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

Labor Cost Control – Meaning and Need

Labor cost covers one of the major portion of the total cost of a product or job. It may increase unnecessarily due to inefficiency of workers, wastage of materials by workers, idle time, unusual overtime work and high labor turnover. Hence, the management should devise effective techniques for controlling labor cost to ensure maximum outputs of better quality at low cost through proper utilization of the labor force. Basically, management is concerned with controlling labor cost. Labor cost control involves such systems, procedures, techniques and tools used by the management in order to keep the labor cost of the product or job as minimum as possible. Labor cost control consists of a number of such regular activities which are carried on by various departments of the organization in a coordinated manner to ensure the availability of the best employees and their optimum utilization. It is the system followed by the Continue reading

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Official Actions to Influence Foreign Exchange Rates

As in some other major industrial nations with floating exchange rate regimes, in the United States there is considerable scope for the play of market forces in determining the dollar exchange rate. But also, as in other countries, U.S. authorities do take steps at times to influence the exchange rate, via policy measures and direct intervention in the foreign exchange market to buy or sell foreign currencies. As noted above, in practice, all foreign exchange market intervention of the U.S. authorities is routinely sterilized–that is, the initial effect on U.S. bank reserves is offset by monetary policy action. No one questions that monetary policy measures can influence the exchange rate by affecting the relative attractiveness of a currency and expectations of its prospects, although it is difficult to find a stable and significant relationship that would yield a predictable, precise response. But the question of the effectiveness of sterilized intervention, Continue reading

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Decentralization of Authority

By decentralization of authority we mean dispersal of decision-making authority at various levels in the organization. In a centralized set-up, decision-making authority is concentrated at the top-level of the management, whereas in the decentralized set-up, many important decisions are made at the lower level also. The most significant feature of decentralization of authority is that most of the decisions made at the lower level do not need approval of the seniors. This means greater freedom is given in decision-making to lower level managers and supervisors in the organization. Factors Determining the Degree of Decentralization Importance and significance of the decision: One of the important factors determining the degree of decentralization of authority is costliness of the decision. Normally, decisions which are costly in terms of money value involved or in terms of factors like goodwill and image of the establishment, employee morale or motivation tend to be centralized at the Continue reading

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Law of Demand – Meaning, Assumptions and Exceptions

Suppose you want to buy mangoes at Rs.100 per dozen you buy 6 dozens. If the price of mangoes increase to 200/- then how much will you buy? Definitely less quantity of goods. What kind of relationship is there between the price and quantity demanded? There is inverse relation. The  law of demand explains the functional relationship between price of a commodity and the quantity demanded of the same. It is observed that the price and the demand are inversely related which means that the two move in the opposite direction. An increase in the price leads to a fall in the demand and vice versa. The law of demand states that “Ceteris paribus (other things remaining the same), higher the price, lower the demand and vice versa”. The law is stated primarily in terms of the price and quantity relationship. The quantity demanded is inversely related to its price. Continue reading

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Characteristic features of a developed Money Market

In every country of the world, some type of money market exists. Some of them are highly developed while others are not well developed. Prof. S.N. Sen has described certain essential features of a developed money market. Highly organized banking system: The commercial banks are the nerve centre of the whole money market. They are principal suppliers of short-term funds. Their policies regarding loans and advances have impact on the entire money market. The commercial banks serve as vital link between the central bank and the various segments of the highly organized banking system co-exist. In an underdeveloped money market, the commercial banking system is not fully developed. Presence Of A Central Bank: The Central Bank acts as the banker’s bank. It keeps their cash reserves and provides them financial accommodation in difficulties by discounting their eligible securities. In other words, it enables the commercial banks and other institutions to Continue reading

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Outsourcing – Concept, Reasons and Importance

In recent decades, outsourcing has emerged as a major trend in human resources all over the world. It has become the practice in where certain job functions are sent outside of a company instead of performing them in house. Day by day, more and more companies are focusing on outsourcing as an easy way to grow as well as reducing overhead and payroll costs. In the simplest terms outsourcing can be described as farming out of different services to third parties. For example in case of   information technology, outsourcing includes any task such as outsourcing all kinds of management of IT to HP or IBM, or even outsourcing a very easy and small task, such as data storage, data editing, disaster recovery or, and any task in between. No precise definition of outsourcing can be found. The term is often used in an inconsistent way. Outsourcing is often involved Continue reading

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