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

Five Approaches to Differentiation Strategy

In order to achieve competitive advantage against the competitors, corporations carry out the strategy to distinguish themselves from the competitors in aspects of product, service, image, and etc. The focus of differentiation strategy is to creative the product and service, which is considered to be unique and special by the industry and customers. The foundations of the implement of differentiation strategy are customer needs, competitors, products and services levels. There are many means to carry out differentiation strategy. Such as product differentiation, service differentiation and image differences and so on. By carrying out differentiation strategy, the brand loyalty of users will be cultivated successfully and the corporation can also avoid the direct confrontation of competitors. Therefore, differentiation strategy is an effective competitive strategy, which enables the enterprise to obtain profits above the industry average level. Approaches to Differentiation Strategy Differential Product Strategy: In order to get an advantage different from Continue reading

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Naïve Diversification of Investment Portfolio

Portfolios may be diversified in a naïve manner, without really applying the principles of Markowitz diversification, which is discussed at length in the next paragraph. Naïve diversification, where securities are selected on a random basis only reduces the risk of a portfolio to a limited extent. When the securities included in such a portfolio number around ten to twelve, the portfolio risk decreases to the level of the systematic risk in the market. It may also be noted that beyond fifteen shares, there is no decrease in the total risk of a portfolio. Before discussing about portfolio diversification process, what the researches of investors and investment analysts have found is to be set out briefly. Firstly, they found that putting all eggs in one basket is bad and most risky. Secondly, there should be adequate diversification of investment into various securities as that will spread the risk and reduce it; Continue reading

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Investment Center

Profit centers, by definition, are really not quite like independent firms. Profit centers do not incorporate allocation of invested capital and appropriate cost of such capital. Where the profit-center concept for control purposes is extended to include such items, the result is known as an investment center. Investment centers may be thought of as profit centers with the addition of an asset base. Investment center is the ultimate extension of the responsibility idea. It is a center in which the head of the center is held responsible for the use of the assets as well as revenues and expenses. In other words, he is expected to earn a satisfactory return on the assets employed in his responsibility center. However, the selection of the appropriate asset base can present difficulties. Three fundamental questions must be resolved in arriving at an asset base appropriate for a particular investment center: Which assets should Continue reading

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Fiat Money – Meaning, Characteristics and Working

The term fiat money is used to define as any money declared by a government to be legal tender with no commodity backing. Legal tender simply means that there is a law requiring everyone to accept the currency in commerce. Besides, fiat money was state-issued money which is neither fixed in value in terms of any objective standard, nor legally convertible to any other thing that was demanded by someone else. In other word, fiat money is money without intrinsic value. In ancient times when money was not invented trade as a whole was on barter system. “Barter” basically means to pay for something you want with products or services instead of paying for what you want with money. Under this system, exchange only can take place between two persons only if each possesses the goods which the other wants. As an example, imagine you grow tomatoes and your neighbor Continue reading

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Importance of Decision Making in Management

Decision making is a process of selecting the best course of action from among many alternatives. It is useful for the successful operation of organizational activities. All the managerial functions such as planning, organizing, directing and controlling are determined by the decision. The following points describes the importance of decision making in the organization. 1. Pervasive Function Decision making is essential in each level of management. Top level management makes strategic decisions such as planning, organizing, directing and controlling. Middle level management makes tactical decisions such as division of works, fixation of authority and responsibility, integration of efforts etc. Operating level management makes regular operating decisions such s preparation of schedule of daily works, divisions of works, delegation of authority etc. Thus, decision making function is performed in all the levels of management according to needs. This is necessary to bring uniformity and smoothness in the organizational performance. 2. Indispensable Continue reading

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Listing and Delisting of Securities at Stock Exchanges

Listing of Securities at Stock Exchanges Listing means formal admission of a security into a public trading system of a stock exchange. A security is said to be listed when they have been included in the official list of the stock exchange for the purpose of trading. The prime objective of admission to dealings cm the stock exchange is to provide liquidity and marketability to securities and also to provide a mechanism for effective management of trading. The securities listed in stock exchanges may be of any public limited company, central or state government, quasi-government and other corporations or financial institutions. To make a security eligible to be listed in a stock exchange, the company shall be obligatory to fulfill all the listing requirements specified in the Companies Act of 1956. Besides the company is also compulsorily to discharge the listing norms issued by SEBI from time to time and Continue reading

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