of money and interest rate, as supply of money increases, rate of interest decrease. There is inverse relationship between supply of money and interest rate.

4.    Money supply Generate economic activity

Money has role in generating economic activity, in case money supply increase, it will boost the investment in the economy, which would create employment.

5.    Inflation & Deflation

There may be equilibrium of national income above the full employment level (inflation) and there equilibrium of nation income below full employment. (Deflation)

6.    Money Generate employment

Public expenditure by the government or increase investment level in the economy due to lower interest rate generates economic activity & employment in the country. Therefore money has role other than monetary role.

Characteristics of Barter System

Characteristics of Barter System

Barter system goods can be exchanged against good and there is no involvement of money in such system. Barter system is old & out dated system and currently there is no effective existence of this system.

1.    No Role of Money

In barter system, money does not play any role and such system works without money. In old days, when there was no concept of money, barter system was the only option for trade. This system became obsolete on introduction of money.

2.    Goods Exchanged for Goods

In barter system goods were exchanged against good, keeping in view modern money in mind, we can say that goods were used as money.

3.    Intensity of Want & Negotiation

Barter system is based on the intensity of want for a good and negotiation between two parties for exchange of goods. Barter system does not support the proper market concept of free economy.

4.    Limited & Essential Goods Concept

Barter system only supports the production of limited and essential goods, which can easily be exchanged with other goods. There is no effective market for non essential or luxury goods.

5.    Effective for Limited Population

Barter system is only effective for limited population, where people know the need of other and producing the required goods according demand. Barter system does not support large production, and people would produce the goods which can be exchanged.

6.    Stability in Economy

Stability in the economy is one of the important characteristics of barter system. There is no artificial shortage and inflation in the barter system. In barter system demand & supply does not depends on the prices and therefore it function in stable and smooth way.