Learning In Organization

Classical and operant conditioning are two important concepts central to behavioral psychology. While both result in learning, the processes are quite different. In order to understand how each of these behavior modification techniques can be used, it is also essential to understand how classical conditioning and operant conditioning differ from one another.

Let's start by looking at some of the most basic differences.

• First described by Ivan Pavlov, a Russian physiologist


• Involves placing a neutral signal before a reflex


• Focuses on involuntary, automatic behaviors

Operant Conditioning

• First described by B. F. Skinner, an American psychologist


• Involves applying reinforcement or punishment after a behavior


• Focuses on strengthening or weakening voluntary behaviors

How Classical Conditioning Works

Even if you are not a psychology student, you have probably at least heard about Pavlov's dogs. In his famous experiment, Ivan Pavlov noticed dogs began to salivate in response to a tone after the sound had been repeatedly paired with the presentation of food. Pavlov quickly realized that this was a learned response and set out to further investigate the conditioning process.

Classical conditioning involves pairing a previously neutral stimulus (such as the sound of a bell) with an unconditioned stimulus (the taste of food). This unconditioned stimulus naturally and automatically triggers salivating as a response to the food, which is known as the unconditioned response. After associating the neutral stimulus and the unconditioned stimulus, the sound of the bell alone will start to evoke salivating as a response. The sound of the bell is now known as the conditioned stimulus and salivating in response to the bell is known as the conditioned response.

Source:
http://psychology.about.com/od/behavioralpsychology/a/classical-vs-operant-conditioning.htm

More Jobs for Less

A PUZZLE: since last quarter, 181,000 more Brits are in work, but output is down 0.7%. What are these people doing, you might ask. The caveats are that the quarterly employment figures are from March to May, while GDP is measured April to June - and subject to revisions. But the enigma remains. Why, to put it crudely, are we consistently having more jobs and less stuff being produced?

The employment figures are convenient for the Chancellor George Osborne, who can wheel around to different television studios and say, "Nearly 400,000 more are in jobs since we came into office." But all the while, the economy has shrunk by 0.3% since May 2010.

There are three responses to this:

(1) Growth is being underestimated in the statistics. The Office of National Statistics (ONS) constantly revises its forecasts. At the start of the downturn, Q2 2008 GDP growth was first estimated to be 0.2%; the estimate is now -1.3%, a considerable quarterly plunge. Had policymakers known this at the time, they might have responded differently. This means we might see this quarter's growth revised up in future. The average absolute revision since Q1 2005 has been 0.4%, which means commentators could currently be arguing over the head of a pin. Nonetheless, the gap between GDP and jobs cannot be wholly explained by systemic underestimation.

Read more at : http://www.economist.com/blogs/freeexchange/2012/07/uk-productivity?fsrc=scn%2Ftw%2Fte%2Fbl%2Fmorejobsforless

Financial Statement

Financial Statements

•       Financial statements are written reports of financial affairs of a company.

•       Such companies’ reports communicate the result of its business operations for a particular period of time and its financial position at the end of that period.

•       Financial Statements

•       Financial statements of the company include:

•      Balance Sheet

•      Profit & Loss Account

•      Trading Account

•      Cash Flow Statement

•      Profit & Loss Appropriation Account

Users of Financial Statements

•       Owners and managers

•       Employees

•       Prospective investors

•       Financial institutions

•       Government

•       Creditors

•       Others

Objectives of Financial Statements

•        To provide financial information to users.

•        To provide useful financial information for predicting, comparing and evaluating potential cash flow of a business.

•        To help in knowing earning power of a company.

•        To help in judging management’s ability to utilize resources effectively.

•        To provide statement of financial position of the company concerning the assets and liabilities of the business.

•        To provide the financial statement in periodic basis so that the comparisons of progress can be made.

•        To compare with competitors.

•        To provide necessary information for financial forecasting.

•        To provide required data for research.

Balance Sheet

•       The balance sheet is a snapshot of the firm’s assets and liabilities at a given point in time

•       Assets are listed in order of liquidity

•      Ease of conversion to cash

•      Without significant loss of value

•       Balance Sheet Identity

•      Assets = Liabilities + Stockholders’ Equity

•        Net Working Capital

•       Current Assets – Current Liabilities

•       Positive when the cash that will be received over the next 12 months exceeds the cash that will be paid out

•       Usually positive in a healthy firm

•        Liquidity

•       Ability to convert to cash quickly without a significant loss in value

•       Liquid firms are less likely to experience financial distress

•       But liquid assets earn a lower return

•       Trade-off to find balance between liquid and illiquid assets

Market Vs. Book Value

•       The balance sheet provides the book value of the assets, liabilities and equity.

•       Market value is the price at which the assets, liabilities or equity can actually be bought or sold.

•       Market value and book value are often very different. Why?

•       Which is more important to the decision-making process?

Income Statement

•       The income statement is more like a video of the firm’s operations for a specified period of time.

•       You generally report revenues first and then deduct any expenses for the period

•       Matching principle –shows revenue when it accrues and match the expenses required to generate the revenue

Statement of Cash Flows

•       Is used to help answer questions such as:

•      Is the firm generating enough cash to purchase the additional assets required for growth?

•      Is the firm generating any extra cash that can be used to repay debt or to invest in new products?

•       Such information is useful both for managers and investors

Statement of Retained Earnings

•       Shows how much of the firm’s earnings were retained, rather than paid out as dividends

•       A positive number in the retained earnings account indicates only that in the past the firm earned some income

Statement of Cash Flows

•       Summarizes the changes in a company’s cash position

•       The statement separates activities into three categories, plus a summary section:

•      Operating activities

•      Investment activities

•      Financing activities

•       Operating activities

•       Includes:

•      net income,

•      depreciation,

•      changes in current assets and liabilities other than cash,

•      short-term investments and

•      short term debt

•       Investing activities

•       Includes:

•      investments in fixed assets

•      or sales of fixed assets

•       Financing activities

•       Includes:

•      Raising cash by selling short-term investments or by issuing short-term debt

•      Long term debt, or stock

•      Also because both dividends paid and cash used to buy back outstanding stock or bonds reduce the company’s cash, such transactions are included here

Classification of investment proposals :-

There are different types of capital projects. Project may be to install new plant and equipment or it may be to replace existing one. It may be to start a new business. There may be a number of independent projects as well as mutually exclusive projects. Some project may be dependent each other. In short there are varieties of projects and they are classified in the following categories:

i.                    Mutually exclusive investments – Mutually exclusive investments serve the same purpose & compete with each other. If one investment is undertaken, others will have to be excluded. Only one project is accepted among the mutually exclusive projects. For example if a cement factory is evaluating for truck or pulley system for bringing raw materials into factory then it can choose one from the alternatives. So, the company will choose the best one from the available alternatives.

ii.                  Independent investments – Independent investments serve different purposes & don’t compete with each other. In such a project, selection of one project does not affect the selection of other projects. In other words, approval of one project neither refutes another projects nor compels to approve it. That is independent projects are those projects whose cash flows are independent from one another. For example installation of brick factory and installation of sugar mill are independent projects. Approval or rejection of one project does not affect the decision process of other projects.

iii.                Contingent investments – Contingent investments are dependant projects, the choice of one investment will require that one or more other investments should also be undertaken. Decisions on contingent projects cannot be taken independently. For example construction of dam and cannel in a irrigation project.

iv.                Replacement projects: Sometimes due to the wear and tear, or due to the advent of new technology, existing machine or assets need to be replaced with new one. So, in replacement projects, serviceable equipment is replaced with new one.

v.                  Expansion  of the business: Expansion may be done in terms of  output of existing product, retail outlet or distribution channel. The available capacity may not be sufficient to meet the growing demand for the existing products. In such a case production capacity should be added to the existing one to meet the growing demand for the product. Similarly, management may expand its business in different geographical regions and open new outlets. All these projects fall under expansion projects.

Business Cycle - Q&A

(a)          What is meant by stock market boom?

Stock market boom is the sustained periods of rising real stock prices and asset prices. Stock market booms tend to occur during periods of above-average growth of real output, and below-average and falling inflation. Stock Market booms are associated with the business cycle, arising when the output or Real GDP growth is above average which means during periods of expansion or recovery, ending when Real GDP slows or declines.

(b)          Why may a boom be accompanied by a widening current account deficit?

Current account deficit occurs when a nation’s total import of goods, services and transfers is greater than the nation’s total export of goods, services and transfers. It reflects a surge in investment spending caused by accelerating productivity. But producing more goods and services in the future requires current investment. Thus, the increase in productivity raises domestic investment spending, causing total domestic spending to exceed domestic production in the short run and to cover the excess of domestic spending over production, the country imports more goods and services than it exports. In particular, the surge in investment may increase the demand for imported capital goods.

(c)          Describe the features of an economic boom.

Economic boom is the period that follows recovery phase in a standard economic cycle. It is an upturn in the business cycle during which real GDP rises. Hence, the following features are observed during the stage of economic boom:

—  GDP Growth faster than the regular trend

—  Rising Aggregate Demand

—  Increase in employment, Real Wages and Disposable Income

—  Increase in Government Revenue

—  Threat of Demand pull and Cost Push Inflation

(d)          Which phase follows the boom?

The boom-bust cycle is an episode which is characterized by a sustained rise in several macroeconomic indicators and followed by a sharp and rapid contraction. After the economic boom, there is an increase in credit prices and the value of assets prices might collapse which ultimately causes a considerable reduction in investment and fall in consumption and then, lead to a recession. Thus, recession is the phase after boom.

(e)          Why might an economic boom not be accompanied by inflation?

Economic boom is not likely to be accompanied by inflation as increase in money supply increases aggregate demand. However, shrinking the money supply may keep the inflation under check but, it increases the cost of borrowing which is supported by the stimulation of supply side factors, i.e. cutting taxes on capital investment which would foster job creation or employment. Also, it may bring the increase in labor productivity (output per worker) through investment in capital goods, technological breakthroughs etc.

(f)           Explain what is likely to bring an economic boom to an end?

Usually the demand pull inflation and cost push inflation causes the economic boom to come to an end. When the AD exceeds the SRAS for a prolonged period of time, the inflation rises to above the normal rate forcing the value of money to decline often explained by the increased burden on the limited resources regardless of the economic growth and capability of a nation. This results in government intervention and government controls the supply of money which ultimately tightens the money deposit in the market and thus decreases the credit creation. And when the money supply is decreased, the investment rate also decreases along with decrease in consumption which ultimately forces the economy to go on a depression.

(g)          Explain how strong exchange rates suppress inflationary symptoms.

Exchange Rate is the external value of a nation’s money in terms of how much of the other currency it can buy. When the exchanges rates become stronger, the value of the currency of a country compared to other country rises which results in the foreign good being cheaper since their money value is less. Now the domestically produced goods will be valued higher than the imported goods, so more imported goods are likely to be bought which causes the demand for domestically produced goods to decrease which will force the domestic producers to cut down their prices by lowering their cost in order generate customers. When the prices are lowered by the domestic producers, inflation is suppressed. Hence a strong exchange rates suppresses inflation.

Productivity

What is meant by productivity?

The amount of total output produced per unit of a total input which could be labor, equipment and capital is called productivity. It is a measure of the efficiency of production. The productivity could be measured on the basis of number of hours the firm takes to produce goods, could be measured on the basis of revenue generated by an employee etc.

Discuss the relationship between productivity and economic growth.

            Economic growth is defined as the increase in the real national product or the output over time. It should mean that an ever increasing quantity of goods and services is available to meet the economy’s needs over time. Whereas, the productivity means total output produced per unit of input.

            Economic growth over time is either due to the improvement in the productivity of given inputs or it due to the quantitative increase in economy’s factor endowments or due to the combination of both these factors. For e.g.: while the economy’s total labor force increases over time its productivity may also increase. The performance of economy’s capital stock may improve while it grows over time. Whatever be the factors responsible for economic growth, it will be reflected in the upward shift of the production possibilities curve

At the national level, productivity growth raises living standards because more real income improves people’s ability to purchase goods and services, enjoy leisure, improve housing and education and contribute to social and environmental programs. Productivity growth is important to the firm because it means that the firm can meet its growing obligations to customers, suppliers, workers, shareholders and governments’ taxes and regulation and still remain competitive or even improve its competitiveness in the market place.

            Thus, both have the positive impact in the development of the economy.

Discuss two factors, other than increase in productivity, which could cause economic growth.

            Economic growth means there is an increase in national output and national income. One of the factors that cause economic growth is increase in productivity that is the increase in aggregate demand and increase in aggregate supply.

            The other two factors that cause economic growths can be broadly classified into tangibles and intangibles.

 The tangible cause includes economy getting closer to full employment, technological advancement, capital increment etc. Intangibles include the property rights structure, which directly affects individuals’ incentives to apply the tangibles to the production of goods and services People must be motivated to put them all together without which no amount of labor, capital, and technological advances can do it alone.  

Distinguish between human and physical capital.

            Capital is any resource necessary to produce the finished goods. The differences between human and physical capital are:

Human capital refers to the investment in education, skills and experience of people in the labor force. At the beginning to work, people lack significant human capital. It is the labor required to directly contribute to the production of the goods. For e.g.: an engineer in the production of a car.

On the contrary, physical capital refers to investment in infrastructure and productive physical plants and equipments. Firms use physical capital to produce other items. It is the contribution of inanimate objects in the production of a good. For e.g.: a crane, a machine etc.

Combining workers with more human and physical capital tends to increase their as well as firm’s productivity.

Why might productivity be lower in the public than in the private sector?

The value of an average government worker's labor is not equal to that of an average private sector worker with similar education and work experience. This is because private sector workers tend to be more productive. They work for more time than that of the public sector employee. Because of which the productivity tends to be more.

Even on an hour-for-hour basis, one would expect private sector workers to be more productive due to the lack of competitive forces in government. Private sector businesses face constant pressures of competition to innovate and improve their goods and services, lest they lose business to their competitors. Government agencies, by contrast, are typically monopolies protected by law, and thus are not subject to such competitive incentives and pressures.

         

Most dangerous game - Summary

"The Most Dangerous Game" opens with a conversation between two men, Whitney and Rainsford. The pair are on a yacht headed to Rio. At the time of the story, they find themselves somewhere in the Caribbean. Both men are aficionados of big-game hunting. As such, they converse about the ability of an animal to understand the hunt. Rainsford is of the opinion that animals are incapable of feeling or understanding any human emotion.

Shortly after their discussion, Whitney retires for the evening. Rainsford decides to stay on deck to smoke his pipe. He suddenly hears the sound of gunshots and in his attempts to get a better glimpse in the direction of the sound, he falls into the water. After a brief moment of panic, Rainsford rallies and decides to swim toward the source of the gunshots. When he finally makes it ashore, he falls asleep.

The next morning he decides to investigate his surroundings. He finds a pool of blood and surmises that it is from the prey that was shot the night before. Near the blood he sees the footprints of hunting boots. He elects to follow them. After a long hike Rainsford arrives at a palatial estate. He is greeted at the door by a large man wielding a gun. A second man enters and explains that his assistant, Ivan, is deaf and dumb. The man is dressed elegantly and has an air of sophistication about him. He introduces himself as General Zaroff.

Zaroff is familiar with Rainsford's book on hunting snow leopards. After getting settled, Rainsford and Zaroff dine together and discuss the merits of hunting. It is during this conversation that Rainsford learns that Zaroff hunts men on the island. As a result of becoming bored with the available game in the world, Zaroff has turned to hunting those that can reason and present a greater challenge. Rainsford is mortified by Zaroff's revelation. Zaroff invites Rainsford to hunt with him but Rainsford declines citing exhaustion.

That night Rainsford is unable to sleep. The next day he learns that he is either to serve as Zaroff's newest prey or fall into the burly, violent hands of Ivan. He elects the former and immediately sets off into the jungle. After a few hours of zigzagging through the dense jungle, he climbs a tree to hide from his adversary. Incredibly, despite the elusive trail, Zaroff is able to easily find Rainsford. However, in order to prolong the fun of the game, Zaroff leaves Rainsford without harming him.

Rainsford panics and is subject to a few other encounters with Zaroff. Each time he gets closer and closer to defeating his foe through the use of primitive traps. Unfortunately, he is unable to trap his pursuer. He does manage to kill one of Zaroff's prized dogs and Ivan. In the final chase, Rainsford dives off the edge of the cliff into the ocean. Zaroff is disappointed to have lost his worthy adversary and returns to his house crestfallen.

After a hearty meal and much reminiscing of the day's events, Zaroff decides to retire for the evening. Upon entering his bedroom, he is confronted by Rainsford who has been hiding behind the bed curtains. Zaroff is delighted that he has been defeated. However, Rainsford is not willing to let the game end there. He challenges Zaroff to one final duel. Zaroff accepts and says that whoever loses shall be fed to the dogs, the winner is to sleep in Zaroff's bed. The story ends with an indirect ending-- Rainsford cites that he had never slept in a better bed.