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 Customer Satisfaction Model – Based on American Customer Satisfaction Index (ACSI)

Marketing Management

Asset Swaps

Unlike interest rate swaps and basis rate swaps discussed earlier,   in which cash flows of debt obligation were changed, asset swaps are used to change the characteristics of an asset. For example, an investor with a ten year fixed Japanese yen bond may decide to enter into a currency swap to change his investment income into US dollar. The investor may feel that the Japanese yen will lose its value against the US dollar and would like to change his income into US dollar. Assume the current five year swap rate for US$ versus Japanese Yen to be 6.45-6.50%. The coupon rate of the investor’s bond is 7.00% and the bond has five years remaining. The investor can exchange his 50 bps Japanese Yen payments at the spot market as an extra income above LIBOR or have the dealer manage that risk as well. At the maturity date, the Continue reading

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Harrod-Domar Models of Economic Growth

The Harrod-Domar models of economic growth are based on the experience of advanced economies. They are primarily addressed to an advanced capitalist economy and attempt to analyze the requirements of steady growth in such economy. Both Harrod and Domar are interested in discovering the rate of income growth necessary for smooth and uninterrupted working of the economy. Though their models differ in details, yet they arrive at similar conclusions. Harrod and Domar assign a key role to investment in the process of economic growth. But they lay emphasis on the dual character of investment. Fist, it creates income, and secondly, it augments the productive capacity of the economy by increasing its capital stock. The former may be regarded as the ‘demand effect’ and the later the ‘supply effect’ of investment. Hence so long as net investment is taking place, real income and output will continue to expand. However, for maintaining Continue reading

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Process Benchmarking – Definition and Steps Involved

Benchmarking involves comparison of one firm’s processes with that of other firm while reengineering is concerned with redesign of operational processes. Benchmarking involves thorough research into the best practices followed by other organisations in the industry where the company operates and it helps in breaking down the organisations’ activities down to process operations and modifies them to the best-in-class for a particular operation. The word benchmarking has been derived from the set of activities used by cobblers to mark the size of the foot of their customers. For measuring the size of the foot they used to ask the customer to put their foot on the “bench” so that they can “mark” the foot using a pen. In Benchmarking processes of one company are compared with the processes of the industry leader to see the practices and the ways in which these industry leaders operate and to modify their own Continue reading

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Ethical Issues in Marketing

Ethics are defined as the set of principles that guide a person’s conduct towards being morally right. When a person is faced with some moral dilemma, the choice that the person makes largely depends upon the values and ethical principles that person holds. It is over and above just being legal. Due to being dependent upon the personal values and principles a person holds, an ethical code of conduct cannot be described in absolute terms. Like in all the disciplines of life, recognizing and quantifying what is ethical in marketing and what is not is difficult. In a broader sense, ethics in marketing mean implementing standards of moral rights and wrongs and of fairness in the marketing practices of an organization. The main objective of any business is said to be shareholders wealth maximization. In order to achieve this objective, the organization has to perform better than its competitors and Continue reading

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Credit Policy in Receivable Management

Concept of Credit Policy The discharge of the credit function in a company embraces a number of activities for which the policies have to be clearly laid down. Such a step will ensure consistency in credit decisions and actions. A credit policy thus, establishes guidelines that govern grant or reject  credit to a customer, what should be the level of credit granted to a customer etc. A credit policy can be said to have a direct effect on the volume of investment a company desires to make in receivables. A company falls prey of many factors pertaining to its credit policy. In addition to specific industrial attributes like the trend of industry, pattern of demand, pace of technology changes, factors like financial strength of a company, marketing organization, growth of its product etc. also influence the credit policy of an enterprise. Certain considerations demand  greater attention while formulating the credit Continue reading

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Logistical Organization and Development

Prior to the 1950s, functions now accepted as logistics were generally viewed as facilitating or support work. Organizational responsibility for logistics was dispersed throughout the firm. This fragmentation often meant that aspects of logistical work were performed without cross-functional coordination, often resulting in duplication and waste information was frequently distorted or delayed and lines of authority and responsibility were typically blurred. Managers recognizing the need for total cost control began to reorganize and combine logistics functions into a single managerial group. Structuring logistics as an integrated organization first appeared in the 1950s. The motivation behind functional aggregation was the belief that grouping logistics functions into a single organization would increase the likelihood of integration. The paradigm (model) was that functional proximity would facilitate improved understanding of how decisions and procedures in one area affect performance in other areas. The belief was that eventually all functions would begin to work as Continue reading

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