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

Ways of Resolving Agency Problems and Costs

Agency problems are defined as problems happening due to conflicts of interests between a principal and an agent. An agent is hired by a principal and is supposed to perform on behalf of the principal with the aim of maximizing the principal’s benefits. However, the agent also has his own interests, and, during the time working for the principal, he may diverge from the ultimate purpose of working for the principal and may perform for his own benefit. In the financial field, there are two primary types of agency problems: between shareholders and managers, and between equityholders and debtholders. First one is the agency problem between shareholders and managers. When a company is set up, the founder is the owner and manager. He will act on behalf of himself to create more wealth. If the owner sells a part of his ownership to outsiders, the owner-manager will not possess 100% Continue reading

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Importance of Leadership for Organizational Excellence

A leader is someone who exercise influence over subordinate and other people without using threats or power for the only sake of the benefit or welfare of the community or groups so chosen or elected him/her as their leader. It would not be meaningless to say that a leader is someone who influences others through motivation and people likes to obey him or her willfully not in compulsion. A leader is person who represents the urges and requirements of his community or group and his all actions are only for the welfare and benefits of his groups. Generally leaders are of two kinds’ formal leaders and informal leaders. A leader who is appointed as leader and has been delegated some power under the shelter of a particular rank or position to perform the particular object. A formal leader is not a natural leader because such leaders are selected or elected Continue reading

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Porter’s Generic Competitive Strategies

In 1985, in his book  Competitive Advantage: Creating and Sustaining Superior Performance,  Michael Porter, outlined a set of generic strategies that could be applied to all products or services.  In coping with the Porters model of   five competitive forces, there are three potentially successful generic strategic approaches (also known as Porter’s Generic Competitive Strategies)  to outperforming other firms in an industry: Overall cost leadership. Differentiation. Focus. Sometimes the firm can successfully pursue more than one approach as its primary target, though this is rarely possible as will be discussed further. Effectively implementing any of these generic strategies usually requires total commitment and supporting organizational arrangements that are diluted if there is more than one primary target. The generic strategies are approaches to outperforming competitors in the industry; in some industries structure will mean that all firms can earn high returns, whereas in others, success with one of the generic Continue reading

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Purchase Management and Methods of Buying

Purchasing is a function of procuring goods and services from sources external to the organization. In the words of Alford and Beaty,”Purchasing is the procuring of materials, supplies, machine tools and services required for the equipment, maintenance, and operation of a manufacturing plant.” According to yet another authority,” Purchasing is the procuring of materials, tools, stores and services required for the manufacture of a product, maintenance of the machines, and un-interrupted running of the manufacturing plant in a manner that guarantees the marketing of the company’s products in the quantities desired, at the time promised and at the competitive price consistent with quality desired.” Purchasing in essence is the task of buying goods of right quality, in the right quantities, at the right time and at a right price. Since raw materials, components and services account for a significant as much as 50 to 70% proportion of the company’s total Continue reading

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Shareholder Wealth Maximization

According to the maximization model, there are three types of maximization in a company, which are shareholder maximization, stakeholder-owner maximization and total stakeholder maximization. Shareholder wealth maximization is a particular case of stakeholder-owner maximization, where only the pure owner interest as supplier of risk-capital is considered in the maximization. The stakeholder-owner has particular resources and interests which are important for the commitment of other stakeholders and thus for the economic performance of the venture as a whole and for the distribution of stakeholder benefits. Examples of such stakeholder-owners would include managers within the company who were also shareholders or suppliers who had an interest in the ownership of the company. Total stakeholder maximization includes the advantages for all groups, such as employees, local communities, shareholders, suppliers, customers, investors and partners. Among the three maximization of a company, shareholder wealth maximization plays a significant role and indeed more important than the Continue reading

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The Minimum Wages Act, 1948

Introduction: Wages means all remuneration capable of being expressed in terms of money, which Would, if the terms of contract of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such. Employment it includes house rent allowance but does not include the value of any house accommodation, supply or light, water, medical attendance or other amenity or service excluded by general or special order of appropriate Government; contribution paid by the employer to Pension/ Provident Fund or under scheme of social insurance; traveling allowance or value of traveling concession; sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or any gratuity payable on discharge. As of now there is no uniform and comprehensive wage policy for all sectors of the economy in India. Wages in the organized Continue reading

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