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

Retail Investment in India – Retail as an Investment Option

Despite the huge presence of the unorganized sector, the Indian retail industry is attractive for international players (Read: Unorganized Retail in India). It is favored over China’s among the developing countries due to a slew of laws in the communist country at various levels. Though the market hasn’t seen big time players of the developed nations yet, the fact that Indian per capita retail space is among the lowest, is expected to provoke people to look at retail as a potential business arena. The growth of integrated shopping malls, retail chains and multi-brand outlets is evidence of consumer behavior being favorable to the growing organized segment of the business. Space, ambience and convenience are beginning to play an important role in drawing customers. With the Indian per capita income on the rise and the distribution of consumption expenditure expected to remain fairly stable, the current segments of food and apparel Continue reading

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10 Steps to Successful Crisis Management

A crisis is an abnormal situation, or even perception, which is beyond the scope of everyday business and which threatens the operation, safety and reputation of an organisation.  Crises do not discriminate based on a company’s size or notoriety, and they can hit when a company least expects them. They come in many forms — strikes, layoffs, product recalls or allegations of misconduct, but while some of these may seem small, every crisis has the potential to damage the reputation of a company. Regardless of the severity of the situation, crises pose a serious threat to companies — not only to their reputation but their fiscal health as well. When Odwalla’s apple juice was thought to be the cause of an outbreak of E. coli bacteria, the company lost a third of its market value. The same allegation against Jack in the Box restaurant in 1993 caused the hamburger chain’s Continue reading

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International Payments Using Drafts

Commonly used in international trade, a draft is an unconditional order in writing –  usually signed by the exporter (seller) and addressed to the importer (buyer) or the importer’s  agent – ordering the importer to pay on demand, or at a fixed or determinable future date, the  amount specified on its face. Such an instrument, also known as a bill of exchange, serves three  important functions: To provide written evidence, in clear and simple terms, of financial obligation. To enable both parties to potentially reduce their costs of financing. To provide a negotiable and unconditional instrument (that is, payment must be made  to any holder in due course despite any disputes over the underlying commercial  transaction.) Using a draft also enables an exporter to employ its bank as a collection agent. The bank  forwards the draft or bill of exchange to the foreign buyer (either directly or through a branch Continue reading

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Features of Service Tax

Service tax is a tax levied by the government on service providers on certain service transactions, but is actually borne by the customers. It is categorized under Indirect Tax and came into existence under the Finance Act, 1994. The salient features of levy of service tax are: 1.   Scope: It is leviable on taxable services ‘provided’ or ‘to   be provided’ by   a service provider. The services ‘to be provided’ in future are taxed only if payment in its respect is received in advance. Two separate persons required   Payment to employees not covered: For   charge of service  tax, it is necessary that the service provider and service recipient should be two separate persons acting  on ‘principal to principal basis’. Services provided by an employee to his employer are not covered service tax and, therefore, salaries or allowances paid to them cannot be charged to service tax. Continue reading

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Working Capital Concepts

Working Capital, being lifeblood for any enterprise, its management becomes a crucial exercise for the Financial Manager of a firm. The need of working capital is directly linked to the growth of the firm. Working Capital refers to the funds invested in the current assets of a firm such as raw materials, work-in-progress, finished goods, receivables, cash etc.   From the viewpoint of manufacturing process, working capital means that part of capital, which is required to keep the flow of production smooth and continuous. For day-to-day operations, a business needs to carry certain amount of raw material of all sorts so that commencement of production is not delayed, certain amount of work-in-process so that production operations go smoothly, certain amount of finished goods so that supply to market is not hampered by fluctuations in production, certain amount of book debts so that sales take place continuously and certain amount of Continue reading

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Uses of Currency Futures – Hedging, Speculation and Arbitrage

Future contract is normally defined as a standardized agreement with an organized exchange to buy or sell some item, such as a currency or commodity at a fixed price at a certain date in the future. Some contracts for example, foreign currency futures, provide for cash delivery; others, such as Eurodollar futures, are based on some reference price and allow only for cash settlement at maturity. The purpose of futures is not to obtain delivery but to replicate without credit risk, the gains or losses that would occur from an equivalent forward contract. In principle, currency futures are similar to foreign exchange forwards in that they are contracts for delivery of certain amount of a foreign currency at some future date and at known price. But in practice, most futures contracts are terminated before maturity. The most important uses of currency futures are listed below; 1. Hedging: Presume Entity A Continue reading

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