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

Meaning of Reliability and Maintainability

Reliability Reliability may be defined as the probability, or degree of confidence that a product will perform a specified number of times under prescribed conditions. For example, the reliability of an electrical changeover switch may be defined as 0.9999. This may hold true only when it is operated with an input voltage of 440 volts AC, in an environmental temperature range of 0 to 80 degrees C, with humidity less than 90 percent, if its housing has never been opened, if it has been operated less than 1 million times, and if its is less than five years old. Even if any one of these conditions is violated, then the reliability concepts goes off. When parts are interdependent, and especially when there is a large number of them, achieving a high degree of reliability for a product presents and real challenge. Maintainability Maintainability refers to the ability of the user Continue reading

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Arguments in Favor of Firms Profit Maximization Objective

Profit  maximization  is the most important assumption, which helps the economists to introduce the price and production theories. The traditional economic theory assumes that the profit  maximization  is the only objective of business firms. According to this theory, profits must be earned by business to provide for its own survival, coverage of risks, growth and expansion. It is a necessary motivating force and it is in terms of profits that the efficiency of a business is measured. It forms the basis of conventional price theory. Profit  maximization  is regarded as the most reasonable and analytically the most productive business objective. The profit  maximization  assumption in this theory helps in predicting the  behavior  of business firms and also the  behavior  of price and out pet under different market conditions. No alternative hypothesis or assumption explains and predicts the  behavior  of firms better than the profit  maximization  assumption. The traditional theory supports Continue reading

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Different Types/Categories of Mutual Fund Products

Investment companies or investment trusts obtain funds from large number of investors through sale of units. The funds collected from the investors are placed under professional management for the benefit of the investors. There are a variety of ways in which mutual funds are created to accommodate varied risk and return requirements of investors. Depending on the investment portfolio that is created and the segments of the various markets in which funds are invested, there is a choice of funds to investors. Mutual funds can offer further broad choices to the investors in terms of: Nature of participation: Open and close-end funds. Nature of income distribution: Dividend, growth and reinvestment of dividends. Mutual Fund Products based on the Nature of Participation 1. Open-Ended Mutual Funds An open-ended mutual fund remains open for issue and redemption of its shares throughout its unlimited duration. As an open-ended mutual fund is required to Continue reading

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Strategies to Resolve the Principal Agent Problem

The principal agent problem refers to difficulties of motivating one party the agent to act for the best interest of the other party the principal. In a company, the owners of the assets (the stockholder) are the principals and the managers of the company are the agents. The stockholders of the company authorize the managers to manage and use their resources to make profit for the stockholders. The cause of the principal agent problem is that the information asymmetry between the principal and the agent and the principal and agent have different interests. Generally, the Agents are the managers of the resources and have more information than the principals. In a company, the managers of the company will have more information about the company than the stockholders of the company. The agents may use this asymmetric information to get interest for themselves rather than the principals. In general, the principal Continue reading

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Disadvantages/Drawbacks of Television Advertising

Television advertising does have some disadvantages as well. Some of the limitations of television advertising are: Costs: Though television offers unsurpassed creativity and reaches large audiences, it is an expensive medium to advertise. Besides the high cost of media time, the cost of producing good quality commercials is quite high. Besides the airtime costs, considerable costs were involved in producing that the commercial. Even local ads can be expensive to produce and often are not of high quality. High costs associated with TV advertising discourage small budget companies. Lack of Selectivity: Advertisers, who are interested in delivering their message to a very specific, narrowly defined, often small, target audience, find that TV leads to overexposure, reducing its cost effectiveness. For example, it would be difficult to reach only a particular group in the entire population. Any TV commercial is bound to extend far beyond the target audience. Though, advertisers are Continue reading

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The Impact of Bureaucratic Structure in Organizations

A  bureaucracy  is a form of organisation based on logic, order, and the legitimate use of formal authority. Bureaucracies are meant to be orderly, fair, and highly efficient. Max Weber, a German theorist, was the first person to introduce many of the concepts of bureaucracy. During the 18th and 19th century period many employees worked only for themselves and in a workplace environment that was primarily focused on getting the job done in whichever way possible unconcerned with efficiency. Weber’s idea was to use regulation by rules, policies, supervision, reward systems and other mechanisms to make sure that the behavior and standards of the employees are always met and making the contemporary workplace more organized. The six key principles of bureaucracy that Weber identified were; division of work, hierarchy, promotions, record-keeping, business as a separate legal entity and rules and regulations. Many businesses today have benefited from Weber’s work. Division Continue reading

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