Introduction to Business×

WORKMEN COMPENSATION ACT 1923

2011-11-14T04:20:00.000-08:00

WORKMEN COMPENSATION ACT 1923

The workmen compensation Act is the first measure of social security introduced in 1923 came into force from 1^st July 1924.

The workmen compensation is an act to provide for the payment by certain classes of employers to their workmen of compensation for injury by accident.

Importance:

It has been of great help to the employee and the employer both. There were many confusions in all cases of accidents before the introduction of this Act. Its proceedings were long drawn time consuming and sheer wastage of time and natural resources.

The workmen compensation Act has abolished all the problems and difficulties. The employee is declared to be entitled to the benefit of the law regardless of negligence. Under this Act 1923, the issue is as to whether the injury was accidental and arose out of and in the course of his employment and if the answer is yes, he would be entitled to get compensation, other wise not.

The workmen compensation Act perform a great service to both the parties i.e. employee and the employer. It provides a very simple procedure for the recovery of compensation.

It makes the possible to know, how much is to be paid, as schedules for different types of casualties are provided in the Act.

The workmen or his dependent are at liberty to either life a suit for damage against the employer and run the risk of employer’s escape from liability.

So it is intended to promote the welfare of public community and it does not concern itself with the measure of preventive nature.

Employer’s Liability

a. Incase of injury:

Sec 3 of the workmen compensation Act 1923 provides that if personal injury is caused to a workmen by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation.

b. In case of physical disease:

Besides bodily injury, the section provides for employers liability to pay compensation to an employee of his if the employee contracts any of the occupational diseases mentioned in the schedule III.

Amount of Compensation

The amount of compensation will be determined by two factors i.e. (1) the amount of wages (2) the nature of injury.

According to section 4 of the Act 1923, the amount of compensation shall be as follows.

1. Where death result from the Injury:

Where death result from the injury to a workmen in receipt of monthly wages failing within the limits of Rs.3000 as shown in the first column of schedule IV, the amount of compensation will be Rs.2,00,000.

2. Where permanent total disablement results from the Injury:

Where permanent total disablements result from injury to a workman in receipt of monthly wages falling within the limits of Rs.3000 as shown in the first column of schedule Iv, the amount of compensation will be Rs.2,00,000.

3. Where permanent partial disablement results from the Injurty:

a. Specified in schedule I:

In case of an injury specified in schedule, I, such percentage of the compensation which would have been payable in the case of permanent total disablement as is specified there in as being the percentage of he loss of earning capacity caused by that injury, and.

b. Not Specified in schedule I:

In the case of an injury not specified in schedule I such percentage of the compensation payable in the case of permanent total disablement as is proportionate to the loss of earning capacity permanently caused by the injury.

4. Temporary Total or Partial Disablement:

Where temporary total or partial disablement results from the injury, ½ of the monthly wages will be payable during the period of disablement or a period of one year, starts from the date of injury, whichever is less and thereafter only in case of chronic lung disease 1/3 of the monthly wages will be payable during the period of disablement or for a period of five years, starts from the date of injury, whichever is less.

Communication

2011-11-04T23:09:00.000-07:00

Communication

Communication is the act of sharing or imparting information between two persons or parties.

The word communication has been derived from the Latin word “communis” which means common. So communication means sharing of ideas in common.

Literally communication means to inform, to tell, to show or to spread information.

It is a two-way process in which a speaker must have a listener and a writer must have a reader to share his ideas. So communication is the process by which message evokes response.

Definition of communication

Here are a few definitions given by various thinkers.

“Communication is the process of conveying messages (facts, ideas, attitudes and opinions) from one person to another so that they can be understood.” (M. W. Cumming)
“Communication is an exchange of facts ideas, opinions, or emotions by two or more persons.” (George Terry)
“We define communication as the process by which message affects response.” ( Harold Janis)
“The search for all available means of persuasion.” (Aristotle)
“The flow of material information, perceptions and understanding between various parts and members of an organization.” (Fred Luthans)

Communication enables organizations to function. Organizations cannot function without open and effective communication. So it can be said that communication is the lifeblood of every organization.

Why do you communicate?

The purposes or objectives of the communication may be any one of the following:

1) To initiate some action;

2) To impart information (ideas, attitudes, beliefs or feelings);

3) To establish, acknowledge or maintain links or relations with other people.

1. Initiating Action

The basic purpose of communication is to initiate some action. It is used to express the needs and requirements of a person. Firstly, you communicate to change the attitudes and behaviours of others. Then you persuade them to carry out the desired action.

2. Imparting Information

Information gathering is a constant activity of human beings. Much of the knowledge you learn comes from communicating with others. Teachers most often make a speech to impart information. Feed back from other people, shows your strengths and weaknesses. You impart information through news bulletins, bank statements, gossip, business information, discussion etc. Imparting information may have the following specific purposes:

Creating awareness
Creating understanding
Persuading others
Influencing others

3. Establishing Relations

Establishing and maintaining relations with other people is a vital function of communication.

Aristotle says, “Man is a social animal”. Being the social animal, he cannot live alone. To fulfil his needs of life, he has to communicate with others. Similarly you communicate with others to fulfil your needs of life. You can communicate with others in the following ways.

1) You can nod or wave to show that you recognize some one you have met before.

2) You can make eye contact while speaking.

3) Keep in touch by telephone, letter or making a visit.

4) You can use his/ her name while speaking or writing.

Benefits of communication

Good communication skills have always been important in the work place. They are even more vital today. Effective communication helps in technology and globalization of the market place. Following are the benefits of effective communication.

1. Increase Productivity

Your ability to communicate effectively increases productivity, both yours and your organization. You can get maximum product at minimum cost and make profit with the help of good communication.

2. Co-ordinate with Flow

Organizational communication establishes a pattern of formal channels to carry information. Information is passed in three ways: upward, downward and horizontal. Suggestions, complaints and problems flow upward from employees to supervisors. Instructions relating to the policies of conducting business are conveyed down ward. At horizontal level, information is exchanged between the employees of an organization.

3. Strong Business Relationships

Communication is the most vital means by which people are connected together in the society. A communication skill is a key to establish strong business relationships. Without effective communication, people misunderstand each other and misinterpret information.

4. Build Professional Image

Effective communication makes difference to your organization in international market. The ability to speak and write helps in dealing with national and international business people. So this ability promotes the image of your organization.

5. Making Prompt Decisions

Communication helps to make prompt decisions. For making prompt decisions, fact-collecting process is necessary which results from effective communication.

6. Building Goodwill

In this age of competition, for excellence and success, organizations need to develop goodwill and sound status. Effective communication assists organizations to maintain good will and credibility.

7. Career Building

Anyone who is able enough to communicate effectively possesses a high valuable skill. So communication skills are the main requirement for getting a good job. Your job promotion and success often depend on doing well in written and oral presentation. Your ability to communicate well is a valuable asset that leads you towards success.

8. Job satisfaction and Good Morale

Morale is the human element that motivates a man to work in the right spirit. Good communication removes the possibility of misunderstanding among the employers and employees. It increases the morale of the workers and each worker feels job satisfaction.

WAGERING CONTACT

2011-11-04T07:24:00.000-07:00

It has been discussed in the Chapter i.e. “Contract of Indemnity and guarantee.

Reciprocal Promises:

“Promises which form the consideration or part of the consideration for each other are called reciprocal promise.” [Section 2 (F)]

One reciprocal promises are bad, the other are good. (Section. 57, 58). These sections lay down tow further rules with regard to reciprocal promise: (i) where persons reciprocally promise, firstly to do certain things which are legal, and secondly, under specified circumstances, to do certain other things which are illegal, the first set of promises is a contract, but the second is a void agreement, (Sec. 57) e.g. ordinary agreement of lease with a promise to pay higher rent if used for gambling. (ii) in case off an alternating promise, one branch of which is legal and the other is not, the legal branch alone can be enforced (Sec,. 58)

ILLUSTRATION

X and Y agree that X shall pay Y Rs. 5000, for which Y shall afterwards deliver to X either rice or smuggled opium.

This is a valid contract to deliver rice, and a void agreement as to the opium.

DUTIES OF THE EMPLOYEE

2011-11-02T02:02:00.000-07:00

DUTIES OF THE EMPLOYEE

The employee performs the following services in respect of his duties.

1. Rendering Personal Services:

It is the duty of the employee to render personal service according to the terms of the contract. He may not delegate his duty without the consent of the employer.

2. Compliance of Lawful Orders:

The employee’s duty is to obey his employer’s lawful orders. Lawful orders are those orders given by the employer within the terms of the contract of employment and which are neither illegal nor contrary to the public policy.

3. General duty of Fidelity:

There is a general duty of fidelity imposed on the employee, and this duty will be extended by the courts to meet the circumstances of any case.

4. Confidential Information:

Where the employee possesses information connected with the employer’s trade secrets or lists of customers, the employee may not use this information freely. The employee has a duty to respect his employer’s confidential information. This duty continues after the contract of service has been discharged.

5. The property of the employer:

Where a copy rights, an invention and patent represents work done by an employee under a contract of employment, then the copy right, an invention and patent is industrial information, the property of the employer. It does not belong to the employee in these circumstances.

6. Indemnity:

Where a servant, in the usual course of his duties, causes injury or loss to a third party through want of due care in the performance of his duties, the master will normally be liable. Where the third party succeeds against the master, the servant is under a duty to given an indemnity.

IMPOSSIBLEITY OF PERFORMANCE

2011-07-11T20:47:00.000-07:00

IMPOSSIBLEITY OF PERFORMANCE

DOCTRINE OF FRUSTRATION

Frustration of a contract means impossibility of performance. It happens very often that parties to a contract agree to perform certain things which are not impossible at the time of contract but which become impossible to be performed subsequently due to causes beyond their control. In such a case, the contract is discharged as having become void.

Illustration

1. A ship was chartered to load cargo at the part Karachi and carry it to port saeed, and before she arrived there, there was a violent explosion of one of her boilers, which made it impossible for her to carry out her charter, it was held that the explosion frustrated the contract and that the parties were discharged form all liability.

2. English sellers agreed to sell machinery to polish buyers but before delivery was due, Poland was occupied by Germany, held, the contract was “frustrated” and the parties were discharged from their obligation there under. Thus, if the act becomes impossible subsequently by reason of some event which the promisor could not prevent, the contract is discharged. The doctrine of frustration is based on the maxim “LEX NON COGIT AN IMPOSSIBLY” i.e. the law does not compel a man to do the impossible thing. The discharged of a contract rendered impossible of performance by external causes beyond the contemplation of the parties is known as frustration. Here, the fundamental assumption underlying the contract becomes impossible. Under the doctrine of frustration what happens is not that the performance is actually impossible, but that the contract cannot be performed as originally contemplated by the parties. In such a case, there is a frustration of the object of the contract.

Frustration is a device by which the rules as to absolute contracts are reconciled with a special exception which justice demands it has become a gloss on the older theory of impossibility which it has greatly developed under the guise of reading “implied terms” into contract. So the doctrine of frustration has been placed on two grounds:

i. Some times it is said to depend on the presume intention of the parties.

ii. Some times it is regarded as depending on an implied term of the contract.

Factors of Frustration of Contract or Impossibility of Performance:

The contract is discharged when performance becomes impossible du to:

i. Change of Law;

ii. Destruction of the subject matter;

iii. Declaration of war;

iv. Death or incapacity of the promisor in a contract for personal services;

v. Such an alteration of circumstances as to bring about complete frustration of commercial object:

vi. Absence of a fundamental condition;

vii. Act of God.

It has been laid down in section 56 of the contract Act which says “a contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful”.

Rights and Liabilities of the Parties to a Frustrated contract:

The law on this point is set forth in section 65 which lays down that “when an agreement is discovered to be void or when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it or to make compensation for its to the person from whom he received it”.

Non-Application of Doctrine of Frustration:

The doctrine of frustration cannot be applied in the following cases:

1. Stoppage of work by strike and mismanagement etc;

2. commercial impossibility;

3. Difficulty of performance;

4. Impossibility come to the notice of the promisor but not the promise;

5. Failure of the performance of anyone of the purposes;

6. Temporary illness.

Cost, Market Structure And Revenue

2011-05-30T22:18:00.000-07:00

Cost, Market Structure And Revenue

This Chapter Includes

1. Concept and derivation of short run cost curves

2. Meaning perfect competition

3. Meaning of and different concepts of Revenue

4. Derivation of revenue curves under perfect competition

5. Meaning of monopoly and derivation of revenue curves under monopoly

CONCEPT OF COST AND DERIVATION OF SHORT RUN COST CURVES

Explain various concepts of cost. Also discuss the behavior of cost curves of a firm in the short run

The concept of cost which is most commonly used in economics is that of money cost of production.

Short Period Costs:

Short run period is that in which supply of goods can be changed only by changing variable factors of production.

In short run period some of the factors are fixed and some of the factors are variable. Those factors whose supply is given and fixed are called as fixed factors. Such factors include machinery, building etc. The cost of such factors is called fixed cost of production. On the other hand those factors whose supply can be changed are called variable factors. Such factors include raw material, labour etc. The payment made to variable factors is known as the variable cost.

Following are important concepts of cost of production.

1. Variable Cost

“Variable or prime costs are those costs which change with changes in production. eg wages paid to the labour and price of the raw material.”

Variable costs cease as soon as the production is stopped.

2. Fixed Cost

“Fixed Costs or supplementary costs are those costs which do not change with change in production.”

The entrepreneur has to bear these costs even when there is no production. They include the costs of constructing building or installing machinery.

3. Total Cost

“Total cost is the total amount of money spent upon the production of a given volume of output.

In the short run : Total cost = Fixed cost + variable cost

4. Average Cost

“Per unit cost of production is called average cost and it is calculated by dividing total cost with total output.”

AC = TC/Q

Where AC is average total cost, TC is total cost and Q is the total quantity of production.

Similarly AVC and AFC cost can be calculated by using following formulas.

AVC=TVC/Q

Where AVC is average variable cost, TVC is total variable cost and Q is the total quantity

AFC= FC/Q

Where AFC is average fixed cost, FC is total fixed cost and Q is total quantity of production

By definition ATC = AFC + AVC. i.e., Average total cost is equal to sum of average fixed costs and average variable costs.

5. Marginal cost

“The cost of producing an extra unit of output is called marginal cost. Or it is the change in total cost due to change in production.”

MC = Change in total cost / Change in production

The costs of production and relationship between them can be further explained with the help of this table.

Table

Q	FC	VC	TC	MC	ATC	AVC	AFC
0	10	-----	10	-----	-------	-------	-------
1	10	50	60	50	60.00	50.00	10.00
2	10	90	100	40	50.00	45.00	5.00
3	10	120	130	30	43.33	40.00	3.33
4	10	140	150	20	37.50	35.00	2.50
5	10	150	160	10	32.00	30.00	2.00
6	10	170	180	20	30.00	28.33	1.67
7	10	200	210	30	30.00	28.57	1.43
8	10	240	250	40	31.25	30.00	1.25
9	10	290	300	50	33.33	32.22	1.11
10	10	350	360	60	36.00	35.00	1.00

The table shows that at “0” output level the firm only incurs fixed cost, and this cost remains unchanged for all the units of output. The variable cost of the firms changes with change in production. In the beginning of production variable cost increases at decreasing rate and then it increases at increasing rate. The total cost of a firm in short run is the sum of fixed and variable costs. Marginal cost is a change in total cost due to change in production, In the beginning MC decreases and finally increases with increase in production. ATC, AVC and AFC are calculated by dividing respective Total costs with units of output. When the various values of costs are plotted against different units of output, the different cost curves look like as in the following diagram.

In the diagram on left, TC and TVC and TFC are plotted. The TC and TVC curves initially rise at decreasing rate and then at increasing rate. The FC curve is parallel to x-axis thus shows constant FC at all output levels.

In the diagram on right MC, AC and AVC are marginal, average and average variable cost curves respectively. These costs initially fall and then start increasing. Therefore these curves become similar to 'U' and therefore some times called “U” shaped cost curves.

Relation Between Marginal Cost And Average Cost.

When average and marginal cost curves are drawn together on the same plane then we observe following three types of relation between them.

(1) When average cost curve is falling marginal cost

curve lies below it.

(2) When average cost curve is at its minimum marginal

cost curve cuts it from below and

(3) When average cost curve is rising marginal cost curve

lies above it.

Logical paradox

2011-04-15T03:25:00.001-07:00

Logical paradox

Common themes in paradoxes include self-reference, the infinite, circular definitions, and confusion of levels of reasoning. Other paradoxes involve false statements or half-truths and the resulting biased assumptions.

For example, consider a situation in which a father and son are driving down the road. The car collides with a tree and the father is killed. The boy is rushed to the nearest hospital where he is prepared for emergency surgery. On entering the surgery suite, the surgeon says, "I can't operate on this boy. He's my son."

The apparent paradox is caused by a hasty generalization. The reader, upon seeing the word surgeon, applies a poll of their knowledge of surgeons (regardless of its depth) and reasons that since the majority of surgeons are male, the surgeon is a man, hence the contradiction: the father of the child, a man, was killed in the crash. The paradox is resolved if it is revealed that the surgeon is a woman, the boy's mother. Other assumptions whose resolution would also resolve the paradox are based on cognitive bias; the reader, reading terms like "father" and "son" and thinking of a familial relationship, may assume a traditional family (biological father, biological mother, and son) because other combinations are unknown or disregarded out of prejudicial views. The paradox would resolve itself if it were revealed that the child was adopted and therefore had a biological and adopted father, or if a divorce resulted in the boy having a father and stepfather, or if a homosexual male couple had adopted a son or entered a committed relationship after one had already fathered a son. Another solution is that the father and son in the car are indeed not related at all - the father being parent to another individual distinct to the one in the car with him. This is because most people read the words "father and son" and immediately conclude that they are referring to two people in the same family, which is not necessarily true.

Paradoxes which are not based on a hidden error generally happen at the fringes of context or language, and require extending the context or language to lose their paradoxical quality. Paradoxes that arise from apparently intelligible uses of language are often of interest to logicians and philosophers. This sentence is false is an example of the famous liar paradox: it is a sentence which cannot be consistently interpreted as true or false, because if it is false it must be true, and if it is true it must be false. Therefore, it can be concluded the sentence is neither true nor false. Russell's paradox, which shows that the notion of the set of all those sets that do not contain themselves leads to a contradiction, was instrumental in the development of modern logic and set theory.

Thought experiments can also yield interesting paradoxes. The grandfather paradox, for example, would arise if a time traveler were to kill his own grandfather before his father was conceived, thereby preventing his own birth. Under the 'traditional' definition of a paradox, the Grandfather Paradox (and other similar situations) are typically thought to cause spacetime to rip itself apart under the strain of attempting to resolve an 'unresolvable' conclusion (ie, the time traveller killed his grandfather, therefore the time traveller wouldn't be born, therefore his grandfather could not have been killed, therefore he (and the time traveller) are still alive - and so on). However, if the many worlds theory is correct, the death of the man does not cause the father of the time traveller and the time traveller to never be born because he is an alternate version of the grandfather.

W. V. Quine (1962) distinguished between three classes of paradoxes.

· A veridical paradox produces a result that appears absurd but is demonstrated to be true nevertheless.

· A falsidical paradox establishes a result that not only appears false but actually is false; there is a fallacy in the supposed demonstration. The various invalid proofs (e.g. that 1 = 2) are classic examples, generally relying on a hidden division by zero. Another example would be the inductive form of the Horse paradox.

· A paradox which is in neither class may be an antinomy, which reaches a self-contradictory result by properly applying accepted ways of reasoning.

A fourth kind has sometimes been asserted since Quine's work.

A paradox which is both true and false at the same time in the same sense is called a dialetheia. In Western logics it is often assumed, following Aristotle, that no dialetheia exist, but they are sometimes accepted in Eastern traditions and in paraconsistent logics. An example might be to affirm or deny the statement "John is in the room" when John is standing precisely halfway through the doorway. It is reasonable (by human thinking) to both affirm and deny it ("well, he is, but he isn't"), and it is also reasonable to say that he is neither ("he's halfway in the room, which is neither in nor out"), despite the fact that the statement is to be exclusively proven or disproven.