Concepts of Throughput Accounting and Theory of Constraints

Financial Management

Kaizen – Understanding the Japanese Business Philosophy of Continuous Improvement

Operations Management

Role of Leaders in Shaping Organizational Culture

Management Principles

Organizational Culture – Development and Importance

Management Principles

Five Important Organizational Cultural Models

Management Principles

The Micro Economics and Macro Economics

Economic analysis is of two types (a) Micro economic analysis and (b) Macro economic analysis Definition and Meaning of Micro Economics: According to E. Boulding, “Micro economics is the study of particular firm, particular household, individual price, wage, income, industry, and particular commodity.” In the words of Leftwitch, “Micro economics is concerned with the economic activities of such economic units as consumers, resource owners and business firms.” ‘Micro’ is a Greek word means ‘small’. Micro economic theory studies the behavior of individual decision-making units such as consumers’ resource owners, business firms, individual households, wages of workers, etc. It studies the flow of economic resources or factors of production from the resource owners to business firms and the flow of goods and services from the business firms to households. It studies the composition of such flows and how the prices of goods and services in the flow are determined. In this Continue reading

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European Monetary System

After the break down of the Bretton Woods System in 1973, several European countries attempted various mechanisms to fix their exchange rates to each other. While allowing their currencies to float against the dollar, these European countries tried progressively to narrow the extent to which they let their currencies fluctuate against each other. Six members of the European Economic Community (EEC), including France and Germany, jointly floated their currencies against the dollar. The currencies of the participating countries were allowed to fluctuate in a narrow band with respect to each other (1.125% on either side of the parity exchange rate), and the permissible joint float against other currencies was also limited (to 2.5% on either side of the parity). This fixed exchange rate system that arose concurrently with the fall of the Bretton Woods System was called the “snake” as this gave the currency movement the look of a “snake”. Continue reading

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Inefficient Working Capital Management

Working capital management is an important component of management of corporate finance; since it directly influences firm’s profitability as well as liquidity in everyday activities. In any business organization, it is obvious that there must be sufficient working capital to run day to day operation. Therefore, to operate the business activities smoothly, working capital of firm’s must be sufficient. Then, the concern of working capital management is setting sufficient (optimal level) of working capital and managing short term assets and liabilities of firms within a specified period of time, usually one year. It is obvious that, the importance of efficient working capital management is unquestionable to all business activities. Because, business capability relies on its ability to effectively  use (manage) receivables, inventories and payables. If there are excessive stock, debtors and cash and very few creditors, there will be an over investment in current asset. The inefficiency of managing working Continue reading

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Ethnocentrism in International Marketing

International marketing activities are interlinked with a firm’s corporate goals, objectives and strategy. The overall aims, objectives and strategy of a firm has a great impact on international marketing decisions e.g, whether to enter new uncertain markets and how maximum would be risk that the firm is ready to take or the level of control required over international operations. There is no denying in fact that a person’s self reference criterion (SRC) and an associated ethnocentrism are a two primary obstacles to success in international marketing. Self reference criteria is defined as an unconscious reference to one’s own cultural values, experiences and knowledge as a basis for decisions. Ethnocentrism is closely connected to self reference criterion. Ethnocentrism can be defined as the nations that one’s own culture or company knows best how to do things. Ethnocentrism has been seen particularly a problem in the American managers at the beginning of Continue reading

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Case Study: An Assessment of Wal-Mart’s Global Expansion Strategy

Founded in the year 1962, by Sam Walton, Wal-Mart was a single discount store in Rogers situated in the state of Arkansas. Then the growth of the Wal-Mart chain of stores has been tremendous. Initially the chain consisted of 9 stores amounting to a total sale of 1.4 million US dollars and the growth exploded with a overall sale of 118 billion US dollars in the year 1998 and the number of stores amounted to over 2,316 stores. The company also includes discount stores, warehouse outlets offering deep discounts, the whole sale club, supercenters of Wal-Mart. The success story of Wal-Mart is unique in the history of retailing and this success could greatly be attributed to the dynamic leadership of Sam Walton. Its innings in the international arena started when the company inaugurated a store in Mexico in the year 1991. Then the international chain kept on expanding to many Continue reading

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Foreign Exchange Control – Definition and Objectives

Exchange controls, like currency devaluations, form a part of expenditure-switching policy package. Because, they, too, like devaluation, aim at directing domestic spending away from foreign supplies and investment. Exchange controls try to divert domestic spending into consumption of domestically produced goods and services on the one hand and into domestic investment on the other. Exchange controls represent the most drastic means of BOP adjustment. A full-fledged system of exchange controls establishes a complete government control over the foreign exchange market of the country. Foreign exchange earned from exports and other sources must be surrendered to the government authorities. The available supply of foreign exchange is then allocated among the various buyers (importers) according to the criterion of national needs and established priorities. From a purely BOP standpoint, the sole purpose of exchange controls, is to ration out the available supply of foreign exchange in accordance with national interests. There are Continue reading

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