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

Quantum Meruit in Business Law

‘Quantum meruit’ literally means ‘as much as earned’ or ‘as much as is merited’. When a person has  done some work under a contract, and the other party repudiates the contract, or some event happens  which makes the further performance of the contract impossible, then the party who has performed the  work can claim remuneration for the work he has already done. Likewise, where one person has  expressly or impliedly requested another to render him a service without specifying any remuneration, but  the circumstances of the request imply that the service is to be paid for, there is implied a promise to pay  quantum meruit, i.e. so much as the party rendering the service deserves. The right to claim quantum  meruit does not arise out of contract as the right to damages does; it is a claim on the quasi-contractual  obligation which the law implies in the circumstances. The claim Continue reading

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Tesco’s Steering Wheel: A Tool for Strategic Value Creation and Business Transformation

In early 90’s Tesco faced a stiff competition from various other retailers in the industry and thus its revenues showed a downfall. At that point Tesco could not differentiate itself from the other competitors. Later under the leadership of then CEO Ian Mac Laurin it went through an image makeover, and acquired other retailing outlets like William Low; with which it reached just up to the sustenance mark. Later Terry took over as the CEO of the Company and aimed to make the company value driven. Tesco in early 70’s had acquired a lot of other retailer companies but faced a problem of integrating them, more over Tesco stores were small and ill equipped. The company only focused on price where as the goods available at the stores were perceived to be of mediocre quality, but with rising income customers looked forward to expensive and luxury merchandise. Answering to this Continue reading

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Cost Control Concepts

The long-run prosperity of a firm depends upon its ability to earn sustained profits. Profit depends upon the difference between the selling price and the cost of production. Very often, the selling price is not within the control of a firm but many costs are under its control. The firm should therefore aim at doing whatever is done at the minimum cost. In fact, cost control is an essential element for the successful operation of a business. Cost control by management means a search for better and more economical ways of completing each operation. In effect, cost control would mean a reduction in the percentage of costs and, in turn, an increase in the percentage of profits. Naturally, cost control is and will continue to be of perpetual concern to the industry. Cost control has two aspects such as a reduction in specific expenses and a more efficient use of Continue reading

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Current Exchange Rate Regimes

An exchange rate is the price of one currency in terms of another currency. As in the case of any other goods, the price of a currency is affected by supply and demand. As demand for a currency increases (or supply decreases) its price will rise. This is referred as an appreciation. Conversely, as demand for a currency decreases, or supply increases, its value will depreciate. The prospect of large and rapid swings in exchange rates introduces uncertainty into the business environment.   A well-functioning international monetary system ensures stability in the exchange rates. The central element of the international monetary system involves the arrangements by which exchange rates are set. The purpose of an exchange-rate system is to facilitate and promote international trade and finance. There have been three major exchange rate regimes from a historical perspective — Fixed Exchange Rates, Floating or Flexible Exchange Rates, and Managed Exchange Continue reading

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RBI as the Exchange Control Authority

One of the important central banking functions of the Reserve Bank of India (RBI) is the maintenance of the external value of the rupee. As such it has been given the custody of foreign exchange reserves and sole agency for the administration of exchange controls in India. All receipts and payments in and out of India require general or special permission of the RBI. The dealings in foreign exchange and foreign securities in India, payments to person resident outside India and export and import of currency notes, bullion or precious stones etc., are subject to general or special permission of RBI or are prohibited. The RBI with the help of authorized dealers, and moneychangers carries on the administration of controls. The types of transactions, which are controlled by the RBI and the government are in general those which have international financial implications and include inter alia the following important items. Continue reading

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Product Life Cycle and Industrial Pricing

Pricing strategies vary as the  industrial product moves through its life cycle. The industrial pricing strategy is a key  factor in each of the four cells of product life cycle. Introductory Stage Pricing Strategy: There are two pricing strategies  available for a new product which is in the introductory stage of its life cycle.  These are: (a) Penetration Strategy, and (b) Skimming Strategy. An industrial  marketer must analyze the price from the angle of the buyers. How soon the  firm should try ton recover the investment on the new product is another  important factor to be considered by the industrial marketer. Penetration Strategy: When the price elasticity of demand is high or the  buyers are highly price sensitive, strong threat exists from potential competitors  and opportunity exists to reduce the unit cost of production and distribution with  increase in volumes the penetration strategy is effective. The firm can draw on Continue reading

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