Capital Sources for Business: Preference Shares

Preference shares are those which carry priority rights in regard to the payment of dividend and return of capital and at the same time are subject to certain limitations with regard to voting rights.   The preference shareholders are entitled to receive the fixed rate of dividend out of the net profit of the company. Only after the payment of dividend at a fixed rate is made to the preference shareholders, the balance of profit will be used for paying dividend to ordinary shares. The rate of dividend on preference shares is mentioned in the prospectus. Similarly in the event of liquidation the assets remaining after payment of all debts of the company are first used for returning the capital contributed by the preference shareholders. Types of Preference Shares Cumulative and non-cumulative: In the case of cumulative preference shares, the unpaid dividend goes on accumulating until paid. The unpaid dividends Continue reading

Case Study of Lenovo: Project Management Improves Strategy Execution and Core Competitiveness

I. Background In recent years, the personal computer (PC) industry has been developing by leaps and bounds. Global sales of PCs totaled 230 million units in 2006, representing a 9 percent increase over the previous year. Lenovo has a product line that includes everything from servers and storage devices to printers, printer supplies, projectors, digital products, computing accessories, computing services and mobile handsets, all in addition to its primary PC business, which made up 96 percent of the company’s turnover as of the second quarter of 2007. Since its acquisition of IBM’s Personal Computing Division in May 2005, Lenovo has been accelerating its business expansion into overseas markets. The company transferred its corporate headquarters from Beijing, China to Raleigh, North Carolina, USA. Today, the group has branch offices in 66 countries around the globe. It conducts business in 166 countries and employs over 25,000 people worldwide. Lenovo is organized into Continue reading

Documentary Sources of Information in Research

The documentary source is an important source of information for a researcher. A document is anything in writing a record, files or diaries, published or unpublished which can be extracted and used in research. It is a very valuable source of information for a research either in management or in social sciences. It may comprise office files, business and legal papers, biographies, official and unofficial records, letters, proceedings of any courts, committees, societies, Assemblies, and Parliaments, enactments, constitution, reports of surveys, or research of commissions, official statistics, newspaper editorials, special articles, company news, cases or company directors’ reports, etc. Documentation is the process of collecting and extracting the documents which are relevant to research. Documents may be classified into: Personal documents; Company documents; Consultants’ report and published materials; and Public documents. Personal documents are those that are written by or on behalf of individuals. They may include autobiographies, biographies, diaries, Continue reading

The Role of Organizational Culture on Strategic Management

The organizational culture is the basis of the Strategic Management, Strategic management is to determine its mission, according to the external environment and internal conditions to set the strategic objectives of the enterprise, in order to ensure the correct implementation of the goals and progress plan, and rely on internal capabilities implemented this kind of planning and decision-making, constraints in the implementation process of a dynamic management process. The organizational culture is the value orientation of the enterprise for a variety of internal and external affairs and resources, enterprises in the long-term organizational values, under the guidance of shared values, guiding principles and select corporate behavior. Excellent organizational culture is an important condition for business strategy development and success. It can highlight the characteristics of enterprises, the formation of the common values of the members of the enterprise, also because of its distinctive personality, more conducive to enterprise to develop Continue reading

Modern Theories of Organization

Modern organizational behavior has become complex. It synthesizes the classical and neoclassical theories of organization, while incorporating technological development.  Modern theories of organization are classified into quantitative theory, system   theory and contingency theory. 1. Quantitative Theory The quantitative theory includes operation research and quantification of the problem.   It analyses the problems from quantifiable angles and provides solutions to complex problems only with the help of statistical and mathematical models such as linear and non-linear programming, game theory, decision tree, simulation and probability.   Computers are used to solve management problems whereas mathematical models were previously used for the purpose. A large number of problems are solved with the use of simulation equations and computers.   The development of equations requires specialized skills and advance knowledge of mathematics, statistics, economics and behavioral sciences.   Models are tested while the context of the real world and use of operation research. Continue reading

Strategic Pricing

Pricing is a key factor in business innovation. Strategic pricing involves aligning the pricing strategy with corporate strategy. The price must be chosen carefully after considering various scenarios and possible implications. Is the price attractive enough to capture the mass of target buyers? Can the company make the offering at the target cost and still earn a healthy profit margin? Can the company profit at a price that is affordable to the target buyers? Strategic pricing is a key component of Blue Ocean Strategy pioneered by Chan Kim and Renee Mauborgne.  To have strong revenue flowing, the strategic price must be set. This procedure will ensure that consumers will want to buy and will have the compelling ability to achieve it. It is fundamental, from the start, to know the price that will bring mass of target consumers.  The strategic price defined must not only attract customers but also retain Continue reading