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

Role of Different Parties Involved in Industrial Relations

Role of Government in Industrial Relations In recent years the Government has played an important role in regulating industrial relations but the extent of its involvement in the process is determined by the level of social and economic development while the mode of intervention gets patterned in conformity with the political system obtaining in the country and the social and cultural traditions of its people. The degree of Government  intervention is also determined by the stage of economic development. For example, in a developing economy like ours, work-stoppages to settle claims have more serious consequences than in a developed economy and similarly, a free market economy may leave the parties free to settle their relations through strikes and lockouts but in other systems varying degrees of Government  participation is required for building up sound industrial relations. In India, the role played by the Government  is an important feature in the Continue reading

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Accounting Treatments for Non-Performing Leases

There is no information in the guidance note on lease accounting, 1995, for non-performing assets. The general accounting principles for non-performing assets is contained in accounting standard 9 on Revenue Recognition which is more or less on the lines of the International Accounting Standards on the issue. The Standard provides that whereas, in general, incomes are to be recognized on the basis of accrual, in case of an uncertainty in the ultimate realization of an income, the treatment is as follows: If the uncertainty is prevalent at the time of raising the claim for the income, the recognition of the income shall be postponed If the uncertainty arises subsequent to the claim being made, there shall be a provision made to the extent of the uncertainty. This statement lays down the basic difference between a provision against an income, and non-recognition of income, which is very significant. The accounting for Continue reading

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Prospect Theory in Behavioral Finance

The Prospect Theory was originally conceived by Kahneman and Tversky (1979) and later resulted in Daniel Kahneman being awarded the Nobel Prize for Economics. The work by the authors is considered as path breaking in behavioral finance. They introduced the concept of prospect theory for the analysis of decision making under risk. This theory is considered to be seminal in the literature of behavioral finance. It was developed as an alternative model for expected utility theory. It throws light on how individual evaluate gain or losses. The prospect theory has three key aspects. People sometimes exhibit risk aversion and sometimes risk loving behaviors depending on the nature of the prospect. This is due to the fact that people give lower weight age to the outcomes which are probable as compared to those that are certain. This makes them risk averse for choices with sure gains while risk seekers for choices Continue reading

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Outsourcing of Training and Development

Organizations now are using a unique approach to provide training internally by outsourcing their training departments. This they have found is a way that reduces costs improves productivity and relives them from the need of constant upgradation. Handing over the organizations training function over to  “experts”  in many ways also improves the quality of training. These  experts  have a lot of advantages; they are constantly upgrading themselves to differentiate themselves from the competition and add value to their clients, by virtue of the multiple clients they serve – they have an upfront feel of the best industry practices; training costs can be tracked more objectively and can help align your training’s with your strategic objectives in a far better manner. Outsourcing of training and development activities means comprehensive, end-to-end outsourcing–from the management of the training function to the design, delivery and reporting. Training BPO refers to the transfer of management Continue reading

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Reward Strategies in Modern Organizations

Since 1990’s the dynamic link between performance and reward has been a topic of debate. The need of flexibility and cost effectiveness has lead to organizational restructuring of various kinds; including flatter structures with their focus on teamwork, broader roles and non-traditional work arrangements. Implementing a flatter structure is meaningless unless there is a degree of consistency between what is expected of employees in terms of working practices and systems, processes and the resources needed to do the job. All human resource systems especially pay; need to reinforce the forms of skilled performance required of individuals. However most of the companies believe in following the preferred model of paying market rates alongside schemes that recognize individual short-term performance but not long term development. This is among the most challenging responsibility of human resource specialist, as there are many factors to be taken into account before revising a compensation system to Continue reading

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The Corporate Personality and Piercing the Corporate Veil

Concept of Corporate Personality A company is a legal person, since in the eyes of law it is capable of having legal rights and  obligations just like a natural person. Like any other person it can acquire and own property, transfer  property, enter into contracts and sue and be sued in its own name. Being a legal person, a company has a  separate legal entity, a personality distinct from its members or shareholders. The concept of separate entity of a company was established in the celebrated case of Salomon Vs  Salomon & Co. Ltd. The facts of the case are that one Salomon, a boot manufacturer, formed a company  with himself, his wife, and daughter and four sons as the sole shareholders. Salomon took 20,000 shares  of £1 each, debentures worth £10,000 secured by the assets of the company and the balance in cash. His  wife, daughter and four sons Continue reading

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