Leadership is a process in which a leader attempts to influence his or her followers to establish and accomplish a goal or goals. In order to accomplish the goal, the leader exercises his or her power to influence people. That power is exercised in earlier stages by motivating followers to get the job done and in later stages by rewarding or punishing those who do or do not perform to the level of expectation. Leadership is a continuous process, with the accomplishment of one goal becoming the beginning of a new goal. The proper reward by the leader is of utmost importance in order to continually motivate followers in the process. There are basically three models on Leadership: Trait, Attitude and Situational. In the trait theory certain inherent characteristics of the individuals were given importance. Other who did not possess such characteristics was considered as ineffective. This theory was questioned Continue reading
Modern Management Concepts
Fundamentals of Internal Auditing
What is Internal Auditing? Internal Auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. Internal auditing is a catalyst for improving an organization’s governance, risk management and management controls by providing insight and recommendations based on analyses and assessments of data and business processes. With commitment to integrity and accountability, internal auditing provides value to governing bodies and senior management as an objective source of independent advice. The Institute of Internal Auditors has defined internal auditing as follows: “Internal auditing is the independent appraisal activity within an organization for the review of the accounting, financial and other operation as a basis for protective and constructive service to the management. It is a type of control, Continue reading
New Venture Teams
A recent idea for facilitating corporate innovations is called a new venture team. A new venture team is a unit separate from the rest of the organization and is responsible for developing and initiating a major innovation. New venture teams give free reign to members’ creativity because their separate facilities and location free them from the organizational rules and procedures. These teams typically are small, loosely structured, and organic, reflecting the characteristics of creative organizations described in the table regarding the characteristics of creative people and organizations. Peter Drucker advises organizations that wish to innovate to use a separate team or department: “For the existing business to be capable of innovation, it has to create a structure that allows people to be entrepreneurial… This means, first, that the entrepreneurial, the news, has to be organized separately from the old and the existing. Whenever we have tried to make an existing Continue reading
Forms of Corporate Entrepreneurship
Corporate entrepreneurship is one that generates and exploits new technologies, products, or businesses under the corporate umbrella of an established firm. Corporate entrepreneurship can speed up processes inside the company and helps to invent and commercialize innovative products or services. Corporate entrepreneurship is the process by which teams within an established company conceive, foster, launch and manage a new business that is distinct from the parent company but leverages the parent’s assets, market position, capabilities or other resources. Corporate entrepreneurship is also more than the development of new products; it also implies innovations to existing products or brands. Corporate entrepreneurship is also defined as the process of stimulating innovative ideas and processes. The common goal of the concept is creating wealth. This definition differs from the other two definitions above in the sense that it doesn’t mention the protection of an established firm as a characteristic of corporate entrepreneurship. Innovation Continue reading
Kurt Lewin’s Force-Field Theory of Change
Change management is a methodical approach to handling with change, not only from the angle of an organization but on the individual level. A rather vague term, change management has more than three different dimensions, adapting to change, controlling change, and effecting change included. A proactive approach to handling with change is at the central part of all three aspects. For an organization, change management means making the definition and implementation of procedures and/or technologies to handle with changes in the business environment and to profit from changing opportunities. Triumphant adaptation to change is as vital within an organization as it is in the natural world. Just similar to plants and animals, organizations and the individuals in them unavoidably run into changing conditions that they are incapable to control. The more effectively you handle with change, the more probable you are to flourish. Building structured methods for addressing changes in Continue reading
Social and Commercial Profitability Analysis
Social or National Profitability Public projects like road, railway, bridge and other transport projects, irrigation, projects, power projects, etc for which socioeconomic considerations play a significant part, rather than mere commercial profitability. Such projects are analysis for their net socioeconomic benefits and the profitability analysis of such projects is known as social or national profitability analysis which is nothing but the socioeconomic cost benefit analysis done at the national level. Steps involved in determination of social or national profitability:- National/Social profitability analysis takes into account the real cost of direct costs and real benefit of direct benefits,. For instance, some of the inputs may be subsidized. Only the subsidized prices of input is what is relevant for assessing commercial profitability. However the national profitability analysis takes into account the real cost of inputs i.e. cost of input had they not been subsidized. Accordingly the required adjustment to direct cost of Continue reading