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

Revenue Structure of a Firm under Monopoly

Monopoly is that market category in which a single seller dominates the market.   There is only one producer (firm) and there are no substitutes for its product.   Since under monopoly there is just one firm producing a particular product there is no element of competition.   Besides in the absence of any other firm producing homogeneous product the firm itself constitutes the industry.   Hence it is futile to make any effort to distinguish between a firm and an industry under monopoly.   Under Monopoly, firm is itself an industry. The revenue structure under monopoly is bound to be different from that in case of a firm under perfect competition.   Under perfect competition, the firm is a price-taker and not a price maker and its AR curve is horizontal denoted by perfectly elastic demand curve.   But a monopolist is not a price-taker; he is price-maker.   Continue reading

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What are Circuit Breakers?

Volatility in stock prices is a cause of concern for both the policy makers and the investors. To curb excessive volatility, SEBI has prescribed a system of circuit breakers. The circuit breakers bring about a nation-wide coordinated halt in trading on all the equity and equity derivatives markets. An index based market-wide circuit breaker system applies at three stages of the index movement either way at 10%, 15% and 20%. The breakers are triggered by movement of either S&P CNX Nifty or Sensex, whichever is breached earlier. Further, the NSE views entries of non-genuine orders with utmost seriousness as this has market-wide repercussion. It may suo-moto cancel the orders in the absence of any immediate confirmation from the members that these orders are genuine or for any other reason as it may deem fit. As an additional measure of safety, individual scrip-wise price bands have been fixed as below: Daily Continue reading

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Separate Trading of Registered Interest and Principal of Securities (STRIPS)

STRIPS is the acronym for Separate Trading of Registered Interest and Principal of Securities.  STRIPS let investors hold and trade the individual interest and principal components  (also known as stripping)  of eligible Treasury notes and bonds as separate securities. The origin of Strip Bonds can be traced to the 1960s, when Investment Dealers in the United States began (physically) clipping coupons from bearer government bonds and selling the individual pieces as separate securities. These clipped bonds gained immense popularity and their sales gained momentum in the early and mid 1980s as the interest rates surged to high levels. This was so because it allowed investors to lock in the very high yields that were available at that time, without worrying about the risk of not being able to re-invest future interest payments at the same high rates. The interest and principal steam of cash flow are deterministic and are known Continue reading

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Some Facts about Over The Counter Exchange of India(OTCEI)

In 1992 , to provide improved services, the country’s first ring less, scrip less and electronic stock exchange Over The Counter Exchange of India(OTCEI) was created by some of the prominent financial institutions like UTI, ICICI, IDBI , SBI Capital Markets, IFCI, GIC, Canbank Financial Services. The trading at OTCEI is done over the centers across the country. The securities traded at OTCEI are classified into listed securities, permitted securities and initiated debentures. The feature of this exchange is that instead of share certificate, a counter receipt is generated out at the counter which substitutes the share certificate and the same is used for all transactions. Recommended Reading: Over The Counter Exchange of India(OTCEI) Trading on OTCEI Trading on Over The Counter Exchange of India(OTCEI) is the first of its kind in India. It is fully computerized set-up where trading takes place through a network of computers at the member/dealer Continue reading

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SWOT Analysis – A Strategic Planning Tool

SWOT   is an acronym for internal Strength (S) and Weakness (W) of an organization, and external Opportunities (O) and Threats (T) facing that organization. A   merging of the organization’s resources with the opportunities in the environment results in an assessment of the organization’s opportunities. This merging is frequently called SWOT analysis because it brings together the organization’s Strengths, Weakness, Opportunities, and Threats in order to identify a strategic niche that the organization can exploit. SWOT analysis  provides information that is helpful in matching the firms’ resources and capabilities to the competitive environment in which it operates and is therefore an important contribution to the strategic planning process.  Having completed the SWOT analysis, the organization reassesses its mission and objectives. In the light of the SWOT analysis and identification of the organization’s opportunities, management reevaluates its mission and objectives. Are they realistic? Do they need modification? If changes are Continue reading

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Foreign Currency Futures Contract

Market Background In 1972 the International Monetary Market (IMM), a division of the CME, was formed to offer futures contracts in foreign currencies: British pound, Canadian dollar, West German mark, Japanese yen, Mexican peso, and Swiss franc. In 1973 Western economies allowed currency exchange rates to float free. Trading in foreign currency futures contracts became even more attractive. Currency Future markets developed at Philadelphia (Philadelphia Board of Trade), London (London International Financial Futures Exchange (LIFFE)), Tokyo (Tokyo International Financial Futures Exchange), Sydney (Sydney Futures Exchange), and Singapore International Monetary Exchange (SIMEX). Definition of Foreign Currency Futures Contract Foreign Currency Futures Contract refers to standardized and easily  transferable obligation  between two parties to exchange currencies  at a specified rate during a specified  delivery month; standardized contract  on specified underlying currencies, in multiples of standard amounts. Purchased and  traded on a  regulated exchange  on which  margins are  posted. Foreign Currency Futures Contract Continue reading

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