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

Guidelines for Effective Performance Appraisals

The performance appraisal requires willingness and a commitment to  focus on improving performance at the level of the individual or team every day.  Like a compass, an ongoing performance appraisal system provides  instantaneous, real-time information that describes the difference between one’s  current and desired course. To practice sound performance appraisal system,  managers must do the same thing-provide timely feedback about performance,  while constantly focusing everyone’s attention on the ultimate objective of  being the best among the competitors in the market. Well-written performance appraisals are among the most effective tools  for developing people. The following guidelines would be used for effective  performance appraisals to significantly increase your team’s effectiveness and  perceived value within your organization. Increase employees comfort level with performance appraisals. At the  beginning of each review period, explain the appraisal process, rating  system, and appraisal form. Agree on performance objectives and  measurements for the upcoming review period. Start thinking Continue reading

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4 Phases of Hawthorne Experiment – Explained

At the beginning of the 20th century, companies were using scientific approaches to improve worker productivity. But that all began to change in 1924 with the start of the Hawthorne Studies, a 9-year research program at Western Electric Companies. The program, of which Elton Mayo and Fritz Roethlisberger played a major role, concluded that an organization’s undocumented social system was a powerful motivator of employee behavior. The Hawthorne Studies led to the development of the Human Relations Movement in business management. The experiment was about measuring the impact of different working conditions by the company itself (such as levels of lighting, payment systems, and hours of work) on the output of the employees. The researchers concluded that variations in output were not caused by changing physical conditions or material rewards only but partly by the experiments themselves. The special treatment required by experimental participation convinced workers that management had a Continue reading

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Earnings Management Practices and Techniques

What are earnings and what is earnings management? Simply stated, earnings are the accounting profits of a company. Stakeholders (current or potential providers of debt and equity capital, employees, suppliers, customers, auditors, analysts, rating agencies, and regulators) use earnings to make important financial decisions. Many investors view earnings as value relevant data that is more informative than cash flow data. Others have suggested that current earnings are better predictors of future cash flows than are current cash flows. In the US, these profits are derived using Generally Accepted Accounting Principles (GAAP) – a system based on the accrual method, which measures the performance and position of a company by recognizing economic events regardless of when cash transactions occur. The general idea is that economic events are recognized by matching revenues to expenses at the time in which the transaction occurs rather than when payment is made (or received). This method Continue reading

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Cost of Capital – Meaning, Significance and Components

Investment in capital projects needs funds. These funds are provided by the investors like equity shareholders, preference shareholders, debenture holders, etc in expectation of a minimum return from the firm. The minimum return expected by the investors depends upon the risk perception of the investor as well as on the risk-return characteristics of the firm. This minimum return expected by the investors, which in turn, is the cost of procuring funds for the firm, is termed as the cost of capital of the firm. Thus, the cost of capital of a firm is the minimum rate of return that it must earn on its investments in order to satisfy the expectation of the various categories of investors who have invested in the firm. A firm procures funds from various sources by issuing different securities to finance its projects. Each of these sources of finance entails cost to the firm. Since Continue reading

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Approaches to Studying Consumer Behaviour

There are two broad approaches to the study of consumer behavior: 1. A Managerial Approach 2. A Holistic Approach A managerial approach views consumer behavior as an applied social science. It is studied as an adjunct to and a basis for developing marketing strategies. A holistic approach views consumer behavior as a pure rather than applied social science. In this view, consumer behavior is a legitimate focus of inquiry in and of itself without necessarily being applied to marketing. Although it may appear that the first view has the most credence for marketers, in reality, a holistic approach also provides a useful perspective to strategy in many cases. A Managerial Approach A managerial approach to consumer behavior tends to be more micro and cognitive in nature. It is micro in emphasizing the individual consumer: his or her attitudes, perceptions, and lifestyle and demographic characteristics. Environmental effects- reference groups, the family, Continue reading

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International Financial Institutions: International Monetary Fund (IMF)

Origin of International Monetary Fund (IMF) The International Monetary Fund (IMF) also called the Fund is an International monetary institution/ supranational financial institution established by 45 nations under the Bretton Woods Agreement of 1944. Such an institution was necessary to avoid repetition of the disastrous economic policies that had contributed to Great depression of 1930’s. The principal aim was to avoid the economic mistakes of the 1920s and 1930s. It started functioning from March 1, 1947. In June, 1996, the Fund had 181 members. The IMF was established to promote economic and financial co-operation among its members in order to facilitate the expansion and balanced growth of world trade. It performs the activities like monitoring national, global and regional economic developments and advising member countries on their economic policies (surveillance); lending member hard currencies to support policy programmes designed to correct BOP problems; offering technical assistance in its areas of Continue reading

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